for three years and after that, some payments have to come from states more and more, people are worried about state budget. how they will afford it long-term. >> right now long-term think how they pay for healthcare in next couple years, he said, i think smartly, we don't take the money, it does not mean that money is not spent it is just going to connecticut. neilconnecticut. >> one minute lift, lighten it up, first lady having a tough week. people are miffed with her at on the c.a.roscars. and now on aches, what d abc7. -- i'm not surprised by media, she meant to say semiautomatic, and i think this shows that media's to protect administration, it is not her

fault, she made a mistake they could have aired it. it. lori: last comment. >> give her a break, she is the first lady, she does it on television that is it. >> lighten up about the oscars though it was fun. lori: thank you so much, please our to have our a-team, have a great night, and that just about does it for me, sitting in for "lou dobbs tonight" it has been a blast. tomorrow night, lou returns tomorrow. i'm lori rothman you can catch me alongside melissa francis. thank you for joining us, good night. from new york. neil: read it and weep, coat

wall street closes in on a record, why is wall strt laying off with a vengeance? welcome i am neil cavuto, at fox on top of broker bumming out, a bot of brokers. these guys got a case of the blues, jobs blews, today, news that jpmorgan chase plans to cut 4,000 jobs in consumer banking business this year, and 13,000 next year that is a lot, goldman sachs likelyhe same, as it begins annual weeding out of so-called underperformers, early this week. now keep in mind goldman sachs has already cut its workforce by 9% or 3300 employees. so you see a pattern? bank of america, citigroup, ubs ag, they have been cutting staff for years now, they show no signs of letting up now. the problem, well despite the busy market driven by surprisingly few players, not so busy anything else, investment banks under pressure in their

other fa far-flung businesses, y are squeezing the lemon to make whatever lemonade they can, cutting costs, managingic pengs, the likes of which we have not seen since after the famous meltdown, not good for those getting laid off, and not much better for those zombie-like survivors hanging on. their bonuses are down, and potential ripple effect is already clear. so let me be clear. whether these guys cough the economy often catches a cold. when they make big bucks they spend the big bucks, that is good for car sales, home sales, lots of sales, but those sales appear to be slowing down, a sign that corner of wall and brode's further lay offs will create more problems for the economy ro now? >>the rallye is nice, at bite we're going back to future. before it hit the fan, looking

around now. maybe before everything hits the fan all over again. to wealth manager ty young. and market watcher lenore hawkins with a lowdown on a new version of trickle down, lenore, what is going on? this disconnect between wall street doing okay it would seem, but, wall street power houses, not? >> well if you look at just equity trading activity, it is down over 7% this year, that is very indicative there will be a lot more cuts. looking from a historical perspective, normally, during 1900s, the financial services sector is a percentage of gdp was between 1 and 2.5% it has only peaked twice. in 1930s, and after that early 1940 its of down to 2%.

and peaked in 2006, represents 8.5% of gdp not a surprise you will have to lay people off. neil: ty let's look that the rally, if she is right, and that would raise an issue that, maybe, this rally is not quite what it appears, break it down for me. >> well, i think you are right, i think that we can find good news out there there are not companies with good earnings, but this market in my view is up because of price inflation due to prints of money, in this environment, traders are trading now more on government news, government policy news. be that they are on en no vague from individual -- innovation from individual companies, look at ben bernanke's testimony to morning, the market is up because of that. i think that is a great idea. i think that is a great idea, so what it comes down to, here is

wall street having to deal with same thing that main street is having to deal with. the problem with bank, credit creation is no longer's function of the free market, if is a trunk of this -- function of the government, and you factor in dodd-franks and low interest rates it is tough to make money, i'm not surprised we're seeing layoffs and i think we see more. neil: i think that a lot of everything, including market rallying, and continuing to rally, the economy turning and wall street doing better hinges on housing. we've had hiccupy reports on housing, it has been all over the map, that reinforces the notion it is not a slamdunk. and i suspect that until it is, all of this is held in question. >> it is. in the fact that the cutbacks

