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tv   MONEY With Melissa Francis  FOX Business  March 31, 2014 2:00pm-3:01pm EDT

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deirdre: all the big ivy league schools are doing it. that's what i hear. melissa: deirdre, thanks so much. we have a nice rally to start the week. we'll see what is behind it. overpromise and underdeliver what some are say about bill gross, the bond king, as pimco lags hyped its peers and gets a downgrade. maybe he should take a tip on elon musk. this guy is a mix of "iron man" and steve jobs. we'll take a look at that one. beware the bubble. all this week we're pinpointing exactly what is about to pop because even when they say it's not, it is always about money. melissa: member of wall street royalty in danger of being knocked off his financial thrown. pimco founder, bill gross, one time king of bonds, lagging behind the competition a big way and investors are taking notice, pulling money out of his fund by the billions.
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key staff defections, criticism by trustees, a scathing takedown of his management style, probably not helping matters. is pimco's bond legend grossly overrateed? let's bring in charlie gasparino, matt mccall and hilary kramer. what do you guys think? >> i think it is overrated. looking up last couple calls he called. he called end of bond bull market three times in last four years. like bears call the end of the bull market and stock market. you keep coming out eventually you will be correct. if you look at stats he hasn't done very well. deirdre: if you're time something off you're not making money, right, hillary? >> yes, but, bill gross maybe lagged all his peers in first two months of the year, but 0.75%. he has been around since 1970. deirdre: he is worse than 87% of his peers. 90% of the funds out there did -- >> such small amounts of money. deirdre: last year he lost 2%. if i was investor and lost 2% for me last year when quantity funds are making money hand over
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fist would i be really mad. what do you think, charlie? -- quant funds. >> i'm not a class warfare guy. bill gross's problem, aside from everybody has bad years, sometimes people have three bad years in a row, his problem is pr. he has lousy pr. why is that? when you pay yourself $200 million having a lousy year people think you're insane. deirdre: there you go. that's it. >> then they start saying well, is this guy out of his mind? why am i keeping my money with him? if he were start he would start looking inward and getting his pr house in order. the bottom line, stan drunkenmiller is great investor. there are years he last lousy years. george soros is great investor. he has three lousy years in a row. steve cohen. the question all the guys go up and down. the question is this secular change? is this fundamental? is he losing his mind or chasing good people out? or is just normal blip in the
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road ever good investor faces. i can't tell you that. deirdre: somebody that gets to become an industry and loses focus. he lost mohammed el-erian. >> we don't nomo homed el-erian's cakier. how about his performance? he sucked wind too. >> bill gross is all about performance f someone doesn't perform they're out. deirdre: he is not performing himself, right? he is not performing himself and still paid himself $200 million. >> that is the scary part. >> he made a call conservative and smart based on someone investing since the 1970s. there are really smart, best investors have been really caught off-guard because -- >> he has, what happens is you think you can outsmart the market. i think that is what he is trying to do. >> that is investing. >> bottom line i would put my money with bill gross. >> as an investor, the question is, as an investor why would you keep your money --
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deirdre: hillary said she would. >> here is why i wouldn't. i say this, investments go up and down and if you're a long-term investor you have to look at the individual. would a really rational person pay themselves $200 million after three lousy years? that has got to be a sign to get out of dodge. that is not a good sign. deirdre: you can lose your touch over time. >> right. deirdre: i wonder, having been at the helm for so long. he is constantly on tv. always on another financial network trying to move markets. do you eventually lose your touch with what is really going on? and for investors out there watching, do you stop following what bill gross says? >> you tell me there has never been guy or gal, been a good money manager lost three bad years? that happens all the time. deirdre: you don't listen to those people on television and we're raising the flag. >> we do. deirdre: when you hear him saying what is going on maybe you shouldn't gave him the same credence in the past. >> good point. deirdre: that is our warning for viewers.
