thank you for watching. >> thank you. "closing bell," final hour of trade starts right now. >> see you tomorrow, too, by the way. welcome to "the closing bell," everybody. i'm kelly e vanls at the new york stock exchange. >> i'm bill f griffeth. another big year of the markets, kelly. following the stories. i mean we didn't get the tremendous numbers we got in 2013 but 2014 turned out to be a big year didn't it? >> especially, bill if you look back at how long the stock market has been rallying now. eight quarters in a row. we haven't seen a run like that in quite sometime. >> those small caps are just kicking in. they're kicking in just the right time with the end of the year. plus new evidence of weakness actually for home prices. not everywhere.

we're going to talk about the hot pockets and the not so hot areas around the country and what it means for real estate in 2015. >> we'll also have an update for you on that missing airasia plane and then a closer look at how it's possible we don't know what happened to two passenger jetliners now in less than a year. >> it is hard to believe, isn't it? more than 2 million people forking over $5.99 plus tax along with their credit card number to stream the motion picture "the interview" over the weekend n. this era of cyber-hacking, does it show many people don't worry about that issue when it comes to their own personal information being stolen? we are looking at that that's an angle to look at coming to sony pictures and "the interview" here. >> and an hour to go here kicking off the final week of the year and 2014. if you can believe it we have a headline. the dow over 18,000. the close above that level last

week and today comfortably above that level and now the dow is green. the s&p up by about 3 and the nasdaq half a point for its part. >> all right. let's get to the exchange for the final monday of the year. anastasia anamaroso, jeffrey cleveland, jim kahn tom essay and kenny pulcari there at the new york stock exchange. kenny p, you know what are we supposed to expect this final week of the year especially when we're really in comeback mode after that decline we saw middle of december? >> you won't expect too, too much. i think most of the action if any comes on wednesday, the final trading day of the year. it's a full day. it gives everyone time to take advantage of that last-minute kind of realoe case tax loss selling and typically and we have seen it today, very very quiet day.

there's no real economic data on the calendar. there's home price reports coming out and kind of old news at moment and not causing any activity at all. i think you have to wait for the year end wednesday and that's about it. >> it's amazing, jeff. i'm struck by if you look for example, the lead headline of the drudge report right now, the sworld safest richest and healthiest in history and giant bold letters and seems to be a moment of everybody waking up and going, wait a minute. look at david tepper and thinks 2015 will be a great year. do you think we'll see that for the economy? talk to us a little bit about the trends you foresee. >> i think that drudge report headline is spot on kelly. happy holidays to you. it is still a wonderful life. there's good positive signs out there, particularly in the u.s. economy. we're looking at 2.5% 3% growth in the coming year. we're looking at another great year for the job market.

that's all wonderful. i think we're setting up for a good year in equities and the bond market won't fare so badly given that we don't have the boogieman that's worried everyone for four or five years now, inflation, kelly. it's not come and don't expect it next year. it could be a really great year once again in 2015. >> anastasia, what about that? plenty of people are asking is this as good as it gets with prices holding steady here i'm talking about like gasoline prices, oil still going down here, interest rates are still low. the housing market is showing signs of continued growth here. stock market at all-time -- i mean do you see any things to be concerned about going into 2015? >> yeah. i think first things first, it is absolute right and it's been a manner year for the american consumer. more so for the u.s. consumers. you're right about the unemployment rate lower gasoline prices and the fact that wages went up ever so

slightly, that does set it up for very strong 2015. economically speaking. now, to kind of balance the discussion a little bit, i will say that 2015 is not going to be risk free. in fact a lot of risk we have seen in 2014 can and likely will be carried over into 2015. russia, of course not to mention, ukraine, lower price of oil, high yield. and also places like venezuela, for example, also very sharply and adversely impacted by lower oil prices and there's also greece. right? greece now has a snap election set for january and i suspect we could see volatility between now and then leading up to that. >> tom, how focused are you on europe right now? will the risks emanate of russia? >> i think so. obviously that was a disappointing headline out of greece today. it is not a bearish game changer on europe but the big thing is does the greek political instability delay qe by the ecb

which is widely expected in january? if that does happen you could see some headwinds on markets. but right now, it's not quite the bearish game changer some of the headlines are making it out to be. a little bit, yes. i think europe can outperform the u.s. in 2015. >> jim, the guessing game is you know what will be the performers in 2015? as we begin the new year here where would you put money to work? utilities are at all-time highs. small caps have come back now suddenly. do you go with technology? what are you doing here? >> so it's interesting that all of the guests talking about how great 2014 was but investors will be surprised. diversified portfolios had a rough rear. europe small caps, commodities, you took the brunt of a pretty bad year for all assets except for the dow jones, s&p 500 and u.s. 30-year bonds and there's shock when people open up the statements and compare it to

all-time highs in the market and seeing in '15 a reversal of anomaly in '14 and bullish on european equities in 2015 and a.m. looks cheap and moving some money into emerging markets. russia china, the places with terrible negative head lines in '14 i don't think rush why's likely to invade another country and i don't think growth in china slows substantially more and that's supportive as a whole. >> jim, something you said is so fascinating and i wonder if there's a broader trend over the next couple of years. now said this is the year the diversified portfolio did not work for you. what do you think people do as a result of that? will they say to heck with this idea in terms of alternative asset classes and go to a half stocks, half bonds kind of portfolio? >> it's interesting. talking to clients, should i be more invested in the u.s.? why do i have international stocks in the portfolio?

seeing what we have in 2014 four this large since 1970. next 12 months on average international markets outpace u.s. markets by 14%. that's huge. what i'm telling them is stay invested and diversified. what didn't work in 2014 is likely the big winner in 2015 and looking sort of at consensus in terms of what people's best trades are for '15, it is around the things that didn't work in '14. >> can i get a five box? >> do i get a box? >> yeah. sure. you can be in there, too. show of hands. anybody agree with jim? do you see the european markets and the emerging markets outperforming? kenny raised his hand first. >> i do. i think he's absolutely right and negativity and this whole greece thing only causes in my opinion mario draghi not to move up the announcement then i think scheduled for january 20th or somewhere around there and move it up, a sense of this greece thing to spill over and cause

turmoil in europe and i think that net-net unless you're fully invested in greece this is not going to necessarily be a big problem and europe will do well. >> tom? >> yeah. absolutely. i agree with everything that kenny and the previous guest said about europe and also keep something in mind for the united states. everybody was bullish but there's a large differential between where the fed expects interest rates to be at the end of the 2015 and where the market expects interest rates at the end of the 2015. i think there's risk of potential headwind on u.s. stocks, as well. not just europe to outperform but the u.s. underperform going forward in 2015. >> and jeff? why aren't you as interested in some of the beaten down asset classes as was mentioned, europe commodities even? do you not foresee the same kind of bounceback next year? >> yeah. i think long run in our view commodity prices are going lower

and oil, you know would be one candidate for that. another candidate i think would be gold. i think gold is overvalued and can move lower so just because it zrnt a great year this year doesn't mean it's a great year next year and then nervous maybe it's a gut instinct everyone is captivated with sort of a strong u.s. versus the rest of the world and a lot of story that is get out there that ecb qe is when's needed and drive markets. whenever investors are too much of the same narrative i get a little suspicious so i don't think qe in the euro area solves europe's problems. i think investors will be disapointed and the other area a similar problem is japan. i think investor enthusiasm for those policies will wane in the coming year and find out that qe wasn't the solution to japan's problems and they'll be left a little bit of disappointment for