are hitting wall street right now, is a real concern to me, if you think it is difficult getting a mortgage now with what we have in place, we continue with the cutbacks on wall street, it is going to get more difficult, the feds are backing off on what they are buying as far as number of loans, they are backing offfand they are going to private market saying come back in, stop buying mortgage backed securities, they are loans gathered and sold, if government stops buying those, and wall street is not there or is under staffed to be able to get in and facilitate the liquid to the housing market this housing recovery is not going to continue. neil: then all bets are off? >> y nailed it. you look at, the federal reserve, their balance sheet is now 85% correlated with the stock market. normally about 20%, corporate

earns have a 7 percent correlation. neil: for now we should like it when the market is doing well. we don't when is not? >> but, at some point the balance sheet has to get pulled back in, if the correlation maintains, what are you going to do. neil: that is what the balance sheet hits fan. >> without a doubt, and to real estate marke just a second, if we look at real estate market, most of the money coming in righright now is investor money, just like it was in 2007, and 08, one thing we have not talked about is gas prices, they are up big and quickly, every dollar that goes into a gas tank cannot be spend in another part of the economy that makes the economy growth worse. that is a greater effect on main street and wall street. neil: you hear conflicted reports, that loans are not as hard to get as they used to be, but, there might be a some --

some element of truth. but all you need is the first sign there is a problem that lending tightens up like a drum? >> it does, i think we look at consumer confidence, a lot say that not a indicator, but it indicates psyche of what is going on with average consumer, you apply for a loan, you can't get approved, that is going to put a real you know, real damp or the market for sure. neil: when you say a damper, how much? whatever uptick reversed orr3 what? >> well, i think that there is a potential for that first of all, investor money is coming in, not all everyone coming out of their homes trading up, we're not seeing that at rates we have historical levels. at healthy levels, we should had a lot of billions of dollar investor hedge funds coming in seeing a huge opportunity to

invest in real estate, and rent it and flip it when the market at a higher point. they will do well with that. neil: quickly, just a matter of time, i think before we make a new high on the dow, then what? >> watch for the correction that has to becoming here, with something driven just by the plan sheet, 90% of all of new treasury issues and mortgages are being bought by federal reserve,here is only 10% on the market, all that money that would have gone in to buying treasures and mortgage backed security has to go someplace else. neil: ty, you are still bearish? >> well, i am. i tell you, last quarter we've seen inflows of money into mutual funds and managed account, the average investor is rusely wrong, they buy high,

sell low, it is hard to make money with that strategy, and we're setting up for it right now. neil: all right. appreciate it. by the way, i now just call him -- president barack or -- [screaming] he is scaring me. stop the nightmare now. and bernie going berserk about it. because of these guys. the capital one cash rewards card

gives you 1% cash back on all purchases, plus a 50% annual bonus. and everyone but her likes 50% more cash, but i have an idea. do you want a princess dress? yes. cupcakes? yes. do you want an etch-a-sketch? yes! do you want 50% more cash? no. you got talent. [ male announcer ] the capital one cash rewards card gives you 1% cash back on every purchase plus a 50% annual bonus on the cash you earn. it's the card for people who like more cash. what's in your wallet? i usually say that. >> there are too many republicans in congress right now who reduce to compromise even an inch, that is what is holding things up right now. neil: you know, she not only one

-- he is not only one blaming the republicans, some republicans also frustrated with leaders of their own party, my next guest, one of them, utah of ofgovernor said both sides are botching this, explain, sir. >> thank you, neil. there is a dearth of leadership out there, as governor we're expected to get things done. if we don't we get criticized for it i see in washington, d.c. is a lot to criticize, taxpayers are not treat the fairly. it like a dfunctional marriage back there, everyone is pointing fingers, no one is taking the blame it has to stop, this is hurting the states, and the taxpayers, and the market place. neil: republicans say they have given their pound of flesh by agreeing to tax hikes in the cliff deal, they are not about to repeat that. they gave the president what he wants, enough already, start

