either. >> this is the time to cash in. he is 28. he is in his prime. he has already turned down 16 million. don: here is van morrison. ♪ ♪

♪ ♪ stuart: the timing could not be

worse. gas prices going up again overnight. this is indeed a spike. good morning, everyone. $3.53 is the average. this is getting everybody's wallet just as taxes go up on every paycheck. plus, the economy is shrinking, unemployment is rising and the president calls forever higher taxes. a gas spike could not come at a worse time. $2900 per family. this is what happens when bernanke pushes down the value of the dollar. off goes oil and off goes gas. this is the inflation that everyone sees and everyone feels. varney & company about to begin.

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stuart: breaking news from dell, as expected. the company is going private.

the stock is up 30% this year. it is a done deal. i have a whole raft of tax stories for you. first item, the feds propose to legalize marijuana and establish new pot tax. that would bring in an estimated $20 billion a year. passage of the law a longshot at best. today congressman eric cantor will give a speech on just how expensive it is to raise a family and how higher taxes will make it more difficult. then there is this example of punishing success. super bowl mvp, joe flacco want a new stingray. if he accepts it, he will have to pay $2500 in taxes.

forecasting our future deficits. expect a lot of red ink. i expect a lot. president obama will miss his budget deadline. it is the third year and a row in the fourth time they have done that. you know, after all of that, i need a change of subject. i give you budweiser's clydesdale commercial. ♪ ♪ i took my love and i took it down mobile i climbed a mountain and i turned around ♪ ♪ stuart: that really was heartwarming. it was the number one super bowl ad. at 10:45 a.m., we have a very force on the road and the man

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♪ stuart: remembered there was a big drop for the market yesterday. we will bounce back a little bit at the opening bell this morning. it is not much of a bounce back after a big drop, but the opening trend should be higher. i have news on dell. they have announced they are going private. michael dell is taking them back along with silverlake partners. the stock is already up 30% this year. all right. we are off and we are running. the opening trend on wall street is indeed higher. we are starting off at 13880. the other day we were starting out at 14,000. let's talk about toyota. we do not -- we often talk about

them as being teflon toyota. they just raised their outlook for the stock. it was after posting pretty strong profits. nicole: we are going to bring you right to the post. this is a story that you talk about so often. take a look here at toyota motor. that is because they have a weaker yen. that will play a factor going forward. there it is. looking at that $99.05 range. stuart: i remember when it was 70 after the tsunami. all right, local, stay there. i have a couple of other items coming up. boeing. asking to do test flights of the dreamliner again.

the stock has gone up to 75 this morning. then we have mastercard. they will pay $0.60 per share and it will buy back stock. that is giving it a rally. i have to say happy birthday to facebook. it turns nine. that is all. it is nine years old today. nicole: i cannot believe it is nine years old. we are looking at facebook on the move. we were talking that $30 mark. i can see it at 28.46 on it ninth birthday. stuart: how about that. it ain't what it is supposed to be, is it. tell me about kellogg's this morning. >> they had the pension

payments. they did well internationally. we are watching kellogg's on the move. to the upside of 1.5%. stuart: the dow industrials are up on upside as well. we are opening higher. the last eight years have been the worst period of economic growth since world war ii. in his pre-super bowl interview, president obama said his policies will still spur economic growth this year. the latest gdp number shows that the economy is actually contracting. terry, you brought us the news that the last eight years were the worst since 1948. we got that. now, i want you to look forward. where are we now or where are we going?

>> i think the biggest shadow hanging over economic growth and employment in the united states is the coming implementation of obamacare. we are now 11 months away. the irs are still issuing regulations. people do not know that the final law will force them to do the biggest single thing in obamacare. all employers have more than 50 full-time employees and must provide them with health insurance. that is like a brick wall to the growth of insurance. stuart: you say it is the biggest drag on our economy as we go towards the future. is obamacare a big enough drag to push it into a recession? >> i think so. you know, the way the national bureau of economic research times a recession is when

economic growth starts to decline rather than increase. we just thought the fourth quarter economic growth the climbed a little bit. i think there is a question, is this just a blip in the road or have we already started a recession. stuart: what would be your judgment? if you have obamacare coming at you, we have already raised taxes, the president wants to raise taxes more, in your judgment, are we likely headed to recession? >> well, we will have one sometimes. i think it is very possible that we are in one. especially if you look at immigration out of the labor force of americans. each new month we are getting a record amount of people that are not in the labor force. unfortunately, i think it is

possible that we are already in a recession. congress has to be very careful about what they do going forward dealing with obama on fiscal issues. stuart: why is the stock market rallying? you want to explain this? >> i cannot explain it. of course, you know, what is more important is the long-term trend. rather than the momentary trend. we have some theoretically good things. i am not sure that they are good in the long run. they are kind of punting right now. eventually, we have a crisis. will they give him another $2.4 trillion in debt to run over the next couple of years? how much leverage are the republicans going to put on the

legislation? will they disciplined the president or will they accommodate the president? those are huge questions for the economy. stuart: nothing will stop bernanke from cranking out the printing process. will that keep us out of recession? >> no. i do not think so. i think we do have a problem where the federal reserve is the single largest owner of u.s. government debt. we are running up all this that. eventually, we will run out of a market for u.s. that and eventually that will happen and eventually interest rates will go up. right now the treasury is paying very low interest rates on a historical basis. stuart: thank you for joining us. we will see you again.