global investors at that point. >> all right. i like it. >> not there yet. >> good to see everybody. >> thank you. >> something to think about here with 50 minutes to go. >> happy holidays to you. >> to all of you. and the dow, bill as mentioned turned positive trying to hold on to a small gain here of 5 points. 18,058 today. the s&p adding about 4 points nasdaq up by just 1. >> wait until they get us to do our predictions for 2015. that ought to be big. >> s&p by the way is trying to set the 53rd record close of the year so we'll be watching to see if we can do that. when we ring in the close. amazon reporting more than 10 million new prime members subscribing this holiday season. that's 10 million. the pros will debate if the online retailer is a stock you need to own heading into 2015. plus we want to know i mean this is one of the great water cooler stocks out there. do you think amazon shares will be higher or lower a year from

now? click on cnbc.com/vote. cast your live vote and we'll bring you the instantaneous results as we're talking about it coming up. what's in store for the housing market next year? we'll check in with our diana olick and dolly lens for their outlooks. stay tuned. you total your brand new car. nobody's hurt,but there will still be pain. it comes when your insurance company says they'll only pay three-quarters of what it takes to replace it. what are you supposed to do, drive three-quarters of a car? now if you had a liberty mutual new car replacement, you'd get your whole car back. i

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my 2015 wish is to see a very strong economy and to see our middle class start to enjoy some of the successes that many of the upper class have benefited from. they have been a neglected pot and the way they get better is to see the economy grow and more jobs created. >> great allen questrom.

>> wishes coming true. amazon celebrating a milestone. the online retail giant adding 10 million prime customers. >> courtney reagan joining us. >> if you were among the holiday procrastinators and this may have helped you deliver in time for christmas. the prime membership is $99 for a year of free 2-day shipping on millions of items. music content and more. amazon never released the number of prime members but saying more than 10 million more consumers tried prime for the first time this holiday season. there's an estimate of 30 million members and they also say customers ordered ten times as many items with same-day delivery this season than last. mobile stole the show. 60% of shoppers using a mobile

device. a trend an accelerated getting closer to christmas and sales from amazon app doubled. some of the most popular toys are "frozen" related and they reached the top of cinderella's castle 855 times and wall street won't know how the holiday season turned out for amazon until the earnings released sometime toward the end of january. kelly, back the you. >> can't wait for those. thank you. what does it mean for invest to recalls? is this the best time to bet on amazon stock, bill? >> we are asking you folks that question in our poll. cnbc.com/vote. we want to know your thought. one year from now, will amazon stock be higher or lower than it is right now? let's ask the pros as well. joining us we have collin sebastian seeing opportunity and james rameli does not see anything incredible for this stock in 2015.

james, let's ask you why. what's your concern? >> right. so what we saw in the broader market in 2014 was a huge move higher. s&p closing this year higher by around 13% and seeing a huge move lower in amazon. it was not loved in this rally and the main reason for that is amazon continues to seek investments outside of the core business trimming profit margins that are razor thin. i don't know what these prime me believes mean for the stock. investors aren't overly enthused about it today. however, i think margins will continue to be of major concern for amazon in 2015 and i don't see anything in the pipeline to improve that situation for them for profitability. >> i'd love to know if they talk about churn ever. anecdotal reports say maybe people got a free trial membership with a card offer or something like that. what can you tell us about who all of the members are and if the memberships will be sticky

or see some churn for amazon. >> well, we believe the numbers do include free trials. i think that's something they've offered for a number of years but certainly the overall base of prime membership paid has been increasing over time and certainly speaks to ongoing growth opportunities for the company. >> is it something, collin to help put the concerns of james and others bearish on the shares have about amazon's ability to monetize some of this investment it's making in the future? >> well there's no doubt that you have to take a long-term view on amazon and the stock. the company, the leadership team, is focused on significant growth opportunities and the markets of retail and technology and media. they don't manage to a particular quarter or a particular year. and so as an investor although we think that margins have likely bottomed out here they're less likely to move lower at this point. we do think it requires some patience. >> what do you think, james?

>> right. i mean that monetization of the investments they have had over a year has really been the key of why they're struggling so much and why investors have yet to get enthused about the stock. a big thing to help amazon going into the next quarter is the price of energy is so low in the last quarter of this year and help the american consumer. however, if we see that trend reverse into 2015 i think that puts more pressure on the consumer and have more people bearish on the american consumer and bearish on amazon compared to other names. >> if for no other reason, showing the results of the poll, unscientific, they choose to vote. 60% right now think that this stock will be lower a year from now, james. from a contrarian standpoint and when you consider many times when a stock suffers one year it does better the next year. >> right. absolutely. i mean this name has been beaten down this year.

and one of the things that investment managers might look to do is get into names beaten down. however, once we look at the top of growth that is required by amazon to sustain the current price levels i think it is not going to add up for investors and going to see that their core business while it does have some growth potential, they look into areas that don't have good enough margins to support investment and what i think has people bearish this stock. >> collin how good are prime memberships for the bottom line and how many more to take for them to be a $400 stock again? >> well it is part of the overall promotional initiative of 578 zon. instead of advertising, marketing, they invest in shipping and product discounts. keep in mind amazon still less than one quarter the size of walmart. that's enormous growth opportunity and they're still just scratching the surface and plenty of growth to come for amazon for many years. >> i guess i jinxed it. almost 50-50 now on the viewers.

it depends on when we close it. it could be -- okay. 51% now see it moving higher next year. people are changing their minds as we go. thank you both for joining us. appreciate it. happy new year. >> thank you. the dow and the s&p and the nasdaq all trading a bit higher here. any positive close for the dow and the s&p, another all-time high. nasdaq less than 5% from the old, old, old all-time high. >> wow. dominic chu will round up the big movers for us and jane wells with a playbook for the defense industry. where do the opportunities lie? the answer may surprise you. stay tuned.

as we continue to talk about our themes for 2015 one clear theme from 2014 was the shocking drop in crude. just this quarter. another 2% move lower. in fact some of the lowest prices we have seen since 2009. >> yep. low for the year is right now, as a matter of fact, too. dominic chu's tallying movers for us this final hour of the trading day. what do you have? >> let's start with what's happening with manitowoc. i just like to say that name.

icahn called the shares undervalued and wants to discuss the possibility of splitting the businesses up. another stock in the green is gilead sciences. best performer in the s&p 500. helped along by an upgrade of overweight due in part to the recent slide in the shares and let's finish off with a move in utility stocks. they're on the upside here. they're near record highs for the dow jones industrial. leading agl resources, xcel energy and teco energy. up almost 30% in just 2014. >> one more time. >> manitowoc. i love saying it. >> we love you, dom. thank you. interesting, bill, as well joking about how it wasn't good to be a bear this year. frankly as a person on twitter

pointing out, you bet on utilities, 10-year, u.s. dollar they paid offhandsomely for you in this market. >> exactly. >> and as 2014 draws to a close, cnbc is breaking out the 2015 playbooking looking at ways to make money in the coming year. >> we're looking at defense. here's jane wells. >> reporter: spending cuts? what spending cuts? pentagon spending spikes in the third quarter to a five-year high as the islamic state became america's latest threat. in 2015 we'll have a republican-controlled congress and new defense secretary. here are three predictions. first, hack attack. america runs on the internet an it seems everyone from china to syria is hacking into our computer networks. the pentagon boosted its cyber security spending and expect more problems than solutions in 2015, more attacks as defense companies try to figure out what tools are needed and if they have them.

