the broadcast transfer fees are. >> it's possible. we have seen apple products affect the retail sales electronicingselectron electron electronics data. >> we could talk quadrenially all day. great word. we got to go. >> "closing bell" starts right now. and welcome to "the closing bell." i'm kelly evans here at the new york stock exchange. >> i'm bill griffith. the dow still chasing its all-time closing high. we thought we had one yesterday. there was a little bit of late selling. we still do not have a new all-time high for the dow in 2014. >> yeah, we probably would have had it this morning as well. we were above the 16,600 mark. now we're negative. >> even if we were to make an all-time high today, my dear friend ron will be here to throw cold water on that notion.

he says we could see a 20% move lower in stocks. his view that he wrote about on cnbc.com has caught fire with readers. now he'll be here to make his cl case exclusively. >> now coca-cola defending itself on the program. david winters will be here this hour to respond to what coke is saying earlier this morning. this is a battle that's now escalating. you won't want to miss the latest chapter. again, that's an exclusive interview coming up. >> all about compensation and governance. of course, tomorrow all eyes will be on the employment report for the month of march. but what if we told you the key to america's jobs market rests with exconvicts? do not scoff. there's data that explains this and something that new fed chief janet yellen did this week has highlighted that very issue. we have a special report coming up today on "closing bell." >> here's where we stand in the

marke markets. the dow off 23 points at 16,549. take a look at the nasdaq, which is off by more than 1%. it's almost 50 points lower today. finally, the s&p 500 after hitting a new high is giving up about five points today. >> let's talk about this market in our "closing bell" exchange. jim lowell is with us today from adviser investments. larry mcdonald from new edge. we've got frank braddick. and our own rick santelli. welcome to everybody here. jim lowell, would it matter if we keep trying to set a new high for the dow and we just keep failing? eventually the technicians are going to tell us we're putting in a double topper, something here won't look good. >> well, a double top or not, this is a market that can't be kept down. the reality is we see a lag in the multinational balance sheet blue chip stocks. we think those have real room to run, especially late during the year, especially if not only the u.s. recovery but the global recovery remains at least on par, if not picks up a little

bit of steam. we definitely share janet yellen's concern that the jobs being created aren't quite good enough to call us recovered, but we are clearly still in an economy that's recovering well and a market that's going to keep pace with it. >> larry, you've been cautious here, have you not, on u.s. equities. where do you stand today? >> if you look at the s&p, we did some damage on the s&p and the nasdaq over the last month. i think over the last eight days we've repaired a lot of that damage. the bull/bear battleground at 1878-ish. so far the bulls over the last five days have improved there. i think above 1880, it's very difficult to be bearish in the short term. >> and frank, what do you think about the jobs number tomorrow? there are some growing expectations. maybe we might get a surprise to the upside here. what do you think that does for the federal reserve? >> i think it makes it a lot easier for the fed. i got to tell you, bill, i'm

concerned. if you look at the labor participation rate, it's still lagging. i'm probably much more on the soft side. i'm afraid not so much of a surprise to the upside but a surprise to the downside tomorrow morning. >> it's not a question of the number of jobs. it's a question of the quality and kind of jobs that are being created. if it's temporary jobs, if it's hair net and name tags, that's not going to be enough for her to get too comfortable. i think tomorrow inside the data where the surprise could be is the quality of jobs. maybe we see a slight tick up there. >> that would be encouraging. rick, i can't help but also wonder about jeremy stein leaving the federal reserve. he's going to return to harvard. he's the guy who's really been raising issues about financial instability, keeping a close eye on some of these metrics even as janet yellen's been on the side of caution. >> oh, yeah. no, jeremy stein's a huge hero on this trading floor. some of the research pieces he's penned about the risks of some of these programs, especially

qe, are amazing. i think we're losing a good voice. then again, stanley fisher is coming in. great respect for him as well. real quick, let me weigh in on the equities. maybe we could have a key revers reversal, but we'd have to close below yesterday's lows. i know that 16,506 was yesterday's low on the dow. if we close under there, you really need to wake up. in terms of the markets, you learned a lot today from treasuries. yields basically spiked on some of the data this morning. all in all, they've eased back. the curve continued to flatten. fives are still hovering basically at september highs. you have 30 year that can't keep up with the rest of the curve. that's been going on. the euro definitely lost ground after the ecb. they can hint about qe. they want to bring their currency down, but can they get to the logistics of what that would entail in terms of buying these securities? it's just craziness to see a spanish ten year even in the neighborhood of a u.s. ten year. there's a lot going on with europe that doesn't quite pass the smell test in all in all,

we're looking at a treasury market with a flattening curve. no matter how you interpret it, it's not a good thing with regard to the economy. although, it's probably pretty complicated. we don't know where rates would be if it wasn't for the fed. >> yep, that's for sure. stand by, even. we have some breaking news. it'll be fodder for discussion. interesting development in the wake of the controversy about high-speed trading and if it rigs the market. eamon javers with that story. >> that's right, bill. what cnbc has learned is later this afternoon, interactive brokers is expected to announce it's launching a new piece of its service, which is going to allow its customers to connect directly to iex, that new trading platform that's been highlighted by michael lewis' book "flash boys." interactive brokers saying they don't necessarily want to take a side, but they want to offer their customers to connect to iex, which is marketing itself as a trading platform where

customers can't easily be taken advantage of by high-frequency traders. we're going to see that announcement later this afternoon. interactive brokers saying customers will have a choice. they can let interactive brokers' smart router decide which exchange their orders go to, or they can click a button and say, i want iex, i'm sending all my business that way. a new option in the market, guys. >> eamon, thank you. let's talk about the brokerages. larry, let's put up some of what the discount brokerages are doing today. this is calling into question the extent these guys are paying for order flows. they're all in the red today. in some cases significantly so. they're the discount guys. they say, yeah, they might pay for order flow, but they're able to keep their services quite cheap as a result. larry, what do you say about this pay for order flow practice? does a retail investor get as

hurt by this kind of behavior as the high-frequency stuff going on isn't the market? >> i think cliff with aqr said it well today. the retail investor has never in the history of the financial markets had it so good. i mean, i was trading equities in the '90s. i remember 50, 60, 70 cent spreads on intel, microsoft and cisco. now we're down to a penny. i just think at the end of the day you can't blame the discount brokers. the retail investors never had a better deal. >> rick, what do you think? will there be a stampede if brokers start to hitch their wagon to an iex to try and at least give the perception that investors will have a level playing field that they're working with now? >> you know, having a little bit of skin in the lower cost to do business is a funky dynamic. i think all in all, i'm very

pleased to see that alternatives are being offered. that's actually the free market trying to be reborn into this space. let end users make a choice in a fragmented, distorted, horrible marketplace. even if we knew how to address these issues bugging people, the fragmented structures many have talked about really wouldn't lend it to happen. some of these subtle changes need to occur. the easiest way to make all this go away is just charge a little bit to cancel orders. it would disappear. or some time of margin to put some flesh in the game. all these cancels, no money up, no money at risk for these traders making markets. yes, i think we're on the right track. it's getting taken care of just by shining a light on it. >> jim, what concerns have you heard from clients? what do you tell them? should they pursue an option like what interactive brokers is offering and use iex? >> we tell our clients not to worry. the reality is anyone who can

front run a best of, good luck to them. we're getting good prices across the board. the hands of the savviest managers. we know michael lewis is good at rigging book sales, but a lot of his story line was from years ago. it doesn't feel current enough for us to be concerned about. >> but wait a minute. just because this is a practice people knew about doesn't mean that it's not wrong or that people shouldn't be aware of what's really going on in these markets. >> no question about it. and there's a lot of awareness. there's a lot of rumor. there's a lot of fear behind the rumors. but the reality on the ground is i don't think anyone that i know of has developed a program that can outsmart the best managers we invest in. >> all right. >> it's not a question about smarting. it's a question of slowing them down a little bit. that's all. >> well, and -- i mean, i don't want to prolong this because we need to move along, but it is a big question. i still go back to thinking about the average investor watching programs like this where we debate this very

eclectic issue of high-frequency trading and they wonder if it affects them. for the most part, i don't think it does. does it, rick? the average investor is not -- >> there's an easy way to understand it. the section i'm worried about that can go four years with a 99.9% success ratio, call it whatever you want, it's not trading because trading deals in risk. >> but rick, you're talking about virtue. what they do to some extent is act as an intermediary providing liquidity -- >> no, no. all of them went through these periods. >> all of them being who? >> oh, listen, there's about five or six really big boys in this space. >> rick, the long winning streak isn't something where it's about you and i making trades in the market every day and winning 100% of the time. >> i didn't say it was. i'm just saying it isn't trading. whatever it is, it isn't trading, okay? >> right. no, it's the kind of behavior that has to be profitable. >> there's no risk.