cutting. they say, it is his fault. not their fault. >> leadership starts at top, the executive branch, president obama has the opportunity to be the honest broker and lead and bring the partying together, we talked with him over the week, we talked about e entitlement reform, i suggested he needs to speak louder and put it on the table now. i am frustrated it impacts my bottom line as i put together my own budget here in utah, we're a healthy economy. but what frustrates me more than anything is talk about cutting, and a loss of services to the public, whether there is no talk about increing efficiencies in federal government, there is no reasone cannot have a cut, and find efficiencies in federal government. neil: that assumes what they are doing is cutting, right? you know that better than anyone, that they are curbing,

so slightly, 1.5% more like it growth in a lot of these programs, but that said, what do you think of republicans counter plan that has been raised, mr. president, we'll give you discretion what has to be cut, wider parameters than exist now, there by taking andninging point away from white house -- an arguing point from white house that all tr draconian cuts are comes into place. >> i think this is a proposal put out to there, put the president on the spot. neil: he rejected it out of hand. >> he wants congress to do the work, he does not want to be put in a position have to decide where to take cuts from. and i think that is the problem. both are pointing this way. there needs to a discussion about spending cuts. i told the president, i said, it does no radio monday, it does not help when we have former speaker of house, nancy pelosi

out there on the sunday shows, just a few weeks ago saying there is not a spending problem in washington. everyone knows there is a spending problem in washington, he said we don't have to have the sequestration, we agree but there needs to be spending cuts. neil: were you afraid, that republicans are losing there argument, everyone you said -- everything you said is valid. republicans are always drawing the shorter end of the straw on this. >>we put ourselves in a bad situation with that fiscal cliff discussion, we allowed tax rates to increase, and we'll do the cuts later, now cuts are not part of the dit discussion, thas probably bad poker playing. does anyone find it unconsound

able that senate has not had a budget in over 4 years? so, i tell you, governors are frustrated. i am frustrated. it impacts our state with the damages, we need to see leadership, they have to quit squabbling and come together, the president more than anyone else, he can say that democrats we'll have en teat il entitleme, speaker boehner we'll look at loopholes, let's come together for the good of the american people, and bring certainty to the discussion so businesses can go out and create and expand. neil: you make way 52 muc 52 toh sense. >> we're doing it in utah. neil: well did you see the huge,

aarium -- aware umium that home depot opener built in atlanta, amazing. after the bailout, tax payers out billions, new watch dog saying watch out, you are paying big bucks and the government is not watching out for you.

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bailouts. expectation or general, what is going on here. >> my pleasure to be here. well, just a very sim simple concept, they bailed out company to protect ourselves, we were told that entire financial system would go down without a bailout, but we did not do it on-line the pockets of the economists, you -- executives, you take worse offenders of the bailouts, and we found is that treasury who sets pay package for top employees is giving excessive pay, thattic eads economy seeds -- that exceeds their own guidelines. neil: the bump up began wh ben oh, shea when we took over at aig . and so they just said to keep people there you need the best

people to turn things around, they went too far? >> absolutely, there has to be balance, you want them to repay t.a.r.p. but you have to balance it. treasury came up with a set of standards, they are basic. don't pay cash over 500,000-dollars, and keep the pay packages right in the middle at 50 percentile, use part of pay that is stock. tied to company actually repaying t.a.r.p. neil: that wld be some of the key criteria getting the money back to taxpayers before we think about paying you a boat-load of money. >> absolutely, you want each person to have some personal stake in the company repaying t.a.r.p. making part of compensation dependant on that with an

important measure that when special master fienberg determined was the right way to address some problem with compensation that contributed to financial crisis. neil: you know, inspector general, looking at this i am wondering if all good intentions go bad. to pay them more so that a would turn around and incentives for smarter better players. but this could degrade into hey, there is no punishment for screwing up. i'm still paid a lot, i will be incentivized all the more if i st keep the lights on. >> it is not supposed to be comfortable to pay t.a.r.p. neil: tell that to the broker.