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>> when a guy loses money for three years and pays himself 200 million. deirdre: we don't mow how much his firm made in general? what percentage? melissa: >> on recurring. >> private equity managers look what they're making. >> they make money -- melissa: that is what carry is all about. very nice rally on wall street. thanks to fed chief janet yellen. let's go to alan knuckman at the cme. alan what are you seeing out there? >> price action is positive. i like technically speaking, her quote was they will continue doing what they're doing for some time. that is open-ended. we all know that the fed will do what they can. you may not like how they have done it. results for the stock market have been very positive. technically thinking this 1850 apex point is the wedge apex. that target moved to 1905, a 50-point range we've been in the last month with lower highs and higher lows. big picture i'm looking 1950
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which is another 5% higher. if you look at selloff we had in january, add that on to the 1840 top we still have a lot more upside. melissa: alan, from your lips to god's ears. let's bring the panel in. we have a great rally despite last night sixsy minutes told us the market is all rigged -- "60 minutes." >> this is the way the market worked and we all lose that nickel and dime when we place a trade. this is not new news for that's why we're still bringing -- >> for masses, maybe people on coast, everybody in middle america -- melissa: are the masses day trading? the thing about last night's story? they didn't cover any new ground. you had to have been asleep for past five years if you didn't hear anything. >> depend who you're talking. talking to me and you, yes. i was completely underwhelmed by the whole thing but my wife greeked out. they can trade ahead of my order? melissa: of course they can. called computers and technology. woke up regulators right?
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the real news is that who is watching, right. >> i know this for a fact. sources have told me inside the u.s. attorney's office since the middle of last year the u.s. attorney's office from manhattan, preet bharara's office, has been looking to make some sort of case against high frequency trading. melissa: that is not illegal though. how will they make it? >> good point. they see it as a place ripe for fraud and abuse. front running, knowing what someone will do and trading ahead of an insider tip is clearly illegal. the question if you have an algorithm figure out what someone essentially will buy en masse and trade ahead of that is that illegal? i don't think so. i don't think so. there is no insider trading. melissa: you have information -- >> they do have information. they are plugged right into the exchanges. >> right. >> so that is the case. >> is that inside information? >> no. >> not necessarily because they have been given that they have a contract from the exchanges to be able to have that information. >> doesn't sound like what they're doing violates the law.
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>> the key here, it showed up on television, on "60 minutes" and was finally explained as charlie said, explained in a way everyone could understand. melissa: markets work. at the end of the story, that's what i got. there was this little arbitrage opportunity if you had faster computer you could get in between buyers and sellers so many did that it went away. another exchange gets it out of the system. markets work. >> i think problem with "60 minutes" piece, and book itself, he is a great writer, i will read the book. the real problem is not high frequency trading, the fact that you have 40 markets, all these black pools where high frequency traders can go in and extrapolate, bet a lot of leverage by trading through other less transparent markets. in the old days you had two markets. 08% of the trading went to new york stock exchange, if it was new york stock exchange listed stock or nasdaq. now you have 40 different markets where all sorts of games could be played. you had two markets.
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he missed that. he never explained what that stock market was actually a dark pool. melissa: that would have been going in pretty deep. >> but that is the real problem. that's the problem. melissa: we'll leave it there. thank you so much to my whole panel. up next the glorification of elon musk, like him or not, is it a smart strategy to put him so high up on a pedestal. we're breaking down the new steve jobs and bursting the bubble. you think you know what will pop but we're bringing in all week the best what they see as the next bubble. more news you can use. more "money" coming up. ♪ i ys say be thman with the plan
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melissa: "iron man" no more. the man of the moment elon musk is bigger than "iron man." he is the new steve jobs. but is has many wondering if the magic can last. let's bring in scott martin, and bruce terkel. mt. mccaul is back with us as well. -- mat mccall. this is the other big story. elon musk, the man, the myth, the legend, it's a lot. >> it's a lot.