listen, in the movie "casino" even though the mafia was skimming, people were still going to the casino. they were still winning at blackjack. they were still happy to be there. it still didn't make it right. >> all right, guys. we got to go. thank you. an important topic. we all need to keep an eye on it as we move forward. thank you for joining us today. about 50 minutes left. the dow down 19 points. we're probably on jobs watch right now, i would think. as we go into this final hour of trading, the thinking will be on tomorrow morning's job report from the federal government. we'll wait for that to see what happens. >> in the meantime, mylan surging over 70% from last year. the ceo is here next. today it's down with many drug and biotech names. we'll talk about different issues affecting this company. plus, we'll get her reaction to the criticism that drug prices are skyrocketing out of control. is she worried about government intervention into the drug space? also ahead -- >> it's important to note that

compensation committee sets the compensation for our company. so the compensation committee is comprised entirely of independent directors. >> that was a top lawyer for coca-cola firing back at activist shareholder david winters who calls the beverage giant's executive compensation plan excessive in light of coke's slow earnings growth these days. david winters, he will be with us to respond to that coming up. also ahead, wearable tech failing to wow consumers so far. you only need to look at the slew of resales on ebay. someone here is banking on apple hitting a home run when it comes to new gadgets that will hit this space. when, ultimately, will that be? we'll get the best ideas from the pros when we come back. don't go anywhere. aflac.

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all right. here's where we stand right now. the dow needs to gain only 3.76 points to close at its first record high of 2014. not happening though right now. >> no, it is currently down 18 points. bertha coombs, what are the stories driving this market today? >> we have a number of them. we're going to begin with petroleum, which surged after announcing it will pay $1.15

billion to settle environmental claims in the tronics case, which badates back to 2009. barnes & noble losing ground ending a three-year bet the struggling retailer would emerge as a dominant seller of e-books. it's currently trading lower by more than 14%. and the selling in netflix continuing after hitting its all-time high on march 6th. the stock has dropped more than 100 points or about 20%. talk about a losing streak. it's down 19 of the last 22 sessions. losing is the new black, apparently. it's the first day of trading on google's class-a voting stock. topeka capital raised its earnings estimates for the company, presumably on the main stock. back to you. >> i don't see a whole lot of

selling in that class-c shares. we were talking about that yesterday, whether the non-voting shareholders would throw a fit and unload their shares. not happening. >> all of a dollar of a difference. fascinating experience though. anyway, meanwhile, mylan has seen quite the surge in the past year. it's up almost 70%, down about 2% today. the overall sector has been weaker, but some say march 20th letter from democratic congressman harry waxman to the ceo of gilliad sciences for pricing a new hepatitis c treatment over $1,000 per pill has something to do with secular pricing pressure in the space. maybe a move to cap drugs in the business or just put pressure on them. >> we get reaction on that. joining us exclusively, back with us today is mylan ceo heather bresch. first, we know drugs are

expensive. is there -- are they too expensive? are they going up in price too much? i know who i'm asking here, but is there a need to revisit how drugs are priced right now? >> you know, we have always been a proponent of the open market. the free market system. it's what's built this country. i don't believe price controls are the answers. what i do believe is the answer is making sure the pathway to make affordable medications on to the market. that's where mylan has spent its life fighting for that access to get affordable medicines. we see all too often we're held off to the market longer than we should be. patent challenges. so i believe the answer -- and we're going to see that in biologics. >> tell us, speaking of some of the challenges, you're talking about other drug companies as well. it's not just about regulation. so how difficult is it to move forward, for example w this

multiple cler row sis drug where you're trying to get something on the market. >> yes, so again, fighting to get affordable alternative to multiple sclerosis drug on the market. absolutely believe that at this time the supreme court's decision to listen to their me addition does not change our expectations or plans. >> which is to bring that drug to market. a jeer in rick version to market. >> correct. >> and that would happen later this year? >> the patent expiration is may 24th. >> wow. so that's coming up. >> you on the market may 25th? >> we would like to be on the mark at formation. >> that's as far as we're going to get you on that one. what impact will the affordable care act have on drug pricing, do you think, if anything? >> you know, i look at the obamacare as being incremental to our industry. i think the more you can give people access to health care, the more ability they have to have access to the medicines

they need. you know, i think overall obamacare has served as a catalyst to get this country talking about the right things. i think those right things are consumers getting engaged in their health care. that's driving -- you know, we are the best shoppers in the world. we'll drive low price and high quality. i think that if consumers can get engaged at that level, that would do the same in the pharmaceutical industry. >> and what are your plans? what does a pipeline of mylan drugs look like for the next couple years? >> we have a very robust pipeline. we're bringing some very unique products to the market. very important products that will be coming to the market as well as a voluminous amount of launches. we have over 400 products here in the u.s., over 1,000 around the globe. our ability to bring scale and efficiency at the high quality. i'm sure as you've seen, a lot

of disruption in the supply chain with, you know, exports being banned. we've really pursued fda and been an advocate to get that one quality standard. if you're going to sell product here in the united states, your facilities and the medicine need to meet the same standards we have if you're making the product in the united states. >> but circling that back to the affordable care act, with the government more involved in the process as a result, do you expect them to be looking over your shoulder that much more when it comes to pricing a lot of these drugs in the pipeline? >> again, i can't speak for congress. what i would say is that i would rather them focus their attention on making sure the quality standard is the same, making sure that there's pathways for us to get our products to the market. i believe at the end of the day, that drives price. that'll drive supply and demand. again, i think it keeps the balance we've had in this country. that balance gets out of whack when we can't get our product to

the market. >> we get the jobs report tomorrow. there's a lot of focus on the quality of jobs. what kind of jobs are you creating? what challenges do you have when it comes to expansion? >> we've been very fortunate. we've had not only a robust growth trajectory over the last five years, but over the next five years, we've said we'll triple size, double our eps. we have 22,000 employees dplo l globally. we'll be substantially adding to that. >> these are the kind of jobs where if i'm janet yellen, i assume they come with a 401(k) plan. the average pay, are we talking about sciences, people who need highly technical degrees? are you having problems recruiting them? >> growth across the board from our manufacturing line to our scientists to just our business. we believe we have one of the best benefit packages as a health care company in the industry. >> including health care coverage. >> including health care. >> how about that? >> nice to see you again. >> you too.

thank you. >> heather bresch, ceo of mylan labs. >> keeping a close eye on the indexes to see whether we will be closing on record highs. looks like there's still downward pressure across the board. >> coca-cola's management under fire recently by activist david winters for the amount of stock issued to top executives. earlier here on cnbc, a coke executive responded on "squawk on the street." now david winters has his turn. he'll talk about it exclusively when we come back. and apparently wearable tech isn't everything it's cracked up to be, at least so far. the samsung watch on ebay is going for a lot less than its retail price. will apple swoop in and steal the show on wearables like it has in the past? our tech pros weigh in on that right after this.

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welcome back. smart watches have not exactly been this must-have product for everyone. at least that's not the one that's hit the market so far. >> that's the kind way of putting it. john fort is our resident tech expert. first, what time is it? second, you've seen evidence of this lack of demand on ebay.

