ken chenault talking about to our andrew ross sorkin talking at the deal book conference. that's enough of that interview for now. the federal reserve proposing a new rule increasing capital requirements for the nation's largest banks. some regulations make it too costly for banks to hold large deposits from companies, making them ask their clients to put their money elsewhere. former fdic chair sheila bair is here next with reaction. stay tuned. can it make a dentist when my teeth are ready?

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welcome back. it's t is the spending bill that would keep the government open in jeopardy? john harwood has the details. >> there's an agreement negotiated by the republican house, democratic senate, and the white house to fund the government through the end of the next fiscal year with the exception of homeland security, only funded a couple months as a republican protest against the president's immigration action. it is now facing fire from both the left and right. the white house and republican leaders both trying to round up votes for this package. if they fail -- and remember, the government runs out of money tonight. the house will drop back and pass a short-term funding extension.

the senate will follow suit. then they would leave for the christmas holidays without having passed a longer term funding extension. and we're just waiting to see whether they can round up the votes. it's very interesting seeing a combination of both the republican leadership in the house teamed up with the president against nancy pelosi, who's the house democratic leader. she's opposed to this bill. >> our john harwood this afternoon. john, thank you very much. part of the spending bill that john spoke of includes a whittling down of the dodd-frank financial regulations. to get her take on that and other bank news making headlines lately, i'm joined by former fdic chair sheila bair. good to have you back. welcome. i just want to begin with what's included in this spending bill potentially. this provision that would allow for the spinoff, if you will, of the swamps business, part of the dodd-frank financial reform. how significant in your view is it that this could go forward as written? >> well, i don't think it's a huge provision.

it's an important provision. directionally it goes the right way in trying to take certain types of high-risk derivatives outside of an insured bank, force it into the broker affiliated. that's important, but it's only about 5% of the business. i guess you can argue it both ways. i guess i'm frustrated that wall street decided to make this big power play of a revision that will maybe help them a little on the margin. they can still do the business, it's just having to do it in the broker affiliate. they're taking a lot of reputational hits now. a lot of people saying you're trying to blackmail us, not fund our government until you get your way. it's terrible publicity. i hate to see that because i think the industry needs to be rebuilding trust with the american people right now. you do stuff like this, it just adds to the cynicism about banking, especially big banks. >> and you bring up the 5% figure, which i've seen others refer to. you have to wonder since it did somehow wind up in this legislation, perhaps it's a much bigger deal to them down the

road than the number would otherwise suggest. >> i would like to think that, but i don't. i don't think they want to give an inch on any of this. that's been the lobbying tactic all around since the day dodd-frank was enacted. don't give an inch, take everything you can get. i think it's sad. i think it's feeding into public cynicism and distrust. i hope the bank ceos will look at this spectacle going on in washington that their institutions are being implic e implicated in and ask themselves, is this the kind of reputation i want for my bank? i hope they take a serious look at what's going on. >> i'm curious as well when you said this whole idea of them not giving an inch. what we hear is all about how there's just been too much forced upon them already to the detriment of healthy capital markets. and to the concerns about liq d liquidity in parts about whether it's the fixed income market, commodity currencies, et cetera. is that just rhetoric, or has there been damage done here? or are there economic factors underlying all this? >> i think there's been

incremental progress. i don't want to take away from that. it has forced them to change their business model a bit. i think in a way that makes them for stable and long term is in their best interest, whether they want to admit it or not. i would agree with them there's been far too much bureaucracy and complexity as part of this implementation. we need simpler rules, easier to understand, easier to enforce. the horrific complexity of this has created a lot of compliance cost that is a drag and hurts the smaller players too. i would agree with them on that. in terms of reform in any way fundamentally changing their business model, that hasn't happened. it's a hit around the edges that has made them more stable. they're still as profitable as ever. you saw the third quarter earnings released by the fdic. they're back at record profits again. it's kind of hard to feel sorry for them. >> yeah, want to go back as well to this issue about how this is being done. so this is part -- this language inserted in a spending bill that

we need to keep the government up and running and ultimately funded. anybody who thinks that dodd-frank, by the way, is a done deal, as we know, only about half of the provisions have even been completed. this thing is still five years down the road from its passage. very much a work in progress. how much of that progress depends now on this provision, on what happens when the new gop congress begins the beginning of next year? how much is at stake here over the next couple of months for the future of financial reform? >> well, i think a lot is at stake. you can see this playing out in the controversy over the weiss nomination. you have a lot of good people, very good people in this administration. but the commitment to the reform, the speed with which these reforms have gotten done, the way they've been implemented, they haven't been simple. i do think you have disproportionately people running the economic policy and rig story and financial policy that still have a somewhat wall street centric view.

