the stats say it. the data doesn't lie. >> well, you have busted that myth. thank you so much for joining us. >> my pleasure. >> great to see you. >> come back. >> keep on doing what you do. >> you come back, too, america. thank you for watching. >> "closing bell" is next. don't go away. welcome to "the closing bell." i'm scott in for bill. >> i'm michelle. kelly and bill will be back tomorrow. and this is a market that was down as much as 223 points today on a whole host of issues ranging from global economic concerns, fed hike worries and the oil shock, of course. >> pretty good turnaround, as well, early in the afternoon. this happened the market coming well off the lows and right now they still sit there. dow right now down 75 points. s&p as you can see down .25%. nasdaq in positive territory. money moving into tech.

energy actually is the leadership group with oil touching that five-year low and then getting a little bit of a bounce and energy names with it. >> let's talk about the markets. joining us now is dani hughes and kenny pulcari, diane gartnick and our own rick santelli. dani, what do you make of today's move? it occurred to me months now we have one story of the stock market. it's great. commodity and bond market tells us there's manager to worry about. what does today tell you about where we come down on the question? >> we don't know. we have seen the market fall off dramatically today and come back dramatically, as well. the underlying issue of oil and oil prices is big one and you see the dichotomy, as well. consumers are benefitting and you see housing prices rising, as well, so they have a lot of juice in that and then the job

recovery, as well. but then you see oil producers getting hit very hard and the concern about the price of oil and domestic oil producers and how to make money going forward. that's the big dichotomy we see. >> can the rally in the stock market keep going if oil doesn't stabilize? >> no. i think if the oil doesn't stabilize and continues to be nervousness around it, it's in the overall market and stays and actually oil will stabilize in here and then the market finds the footing and move higher again. >> why would you think it would? >> i don't know. in my gut i don't see oil going to $40 a barrel. >> i bet you didn't see it going to $ 63. >> it was a level where most people thought it would find stability and it does feel like it's going there. dennis gartner and the guys from morgan and the analysts, in my gut i don't see that and so i think it might churn here for a while in the low 60s. that's okay and stabilize higher but the truth is what is really

changing this conversation from a month ago? we knew what was happening in asia, oil, japan, europe. so why all of a sudden is everybody starting to panic thinking, like, oh my god, this is new information? >> we have millions of barrel of oversupply on a daily basis an we don't know why and if china is a huge problem and leads to a slowdown in overall growth or is it -- >> it's an importer. >> diane, people think it's both. >> yeah. one of the thing that is really important is thinking about the price of oil and positive impact for consumer. people talking about the wonderful impact for households and equally positive is corporate earnings. one thing that spooked the markets is very strong u.s. dollar and how that was going to drag on earnings. lo and behold, one of the largest inputs to corporate earnings everywhere is energy. and with the energy sector being

so low and energy prices that major input coming down, that's got to offset some of the really negative impact of the high dollar and ends up being great for next quarter's earnings. >> exactly the point. right? so why's everyone getting nervous? listen. we saw china off 5.5%. china was up 32% for the year. 5% move in china is putsing perspective. right? >> i think another issue, too, two types of oil producers. rich and poor countries and when the poor countries can't make money, there's geoplitd call problems all over the place and i think instability is a person, as well. >> well, okay. okay. that might be true. >> i would add just india and china are also beneficiaries, as well. so from the global market, it's emerging markets, it's beneficial, as well, to those countries. >> and now the core question. the bond market and the commodity markets, put oil aside, are saying something about growth or they're not?

>> sure. it is saying something about growth. it's saying that there's deflation in the marketplace. if you look at europe and the pmis and the inflation data out of europe it's not good so when you're looking at the global kind of landscape of economic activity i think what you are seeing is oil is reflecting that and the strong dollar's reflecting that and what we have here is an opportunity for sectors like the airlines to outperform, sectors like the autos to outperform and pick battles. right now, i agree with kenny. oil should stabilize here and going back to $80 in a month? i don't think so. >> why are the airlines hammered today? >> because i think -- >> tranports are hit -- >> because i think they're -- >> stocks from 27 -- looking at american airlines, from 27 to 47 in 2 months. and that's profits. >> and i also think it's one of those days where the mind-set is

accentuate the negative and people are jumping on board. >> jeoverseas and so much carna? >> yes. they got nervous. let's take the money out of the -- let me regroup. that's why i think it's going to stabilize and then find its way higher again. >> maybe, rick, people are facing the realization the fed language changes sooner rather than later and changing rates and throws it all off track. >> i don't know if it throws it all off track and anybody that doesn't think low interest rates don't fuel a lot of the positive investor confidence in many of the markets and indeed some of the financial inflation with regard to things like equities, we're going to find out. i'll tell you what. today was one of the first sessions, near dollar futures, not the foreign exchange side of it, really saw some very large blocks of selling and when they're selling in that part of the short-term structure of the

curve, that is always something nervous about potential changes in the overnight rate. are they going to handicap or give you the day? i don't think so. it's important. remember, everybody, two thirds of our economy is consumption driven and stronger dollar helps two thirds of the economy. big boys always lose on deflation. whether you have a lot of debt out there, owning real estate, whatever it is. two thirds of the economy much of the middle class is going to benefit from a lot of what's going on with energy. >> you mentioned the big block trades. we're seeing all kinds of warning signals from different regulators, very concerned about the bond market and whether or not there is enough liquidity out there and that when a massive selloff if and when it occurs it is painful because you just will see a lot of gapping down. are you seeing evidence of that? hearing concern about this? >> no. see, this is the flattening yield curve story that we all need to reckon with. i think the futures and short rate vs a much more difficult

time than the longer end and even in a fed tightening mode is preoccupied with international flavors of relative trades overseas. this is a wild yield curve ride in my opinion. >> dani, i want the know, partly plays into the yield curve story, as well, about the financials. okay? everybody says i can't find a person who says don't buy the financials, yet you have more reason today to be worried of owning a financial stock. you have the citibank charge. you have bank of america ceo talking about trading revenue weak. you have new fed regulations that banks raise more capital and if they won't cooperate, maybe they will or won't, energy stocks may not cooperate, where will you go? >> financials usually lead us up. don't forget, too, they make money on interest rates and not making money there at all. where do you go? people are chasing yield right now and i think you see trouble, too, with investment managers and hedge fund managers that if

they have done well they have to take their profits right now at the end of the year and if they haven't done well like a lot of hedge fund managers haven't, that's why we see the sloshing around looking for that short term. >> diane, bottom line this for us today. what did you do today? >> there's important to da that to focus on with yields. now that we know that the fed is going to be raising rates in 2015, we're finally on the cusp. right? all of the companies have been holding tremendous amounts of cash on their balance sheet waiting to see when rates are going to raise so that they can begin to invest one quarter prior to rates going up. i think over the next few months we'll see an awful lot of new business formation, lots of capital finally going into place where we're going to see some investment and property plant and equipment long-term asset that is are cash to be deployed into working. i think that's really what's important this time around. not yesterday's financials but

instead focusing on the manufacturing of 2015. that's the space we should keep an eye on. >> all right. thank you. thanks so much for joining us. all right. 41 minutes before the bell. the dow jones industrial average lower by about 82 points. and the s&p is lower by a little more than -- nearly 5. up next, today's initial selloff sparked by the fed fears and our steve liesman and former head of the miami branch tell us what they're hearing. billionaire mark cuban speaking with melissa lee and scott and me exclusively. a lot to talk about, drones, artificial intelligence, maybe turning on humans. we have heard that from a number of guests. does he think netflix will kill cable any time soon?