second, drone wars. in 2015 growth in unmanned aircraft will explode on the commercial side and boeing lockheed northrop and others will lose ground to a plethora of newcomers. third, substitutes. the russians tested a missile but our fleet of subs is old, especially ohio class. the cost to replace them though, to benefit northrop grumman is astronomical and in 2015 expect the pentagon to propose paying for them outside of the regular navy budget in a fight over money that could go nuclear. >> jane joins us live now and assuming that ashton carter is confirmed as the new secretary of defense, what do we know about his priorities? >> what we're told is he wants to focus on three things many things but the priorityies are cyber security. boy, are we well aware of that

now. and also space and seen a turnaround for funding for nasa and third the shift toward the pacific and could help the navy and the big fight over the submarines really expensive and really old. >> by the way, jane the pentagon still has to deal with budget sequestration as the finances significantly improved. >> we have to see what happens with the new congress what they do about that because that is an extra $50 billion coming due, in cuts coming due next october 1st and the big challenge for the pentagon is balancing needs for updating programs and weapons and what to do about ballooning costs for military retirees military pay. congress has been reluctant to have pay cuts or even lower the co-pay on drugs. that sort of thing. all those things add up to billions of dollars. congress doesn't seem to want to

cut there. we'll see if it comes out of weapons programs. >> jane wells, happy new year to you. >> same to you. >> 30 minutes to go here until the bell bill. green arrows but barely. the dow trying to hang on to positive territory. the nasdaq just turning negative now and this as we mentioned a tough day again for oil in the oil space. also wondering about a lynch pin in the economy, will it be boom or bust for housing next year? we have a special report coming up and check in with the queen of real estate herself and her outlook and why with prices soft across much of the country new york city is still off the charts price-wise once again. that's coming up.

♪ my 2015 wish for housing is for better consumer confidence. when buyers feel better about their station in life they buy homes. that's my wish for 2015. >> well so much for the new year wish. we could see the start of price dip in housing some are saying bill, but maybe not a bad thing. >> diane olick joins us now to

explain why. diana? >> bill i'm glasses half full for this one. call me crazy. it's the new year. happens to me every time. home prices were up nationally 4.5% in october. compared to a year ago. that's according to a new report of black knight financial services. now, that's still a healthy gain but it is about half the gain we were seeing last fall and that's a good thing because affordability is sidelining a lot of potential buyers. home sales down dramatically in november and price could be the culprit. the number of homes for sale is down a bit from a year ago and the number of affordable homes for sale that's way off. a survey of potential buyers by red fin found just 11% said their biggest obstacle is lack of homes for sale while nearly 33% cited the biggest obstacle affordability in the area to buy. that's the first time since 2012 that buyers were more concerned about affordability than they were about lack of inventory.

the good news is with prices still a little bit higher more lower end sellers up from underwater and may list in the spring market. if you want the know where your market stands right now, please head to the all-new recovery watch map on cnbc.come. over 100,000 people already have. kelly? >> diana, thanks very much. stay right there. let's talk more about this dip in home prices. >> dolly lens herself. she's a cnbc contributor. that price dip there, i'm curious about that. you're not seeing that in new york city, though are you? again. >> no. sadly, i kind of wish we were seeing a bit of a price dip because there are a lot of people on the sidelines. sticker shock is killing everybody. >> really? >> not a good trend. >> even your clientele? >> yes, yes. why is this worth $35 million and last year it was $25 million, asking price. >> yeah.

>> it is a problem. sticker shock will scare people even the ultra wealthy. >> diana, houston, that area is one of the strongest parts of the housing market here and some ways i guess real estate is local again but how much of a risk is it to start to see localized price declines? >> we will and real estate has always been a local business. we had never seen a national price decline except during this recession but looking market to market, of course, new york city, it's an island. literally and figuratively but you are going to see these pockets. we're already seeing connecticut is one state that saw negative year over year declines in prices. the question is will that help people get into the market and i'm hoping it will or freak everybody out and say, okay i won't buy and won't sell which would be a problem. >> why is it happening? >> i think it helps people get in. yeah. get in the market for two reasons. one anything that's going to go a little down will make people move afraid they'll lose it.

secondly, low interest rates have not been good to make people want to jump in. the low interest rates and the continuation of the low interest rates, there's no rush. once we start popping up a little bit i think we'll see people jump in. >> that often happens. >> so true. >> why are prices coming down now if we have the low interest rates? >> because there's no rush to get in. >> because they were too hot and sales came down. prices always follow sales and sales always come off then the prices will come off. we saw huge price appreciation in 2013. it was double digits. it was driven by investor who is are now coming not selling but they're stopping their purchases of these low-end homes and still seeing activity on the high end but prices come down to get people to buy homes. not only sellers set the market. the buyers set the market. prices have nowhere to go but down. >> that's interesting. dolly, i was going to say this

is one of the cases and everybody remembers that falling home prices with signs of a recession and lower prices that's not always the case. i mean you could possibly have a scenario where more inventory comes online interest rates go up, other things can control when's happening with prices. it is just that we haven't seen an environment like that in sometime. >> but we have to remember also that demographics are supporting sales and so when you see that there's more household formation, the economy's growing, that incomes are growing again, that we're seeing more jobs that means that there are more potential buyers and again only thing holding them back. sorry, dolly. i cut you off. >> not at all. we need wage growth and make everybody happy and make them want to jump in. i do believe almost every single person wants to ultimately be a homeowner. >> what do they want most, low price or high -- we expect the fed to raise rates next year. there's the mortgage rates. we won't have the record low

rates anymore. dolly, when's that do to your business? >> slump in. so for that period where it's starting to rise it will make them jump in and say, oh my god, i'll miss the interest rate. >> how long does that last? >> they can choose. you know, it could last a good six months and depends how fast they raise but i doubt it will be fast. >> and depends on whether people think it's the beginning of more rate increases. it's all about psychology. interest rates or psychology. i guess the final question diana, is it psychology at play here or more supply and demand story and with more inventory here contributing to price declines lately? >> that's always important but housing is emotionally driven market of any. people buy and sell with their hearts first and foremost. and so when they see interest rates going up starting to spook them they get in. maybe they don't. again, i don't think these small interest rate moves are really

going to affect the market as much as some people think because we have seen them go between 4% and 5% for a year or so. record lows and it's not moving the 8 ball very much at all. so i'm not in the camp where a rising interest rates are going to stall the market and may help juice the market. >> we'll see. good to see you both. thank you. >> thank you. >> die yeaha >> thank you. >> die yeahana and dolly. i think dolly will be back tomorrow. >> oh boy. >> looking forward to that. >> why would it be $35 million this year and $25 million last year? i love how she throws the numbers around like that. 20 minutes left in the trading session here and we still have some -- well we did have gains. dow is back in negative territory. down 2. s&p holding on though. nasdaq down a quarter at the moment. we have morgan brennan standing by for the biggest winners and losers of 2014. that's next. >> all this happening amid oil prices at lowest levels since

may 2009. we'll get a live report when we come back.