the american banker had a really good piece this morning about the overwhelming number of people who were part of the reuben economic team, how they have populated this administration. again, they're good people. but they have a particular view point that i think is somewhat of an echo chamber. the hard-charging folks who want to get this done, get the pain over with, get the rules in place and get the system stabilized you haven't seen for the most part that kind of commitment and resolve. yes, now we are at peril because the public is losing interest, they're getting cynical, the government is never going to fix it. it's a very, very bad situation for the financial industry and for our government. >> what's the alternative vision? if you see one emerge managing? is it one elizabeth warren has been championing? what does that look like? in other words, if we don't go down the road we have to date, what does the other part start to look like? >> right. well, i think they need to be

simpler. we need to have credible resolution mechanisms. so too big to fail is over. the market understands if they go down, the market is taking a loss. the taxpayers aren't taking the loss. we need much higher capital levels. we have made some problem there, but they're not where they should be. those, i think, are the two most effective things. much stronger capital levels and credible resolution mechanisms to get market discipline back into this sector are the best things we can do. but whether we're going to have that kind of forward progress or fall back, i don't know. but i would like people that have more of a main street, those who use financial services and those who provide financial services, would be nice to get more of those kinds of people in these positions. you can get very smart, very sophisticated people with those kinds of backgrounds working in the financial regulatory structure. and there's still plenty of people who understand wall street and will bring that perspective. we need more diverse views. >> i'm reminded as well by how much the industry may be forced to change by the debut of the lending club down here at the new york stock exchange today. >> that's true. technology may have changes as

well. that's very true. >> that's how it happens. this is a case where we're seeing pieces of what was traditionally the bread and butter business for these banks taken by the lending clubs of the world, taken by some of the payment stuff going on right now. we just heard from ken chenault on this. there might be an issue with even though they've had record profits so far, exactly where the return on equity is going to come from over the next couple years. >> well, i have some concerns, but your overall point is a good one. frequently when you have these very, very large conglomerates and concentration of power, frequently it is the market that eventually breaks them up. you can see government playing a positive role. for example, teddy roosevelt, if you want to go back that far, helped accelerate that trend. but yeah, it is a competitive market. that's one of the things that's good about having a competitive market. but it's so pernicious about too big to fail. it gives huge funding advantages to institutions that are backed by the government.

makes it harder for the competition to come in. >> just a final word before we let you go to put this in p perspecti perspective. the dodd-frank bill passed a couple years after the financial crisis. we're heading into 2015 with this debate over whether this language needs to be inserted into the spending bill tonight. i mean, have we made enough progress? is it -- what do you think the verdict is thus far on dodd-frank as a bill, as its function of overhauling the problems in the financial system? >> well, i think you said it's about half finished. it's a work in progress, which is unfortunate because it's 2015. it's only about half finished. the pieces that have been done, there's been a lot of complex y complexity, a lot of exceptions, a lot of lack of transparency, which comes with complexity. so even the pieces that have been finished, how well they will work is very much an open question. again, i just wish we'd had more people with determination and resolve to finish this and finish this in a way that's effective and protects the public so we never see 2008

happening over again. >> we'll leave it right there. sheila bair, thank you. up next, talk about bad weeks. from lawsuits to rape allegations against drivers, uber is on the hot seat again. kate rodgers tallying up the hits. and we'll look at uber investors. are they starting to worry about the $41 billion evaluation? and sony's e-mail hack revealing executives making racially sensitive jokes about president obama. how this hack attack is changing culture in hollywood. stay tuned.

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welcome back. some breaking news on united technologies with our courtney reagan. >> that's right. so these headlines are crossing as far as united technologies' guidance is concerned for the fourth quarter. both their earnings guidance and their revenue guidance coming in below street expectations. united technology is looking for fourth quarter earnings of $1.60 per share. consensus is about $1.68. revenue of about $17 billion. kehl by, back to you. >> and we're seeing the share reaction, trading down after hours. courtney, thank you. last week uber was celebrating a new round of funding. this week they're doing anything but celebrating. kate rodgers rounding up a tough week for the car-sharing service. >> that's right, kelly. let's call it the week of uber backlash. the latest coming out of

