december like you said. [closing bell ringing] cheryl: we're looking at those as the bell rings on wall street, lauren. david, again, 50th record. s&p 500, four days in a row. 44th record close for the s&p. david: you have to go back to 1997 to have a year this good. you add up all the times the market has been up over 20% a year, there aren't many. you can count them on one hand. all of the indices are in the plus today. interesting the russell 2000 managing to eke out a gain. only .06% to the plus side. but still it's a green arrow. cheryl: fourth straight up close for the russell 2000. glad you pointed that out. david: small, medium large, they're all doing well. cheryl: time for your front page headlines. the number of people filing for jobless claims fell to the lowest total in three months. david: main street and

wall street doing well we're happy. holiday sales rose despite forecast that is the shopping season could be the worst since 2008. mastercard advisors spending pulse reporting that sales increased by 2.3% through december 24th. cheryl: amazon says its holiday season was the best ever. the online retailing giant saying on cyber monday alone it received a record breaking 426 orders per second. the problem was getting those delivered. david: blackberry's stock ending lower after the cofounder mike lazear, cut his take to 8% from 9.44%. cheryl: follows a report that china daily newspaper that tesla is planning to open more showrooms in china next year. david: reuters reporting that japan's softbank which owns the u.s. wireless carrier sprint, has begun discussing financing for a possible deal to take a majority stake in t-mobile usa.

one source saying it could happen as soon as april. "after the bell" starts right now. david: with cheryl's fourth hour, today, wow, what a marathon session. let's break down today's session. what a great day we have. jeff saut, raymond james who says u.s. equities still have room to run. he will tell investors the best play to play the market. john paxson, beacon capital management on what industry he will be bullish on in the beginning of 2014. and scott shelled lady from the pits of the cme. i was surprised to see you think stocks could go another 15% higher in 2014. tell us where. are you talking nasdaq, small caps, blue chips, what?

>> i'm staying away from nasdaq. they started to smell a little bit like 1999. they haven't settled this high since september of 2000. david: okay. >> 1800 to 1900 on the s&p is only 5%. do you think we can do that two or three times? i do. the reason why is this. i think we may even see more accommodation. janet yellen might come back and put her foot on the gas pedal. look, we've only had five or six good economic numbers. i give you a couple good jobs up in members but only back up to the 185 number we started year. we'll see a few good numbers in a row. throw in a good retail number. there is nothing to see here, move along. move along. i think we have a bumpy road. what happens if we have bad jobs report in january? what will market do then? we have a long ways to go. cheryl: i know you're bullish, jeff, respond to what he is saying that janet yellen could step back in and put her foot on the gas pedal. that is an interesting dynamic

that coo shape 2014. do you think that is a possibility. >> i think if it is possible if the data supports. i think they will do exactly what they said, watching the data. the move by the federal reserve will be data depend. that said, i do agree with him. bottoms-up earnings estimates on s&p this year into next year up 13%. i think equity market as measured by the s&p could track that as well. up 12 or 30% next year would be the call. >> john, i don't want to rain any anybody's parade particularly with the growth figure from the third quarter, 4.1% annualized. that is a hajj jump, although let's put in this one carve yacht, see how you to respond. most of that was to build up inventory. it wasn't necessarily based on sales to products. it was creating products. what happens if the products don't sell? >> thanks for having me, david and cheryl. you're right, the gdp number was strong number, 4.1% revised.

that is only second time we've seen a number that high since the recovery since 2009. but you said a lot was due to inventories built up. right now the consumer pretty confident. they're spending money. in the summer months of last year, consumers were spending 2% against an estimate of 1.4. that is good for consumer spending economy but as the fed begins to taper, and we think that is a good thing, the question will be, is the economy really strong enough to absorb potentially higher rates? so i think that remains to be seen. i think you will see gdp come down in the first quarter of next year some. but i don't think we'll have a negative year in the market next year. cheryl: also scott, about gdp and forecasting, the initial claims we got one of the big reasons we saw markets rise higher today. to david's point about gdp and where the growth came from, for the gdp number are to the third quarter, jobs are not really picking up where they need to be. is this one of the reasons you're thinking that janet yellen could actually step back

in, data dependent? >> and i agree, yes. absolutely 100% data dependent and that is why she could jump n two jobs numbers don't a year make. last 200 prints we had only brought us up to the average we began the year with. does anybody really believe that the fed will be able to orchestrate a safe way out of this without any blood or any bumps in the road? i think we've got a long way to go here. i'm a little bit skeptical. i do think if you see some bad news and they are data dependent end she could start to throw more gas on the fire. david: no matter what she does and what the fed does, you have interest rates going up. they're going up a couple interest points here and there, lo and behold 3% on 10-year. is this economy strong enough to handle continually rising interest rates? >> i think it is. last time secular bull market was 1950.

