doctors like jon stewart. barbara walters says mrs. george clooney is her person of the year. whatever. my person of the year, law enforcement. that's my pick for person of the year 2014. have it covered for you. meanwhile "the willis report" is next. gerri: we begin with news that the federal government promises it will respond in kind to the hack of sony pictures. the fbi today officially blaming north korea for the hacking and president obama this afternoon saying sony made a mistake in pulling the movie "the interview." with more on this former white house chief information officer teresa peyton and ambassador john bolton, former ambassador to the u.n. and now senior fellow with the american enterprise institute. welcome to you both. i want to start with breaking news just moments ago crossing on the ap. staples announcing they had an exposure of customer data previously announced in october, but only now are we

getting real details on this. 1.2 million customer payment cards may have been exposed in a security breach and, in fact, information exposed included names, payment card numbers, expiration dates, card verification codes. this is one of many, many, many retailers this year who lost data to hackers. data belonging to americans. teresa peyton, your reaction to that tonight? >> i'm not surprised, but i'm definitely devastated both for the company and for the customers of that company. here we are peak time of holiday travel, holiday shopping, and now they're going to have to get new cards reissued and deal with the inconvenience of that. dav dave:. gerri: we heard instances people's e-mail address is the information exposed. this is far more serious, the card numbers themselves, expiration dates, the card

verification codes, everything you would use toude a credit card over the telephone or remotely. this seems to be more serious, do you agree? >> i absolutely agree, gerri, you are right, now they have all the information they need to use every channel, whether it's online, telephone or creating a counterfeit card that has all of this information on it. so basically, these cybercriminals hit the jackpot with this one. gerri: hit the jackpot. that sure is true. ambassador, i want to turn to you and the president, comments regarding sony, really interesting comments from the fbi, let me read those, the fbi will identify, pursue and impose costs and consequences on individuals, groups or nation states who use cybermeans to threaten the u.s. or u.s. interests. that's the fbi response to what happened to sony. they are blaming north korea today, ambassador, are you surprised? >> well, i'm not surprised that north korea has been accused of

cyberattacks on south korea, possibly iran, possibly china to build up cyberwarfare capability. i say this about the fbi response, this may well constitute this attack on sony, a criminal violation in many respects. but you know, the fbi is not the first line of national security defense. if this is indeed an action perpetrated by the north korean government, i think we have a national security issue here. the obama administration has said as much, and while i'm thankful the fbi is involved, i wish them all good luck. what i'd like to know is what the department of defense is prepared to do about this. gerri: that is a great question, my response is can the fbi handle this? who is the fbi in an international problem of this nature? theresa, you said you saw the white house attacked every day when you were cio, what is the

fbi's line of defense as the ambassador suggested. >> make sure we understand who is behind this, if it's state sponsored or a cyberextremist group under the direction of state sponsor. we don't know that, that's still under investigation. the fact remains that this was a war on american soil, it just happened to happen in the cyberdomain. something we can't see. we can see tanks invading ukraine from russia, but can't see the cyberdomain. and so if, in fact, this was a government behind the action even if they hired hackers to do this, we need to get political leaders together around the countries to say this cannot stand. gerri: i have to tell you, it's very, very serious, right? don't we have 30,000 soldiers on the border of north korea. we don't have normalized relations with the country as far as i know. ambassador, respond to what the president said today about how

we might respond, listen to this. >> we will respond proportionally, and respond in a place and time and manner that we choose. it's not something they will announce here today at a press conference. gerri: what do you make of that? is that the right tone? >> certainly, not something he should announce at a press conference. if we conclude this was directed by north korea, i think our response should be something more than proportional. i think what we want to establish are structures of deterrence so people aren't doing this us to, and it's another aspect that worries me about apparently giving the fbi the lead role. i don't view this as far as we know now as a law enforcement matter. law enforcement's the way the president sees the terrorist threat. that's wrong there, too. we need better thinking about what constitutes warfare, what constitutes intelligence gathering, what constitutes theft. what constitutes vandalism in the cyberworld.