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the guy's a rock star though, melissa. there is a couple things going on here. one he is a visionary, he is a fire starter, no pun intend and and inspirer. meaning that he comes out with ideas. yes, it is a lot of boom, bust type of things that go on with companies that he starts. look at 08. tesla was hemorrhaging money. looked like it would shut down. he admitted himself he it would fail. melissa: melissa: he was broke. >> speaking of broke he put a lot of his own money in his ideas. he puts a lot of his own money where his mouth is. the stock, the stock market loves guys like this. they love visionary. with twice that come out with crazy ideas, that one of them might work makes the stock go nuts. that is what you're seeing with tesla. melissa: bruce, the danger of this, the guy that turned everybody's little boy's dream to reality, fast cars and rocket ships n america we love to build up icons and love to tear them down. seems like that is the danger
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for people buying these stocks, what do you think. >> of course, the difference, melissa, between a celebrity ceo and anonymous ceo. w a celebrity we all love him. at some point you're right, we start to tear him down. you're steve jobs. steve jobs comparison was apt in a lost ways. the genius of steve we heard over and over. when steve was no longer around people worried what would happen to apple. all they had to do was look at bench depth. they have tim cook, john knee ives. they have a power will group. look at website. look how deep is the website. >> nobody knows who is on the bench although know is elon musk. average investor sees elon musk. we like to build them up and tear them down. i like a little girl with a boy band elon musk. i own his stock. melissa: on that note i have to get to breaking news on gm. so gm ceo mary barra is filing a
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written statement before her testimony on tuesday so we know a little bit what she will say tomorrow. these are the quotes we have so far. i can't tell you why it took years for a safety defect to be announced. i will tell you when i find out. i don't know what that is in response to. today, gm will do the right thing is another thing she is going to say. my sincere apology to everyone affected. i'm deeply sorry. bruce, from a branding perspective. what impact does, i know we're throwing you a curveball here. we're supposed to be talking about something else. this is the breaking news coming right now. so we have the right people to talk about. bruce, from a branding point of view, what dud she have to do tomorrow in order to make people feel better about gm? >> she is doing right things. first thing she needs to say, we are sorry. we understand what happened. we're going to get to the bottom of it and we're going to make good. she will do. she has a huge advantage only being in the seat two or three
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months. it is not entirely laid in her lap. she has the opportunity to provide real credibility and real sincerity and a real solution. if she does that, likely they will put this behind them. if she doesn't do that, they're in big, big trouble. melissa: scott, it is like quicksand. every day we see a new headline we see they knew about it sooner and more they could have done. it comes down to real trust issue. i don't know if this is the company i want behind the car i'm driving to keep my family safe. as somebody who trades stock would you get anywhere near gm right now? >> no. i would get next to the competitors. think they will benefit. you're right. that could hurt sales. the quote, it took years to find out, that is not good. remind me of what happened to retailers over the christmas holiday season. target, all the retail companies found out earlier about the hacking dainty -- but didn't tell anybody. that's a big deal. that is where you lose a lot of customers.
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melissa: thanks so much for rolling with the breaking news. we appreciate it. we know we threw you a curveball. from the u.s. money is flying around the world. a official, worth more than $14 billion, how is that possible? former security chief had somehow accumulated cash deposits worth nearly six billion bucks during time in office not to mention bonds and real estate worth more than $8 billion with villas filled with antiques and gold obviously. some are calling this china's biggest corruption scandal in 60 years, or more maybe. cuba is offering huge tax cuts to overseas investors in order to bring in badly-needed capital. foreigners are exempt from paying taxes on profits for 15 years. the tax rate is 15%, down from 30% previously. good idea. landing in italy where the cash-strapped government found a new way to fill its coffers, by selling official cars. thousands of jaguars and bmws
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and maseratis are being sold on ebay. the bidding ends on april 16th, so hurry up. next up, picking what is going to pop. we have our experts predicting what may be the new bubble and you may be surprised. gadgets invented by none other than ryan seacrest. stay with us. do you have ever have too much money? i've always kept my eye on her... but with so much health care noise, i didn't always watch out for myself. with unitedhealthcare,
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this morning. the market is taking up. it is over the 100 point mark and staying there. the dow is up 138 points. the nasdaq is best-of-three indices, up 1.1% led by of course technology. we're watching names like micron and also microsoft. microsoft is up 2 1/2%. don't forget, satya nadella came out said they will bring office to the ipad focusing on mobile apps. micron doing really well today. several brokerages expect a better than expected second quarter for the chipmaker that will be coming out. we'll get news from micron on thursday. we're seeing technology among the sectors doing very well. melissa: hey, nicole, i can't let you go without embarrassing you. you had quite a busy weekend this weekend. where were you exactly? i think we have a little video here.