chicago, which approved a plan on wednesday to sponsor a new app that will allow riders to hail local cabs, which they say will level the playing field between the taxi establishment and upstarts like uber in the city. reuters is also reporting chicago police were investigating allegations that an uber driver raped a passenger in the city and the driver has since been removed. on tuesday, the san francisco district attorney filing a civil suit against the company. it alleges that uber charged for background checks it didn't perform, operated illegally at local airports, and did not get state approval for its app that calculates user fares. portland also sued uber to stop operating within the city, where it just launched on friday. claiming the company isn't following local regulations. uber's problems aren't limited just to the u.s. the indian government recently banning uber and all web-based servicers like it in the wake of an uber driver being arrested on

charges of raping a passenger in new delhi. spain and thailand also ordering the company to cease operations there. while the valuation is getting a lot of attention, tso, too, are its growing pains. kelly? >> all right, kate. thank you. coming up, goldman sachs ceo lloyd blankfein declaring today we should prepare for the advent of what he calls the chinese century. it's one of the most popular stories at cnbc.com. we'll see if it makes the cut for the hot list next. and hollywood, long known for being superficial. but racist? no one spared including president obama. we'll have the latest from tinsel town just ahead. (vo) rush hour around here starts at 6:30 a.m. - on the nose. but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading.

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welcome back. crude oil is under more pressure after hours, lighting up the hot list, alan waste her joins us now. how bad is it? >> it's pretty bad when you look at oil, but it's bringing a lot of traffic to us right now. people have been eating up the oil coverage. right now a little analysis by

john shone p taking a look at the winners and losers and what happens if it goes to $40 a barrel? surprised philippines actually stand to benefit nicely. the deal book conference going on in new york, we've been getting a lot of traffic on that. right now the leader of that pack is paul singer, running elliott management, talking about how unfair the economic recoveries is, into you it tends to favor investors, not the regular folks, and the continuing resolution going on, people diving into the news coverage, we're updating it, and we get more traffic. >> pretty good at that gap bit after is the experience of the last couple years. that will be a story we're following all evening, and the hacking of sony's computers. that's when we come right back. you can bring back a lot of things

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the best offers of the season. lease this 2015 standard collection ats for around $329 a month. welcome back you. the sony hack keeps getting work and execs under fire for perhaps being seen as racist. julia? >> that's right, kelly. lead correspondents amy pascal

and producer scott rudin revealed -- it started when pascal asked what she should ask the president about. should i ask him if he'd like jengo, and then threw back several films saying i bet he likes kitchen hart. both of them have apologized, pascal saying the content were insensitive and inappropriate, but are not an accurate reflection of who i am. i accept full responsibility for what i wrote, and apologize for everyone who is offended. >> sources tell me there's been a massive shift of any sensitive communication towards the phone. i'm also hear execs across the studios are searching all the correspondence they have ever had with sony's employees, some of them even making preempt tiff

phone calls for those who might be offended. >> kelly? >> wow, so yulia, not the last that we seem to be hearing about it. jon fortt, your reaction to these accusations of racism? >> it's insensitive, the jokes may be bad, but i don't think on the face of this this is racist. they may think it's funny, yeah, probably he doesn't, naming all these movies with black people in them. if they were going for offensive, i think they could have been more offensive, but i can't imagine how many e-mail searches they're doing now and hitting delete. >> it was a reference to a -- and just an unexpected i guess -- was that unexpected? >> you mean the hacking? yes, there's lots of hackers out there. >> i've had people in the last couple days saying give me a call. i wonder if this is more

chilling than anybody has suspected, because you say anything -- and all your private e-mails are out there. >> forever. never go away. >> no context, nothing. >> we're all back to the phone. >> dr. jay? >> don't put it in pictures, don't put it in writing, kelly. >> how about pictorial or otherwise quick final thought, what you are watching tomorrow? >> i'm going to see whether or not we can settle at a price of crude. i already set is 3% move, if we start settling and only see 1% moves, that volatility with come down. >> real quick? >> and we'll be talking to the ceo at 10. i'll be watching that stock. >> less oil prices, more oil stock valuations. 12 times p.e. ratios, 1.3 times book, those are near ten-year lows, that's usually a good time to be thinking about adding to the oil, not running from it.

>> gentlemen, thanks. "fast money" is coming up in just a few moments, ticking up on this -- which continues after hours. \s. "fast money" starts right now. on you traders tonight are dan nathan, steve grasso, karen finerman and guy adami. we almost had a big rally today, but oil prices weakening again breaking below the $60 a barrel oil for the first time in five years. >> there's a lot of positives to the economy. . the most important thing is