that's our jackie deangelis as oil prices are swooning to multi-year lows and tell us when's happening there in the nymex pits. >> good afternoon to you. interesting action today. a little bit of a pop in the morning on that conflict in libya and then some steep selling pressure. wti closing at $53.61 lowest since may of 2009. yes, gee oweogeopolitics will matter and issues will have to be very significant to get this market buying again. now, talking about the rest of the year only a few days left. traders are expecting wti to close somewhere in the range where it is now, probably over $50 but they do think when the

calendar flips and everybody starts a fresh book we see that selling pressure again in january so that's what they're watching for. i do just want to hit on gas prices. aaa, $2.29. lots of people talking about the fact that this their states they're seeing gas under $2 so as the price continues to go lower the gas prices decline and hopefully some of that money will trickle into the economy. back to you. >> all right. precisely that's what i paid this morning is $2.29. my guy suspiciously is tracking aaa very closely. don't think i'm not watching you. >> like a hawk. >> thank you. >> yep. it's that time of year looking back at the stocks that outperformed and underperformed a few surprising names, right, morgan? >> that's right. russell 12,000 up and biggest movers of 2014. start with some winners. top stock, sky works solutions,

up about 156% this year on strong demand for apple devices and an upwardly revised outlook for 2015. in general, semiconductor stocks have done well in 2014. another name to watch, intercept pharmaceuticals gained 124% this year. this after strong early results from deliver treatment. others allergan and mallincrrodt. look at the airlines southwest soaring this year. lower fuel costs, stronger demand higher prices. also liftding other airline stocks american has more than doubled, delta and united continental up big this year. some of the losers in the russell 1,000, biggest laggard, cliff's natural resources down for 2014. tough year for steel stocks and

structural issues in the company weighing on that stock. another laggard, ocwen financial. a settlement weighing on that company, as well. and lastly the steep slide in crude oil prices that's dragged down the entire energy sector but most of all oil field services companies seadrill and down about 71% this year and just slashed the dividend recently. so guys biggest winners and losers in the russell 1000. >> ouch. slashing the dividend. it is like adding pain to that. >> exactly. >> yeah. thank you, morgan. bill i need you here. >> yes, ma'am. >> i need you, bill. they have you working overtime. i don't know my excuse. >> that's why i'm sitting here working tonight. >> we thank you for that. >> certainly. >> 13 minutes into the dow. and the nasdaq look at this back and forth around the flat line latest looking of a gain of 2 points.

with millions of americans giving up their credit card number over the weekend to stream sewmy's controversial film "the interview" this holiday weekend, are americans not searched about getting hacked? we all have been hearing the story. we have the cyber security pros weighing in coming up.

ten minutes left in the trading session. green across the board so far. not by a whole lot but enough to put us in record territory for the dow and s&p. nasdaq up 2 1/3 points right now. joining us ben willis and our own bob pisani. i know you're watchers like i am. some of the viewers, they love it when bill starts talking technical analysis. i have a one-year chart of the russell 2000. we'll show you that. there you are. all right. you got that one? >> okay. yeah. >> one-year chart of the s&p mid cap index. ben, don't you see the same reverse head and shoulders i do? are we headed for a rally or something or what do you think? >> i only hope that. that's the -- russell 2000 is missing puzzle for the market move we have seen so i'm with you.

i believe that we need that to confirm the bull run i think takes place into the end of the year and continue. >> gee, that's odd. i see a duckie and a horse sy. >> thank you. >> just trying. straining my eyes. >> how much is oil still calling the shots here bob? >> you know what? i'll tell you. today was an encouraging day. i think we are finally starting to break that correlation with oil. not only that but the greek election coming up didn't rattle europe that much. and now we had oil at new lows and while we saw a drop most are positive right now and the overall market barely hiccupped. very encouraging sign. >> ben wait a minute. you are waiting for the russell to confirm. it is all-time highs. >> as far as the movement compared to the rest of the major indices. up 4% compared to utilities or semiconductors. it is a group that's a good indicator and more important to the pension fund managers.

most of the pension funds are marked to the russell 2000. not necessarily to the s&p. so it's an important -- for the broader market's health and to keep an eye on the market. it's shown us the downturns you recallier in the market and looking forward to keeping that on an upside trend like i said to continue the bull run. >> we'll see. stay right there, guys. we'll come back. head toward the close and talk about a company that filed an ipo today and that what means for 2015 and after the bell why aren't the long-term unemployed coming back as well? larry kudlow on the panel this next hour weighing in on that and much more on "closing bell." you are watching cnbc, first in business worldwide. actly. to attain success, one must project success. that's why we use fedex one rate®. >>their flat rate shipping. exactly. it makes us look top-notch but we know it's affordable. (garage door opening) (sighs)

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time for the countdown. we have four minutes left here. i just want to show this chart for the month of december with wti crude which now today is at a year low and the dow which today any positive close puts it at an all-time high again and back with ben willis and bob pisani. we saw oil and equities corelate. do you see that continuing, sfwhen. >> i do. i think it's a healthy move. i go back to when oil was over $100 a barrel and jpmorgan announced they were out of the commodities game and oil never

saw that amount again. there's more to the game of where it's priced and i think it's getting used to a more natural market than the last decades. >> i hope so as well. there's a seasonality going on here. remember the santa claus affect. right in the middle of it right now. i'll believe it when i see it in the second week of january. i do see a lot of people arguing that we should bargain pick or bottom pick on a lot of the e & p stocks out there. >> shake shack filed for ipo today. here's danny and the company. the outlook, i mean you know that's a hot commodity right now. they have seen casual dining stocks have done after coming public here. is that a sign of what the ipo market is likely to look like in 2015 early on bob? >> yeah. i think so. we had 2014 was the best year for ipos since the year 2000 and 2000 was the record year. we never had more in terms of

numbers or dollar value. this is either second or third and might be third dollar value with 1999 but let's not quibble. it was a great year. it's starting out very strong and we have big tech names out there. there's other fast casual names. smash burger is another one to go public as well. come petpetitor to shake shack. >> ben bought 100,000 shares of something just like now. >> the bulls will argue it's an indication of the health of a market but the bears will use it as an indication of a top. how many people said the twitter ipo is an indication of a top in the market? >> right. >> so it's an argument that will be had on both sides but, you know, shake shack we can't wait for them to come down here and bring some with them. >> when alibaba came public they said that was the top. >> correct me yes. >> we swooned into the middle of october at that time with that.

what do you want to see here ben? buying or selling here? >> i won't create a new position in the energy sector. i would still be for new money i still like to be in some of the high-tech sectors, some of the enterprise systems, if you will. but as far as new money, i'd still be a little cautious on bottom picking if you will in the mlps in place like that but for new money i would think take a look at some of the enterprise and semiconductors. >> how about for 2015 a prediction europe may outperform u.s. stocks? that's an interesting idea. also commodity plays like brazil not so bold for russia. i wouldn't go that far but they're also intriguing to look at. buy low, sell high right? >> commodity stocks whacked and led by copper. i don't disagree at all. >> all right. thank you, gentlemen. >> okay. >> see you soon. that's it for the first hour of