>> i'll be using my phone to tell you it's 3:27. i'm not wearing a smart watch. ebay is a decent gauge for demand on certain products. certainly quite a few smart watches available. most of them for around $100, $150 and $250. very few people seem to be paying full price for these things, including the latest samsung galaxy gear watches. that's just because there has been no break-out hit. of course, google has the android wear software. that has come out now. we expect to see the first offerings from motorola, the moto-360 and lg, the g-watch out later this year. maybe those will do a little better. of course, everybody looking for apple to come out with something. tim cook has hinted that whatever successful might be in an area like this would combine specialized functions like the fitbit and nike's fuel band into a general computing platform. that we don't quite have yet, at least not in a form that most people seem willing to wear,

guys. >> john fort, thank you, sir. so could apple dominate the wearable tech market if and when it finally enters? let's get a view from the founding partner of sierra ventures. welcome. you just heard from john. people have been talking for years about apple potentially coming out with a watch. what's your view on the matter? >> you can see it in my hand here. i own all these devices. it's a connected world we live in right now. the market this year from the ces show and beyond for 2014, there's been over 100 wearable technology companies. the market in the next five years is really going to be at around 20 billion. apple is going to take away market share. let me show you why. i don't have a smart watch yet. i have my nike fuel band. i have my blackberry. get rid of all these, this huge watch i have. i'm going to have a nice, sexy, fashionable, innovative designing watch, which i could

have used on the way here. >> are you saying you know that's coming, or you're hoping that's what's coming from apple? >> well, you know -- >> i've heard about this smart watch for now. >> sure. it's not that we know. no one knows for sure. they poached executives from burberry, nike. there's already been photos, pictures. no one knows for sure. >> what you're saying is the moment they come out with it, you're going buy one, and then you're going to get rid of all of this other devices and your watch. >> absolutely. let me show you again. throw away these. throw away that. next time i'm in my boardroom in the meeting -- >> you haven't even seen it. how do you know you'll want it? >> there's plenty others i've tested already. >> you're just going on blind faith they'll make a product you want. >> john, where is it written the next wave of technology has to be wearable? this kind of thing happens organically. it's not something they can dictate to us, especially when

you're talking about the millennial generation. they're going to tell the technology industry what they like, not the other way around, right? >> i might take a different direction from that. i think often it is dictated to us. though it seems obvious now that touch screens are the future because certainly they're the present, they were going nowhere before apple came out with the iphone, really commercialized the technology. the wrist, though it's one of the few places on the body where it's acceptable to wear a device, it's a really, really difficult interface problem. the screen that you can fit here is really small. then how do you surf on something that size? talking to your wrist sounds good in theory. in practice, not very cool. so i think we're going to see apple come out with an app called health book for ios-8. when we see that, we'll get more hints for what they might build into a watch-type product. perhaps soon the end of the year. hey, everybody's guessing about what might come out and whether

we're going to want it. >> and to jump on what john said, you bring up a great point. it's really huge in health and fitness. the technologies that are going to come out for start-ups, we're telling our entrepreneurs here, hey, you have to have a strategy with wearables. how is your company going to go on to the next level when all these start-ups and user cases from health monitoring with your heart, from blood pressure, there's all these sensors. >> that part i get. but telling me i'm going to have to read my e-mail on my watch or, you know, god forbid -- >> you're not going to read your e-mail on your watch. >> you're saying you're going to lose all those other devices. >> i'm one of those people that texts and drives. i think the watch is not only to save my life, but save others. i think all of us check our e-mail. we're in a boardroom, get a phone call. now can i look at my watch and know how important it is and i don't have to reach over to my phone to check who's calling me or who's e-mailing me. >> let me know where you're driving next time. we'll try and avoid that area.

>> you got it. >> thank you for joining us. >> thanks, guys. >> meanwhile, john fort, we hear you might have breaking news. can you share that now? >> absolutely. the mozilla foundation, makers of firefox and other products, the ceo is out. he was just named last month. he's a prominent figure in silicon valley, known for creating java script language as well as a number of other technical achievements. the key thing here is several years back he made a $1,000 donation in favor of proposition 8 in california, which was in opposition to gay marriage. that made him persona non grata in the valley, particularly when he was announced a ceo. it had been known about since 2012. as ceo, a lot of employees at mozilla and partners across the ecosystem, felt he was not the right person to represent that business. so he has stepped down. >> thank you. >> thanks, john. see you later. well, look here.

we've got 30 minutes left, and the market is coming back. the dow just needs a gain of 3.67 points to finish at an all-time high for the first time in 2014. i don't know. maybe we'll do it now. >> anything can happen. the s&p 500 only needs to close in the green, and it will set another record high. we have to again point out that the nasdaq is lagging by 42 points this hour. >> biotech getting hit again today. >> that's right. now former fdic chair sheila bair will be talking to me in the next hour. we'll talk high frequency trading. also, we have david winters explaining why he thinks coca-cola executives are getting too much compensation this year, $13 billion spread out. he answers a coke executive who was blasting him earlier today on "squawk on the street." don't miss his response coming up. up. e

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turning dreamers into business owners. these days, everything is done on the internet. and tomorrow you'll do even more. that's what comcast business was built for. slow dsl from the phone company was built for stuff like this. switch to comcast business internet. then add voice and tv for just $34.90 more per month. and you'll be ready for tomorrow today. comcast business. built for business. welcome back. the market is teasing us now. we're down two points. the dow needs to be up 3.67 points to hit a new all-time high, something we haven't done so far in 2014. we were down about 30, 40 points at the low today. we've since come back now.

so the market trying to mount a gain of some kind on the close. >> it's been a real choppy session. meanwhile, the s&p down 2.3 points. we'll see if they can turn around. doubt that'll happen with the nasdaq. now activist shareholder david winters calling coca-cola ceos -- >> well, coke is finding itself in a very unusual public fight with investor david winters over executive compensation. winters has sent a few letters to coke's board of directors, fellow shareholders, top investor warren buffett, urging them to vote against the 2014 equity plan saying it dilutes shareholders at the expense of excessive management pay. even though he says he likes the company, he's in it for the long haul, he owns 2.5 million shares. coke has fired back in a big way saying winters is misinformed,

the math is all wrong. that nothing is different about this plan than previous plans, that it's based on the prmpbs and that it actually goes to more than 6,000 employees, not just upper management. now, yesterday winters questioned the joint role of ceo muhtar kent being joint chairman of the board as well because of conflict of interest when it comes to compensation. that's an idea the company rejects as well. the annual meeting is april 23rd. both sides ahead of that are dig digging in their heels. >> they certainly are, sarah. stay with us, if you would. we want to bring in wintergreen adviser ceo dade winters, the principal in this story. david, welcome. let's take a quick listen to what was said this morning and get your response. >> our board strongly believes that a combined chair and ceo is the right structure for our company. and it's important to note that compensation committee sets the

compensation for our company. so the compensation committee is comprised entirely of independent directors. there is not a conflict of interest for having a combine the chair/ceo role. >> that was on specifically the issue of splitting the chair and ceo role. david, she also addressed some of your concerns about the caom generally. what's your response here? >> you know, coca-cola, which is a great company. we know there are many fine people who work at coca-cola, puts itself forth as having the best corporate governance. increasingly, companies are moving towards separating the role of chairman and ceo. and if it didn't really a problem, why not have the best, most modern, most accepted form of governance. >> david, could you set aside the issue of the ceo and chairmanship to focus narrowly for a moment on this issue of why you think coca-cola is paying too much to its executive team and doing so at the expense

of shareholders. >> well, you know, again, if you focus on the facts, not sort of the shell game of information that the company has put out there, they're trying to dilute -- you know, again, from coe can cola numbers, the shareholders by 14.2%. if you do it in a more shareholder friendly calculation, it's 16.6%. it's a vast amount of money. the company isn't doing that well. >> they say you're taking that number out of context. i'm just going to very quickly summarize what they've said. they repurchase shares, which makes up for some of the dilution effect there. the plan dictates the employees who leave the company forfeit the equity compensation yet to be vested. because it's tied to company performance, there's no guarantee they'll receive some of the compensation that you're identifying right now. so there's the context. >> well, there are a couple of points to this, bill. first of all, not that many people leave.