thanks a lot. electronic cigarettes. they are becoming a popular alternative for smokers. sales are truly sorry. as of now, it is still a largely unregulated business. coming up at 10:35 a.m., we have the ceo of an electronic cigarette company. we will ask him about taxes, health issues and profit. all of that coming up later on this program. now, we are calling it the great state tax revolt. two of the biggest states are going against each other. texas governor rick perry taking a pitch to california. >> building a business is tough. i hear building a business in california is next to impossible. i have a message for california businesses. come check out texas. stuart: he was right out. come on over here.

at the top of the hour more on this. we always want to hear from you. send them in, please. e-mails. we have a lively conversation going on every single day. disappointing forecast for the parent of pizza hut. a pizza hut, taco bell and kfc. disappointing forecast. disappointing forecast from the health products maker and it is down. how do you pronounce this -- it says the fda has not approved its treatment for chronic fatigue syndrome. it is way down. china's largest search engine company reported its slowest profit growth since 2009. it is down $10.

lower profit from silicon motion technologies. and you know the name, they'll, it enters into an agreement to be acquired by michael dell and silverlake. a forbes article. it says young woman are not cut out for the workforce. they burn out early. they cannot handle it. up next and outspoken tv personality, a woman, who agrees. ♪ (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everi'm with scottrade. me. (announcer) scottrade. awarded five-stars from smartmoney magazine.

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♪ stuart: i will call this a bounce back rally. the dow getting closer again to 14,000. check the price of oil. ninety-six dollars a barrel. closing in on 97. a new article from forbes. a growing number of professional

women are giving up. let's ask kelly petrone. this article suggests that women have great expectations. unrealistic expectations and women are not met, they just leave. they drop out. >> yes. i think we are living in the kardashian culture. they have access to things that they did not have access to before. when i got into fashion, that was really my first experience. stuart: the young women who come to you for a job, you are saying that they have unrealistic expectations and in some way, they are just spoiled. >> i think that they think everything will come quick.

stuart: is this widespread? >> i had a girl who read a book that i wrote and she moves to tucson to new york city because she decide she wants be in the fashion industry. she runs out of money so i offer a job at $45,000. she said she had to go back home and speak to her parents. she said i like you, but you are a really brilliant woman. are you going to make it up to me? i have 800 applications on my desk for this job.

this money comes in and this money comes out the other side because they all go away because it was not what they hoped it would be. stuart: of course it is a glamorous job. >> you have to get up early. got to go to bed early. it is not so glamorous. they would not be able to do it. trust me. stuart: the young people that work on the show, all of them get out of bed every morning bright eyed and bushy tailed. >> they are the winners. stuart: i could never say, the people that work on this program, i would never ever say that they are unrealistic, that they are spoiled. >> how many freaky losers tried to get the job before. i guarantee you, five to seven years from now, out of the 35 will work in the fashion

industry. stuart: you are putting your opinion on your own personal experience. >> and that of my peers. a girl comes to work at my office. she has a communications degree. i ask her to dial a phone number in vancouver. the hours later i asked her what happened with the phone call. i asked her if she dialed one first and she says no. i didn't know what to say. stuart: if you are not prepared and you do not want to learn and you think that you know everything there is to know, you will not make it through to the other side. stuart: this has been fascinating. give me a solution to this problem. >> parents have to teach their kids common sense and that the

workplace will not always be peachy. you will be devastated and you will get tired. the people who win are the ones who stood up and shut up and come back the next day. sometimes a ghost fall, winter, winter, winter and spring does not come right away. stuart: time for your gold report. it is 9:49 a.m. almost. we are down a little bit. that is where we are this morning. global warming activists say save the polar bears. they are going extinct. listen to this. >> look closely. though polar bears world is nodding. climate change is causing their hunting grounds to disappear. stuart: but as always on varney

& company, we do not ignore the facts. this time around it turns out that the polar bears could be doing just fine. elizabeth macdonald and charles. are here. they will react momentarily. ♪ investor. yeah, i'm a serious investor