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all right. welcome back. there's the market picture with 45 minutes to go. the dow well off the lows of the day, still down 80.

energy's getting a bit of a bid. helping things out. you can see the technology is, as well, tech selling off big-time yesterday, michelle. certainly into the close. >> huge swings, i know. >> tesla, twitter. down multiple days. maybe stabilization there and enabling the markets. >> a lot of commentary of how they're a huge part of the s&p 500 more than historically and is there a reversion to the mean at some point? >> one of the guests in the closing bell exchange suggesting taking profits is not a bad thing. right? >> exactly. >> you'll obviously take them from the stocks that outperformed the rest of the crowd. so maybe that's all this is over the last two days as we have been obsessing over the oil prices. >> yeah. also we had a lot of jitters in the stock market because there was a report that the federal reserve may change some lack wage and lead investors to believe the move to raise rates could come sooner than many anticipated. >> joining us now is steve lies

mans with dorothy weaver, ceo of collins capital and former chairman of the federal reserve bank in miami, a branch of the atlanta fed. dorothy, welcome. steve, good to talk to you, as well. is this going to happen to change the language? >> they could. the nuance of saying considerable time and let's be patient is pretty minimal. what they're trying to do is obviously keep their options open while giving sufficient guidance that they're not going to spook the markets. >> steve, so this is coming from these reports about dudley when he refuses to say rates low for a considerable time and instead saying the fed must be patient. what's the difference when it comes to when they might actually raise rates? >> you know, i think think of it like a bicycle with training wheels and without. you take the wheels off, you lose a guarantee that you're not going to tip over and the way to

think about that is considerable time was around you were pretty sure you had a six-month window. what it will do is create some possibility that they could move earlier. just to be clear, this news is effectively more than a week old and you could say it's older than that. i think it's pretty baked in, this expectation that considerable time going this meeting and discussion about it leaving in an earlier meeting. stan fisher talked about this last week, the vice chairman of the federal reserve and baked in and doesn't change the reality of living without that essentially a soft guarantee from the fed. and what this does is if the economy improves, i think we need one more jobs report like the one we had. >> a good one way the decline of the unemployment rate and with evidence that the decline in oil prices is not spilling over into a generalized decline in the price level or into the core inflation numbers. then i think it's possible the fed can move earlier. >> dorothy, do you think --

steve says maybe baked in to the market at this point. do you think investors are willing to accept the fact that the fed is going to take this language out, is going to eventually raise rates and how much do you think members of the fed even care about what the market reaction initially is going to be? >> i think the fed does care about the market reaction and the market, though, i think was said is pretty well baked in, not a question of if but only a question of when. so i think the market has already begun to position itself with that in mind. the wild card in this is not really even what we have been looking at historically from the fed's point of view. our unemployment and our inflation. it's really now turning to focusing on the global. and the situation and the growth expectations and europe and china and japan. and it's concern over those and now you're getting the

bifurcation of we have quit qe and now an economy between what we're doing and the rest of the world's doing, so we can't just look at our numbers. we're going to have to continue to look over our shoulder and see how that is going to have any sort of contagion in slowing down growth in our markets. >> steve, you and i have talked about that very point, right? the u.s. economy better and the fed raising rates and supposed to be focused on what's happening here and not necessarily worried about the impact overseas but at the same time, it's intuitive, right? the whole world is slowing down, the f there's potential crises in emerging markets with the strong dollar, that can cause feedback right back to the u.s. economy, right? do you agree with dorothy. they could stay on hold for longer than people expect because of what's happening overseas? >> i think to an extent. folks at home, it is michelle's sympathy for the central bank that is have failed to insulate

themselves from what they know is coming that really is the discussion that we have. and i argue that these guys have had a long time to prepare for this. >> i agree. i don't have any sympathy for them either. >> i know. just having fun here. but i think that only to an extent. i think it is extraordinary that the usda that has been as strong as it's been given what's happening overseas and the end of the day with pretty much still the largest economy, of course, depends on how you mshl it. we remain the price maker, not necessarily the price taker and the great hope is essentially strong u.s. growth helps out other countries rather than the weakness overseas dragging us down. i'm surprised so far through the fall we have not really seen that weakness wash up on our shoerls and i expect it to stay that way given the way the data is going. >> either one of you want to comment on this? jeffly gunlak saying the 10-year yield crossing from reuters could fall to 1%. >> wow. >> dorr chi, what do you think

of that? >> no. we certainly saw a very dramatic and quick dip just on sort of fear at one moment in time and so the market is skittish and it could move quickly. the question's going to be what is the triggering point? when's the catalyst? how quickly does it bounce back? >> dorothy, steve both, maybe, steve, you take this. if he's right and the 10-year gets close to 1%, that's going to suggest that you have got some major issues perhaps here in the united states. that's going to keep the fed on hold. >> that's exactly the right way to think about it. one cannot have a conversation about a yield on a 10-year or price on a stock in a vacuum. if we get to that point there a es a whole series of events likely happening. you likely have -- >> and likely bad. >> core inflation number is falling precipitously and stock prices way down. i want to point you to an extraordinary speech of new york fed president dudley gave not

too long ago and he said, look, part of the speed with which we move and how far we move is going to be dictated by how markets react. the fed wants to bring the markets along with it. they're going to try to avoid in this next step in policy normalization and try to avoid another taper tantrum. >> all right. dorothy, last word here? what should we thinking about the most talking about the fed? >> i think the most important thing is that the fed is really in a delicate balancing act right now because certainly we're seeing employment numbers come in strong ler. growth not been dramatically impacted by the slowdown globally and the inflation is not climbing. one inflation they really want to see, though, is wage inflation. oil prices will go up and down. food prices go up and down. they're really looking to see wages beginning to go. they have just been going nowhere for so many years and i

think that's one of the big keys that they're looking to see before they do anything too dramatic. >> steve, would you be shocked if the fed did not raise interest rates next year? i ask you that a day after i read a few notes that were being passed around on the street. i believe it was morgan stanley said maybe it's going to happen much later than people expect and what dorothy's suggesting. goldman sachs saying what's going on with the dollar and crude oil and inflation that maybe it's going to come later than expected and that could mean bigger things for equities. would you be shocked if they didn't raise rates? >> i would be. i don't think that's going to happen. i don't think the economy will have those kind of outcomes or print weak gdp numbers. look, i think what you want to do, scott, take your cue from where you think the leadership of the fed wants to be. and i think they want to get back or begin a normalization process. i think janet yellen is preparing the markets for this

and personally ready to do it and i don't think she wants to rush to do it and set the train in motion and i think it's going to happen and i think the preponderance of the evidence has to be why they shouldn't do it rather than why they should because i think that that's the train that they want to get on and make happen here. >> dorothy, i get the impression that janet yellen is somebody that just doesn't want to raise rates. when you look at historically the reasons why they haven't changed the language is, remember, there was the real estate situation. and then there was, well, it's not just the unemployment figures. there's a dashboard of unemployment numbers that we need to look at. it feels like they want to do and she in particular want to do everything possible not to raise rates too soon. so what do you think? is it possible that next year they don't actually move? >> it's possible. i would agree, though, that we are on a course that -- of we will be raising rates. she will be thoughtful,

deliberate. she is in no hurry. if there's bumps along the road, she will take her time and assess exactly the implications of any bumps. but as far as will we reverse course? it would take a very dramatic change. >> hey, scott? i want to add a quick thing. just because they have raised rates once or twice doesn't mean it's an automatic course, right? you can see the fed getting to them. 1% fed funds rate and be stimulative for an economy running, say, for example, 2.5% and jobs at 200,000. the fed could do a quarter, stop, it could come back and do a quarter and stop. i think this notion that where the market might have it wrong is a notion of automatic quarter-point hikes the way greenspan did it. i don't think that's the case this time. >> call me crazy. i just refuse to believe that the market is ready to accept it. i think that the day that considerable time language comes out of the statement the

market's going to have a tant m tantrum. i'm not saying a heart attack but not a happy thing for a lot of investors that expect the party to go on forever. >> that assumes they're not paying attention. >> they can telegraph it as much as they want. >> you think the market doesn't react to what happens, not discounting it in the future? >> i just -- i'll believe it when i see it, i suppose. >> okay. >> i think far more interesting is your contrarian view about maybe they don't do something next year and gun wilak says 10-year could go to 1%. when everybody believes something, everybody's often wrong, right? >> i have bigger issues with that. 10-year to 1%, it's a far different conversation. >> thank you. you still across the street from univision, dorothy? >> no, no. in coral gables? >> got it. all right. >> nice. >> i used to work across the street. >> thanks for asking. >> beautiful.

