because in october 2008, internal jpmorgan memo described jpmorgan's inability to validate madoff's tradingustody of accounts, questioned madoff's quote unquote, odd choice of a one-man accounting firm. that internal memorandum concluded quote, there are various elements of this story that could make us nervous, close quote. including the lack of proof that madoff's quote, assets actually existed, close quote. within two weeks of that memo, jpmorgan filed a report with uk regulators noting that madoff's returns were probably too good to be true, and that as a result, of these suspicions, jpmorgan planned to withdraw much of its own money invested in the maff feeder funds and that is exactly what jpmorgan did. between october and december of 2008, as part of a broader re-evaluation of the bank's exposure to hedge fund risk, jpmorgan successfully pulled out more than $275 million of its money from the madoff feeder funds before madoff's fraud was exposed to the whole rest of the world on december 11th, 2008, when he was arrested. much of what i've discussed is shown on this timeline on the ch

jpmorgan failed miserably when it came to bernie madoff's trade. i talk to one of his victims, and a man that cashes in on a thirst for burr ban. i'm ali velshi, this is "real money." >> this is "real money," you are the most important part of the show much join the live conversation on twitter. this frigid whether is redefining what cold means for many. the weather forced airlines to cancel or delay more than 8,000 flights on fond. airlines are used to dealing with winter storms. most will bounce back. the weather is affecting agriculture, the cold and snow making it harder for cattle to gain wait and disrupt the transport of livestock to market. it can mean higher prices and 15% of winter weak plantings, facing damage from frost. the snow cover from the weekend storm my insulate and protect much of the crop from the freeze. no such luck in florida where overnight temperatures threatened the sit res crop. you cannot make juice out of a frozen fruit. >> more households are scrambling to stay warm. half use natural gas. gas futures trading 32% highe

jpmorgan be on the top line, wells fargo beat on the bottom line.t thrill you in either sense? >> it beat analysts' estimates but this is basically a cost-cutting exercise. the banks don't have a lot of disability on revenue. a lot of the had down estimates from the street. overall we are suffering financial regression imposed upon us by the fed, the banks really don't have a lot of lift on the revenue line. a lot of future excitement here, this is about watching expenses that wells fargo took $800 million out of a $10 billion awed non-interest expense category. that is amazing. think about that. it is cutting people. liz: i get excited by we made some much money here, there and everywhere. when you talk about auto lending some of these names of come through that are auto lending numbers and decent margins on something like that but what gives you hope? and if you could, revert back to january of last year, did you think it would be this year good year? >> it was good because stocks caught up in the second half. liz: could that happen this time? >>

they will not go after any individuals with jpmorgan.there is not anyone to go after any more than there would be someone from the regulators. morgan was banker. bankame way i use people's for my checking account. >> the question is, why is the department of justice going after jpmorgan and no one else? because they can. opinion says, i want to take a pound of flesh and i will get it from jpmorgan. at school drop off yesterday she is not getting fined $2 billion right now. jpmorgan is. ago, 23% ofrs americans saw the made off case as isolated. instead, a majority, more than six in 10, saw this as common among financial advisers and institutions. that shows the extent the public feels toward financial institutions. many americans see that case as an example of unfair and improper activity in financial. >> which is why going after jpmorgan is political. >> one would say, why did jpmorgan not notice. in the same breath, why did his son not notice or his wife or the internal accounts not with sayingruggle only jpmorgan should've known. >> it

jpmorgan, of course, was the great jpmorgan. that is not the same jpmorgan chase we have today.wer and fewer players, the economies in britain, demand for their services is continuing to improve, -- the economy is approving, demand for the services is continuing to improve, you cannot have capitalism without wall street firms -- >> p.j. o'rourke wr ote the classic "parliament of whores." are you willing to say "banking of whores"? with these 2 ancient people onset to my feels -- i feel so comfortable >>. >>jpmorgan stock is up 20% in 2013. >> did well. paying $22 after billion in fines. any other company that paid $22 billion in fines would be bankrupt, out of business by and large. jpmorgan stock is up -- learnrlet, do you anything about fines within this report? >> i don't see anything off the bat but adjusting -- adjusted earnings per share is $1.40. an update year -- adjusted earnings per share for the fourth quarter, jpmorgan, $1.40. the consensus was $1.37. the big theme for jpmorgan this earnings season was lower trading revenue. higher investment banking because the ipo