yield was 3%. over next 14 years it went up to 4.5%. the dow jones industrial average went from 173 to 730 because interest rates were going up for the right reason. the economy was getting stronger. i think you're going to see that as we get into the first half of next year. i think the inventory build in the fourth quarter was legitimate because i think sales are going to be stronger than the official figures suggest. cheryl: john, you like homebuilders. and, that i think is an interesting point for you because homebuilders for 2012, hottest sector, 2013, a bit of a pull back. now we're talking about interest rates going up. what do you see in homebuilders next year? >> i think in particular the first couple of quarters they will have a really good spring sales session because historical, the rates are still historically low, even if they begin to go up based on tapering or fear of tapering. coupled with the fact we've got jobs absolutely improving that is undeniable. consumers have more confidence. cheryl: you know what, john,

though but the prediction for 2014 is services sector will be the main growth. those are lower paying jobs. those are not people maybe buying homes. >> well that's true, but overall it is unquestionable that the housing sector is improving and inventories are really in check with the majority of the homebuilders. and when you look at companies like union pacific which transports, they're seeing increases in home building supplies on rails which is another sector that we like. david: jeff saut, let's talk about real estate in the sky. you have a couple of tower companies, people will still be going mobile, a lot more than they already have and american towers corporation, sba communication are two tower companies set to take off when that happens, right? >> well you can see it every year, david, your mobile device becoming a computer. you've seen it every year for the past five or six years. you see the trend continue. tower stocks are real estate in the sky. need more bandwidth, hang

another tower stock. cheryl: we had all the talk about the volcker rule and what it means for banks, financials. 2013 were great for financials but now what? >> i think you're going to see the big guys start to spin things off. that is the only way they can create value. citigroup is likely going to be the first one. the new ceo in there has done this before. if you could spin out investment asset management division you get two or three times the valuation on it being given inside the corporate shell of citigroup. i think the first one that does it creates a domino effect for the others and i think that is only way they realize their full value in years ahead. david: jeff saut, john, thanks for your investment advice. scott shellady, we're not done with you. we'll come back when the s&p futures close. >> you bet. cheryl: looks like hedge fund glory days are coming to an end. this year they averaged returns of 8.2%, versus 25% for the dow.

will they make a comeback and or has the smart money lost its way. david: just 8%. that shows you where the market is also. were you missing gifts under the tree? cheryl: casone family were upset. david: asman family was pretty happy. don't blame ups and fedex for a delivery debacle that caused many packages to arrive late or if at all. we'll tell what you is being done to fix it. cheryl: latest numb remembers jobs are recovering but skepticism remains. do you believe the new numbers or is the economy still in trouble? log on to facebook.com/afterthebell. we'll talk about that coming up later. ♪ [ male announcer ] what if a small company

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cheryl: shares of 3-d systems are making a bit after comeback after seeing a bit of a selloff on tuesday. lauren zimmmerman on floor of the new york stock exchange. lauren? >> tuesday last day markets were open. it was a half day. shares of 3-d systems got hammered. they're up 7% today, new high. if you're curious this year the stock is up 158%.