you know, it's a great deal to stay at the coca-cola company. they've moved actually the performance targets down. and, you know, the reality is that a huge portion of the company's wealth is being transferred to management. now, the buyback program has been hijacked by the company. it was originally put in place to benefit all shareholders. increase willingkreecreasingl increasingly, due to the size of the dilution, which we believe is massive, more and more of that buyback actually has to go to offset the dilution. so, you know, when you look at it realistically, there's an awful lot of money being transferred from the shareholders' pockets to management of a company that's not growing very fast. it's just not right. we think it's wrong. >> david, to your point about growth and share performance, the company's rebuttal is that it is tied to performance of the shares. and in fact, muhtra kent

received 30% less in his total compensation last year because of the underperformance of coke shares. i know you question sort of the murkiness of those incentives, but there's something to be said for that. that the management should be rewarded and not just managemenmanagemen management -- more than 6,000 employe employees -- for how well the share does. >> here's the thing. it's 5% of the employees getting this money. 5%. the other thing is that a big part of muhtar's compensation -- and we like muhtar. he's a very personable fellow. i admire him. if you go to the proxy statement, a big piece of his comp is because the pension value declined last year. they've also given top management a lot more options. and options are rocket fuel. so the thing you really have to focus on is not the shell game but the magnitude, the huge amount of money that's going from the shareholders to the management at a time that the

company's not doing that well and that the buyback program has been hijacked to slink this massive dilution or shrink part of it. >> david, are you disappointed in warren buffett with all of this? >> he doesn't have a problem with this. >> well, he hasn't commented. >> we don't know whether he has a problem or not. we're huge warren buffett fans. we own shares in berkshire. i think buffett has been very open over the years that excess compensation is a bad thing. and when you look at the amount of money that is being transferred from the owners of the company to the management, it's just -- it's mind bogglingly huge. >> david, what's under dispute here is that it is excessive compensation. i've talked to a number of analysts who follow these companies. they say this is within industry norms and not that much

different than what we've seen out of coca-cola and other companies like it. >> well, it is actually different. the 2008 plan and the 2014 plan, there's an increase -- i think it's about 53% in the dollar amount, and the vesting period is shorter. it goes from six years to four years. and the key thing here is that coca-cola is an american icon. everybody who works at coca-cola already does really well. so the idea they have to massively increase their compensation during a period of time where the company is struggling -- look, management should do well only when shareholders do well. >> the question i always ask in a situation like this, i mean obviously in a capitalist system, any shareholder has the right to have their voice be heard. i applaud you for letting the public know and coca-cola executives know you're unhappy with the compensation package. however, why not just sell your

shares if you're that unhappy? >> you know, we love the coca-cola company. but a big part of the economics of the coca-cola company has been that the stock buyback in a slower-growth business helps grow the n.a.d. per share for all shareholders. unfortunately, because of this massive amount of money, it's not justifiable. there's nothing coca-cola has done -- >> but david, would you consider selling your shares if the shareholders don't side with you and don't vote with you against this plan? >> look, you know, we obviously hold our rights of what we believe is in the best interest of our investors, but we would prefer to be long-term shareholders in the coca-cola company. we'd prefer them to withdraw this equity program, this massive dilution, and have something that's much more modest where it's not -- the company wins, the shareholders lose. it's a big issue, i think, in

capitalism. we need to have -- we noeed to have a fair system. >> david, we want you back to talk about the one-share, one vote system going on. thank you for being here. >> thanks, david. thanks, sarah. >> thank you, everybody. appreciate it. >> you bet. see you later. 14 minutes left in the trading session. if the dow were to close right here, we'd be at an all-time high. first time this year. s&p, any positive close there. we're not there yet. >> no, we're not. just about on that flat line. coming back, the closing countdown. countdown. how did i know? well, i didn't really. see, i figured low testosterone would decrease my sex drive... but when i started losing energy and became moody... that's when i had an honest conversation with my doctor. we discussed all the symptoms... then he gave me some blood tests. showed it was low t. that's it. it was a number -- not just me. [ male announcer ] today, men with low t have androgel 1.62% testosterone gel. the #1 prescribed

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fifteen minutes could save you fifteen percent or more on car insurance. welcome back. ten minutes to go. right now if we were to close here, the dow would be in record territory. a gain of five points. all we need is a gain of 3.5 basically and we're there. we were above 16,600 this morning, bill. we turned decisively negative. now we're coming back, at least for the dow. the nasdaq still negative. the s&p right around the flat line. we have breaking news on citigroup now. >> just within the last hour, citigroup ceo mike corbett issued an internal memo addressing issues from last week when the fed rejected citigroup's proposed plans to

increase shareholder dividends. according to the memo, he's taking this very seriously, asking outgoing ceo of the citibank north america to run the stress test process for the next year and listen to some of the language he uses here. maintaining prudent levels of capital and returning excess capital to our investors are key to safety and soundness. for that reason, last week's objection by the fed to our 2014 capital plan is a call to action. then he goes on to say, whatever the gaps between the fed's expectation and our performance, we need to close them. and timely, anyone from our businesses and functions who's involved in a work stream related to addressing any concern that the fed has raised will also be accountable to gene. mcquaid, guys, is who he's talking about. this will be the vice chairman running the stress test process going forward. >> all right, kate. thanks very much. you see citigroup shares down 1%, even as the market is moving higher. we have nine minutes left. the dow now starting to pick up pace. a gain of eight-plus points right now. we are in record territory.

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all right. five minutes to go. the market really is toying with us now. we had an eight-point gain going into the break. now going back to unchanged. we're not in record territory again for the bowe industrial average. david nelson from bell point asset management. you're sounding a caution to your investors right now, aren't you? >> you know, i put out a piece earlier this week about this shift from growth to value. what we saw last month, that was a warning sign. that was saying that we probably pushed the valuation on some of these growthy names, some high multiple names maybe a little too far. >> are you taking money off the table right now? >> not in the markets. the markets are doing just fine. >> we're grinding now. >> but that's a good thing. i think it's a good thing. i think that if we hadn't unwound some of this excess, we probably would have set ourself up for maybe a more significant event further down the road. this is very good news for the markets overall. >> all right. stick right this. we're going to come back and do

the closing countdown, see if we can close at an all-time high. doesn't look like we will. we'll do that after this. stay with us. stay with us. ent isn't the only return i'm looking forward to... for some, every dollar is earned with sweat, sacrifice, courage. which is why usaa is honored to help our members with everything from investing for retirement to saving for college. our commitment to current and former military members and their families is without equal.

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people. >> are you focusing more on growth now or value in this market? what do you see moving us forward here? >> i think the market is telling you where to go. it's telling you to get out of some of these growthy names. >> so you're becoming more defensive? >> if you want to call it that. i think it's growth at the right price. i think what happened last month, we woke up and said, oh, my god, how much are we paying for some of these names? we realized we were paying growth at any price. there's a time and a place. >> what fits that criteria? >> you've seen the rotation of names in netflix and facebook into names like microsoft. people want some growth. they want some upside. but they don't want to pay in some names 100 times earnings. >> so the age of the high flyer is over in your view. >> i'd stay away for now, absolutely. >> good to see you, david. thanks for joining us. so we're going out. it's going to be close. doesn't look like we're going to

get another new all-time high. will it matter? who knows. we will get that jobs number tomorrow morning. that will dictate tomorrow's trade. we're going to talk about it now coming up on the second hour of "the closing bell" with kelly evans and company. a lot more so stay tuned. see you tomorrow, kelly. and welcome to "the closing bell." i'm kelly evans. here's how we're finishing this thursday on wall street. is it a historic one? it'll be a squeaker. take a look across the major indexes. the dow negative as we ring in the close by about four points. significant because we were within a hair's breadth of setting a new high. won't happen today. meanwhile, the s&p 500 giving up a few points. and the nasdaq down almost 1%. actually having a pretty tough session. so let's bring in today's pam for more reflections on what's

happening in the market. welcome to you all. john fort, how much more air could come out of the nasdaq balloon here? >> oh, boy. it's a lot. to quote an old show, ward, i'm a little worried about the beaver. the beaver in this case is tech stocks. a lot of them falling apart. look at workday, down almost 9%. a lot of these high-flying names. i realize a lot of them, all the names i've named so far, twitter, sales force, blackberry, they've been falling all throughout the month of march while some of the other names are rising. the names that have been up and did well today, hewlett-packard, oracle, microsoft, apple, ibm. some of these names are really in trouble in the areas where they operate. if we're looking there for growth, i don't know if we're going to find it. >> this isn't a case of a day where it's kind of old-tech part of the market or high fliers. i think you named everybody.