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12. stuart: al gore said polar bears are going extinct. he said that in his film. a man who packed up his family and move to canada to study polar bears basically write a eulogy for them. he says that is not the case. there are more polar bears that out then there were 40 years ago. charles payne is here. he found the story for us. does that mean you are critical? you do not believe al gore, charles? charles: i see where it is leading. i really think it is a dangerous thing. i am a huge polar bear fan. i want to go to church hill and watch the polar bears. i absolutely love them. i love that this guy wanted to be a hero to the environmentalist cause, but he

had to be honest about what is going on out there. stuart: just a little bit of honesty. >> i disagree with it. he is being criticized, by the way, for being a freelance writer and not a scientist. he is saying that it is a hunting ban that went in place and that has helped the polar bear population. arctic sea ice is in danger. that will hurt all sorts of populations, including polar bears. stuart: are you turning global warming on it? >> i do question the global warming consensus. we have a lot to fear. stuart: i will throw off in a second. [ laughter ] stuart: that is a joke. the dow is now up triple digits.

we are getting close again to 14,000. the great state tax revolt pitting two of the biggest states against each other. texas and california. >> building a business is tough. i hear building a business in california is next to impossible. this is texas governor rick perry. come check out texas.

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stuart: phil mickelson, tax refugee, that story will not go away. and texas governor rick perry is running 30 second radio ads in the big california cities trying to attract hard hit taxpayers to his state. high income california residents pay a 13% rate. in texas it is 0. come to our state, says governor perry, a fair legal system, sensible regulations and the big attraction, yep, lower taxes. you will see a lot of this. phil mickelson's complaint was one of many. as federal tax rates go up, and states like california and illinois pile on, the low or no tax states compete actively for tax refugees. and why not? we're free to live where we choose. and if governor jerry brown thinks that 63% is a fair share, he's in for a tough debate.

gas prices affect your wallet every day, and they continue to climb. just in the past week, the price of gas has spiked about 17 cents. that's in the week. almost 20 cents up since monday of last week. self-serve regular now is $3.53, and just how much are you spending on gas? well, the average family spent 4% of household income on gas in 2012. that's according to the eia. and here's the company to talk about that, texas, everything else, gas prices, you name it, we're going to talk, elizabeth macdonald, charles payne and on the floor of the exchange nicole petallides. first of all, everybody, your thoughts on gas prices. my feeling is this is the worst timing possible. charles: oh absolutely. and you know what's really interesting is that it's sort of still flies beneath the radar. i thought it would play a bigger role in the presidential election. it didn't. people aren't really saying a lot about it in this era of e-85

gas and all this stuff. it's taken a huge chunk out of the paychecks of a lot of people. stuart: not good. especially now, taxes are going up, and now we have gas on our hands. bad news for the economy? liz: it is. you usually see a gas price spike around spring or summer when people are traveling right via car doing their vacations. this is a bad time for gas prices to go up. stuart: maybe it is not over, i don't know. we got the ism manufacturing -- nonmanufacturing, services area. came in with a reading of 55.2 versus 55.7, that was in december. that's kind of -- i'm reading that as neutral. charles: i mean it is a good number. anything above 50 is expansion. you know, but right about in line with what the street was looking for. stuart: the dow is holding to a gain of well over 100 points, closing in again on 14,000. apparently that ism number is a help to the market. to nicole, who has a big winner for us, and that winner is estee

lauder. we want to know why. nicole: they are seeing nice sales numbers. the stock is up 5.3%. number two best performer in the s&p 500. they saw strong u.s. demand. 13% rise in their sales -- earnings per share boost, i'm sorry. that's good. and they are saying that their affluent customers are spending freely. can i say one thing on gas prices? stuart: go. nicole: because you are all saying it is not a good time for gas prices to spike. it's never a good time for gas prices to spike. you know what? february now, they are going to go even higher in june, july, when i'm trying to drive out to the beach. stuart: point taken. there's never a good time for gas price spike in america. that's true. thank you very much indeed nicole. i have two big names that we should look at here, kellogg and hormel, both hitting all-time highs. kellogg beat the estimates despite losing money or paying a lot of money into its pension funds.

and that stock is up a buck. and then we have hormel, it completed its deal to buy skippy peanut butter and that stock is up too. two names you know. both of them up. now to the big story that we broke -- we didn't broke but we gave it to you at the top at 10:00. texas governor rick perry, he's running an ad to lure businesses from california to his state. listen to this: >> building a business is tough. but i hear building a business in california is next to impossible. this is texas governor rick perry and i have a message for california businesses. come check out texas. there are plenty of reasons texas has been named the best state for doing business for eight years running. visit texas wide open for business.com and see why our low taxes, sensible regulations and fair legal system are just the thing to get your business moving. stuart: he comes right out with it, doesn't he, building a business in california is next to impossible. tell it how it is, governor. why don't you. that's powerful stuff. liz: it is powerful stuff.