"closing bell." positive numbers for the dow and s&p those will be record highs but it doesn't look like the case right now. i don't have a monitor but looks like the dow is heading lower heading toward the close down about 18 points. stay tuned now. hour number two with "closing bell." see you tomorrow, kelly. thank you, bill. welcome to "the closing bell,s quervebell,s" everybody. i'm kelly evans. the last trading week of the year if you can believe it. green arrows it looks like. see how things settle for the s&p and nasdaq. should be enough for a new record high. the 53rd this year i believe for the nasdaq and let's just call it roughly flat and most remarkable is 5% away from the nominal high although it's been quite sometime. bring in today's panel to talk

about it susan ox is here senior contributor larry kudlow and kayla tausche and jon najarian. larry, sir, tell us. what did we learn here in 2014? >> we have learned not to give up on prosperity. we have learned not to be negative. but to be optimistic. this year our economy, our stock market has outperformed all of the negative expectations that have plagued us all year. and in fact you know i've been a bull this whole year. i keep saying buy the dip. i will keep saying it because i see a couple more years of this. now dollar up. oil prices down. inflation nonexistent. profits continue to rise. people are working. it's never good enough. i get that. and if you give me 20 minutes i can fix the little glitches around the edge. but i just want to tell you in

some sense, where america has come in the last half dozen years, we have never had it so good. and it's going to get better. >> who gets the credit? obama? yellen? all of the above? >> resiliency of the free market capitalist system and the large and small businesses and entrepreneurs inside that system have overcome tremendous handicaps and obstacles and if we let them alone they will continue to do so. >> kayla? >> it is hard to believe that just a year ago we were talking about the fact that the end of qe would bring a supposed up ending of the entire market and here we are this year with really steady job growth with finally some wage growth and with 5% gdp. qe came and went and the end of it was really more of a wimper than a bang and the economy is taking off only its own without the help of the fed. >> kayla just nailed it.

three big nails in there. which is fabulous. i just want to say, if qe had worked with all the money -- >> you just told us how great it is. >> government had nothing to do with this. >> all right. >> if qe worked, the inflation rate would be 15%. the great news is reserves never went anywhere throughout the economy and wind up gradually running it off and redeem it. >> susan? >> this is an experiment that history will not look kindly on. >> you think so? >> great news is it didn't work and it didn't do any harm. >> you have people telling larry the same diagnosis as you put it for the economy and saying partly because of the federal reserve did. >> we're talking about a slowdown in europe and asia and their central banks are implementing stimulus plans. so, if you don't think those are going to work then we're looking at potentially slowdown in

growth in 2015 and hurt our economy. >> no, it is not. you have the story backwards. you are terrific. i like you. you have a lot of good independent ideas. this is not one of them. let me tell you. the american economy is locomotive that pulls the world. europe is a little caboose out there some place. okay? >> china and japan are not little caboose. >> we have not seen growth in china in three decades and europe. china is in a slump. it's only 8% of the trade. but they're taking some positive steps. >> growth of japan in three decades? >> yeah. >> greece is a country that peaked in 450 b.c. look at europe. america's growth and it looks like we are picking up. i like that. we will pull them out. they don't pull us out. that's the history. >> on that note let's bring in somebody who has a slightly different view on what's happening in greece right now. into the conversation. matthew jan with royal oak, a

financial -- i'm sorry. managing partner there. bottom line greece. we wake up today and see headlines about it. they couldn't build another coalition government. more elections or runoff or something next month. and people saying maybe mario draghi will have to delay or bring forward quantitative easing. how much of a concern still that europe is unresolved? >> well i think greece isn't as big of a problem as people might be putting it out to be. draghi will come back to the table and regroup a bit on the deal. but you know, as far as it goes with greece they're their own wild card. unfortunately, the government and their own people are divided and they need to quit using the people as a whipping post. if they encourage their people to come to the table and work together, they could do great things but the contagion is removed when they did the original deal on the euro. they will come back. i don't think it's a hindrance. it is not to the u.s. of a. i agree with larry kudlow.

we are going to rocket next year. i'm calling dow 20,000. i'm in the jeremy siegel camp. oil is a great gift from santa. low oil putting a ton of money in consumers' pockets and see that next quarter in the numbers and plus an investor you can really snap up some nice energy investments right now and prosper next year. >> and business. >> and dr. j, as well. hang on a second larry. >> business. tax cuts. >> how are you investing in 2015? do you just buy american companies writ large? >> 2015 -- >> are you staying away from energy? >> listen. 2015, you want to be in u.s. domiciled companies. next year like larry said we are the train. we are the locomotive and doing incredible things next year. >> all right. >> i think you are going to see small businesses finally blow the socks off of the economy. now, remember in the spending bill the dodd-frank act is

loosening up regulations. that's another big help. but the interest rate rise whether a quarter point or a bit more to show that we're ready to do some good things. >> jon, najarian sir, i'd love to hear your ideas. we are talking for 2015. are you bullish as everybody else here and if so how are you thinking of playing this space? >> i'm going to be in energy in a pretty big way. >> really? >> yeah. because i think, kelly, that nothing focuses the mind like the gallows and in the case of energy stocks people have focused in on them thinking that they're dead. thinking that they won't innovate. i think the opposite. i think you are going to see the price of fracking come down. it wouldn't come down with oil at $100 a barrel but it will come down. >> okay. but what about the dallas fed survey this morning? there are people that argue all of the business productivity is

the same phenomenon. companies squeezed and adapt and evolve and some of the comments survey this morning from a wide variety of industries reliant on oil sounded negative and concerned. >> from a state that was so dependent on energy for the turnaround that they have had or at least for the growth that they have had i guess texas never really was slow in the last five years but certainly the resurgence of energy has been great for the dakotas, pennsylvania, great for texas and areas close to those benefited, as well. >> jon? >> yeah? >> i agree with this. people forget the energy story is predominantly a high-tech breakthrough story that happens to be in the energy sector. and what have we learned down through the years? high-tech innovations bring down production costs. and bring down break-evens for

profits and that's exactly what's going to happen with the energy producers and a catastrophe catastrophe. i was down at texas, went to governor perry's christmas dinner party. spent an hour with him after that. he said, yeah the oil guys instead of making humongous profits make modest profits and texas is high-tex. texas is medical tech. texas is information tech. it's a completely transformed state. >> yeah. >> which companies are you betting on for this? nrds in other words, is it cheapest names to hang on for more selective to figure out who's most productive through this period? >> sure. you will see the names shortly. unfortunately because we'll disclose them on "fast money" i can't tell you right know. there's the tease. >> good little tease. >> i would say that when you're looking at the green energy stocks as well. government subsidies aren't what get the guys producing the best technology but now that they have got to tighten the belts i think you see great technology

coming out of these green energy players because if they can -- the ones that survive $50 oil those are the ones to bet on going forward, kelly. i think there will be a lot of great innovation from engineers as well as the tech space for solar and wind and water. i think you will see that happen over these next two years that larry's talking about and i think that's another benefit. everybody says oh this is the worst thing in the world for energy. no it is not. it focuses them in on making profits and squeezing out that last little bit rather than putting their hand out to the government. >> yeah. understood. and last word before we let you go matthew, what are you guys -- same strategy that we just heard from jon or are you staying away from the energy space? >> no. i think right now's a great time to be dollar cost averaging into companies of exxonmobil chevron. those are companies that you can dollar cost average into when the oil is falling and getting oil to start to recover there's a lot of good companies that you

can go into. now, remember we produce 99 million barrels a day. we consume 98 million. the margin of small is so small. oil can snap back in an instance. this is a great opportunity for people right now. >> okay. all right. matthew, thank you so much for joining us this afternoon. happy new year to you. thank you, everybody. stick around to catch dr. j on "fast money" at 5:00. they'll talk to denlnis gartman. the year-end rally with the russell 2000 recouping the losses and then some. can the momentum continue through the new year? we'll ask and not one but two planes gone missing this year. we'll have the latest in the search for the missing airasia jet and talk to a former pie lot of what airlines need to do to make sure we can find planes if there's an unfortunate accident. later, seth rogan and james franco, $15 million men because that's how much "the interview"

made over the weekend but for the people that streamed the movie, are they at risk of a cyber attack?