it cost jpmorgan $23 billion last year. >> jpmorgan took a big step.e will see the other big banks look to put this similar issue to bed, but on the mortgage front, hopefully we have heard the last. they are expected to be quite smaller than we have seen the last few years. >> could we be talking in the fourth quarter about a more normalized operating environment for these banks or is that impossible as long as we have quantitative easing in play? >> there are a lot of moving pieces. standpoint, gdp growth accelerating, from an interest-rate standpoint, , it's going to take years for those to normalize. but by and large, we are moving closer toward a normal environment and as you get the financial reform hoosiers, banks have the -- financial reform measures, banks have the ability to adapt. >> jpmorgan has paid tens of billions in fines and still continue to crush it as far as making money. a -- engageorld, these risky is this is an just pay the fines? >> if you look at the big banks, they have exited a lot of businesses that were lower return and high

in that area i pick today, ge, google and jpmorgan. i think that all of these will participate in the global growth, including jpmorgan because we think european banks are not going to be as competitive as large u.s. banks and but actually stay in the s&p a little bit, it is 46% of the sales come from outside the united states. i think the world will do really well this year. liz: can i just ask you about the banks. why pick a name like jpmorgan? nothing wrong with them. i think they're a great bank certainly but why not after run-up with most of the names go with what chris whalen last hour suggested and that is names that provide yield, bank of america and citibank? >> i think jpmorgan's the cheapest of all. they're trading 1.5 times book. that's cheap. about 15, 20% cheaper but we also own wells fargo. we own a few other banks as well. david: by the way jpmorgan is cheap but they're also paying a lot of legal expenses is. their revenue came down significantly because of all their legal expenses. their profit was down 7% as they anno

jpmorgan set aside $70 for pay and compensation. 30% of revenue, the same as it was last year. in terms of headcount, the cfo at jpmorgan says he sees a little way to go. >> the earnings call, jamie dimon addressed -- he said the bank had to replace 2 million payment cards after the breach of consumer data at all the retailers like target. >> the cybersecurity is a big deal and will not go away. all of us have a common interest in being protected. might be a chance for retailers and banks to for once worked together as opposed to sue each other, like we have been doing the past decade. >> to wells fargo, the largest u.s. home lender. it writes about 30% of the mortgages in the u.s.. they posted a record fourth quarter. the net income advanced 10%. the numbers were also dug into at wells fargo. >> the biggest home lender, responsible for one in five u.s. mortgages, hurt by the higher mortgage rates. we saw them drop about 30% from the third quarter down to $50 billion from $80 billion in the third quarter. that was offset by rising t

jpmorgan's cost of capital goes up because when you have deposits, you can borrow cheaper.y would still have access to the discount window, but unless all of them break up, you know, that puts jpmorgan at a disadvantage, and that's clearly what the board was worrying about through 2013. now, i can't tell you whether they're out of woods. they think, from what i understand of of people on the board, they're what's been described to me as cautiously optimistic that the government is not going to go that route. that break up. but anything is possible, and i will say this if you're an investor and you're looking at this stock, you have to figure that in. this was more than a theoretical possibility that jpmorgan really believed, this is the board, that the bank was going to be -- that eric holder, the justice department through some sort of a deal would have forced a breakup. now, if you notice the last deal, does not address that. the madoff deal that's coming over the bernie madoff claims that, eventually, you know, we should point out that jpmorgan for even though handled so

we will start first with jpmorgan.pmorgan paid out $2.6 billion in claims tied to a ponzi scheme. >> a lot of one-time items include the $2.6 million settlement tied to the ponzi scheme. also sale and visa shares and the sale of properties. analysts like to call it a noisy quarter. when you strip out one month -- some of the one-time items, jpmorgan had a profit beat of and $.40. jpmorgan set in excess of $20 billion in legal settlements in 2013. when reporters asked jamie dimon on a conference of $20 billion in legal settlements in 2013. when reporters asked jamie dimon on a conference call later on whether jpmorgan will be done with the legal headaches this year, he declined to comment and said he would to take a rain check on that. no clarity from on the upcoming legal settlement. what we learned from the earnings report and a fourth quarter is credit trends continue to improve at jpmorgan, though trading revenue and equities did miss the mark in the fourth quarter. commodities trading revenue was higher than antici