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>> [speaking italian] melissa: you didn't bring any for us? nicole. the very own greek goddess, grand marshal of the parade. i hosted the parade, even better than on tv the whole entire time. we had grand marshals, chuck assume irand big business leader. we interviewed mayor de blasio in new york. all the food that looked so great. octopus, i did not make that. we had yogurt people on and a lot of great people. maria menounos, tony orlando. it was a lot of fun. thanks, melissa. melissa: our very own greek goddess. we love it. appreciate it. all right. pop goes the sector. all this week we'll look at areas that could be the next big bubble. kicking uggs off is scott martin of united viceadvisors. calling bubble on one of my
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favorite things, 3:00 deprinting. >> i didn't know that was your favorite thing. three deprinters have been hit hard. they're getting back to valuation a little more tenable. i think they will still go down. matt said in previous segment he felt like a girl in a boy band. you could have printed your own boy band. matt could have fabricated his own boy band to hang out with and giggle around because 3:00 deprinting would come to the consumer. all the valuations on 3d printing got out of black. they thought the consumer would make boy bands and not do it in next couple of years. i would get out of the industry. want to respond to that. >> i'm obviously not growing to disagree with him after the boy band comment. i actually do disagree. this is $2.5 billion industry. they say in five years it is $16 billion industry. to me that is growth. sure we'll go up and down. valuations may be out of lines.
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my first cell phone as big as half my body. cost a lot of money. basically they're free. economies of scale. in 15 years we'll all have 3d printer and print whatever you want at home. melissa: scott, there is so much in here. it is about technology. it is about medical solutions. there is just so much things in the 3d printing well. that is also about sentiment. you look at valuations behind what elon musk is doing don't make sense but they continue to move in that direction because people believe in the dream. isn't there some of that in here as well? >> some, but you can go out and buy musk's products. i get the medical use and phone example. but, revenue, the growth is still there, but it is slowing. to me the time to get in the industry is back in 2010, not now. i would let this thing bottom out before nextwave of investors come in. that might be a real long-term money. melissa: scott martin, you will be able to tell us i told you so. thanks for coming on. we appreciate it. >> yeah. melissa: all right. now quick update on probably my
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favorite innovation in the past couple of years. it's by none other than than ryan seacrest himself. you remember he backed this type of key phone for the i board, blackberry lovers comfortable without a physical keyboard. i was so excited about this the judge sided with blackberry, saying it is blatant infringement on their look and style. well, duh. now it is banned from being sold. this is very sad. i can't believe it. i was banking on it. i was one of the people can't type on iphone. >> i can't type on an iphone. i can't feel for ryan seacrest. melissa: i don't care about ryan seacrest at all. i feel bad for me with an iphone. >> one more thing, you know, should know from day one it would be infringement. not very good lawyers putting this together. melissa: i mean a keyboard is a keyboard. who cares? >> yeah. melissa: up next, is your supermarket dead? tweet me, your favorite supermarket. we have got the guru himself
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whether the model is on its way to extinction and what americans love instead. gm gearing up for mary barra's testimony tomorrow on capitol hill. shocking new reports that gm used faulty ignition switches even though they didn't meet specs. we'll tell you how bad this could be. "piles of money" and no blackberry keyboards coming right up. ♪ when does your work en does it end after you've expanded your business? after your company's gone public? and the capital's been invested? or wn your compan's bought another? is it over after you' given back? you never stop achieving. that's why, at barclays, our ambition is to always realize yours.
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get a lyric in your life. >> we have a solid rally underway. same technology was the key driver this morning. as well as healthcare. let's go to keith litz at the new york stock exchange.