okay. we do have about 35 minutes to go. and the dow is sort of in a holding pattern now and in that range. it's been in a bit of a range for a couple of hours. down 77 points. certainly well off the lows. naz democracy's looking pretty decent right now. up a third of a percent. russell 2000 with money moving into small caps, too. that's been a point of strength throughout the day today. a lot more about the wild market swings, also first elon musk sounding the alarm on artificial intelligence right here on "the closing bell" this summer. >> i'd like to keep an eye on what's going on with artificial intelligence. i think there's potentially a dangerous outcome there. >> stephen hawking also giving the same warning. two very smart guys and another smart guy coming up, mark cuban here next and find out what he thinks of artificial intelligence, the rise of robots. is he as scared as stephen king would have you be? doom and mankind, a lot more

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welcome back. dow jones industrial average down by 69 points, near the highs of the session. s&p lower by 3.5 points and nasdaq higher by 20 points. this started the turnaround with tech come back and oil come back. >> we were talking in the last segment of double lines jeffrey gunlak, the 10-year yield could

hit 1%. >> very scary. >> startling number. >> yep. >> to throw out. let me also say that i believe he just gave a statement to cnbc. in fact, maybe to patty martel saying the statement was made but only in the context of a hypothetical. if oil goes to $40 a barrel, then the 10-year goes to 1% suggesting that if you can get oil all the way down to $40 a barrel, you have a much more to worry about the slide in crude oil that that means that something is wrong in terms of global demand. >> right. if that happens, then this would happen. not just an arbitrary throw it out. the 10-year going to 1%. >> okay. he previously said 2% and then at the time people thought, come on. you're crazy. take a look right now. 2.1. >> he did speak, i want to clarify, as well. he did speak to patty martel to

clarify exactly what he meant by the comment. dom chu is tracking the movers for you. >> let's talk with kahn's plummeting after a third quarter loss. accepting the resignation of its cfo. negative trifecta there. shares down on the day sharply. spirit airlines falling after it said the load factor fell in november. raymond james downgraded it to a market perform and removed the price target. and then lots of turbulence in the airline sector overall. american, delta, united, continental, southwest lower on the day. autozone is higher after the retailer reported better than expected first quarter results and ending with abercrombie & fitch gaining ground on the new ceo would retire effective immediately and then replaced by

team led by arthur martinez, executive chairman. the shares as you can see up by 8% on the day overall. michelle, scott, interesting moves on a day when the dow bounced back off we'll say really 150 points off the lows. back over to you. >> certainly. thank you. interesting moves coming to telecom. invest to recalls hanging up on verizon, at&t and sprint as the wireless price wars heat up. morgan brennan, big volatility today for the stocks. what is going on? >> this holiday season is a free for all for wireless carriers and pushing telecom stocks down almost 4%, the worst performing sector in the s&p now negative for the year. verizon falling about 4.5% after cautioning that holiday promotions and more subscribers will quote put short-term pressure on q4 margins. downgrading the stock to neutral and analyst william powers saying if verizon considered the best position is warning signals how competitive the wireless

space has become. at&t also down about 3%, 3.5% after cfo stooefbs warned this morning that subscriber turnover, basically the churn rate, to increase for q4, as well. sprint cutting prices to target millions of verizon and at&t subscribers coming off contract this season and trading lower and t-mobile, the biggest loser of the carriers today dropping about 9% today on the proposed public offering to raise more money for capital investment. so the challenge for them, balancing these price cuts to get new customers with investment in their networks which is needed to keep their existing ones. back to you. >> yeah. super expebsive to build out. thank you. we have 27 minutes before the bell. dow jones industrial average lower by 85. >> what turned this market around this morning and mark

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welcome back. melissa lee is in las vegas live

today at the market count sul monorating a forrum. here's some of of that exchange just a short time ago. >> there's no point in s.e.c. -- >> wait, wait, wait. you bought into this thing. >> oh yeah. >> you're supporting it, as well. you're saying they should have turned it away but you're there as a shareholder. >> i think they're worthless in the first place coming to enforcement. >> oh. >> seriously. that's my perspective. i grow and like chris and i respect what he's saying. but -- >> cox. >> our melissa joins us now with mark cuban himself. take it away, melissa. >> thanks, guys. that was a fiery exchange, mark. >> yeah.

it was fun. >> that case turning into one of the foremost vocal critics of the s.e.c. how did you come away from the panel feeling and there's very interesting thing that is we learned. >> when i came in the decision process in my mind whether or not i was going to shake his hand because he was the director of the s.e.c. when my face started but as it turned out i was misinformed by the s.e.c. shocking, about his role. he was completely recused and there was a chinese wall. so that was a good thing and that -- so that was part one. part two is i love his candor and honest, i learned a lot about the s.e.c. i learned about the role the director of enforcement which scared the hell out of me. overall, you know, i thought it was a great session. >> he said the director of enforcement has all the power from the arresting officer through the executioner and that was -- >> that was crazy. >> that was interesting. >> explain it to people, as well because he said the commissioners and commissioner

in charge really don't see the enforcement cases. they just get a summary and that all the power, 100% of the discretionary power to bring cases and how they're handled is in the hands of the director of enforcement. sat skaerls t that skaerls tkaerl scares the . >> you say you have to burn the place down basically. those are your words. >> burn it down. lot literally. >> of course. >> i don't want anybody -- >> start from scratch. >> correct. when you have an organization whose culture so upside down, so misplaced, there's such an emphasis on attorneys and working and thinking like attorneys that you're not going to accomplish your goals and all you have to do is look at the stated goals of the capital formation, trust and you can see that they're failing miserably at the stated goals. >> alibaba, the exchange we played and you essentially said

at any particular time, a member of the party says, give me some information. there could be insider trading for which the u.s. government, the agencies, did not have any recourse. they don't have any authority. >> right. i'm a shareholder. that shows you how much -- >> are you being hypocritical? >> no. i don't see it mattering. the mrkt's the market at this point and i don't expect the s.e.c. to do a whole lot of consequence of inside trading in the first place. my point is the largestipo in the history of the stock market is a chinese company and it's a communist country. so by definition, you know, if someone calls up someone at alibaba and says, okay, you know, i'm this big wig and, oh by the way, tell me what's going on in alibaba or let me tell you about the new gulag we just built in china. there's nothing to say. they're not going to say it.

>> should the s.e.c. have turned alibaba away? >> yes. >> they should not have been able to list in the u.s.? >> no. if you're host -- at least the chinese operations, right? if you're -- just my opinion. if you're hosted and based in a communist country where the only rule of law is what the communist party says it is, how can you enforce any type of law at all? >> so basically saying that the u.s. should close its borders, actual market close the borders coming to so many of the other companies to come here to list? >> look. if -- alibaba has special exception. i forget what it's called to go public and the reality is yes. right? i'm not going to say i've done research. this is the topic that just came up in the session. right? at the same time on a common sense basis, how can you enforce any type of inside trading laws in a communist country? put that in bucket. or ask the question, are our

insider trading laws back ass half wards and that's the problem and not a problem of a company in a communist country come in and realize that our insider trading laws are ineffective and apply them to the united states companies. >> right. so even though you're alleging that the s.e.c. should have done x, y and z, you are investing as if the s.e.c. doesn't exist? is that fair? >> yes. with a caveat. >> okay. >> caveat is i take 3% or 4% of the portfolio and invest it in hedges. my perspective is that all of these things that have negatively impacted the market in a dramatic sense aren't one offs. they will happen again. not a question of if. it's a question of when. i want to be protected when they happen and i want to be able to invest when they happen so i made a big investment october 15th, you know, when -- in 2008 when everything was going to hell, i dove in and made my biggest investments when, you know, i did invest a lot in

currencies when the yen hit 85. i took all my debt and converted it over and i'm a big believer in warren buffett's approach. the "s" hits the fan you dive in. i know there's no chance that the s.e.c. stops the next thing from happening. >> all right. speaking of going in when things are cheap or when there seems to be opportunity, oil. are you interested? you're from texas? >> i'm from texas. >> oil, oil stocks? do you see opportunity there? >> i'm still starting to do my work in terms of mpls because i don't think the flow of oil will reduce and in terms of wipe lines and the like. i think they're being impacted more than the based off of price when they shouldn't do and i'm doing work there with the advisers. >> looking? >> i'm looking. in terms of price of oil, it's a technologically driven environment right now and starting to see the impacts now. >> i want to go back to the anchor desk at the stock exchange. got a question? >> yeah. mark, it's good to talk to you.