as teresa said, it's different, we may understand that in the physical world. we don't understand it in the cyberworld. that has to -- that kind of thinking has to develop to know how to respond. let me just say it again. if it's north korea, i don't want to respond proportionally. i want to make sure they never try this again. gerri: just to be perfectly clear here, ambassador, sounds like you are saying we're not being strong enough on this. that we need to be more emphatic in our response, clearer in our response, close the door on this. >> absolutely. i would go beyond. that last night i suggested we put north korea back on the list of state sponsors of terrorism. not for the cyberattack but for the threat to attack theaters that showed the movie. they were a state response offer terrorism before, should be again. i'm happy to say the "wall street journal" is reporting today, even the obama administration is considering. that there are a lot of steps we could take and should be

look at all of them. gerri: theresa at the end of the press conference the president made a statement, kind of the last thing i want to see is the government regulating the internet, is there a case to be made that there needs to be safeguards? >> a lot of safeguards in place, they didn't stop the sony attack. i'm with you, gerri, i hear about more government regulations on the internet part of what makes it so resilient and innovative and creative is it's open. we need a protocol between government and business where we talk about practicing digital disasters on this level of calamity. we did drills all the time at the white house. we do drills with clients today. i have to tell you doing a drill like this, this extensive, this depth of success in hijacking a company,

holding them hostage, physical threats, we have not practiced disasters like this before. gerri: new territory for sure, and ambassador, before you go, i just want -- i just feel like we're not having the conversation we need to have about north korea. if this is really what happened, shouldn't there be tougher economic sanctions? isn't there something we can do, announce instead of sitting on our hands and say tisk, tisk, that internet is the wild west. >> reg-story structures are not going to protect us from north korea. we out to have a more offensive with north korea, china may or may not be in lead with north korea, communist party is close to north korea. gerri: there were fingerprints on this that seem to suggest that china was involved, that

was the initial reporting. today the president denying they had evidence china was involved. we'll have to wait and see. thank you so much for being on the show. appreciate your help. >> thank you. gerri: and that sony hack attack taking center stage at president obama's last press conference of the year as we mentioned. here with the highlights is fox business senior washington correspondent peter barnes. tell us more about the president's stance on sony? >> reporter: let's circle back to intro. the president was asked if he thought sony made the right direction by pulling the movie from theaters. here's what he said. >> sony's a corporation. it suffered significant damage. there were threats against its employees. i am sympathetic to the concerns that they faced. having said all that, yes, i think they made a mistake.

>> reporter: he also suggested that the company should have done more to beef up its cybersecurity. said he the government could also do more, he said he was worried that this could set a precedent that sony pulling the movie could set a precedent that he didn't want to see self-censorship of free speech, he didn't want to see intimidation of free speech, and he also said he wished that the company had called him beforehand to talk this through with the administration, gerri? gerri: peter, to add onto what you're saying, sony came out with a statement saying they had no choice but to pull the movie because theaters wouldn't show it. they said their hands were forced, they had to do it. the president saying, you know, they should have called me, what did you make of that? the context of his remarks were

a little unclear. >>. >> reporter: so the company ceo in an interview with cnn just a little bit ago said the company had no choice because he said with the threat from the hackers of potentially launching 9/11-type attacks on movie theaters, that the movie theaters were cancelling the showings. they're the ones that forced the company's hand. said he that the company was fighting back, and was trying, you know, had done its best in this regard. but again, the president said he wished that somebody from the company called and talked to his administration about its plans. apparently, that did not happen. gerri: peter, thank you for that and merry christmas, my friend. >> you, too, gerri. gerri: still a lot more to come including your voice, your voice is important to us, during the show, we want you to facebook or tweet me, you can send me an e-mail, go to the website, at the bottom of the

hour, i'll read tweets and e-mails. but first, it's not just gas prices falling, so are mortgage rates, hitting new lows for the year. what it means for the industry and consumers, coming up. ?

. gerri: more good news for people looking to buy or refinance a house, mortgage rates dropped thanks to plunging oil price, a good time for consumers to get a mortgage, what will it mean for 2015. real estate attorney, adam lightman bailey joins us to discuss. welcome to the show. great to have you here. >> thank you for having me. gerri: i'm amazed rates are staying this low this long. how come? what's going on? >> fantastic news, because the lower the rates are, the more money you have to go shopping with to buy a home. we love it in real estate. why? russia, shakiness, china, we don't know what's going on. europe, shakiness, you got wars we don't understand, all making america security safe. gerri: so it makes us look like

the prettiest horse in the glue factory. >> we're a unicorn. gerri: i don't think anybody thought we would be at these levels now. most people were predicting at least the experts on interest rates were saying they would be higher at this time. what do you think is the outlook for next year? what are the people in real estate saying next year? will we remain under 4% or higher? >> i don't know what the interest rates will be. this couldn't be more fantastic for the start of 2015. why? you have more money to go shopping with to buy a home, number one, number two, you can put 3% down. the lowest interest rates you've seen in years, and 3% down and now have a jumbo mortgage, you can take out two mortgages instead of one. government is doing everything they can. gerri: they are throwing possibly too much at the wall. offering 3% mortgages now, and we've seen this movie before,