>> it is not business as usual. if taxpayers own you, it is not. so really, the really the important question, becomes rwhat is the amount of pay that is appropriate. and how should the paying structured so we don't go back to the same situation before where the compensation played a role in causing finish crisis. neil: don't go after financial anchor's pay if you don't mind. >> i think you are safe. neil: do you think that t.a.r.p. was a waste of time? when all is said and done, with rescues and abuses, balancing it out, what do you think? >> i think it is along with other government effort not just by itself did help stave off the economic collapse of our financial system. but there are so many costs that come with that there is dollar cost. there is the morale hazard.

this -- this leads to morale hazard with companies, who if there -- if they are rlly protected from risk they take, by getting paid even if they are bailed out, this is another form of meral hazard, -- morale hazard, the other side is crime. our investigations have resulted in criminal charges again 121 people, we are putting people in jail for this, there are very serious consequences related to bailout. neil: all right. thank you. >> thank you. neil: two republican senators say they are open to revenues, just had a powwow with president who is now demanding revenues, why home depot cofounder bernie marcus finds this a little bit more than taxing.

neil: half time. have republicans lost their throttle? caving for cash? some say raising revenue might be the right thing to d lindsay graham and john mccain are twof them, home depot

cofounder, bernie marcus finds amazing that whole budget mess did not come up. the possible that's they included in dealing with any budget mess. all right bernie, i'm listening and hearing this and wondering, -- i i don't know if revenues are the problem here. >> well, neil, if i had a very serious concussion, i don't think i would go to a po a -- podiatrist. this is ridiculous, if he raise taxes on people, it does not solve any of the issues, this is not going to lower debt, we'll be in terrible debt, it will continueo go to 16 to 17.

neil: what this day tony care? -- what if they don't care. debt does not matter. if it is invisible you are fighting claude raines. >> i heard a couple republican say, let the president do what he is going to do, after he destroys the economy and kills businesses, then we will have a chance to get back i in to was. what does this have to do with getting back in office? we have unemployment at a very high level, why are we not addressing the things that really make a difference rather than talking the politics of it, the president is running on as though he still, the way i look at it november is another elect for him. the election is over, my god.

if you look at small, you know i'm involved with the job creators alliance. and this is small business people. and that is where i was many, many years ago, i remember those days they were hard. they are struggling today, all of small business people i have talked to in america today, 70% think that washington is anti-business, i agree, they think there are too many regulations, and they think that taxes on this last tax bill, coming out, most of these people you know their sub-chachapter s, they play ordinary income. neil: wt do we make of how wall street is doing with this and companies doing, i thought of home depot, buying back 70 of its own stock. others are merging together.

and others taking themselves private. but most cases that i just cited, they are not branching out to n businesses so much as trying to session curingtrying . >> you were, neil, you hit on it, they are not investing, they are not growing the way they normally would have. listen. even big businesses are facing -- i'm not speaking for home home today i'm now the i'd of the company, not on the board or management. but i can talk about people that i know, outside of home depot, they are struggling with obamacare. i don't know -- i would hate to be a ceo today. i am thinking aboutous a thousand people working for you, you cover with insurance, and you see insurance going up, 20 to 30%, and by the way, it will be going up 20 to 30% over next period of time, you will have to

dump those people into obamacare. and so they will go from a cadillac service into a medicare, which today is very bad. you know that if you had -- i give you a great example, this happened a dee friend with a ses back issue. maybe 30 people that do the kind of operation she needs, 25 would not talk to her. because she is on medicare, what do you think is going to happen to people out there? the situation is desperate. and so, you are right, neil, companies are not expanding. when they are expanding by the way, they are going to part-time. i could promise you, i heard this across the board in food industry, and other industries, they are hiring people, 25 hours, no -- nothing past 25 hours. now how is that going to help people, earn a living? people cannot earn a living on 25 hours?