welcome back. some of the major indexes with monster rolliesy s lyrallies this year. dom? >> if you look at the monster rallies some had them and most in the last couple of months and take you through the play by play for some of the big indices we are talking about. russell 2000 year to date. we are at record territory for the russell but it's only been the last couple of months to make that push to get up there. it's up about 13.5%. you can see here just in the last couple of months so far this year. so it's only up about 4% year to date. returns have come from here. and another part of the market mid caps. slightly bigger than the small caps stocks. the s&p mid caps also in record territory and look at the last couple of months. near 14% gain just in the last 2 months since the beginning or middle of october, october 15th when the markets had volatility and then look at the large cap stocks. s&p 500 index, a less volatile

route than the other indices here but again, the last two months where it's been up 12.5% seeing the gains accelerate into year end. and if you're looking for where the real strength has been driving the market higher at least from a performance perspective, three indices that stood out there so far. technology up 20%. a big deal. cyclical index. also health care now the second best performing sector in the s&p 500 and then utilities. this is a bit of a mixed bag here, right? utilities up nearly 30% this year and they're a defensive sector. ones that have bond-like characteristics. they pay hefty dividends and don't pay that volatilely. investors are flooding with the promise of higher yields given the low interest rate environment and utilities leading the way higher an may

not be a good sign for the health of the market overall. back over to you. >> i think if memory servels they led the way in 2000 or a great year in that peak year as well. stay right there. what's in store for the markets in 2015 and what should investors keep an eye on? carol roth says it's all about the fed does or does not do. carol, good to see you. just lay it out for us. we have been talking about a lot of optimism and i think you are cautious of 2015. yes? >> right. larry kudlow always says that earn sgs the mother's milk of all stocks and from my perspective the fed and central banks around the world are the kool-aid pushers, if you will of the stock market and as long as they are bringing kool-aid or punch or whatever flavor of the month it is to the punch bowl i think it would be silly to push back against these central banks and that is really been one of the key drivers of the market

and i think it's going to continue to be the driver of the market in 2015. in fact i personally think that there's a better than 50% chance that the fed does not raise interest rates in 2015. >> okay. what's interesting about this carol, is a mini consensus the fed isn't all that relevant. larry? >> not making any sharp moves. that's all i'm saying. >> your earlier point it doesn't matter what they do. >> up until now, i'm not saying zero interest rates are irrelevant n. terms of reserves none had an impact whatsoever. if it had an impact the inflation rate would be 15% but it is not. to carol's point, i think the fed will be easy this year. only a couple of quarter point hikes but mainly as the economy picks up nominal gdp growing at 6% to 7%. that's good for the revenue component and profit component is enormously helped by lower oil prices outside of energy.

so i agree, profits are still driving this thing and will continue to drive this thing. >> i wanted to clarify and susan, generally speaking your view on the economy is a little bit more positive than carol's. how contingent is that on what the fed does this year? >> it is somewhat but when you know that you have a spector of an interest rate rise and can start to move business investment faster to get ahead of interest rates going up and can be good thing for the economy. i'm looking very positive. i don't disagree with larry about the economy and strong growth and i think the financial markets are out over the skis right now and gotten a little bit inflated and a financial rise driven by utilities, that's not what you want to see so i would say i think there could be a little bit of a market correction next year and the overall trajectory of where the financial markets go -- >> i don't like the utility story. i have been wrong on long-term rates. rates have come down and i expect them to go up and i roll

the dice again and say long-term rates rise this coming year. that's going to open up the spreads in the yield curve. that's very positive for economic growth. >> right now it is flat. >> it is flattening. >> our friend -- >> if the pick-up in the economy -- let's say we go to 3% trend rather than 2, 2 1/4, that's good for that yield curve. >> it should be. >> good for stocks. >> what if it's not? to quote other guys and, carol, i love your thought on this as well looking to 2015 if you are a year where the 2-year is 1% and the long end doesn't move how much of a tell and a cautionary sign is that situation all over again? >> you know i think that from a big picture standpoint it's somewhat difficult to say we are in an unusual circumstance but i like to look for where there's opportunities and even though i'm neither really a bull or a bear but a realist, i do look for the opportunities and if you believe that there's going to be a low interest rate environment and you believe that there's

going to be an easy lending environment, one with a key driver for 2015 is going to be continued mergers and acquisitions growth and i think particularly at the high end of the small caps aenl in the mid cap section of the market you are going to continue to see a lot of that. i'm seeing right now in the market that lenders are willing to lend somewhere around 5.5 times ebitda 4 to 4.25 times of ebitda senior and another turn and a quarter and from my perspective that is, if you think about an acquisition, that's 5 to 5 1/2 times free capital almost to make acquisitions and that's going to continue to drive the market higher. >> is that going to be true especially with the smaller names here finally do you think? >> it can only happen with smaller names but seeing the russell 2000 hitting a new all-time high today, the resounding chorus of potential acquirers is targets are still too expenlsive.

you have to have a pullback before anyone wants to go out into the market to borrow because they don't want a purchase at the top of the market. >> right. >> that's something that gets them in trouble. >> exactly. >> the real economy growth and mergers is great for the financial markets but you need the growth in the underlying company. >> that's a great point. m & a, i'll all for free markets and doesn't create jobs and shrinks jobs. dead right on the point. king dollar. one of the underrated factors is king dollar. >> positive or negative? >> positive positive positive positive. not only is it holding down commodity prices and inflation, it is attracting capital from all over the world. >> is that part of susan's point to overheat here because of that? >> i can just tell you we're $2 trillion below the potential growth? >> you take it? >> talk to me in about three years about it. >> fair point. carol, thank you. good to see you this afternoon. >> you, too. coming up the u.s. jobs

market continues to recover or so it appears on the surl fast but there is a data point lurking in the reports and has economists worried. long-term unemployed unemployed. we have larry with jimmy p. when we come back. but first, the missing airasia flight is the second plane missing this year and latest details in the search and discuss how the huge airliner can vanish in this so-called age of technology. and we want to hear from you. should airlines pay more for tracking technology so more planes don't go missing? go to cnbc.com/vote to weigh in. she inspires you. no question about that. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph,

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welcome back. we start here with a quick market flash and dominic chu. >> good afternoon, kelly. we are watching sharyls of civio corp. right now. this after the oil services accommodations company, they make a lot of accommodations that oil companies use, they issued weak guidance after today's market close. it also said they would suspend the dividend payment anticipating first quarter 2015 rev nus in the range of $160 million to $175 million versus current estimates of $228 million. they are struggling on continuing weakness in the global commodities market as companies in north america reduce the 2015 capital

expenditures budgets and kelly, this is worthy of note too, as well. as of the last reporting period two of the largest shareholders in this company are activist hedge funds and a couple of large name investors in this particular stock and down 20% in the after hours trade. back over to you. >> ouch. for now, dom, thank you. seems almost too crazy to believe but another plane is missing. this time an airasia jet out of indonesia. katy tur has the latest. >> reporter: it is nighttime here in singapore and the search is suspended for the evening and resuming again tomorrow morning with daylight weather permitting and expecting rain in the area tomorrow and there's a concern that if it's strong enough that it might hamper the search effort. they're searching around the islands halfway between singapore and indonesia and in the flight path.