he tweeted to phil mickelson saying come on over to texas. jerry brown, governor of california not happy about this. even though governor brown has already said his capital has incredible complexity. the thing that texas has going for it too besides low taxes and regulation, it is a loser pay state, dramatic tort reform in that state. stuart: he mentioned fair legal system. they have tort reform in texas. they absolutely do not in california. that's a big deal. charles? charles: that was the rick perry that had a lot of people excited when he jumped into the presidential election. that was the rick perry strong confident making a lot of sense. it's a hopeful message. what would brown's counter radio ad be? come to california if you have a lot of guilt, don't want to leave your kids any money, want to pay for a whole lot of people's education that aren't in your own family but you can't afford to send your own kids to

school. california is like france. the only people who are rich are the people who inherited the money. it is hard to build fresh wealth there unless you have discovered something really great that works on the internet. stuart: i think you just made the highlight reel. you are the highlight reel. charles: thank you. stuart: perhaps the state in the worst financial shape of all of them is illinois. remember, it just cancelled a 500 million dollars bond auction because it couldn't afford the high interest rates that were demanded. in state worker pensions alone, it's 96 billion dollars -- it has 96 billion dollars worth of unfunded liability. it's in the red, big-time. and because of that, standard and poors downgraded the state's debt. giving it the worst credit rating of all the 50 states. joining us now is illinois state treasurer, and dan is with us from illinois. welcome to the program. good to have you with us, sir. >> thank you very much, it's good to be back on with you, stuart. stuart: i have to put it to you, when you cancel that bond auction, and you're so much in debt, you can't even pay your own vendors, your state

financially is at a stand still. am i right in saying that? what are you going to do about this? >> let me just be candid with you. it is a very tough situation. full disclosure as the treasurer of the state of illinois those issuance of the bonds don't fall under my purview. i happen to have gotten elected here in 2010, the first republican in the state of illinois in quite some time, to the role i have been playing literally for the last two years is i don't want to call it pulling the fire alarm but pointing out the type of things you just highlighted about the unfunded liability in our pension systems, the income taxes were just raised, and it is a tough situation here. and it's time for my capital city of springfield, legislators and governor to be able to put it together so we can move the state on forward. stuart: what are you going to do? you can't borrow money at reasonable interest rates. what do you do? >> we shouldn't be going out borrowing more money, capital projects perhaps, but the idea of borrowing more money to pay for the operations of government is something that as the state treasurer i have said no to

absolutely. here, bottom line is, we have to have the people around the table from the public employee unions and the policymakers understand that the type of benefit we have for our pensioneers and for the retirees and the type of healthcare we have for those participants is not sustainable. all the other things one may try to do here in our state, in fact our governor and the democratic controlled general assembly raised the income taxes two years ago and the outstanding bills to our vendors in january 11 was 8.5 billion dollars. now in january 2013 the outstanding bills to our vendors is 9 billion dollars. it's evident that it is a pension issue that has to be resolved. stuart: it has to be resolved. it's not been resolved, despite years, and you are not going to resolve it in the near term. it is not going to happen. what are you doing? you can't -- >> i don't disagree with you

that it can't be solved in the near term. we have to address it in the near term. it will take time for it to work itself through the system. if we don't stop the bleeding right now, and it has to be done in this session of the general assembly in this year to get that thing stopped. and from there, then we go ahead and we build on top of it from there. stuart: i got it. what are you doing right now? the bills are coming due. are you not paying your bills? >> no, there actually is increased revenue coming in. in fact in 2014 fiscal year, the increased revenue projections is 600 million dollars. that is without raising any taxes or fees. it's just by natural revenue growth. so where our problem is is also the increased payments in the pension systems is 950 million dollars. so it's pretty evident that natural revenue and taking out the payments necessary in the pensions, they are far exceeded by the liabilities. so we have to go deal with this pension obligation and then we've got the cash flow to pay for our bills. stuart: what are you doing in the immediate future? you tried to borrow 500 million. you couldn't borrow it. in the immediate future, the

next days and weeks and couple of months ahead, what are you doing? >> what we're doing in the immediate future, again this is on the governor and general assembly to address the pension issue, the cash flow is coming in, and it cannot be siphoned off to go to the public pension systems. that's the bottom line of it. you can't go out and raise more taxes. you can't go out and -- do cut in the budget yes, but the 350 million dollars spread can't be met. so the idea is absolutely to go out there -- stuart: who are you not paying? >> the vendors today are the outstanding pharmacies, nursing homes, school districts and so forth. so they are being paid. it is behind, and believe me, i don't like it. that's why i've encouraged this governor and this general assembly to get their act together. stuart: okay. dan rutherford, state treasurer, illinois, republican, what a pleasure. thanks for joining us, sir. we wish you well in a difficult endeavor. >> we are going to keep the pressure on, thank you. stuart: thank you, sir.