more on jpmorgan coming up with charlie gasparino. will speak with the all-star banking analyst who is defending the big banks. but first, samsung putting the home tv to shame. the new off-the-wall tv on display at ces, 105-inch behemoth. it is curved. liz claman shows us next. capitato make it happen? that makes it real? what's a vision without the exrtise to execute it... and the financing to make it grow? whatever your goal, it can change more than your business. whatever your goal, it can change e future. that's wh at barclays, our ambition is to alys realize yours. lori: what happens in vegas stays to vegas unless you are the outspoken ceo that crashed at&t ces party last night but he didn't last very long. reporter spotted the ceo and we did a picture of him well within 15 minutes he was escorted off the premises by security guards. the reason for turning the party, he just wanted to see mac amar perform. of course. the other big thing everybody is talking about at ces is hollywood director michael bay big stumble at last night'

mixed results for jpmorgan and wells. >> jpmorgan executives are wrapping up a call with analysts andis surprisingly rosy, they say the worst of the litigation risk should be inside it with the worst case estimate coming down to $5 million over its outlaid reserves already. they have clarity on the regulation like the volcker rule and they are also optimistic about meeting the fed's 5% leverage ratio and giving money back to shareholders even though they largely stopped doing that in the back half of last year but all of that helps lift an earnings picture from the numbers isn't incredibly positive. you hove mortgage originations and the derivatives accounting hit net income there. they saw some business demand picking up and asset management outshining them all with 15% jump in revenues and roughly for profit. though expenses are rising in that area as well. on the conference call, the cfo said the asset management unit saw gains from a seed capital investment rising in value. the speculation that is that's the digital growth funds investment in twitter which went public in the fourt

is it more. >> yes, it's a sweetheart deal for jpmorgan. i think this was not only a slap on the wrist financially but nos executives are going to gaol, and it seems like a miscarriage of justice, especially for the bernie madoff victims, the investors who lost their life savings, they are doubly punished by seeing jpmorgan, madoff's banker, is getting off relatively scott free. >> are you surprised by that? did you expect individuals would face charges for not alerting authorities. >> you know, initially i did. when madoff was arrested i thought for sure, you know, whichever institution turns out to be the one sloshing his money back and forth would be held accountable, and individuals held accountable because right now some of madoff's co-worker are on trial in manhattan. these are clerical workers, staffers with him 20-25 years. i was very surprised to see that instead of individuals going to gaol, essentially the bank got what is called a deferred prosecution agreement. that means they have to behave for two more years or bad things wil

lawyers at jpmorgan. much. >>> despite lawsuit after lawsuit, jpmorgan's stock keeps going up. some 14% over the past two months and more than three-quarters of analysts have a buy on it. let's talk about it. marty mosby and paul miller join us. paul, you're in the minority. you got a market perform and a target that's below where jpmorgan's stock is. how come? >> we think jpmorgan is too much of a black box and that it's still just too big to really show the returns that they should get. i'm not saying jpmorgan's not a good company but a lot of their earnings or the trading revenues, investment banking revenue, not a lot of recurring revenues like a company like wells fargo has. i do get criticism from my clients saying it's trading at a very low multiple relative to everybody else but given its earnings volatility, we believe that nine, ten times number is the right number for jpmorgan. that's why we have a market perform on it. the legal troubles aside, you're right, it's -- >> paul, you make some good

we're taking you over here to jpmorgan to take a look. we'll watch jpmorgan and wells fargo. 57.80. it is up about.of 1%. fourth quarter earnings dropped 7.3%. we're keeping eye on wells fargo, u.s. mortgage lender, the largest of the bunch. we saw with wells fargo, they posted better than expected 10% rise in net income. we've sign both of these stocks between negative and positive territory. banking index is holding on to a gain today. back to you. dennis: thanks very much, nicole. lori: let's pick up with more on big bank earnings. for that we bring in matt mccormick, principle and portfolio manager to weigh in. matt, always great to see you. start with your take on jpmorgan. the fourth quarter print beat wall street estimates but overall down 7.3% from year ago quarter. the big problem of course, the headline risk associated with billions and billions of dollars in legal settlements although ceo jamie dimon suggest that is the worst is behind them now. do you agree with him and hey can move past isn't. >> i hope so, lori. they seemingly get fined every week. once that pot