they lost communication asking for a change of altitude flying to 38,000 feet to avoid bad weather. questions surrounding that though. it disappeared right after that and a number of other planes in the area without too much trouble in the weather and made it to final destination. for some reason this plane did not. meanwhile, malaysian families are waiting hoping that there's a miracle that their loved ones are alive somewhere and will be found. indonesian officials are urging caution saying from their calculations and estimates that they believe this plane is at the bottom of the java sea. katy tur, nbc news singapore. >> now this is the airasia second plane to disappear in 2014. leaving many to wonder if airlines should spend more on technology so planes don't go missing. log on to tell us what you think. while we are joined by phil lebeau and denny kelly.

first to you, when the first jet went down this summer these are the questions immediately raised and now again. has any steps made in the industry since? why is it we can't track a plane? >> well the biggest problem is the vast distances. you know you have satellites and some of these airplanes have capability but you have such vast distances that sometimes the information they get is inaccurate and sometimes they don't get any information at all and the technology is not up to date on these airplanes where they can track them you know within a quarter of a mile or so. sometime in the future maybe but not now. >> why is that the case phil? >> money and the push is not there internationally. from the airlines' perspective they are using the technology that's been there for sometime. air traffic control centers and the captain mentioned, there are satellite coordinates and

satellite communications so they can track airlines generally speaking relatively close but not exactly where they are. to upgrade to this next generation of air traffic control worldwide is going to cost hundreds of millions of dollars. if not billions of dollars and the question becomes -- >> but phil that's -- the u.s. budget alone, that's a rounding error. is there a way for somebody to take the lead and make it happen? >> who's it going to be? >> go ahead. >> what's that? >> who's that going to be? who's going to take the responsibility to pay for all of this? the federal government in the united states isn't going to do it. the airlines certainly aren't going to do it. so the only thing you can do is maybe put additional tax on the tickets and the passengers are already paying -- >> fine. do it. larry, would you support that? fine! >> but probably wouldn't be a couple dollars. it would be probably $20 a round trip.

>> how big -- what is the size of the airline industry globally? it has to be what? $100 billion? am i way off, phil denny? >> yeah. there's a lot of money that the airlines take in internationally. but they'd have a lot of expenses. and they're not just going to pay the money. >> look at oil prices larry. they can't take a little bit to upgrade their technology? >> just i don't know what a little bit means. there are a lot of user fees on the airlines. captain kelly, may i ask you, sir? i speak as a novice. what cause third degree? was this bad weather? was this an instrument breakdown? did somebody shoot it out of the sky? what is your theory? what caused this crash? >> well this particular airplane, this specific model airplane, two weeks ago or so they came out an emergency air worthiness directive that this airplane under certain icing conditions becomes

uncontrollable. these airbus airplanes are all electric. the pilot has no direct control of the airplane. everything is through a computer. and if you get this icing condition, the computer senses the wrong information and the airplane can become uncontrollable. now, they have come up with a temporary fix but this fix is so exorbitant that you have to be a superman to be in turbulence in the dark and the airplane going out of control to be able to pull the circuit breakers and turn the switches. >> okay. >> this is a weather accident is what it is. >> kayla? >> getting -- you know. >> my question is for phil and it's just, you know, we see the airlines here in the u.s. spending hundreds of millions of dollars to renovate the terminals, something that is not necessarily a pressing need and then again not the airlines here in the u.s. that are having issues like we have seen with airasia and the malaysian airlines as well. phil, do you think we need

something like the iata to mandate they have the technology to step in this circumstances like we have seen? >> i think it's going to be much more than that needed. you need to have the governments around the government lead the way. and that's a start but even after that you're going to have a lot of smaller countries, especially in southeast asia who might be looking at this saying who's going to pay for this upgrade? >> right. >> in air traffic control. and it's easy for us to say from the united states with the airlines doing as well as they are. well, take some of the profits and do that. not every airline around the world is profitable and some of the smaller countries you have pushlback and then a question of are you going to get the worldwide? >> right. i understand all that. denny, all i'm saying is -- listen. it's not that i don't understand why they don't have the money. my simple point in this holiday season is why not have somebody with the pockets step forward and say, i mean we are talking

about 500-plus people completely unaccounted for now after 2 accidents in the middle of the vast oceans. can't somebody say, i understand it might be the initiative the drive to try to make it happen? >> i would rather spend that money rather on -- rather than put it on satellite locating for in an accident i would rather put the money in air safety. safer airplanes. safer instruments. better training. this kind of thing. and that's what you will have. >> what you're saying is -- you're saying it sounds to me sir, like you're saying there was a technology instrument breakdown here with respect to the -- >> yes, absolutely. >> that's where you got to go first. you got to figure out the immediate technology so it's safe. i'm just interested. is it a coincidence or not? asian airlines going down. is this happening to american airlines? american based airlines?

>> we can't find them? >> we can't find them. >> i'm not aware of that. >> no. >> i'm investigating accidents for 30 years and first of all, that it's very difficult to find the wreckage. but we don't have in the american airlines presently that have had accidents and can't find the wreckage. have we had american airlines that crashed in the java sea, the indian ocean, the middle of the pacific? no. we have not. that makes it more difficult. >> understood. we got to go. we got do go. captain, thank you so much for being here. phil, as well. to you both. difficult issue. 56% of people are now saying airlines shouldn't spend more and, larry, that's different than where we started at the beginning of the segment. vastly different. the unemployment rate in america is declining. but there is a key piece of data keeping economists from celebrating 50 straight months of job gains. we'll reveal that and whether or not americans should still be worried about the economy next. north korea, who millions of

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new year new job? not so much. let's bring in jimmy with the panel. good to see you, jim. this is an issue that people almost forgotten about and tends to happen right? everyone gets focused on the improving economy. how bad is it out there? >> well listen. what's not happening, despite the fact you have a better job market creating 200,000, maybe 300,000 jobs a month but you have a huge pool of people who are unemployed who are not even counted part of the work force and not actively looking for work and you would think they drift back into the labor market but it doesn't seem to be happening. labor force participation rate is stuck at a very low level and while there's a demographic

issue going on there, you have the baby boomers retiring that's not the entire story. we have to figure out aren't they coming back and are there public policies to put in place because we want people to work and pay taxes. we want them to add to the output of this country. >> susan? >> part of the issue, jim, i think that you would recognize, too, with the housing market collapse, we didn't have the labor mobility early on in the recession. people couldn't move for a job and if you look at individual states, even the state that is have very low unemployment like north dakota and wyoming his cloer tore historically, you're still not getting a job. how much of this is really kind of a psychological pressure on people and get discouraged and think the skills have worn out? all the rejection of getting a job over nine months or a year and psychological issue versus policy issue? >> well your skills outdated is

a real issue. >> thinking that they are. >> well, yeah but maybe the case that's true and their skills have gone out of date and psychology that people don't want to hire people who have been out of work for a long time. there's as you said a sense of discouragement. especially if the job you left was sort of a solid middle class job and that job's gone offshore or automated away and now the job to take is a lower wage job and can you get yourself out there to take that lower wage job even though you may find that beneath you? that's a factor too. >> jimmy, let's look at this. even "the new york times" clip that you used acknowledged we're paying people not to work. we have had expansion of all of these federal entitlement programs, not the big ones but the food stamps the disability the various welfare ones the unemployment insurance. we have ended time limits. we have expanded eligibility. and we have made it frankly, to