we know what happens when you offer rates too low, everybody gets into the marketplace, some people can't afford loans. >> we do thousand of closings a year, the big news is people are refinancing, that's the biggest thing, the rates dropped, refinancing to cash out, taking money out of their homes. gerri: we're back to that. old trick from 2005, 2006 where you cap equity and use it to pay down credit card debt or college loans. back to the same old things. i want to show folks, mortgage applications are down in the past week, surprising. did that have to do with the holiday? >> the market's been frozen since february. less people are buying houses. why? very little inventory. when you go shopping for a home, all clients are having trouble buying. they can't find homes that are affordable. first of all, there's less homes out here. people selling don't realize

the prices have dropped. they're keeping prices high, and that with higher interest rates even six months ago kept people on the sidelines. gerri: a fascinating market, watching it next year. hope you come back. adam, thank you. >> thank you very much. gerri: we'll show you how takata air bags are supposed to work. how things went terribly wrong. they are claiming state farm's policy don't adequately cover the cost of accidents. our legal panel weighs in coming up. ♪

make the best entertainment part of your holidays. catch all the hottest handpicked titles on the winter watchlist, only with xfinity from comcast. . gerri: state farm is in legal trouble tonight, the insurance

company accused by several states of not paying enough to fix cars involved in accidents. so is state farm low balling repair costs to save money and putting us at risk. with us now rebecca legrand and eric guster, criminal defense and civil rights lawyer. what do you make of these lawsuits? >> these lawsuits are extremely valid. state farm is not being a good neighbor in the situation. they need to pay what needs to be done in order to fix a car, because what state farm does, they lowballed these auto repair companies, they get them to use insufficient parts, old parts, scrapyard parts and that's not fair to the consumer who depends on car to get them from point a to point b safely. gerri: work, school, you name it. here's what buddy caldwell says on the case --

what do you take of that, rebecca? >> certainly hasn't been proven yet. the one thing we can say is litigation will be good for lawyers. hundreds of lawyers involved in this case at this point. look as insured person, i want insurance rates to be low. they have to hit a balance between safety and cost. it's not clear state farm has done anything illegal in controlling costs. gerri: state farm is saying all the repairs are up to standards. what's the outcome for consumers in your view? >> consumers don't save money based upon this. this is about state farm protecting their bottom line for their investors, for their chairman of the board. they want the bottom line to be huge, and that is what the problem is, they're not looking to lower costs because insurance costs have actually gone up, almost doubled over the last few years. state farm and other insurance companies lining up behind them because they're the largest,

they're not protecting consumers, they're doing something to increase their bottom line. gerri: rebecca, this is a common kind of suit. what's interesting about it, i find people representing the consumer directly, here they're actually representing the people doing the repairing themselves. what does it tell you? does it mean it's a more serious complaint? >> or less serious, if i were the insurers, these are auto body shops that want more money, which will cost consumers more. i don't think it means it is necessarily more serious but complicated, and again, there's a lot of different lawyers and a lot of parties involved in the suits. gerri: i agree the people that benefit are probably the attorneys, but they moved this case to florida, and louisiana, eric, to you. as you look at this, when we have the lawsuits not just on auto insurance but home owners insurance, it originates out of south and i'm not sure why. are consumers being fairly

represented by their insurance companies in your view? >> in some cases no, the insurance company's job is to make money, they don't care about the consumers. gerri: that's a big blanket statement. >> a lot of them don't. they care about their bottom line. and this is evidence of them. when a person's in a car wreck and the insurance company is not reducing premiums, they're not saving you money off of how much you have to pay every month, they want you to use cheap, old, used parts, that's not fair to a consumer. gerri: rebecca, i'm going to give you a chance to get in here. he said insurance companies never have best interest at heart, is that true? >> as a consumer, i can always go to another insurance company. unless companies are conspiring with each other. i can pick a different insurance company if i'm not happy with mine right now. gerri: there are lots and lots of options, rebecca and eric, thanks for coming on the show. great to see both of you.

next, i'll be joined by the car coach, she's going to walk us through how the deadly takata air bags are supposed to work and how they're malfunctioning. while many of you are dreaming of a white christmas, it helped to be prepared for the snow. we went to consumer reports to find the best snow blowers on the market, and i almost broke one. you'll want to see. if you store your guns properly...