3-d printing and servicing market is absolutely tremendous. it was more than $2 billion last year. it is expected to hit 6 billion in the year 2017. you will see dentistry, automotive, aerospace industry continue to use 3-d technologies. this company thus far has been a big winner. one of the reasons that it got a pop today, canaccord raised its target by $10 to $95 a share and have 3-d systems with a buy rating. back to you. cheryl: as long as they can print 3-d 100-dollar bills. >> that would be awesome. a scary concept and completely industry at the same time. cheryl: it is. that's cool. >> i like the $100 bills. i can think of a whole bunch of things to be 3-d printed. david: how about 3-d cows? scott shellady knows about real cows. he doesn't need 3-d cows. he has real thing on his farm. what is the s&p doing at the

close here, scott? >> looks like we'll hold on to these gains. we don't have any sellers here all traders will tell you don't want to short a quiet market. at the same time looks like the trend will continue into the new year. i say this because we're not looking at anything that will give us a jolt to the downside until we get the next jobs number. it will stay kind of levitated until then. david: good stuff. scott, thank you very much. appreciate it. >> all righty. cheryl: hedge fund are thought to do better than the market, that has always been the thinking but this year a bet on overall market did three times better than a hedge fund market. david: hedge fund are up 8.2% but dow is up 25%. three times. are hedge funds lost their touch and are they worth high fees? greg stewart, chief investment officer of top turn capital. greg, good to see you. when you look at numbers, anything in isolation could be distorted. you think a straight comparison this year is unfair. explain why. >> well, i think the reason why

that is, is that each hedge fund has its own particular unique strategy and a role in the portfolio. so to compare all hedge fund to the market i think is, you know, comparing apples to oranges a little bit because, again, they each have their own roles. cheryl: greg, you see it, hedge fund became so popular. everyone wanted to be part of a hedge fund. you even have fund that mirror hedge funds in strategy so the average person can get n. doesn't that kind of negate the point of being hedge fund investor and being a millionaire investor, beating the market out, and then we have numbers we're showing of yours today? >> i don't think so. i think, again, if you look at it in on this year's basis here for example, stocks have had a great year this year but there's been times past where stocks had a great year and again, you know, you don't know what

tomorrow's going to hold or the next year or the next year after that. and so i would say that, you know, who knows what is going to happen next year. david: of course obviously by the definition hedge fund are met to hedge other people's losses. so that if you have any kind of losses you can hedge those losses with some positive gains. that is why they're such valuable institutions. say next year we get another double-digit gain, maybe not 25% but 10% on the dow, won't there be a shakeout ahead? a lot of people will look at the high fees you pay for those hedge fund say, hey, look, if i'm getting double-digit returns in the dow and single-digit and higher fees in the hedge fund i will get rid of the hedge fund. >> well i think, if you have based your investment strategy on a hedge fund being able to compete with the market as a whole, i think that again, i think you're miscasting the role there, unless your hedge fund is

really designed and earmarked for that role. so if your hedge fund is earmarked for that role, i think yeah, there is a lot to worry about. but again i think a very thoughtful investment strategy includes different pieces. and again hopefully those pieces are not correlated and hopefully those pieces, they can, you know, do different things to different times. so, even though a stocks have had its time in the sun and even if it happens next year, which, i'm not sure that it will, but even if it happens next year, i don't think that's the time to abandon hedge fund. in fact i think it is a great time to look for strategies that don't correlate with stocks and bonds. cheryl: greg, that is what i wanted to ask you, despite the underperformance, even through november, net inflows, 71 billion for this year. does that tell you this is still the way to go or that some people say that is the way to go, they have got the money? >> yes. so i would agree with that. and i think that's indicative of

the fact that people don't buy hedge fund to complete with the market. think they buy hedge funds again for an alternative source of return. and if you compare those sources of return out there, let's say even if you bought a hedge fund that, instead of bonds, for example, and say they even have the same volatility, well you know, 8% return versus being down 2, 3, 4% this year, i think that is wonderful, wonderful return and you could say that was outperformance in that case. david: greg, something you said piqued my interest. if you think, and a lot of people do, that we just about topped out with this equity market and yet you also think that a bet on bond would be a mistake because there's not going to be a lot of interest there, there are hedge fund that deal with that bet, thinking that we've topped out in the stock market and bond is not a good alternative? >> yeah. of course there are. i think you could look at strategies that are directional

in nature. that can take advantage of moves going up or down. i think market neutral strategies could have a comeback. i think where we're setting up here, you know, with the nasdaq looking toppy and tech stocks roaring, i think if we see an increase in mergers and acquisitionss i think merger arb could be an interesting place to find some extra return. cheryl: interesting. well, greg stewart, top turn capital cofounder and cio thank you. david: very interesting stuff, greg. appreciate it. >> thank you. cheryl: so, if you're at the casone household yesterday gifts were missing under the tree, don't blame the grinch. blame ups and fedex. we'll tell you about a delivery disaster coming up. like five. my brother was really upset. david: 2014 may not be a very friendly year for homebuyers as new mortgage rules take effect, more restrictive rules. so what can you expect if you're in the market for a new home or if you're trying to sell one? we'll break it all down from