nicole, let's get back to toyota. has it hit $100 a share yet? nicole: so close. it was at 99.67. so not quite at the $100 mark. however, we talked about a weakening yen, and that will help them going forward, in 2013. and they also anticipate to sell a whole lot of lexuses as well. certainly some good news ahead for toyota motor. stuart: is this the kind of stuff you would buy? charles: absolutely. you could see this coming stuart, the last six or seven months they have been taking so much market share in this country. you knew the tsunami would add temporary logistics, supplies, but they have done extraordinarily well. the only thing, this thing with china becomes protracted, i don't think it will. stuart: you own it. charles: no, i don't own it. but i said before when it started to stabilize, i thought

it was a buy. liz: -- raised fiscal year profit forecast to triple it was in the disaster year prior. you have to think of that too. charles: that weak yen is playing a tremendous role. the person in charge of the bank of japan quit today. they are putting in a new guy or woman, whoever, they are going to print money like crazy. the yen is going to plummet, and it is going to give them a greater competitive advantage to the point where you might even see the u.s. federal officials get involved this somehow, being pressured by the automakers saying we can't compete. stuart: very interesting. toyota, it is a buy to you. charles: it is still a buy. stuart: usa today calls this ad from budweiser the winning super bowl commercial. and i have to admit, it was a tear jerker. i was moved. a solid and effective commercial. it's coming up at 10:45. we're going to have that horse and the man behind the ad. charles: the horse is going to be here? stuart: it will be on our screen live. we sere going to ask the guy

who -- we're going to ask the guy who made the commercial what does it take to deliver a real winner? that's coming up at 10:45. lightning round, first up congressman cantor will give a speech today stressing how expensive it is to raise a family and how higher taxes make that more difficult. charles, he's stressing how bad it is for families, all these new taxes from president obama, is he carving out a new republican party? charles: a smarter republican party. you have to make people understand what these numbers mean to them and their families. i have to tell you, we already saw it with the consumer confidence number. people are going to have a choice between spending the little bit they have or saving it. in december they decided to save it. charles: next item, in canada, they're dumping the penny. they cite production costs that exceed the actual value of the penny. liz, apparently in america, to make one cent, one penny, costs 2 cents to make the thing. do you see the day coming when we get rid of the penny?

liz: no, we have had this debate before. there's also been a push to get rid of a nickel. you will have big fights in the retail stores between people who are the lower brackets at the checkout counter. they don't like it. they don't want to feel like they are losing money just because the u.s. won't print a penny. stuart: you don't see the demise of the penny coming any time soon? liz: no, it would turn into another class warfare. stuart: president obama will meet with union leaders and big ceos on immigration, that happens today. peter barnes is at the white house. peter, it sounds to me that immigration reform is going to be very popular with the high-tech companies, because it will expand the number of visas available to high-tech workers coming in. got that right? peter: that's right. the h-1-b program for high-tech, highly skilled workers, the president wanted to expand that, so do republicans, and the other piece of this, stuart, is the president's proposal to staple green cards to any of these

really start kids who come to our colleges and universities, to get a phd or masters degree in science, technology, energy and math. the high-tech companies support that as well. stuart: got it, peter. we will get that checked out later. thank you very much. the department of justice suing standard and poors, is this payback for the debt downgrade? the judge has a theory on that. that's next.

stuart: it's a done deal, dell entered into an agreement to be a -- acquired by its founder michael dell and silver lake. shares of dell is virtually unchanged because it was expected. apple's new fourth generation ipad, with that high resolution display, available today. the new ipad 4 has 128 gigs at stores, costs 799 and the stock is up a buck. that's it. on its ninth birthday facebook continues to fall from the $30 a share mark, but shares still 6% up for the year. back to 28.25 on facebook right now. stocks suffered the worst day of the year in yesterday's trading session, rallying today though, went above 14 k very briefly. now at 13,996. coming up, payback maybe from the justice department to the s&p. we will hear from the judge on that. thank you so much.

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stuart: all right everybody. listen to this. the feds are looking at legalizing pot and yes taxing it. $50 per ounce of marijuana bringing an estimated of 20 billion dollars a year. we have judge napolitano with us. i want your quick response to the story. >> well, it would be nice if the feds did legalize pot because you have the right to put in your body everywhere you want, but a tax rate that high will create a black market. that's a lot of money. that's less money than you pay the mexican cartels. stuart: depends on the current

street price of marijuana which i'm told is in the region of 500 bucks and upper ounce -- up per ounce. a 10% tax would not drive people to the black market. stuart: yes it would. i think it would. -- >> yes, this would. i think it would. if they want that kind of money, they need to start lower and gradually raise it. starting a number that high will defeat their purpose. stuart: if you take away the criminality, you reduce the price. >> from blue-collar to white-collar, white-collar crime meaning without violence and black market. stuart: i disagree with you. i think if you take away the criminality, you lower the price. >> are you in favor of it being legalized? stuart: marijuana, yes, i am. >> i can't believe that. stuart: a quick story, when the beatles were awarded their ombe, i think it was, they smoked marijuana in a bathroom at buckingham palace and the law at the time said that the owner of an establishment where marijuana