two things, number one, if you were so against alibaba going public here, why did you just make a statement with your feet and walk? why did you invest in the company? and if people, you know, watch that and say, cuban's a hypocrite saying, no, they shouldn't have been able to list here and bought the stock. is that a fair -- >> i'm a hypocrite. absolutely i'm a hypocrite. i think the s.e.c. doesn't matter. right? they do their best and halfass backwards in enforcement they won't stop the next thing and i don't give them much in the way of consideration and my preference is they shouldn't be allowed based off of what i know and it's one more stock to trade or invest in depending on your perspective. >> do you still own shares of netflix and do you have the same level of conviction today that you did more than a month ago when we first learned that you

bought the stock? >> yes. >> let's be clear. since that investment, the stock is down something like 9%. >> yeah. okay. i'm going to -- the way i look at things, there's the word of investor. right? investors buy and hold stock even through ups and downs. i know we forgot what the term means in this market. people talk about trading in and out. 9% one way or the other doesn't make or break or change a thesis. i still think netflix will grow, disruptive. i like to own disruptive companies and could go down another 10%. i'll buy if it goes down 30%, i'll buy more. i don't worry about the fluctuations and the thesis didn't change. >> what are you buying? >> nothing. >> hey, mark. >> hi, michelle. >> hey, full disclosure to our viewers in my book i have an entire chapter about why the s.e.c. should not exist in particular because every time they fail they just say -- >> i knew i liked you. >> they said they wished they had more money and staff and

could have stopped madoff. >> it is worse than that. >> i agree. i agree. you know i'm right. more prosperity, less government if you want to go amazon. for a second, you are in technology. we had elon musk on saying he feerls the rise of the machines, the merging of robotics and humans and stephen talking ab it this recently. are you afraid of artificial intelligence? >> five, ten, 20 years, no. beyond that, i don't know. you know? i don't fear it right now. but there's always that possibility. you know? as processor and cpus are more powerful and logic in places we don't expect it, there's always a chance that i robot could happen but i don't think it's going to be in the realistically in the next ten, 15, 20 years. >> you are a tech guy. you have an app.

and born out of this s.e.c. brush-up. essentially for viewers out there not familiar, the message goes away in -- >> not cyber dust. 30 seconds after you've read it, the message disappears and never touches a hard drive in the servers or the device and not recaptures. >> snap chat and sort of a same thing and for photos, they hired a banker of credit swiss. it looks like they're look preparing for an ipo. >> that's great. >> are you looking at that company in terms of valuation? >> no. we are in two different markets and might have started off in the same way but snap chat is crayons on pictures for kids and a great market and looking at what they're doing, they're trying to take on facebook. they really want to take on facebook in terms of a way for kids to communicate with their peers. whether or not they'll be able to do it is a whole other question and it's a smart guy and cyber dust, we're for real

communications and privacy based communications -- >> going public? >> no, no, no. >> no casino. >> no. >> up for sale? >> not for sale. we keep on growing. >> interested, mark? not taking the call? >> the value of privacy is worth more than the money because you know in a scenario -- the reason i created it, the s.e.c. came in. those of us through depositions, whatever you say is taken out of context. with cyber dust, there's nothing that's discoverable. when it's gone, it's gone like a face to face conversation. that is worth more to me as a business person than -- i won't say any amount of money but in the foreseeable future. >> mark? >> yes? >> should goodell have a job? >> i'm sorry. i didn't hear what you said. >> should roger goodell have his job still? >> yeah. look, i'm a roger goodell fan. he works for the owners and roger is really good at taking the bull. you can argue about the tactics

but his job is to take bullets for the owners and that's what he's done. i think when you look at what the future of the nfl is it's not about roger goodell but the owners want and really we have no idea. >> okay. >> a quick fire round, mark. >> okay. go ahead, scott. >> real quick before we go. again, putting your sports owner hat on. i mean, what do you make of lebron and some of these other athletes over the last several days with the i can't breathe t-shirts to make a statement on the eric garner case and apeerls they're willing to make these kind of statements more so than they have maybe in the last 50 years. >> you know what? let me just put my hat on as a citizen of the united states. i love non-violent protests. that's something that's value to believe the democracy and we cannot get enough of it. we have rules in the nba in terms of on-court apparel that, you know, got to try to finagle and adam silver is great in handling it so far.

our guys, whoever it is, you know, the on-court, that's fine because they know the camera's there but the bigger picture, any one of our guys that wants to stand up and give their opinion and speak in a non-violent manner and protest, anything, not just this but anything, that's what makes this country great and i'm all for it. >> we're out of time. thank you so much. we appreciate it. >> thank you. >> back the you guys. >> i love when we have guests so frank about everything. no politics. >> a definition of when you say somebody's unplugged -- >> yep. it's great. >> cuban. unplugged, cuban. >> nine minutes before the bell. the dow jones industrial average lower been 55. s&p lower by 1.5. nasdaq higher by 24. coming up, will we see a santa claus rally this year or not? berra said it's getting late early around here. we've got pros pushing both sides of that debate. keep it right here.

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nasdaq stocks leading the declines at the start of the day. kate rogers, when a turnaround, though, huh? >> absolutely, scott. up about half a percentage point. big tech, amazon, microsoft, apple all in the green.

amazon up over 1%. yahoo! up over 1%. netflix also up at the end of the day near 1%, as well. other big movers here, o'reilly automotive and western digital. we have been watching those for you all day leading the nasdaq 100. now in the face of all that good news, the nasdaq come pez it actually the worst performer out of the three major averages for the month of december so far. finishing higher today, it's the first two-day losing streak. after the bell, oil at 63 bucks. great news for anyone with a car and our economy. but what about banks that lend all that money to the oil producers? will they be struggling now? that wrinkle could send ripples through the market. that very important story just ahead. how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany?

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and apply online. creditcards.com. welcome back from the floor of the new york stock exchange. time for the closing countdown. good to see you. dan, to you first. quite a move. down 46 now. >> you know, the market is going higher to year end. that's all it comes down to. we sold off this morning. following suit with china giving something back after being up 20%, 25% in the last month and people focusing on europe opposed to a real fundamental issue. >> terry, nothing can stop this

market as dan suggests? >> i feel that's accurate and find out trading in a narrow range in the end of the year and seeing the dips and bars are coming in to see value out of fully priced market here and headwinds maybe next year and not so much between now and the end of the year. >> this drop in oil doesn't concern you? i know it's great at the pump. we all know that. more money in our pockets to go shopping. >> there's still money to be made in oil and seeing the energy complex up earlier in the day. so you're starting to see people nibble at it. you know? crude at 60, it's a benefit for the pump as you mentioned and not crippling the industry. got to go much lower before real concerns. >> stocks up between now and the end of the year, where do you want to be? >> properly leveraged to those stocks that are same consensus. don't chase something just for a six-week trade. good cash flow.