neil: someone told me since this health care law came into effect we have fewer people -- that is a incredible irony. >> i don't look at it this way, i speak to people who are democrats, i spoke with one last night, who is a manacturer, i asked him about this. after everything was over, he said, number one he thinks he made a mistake, and number two, he is shipping jobs overseas, wow. how do you figure that one. so, you know, hypocritical on top of everything else, it is not -- it is not good out there. and small business guys, they are getting the wrap, he is getting wrapped with taxes and wrapped with regulations. you know, this whole thing with the nlrb, a wrote an article on "wall street journal" three

members appointed in recess, they say of a recess, court said was not recess, now, they refuse to leave offers, and they are still, -- live office they are still doing their thing as though nothing happened, they decided a hundred cases in last year. neil: they will keep deciding them. >> they will keep doing it so, if you are a guy that can't afford to pay $100 240u $100 thr an attorney, you are going to get killed, it is not good, it is not good, is there anything good out there right now anyway? neil: you, you. we have a couple peopl who e-mailed my, said i love bernie marcus, when you are on, he is smart and sexy. >> sexy? who is that? neil: bernie marcus, cofounder of homeepot.

there is a guy who just gets it, mama mia, what is happening in ing in italy could cause big problems over here, pay attention, because the leaning tower of pissa is just going to fall.

neil: you see that woman in the hat? you know this video for a cause, the deal with t the debt, that s alice rivlin, folks, the former vice chair of federal reserve, former budget director, of congress, of bill clinton, big member of debt commission. she is widely reported by both

parties. and yet she does not feel so haughty, so arrogant she would not appear in a video in a silly hat to make a serious point, this is why live having alice rivlin on. alice, great having you. >> flies to be here. be -- nice to be mere. neil: what got you doing that video? >> at my age you take a lot of risks, who cares. >> i thought it was great, it humanize the whole issue. >> i think so. i have been working with fix the debt, because i care very much about fixing our national debt, and youth arm of fix the debt is the can kicks back. they organized that little thing, i thought, well what fun, why not. neil: your message was, we can't ignore this does it bother you that many still are, there is a

lot of finger-pointing and recripple nating, y democrats and you republicans, you don't want to cut your thing, and blah, blah. and it is like a bad war of the roses in washington. and nothing gets done, debt still grows, what is your biggest worry right now? >> it worries me very much, i'm not sure about war of the roses, i think of it is a kinde kindern squabble, he hit me first, no e hit me first. no one should care who started it. it is nobody's fault, the retiring baby boom generation, we're living longer, and we have rising health care spending they will drive the entitlement spending up faster than our economy can grow, that snow body's fault, we need to fix;

if we need more revenue too. by need a deal, a grand bargain we used to call it on simpson-bowles. that will slow the growth of the entitlement and reform our terrible tax code, we have semiconductor revenue. neil: all right, now, part of more revenue, saying be dynamic. that very, growth that would be triggered by less money ordered by washington. in and was itself creates -- >> growth helps, but i think we also need to stop some of the spending in the tax code, there is a lot of spending in the cac in tax code. neil: maybe you can bring me up-to-date on sequestration thing. president sort of changed goal post, that taxes were not

supposed to be part of the sequestration, he agreed to, that but he changed rules said they will be now. what is true? >> no, taxes are not part of the sequestration, that is say totally dumb policy. neil: is the president wrong to want to include them now? >> taxes have nothing to do with it. we should not have the sequestration, it is a across board spending cut, and only discretionary spending. neil: i understand that, i was not clear, is the solution, the way around this, when he said have you to include revenue in this, republicans say, no, that is n the deal, that is not what we agreed to. revenue was never a part of settling this who is right? >> they have -- this is just part of the squabble. if you focus on real problem. which is what i was talking about. the fact that debt over the next decade or so, will grow faster

than the economy. there are two reasons one is growth of e entitlement work hae to do something about that we can't cut spending enough to solve the problem. neil: i don't think we have to worry about that. anyone who -- at rate that we've been cutting i see little reason to fret about that. >> well, i don't know what you mean by that. neil: we're not cutting anyway, we don't make effort, i don't see what everyone is so are you -- you know getting traumatized about. >> i'm not traumatized about it, what you but what seems wrong about the sequestration, is it is more austerity now, this minute. whether we don't need it, it is stupid across the board cuts in

discretionary spending. and we have already cut discretionary spending we need to turn our attention to the longer runs. >> finally quickly, when we looked at this video. he fancied himself a good dancer, i'm looking at you, i think you are superior to him. he is in the white wig, you are much better. >> thank you, neil. neil: do you think, neither of you dances as well as president and first lady, but i think you are a step ahead of the bidens, alice rivlin thank you very much. >> good to be here. neil: snow no, you are already getting slammed at gas pump, now massive storms will make you massive storms will make you grocery bills