was smoked was guilty of drug possession. theoretically, the beatles made the queen legally liable. i don't think it was prosecuted, as a matter of fact. stay there, judge, because i have more for you. the u.s. government is suing or thinking -- is about to sue standard and poors. the feds say standard and poors may be partly responsible for the crisis, the crash of 2008. they say you gave a favorable rating to bundles of mortgages and they went sour. it's partly your fault. judge, what do you make of that? >> it's a very long and complex document that they filed. it's 150 page complaint. liz with her great sources tells us that standard and poors is worried about this. maybe they know something that i don't. i know they have an absolute 1st amendment right to give an opinion when it's couched in the form of an opinion. now the government says that it has e-mails which show that

officials of standard and poors themselves, doubted the veracity of the public opinions that were given. even that is insufficient to overcome the 1st amendment hurdle. the statute under which the government has chosen to sue standard and poors requires actual knowledge of the information provided. almost inconceivable that there was actual knowledge of falsi falsity -- falsity. the government is looking for a billion dollars, to settle the case and an admission of liability. standard and poors could get the billion, but it would ruin them because it would expose them to countless lawsuits which could never be settled. no matter how much cash they have. stuart: here's the real question, is this political retribution because standard and poors not the other rating agencies which said hey, you america, you're downgraded, you don't get your triple a, you have lost it. >> this is speculation on the part of my part, and i as you know is skeptical of almost

everything that the government does. it certainly appears as though it is retribution. there's nothing in the complaint that it would lead you to believe it is retribution, except that if the people in the complaint, the civil complaint, that they filed in los angeles yesterday, actually did what the government says they did, the government should have indicted them. and it didn't indict them because it doesn't have a strong enough case. liz: well, i don't know. i mean, listen, i know that s&p and moody's, the whole rating industry is very frightened by this because the journalists of free speech opinion which they sold doesn't really hold up under the 89 act that they're bringing this suit. the government is saying falsely saying that these were independent and objective ratings, and also it's sort of like the -- you know, the bartender at the party handing out the fake ids, right? what happened here the rating agencies many of them were involved in structuring the deals. we had sec e-mails uncovered. so, you know, and they were questioning the veracity of the

deals that they were rating. >> the congress cannot -- [inaudible]. the congress would like to do that, but it can't. stuart: yet again, however, just laying the charge ruins the company. mcgraw hill is the parent company of standard and poors it went down 14% yesterday. >> and the government is immune from the consequences of the catastrophic losses that it has caused the shareholders already. stuart: i think it is political retribution, but that is an opinion of mine. i think perhaps you share it. >> i share that view as well. and i lament the fact that the government can do this and get away with it. stuart: many thanks, judge. always a pleasure. my take is next. i am exasperated with the administration. hear more about it in one minute. ♪ [ male announcer ] how could a luminous protein in jellyfish,

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stuart: i'm still waiting, waiting for the media to question the president's economic policy statements. i am sure it is going to be long and exasperating. here's my take, in his super bowl interview, the president said he wanted further savings in healthcare costs. the interviewer simply nodded and let the point go. perhaps cbs should be reminded that obama care, the president's signature achievement, has done nothing but raise the cost of healthcare. and then we have the president

in that same interview calling for more taxes. none of the media pundits questioned whether raising taxes, again, is the right thing to do when the economy is shrinking and unemployment is going up. the same day, senator reid, echoed the president on tax hikes, saying the rich should pay their share. that statement went unquestioned. will somebody please ask senator reid if phil mickelson's 63% tax rate is fair? and is it okay for half the people who work to pay nothing? and for the bottom 10% to get a check in the mail for taxes they never paid in the first place? is that fair? do not hold your breath waiting for those questions to be asked. the establishment media is not doing its job. they are not challenging policymakers. cheering section. and i find it exasperating to see policy go unquestioned. i will close with this, later today, the cbo tells us how big our debt will be in future

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stuart: breaking news for you from the white house.

fox business confirms that president obama will ask congress later today to come up with short-term spending cuts and tax revenue to avoid the march 1st deadline, sequestration. in other words, he wants smaller spending cuts now, coupled with tax increases now, and not the big spending cuts that are scheduled for march the 1st. that's what just happened. now to the business of e-cigarettes, that would be electronic cigarettes. they use a nicotine-laced vapor and companies that make them say this eliminates carcinogens that are in regular cigarettes. joining us now is logic technology's chief executive officer. he makes these e cigarettes. this is kind of a breakthrough product. i've seen a lot of advertising for it. i have a series of rapid-fire questions for you because our viewers may not familiar with what you have got here. number one, can you smoke these in public? >> first of all, good morning to everybody. thank you very much for having us here. this product can be used in