>> what sectors do you like? >> in tech, you know, i can't speak to what we don't like and don't like and what we're seeing. starting to see people sell the underperformers, coming into year end. seeing that in the energy complex. that was the weakest sector down 3.5% to 4%. >> you can answer that question, right, terry? where do you want to be? you have a couple of weeks. >> hard to say. i like things oversold like the oils fantastic purchase. >> i kind of like the financials, too. i like morgan stanley and bank of america specifically because i think the banking sector does better coming up into the next year, spread between long and -- >> what about this language, dan, people are talking about, well, if the fed takes the considerable time language away next week maybe we will have a problem. >> that's the reason for the pullback this morning and

everyone is of the mind of talking about a mid-year time frame. language may change and not changing the fundamentals. >> good to talk to you. just tuning in, dow down 44, not so bad. you would be right. considering the dow was down more than 200 points earlier. next hour, coming up right now. welcome to "the closing bell." here's how we're finishing a volatile day on wall street. dow jones industrial average well off of the lows down 52 points and had been down more than 200 points after we saw the big overseas selloff overnight. s&p lower and another second, go positive? maybe. we'll see. very flat right now. nasdaq come pez it higher by 26 points, a gain of half a percent. joining us on the panel today, herb greenberg and we have larry

kudlow and our own kate kelly. also with us for more on the markets is "fast money" trader guy adami. >> yo. >> why the turnaround? >> comments of european central bank. what's that cat's name? i think it got -- >> we have -- we'll fix this. >> sorry. >> yeah. what do you think happened today? >> put your mic on next time. >> exactly. kate, what turned the markets today do you think? >> there's feeling of excitement on the fed changing the language and the economic progress to make. the possibility of that. anyway. i think energy is really down low and something we'll talk about more on the show, i'm sure and having a little bit of a relief rally perhaps here in the stock market. i think generally people are optimistic about stocks more broadly into the rest of the year and disconnected from some other trouble elsewhere. again, the oil patch and no sign of flagging yet. >> these are grey thoughts.

hold those thoughts. they're wonderful thoughts. >> are you about to disagree entirely? >> no. i agree with you. i'm an optimistic. i think lower oil prices are unambiguously good. okay? i think the shape of the yield curve, the low inflation rate. you get higher real growth and lower inflation as a result of the drop of oil prices. the federal reserve will move from considerable period to patience. that may unsettle investors. >> that's my point of the last hour. >> the fed is acknowledging the recovery. it's optimistic. >> bond and commodity market telling you a bad story and contradict the stock market, they're wrong? >> i think that bond rates are too low. i've been saying that and i have been wrong. i think stocks are the place to be. i've been saying that and i've been right. buy the dips in the stock market. i wouldn't be buying bonds. i wouldn't be buying commodities. outside of commodities and --

everything else. >> not telling you we have a big problem in global economic growth coming the yields? >> no. we have a big solution. it's called lower oil prices. going to help the global economy with the exception of russia and iran. >> and venezuela. >> and venezuela. three of my favorites. three of your favorites. >> we talked about this earlier. >> i would add on half a point of gdp just to screw them. how's that? >> on purpose. >> on purpose. >> i want to point out one thing here. if i was reading it correctly, i haven't seen the context of jeff gunlak's comments of the 10-year and he has a forecast of it going down to 1%. >> only, only if oil prices go down to 40 bucks. >> oh. >> which seems like a possibility from where we sit today and the forecast we're seeing. >> how sustainable is lower oil price? we have seen this before. >> well -- >> we have seen it before and it was good. can i just say that? >> for how long? >> in the '80s and '90s, we created almost 50 million new

jobs and the economy grew. >> that means tesla, that's very bearish for tesla. >> i agree. >> weigh in here, guy. >> can you hear me now? >> i think i can hear you. >> you know what? larry says unambiguously. i get that it's good. i like going to the gas station now as much as anybody else and i can't believe this is not incredibly deflationary and argue back and forth but i'm in the lower rate camp forever and everybody else is thinking no-brainer trade of the decade is rates higher. i still think rates go lower from here and not about getting yield but the instruments that mirror it are up 20%. tlt probably up close to 23% this year. that's a nice little return. so i'm in your camp, mcc. bond market's telling you something and the commodity market. >> i just wonder. i don't have a position. i have seen three markets. two of them telling me something else. >> i don't know. >> and telling you the stock

market something, as well. doesn't care what the bond market is telling you. >> the f there's an interesting report -- >> look at stocks. we were talking about the dow almost 18,000 the other day. >> having this conversation in 2007. >> so here's the question, right. is the energy setback a very short lived, more or less a blip on the screen? >> no. >> and the stock markets are telling us the right story, or are the stock markets discounting when's happening in the commodity markets and iron ore, aluminum, copper. it's a lot of things. >> prices, by the way, the long-term trend of real commodity prices is lower. okay? jillian simon was right many years ago. second point to make is we're producing right now about 1.5 million barrels. they expected 800,000 barrels. that's going to continue for a couple of years. they're going to slow down their oil production and exploration and cap x. at the lower price. they won't end it. it's just a little slower. meanwhile, that's all picked up

that slack from almost every other sector in the economy. that's why lower oil prices are good. scott, they were averaging $25 a barrel throughout the '90s. how's our economy? >> i'm sure that -- >> 4% per year. >> it's a good thing. >> they were just as low in the '80s and the economy grew at 4% a year. in the transition, there's some losers. i agree. that's free market capitalism. >> hold that thought. >> bob pisani on the floor joining us for the interesting action considering down 223 and down 50 is how we ended. >> we turned around earlier in the morning and the primary catalyst and two things, one, scott, still not a lot of other places to put money in the world. i'm hearing that from the traders. second thing is a couple of things out of left field suddenly this morning. events in greece with the no confidence vote and the actions in china with changing the rules for come lat real for trading

stocks and we have 15 trading dales left in the year and historic highs essentially. may not be a lot of room to make a lot of money and there could be a lot of room to lose a lot of money and i think that putt a little bit of a scare in people. u.s. is best place to go but we have a lot of very volatile situations in the world right now. >> we do. >> one more quick point about the bond thing. the bond market not distorted in 2007. the bond market is distorted today as a result of the activity of the fed so i don't know that what the bond market telling you -- >> yet yields go down and supposed to be the opposite. right? hold on. alibaba, mark cuban last hour told us here on "the closing bell" that the s.e.c. should not have allowed alibaba to go public because it's located in china and there could be interference from the chinese government and the s.e.c. could do zero about it.

>> i'm sympathetic to that point of view. i'm not sure exactly what mark's specifics were. jack ma said he stays away from the chinese government. >> that doesn't mean they don't stay away from him. >> that's correct. i accept that. and i regard the chinese as a bunch of law breaking cyber hackers throughout the world but particularly in the united states government and national security and corporations. now, having said that, are we going to make a choice and end all commerce with china? and my answer to that is, no, we are not going to make that choice and alibaba has a positive global affect. >> well, but there is one other issue and i have done a lot of work -- >> herb greenberg did lots and lots of work of chinese companies and timber that didn't exist. >> there are so many stories out there. i think mark made a great point. but it's not really the s.e.c. because it's a broader question and the great institution here

and listing the xaenls in this country because it starts with the listing standards of the exchanges. so they need to bring in more -- oh, you're looking like you're -- >> i agreement agreeing. finish your point. >> so i think there's more to it. >> don't you think the standards have been raised as a result of some of the research and the reporting done by you, others and some of the issues that have been raised over the years? don't you think the new york stock exchange and nasdaq are vetting companies in ways that they never had in the past? >> well, vetting -- what is vetting? going out and doing serious research on the ground or you meet the listing requirements? that's what it amounts to. >> i think herb is right in theory but i don't think the s.e.c. or cftc gets another budget dollar and not in this climate or in general to do anything beyond what they're doing and as the market globalizes and good in general we see the problem in many, many forms and functions. >> kate -- >> kate is right. kate is right on many countries.