a point where on an after tax basis it doesn't pay to work and i think the incentive structure has been distorted, frankly, under the last two presidents and the last bunch of congresses. they have basically discouraged work and that's one of the key factors here. >> listen. i think particularly with disability benefits that may be a factor. what i like to see rather than ways to cut food stamps or cut the earned income tax credit to lower the standard of living to force them to work i'm not going to be for that. what i would be more and a multifaceted problem and sort for expanding earned income tax credit or a wage subsidy and we have to create more good jobs which is what we're not doing. >> quick last word larry? >> not at the extremes but not the middle. >> we have to solve -- okay. the earned income tax credit may work but it's a mixed bag. there's fraud in there and

mistaken eligibility. i think your other point, we have not had at least until maybe the last couple of quarters a real rising tide that lifts all the boats. we just haven't created enough jobs. and i think that's a function of the macro economy and a function of policies. hopefully the policies are going to be changed but i think, you know whether you grow fast you get a lot of job opportunities and if you say to people there's a limit on the unemployment insurance, they go to work. >> jimmy what point is the clock up? six years? what point do we know if it's just going to need more time or a policy support? >> i think that clock may be very close to being up. that's what we had in europe. a lot of unemployment for a listening time and a permanently larger pool of people who just weren't working and that's what i fear is what we're facing. >> they tried to do a tax credit to give you an incentive to hire people out of work longer and didn't seem to do anything.

>> yeah. there's still lots of trial and error. >> what you need in the next five years is get back to the long run trend line of economic growth in this country which is about 3.5% and then 5 years the goal should be policies regulatory policies, tax policies, entitlement policies 4% to 5% growth to catch up to the baseline. >> understood. hope springs e terch. thank you, jimmy. from the shake shack ipo filing and the firm that gave layoffs on christmas day, the top stories on our website when we come right back.

motorists love the falling gas prices and cnbc readers because they're one in the same right? >> i guess pretty much kelly. this oil coverage is drawing people in. we kind of had a little bit of tension in the market today because, you know early in the morning, there was some militia fighting in libya. prices creep up and then people realized, we have a lot of oil and swimming in it. oil prices went right back down again but it was a soap opera keeping readers in. food stories always do well. new offering stories always do well. shake shack to the ipo market. for non-new yorkers, one of the local burger joints that everybody loves and drew all sorts of readers from all over the nation. and finally, here's a scrooge

tale for you. straight from england, a company laying off 2,000 workers on christmas day. >> ouch. >> sent them an e-mail by new year's eve you are out of work. sorry. they didn't want to do that way but they were -- >> what company? >> it was city link a delivery company employing 2,000 people. >> great story. unfortunately. thank you very much. tough holiday season for those workers. not even a threat of hackers kept viewers from "the interview" over the weekend. which means a couple million people screaming the movie of personal computers and using the credit card information online. are those people at risk for having their information stole snn we'll talk to a cyber security expert a former hacker himself and get his take. ♪ ♪ ♪ ♪ ♪

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welcome back. despite north korean hack attacks and terror level threats, the interview was purmsed or rented online more than 2 million times. since this movie was allegedly the cause of a company being hacked, why is it that individuals don't seem concerned

about putting their credit cards online to view it. how at risk are people who have used their credit cards to buy and watch this movie? >> you never know. there could be retaliation for the individuals that did it. you saw the folks, they said they were going to retaliate. i think in general, were pretty ke desensitized to these large credit card breaches. we saw target, home depot, staples staples, a lot more after the christmas holiday. i think people are more open to shopping and using those in the event of a breach. >> are we going to see a change among companies? because a lot of the previous hacks have been focused on consumer information credit cards and now, weave seen how disruptive hacking can be to entire companies. secret e-mails are being distributed online. are companies going to start

paying more attention? >> companies are really fearful of what happened to sony. i think that was a big game changer when it comes to how corporations view their security programs. we're talking most sectors, retail medical, infrastructure for our electrical grids, they're several years behind so it's going to take a number of years to defend against these attacks. we're dpoik to see a lot of that start to happen. we're still two or three years, if not longer of being able to defend it. >> it's important to note that of all the platforms you could have watched the interview on play station was not one of them and it suffered an attack over the weekend, so it seems this one company is still in the line of fire in terms of being the target of the attack. but how expensive does this get for the fdic? because if your credit card information is hacked most of your money would be ensured, no?

>> that's right. if your creditor gets compromised, you're not liable for those. the biggest concern for a consumer is that it can take between two weeks to a month, to get that money back which could be a disaster for folks without a significant amount of money. when it comes to the insurance policy policy on those, there's a lot of breaches. we're moving to emv, so that will help alleviate a lot of these large scale breaches, but it's not going to happen until the end of 2015, 2016. >> david, just 20 seconds. this come from north korea or red china? >> a lot of us disagree that it came from north korea. i'm one that tends to think it was more of an insider coupled with the hacker group that may be alliance, north korea or china or russia. there's a lot of different speck laces over this. the problem is we have no proof. there's not been any that's provided by the fbi, so we should wait to see what happens.

>> david kennedy, thank you for your view on that. >> thank you. coming up, oil services down, plumeting about 25%. our panel. return on investment isn't the only return i'm looking forward to. for some every dollar is earned with sweat, sacrifice, courage. which is why usaa is honored to help our members with everything from investing for retirement to saving for college. our commitment to current and former military members and their families is without equal. start investing with as little as fifty dollars.

we have to take a look at shares in this company, cveo hit on a kuch with cap x outlook for 2015. interesting to the panel here curious for thoughts. we heard from the dallas fed this morning that we were seeing companies nervous about the drop in oil prices. now, we see shares down almost 30%. this is a stock that's trading under $6 now. it's not as if it's in the 50s. never theless, is it the sign of much more pain to come and how worried should we be if it is? >> i think the window is from $40 a barrel to 40. below $70 a barrel the energy patch is not in growth mode. but below $40 a barrel that's when you have some breakdown in the capital structure and when you get beyond we're not in cap xrk, when you have turmoil because of this. 53, that's going hurt a lot of companies. they're saying they're seeing

companies that are clients of its business they're not spend spending as much, so that's something that is a consequence that we had expected here. >> just, i don't think that dallas fed reports it. >> keep in mind dallas fed is a much broader area than just dallas. it's one of the covers of one of the most sensitive areas. >> but the comments were telling. a lot of the executives were pretty concerned. >> they should be. the baker is -- the week ended friday by 37 to 14.99 and still up from a year ago of 13.82. the lowest level since april, but it piqued way earlier. they were still way ahead of where they were and they're going to slow down and that's okay. that's what prices do. >> susan, we got to go, but is it okay? >> it's going to shake out and

then settle down. >> guys thank you for being here. love the panel this afternoon. >> kicking off the week here, fast money coming up with our melissa lee. what's on top? >> hey, more of what david pepper told me and also tech takeout targets. we are naming name. who can buy what next year. >> we're along for the ride. >> fast money starts right now. live from the nasdaq market, i'm melissa lee. your traders are -- oil falling 2%, the dow breaking a seven-day winning streak. we got a dose of optimism today. david tep he thinks it will be a good year. tepper saying quote, it's not the time to be careful now, enjoy the ride, but warneded about the potential of overvaluations. what do we