public, depends on the area. stuart: if i walk out of here and walk into my office, for example, in new york city, is it illegal? >> in new york city, in a workplace at this point, it is illegal. stuart: illegal? >> yes. >> stuart: on a subway platform? >> it is illegal. stuart: illegal? >> yes, sir. stuart: does it smell like regular cigarettes? >> no, no second hand smoke. stuart: it contains nicotine so i'm ingesting nicotine; right? >> that's right. stuart: can i become addicted to it like i'm with regular tobacco? >> this product is designed for people who are already smoking cigarettes. stuart: you are giving me nicotine and it is therefore addictive; correct? >> that's right. stuart: what does the fda say about health problems with e cigarettes? >> at this point, they're still researching this category. they're looking into it. i'm hoping that they will announce that this product is much safer and healthier than

traditional tobacco cigarettes. stuart: much safer but not totally safe? >> no, the product contains nicotine. an alternative to smoking traditional cigarettes. my personal opinion this is a safer alternative. stuart: is your product taxed? >> we don't have tobacco in our product. stuart: what is the attitude of big tobacco? you're taking their business. they don't like you, do they? >> that's true. many of the big tobacco companies are looking into the space. stuart: they're moving into your space? >> yes, they're moving into our space and that will legitimize more the industry and will have more lobbyists supporting this

product. stuart: you've got one with you. let's see it. this is an -- can i hold it? >> sure. stuart: this is an e cigarette. >> yes. stuart: what do i do with it? >> basically you open the pack, you put it together. you have the battery. stuart: put a battery into it. liquid into it. >> this happens to be a two piece unit. there are some one piece units. stuart: how do i fire it up? the audience cannot see this. but there is a blue light. that's not tobacco smoke. it's vapor. that's it. you just ingested nicotine? >> yes sir. stuart: how much is it? 9.95 in every store. -- >> 9.95 in every store. >> how long does it last? >> 2.5 seconds per puff. stuart: what's your sales numbers? >> double digit figures for

2012. we reported a 600% growth from 2011, 2012. stuart: from 2011 to 2012, your sales were up 6 fold? >> yes. stuart: 9.95 equivalent to two packs lasts 400 puffs; correct? >> yes, sir. stuart: any questions from anyone else? liz: i'm curious about the u.s. fda, are you selling this as therapeutic product to get people off of smoking? stuart: what's your marketing? >> not allowed to use as a product that will help you to quit smoking. we cannot use the word safe or healthier. liz: you cannot use it? >> no. we have had thank you e-mails from users that have tried everything for 20, 30 years and saying thank you for putting these logic products out for us. stuart: logic technology is the name of company. not a public company; correct? >> privately owned. stuart: can you name the single biggest investor?

>> myself and my partner howard bennis. i own 50% and my partner owns the other 50%. stuart: i just gave you an enormous commercial. do you realize that? >> thank you. stuart: you can have that back. thank you very much for joining us. we do appreciate it. very interesting product. thank you, sir. >> thank you. stuart: it's being billed as the winner of the super bowl commercials. after this coming break, we have the horse that starred in it and the man who made it. roll this. ♪ ire when he's 153, which would be fine if bob were a vampire.

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kelloggs took a hit for paying a lot of money to its pension plan, but it got an acquisition -- it got a boost, completed the acquisition of pringles. the ratings are in for super bowl xlvii. it was the third most watched tv show in history. beyonce and the rest of destiny child they couldn't beat madonna's halftime show last year. stay right there. the budweiser commercial is next.

♪

stuart: it goes on and it gets better. joining us now is the man who made that ad, his name is mike burn. he's the founding partner of the new york based marketing and ad firm anomaly. congratulations mike. >> thank you very much. stuart: you got to me. >> that's good. stuart: you really did. you know, the slight watering of the eyes there. >> that was the point, yeah. stuart: you were looking to do that. >> yeah. stuart: you wanted that. >> absolutely. stuart: i want you to take us through the creative process. did you sit down with a team and just sort of just shoot it out, give me ideas, is that how it starts? >> it started with the budweiser team in st. louis. they sort of lay the strategic groundwork. stuart: that's budweiser. not you the ad agency. that's the client >> that's the client, correct. but we also work with them in that process as well.

it was a very collaborative process. you don't get to work like that without that teamwork. and then we take that strategic vision that they have laid down and we begin to, you know, go into the think tank. stretch our brains. stuart: who was the first person who said baby horse, it is a winner, tear jerker? >> you know, it was a very small team at anomaly. i don't remember. what i do remember is you look at the lineage f budweiser clydesdale commercials from the past, and it's intimidating because there's been so many great commercials so you have to go well they have done that and they did that, and they did this one. and then i think at some point we came to this notion of well we've never told the story of the baby clydesdale, which is a four year process. just like making a bottle of bud is a 40 day process. there's a nice parallel there. we wanted to do something strong for the brand and something emotional for the brand. and these horses represent, you know, quality craftsmanship. they're stoic. there's so much -- they're treated like royalty, these