was there anyone in the tech space? jason turner, how do you feel about that relative to, let's say, the financials, the industrials, some of the more defensive plays here? >> kelly, we're very bullish on both the financials and the technology companies. we're still very bullish on the market as a whole. i feel there are so few other alternatives as far as what other investors look for. >> around the world? >> really, anywhere. inflation is really not a problem. i think the fed is going to remain very, very accommodative. i think if you're looking at some of the stocks that were just mentioned by john, frankly it's growth at a reasonable price, it seems to me. maybe not even that much growth, but they have a lot of cash and activism is going to be something that drives this market quite a bit. >> so what's eating mother tech here? it's not just today. this has kind of been a theme emerging this year. >> yeah, no, i think that's fair. partly because the high-flying tech is just too expensive. i think the lower price tech is

very reasonable. i think it would be a very good opportunity to wade in here personally. >> there's this huge divergence. the s&p meeting all-time highs yesterday. not again today, but the divergence. can the nasdaq and the russell catch up with the subpoe&p and ? that's yet to be seen. >> but you're not worried? >> no, i'm not worried right now. again, i do see some sort of negative divergence between old technology and new technology, as john alluded to. i think there could be some vulnerability in the months of april. we're not going to hit all-time highs every single day. no, i'm not worried about a 10% correction from here. >> dan nathan, are you? >> i would be. the top ten holdings make up about 30% of the weight of that index. we've just said that we've seen this rotation into some of the old tech. some of the more defensive, the things that have strong balance sheets. they pay a dividend. but there's really no growth there.

all the sudden now you have investors cashing in their chips on some of the high-growth stuff, some of the stuff that got us here in a lot of ways, and they're hiding out. microsoft just made a new 14-year high. oracle, new 13-year high. the nasdaq, though, when you think about the nasdaq 100, it's heavily weighted towards those large-cap names. if you see the rotation back out of those names, that's when you get the 5% down move quickly. >> michelle, many years from now when investors face the firing squad, they're going to look at it and think what to themselves? >> that's a really deep reference kelly just made. the one thing i think about today is mario draghi admitted what his biggest fear is. he says it's come to be realized, which is that there's been prolonged stagnation in europe. worse than their baseline scenario. part of me wonders, is that going to be a drag on the united

states eventually, or is that why we've seen some of the major averages here hit new highs because we're the best house in a bad neighborhood? >> on that note, hold on a moment. i want to bring dennis gartman into this conversation. dennis, hearing all this talk about growth at a reasonable price, other parts of the world that would be envious of some of the growth the u.s. might be on the cusp of seeing, and gdp may be no better than 1%. what's your read? >> i think the economy here in the united states is doing reasonably well. not greatly, but doing reasonably well. i think when i look around here in southern virginia, the ports are moving actively. restaurants are busy. hotels are busy. the airlines are busy. i think we're going okay. is gdp going to be as great god fun as it was in 2003, 2004, and 2005? no, it's going to be a long time before that happens again. it's an old story, we are the

prettiest horse in the show. i see no reason that's going to change any time soon. >> what are your strongest conviction calls right now? >> i like aluminum. that's been proven -- done very well over the course of the last several months. i like simple things. dividend-paying stocks, old line, old guard, old-economy type things. i'm too old to understand high tech. >> an 87-year-old was trying to buy facebook and twitter yesterday on the show. >> she's far wiser than am i. and far more in depth than am i. i can count aluminum pounds. i can count container ships. i can count railroads. but quite honestly, i don't even have a twitter account, and i probably shan't for a long period of time. >> jason? >> well, listen, i think what michelle just said about mario draghi is important. some of you are probably too young to remember, don't fight the fed. right now you're fighting every central bank in the world. the only one you're not fighting

has been the ecb since draghi said, believe me, it'll be enough. that's the only central bank whose balance sheet has declined. all the others are rising. the ecb is about to get involved. that's why i think it's very, very difficult. it's probably wise to expect some sort of correction. but i would be very careful about being short this market for very long. >> even though we're tapering here? >> we're tapering, but tapering isn't tightening. i feel strongly about that. i think you've had a back-up in real long-term interest rates, which is probably telling you more about real gdp growth as opposed to -- >> jason -- >> and that's a bullish scenario. >> even if you were to argue that tightening is tapering, you still have a situation where hopefully tomorrow morning we'll get the jobs report and it'll tell us if the economy is in a position to handle that. that's why it's so critical and we hope it's not distorted by weather and other factors.

>> if you look at a chart of the jobs data, the improving labor market, we hope, there's a strong correlation between the jobs data and the stock market performance. so that is a key factor. >> yeah, absolutely. dan? >> i wish -- >> dennis, sorry. >> that's okay. i wish we wouldn't pay that much attention to this one silly number that is massively revised from month to month. i wish everybody would just sit down, look at other things, look at container ship movements, look at coal movements. >> you want them looking out the window counting ships, dennis. >> yes, i want to look out the window and count ships. >> fair enough. >> dennis used to use a random number generator. remember that? and you had about as good a record as anybody else in predicting the monthly number. >> i did. absolutely. >> and look -- >> i used to randomly generate that number. >> and there's a broader way to look at the labor market.

if you look at the jobless claims figures, those are at cycle lows. other indications are the economy is moving in the right direction. yes, the number is revised. i get that. but at some point, you have to take that number as a reflection, at least relatively speaking, of where we stand. >> well, i'm old enough to remember when we used to pay a lot of attention to the trade data back in the 1970s. markets used to stop completely two days before the trade numbers came out. now we pay very little attention to that. my bet is in another couple years, we'll have moved past paying much attention to the nonfarm payrolls number. i actually like the adp number much more. >> well, they'll be glad to hear that. we'll all be obsessing over the difference between cpi inflation and cpe. dan, what are your top ideas here? >> listen, i think you should be very, very careful still with these high-growth names. some are down 10%, 15%, 20%. i continue to think it's time yet to try to pick a bottom in some of these things because i

think to one of your previous guest's point, i think you can hide out in some of those larger tech defensive names, but just be prepared that some of those indices are very concentrated, like i mentioned before. you may have an opportunity to buy them soon down 5% from here. so to me, i think you want to avoid the high-growth names, the high-valuation names. but you also have to be prepared for the potential of a snowballing effect very soon. tomorrow morning -- let me tell you something. if you get a 250 print on that number and we don't rally, i think we're in for a 5% decline. >> dan, what if it comes in at 150? what do you think the narcotic do -- market does? >> i think the market has already anticipated that. you'll have a nonevent. >> all right. only a few hours to go before that hits. thanks very much, dan. appreciate your time. stick around and catch dan and the rest of the "fast money" crew at 5:00 p.m. our gratitude to dennis gartman as well.

stocks closing just off record highs. coming up, former fdic chair sheila bair once called citi one of the most mismanaged banks on wall street. she joins me next for an exclusive take. and later, why the u.s. prison system may be a major reason why the labor market remains restrained. you're watching cnbc, first in business worldwide. siness world.