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david: time for a quick speed read of some of the day's other stories, and headlines, five store is in discuss one minute. first up, chinese gdp is expected to grow 7.6% in 2013 slightly above the government's target of 7.5%. aside from the growing gdp china is the largest auto market in the world, for the first time in

nine years volkswagen is on track to overtake gm for vehicle sales in that country. taiwan's fair trade commission slapped apple with a 677,000-dollar fine according to "wall street journal." alleged interference with regional iphone carrier's plans and pricing. meanwhile the u.s. postal service temporary i wily raising price of 3 cents to 49 cents starting january 26th. temporarily for two years? do you believe it? i don't. it is intended to help the postal service recover from losses incurred during the 2008 financial crisis. data firm shoppertrak predicting that the after holiday crowds could be the fifth largest of the year. nearly eight out of 10 consumers plan to shop year-end sales after the holidays. [buzzer] that is today's "speed read" i took a little longer. i don't believe it. do you believe it will be a temporary increase in stampsp? cheryl: no, please. david: don't buy it. cheryl: this could be good news actually for the postal service.

shipping companies are under siege from people who did not receive their christmas delivers on time. -ups and fedex taking blame from customers and politicians. david: how does ups plan to make it up to its customers? liz macdonald with the latest developments. cheryl was missing five presents yesterday. >> yeah, they were all from me. no, just kidding. i will get to the potpourri and regifted scented candles to both you and david shortly. cheryl: thank you. >> we have democrat senator richard blumenthal out of connecticut weighing in on this. he is saying quote, christmas is on. line with delays at ups and the other carriers. and fedex. look what he is saying. he is saying we're grateful to ups and usps and fedex, do tremendous work and grueling long hours however it is incumbent on these companies that when customer is quoted delivery date to get the pack an

on time, he goes on to say that christmas is on the line. he calls on ups to do the right thing and provide refund to people whose christmases were a little less cheery as a result of late deliveries. it is odd and interesting he only quotes ups to do the right thing, provide refunds. ups is saying it is sorry. it expects to get all the packages, nearly all by tomorrow. ups traded higher today at the close. it is near its 52-week high as cheryl pointed out earlier. you could see the trend line there. the question is, here's the deal, here's the bottom line. as customers pile on to ups's facebook page to complain, it is retailers who made the online promise that is these packagings would be delivered by christmas. we're not hearing yet about web retailers and what they're doing to make customers happy. we do know that amazon is offering 20-dollars gift charges and refunds of shipping charges if guaranteed delivery by christmas this is the next step. this story is on going.

where are the retailers, web retailers on this? will they give refund to customers when they promised deliveries by christmas? send it back to you guys. david: oldest saying in the world, don't blame the messenger. we're blaming the messenger. cheryl: we're talking with liz last hour, maybe the retailers, i had an analyst come on to say, maybe they overpromised retailers did. so it is their fault. thanks, liz, for the potpourri. >> coming shortly. david: see you later. we have a lot more coming up here on "after the bell." the housing market has been on a tear recently but will good times rolling if interest rates continue to go up? we'll ask our favorite feisty housing expert, the host of national real estate post when we come back. cheryl: it is not just the federal health care site that is plagued with problems. states are also caught up in the obamacare mess. we'll find out what that means for consumers and insurers and investors. that's coming up in just a

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rules set to go in effect on january 10, what changes will we see in housing in 2014? our favorite housing guy, the host of national real estate post, brian stevens. good to see you guys. appreciate it. brian, to you, with we seem to know, 2014 will not be as good with 2013 the way prices went up this year, right? >> well, i'm optimistic. david: really? >> i'm kind of hoping it will be a good year. the fact of the matter we have changes coming up, it is not really an opinion. it is going to happen. we do have more restrictive underwriting guidelines that will take place. it is called a qualified mortgage that has to meet safe harbor. it will limit folks ability to buy. it will stop others from being able to buy in the first place. so going forward without even looking at rates and effects of quantitative easing, the different underwriting guidelines coming in middle of january are going to change the landscape of mortgage lending going forward.