horses. liz: there are so many other ads that were not successful. your ad -- why did you decide to go after the optimism and hope theme? also how did you get stevie nicks in there? she's very protective of her music. >> optimism is how we think about the brand and how the budweiser consumer thinks about the brand. the stevie nicks, we showed her the spot and she has never ever ever -- has been pretty emphatic about i'm not giving you any of my music. stuart: she didn't want her music used in the ad. you went ahead and made the ad anyway. then you showed it to her and melted her heart? >> i think so. i hope so. the song melted our hearts. the other thing too is you would never want to put something in front of her that didn't live up to the song. stuart: i have to tell you, mike, this is a financial program. so i have to ask a financial question. >> right. stuart: you couldn't get that

music for free. you must have paid an arm and a leg for the use of that music. >> all i do is worry about the ideas. i don't worry about the money. if i worried about the money, we would all be in big trouble. stuart: i know you don't worry about it. was it a million bucks or less than a million? >> you know what? i have no idea. i don't even -- that's -- if my producer was here, he could give you all the details. stuart: but he wouldn't, would he? >> he probably wouldn't. charles: did anybody on your team see that piece on the internet that's been around for the while, where these guys raised the baby -- >> absolutely amazing. charles: then they go back into the wild. i think everyone who has seen that, that sort of re -- reminded me of that. liz: you mean the baby lion? >> a good point. after we sort of came to this place, somebody in the team mentioned that. maybe subconsciously that was there. stuart: you understand the segue. let's go to the baby horse, shall we?

joining us now is the general manager of clydesdale operations for budweiser. jeff, welcome to the program. we've got with us the man who made the ad. you're the man who brought forth the baby horse. tell us -- go through it for us, will you? >> well, it was definitely a team effort, that's for sure. but yeah, we had quite a crew working on the process, and when the idea came out in october, we all sprung into action. we had about 10 different horses, what we consider hero horses that were being trained in boonville ranch here where i'm at today as well as in california and then we also had the star, if you will, of the commercial, that we patiently awaited the arrival which was on january 16th, so delayed us a little bit. didn't delay us, but made us nervous by all -- stuart: you could have had real trouble there, couldn't you? it was awfully close to absolute

deadline for the birth of the horse. i mean, you were a little worried, come on, you were worried, weren't you? >> there's no question. we were -- i spent a lot of -- every morning when i got up, i was on the phone with our breeding manager here to find out if we had a baby because when we started in this planning process, there were a lot of debates on if we could meet the production time line and if we could deliver a baby and basically we said it's mother nature, but we will do our best. luckily darla the mother and little hope made it on time. stuart: great job. you melted everybody's heart with that little horse. and we thank you very much for being on varney & company today. thank you very much, jeff. last word from mike burn, have you exhausted the clydesdale repertoire of potential commercials? >> you know, it's funny i was thinking about that this morning. it is going to make next year that much harder. stuart: it is, isn't it? >> i'm already stressed out about it. stuart: do you have the contract? >> i don't know, i hope so.

advertising is a crazy game. we're already thinking about it, trust me. stuart: congratulations mike burn. it was a terrific commercial. we're in awe of your creativity. >> thank you very much. stuart: they are blaming your work ethic on global warming. they say work less and save the planet. can you believe that? that's next. ons platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity option.. evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

stuart: work less and it will slow down global warming. that's from a new report by the economic center for policy and research. the report says that if we switch to a more european work schedule, fewer hours and more vacation time, then we could slow down rising global temperatures, because it would lower carbon emissions. where do you start? liz: two problems with this, more vacation time means more plane rides to get to the vacations. and the study authors admit they did not take into account telecommuting on the rise, that will affect their study results. europe has 11% of the green house gases. stuart: can you imagine worrying so much about global warming that you want to take america down and reduce it to european levels of despair and debt?

charles: ultimately isn't that with everything -- the carbon taxes, our electric bills necessarily have to be higher, you know, this is all part in parcel of an agenda that i think goes way beyond just global warming. i think that's a key component for the attack mode, but there's a whole lot to this that makes us want -- the ultimate goal is to make us more european, i think. stuart: it is. we are becoming more european. charles: and we are. stuart: i think though that the global warmers have lost their scare advantage. because the world has not come to an end. we're not having -- you know, we're just not experiencing -- charles: they have positioned themselves very well that any time there's a storm, it doesn't have to come every year, like they were saying after katrina, it could come every four, five, six years, you know, they've positioned themselves well to scare us all the time. any time something happens, that it's happened throughout the history of time. stuart: everybody in the room is laughing at me. they are all giggling away because there goes varney again, ranting about the europeans.

have your fun and games, boys. [laughter] stuart: the highlight reel is next. ally all your imptant legal matters in just minutes. protect youramily... and launch your dreams. at legalzoom.com we put the law on your side.

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stuart: here it is. the highlight reel. two of the biggest states are going against each other. texas and california. now proposing anything specific. wanting to discuss how disruptive it has been under president obama. >> not happy about this. charles: come to california if you have a lot of guilt and do not want to leave your kids a whole lot of money. , to california. stuart: okay. that was charles stealing the show. charles just made the point that environmentalists have positioned themselves