welcome back. here's a look at citigroup. shares under pressure today on news the banking giant is the subject of a criminal inquiry surrounding fraud at its mexican unit. kate kelly with the details. >> citi shares have indeed taken a hit today that the feds have launched this criminal aspect of the investigation into its large mexican subsidiary. this is a 1700-branch operation that is mexico's second largest bank. the oil services company that were made you should false pretenses losing citi about $400 million in the process. investigators want to know how many citi employees were

involved and whether they knew that loan would never be repaid, among other things. the securities and exchange commission launched a civil probe at least a month ago. in addition, the u.s. division is under scrutiny by prosecutors in massachusetts and the fdic over separate money laundering concerns. now that we know that the manhattan u.s. attorneys office and the fbi are examining the mexican fraud issues too, they have quite a bit going on in the regulatory and legal front. meanwhile, the bank is still struggling to keep up with regulatory demands as evidenced by the fed's rejection of its dividends and buyback plans as recently as last week. in response to that, the citi chief today named gene mcquaid in charge of the handling. >> wow. thanks very much. let's talk more about citi with the woman who dubbed the company as one of the worst banks during the financial crisis. in her most recent book "bull by the horn" she criticized citi

has being mismanaged. former fdic chair sheila bair is with me now. is citi still fundamentally mismanaged, do you think? >> well, i don't know. i wouldn't say that. i think when i wrote my book, this was a different management team in place. i do -- i think a lot of and still respect corbett and mcneil. they take their regulatory obligations very seriously in trying to right this ship. i think there was a lot of weak management for many years at citi. i think they followed a business model for a time that was based more on acquisitions than good, sound operations management and not a lot of integration of the various acquisitions they were making. so it's going to be tough for anybody. i think we should probably just give them more time. i know i still respect both gentlemen. i think they're doing the best job that can be done. >> look, they along with others,

rbs, hsbc, those were the five banks the fed didn't go ahead for the capital return plan. if there's mismanagement at citi to that regard, you'd have to say the same for the other banks who fell short, no? >> first of all, i'm on the board of the group holding company. i'm not on the board of the u.s. bank. this was the first time around for a lot of the foreign-owned banks. so i think everybody wants to meet fed regulatory expectations. everybody will work hard to make sure that happens. obviously i think your question related to the problems they were having in mexico with the $400 million fraud situation and the investigation reported today in the "new york times." i was responding to that. but clearly everybody needs to meet those stress test expectations and everybody should be working very hard to do so. >> yeah, look, there's a lot going on with these big banks. maybe it gets back to these questions about management and whether they are too big to manage to some extent. we know if there's one thing we've learned about the u.s. banking subpoena, it's that the

banks at the top have only gotten bigger. perhaps that's inevitable as they've matured or sector has matured. why do you think that is? does it have to be the case that we have a few mega banks, and if so, how safe do they have to be here? >> you're right. well, it gets challenging. the size, probably the co complexity is more challenging than the size. if you're trying to do commercial banking, derivatives market maging, traditional investment banking, those are all very different distinct business models with different kinds of exper cease required. if you have these complex organizations and you're trying to manage from the top, that's extremely challenging. one of the things i argue for in my book is if we're going to allow banks to continue to have derivativines along with commercial banking and insurance, those should be siloed with their own board and expertise in those given areas.

trying to centrally manage them at the top is very difficult. >> yeah, and it goes back to questions about trust that consumers ultimately have with these institutions. trust coming up in a different way with regard to wall street this week, do you think the stock market is rigged? >> i used to work for the new york stock exchange a long, long time ago. there have been very positive improvements in terms of narrowing spreads, getting commissions down. those are positive things. but it is not positive to have this payment forward of flow. i've hated that. i've always hated it. you should be rooting order flow to where you get best excuse, not because some market or exchange is paying you. i also think all these -- this message traffic, all these cancellation orders, it's a lot of white noise. it obscures a good price discovery. gary cohn had a good suggestion last week to maybe put an assessment, put a fee on those canceled orders to create an economic disincentive to clutter up the market and the price discovery process with those

orders. i think there's some -- yes, i think there's a problem. whether it's rigged,hat's a strong word. i think there's certainly problems that impede effective price discovery. i hope -- i have a lot of confidence in mary jo white. she's just hired a new person to regular at the s.e.c. who will be looking at these issues. >> right. last question, to what extent do you think some of these structural problems in the banking system in particular have held back the u.s. economy during this recovery? would you blame other factors for some of the sluggish behavior that we've seen of late? >> well, i do think, yes, the banks were stressed. they've had, especially the largest ones, were having the most problems. they have had to go through a period of recapitalization. ironically, i think the way the capital rules work right now give them more incentives to do more market trading derivatives and securities activities, not so much lending, especially small-business lending where you really need it. that gets a pretty significant capital charge. so i do think that -- and

quantitative easing has made it easy by inflating financial assets. it's made it easier to make money without having to go out and lend. so my hope is janet yellen courageously takes this out of this qe environment now and eventually, i know it'll be years, but we'll see a normalized interest rate environment. if the economy picks up steam, they will perhaps have more confidence to lend just as corporate america, corporate leadership will have more confidence to invest and hire people. that's really what we need, to get more people back to work and better paying jobs. >> the bread and butter of banking. sheila bair, thank you very much. well, we've been talking about the possibility of a market correction for a while. up next, why one is calling for a pullback as much as 20%. a story getting a lot of readers online already. also, the supreme court moving donations on political

campaigns. why wealthy donors are upset. keep it here. keep it here.

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welcome back. some markets trading at record highs today, but can the bull run keep its momentum? not according to ron ensana. in a piece on cnbc.com, he's calling for a 20% correction. he joins me along with the rest of the panel to join in. ron, it begins today? >> no, kelly. that would be more than a fool's errand to pick the day on which the market starts a pullback.

i've been cautious all year long for a sloppy and choppy year in 2014. economically, we're in a transition year. but i think we've gone almost 18 months without so much as a 10% pullback. we've seen the market get stretched. we've seen things happening in the ipo market. i'm a little cautious here. i don't think if you're an individual investor it's something you get all ginned up about, but people should be aware that exists. >> ron, you just don't like the rally, do you? >> as you know, i've liked it since 2009. starting in december of last year, i got kind of concerned we were getting a little bit extended. so i don't like this rally because i don't think the technical underpinnings thus far are strong enough to make it one that's particularly durable. >> let me put it this way to the panel as well, especially heather. i'm curious what you think. if we're going to get this kind of correction, which frankly a lot of people have said we're overdue for, it's a great point. but when and how does it come and why? >> you know, it's interesting. so far it's been a rotational

correction. the leaders are being taken out and shot, whether it's biotech, certain technology issues. the laggards have been bringing up the rear and getting bought. you know, the how i still think is either the fed is perceived to be moving more aggressively down the road if the economic numbers are like adp yesterday and if we start to see an acceleration of those numbers. >> so you're saying there may be a shift from these high-flying, you know, the internet high flyers, social media companies, and a shift out of momentum back to value. >> yeah, sure. i think that's part of it. i think the interesting part about this is we've had periods where we did not get the 10% or 20% correction in a secular bull market because we had a series of rotational corrections. so that might be the alternative scenario. stuff that's simply overvalued.

either switch to value or switch to growth at a more reasonable cost. and that could be the alternate scenario. even from a technical perspective, it would be a cleansing experience to see this market pull back somewhat meaningfully. >> ron, can i ask you -- >> of course. >> how are you, my friend? >> good. >> what do you think would be -- you know, i'm with you very much with the idea that it's a secular bull market. i'm with you completely. i'm also with you completely if you look at the magnitude and size of this rally. we're due for a pullback. i'm still trying to figure out if all the central banks have their thumb on the scale, what's the catalyst? what are the big catalysts for that to happen? >> i think that would completely pull back from the call if the hint that we got from james bullard of the st. louis fed yesterday, which indicated the fed could taper the taper. if we saw something like that and the ecb go and the people's bank of china go all at the same time, then you just wipe the slate clean and say, okay, we're going up a lot.