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what do you think is moving the market today? >> we fully expect that we will hit intraday highs. amgen is pronouncing they are on a cholesterol drug. they will stay up, dated as long as possible. if you add all that up, you have a rally inside of this market. >> thank you so much for bringing that to us. >> my pleasure. time for the supermarket war. a lot of experts wondering if the old model is dying.
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your favorites are costco and trader joe's. walmart superstore's came and dead last. thanks to both of you for joining us. phil, i have to tell you, i was really surprised. they always ranked everything. our favorite grocery stores are costco and trader joe's. what does that tell you? we are all really cheap? >> well, yes and no. keep in mind, it was started in january 2012. walmart would not be dead last.
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it is all about service. it is one of the best supermarkets in the country. you can increase the customer satisfaction by having low prices. walmart has low prices. their stock has not been as good. you do not want the consumer really happy about your pricing. >> that is a really interesting point. that is a successful business
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model. if you want prices to be really high, it ends up being a very small supermarket. >> i think that jonas is right. they make profit of about 1.5%. clearly, as an investor, you want to go with the whole foods. costco is doing terrific. costco has done an exceptional job of sampling. having a great retail experience. they do more meet expections for e. coli and other bacteria then the whole government does. when you go up and down the line on the list, keep in mind most supermarkets are regional in nature.
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>> people who shop at trader joe's are fanatic about it. it is easy to shop that did a lot of people are doing this at home. throwing food together. maybe as the economy improves, the stores these stores that are focused on that will not do as well. >> gm ceo expected on capitol hill tomorrow. listen to what our experts have to say. at the end of the day, it is all about money. ♪ telephone rings ]
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>> i am melissa francis. pumping a big market rally today. the economy is still far from healthy. yellen highlighted inflation on unemployment onto areas she is most concerned about. labor conditions are probably worse indicated.
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reports suggest more vivax could be in the works. caterpillar is heading to capitol hill tomorrow to defend its offshore tax strategy. they are investigating whether caterpillar has been allocating its profits overseas. that is your fox business brief from the fox business network. ♪
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what's in your wallet? >> anyone that is making a piece of money today has lulu lemon. the ceo also announced an aggressive expansion plan. jeff wilson owed nearly 11 million shares of lulu lemon. what a great monday. also making money, disney. frozen is topping $1 billion in global sales. disney shares not doing so bad right now. maybe losing some money.
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shipping loads of untaxed cigarettes. attorney general eric schneiderman saying the company must compensate for all of the lost cash dollars. breaking news on the gm recall. releasing testimony ahead of tomorrow's hearing. chris malone is here to weigh in. it gets worse every time news breaks. we just hear more that they knew it seems like the situation gets worse and worse. >> it will get worse before it gets better. this really is an opportunity for them.
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they should run into this ambush, not shy away from it. i believe that pending on the way they embrace and handle this, they could cut in half the recovery time. >> if you were a stockholder, with that terrify you what he just said? >> you want the company to, call it, the formula. in this case, 2.6 million cars would have had to have a board expensive ignition system.
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do they throw out the formula and worry about the media event? look what happened to toyota. it did a lot of damage to that brand. i think you have to reassess the formula. it will cost them a lot more than the quarter billion dollars. >> despite the fact that they did not make gm specifications. they canceled the proposed six and 2005. they had their parts manufacturers out there piling on. if people get a feeling that they are not saved in gm cars.
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how do you quantify that damage to the brand? >> that is exactly what the formula does not take into account. the fact of the matter is, they do not factor in the damage to reputation and the lost sales and confidence. that is where i think there is a big mistake. by falling on their sword and admitting their mistakes. tuesday could go either way. she goes out and gives it a good sale. >> there was in toyota when they
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had their safety scandal. i guarantee you what they are not saying is a lot of people have a lot of junk. not to blame the victim, but the ceo is not coming out and saying that. the formula does not take into consideration the media, the internet and everything. thank you to both of you. let's check in with liz claman. >> you better not look at my keychain. it looks like fingers. it is growing.