today, authorities punished his main bank, jpmorgan, for their failures. >> jpmorgan failed to carryheir legal obligations. today, jpmorgan finds itself criminally charged. internal messages and e-mails between j.p. morgan staff about concerns about his in 1998, 1 said it was possibly too good to be true. another said, the more i think about it, the more nervous i am. broughte were concerns to u.k. watchdogs but not their counterparts in the u.s.. later, he was exposed. man lost all of his savings and took his own life. his son told me how he felt about the news of the jpmorgan fine. >> ultimately, my father was a victim of an appalling fraud, and this money coming back from jpmorgan is not going to do anything to bring my father back. i am not convinced my family will ever see a penny of restitution. >> jpmorgan could have done a better job, even though no him please knowingly assisted. there are heavy fines relating back to the financial crisis. bbc news. madoff scandal, and the people who suffered from it around the world. the turkish government has put , and they began a corrupti

it is nice to see jpmorgan has to pay the fine.ruly going to the big dem. >> it is all going back to the victims. let's go back and talk about rovio. they are letting the birds fly free. >> freeish. >> they are letting you download the apps for free. there is a catch. users will have to pay for certain features. it is called the premium model. our next guest says it is the only business strategy that works. she is the ceo of the free to play gaming company. ium the only game in town. >> it is a win for the consumers and content for raiders -- creatures. by removing the barrier, umass and will he expand the audience of people will actually play your content for the actual content creators. we are turning what is a simple transactional relationship with the consumer into a permanent relationship, and ongoing service. we are providing what we can match the effective demand curve to each and every individual consumer. it expands the market, and told reagan's -- and builds brands. >> how much more money? i let my kids upload games about

there are worse places in the world to work and jpmorgan chase.l: 401(k) looks a lot better because likely whether they knew it or not had financial stocks and that is -- >> if jamie dimon left jpmorgan tomorrow that stock is going to $30 a share. just telling everybody. nobody else could run this complicated -- another story about whether he is right or wrong about whether the bank should be as big as they are, i think they should be smaller. that is another story but this guy is the real thing and deserve the money. cheryl: save something for monday. see you then. charlie gasparino, thank you. closing bell going to ring, 31 minutes to go, with the emerging markets dragging down, u.s. stocks looking for a worldwide road map of risk opportunities for 2013. liz in davos is talking with a global chairman and ceo, accounting firm out with a new blueprint for investors. remember the children's song the wheels of the bus go round and round? liz is checking out the local mass-transit system in davos and will tell us about that in a moment. my dad has ao

shares of jpmorgan trade near a 52-week high. investors view the industry favorably as the economy recovers but worry the bank has more legal issues to come. it's the focus of nearly a dozen open investigations, though a settlement over madoff would ease at least one concern ahead of its full-year earnings next tuesd tuesday. for "nightly business report," i'm tash tash. >> still ahead on "nightly business report," an ark tishg blast halts thousands ofan commercial flights. what could that deep freeze cost the airlines? >>> the coldest weather in decades has hit the midsection of the country and is heading east tonight. temperatures early this evening were minus 12 in chicago, minus 14 in minneapolis, and zero in st. louis. travel especially by air has been mightily disresulted as you might expect, but in north dakota, oil production, too, has been slowed. rural temperatures in the minus 20s make extraction and other operations extremely difficult. happily, by thursday it should be 40 degrees warmer in fargo. >>> speaking of air

i put together a chart on the jpmorgan numbers. to deposit ratio, harvesting more deposits than any other bank in america according to the fdic. loans it has outstanding keeps dropping. should we be outraged like a number of 57%? >> i am not sure we should be outraged. things are also a lot of -- under a lot of treasure. thanks should be lending money. companieshe larger trying to thwart small businesses. there are many things that do a good job on this. clearly the banking industry has not been as helpful. >> interest rates at record lows. if i am a bank, white take that chance? -- why take that chance? anything, you will be extra cautious. you have extra regulation. >> the fact that there is not much of the spread in terms of the profits on loans. are a lot of structural reasons. that is why the community is rising. >> the lending business is bad, what about investment banking? if you take a look at investment bank compensation ratios, they are running a low 2012 levels. third quarter jpmorgan the lowest. we heard the compensatio