you're absolutely right. but look. >> we have to let bob get in. >> this is a national security issue and the united states is a bunch of wussies coming to dealing with china. >> i'll tweet that. >> by the way, i wouldn't have sold the waldorf to chinese interests. the ambassador is there. all kinds of cyber hacking possibilities. it's the red army. we make the deals with them on trade and letting alibaba register and so forth. alibaba. what do we get for it? do we ever get anything for it regarding their hacking? we get -- that's not enough. i want them to stop tapping into our secrets. that's what i want. >> it makes no sense at all to argue that just because the chinese government can influence these companies and they can and do they should be banned from being listed outside of china. if that's the case, dozens of governments from totalitarian to just mildly totalitarian would not never list down here at the

new york stock exchange including russian stocks by the way. >> what about the idea that the chinese government or chinese investors may be on an advant e advantaged playing field of material information or they're able to get it whether or not with jack many's assistance? >> that was the point exactly. >> they don't have it and not so much the relationship just that there could be access. >> global markets is best way to drag them fourth sbeer the 21st century and to allow global capitalism and not excludeing them and a-shares completely independent of the rest of the world created a lot of weird distortions with chinese companies at valuations that trade in china that didn't make sense when the chinese companies in hong kong, traded outside and the global market exposed to them and criticize them if they -- the numbers were wrong or the chinese government influencing them. let it be known. why should we exclude them? >> it's a done deal and won't chop off commerce with china. but i'm sympathetic to what cuban is saying. her's the point. except for today, shanghai

market is on a hell of a run. >> yes, it is. >> one of the worst performers for a couple of years. and china is changing its economic policies. they're not only liberalizing their market structure but they're easing. today's collateral change was a tightener. they're dropping reserve requirement. they want the chinese economy to stay at 7%. it is still a pretty good play and stops out commodity deflation if their play is successful. >> very good point, that last one and turn things global. >> thank you. that's why i want to put it in because you would say it's a good point. >> mark cuban himself said he was a hypocrite. he said he doesn't want the company listed and he bought shares of the company. >> of course. he is an opportunist. >> he just wants it to be an even playing field and fair. >> he is right about that on the playing feed. he is right about the even playing field. as i said, our policies of china -- didn't mean to interrupt.

they're just so wussy. >> what do you really think? >> there's a lot more. >> thank you, everybody. stick around. catch guy and the rest of the crew, thanks so much. see you in 45 minutes or so. >> later! >> they're talking amazon taking on e bbay with the new make an offer opportunity. well, december -- i'm sorry. >> yeah. december is historically the best month of the year for stock gains and the market is ice cold including today's decline. >> will the santa claus rally happen? that's next. tell us right now if you think it will come true. cnbc.com/vote. polls are open.

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ham, tur ri, candy canes and stocks, the holiday season is known to bring the gift of market returns oftentimes referred to as the santa claus rally. what kris kringle have to do with the stock market? traders believe that more often than not stock prices rise between christmas day and knock

year's day. it is not clear what fuels the rally, maybe getting the annual bonus check or everyone's full of holiday cheer. these days, the term santa claus rally referred to any kind of bullish stock move in the final two months of the year. according to analysts, over the last century, the month of december has brought an average gain of around 1.3% and been positive 73% of the time. no other month even comes close to this kind of consistency for higher rrns. there's no guarantee on what happens in the future but wall street hopes that santa leaves gifts and not coal for investor stockings. >> so what happened to that rally? because no sign of it so far this year. tell us if you think it's about to come. cnbc.com/vote and take the live poll right now. >> joining us now, jeff and charlie. guys, jeff, is it going to show up? >> it's looks like it's going to show up as dom was explaining is

the -- he didn't have it all quite right. it's not anecdotally on page 112 i believe so check that. but, you know, the first point -- >> point taken. will it happen or not? >> yes. but the important point is if it doesn't, that's the first warning sign for 2015. >> right. there's a follow-on, right? what's the next corollary? >> besides the january barometer, it's usually professionals on the street in the last period of the year and everyone else is on vacation and a bullish buying bias picking up the stocks sold off on tax selling so when that santa claus does not and our saying is if he fails to call, bears may come to broad and wall. it happens in 2000, 2008 and two other times, '94 and 2004. if you don't gate bullish bias and seven-day trading period it's a warning for 2015. >> charlie, why wouldn't santa

claus show up? i mean, seems like the market wants to go up. may have a little glip here and there. by and large it wants to go higher. >> you almost never want to bet against the santa claus rally but investors should take note of differences. one of the main reasons for the rally is a drop of volatility after the holidays and into the new year and causes an increase of risk appetite, investors bid up stocks. there's a few factors at play today that might lead to an increase in volatility. first, in the credit markets, you are seeing credit spreads widen over a few weeks, wider year to date and wider over the past year and seeing credit spreads wider over the prior year, volatility in stocks tends to rise. also, you have the yield curve flattening. year to date lows long duration treasuries outperforming interimmediate terms. what does this mean for stocks?

it means higher volatility on average. lastly, within the stock market is defensive behavior. you have utilities and health care leading higher. our research has shown utilities outperform and leads to higher volatility and that's what we have today and there's no guarantee, only probabilities and suggest the probability of no santa claus rally is higher today. >> herb, do you believe in santa claus? >> i believe in history and i believe that the market's gains usually occur and it is what it is. we're below -- >> the two thirds of the people think it will happen and where sentiment overall is in the market. >> right. but as we know, whatever sentiment is, 18,000. >> what do you believe in? >> by the way, just because people sentiment says it's going to happen doesn't mean it will. >> do you believe in historical determinism? or do you believe in creative

intelligence? >> it is not a class in yale. >> all i'll say is oil is going down and profits are going up. the yield curve is important but it's still very positive. and the inflation signals are very low. so oil going down and profits going up. make me bullish. i don't know whether it's santa claus time or new year's time or whatever. this rally has not run its course. >> kate, we got interrupted. >> i don't know how much more i have to add but i have a trader in particular accurate about the calls as to what was going to happen and telling me to rip between now and the end of the year notwithstanding oil prices. who knows about early 2015? feels like the fundamentals especially on the energy side come together in the first and second quarter to where we may see a broader effect on the stock markets. maybe. but at the same time people seem pretty bullish on the leg down earlier this fall. it is it in terms of givebacks.

>> what's the page? >> 112. >> thanks so much. thanks, jeff, charlie. all right, dom chu. oh. two thirds believe there's a santa claus rally. >> the rest of you are scrooges. >> stop it. >> one historical determinant. >> dom chu, you have a market flash? >> i do. i mean, i hope i can gifts and not coal in my stocking. broadcom raising fourth quarter gings to the upper end of the guided range and increasing the quarterly dividend by 17% to 14 cents a share. it's also announcing a billion dollar stock buyback program. as a result, you see the shares up by nearly a percent in the afterhour trades and two companies with earnings after the bell. krispy kreme doughnuts and

moving lower in the after hours and you can see there down by 5%. a different story for korn/ferry, in staffinging and executive search and shares up by nearly 2%. interesting moves in the afterhours for those stocks. >> certainly. thank you. >> tech stocks had a great run? haven't chip stocks had a great run? >> they have. less than 5% away from 5,000. >> the nasdaq selloff? >> i mean, just -- i just think they're good cyclical signs that the economy is improving and outside of energy and commodities i see eight other sectors to buy and means basically i would buy the whole index. >> hold that thought, larry. we'll ask a question you will love to answer. the eye-popping jobs report last friday, is it an anomaly or new normal? ian shepherdson thinks the u.s. will bust out.

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per share for 2014 in the mid single digit range and analysts on average were expecting a 9% growth number so they're guiding below some analyst estimates for full year 2014 profit growth and continue to say that china division sales significant in the particular downgrade of the estimate and talked about adverse publicity for supplier of chicken in china and estimate the full-year same store sales negative working with that assumption that's how they arrived at their new mid single digit earnings per share growth for 2014 full year. that's below some estimates, one of the reasons why that stock is perhaps lower minus 3.5% in the after market session. >> wow. it is amazing that issue pummeled that stock. >> a lot of issues. >> that china issue for so long. all right. thanks, dom. despite the weakness, stocks had a good run for the year. combined with the jobs number that blew away expectations and

our next guest thinks the u.s. economy could be poised for a big things. >> joined by ian shepherdson, chief investor. great to talk to you. thank you for coming on the show today. you take heart in what you saw on the jobs number for real? >> oh yeah. i can't promise 321 every month. that's maybe asking a bit much but thmaybe 275. >> what makes you optimistic? >> the big change is small business sector finally started hiring and strong number for november was signaled a few months ago by a real pick-up in the small business hiring server and new numbers that are strong and telling us at least for a few months we'll do really well. >> gdp next year for the u.s.? >> picking up to 3.5. >> 3.5? >> yeah. >> i guess this', been down for so long that looks good. right? >> not absolutely wonderful but compared to the 2.25 for 4 years