so not just anyone can get to them... i'll feel safer when i'm playing outside... safer when walking home... i won't have to tell so many family members, "i'm sorry." i won't hear as many scary stories. or scary news reports. i won't have to hold someone's hand and shout, "you're gonna make it." and i won't have to tell my kids, "this isn't a drill." please... [repeated] do it for us. for us. do it for us. your family, friends and neighbors are all counting on you. never let your gun get into the wrong hands. if you own a firearm... and are not using it... please be responsible and be sure that it's stored in a safe place. remember, always... lock it up. for more information on firearm storage safety visit ncpc.org

>> gerri: fiat chrysler expanding the recall of the defective air bags coming on the heels of said japanese auto maker taking al full-page ads. in "the new york times" and "wall street journal" and it says things like the number one seed use of the travelling public and even one failure is unacceptable. two months after the problem

and has taken the co2 months to put an ad in the paper to explain his position. shocking. with me now is the car coach. chrysler's tonight more recalls they are announcing for the first time. what do you make of that? >> it is pressure

. >> some other suggestions like have other companies make up part is not that easy. gerri: it is clear the burden has shifted to the u.s. and german and japanese automakers to get them to find solutions to the problem. are they up to the task? >> they have no choice they love their customers and one to keep them and every manufacturer does what they have to do even the vehicles of 2001 because at some

point you will need another vehicle and i want you to come back and be loyal. >> you said bmw and chrysler are the big laggards. why? >> they stepped-up but bmw does not have as many vehicles under the recall and they have always been good about following through. gerri: if you would to your call it is -- car is recalled go to our web site. gerriwillis.com. i will show you a physical takata airbag. i will pick this up to move it in front of me this is presenting interface it would blow up in here behind it can you get this?

this is what connects intel's the airbag it needs to inflate. when they do it is this piece right here how to buy put this? >> it implodes it is a chemical reaction. >> it contains ammonium nitrate that breaks this open. there are tiny metal poles where there is supposed to come through but in this case the explosion is so hard and fast and violence the whole thing breaks apart. kellogg. >> doing approximately 230 miles per hour explosion in half of an eye blink. but i have statistics from a report from 60 or 80 defective parts out of the

mexico plant that makes it seem like it is not important but in this case i know takata cares but they have to show it to less. gerri: this blows up in-your-face? this breaks opinion based coming flight you this company does not care about you. i don't care what they say this is a problem that needs to be fixed and it needs to be recalled for americans are dying and it does not need to happen. >> people are dying all over the world there are 20 million cars that have at takata air bags that are potentially deadly. as far as i am concerned they should have said national recall and it should be around the world and i don't know what is stopping this if it is politics for money but that we buy them in good faith. gerri: if you have the

takata airbag they say it is a matter unless you are in humid conditions. >> to take the vehicle identification number call the local dealer asked for the service department or go to a safer car and put its in and they had done to detect a couple of hours. gerri: but it is not easy to get the new airbag. if you can the other thing you can do is ask for a loader to tell them you do not want to drive the car. >> demand one because if you don't they will just a disengaged your airbag that is not example -- not acceptable a sticker that says don't sit here is not okay then give me a rental

car at the dealers' expense they can figure it out themselves. gerri: 84 coming on. of "the willis report" prepares you for everything including the big winter storms that are coming. in then to look at the top-rated snow blowers here we go. gerri: try it again. what do you have for us today? >> four of the top-rated snow blowers. >> what are the major things to look for?

>> a single stage door a two-stage it is a function of how much area you have. large areas go to the two-stage we are wheels are self propelled. when you get to the two-stage units looking at some other features. >> with that single stage snowblower? >> this is the top performer. >> it is all in one motion. in this is nice because it contacts the surface. this is for smaller areas of for a more compact units.

it throws reasonably far maybe 10 or 12 or 14 feet. >> in the sixth stage the two-stage is much better. so the difference here is you can see you avocets of auger's the couple in the snow and if you look back here. this spitzer around this way. and there is one feature that you need to see it is heated handgrips.

gerri: but you have another choice? >> this is big brother $1,300. top of the line. >> it seems complicated. this way you operate you are in a hurry. >> to be in control. but a light is little extra to pay for but which he did handgrips adopting get start

dash 430 in the morning if you get up in the morning it will be dark. gerri: how do you move beyond this? >> it is the same technology only 28 inches wide and will handle anything. gerri: this is your budget by? >> craftsman less-expensive at $900. this is a classic pitching. -- machine. the auger is all parallel but it is a two-stage june has good features. buddies start turning questions. >> this is a big investment to make the right choice.