>> frank, you have more restrictive mortgage rules. we can't ignore interest rates. we saw them tick up today. the 10-year rate ticked up. that eventually passes on into mortgage rates as well. pretty much expect rates to go up, right? >> yeah, everybody is expecting them to go up. they are going to go up. but here's the thing. with rates going up i think we'll we will see mortgage applications going down will be refinance sector, not necessarily home buying arena. if you go from, the fours to the fives, david, seriously those are still amazing rates. properties are still valued fairly well. we'll have a decent purchase housing or purchase market going forward in 2014. david: won't there be more, brian, more houses or fewer houses on the market if in fact you do have these restrictions coming on, higher interest rates and more mortgage rye trickses? >> houses are still there. we do have shadow inventory. we still have permits which are going up. we still have new home

construction which is going up. we have more robust reselling market taking place. the houses will be available. the question becomes the rates. like frank says the question becomes are higher rates going to scare people off. when you look at interest rates. rates relative to a longer picture are not bad. rates relative to anything else. kind of like me and frank. if i need to become hand somer i get uglier friend. david: come on. i know a lot of --, by the way, also depends, frank, on the kind of houses that you buy, right? single family homes, have not been doing as well as the multiple dwelling, right? >> well, that might be the case but you know, i think going forward in 2014 we're still going to have a nice, vibrant single-family home purchase market going forward. even if we have qm coming into play and other restricting lending parameters i think we'll see actually what i like to coin

the sub-qm products. they will make it, not relatively easy but allow people to get into single family homes. you're right but i still think we'll see a good single pamly home purchase market going forward in 2014. david: but that very attractive man sitting to your immediate right, brian, i'm sure you're saying seeing numbers on single-family housing, we saw numbers not so good this week or last week i guess it was? >> look it will drop off a little bit, let me just explain. the reason being the rental market is expanding tremendously and more investors are buying into rental property, right? >> well, i mean let's look what is taking place over the last year here. we've seen $2 trillion in equity growth across the country. the numbers we're posting in terms of value elevation are some of the highest we've seen in our lifetimes. out here in the state of california, in san francisco, we're seeing 27, 2% appreciation. most markets, most metropolitan

areas are growing and doing well. we can't hope to sustain those type of levels going forward but i think frank is right. we still could have reasonable growth in spite of higher rates and in spite of policy changes which will make lending a little more difficult. >> the other thing you're looking numbers going into the holiday season as well typically a little lower. you have that to look at as well. david: brian, look at other numbers which is terrible numbers coming out of the federal housing authority, finance authority and fannie and freddie. those organizations that taxpayers are on the hook for are in terrible shape, aren't they? >> no, they're not, they're not. they're absolutely not in terrible shape. the fact of the matter is fha, they have money but they don't have it in the congressionally mandated reserve account which has to stay at 2.5%. if you look at problems in fha reserve account, on projections going forward, not losses they realized. primarily it is from reverse mortgage that is took place

during the greatest downturn in the housing market in the history of our country. that is primarily behind us. changes have been made to reverse mortgages with fha which them going forward will be okay. david: hold on a second. all of the bad housing, frank, all the mistakes that were made, foreclose he sure, et cetera, that is all taken care of now? >> i would say a lot of it is taken care of absolutely 100%. not 100%. >> 94. >> 94%. definitely there is made corrections. we all know that. now we know that for sure. there has been definite improvements and changes making things better going forward. they already have improved and i think will improve going forward in 2014. david: go ahead, brian. >> listen, fannie and freddie over the past year have been posting record profits. david: that's true. >> they have be been paying back treasury 140 billion over 160 they borrowed. fannie mae and freddie mac right now should be deemed success for how they dealt with coming out

of problems the past few years. david: final question, is there any chance, and even robert schiller thought there may be a chance that there's a bubble in the housing market. is there any chance we go back into those bad old days? i know there are new restrictions buying houses but could housing in any way, shape or form become a bubble in 2014. >> we could have a step back but we'll not see problems of years past. we'll not go back from 2008 and before. we certainly can and we set ourself up to see a slowdown in the market. maybe we have a hiccup. but buying a house today is still great value an opportunity not only as investment but a place to rest your head at night. david: frank, do you agree? >> i agree. there is a difference between a bubble bursting and a cool-down. we certainly see a little bit of a cool-down. that's what we think we'll see. david: we could all live with that. brief an, gary, thanks you guys. we appreciate it. >> thank you so much. we'll see you soon. >> thank you. it is crunch time right now for

insurers as the health care industry meets to obamacare rolling deadlines, not in the federal system but in the state exchanges as well. we'll explain what it means for investors coming up in a moment. first numbers in the christmas day's movies with "wolf of wall street" seeking bragging rights. we'll tell you who won the christmas box office race when we come back. ♪