i'll take it. >> what should the u.s. be growing at? >> given the size of the output gap, a lot of people out of the labor force and working part time, i would like to see 4.5 to close the gap up and probably not getting there just yet and i wouldn't be amazed to hit 4 at some point. >> what does that mean for when you think the fed makes the first move on rates? not the language. >> second quarter i think. this is the sting in the tail, you know. you can't brint 275 payrolls month after month and drive unemployment down to the level the fed thinks is unsustainable. you can't do that without a response. >> talk of emerging market crisis with the strength in the dollar, the drop in commodities. to what degree is that a threat to your outlook for the u.s. economy is there any potential for a feedback to here? >> there is some feedback an not very big and offset by the domestic strength i think. this is mostly a domestic

economy. 87% of the u.s. economy is domestic and stronger dollar is clearly hurting emerging market. going to hurt them some more. no doubt about that and drive down the price of imported goods prices into the u.s. and another tax cut for consumers and spend it and grow strongly and what happens in the end not such a big deal. what about this comment that jeffrey gunlak made today of a continued slide in crude oil and down below 50 bucks, maybe pushes 40, not out of the question, that you can get a 1% yield on the 10-year. that is not going to tell a story of a great going u.s. economy. >> no. because i think we'll' a decoupling of oil prices and the 10-year yield. the fed is not put off by aversion. they care about the tightening of the labor market and the unemployment rate and a nice pick-up of ratings and looking past the headline inflation rate and going very low. oil to 40, headline inflation is

0. >> you are not worried about the price of oil and the flattening yield curve. >> that's a tax cut. a big kick for consumers. a horrible on mining and cap x. >> what about the decline in yields? >> depends on circumstances. the market is blaise about the fed and a shock of tightening sooner and faster than people think and wake up the 10-year. we have to wait for the fed to change their mind, say something, maybe actually move but if we print 275 payrolls unemployment is falling and finally wages pick up, game over. >> great kofrconversation. thank you so much. all right. the architect of obamacare calling the american people stupid was on capitol hill today and before anyone could ask him a question, he had this to say. >> it's never appropriate to make one's self seem more important or smarter by demeaning people.

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falling oil prices widely expected to give the consumer and the broader economy a boost this holiday season. >> but not everybody's cheering the drop. more reports that the crude plunge could be putting some nat gas players and banks that lent them all money at risk. kate kelly with details. >> lots of betting going on as to when the effect of $60 a barrel oil is felt in the market at large. conoco phillips said they'll cut cap x by 20% and i've heard other companies are lining up to discuss their positions in this tough market because they don't want to wait until january to do so. still, at least one company, the natural gas producer cheniere energy is forging ahead with a facility in corpus christi. with big checks of wall street to fund it. even though the prices are typically linked to the price of crude, they're protected from

that actually by long-dated supply contracts tended to natural gas instead. but tough times for the enormous junk bond market on energy and they rely to pay back the facility assuming it does get done. this could trouble other companies, too. last four years, the sector raised a total of $550 billion in various credit financing so that's high yield investment grade and leveraged loans to the energy market since 2010 and in a bear market, there's either a big disconnect they say or a thinner tale for this crude oil setback than we think. it's been an interesting point i think. >> why would the natural gas companies have a problem? nat gas price is stable. in fact, they're picking up market share of oil because it's cleaner. i don't get that problem. >> the problem for frackers, they can't go too much further down but they have some margin here. i think the issue there is

regulatory and legal headwinds. with cheniere is liquefied and most players set the prices pegged to brent or japanese crude. >> we want to bring in a guest also standing by. carl larry is an analyst. good to have you here. what do you make of what kate said? when i hear her talking about the high yield that's out there, is this another -- do we see a swath of banks fail because they overlent to a huge sector that's about to take a big turn? >> well, you know, the big factors is that it's really a foreign problem. not so much a u.s. problem and when you look at other countries, that are producing and have the loans out, that's where the issue comes in. i think we're still in the back burner for u.s. but i think that the problem will be with international companies so i think that's where we see the big issue coming up soon. >> is that because you see greater vulnerability in global prices? based on what opec's trying to

do, namely keep production intact, keep that $30 million a day quota to pressure u.s. shale drillers so there's more vulnerable and a bigger leg down overseas? >> looking at what the rest of the world, i mean, demand's that low and they're having a hard time finding a way back up. china could be a really good swing source for oil demand and looking at europe, you know, they don't have a lot of upside there. refining margins are terrible. production on the north sea on the decline. there's a big issue with europe. that's the one that needs to come back. >> can we get back to the high yield issue? so much high yield issued to these drill earls in the united states. larry, i think about the fact that everybody and their mother moved into high yield because it was the only place to get yield. i know people that put their grandmothers in high yield and now they have huge -- huge percentage of the sector. right? >> single biggest sector in

terms of high yield issuances. third biggest in the s&p. >> on we on the verge of a moment of invest to recalls got into something they didn't know they were? >> small way. spreads widened in the junk market. marginal oil producers probably overleveraged and banks who issued loans and sometimed leveraged and going to be some hurt. this is a small part of the story. this is in my opinion wall street's desperate effort to turn every piece of good news into a 2008 catastrophe. >> oh my goodness! small part of the story? >> major players -- >> hold on a minute. mom and pop are watching this saying a small part of the story? invested in etf fully in at 60%, what's the leverage? >> you think a lot of mom and pops in hyg?

>> yes, yes. i do. i do. >> they could be. you had to get the yield somewhere. are they in individual securities? >> they're not buying the paper, herb. but maybe through the etf market, right? >> they were -- >> that's what i'm saying. hyg. >> exactly. >> talking about a small number of companies here. they're not the major guys. and that's why i'm saying this is not 2008. >> there's a bifurcated issue here. one is what michelle's bringing up. a wonderful question and the other's the broader macro point you're likely right on and you have this other part of the story. >> herb, herb, i believe in free markets. >> do you really, larry? so do i, larry. >> i don't know. maybe you're a historical determinant. my point is to you in capitalism there are failures. okay? and as frederick hile taught us, sometimes the failures more important than the successes because they teach us stuff.

there's a small quantity of failures to occur but the majority of grannies are going to do okay. >> can i just make a gut check here? i mean, i don't know what's going to happen, how long $60 a barrel oil might persist or 50 or getting to 40 but i think larry, you are right, it is contained for now. the question is, though, we were talking about this, how long does it go on? you will see the drillers continue to drill until they can't out of money and oil is so cheap that they can't -- >> got to go. >> can i ask mr. larry, i hear you overseas and insightful. what is your point on the herb greenberg catastrophe scenario here? >> not a catastrophe. >> herb's in the catastrophe. >> no, i'm not. >> i think it's a small piece. >> the thing is that we are still a net importer of crude oil. we're producing 9 million barrels a day and great and

bringing in 6 million. i mean, it is not like we're -- we don't have an oil glut here. we are still bringing in oil. refiners are making so much money the past couple of years it's ridiculous. people follow the herd and think think energy stocks are going down and they're not. they're really great value right now. >> thank you, carl. >> to be fair, they have gone down about 40 odd percent, right? >> yeah. you made a great risk here. your analysis is correct. god bless you. >> are you with me here on the leg down that we have already seen in the energy sector? >> no. i was going to say there's a difference, ads well, the impac and the segment is about and whether the banks are impacted or not. there's a difference between corporate leverage on bank balance sheets and consumer leverage on bank balance sheets. the heart of the 2007 crisis versus what we're maybe seeing today and that's kind of your part, isn't it? small, smaller.