>> absolutely. some machines can not work that well. gerri: i want to see you. not impressive but that was so much fun. [laughter] why are people not sending christmas cards anymore? the first year is your consumer gauge. take a look.f?f?555555055555555?

gerri: with christmas less than a week away christmases' rocking with

holiday get-togethers but one thing seems to be missing christmas cards. where are they? are they a thing of the past? the author of the official preppy handbook i am disturbed and distraught that i of not getting christmas cards. >> people are saving money by not doing cards. >> also i am less popular. [laughter] palm and then also social media. stuff gets out even before the holiday inn i have seen the dogs wearing santa hats almost three months now on facebook. gerri: i have said different feel of this town like a cave in to fast and people are behind the curve or if

they put off or people are spending less so there's less in the mood? >> i think so. my block has less lights and decorations. gerri: if i am upset by christmas cards you are deeply upset by the lack of thought rsvp to invitations. >> that concerns me a lot. you give a party in a range for the food. is too much worse than if you do it then if you need to know who is coming. who will sit next to that we aired on call. people don't even think it is important. >> how do you get people to rsvp? >> good parenting. [laughter] it is almost too late.

can you say rsvp or the invitation and it is rescinded? the mitt i put that at the bottom and people to ignore it. i know that people don't send it back. some people think the letter k is a full e-mail sentence i fully endorse what you said and i fully agree with you and i will be there. no. it is just a letter. gerri: make us do it right. we shifting? >>. >> if you tell the truth is fine sunday gave me this. >> that is the point not to tell that. >> that is not cool. gerri: mosquitos of crime that seems pretty minor. >> it is not as bad to be hacked by the north koreans.

gerri: especially if it is a gift that sets? >> i have been accused of re-gifting in a way that i am very sensitive. it wasn't. i have a gift closet. gerri: a gift closet? >> yes. there are things i have bought not necessarily for you because i know you don't like that power tool but we be a lipstick or a power tool. >> but i don't think it is bad. >> as always. thanks for being smart about it. do you re-gifting? we will share the results at the end of the show.

i don't use re-gifting because they may give back to the original giver. >> i would not mind being on the receiving end it is only if they are appropriate. be sure to like fox business on facebook. >> we have the best look at the christmas strings coming up. ♪

gerri:.

[laughter] if you were cheated anaphase christmas bonus or looking for ways to spice of holiday cheer we have ideas. in here with his favorite is chris adams the ceo located here is a new york city i may have been there earlier today result. that is what you do you run into the store to find it for the people on your less talent you do it on a budget and not seem cheap? >> like any industry the internet has transformed our business. it is a great vehicle. you can search for items between 10 and $15 or breads

or whites. did you go on the web site you don't have to deal with people in a wine store you feel intimidated. >> demo is afraid they'll also was the most expensive thing in the place. social was what is a good value at the right price. >> we will start with red and white. so if you go to napa for a nice wine about $20 a bottle but one of the finest producers you can go to bordeaux. talked-about that level of production then you have the rothschilds.

gerri: i would never guess that bottle at $18.95. but they can source wine which is purchased from different properties. >> so maybe if you don't know their tasty by the red door the white? >> but that is what i like about though winds they can be paired with different foods you have something that is more flexible. gerri: you have a reasonable price to champagne's gimmick that is more challenging the demand has risen so it is supply and demand but they have a terrific terrific example. >> end globally sales have outdone the champagne for

the first time in 2013 so it is incredibly popular. it is light a candle by itself or you can mix the. in during the holidays $12 a bottle. >> the high value of champagne. >> you must come back. >> anytimeháñ??w

>> 75 percent said no. and finally i love the christmas season talking about it all week it is a time of giving but i am upset about the christmas cards. i send a fair amount. is a holiday tradition to keep up with friends and family to recognize the importance of each passing season. very christmas and enjoy the season.

that is it for tonight. have a great night. york. neil: times square, new york city, 1219 now you will be counting down. police need not wait. the mayor just threw the hammer down. welcome, everyone, i am neil cavuto. to the guys they keep us safe, the raised finger from the mayor that all but told him to take a number. he had decided to meet with protesters today, but not the folks who have been protecting them as they shouted to kill cops last week. no, they get an audience and the cops get a pass. all the backing of to make sure that he ran them over in the first place? no wonder that the nerves are frayed. what do you make of this.