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they always take my purse away from me. they call it my luggage. all of these names, this matters to that stock. we are going to look at this from the perspective of someone named aaron michael gill. q based looks into -- it is basically called technology intellectual property. he will talk about why this case matters to many different stocks. you have to stay tuned. 3:00 p.m. eastern. we have a rally monday. >> it is rallying for you.
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>> is mark zuckerberg the new marisa mayer? you can never have too much money. we will be right back. ♪
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>> i cannot pass up an opportunity to show you the boards right now. the dow is up nine tenths of a percent. triple digit gains here on this monday. about 1.2%. also trading higher, shares of world wrestling entertainment. nicole petallides is on the floor of the stock exchange.
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>> it is up almost 5% today. the news today is that wwe is unveiling the wrestlemania week programming. for all of you wrestling fans, you will love this. it is cool stuff. certainly exciting for wwe. >> i would say. nicole, thank you so much. this is all the buzz. i was talking to engineers about
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a week ago. no one wants to work for facebook anymore. it is being run by people's parents. you cannot innovate and you cannot do anything creative and excited anymore. are they becoming the new yahoo!? >> i think in a lot of ways, we can see that. they said they had so many millions of users around the world that are still using other computers. i am sure that must be driving engineers nuts. on the same token, i am not sure people are buying the services that people want. we are looking at instagram. it has 400 million users.
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>> they are spending a lot of money to make some good acquisitions. you have to make sure they are bringing new users to facebook still. i am not sure it is enough to keep people like myself on facebook. i think we will see what's app be built up a lot in the future.
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even though facebook users may be leaving facebook.com, they are still using zuckerberg's product. today is the day the obamacare deadline is here. time to change the 30 hour workweek environment. ♪ i've always had to keep my eye on her... but i didn't always watch out for myself. with so much noise about health care, i tuned it all out. with unitedhealthcare, i get information that matters... my individual health profile, not random statistics. they even reward me for addressing my health risks. so i'm doing fine... but she's still gonna give me a heart attack. innovations that work for you.
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that's health in numbers. unitedhealthcare.
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>> it was just hours left in the obamacare enrollment period and a key portion of the aca is a new challenge. the house voting on legislation to change the law's definition of full-time work from the current 30 hours back to 40 hours, a move that would save millions of jobs. matt is back with us and rich edison has the next -- >> wood-spread republican support, we can anticipate that on wednesday, when the house does vote, one of the few republican changes they've brought up, that it will pass
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the house. the problem is the senate where a lot of bills go to die, house passed bills die and we expect this to happen. has summer goes on, perhaps there will be more cause for changes, the obamacare because but it doesn't look like this will go far while the democrats control the senate. >> ripped, businessebusinesses o change this. >> yes, particular aspecting of the affordable care act, the problem is they have a pretty receptive crowd in the house so democrats in the senate have been reluctant to make any changes to this law. the administration has made changes but not one through congress, actual changes to the law. >> matt, you know what do you think about this, this duke university putting out a survey saying that 40% say they'll move workers to the less than 30 hours, in this law stays the same. so how do you think businesses respond? >> i can see why businesses would move it down because they
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cut costs. at the end of the day for the last five years, all companies have been trying to cut costs because revenue isn't growing so that's one more way. they're moving it to 40,000. i don't see anything of a big difference because i think a lot of people talk about doing that. when it comes time to cut somebody's hours, they realize they need that person. >> that's the flip side of the argument, rich, people say if you need the labor, you need the labor and this is helping the labor get healthcare. >> there are some who would commissionly say you reduce people's hours to 30 hours and give them an incentive to reduce their hours and hire more people to fill the jobs so around you go. >> now, that's so true. typical commissions. you can make an argument for war it is you're trying to do there. gentlemen, thank you. >> thank you. >> so that's all we have for you write now on the day when we are seeing a clear recallly in the national with the doug up 140 points, technology really leading the way. healthcare having a good day, as well. i hope you are making money.
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we will see you back here tomorrow at 2:00 p.m. but in the meantime, countdown with liz, back from vacation. it starts right now.

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