>> ron, i want to ask you if the stock market is rigged. take a listen to what mark cuban just said about high-frequency trading. >> when you know your life savings, your nest egg, is part and partial to something that's fixd, you're going to pull out. >> yeah, so kelly, i'm writing a piece actually tomorrow for cnbc.com about how the market has always been rigged in one way or another. that doesn't necessarily mean you can't invest. i mean f you go back to the very beginnings of the stock market in 1792, the reason the new york stock exchange was formed was that a former assistant treasury secretary of the united states tried to corner a market in securities that left a whole host of brokers impoverished. the new york stock exchange was started by the remaining 24 brokers who were solvent. you know, we've had crises. we've had manipulations. we've had people with technological advantages, the telephone being one many, many decades ago. >> fine, but are you saying what's happening now is okay? >> no. >> are you saying what's happening now is a learning lesson and we're going to fix t

it. >> i don't know if we'll fix it. it's easy to fix relative to what people are saying. if they went back to nickel increments, it would be hard to undertake. >> if we wept back to nickel increments, wouldn't we all be paying more to trade? they're trading four decimal points out. >> if you're a long-term investor, it doesn't matter. >> think about large pension funds. the big institutional traders aren't going to want to pay a nickel a share. >> that's life. my point, though, really is that if there is front-running going on and people are painting the tape through flash orders or blinking orders -- >> you're just giving a resolution, a solution to the problem. >> an expensive one. >> no, for hundreds of years we traded mason quarters an the markets got along just fine without trading in pennies and subpenny increments. >> you just said they didn't get along fine. >> you can invest in market

irrespective of all the manipulations that have gone on overtime if you're a long-term investor. >> you know, i spent today talking to a lot my clients. the bottom line, they said, was listen, the system isn't perfect, but it's better than it was. to ron's point, when you had the specialist system, some people called that a license to steel. there were a lot of winks and nods and all the rest. by the same token, you also had somebody there to make a market when there was no market. michael lewis is right when he talks about not confusing volume and liquidity. when you get into trouble, the so-called liquidity tends to evaporate. >> we got to go, but -- >> that's the spacious argument in all these innovations. every time -- you know, when stock index futures and portfolio insurance was big,

people were saying they were adding lick bquiditliquidity. they provide liquidity when it's to their advantage. they pull away when they're worried. we've seen that during the flash crash. that's a market structure issue that needs to be dealt with by regulators. >> ron, thank you. >> thank you, kelly. thanks, everybody. >> ron ensana weighing in. the streaming wars are heating up. up next, the ciena ceo joins me for an exclusive interview. these days, everything your business does

is done on the internet.

and tomorrow you'll do even more. that's what comcast business was built for. slow dsl from the phone company was built for stuff like this. switch to comcast business internet. then add voice and tv for just $34.90 more per month. and you'll be ready for tomorrow today. comcast business. built for business. welcome back. we want to start with breaking news on david letterman. bertha coombs has the details. >> a fixture in late night for more than 20 years. "variety" reporting that david letterman plans to retire in 2015. he recently reupped his late-night contract with cbs in a two-year deal that was expected to be his last. as of next year, he will have hosted "the late show" for 22 years. before that, 11 years on nbc's

"late night. let's take a look at shares of cbs. unlike the transitions we've seen at nbc, there really isn't as much of a succession plan that's so evident at cbs. letterman is such a fixture and has really dominated that show for so long, really a generation. >> incredible, bertha. you're so right. i want to get quick thoughts from the panel here. michelle, what do you make of it? >> i'm not surprised at all. jimmy fallon has done so well on nbc. huge spike in the ratings. best late-night television ratings we've seen in a long time. if you're david letterman, do you want to go up against that? his show is tired. he's been tired for a long time. i'm in the surprised he would choose now when you see such a great young upstart. i don't say that just because i work for nbc. >> i was going to joke about that. giving you a little wink-wink. he's only been on a couple of weeks. you really think a guy like letterman would make a decision like that in response to such a new, recent change? >> doing it for so long, fighting for so long in the

ratings, and now he's got this battle. i don't know. he's going to come under intense scrutiny because the numbers aren't as good. i just don't see why he would keep going. >> jason, would you do anything with cbs shares here? >> no, i don't think so. i don't know if this is big enough. jay leno is probably rested right now. he might just hop back in over on cbs. >> oh, that's an idea. >> it'll be interesting. i honestly don't think it's big enough to move the stock. >> all right. we'll keep an eye on this one. >> if his ratings were bigger, then it would be. >> that's interesting. thanks for now. we'll leave it there for now. cisco has long been the giant in the networking industry. ciena is making a big push to compete after its recent partnership with ericson. joining us for more is president and ceo of ciena. welcome. >> thank you. good to be here. >> you've just had a long day talking about your future here. some have compared what's happening in the networking space today to some of the arms

race we saw in the late '90s to really bulk up the infrastructure in this country. how would you describe things? >> i think you're seeing, you know, enormous amounts of demand driven by lots of applications. cloud computing. we're all seeing it in our personal lives. you're seeing the enterprise put the same applications into the cloud. it's driving the need for an enormous amount of infrastructure to be build, both in north america and globally. >> give us an example from your business. >> well, if you look at the growth that we had last year, we grew 14% last year. this year we're looking to grow double digits and exceed the market as well. we're seeing very strong demand across the board. people like verizon, at&t, comcast, sprint, et seth cetera. also from internet providers. >> how intensive is it to build out these systems? there's been so much focus on

the fact, wow, look at a whatsapp that can take so few employees and have a $19 million valuation. >> kelly, that's a good point. for all the application growth, and that's fabulous because that's what drives usage on the network, but somebody has to build the network to carry that. the good news is the network is incredibly important again because it's such a large part of the experience. if you can't get the information you need at the right time, the right place, then that's an issue. so people are investing heavily in the network to be able to enable all of this application development. >> i'm just thinking of the other big story this week, which is about high-frequency trading and the extent to which you've had some of these financial firms build super fast networks in order to get to a network or database one millisecond more quickly. do you have a lot of big clients in the finance industry? is this a big source of demand? >> we sell into, you know, anybody that requires state of the art networking.

a lot of enterprise. 25% of our business actually comes from the enterprise market. research and education, government, as well as the carriers. you've seen that demand across multiple different market segments. and really, what you're seeing as an overall trend is the virtualization of the network. we saw it can computing. we saw it with storage. now it's the turn of the network. >> and explain what that's going to look like in the years ahead. >> basically, it's when you have an application, it's transport to you how that's delivered from the network. when you touch that application, you want that information when you want it. you don't care whether it's over wi-fi, bluetooth, or we're bouncing it off the moon. you want that right capacity at the right time and the right place. that's really what we're talking about here. really, without that enablement, we won't be able to take advantage of all the information flows that we're talking about. >> so the next time people are bouncing back and forth using those different mechanisms, they should know your technology is in the middle of all that. >> absolutely.

we're a lot of the underpinnings for the architecture for the internet and all the things that are enabled by that. that's ciena. all usage is good usage as far as we're concerned. >> gary smith, thank you so much for being down here to give us a window into the business. really appreciate it. throwing the book at tomorrow's jobs report, people with criminal pasts may be contributing to higher unemployment rates. we'll take a look next. and yesterday's supreme court decision to lift the lid on political donations is giving the wealthy a headache and not for the reason you might think. the verdict on this story is just ahead. there are trading opportunities tdd#: 1-888-648-6021 just waiting to be found. tdd#: 1-888-648-6021 at schwab, we're here to help tdd#: 1-888-648-6021 bring what inspires you tdd#: 1-888-648-6021 out there... in here. tdd#: 1-888-648-6021 out there, tdd#: 1-888-648-6021 there are stocks on the move. tdd#: 1-888-648-6021 in here, streetsmart edge has tdd#: 1-888-648-6021 chart pattern recognition tdd#: 1-888-648-6021 which shows you which ones are bullish or bearish. tdd#: 1-888-648-6021 now, earn 300 commission-free online trades. tdd#: 1-888-648-6021 call 1-888-648-6021

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his dad is my boss. yeah. vin scanning to add a car. just a tap away on the geico app. welcome back. the highly anticipated march jobs report is out tomorrow morning, 8:30 a.m. eastern. some have blamed the winter's nasty weather for the weakness. one of my next guests says the u.s. prison system is having a major effect on the labor rate. also with me, greg ip, u.s. economics editor at politico. welcome to you both. politico, greg? >> thanks for the promaeotion, kelly. >> i'm going, wait a minute, mab i missed something. greg is still with "the economist." >> i am. >> robin, let's start with you on this point. this piece came about because janet yellen using two examples of her three anecdotes earlier this week inadvertently or maybe

advertently included people with a criminal record. explain why that's revealing about what's happening in the labor market. >> i think the actual fact is if janet yellen had picked two people of random from the u.s. population trying to find examples of long-term unemployed people or people on the fringes of the labor market, she'd have found it almost impossible to avoid picking someone with a criminal record because the huge increase in the incarceration in the u.s. which began about 30 years ago, means 1 in 15 of u.s. adults working age have a criminal record of some sort. actually, these are the precise people she should be talking about when she's talking about the long-term unemployed, those people on the fringes of the labor market. >> but greg, that makes this so fascinating. this whole debate is about how telling the u.s. unemployment rate is at the moment. in other words, is there this shadow unemployment population that's going to come in or not.