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neil: the snow keeping falling, gas prices keep climbing, you already know, that get ready to taste the gas when you pull up for groceries, super market maestro on the other shoe that is dropping. >> keep in mind, number one. if you just look at kansas, 22 inches last week, now to be 8 to 10 more inches right there. we move our food by trucks. and trucks can't get places, so if you look one piece of good news, is that because of that snow, the drought is midwest, that wexperienced last year, probably over. wild probably have a -- we'll probably have a great crop yield

for wheat, but we have problem with cattle livestock. we're about 22,000 less than normal. less beef, means prices are going up. neil: how much? >> oh, you know, protein is already up 5 to 70%. also -- 7%. and the bird flu in mexico they slaughtered 2 million head of poultry. i say prices go up 10% over next couple of months, i don't see how it is going to go down. neil: you know everyone, go back and reports on sticker shock. if you are right it will be more of a shock post the storms. a lot was fixed in there. how did storms make it worse? is there really more of a case of more up front hits then they

ease as storms go away. like in case of wheat, the prices subside. but does is offset each other by the summer? >> hopefully, but it depends, the past couple years we've had more hurricanes and more droughts, one after another. for our parent's generation, and grandparents they would have a drought every 50 years, we have it like every 6 months. the weather is really affecting you know all of this agricultural, it aroblem, we need to move more of our produce items into hothouses, but that takes a lot of money. also, you mentioned gas prices before, the gas prices for trucks to move our food goes up, and also what happens is people whether they have the storms, go in and they horde the food, bay more bottled water, canned foods, we'll have probably a

tough 2 to 3 week period where food cannot get to stores in time. >> you are right, i am not one to grocery shop. it is intimidating, there was a woman, in the snowstorm in northeast, had to be 110 soaking wet, but he is o she was like a. >> i would have done something healthy, you are right, good stuff all. thank you phil. super market guru. >> and why is it monkeying around, and looking to pay big bucks, hiring folks, pretty much like this? >> why are you slapping a

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call or cck to learn more. [ male announcer ] if u n't afrd your medication, astrazeneca may be able to help. [ male announcer ] if u n't afrd your medication, >> this sequester could cost tens of thousands of jobs. >> 750,000 jobs lost. >> 10,000 teacher jobs put at risk. >> sequester = job loss. >> it is bad for job growth. >> people will lose their jobs. neil: then they will die. the warnings keep coming about automatic cuts else parkade firing spree the secretaries making 80 grand a year community planners making 106 grand commuters -- committees making with its 65,000 all of this is

just proving it is a scare tactic matt welch and alexander is back. spinet the president knows as well as we all know there is nothing being cut. government spending is increasing 15,000,002,012 through 2013. neil: it shaves the growth by one point* 5%. >> at the end of the day it is a redirection of increase of seven historical perspective post-world war two spending was cut and in the '90s during those decades but even obama was sequestration spending is increased by 2%. we managed in the 80s and

90s and after reports to we can manage now with the $15 billion increase in spending. neil: i don't know. their belly aching but it is a big problem for all of us if we cannot do this much maybe this is a rounding error. >> it is amazing with the scare tactics. the pentagon says more than half of the air force aircraft will be grounded in to demands but after a decade in which they increase there budget by 70 percent could you pay for maintenance with some of that? neil: more like 850 billion not 85 billion. >> somebody is exaggerating. >> with the senate appropriation committee of the jobs are at risk, not that the rubber rooms are closed but the jobs are at risk in trying to scare

people about the firefighters about losing their jobs. neil: like i am a risk of being thin is always a worry but where does this go? alice ivlin touched on this but stable spend like crazy so everyone needs to be alcoholic at the a meeting to say i am misspending pollack and i will admit that and move on but we're so interested how we got here we're not dealing with the real issues to get us out. >> right. ball sides are behavinwi