>> but that doesn't mean -- >> less destructive. >> doesn't mean citibank won't go down for the seventh time in 20 years and we will bail them out again. it's a government-owned bank. michelle is exactly right. >> i looked at the numbers in terms of who's done debt and equity underwriting in the last couple of years and all the big universal banks, of course. citigroup, jpmorgan, wells fargo. >> you have to go somewhere. >> i'm not knocking it. i'm just saying they have exposure. >> let him talk. >> but yeah. >> thanks so much. we have to go. >> okay. okay. >> this guy is brilliant. i want him to talk more. >> carl larry, good to have you. consultant at frost and sullivan. i'm looking over here now. okay. all right. oops! that's about the only thing mit economist gruber didn't say before congress today. that's hill right there. >> a month after a video went

viral and gruber one of obamacare's authors said the administration took advantage of the quote stupidity of the american voter, unquote, he appeared before congress to try to explain the remarks. we'll show you exactly what he said next.

one of the architects of obamacare hauled before the house oversight and government reform committee today.

>> the controversial remarks questioning the intelligence of the american voter and how obamacare was passed is what prompted this appearance. we have exactly what he had to say today. >> reporter: hi, guys. very tough day on capitol hill for jonathan gruber today, the consultant got into hot water over a month for videos of comments he made over the past year in which he suggested that in part the stupidity of the american voter was a help to those who are trying to pass obamacare. today he came to capitol hill to apologize for those comments. take a listen. >> it's never appropriate to make one's self seem more important or smarter by demeaning others. i knew better. i know better. i'm embarrassed and i'm sorry. >> reporter: the members of the congress knew that apology was coming but nonetheless today they took the opportunity really to heap scorn on gruber from both sides of the aisle. take a listen to that, too. >> as far as i can tell we are here today to beat up on

jonathan gruber. for stupid. i mean, absolutely stupid comments he made. >> professor gruber is often said in washington to be the definition of a gaffe. that's when somebody accidentally tells the truth. >> reporter: now, guys the sub text in all of this was democrats out there arguing that gruber's comments were, quote, stupid, unquote, but that he was a relatively minor figure in the overall passing of obamacare. gruber himself minimized his role today. republicans said that he was unintentionally brilliant for telling what they believe is a hidden truth about how obamacare was passed. back the you guys. >> yep, yep, yep. he doth protest too much. thank you. >> two things of gruber. >> quick. >> he appeared on the kudlow report months ago and lied to me. i was talking about medicaid to balloon as a result of the employer mandate which it already has ballooned and he

kept telling me i understand it and it's a completely separate track and he was dead in the water wrong. second thing to say, real quick, democrats are stupid. they backed obamacare and have suffered the greatest midterm election losses in history. republicans are a little smarter by opposing obamacare with the best majority in congress since 1930. so let's look at it that way, too. >> jed clampett said of mit phd. no need to spell those dirty words around here. we're all adults. it's a shake-up at abercrombie & fitch. after 11 straight quarters of declines, jeffries stepped down from the teen retailer. the move sent the stock soaring and so do investors agree with herb greenberg it's long overdue? we'll get herb's take on the resignation of the person he named the single worst ceo of last year.

abercrombie & fitch announcing is that mike jeffries is retiring, effective immediately. the stock up about 8% on the news. oh, he resigned and the stock goes up. >> and it just so happens our own herb greenberg chose mike

jeffries as his worst ceo of the year 2013. so why was he on the list to begin with? and what do you make of the departure. >> well, because his performance was horrific, and on top of horrific performance, he was a public relations disaster, and he obviously didn't see it. and that, i think when you reach that point and you have so many different factors, and at the same time, you had an activist in there pushing for change. >> he was a guy that said overweight teens shouldn't shop in my store, the clothes don't fit them for a reason. >> he should get together for a drink with the former lululemon ceo, as well. who doesn't think all women can wear those pants. >> it was the founder. >> what about the guy from utx that doesn't show up? >> well, if it had shown up in the numbers, perhaps it would -- >> he didn't show up. >> well, he's gone. >> the moral of this story is don't show up on herb's worst list because clarence otis of darden was number three. he's out.

>> he's gone. >> an activist in that one, as well. >> number two, an activist and the activist is carl icahn is still in the job. and two is paul ritchie of nuance. it's still way underperformed. and i'm surprised. it's not a name we often talk about. speech recognition software. this is a significant technology, but it's been a controversial company. and he's still in the job and with carl's backing, i suspect -- >> watch out. >> the only way he will is with carl's backing. >> i would suspect because otherwise it's been a disaster. >> you want to shed any light on who could be on your list for 2015? >> let me tell you something, i didn't do a list this year. but p when i look at it, the one who people would push for. i usually put it out to a polling. and i can tell you now, first person top of the list, don thompson. >> mcdonald's ceo. >> and people would put -- she's been there for two years. >> rametti. >> yeah. i would not necessarily put thompson as one of my top three,

even though the company had all of these issues. i think it was an inherited issue, situation. >> don thompson, well, he was the ops guy when mcdonald's was humming. >> those are old school blue chips and -- >> herb doesn't -- >> you know what, you're asking me a question. i haven't given it thought. >> can i give you one? >> sure. >> can i give you one? >> yeah, sure. >> jack moll. >> he's engaging. >> a heck of a job. >> giving it back to mark cuban, aren't you? >> putting aside the issue of chinese communist government, this guy -- >> the company shouldn't be allowed to list here, but he's the best ceo. >> that's right. >> we're listing it because of him. >> he's enabling the u.s. and the approach to chinese commerce. >> jack's not, it's our own government under republicans and democrats. >> he's a tremendous story. he's a classic. >> i watched the interviews with him. i watched the interviews with him. and by the way -- he didn't go to an ivy league college, which i really like. >> thank you, guys. all right.

next -- >> that was a big day for markets and crude. we're going to get what our panel is watching tomorrow after the break. okay. uh, and i know-uh-i know what blood type i have. oh, wow! uh huh, yeah. i don't know my credit score. you don't know your credit score? --i don't know my credit score. that's really important. i mean -- i don't know my credit score. don't you want to buy a house...like, ever? you should probably check out credit karma, it's free. credit? karma? free?...so, that's... how much? that's how much it's free. credit karma really free credit scores. no credit card needed.

having a perfectly nice day, when out of nowhere a pick-up truck slams into your brand new car. one second it wasn't there and the next second... boom! you've had your first accident. now you have to make your first claim. so you talk to your insurance company and... boom! you're blindsided for a second time. they won't give you enough money to replace your brand new car.

don't those people know you're already shaken up? liberty mutual's new car replacement will pay for the entire value of your car plus depreciation. call and for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch to liberty mutual insurance and you could save up to $423 dollars. call liberty mutual for a free quote today at see car insurance in a whole new light. liberty mutual insurance. all right. time for some final thoughts. what are you guys watching?

>> this was a fun hour, wasn't it? >> yeah, it was. >> fun conversations. >> yeah. larry and i are trying to solve some issues in congress. the difference between obamacare and getting rates lower. we're doing this off camera. it's a small businessman trying to start a business, i can tell you, i can tell you -- >> i'm going to get that. i'm going to personally deliver to herb. >> yes. >> a corporate tax cut that cuts the tax rate to 25%. >> at least somebody can deliver a tax cut. >> s corp.s and llc. >> use that as a tradeoff for obamacare in congress. >> republicans don't know what they're going to do on obamacare yet. that's why this jonathan gruber thing is kind of last year's story. but on corporate tax reform, with the small pass throughs getting the lower c-rated 25%, i think that's bullish as hell. it's going to be announced fairly soon by paul ryan. i like it a lot. >> kate, what are you watching this week? >> curious about financials. interesting commentary over

goldman sachs today from b of a. in terms of trading, i'll be curious to see if there's more color in the coming days out of some of the other banks. >> good stuff, guys. >> good fun. that does it for us on "the "closing bell."" >> "fast money" starts right now. take it away. >> "fast money" starts now, live from the nasdaq market site in new york's time square. melissa lee will be joining us in a little bit from las vegas where she spoke with billionaire investor mark cuban, and she actually got him to play the "fast money" favorite, "would you rather," yahoo or google, twitter or facebook, amazon or alibaba. his picks are coming up. our traders, steve grasso, brian kelly, karen finerman, and guy adami. major swings in the market. first in shanghai, china's stock market suffering the biggest loss. greece falling 13%, and then the u.s., it was on track for an ugly day before