this would suggest no. >> the effect of the prison population is kind of twofold. first of all, when we had a situation with incarcerations going up because there was so much more mandatory minimum sentences, for example, that was taking a lot of people out of the work force. it actually reduced the labor supply. that probably put downward pressure on the unemployment raid. in the last few years, we've seen the reverse happen. incarceration rates have gone down, ironically, because states have been running out of money, so they've been trying to raus their prison population. that might have put a little reverse pressure on that phenomenon. i think the bigger issue is you have a situation now with a real problem of high unemployment, the lack of demand for work ergs. if you're one of the people trying to find one of those few jobs that's available and you have a prison record, you get shuffled to the back of the pile. some of the people including one of the individuals that janet yellen cited had succeeded in finding work in the past in spite of their criminal record. it's now where there's a lack of work that the criminal record becomes a big burden. >> this is why this is so

important to the fed. because when the unemployment rate gets back down to what they think the natural rate is, say 5.5% or something, then it's very likely the last extra worker is going to be exactly someone like this, someone who has a criminal record or, you know, maybe a mental health problem or something that keeps them out of the labor force. the we dquestion for the fed is this. when employers are faced with the choice of, do i employ someone like that or do i raise wages, that's what's going to decide when inflation starts to pick up and when the fed needs to raise interest rates. actually, understanding the labor market dynamics of people like this is really, really important for the fed in setting monetary policy. >> it's a great point. >> it's also a moral question to raise, right? we, as a society, should we be punishing someone forever -- it depends on what they did and their infraction. if it's a very old drug infraction, do they pay for it for the rest of their lives as opposed to someone who's

committed a physical crime or has instability you wouldn't want at the office. >> but in a free society, how do you force employers not soft that information. >> it's a great question. >> very difficult thing. >> a lot of states are doing exactly that. they're passing these so-called bend the box initiatives which essentially prohibit an employer from asking about criminal background check until later in the interview process. i think the point is that this country has probably gone too far in the direction of locking people up for a lot of what are pretty minor offenses, includiig minor drug possession offenses and creating this large population with that huge stigma they have to bear. it's not necessarily making us safer while pushing these people off the fringes of the labor market. when we get to a situation where the labor market is a little tighter, i think the real risk is a lot of people who have been out of the labor force and unemployed for a long time, partly because they couldn't find work on account of their criminal record, will be gone forever. we cannot draw them back. they'll be permanently lost to us as an economy. >> robin, quick last word.

>> i just think this is something that people need to bear in mind when they heard the word participation rate. i think what people imagine is someone who lost their job in the recession and is sitting there desperately trying to find jobs. that's their image of a long-term unemployed or nonparticipating person. in fact, it's far more complicated than that. there's all kinds of these micro social factors at play. >> we'll keep it in mind tomorrow morning. thank you, guys, so much. greg and robin, appreciate it. horrified is how people in favor of finance campaign reform feel after the supreme court removed limits on financial donations. it's also how many wealthy people are reacting to the news. why money can't always buy you political happiness when we come right back. right back. these days, everything your business does

is done on the internet. and tomorrow you'll do even more. that's what comcast business was built for. slow dsl from the phone company was built for stuff like this. switch to comcast business internet. then add voice and tv for just $34.90 more per month. and you'll be ready for tomorrow today. comcast business. built for business. welcome back. the supreme court just removed political donation caps. if you thought that would make wealthy americans happy, think again. why are they upset? >> the wealthy are calling this the great shakedown. until yesterday, wealthy political donors had an excuse not to give more money to candidates. there were limits. now, most of the limits are gone. so, donors are bracing for an onslaught of politicians and

parties asking for cash. this is bad news. my inbox and voicemail is going to get clogged. i'm horrified. planning to delist my phone number and destroy my e-mail address. the bigger fear here is that billionaires like george soros or sheldon adelson will be able to buy elections more easily. but for the everyday millionaire donors, these limits were a blessing. guys? >> that's interesting. stay right there. i want to get thoughts from the panel. >> are you worried about a shakedown? if you're a republican you're probably happy about this because -- a republican donor, i think, because you always tended to see political contributions a form of free speech. i think a lot of republican donors probably aren't that upset. >> what's interesting to me, just calling around to my wealthy donor sources, it really

is both sides of this. and not at the billionaire level. but the level down from that, saying before i could say no. and i had an excuse. even the republicans are saying, look, now, it's just going to be the gates are open. it's going to be all-out money all the time. >> but the pacs could take as much, right? >> that's a really good point. and what people are saying, this could take away a lot of money from the pacs. the pacs didn't do so well in the last presidential election. a lot of people were talking about the pac money that romney got. >> has karl rove been on the record about this yet? >> i haven't seen anything. but the pacs could be losers here. and again, the money consultants and the lobbyists are going to be the big gainers. it is bipartisan. the hands are out for cash. >> it's going to be interesting. i didn't think about the extent that might let people step around some of those pacs, they felt unhappy with, robert. >> the bigger, broader issue here is that more and more money from wealthier people is going

to start, you know, creeping into elections, whether it effects the outcome or not, that's a debate. with the last ruling, the citizens united, and the floodgates are open for money. >> an estimated like $3 billion in the next presidential election, in terms of funding. >> yeah. that's a lot. >> the amounts are going to be staggering. >> we have to go. but it still feels like it was going to go in one shape or form. instead of going to the pac, it will go directly to the candidate. >> i think this will generate more money. that excuse is gone. >> that's true. that's true. it removes the supply side factor. thank you, robert. what's heating up cnbc.com? that's coming up next. oming up .

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welcome back. time for "the hot list." allen wastler, good to see you again. what's topping the website? >> the ultimate bubble indicator. jim chanos. people are loving it. what is it? the stock, rich people go crazy and buys art. people love reading about it. sharon everson wrote up, things

you can deduct from your income tax regardless of your income. she lists eight deductions that are uneffected by that. and jeff cox looked at the monthly investment letter of bill gross. and he led with the discussion of his dead cat. and he talked about other stuff, too. and given how controversial his fund returns have been lately, he got thumped by 94% of his competitors, kind of odd. people are reading about that, too. >> i'm sure they are. allen, thank you very much. >> take care. bill gross has interesting anecdotes that he starts his letter with. not that out of the ordinary. what's out of the ordinary is trying to figure out if markets are in a bubble. what do you make of the chanos stage? >> i think it's a bubble from the top. we've seen seeing it for more than a year. >> i think it's good we're looking at a gauge other than the stock market. a tangible asset like art or real estate, to judge whether the markets are -- >> we can have this debate

forever. but is art an asset? >> i don't know about art. but i'm concerned about tech. you have microsoft and intel at highs, 52-week highs. and they're both really fundamentally challenged in their fundamental businesses. so, if all this air is coming out of the balloon for the growth stocks, if people are looking to those for growth, that makes this earnings season particularly interesting because we're starting to get into guidance for the back half. >> and we're starting to get into the season itself, by the way. the first quarter earnings season. we're going to get alcoa and jpmorgan on the 11th. and tax season. how well do we have to do? >> one of the things that's happened, the preannouncement ratio is probably about seven. a little less than seven right now. it's quite high. it didn't work last quarter. but it usually, when the negative is this high, the market tends to do well during the reporting season. you get a lot of the bad news out before the early season starts. >> it happens this time around again. >> we'll see. >> jason, thanks for being here.

appreciate the panel, as well. "fast money" coming up in a couple seconds. what's on tap? >> we have the co-founder of the company that's disrupting media. they captured the holy grail of mostly male demographics, 18 to 34 years old. the founder says they would be stupid not to test the markets at this point, considering how much cash they're throwing off. >> people in our business talk so much about them and what they're up to. looking forward to that. >> "fast money" starts right now. live from the nasdaq market site in new york city's times square. our traders are brian kelly, karen finerman, dan nathan and guy adami. citigroup getting news that its subsidy is the target on an investigation. >> we think that the company is facing a tough time with all of the international upset and particularly as a