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cheryl: anchorman, hobbit and trader vying for your eyeballs and moye in this christmas day. who came out on top for the early estimates of christmas day box office are usually very lucrative day for movie industry. number one was "the hobbit: desolation of smaug" which brought in 95.3 million. the movie made $127 million worldwide.

"the wolf of wall street", the story of a crooked stockbroker's rise and then fall debuting at number two. don't tell charlie gasparino. it took in about $9.1 million. will ferrell's "anchorman 2" took in number three slot. brought in $8 million. the secret life of water mittty starring ben stiller took in 8.4. final estimates. david: love those movies. with the last minute rush to sign up for health insurance prior to the christmas deadline health care.governor has once again pushed back its deadline -- healthcare.gov. >> federal site is only place where deadlines are extended. states have done it as well. rich edson with the latest. who can sign up and where? >> some states pushed their deadlines. others refused. of the federal exchange covers most states. it required shoppers to pick a plan by december 16th if they wanted insurance coverage

january 1st. then they pushed the deadline to december 23rd and 24th for those who had been at least to the website the day before. now the administration continues to review applications on a case-by-case basis to determine if they can still get coverage by wednesday. in a statement the administration says, quote, as you might have run into delays caused by heavy traffic to healthcare.gov, maintenance periods and issues with the system that prevented you to finish the process on time, if this happened to you, don't worry we may soon be able to help you get covered as soon as january. wednesday ushers in the new year, most of obamacare provisions and congressional election year. one political analyst says the suck or failure of the health care law could determine the outcome of that election. >> if there is a slew of props for the next nine months it will be a very difficult election night for democrats but if the worst of the problems are really behind us and the affordable care act starts to work in a fairly effective way, that is

going to create a real challenge for republican who is have staked a lot on the failure of this program. >> republicans need to pick up significance seats to capture the senate and there are six conservative states with democratic inwomen wants in play -- incouple ants in play. cheryl: thanks, rich. david: withhealth care deadline pushed back is there opportunity to look past the glitches and reform health care in an entirely different way, something other than obamacare? we have someone with real ideas on the other side coming up next. cheryl: when we go "off the desk" we'll show how beyonce made a terminally ill girl's wish come true. that video coming up. ♪ this is the quicksilver cash back card from capital one. it's not the "fumbling around with rotating categories" card. it's not the etting blindsided by limits" card. it's the no-game-playing, no-earning-limit-having, deep-bomb-throwing,

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david: president obama claims once the health care website are fixed the benefits of obamacare will be seen outweighing glitches and higher prices. after all the broken promises not many believe that. are there any solutions that can be implemented to health care than simply watching obamacare fail. my next guest believes there are. john cochran, university of chicago school of business

professor and hoover institute fellow. professor, good to see you. what do you think the next act for obamacare? the president says just glitches in the website are a problem. once we get those fixed everything will be smooth sailing. i doesn't think you agree, do you? >> no. i think we're in another year or two at least entertainment with things going steadily wrong here and there, other places. david: not entertainment for -@those folks going through it. i understand you're being facetious but real people are having real serious troubles here. some folks on republican side, let's sit back and watch obama care fail. you say no, that is not necessary? >> not necessary and not wise. as you said, these are real people with real problems. sitting back and watching it fail is not the right answer. we need to be clear about what the alternative is. there are plenty of people who have written down serious alternatives. the idea there is no alternative is absolutely false. i wrote one down which is why

you brought me on and talk about what to do instead. david: you're piece is a excellent piece. lead editorial in "the wall street journal" op-ed section. correct me if i'm wrong, the entire insurance industry and our tax policy is based on group plans. group plans provided mostly by your employer. what we have to do is get away from the group plans and go more to the individual plan that would do a lot to solve our props, right? >> that's one of the keys. your car insurance and your life insurance doesn't necessarily go with your employ other or house insurance. why in the world should your health insurance the something the employer gives you. that is the root of preexisting conditions. if we let employers contribute to individual policy you take with you across states and change jobs we would solve that problem right away without all the other stuff. david: who is opposed to doing that? it sound so simple. >> i have don't want to get into nefarious forces opposing it.

there are good people on both side. these are hard issues. let's talk -- david: the reason i'm saying professor you do have to battle, there are people with vested interests in the way things are. who are the people with vested interests in these group policies? >> yeah the whole big system. system of vested interests. insurance companies protected by competition from various laws and regulations. various hospitals protected from competition allowed to get you are and my money. david: these people will squeal like crazy when we try to change things. the idea i think, gets back it something milton friedman said, if you want a better health care system you have to put less distance between provider, doctor and hospital and receiver, the patient. the less distance between the two ends the better it is for everybody, is that true? >> that's the most important thing. before we fix insurance we really need a functioning cash market. the fact that you can't walk into a hospital and say, here's

money, fix me and get a good price, they won't even tell you price they get shows you how carved up the system is. let's get competition, functioning cash market in the supply end. then insurance will be a question of money. that makes it much easier. david: how about a high -- this is something by the way steve forbes and others advocated for a while. very high deductible catastrophic policy for healthy people and healthy families so you pay out-of-pocket. everything that you pay out-of-pocket for health care is tax deductible. what about something like that? >> that works great. that is how your home insurance works. they don't pay to clean gutters and repaint the walls. they protect your pocketbook against big problems. but you need a functioning cash market. you have to be able to call up the paint contractor to repaint the walls and they don't say, send the form in triplicate and see you next thursday. david: the reason we have the providers and medical care the

less distance is better, we're putting more distance between them by getting government in there, aren't we? >> yes, government, hospitals, big insurance, exchanges, the state insurance commissioners who tell you who can be on the exchanges, who can't be on exchanges. it is just getting worse. david: are you hopeful, final question, are you hopeful we'll straighten this out perhaps by, i know, we don't want to sit back to let it unravel but so many problems with obamacare eventually people will cry out for other answers, aren't they? >> yes. there is always hope. we live in a great country and, and a government that eventually, after we tried everything else comes around and does the right thing. there is all sorts of free markets brewing on the side. internet is undermining a lot of these price, price problems. there is new cash only hospitals springing up. the weeds may spring up alongside, or flowers may spring up alongside obamacare and undo it for us. david: today's

"wall street journal" what to do when obamacare unravels. we have the university of chicago school of business professor. appreciate you coming in. >> thank you. cheryl: beyonce helps a terminally ill girl have her wish come true. we have the story next. david: if you believe the latest positive economic data, there was more today, or p you're still skeptical of this recovery? your answers coming right up. afghanistan in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, saa auto insurance is often handed dow from generation to generation because it offers a superior level of protection and bause usaa's commitment to serve current and former military members and their familie is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means serve.

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david: surfers dressed as santa clause and snowmen serving christmas eve ways across central florida atlantic coast. the organizer started tradition in 2009 with a couple of family members. it grew so much over the years, they will relocate next year to accommodate all the crowds. the event raises money for ryan for life. this is non-profit that helps cancer patients with travel costs to treatment centers. >> also "off the desk" beyonce made a terminally ill girl's wish come true in front of thousands of people. in the middle of las vegas show, with the help of make a wish foundation, during the concert beyonce stepped down from the stage in the pit area where the girl was sitting. they shared a little duet, love on top and danced together. the clip was released on beyonce's youtube page on christmas eve. gone viral. 200,000 views.

david: i suddenly like beyonce. we asked if you believe the new numbers on the economy. jim wrote in to say the truth will lie in the adjustments that happen in the months beyond the announced numbers. >> that is it for us. "money" with melissa francis is next. >> well, 5:00 p.m., five days to go until the new year. do you know where your health insurance is? different deadlines causing chaos and confusion for americans everywhere. the latest developments on confirming your coverage and the costs because even when they say it's not it always about money. adam: thank you for joining us. i'm adam shapiro in for melissa francis. weather is frightful and deadli