obviously jpmorgan was always strong and it's still strong. hato toen -- to enhance their standing. i think the wachovia acquisition made that bank stronger than it ever was. >> 20.692. they did 20.67. >> right. within a very close point. i would call that roughly in line. >> right. >> the company also making some comments, the chairman and ceo john stump saying that strong earnings power on capital levels and improving economic outlook are the major reasons they look ahead to 2014 with optimism. that's key. they're still looking at improving economic outlook as well. >> they're saying the credit performance continues to be strong. that means they take care of nonperforming assets decline. is that what you said before. >> we talk to an analyst in a couple minutes. they made $5.61 billion. they made more money than jpmorgan. 5.3 billion, 5.61 here. >> wachovia, while they had problems, no doubt, ultimately that really enhanced wells' position. by contrast, the acquisition that bank of america made in the mortgage area really turned out to be on

they had a conversation with the coo of jpmorgan.here were these kinds of reports, federal banking authorities, over 100, and they did not file and turned a blind eye. as a result of that, they had a lot to do with the oxygen going in to keeping the ponzi scheme going. >> and this is what made the government case so strong. it was not like, we did not bring you notice. it was you had some pretty senior people saying this is a problem, and somehow, that got ignored. >> that is right. the allegations are these individuals, people at the upper echelons of the bank essentially knew what was going on, and they essentially turned a blind eye, because this was his biggest account, and they were getting a lot of money and a lot of fees, so the allegations are very serious. day, jpmorganthe is the poster child for compliance. they have spent about $20 , andon over the last year they are serious about this, as well as in washington. >> seth, hold that thought. keri back in. they have huge amounts of money. they can hire compliance lawyers or a

jpmorgan's health care conference kicking off out on the west coast.care, a leader in 2014, almost across the board. it's been kind of a stumbling 2014 but there you see health care up. hmos, bioteches, hospitals all leading the market. dominic chu looking at the best stocks to watch. morgan brennan taking us inside the drug pipeline to look at which may be the next big best for investors. dominic? >> let's talk about this. health care stocks are helping to pace the gains higher in the market again this year. they are one of the few sectors that are performing well. the sector is up around call it 2%, 2.5% to start the year in an otherwise mostly down market. but which health care stocks are the big movers? among the best performers so far this year, pharmaceutical drug company forest labs up 15% helped along by its purchase of privately held avtallis. then there's a hospital operator, tenet health care up 11%. medical device maker boston scientific up 9%. so within health care, a drug company, a hospital company and a services company and medical devi

made a portrait jpmorgan for more than 20 years before confessing to fraud. >> jpmorgan had concernsbernie madoff -- >> internally? >> internally. these returns are too good to be true and all this good stuff. he failed to escalate that to the proper regulatory authorities by filing a report. >> other required to under the law? banks have to have a very hefty bank compliance program. in failing to do that, it cost them $1.7 billion. according to the southern district, who announced it is going to be going to bernie madoff's victims. we don't have specific details. >> there is incriminating evidence, e-mails that established the wrongdoing that the government alleges. the key thing -- >> in this key thing in this case is that they signed a deferred prosecution agreement but which means that they neglected to prosecute. several banks have done this and this is jpmorgan's second deferred prosecution agreement. this is a big deal for them, because admitting to criminal charges not a lot of banks do , that. >> the former finance chief testified that bernie madoff's former workers asked fo

he worked in the compliance department at jpmorgan.he was blowing the whistle on after-hours trading case. his identity was violated. by an sec attorney. it was like, wait a second? how does that work when the attorney was clearly trying to incur favor with the general counsel's office at jpmorgan. and so the second thing that i would propose, a five years ago it was deemed incompetent. said i was graded by self corruption. a self-regulatory model just doesn't work. the idea of goldman sachs and jpmorgan or others can pay regulators so the regulator will aggressively regulate them, that just -- i mean, come on. when you look at the statistics. for the revenue that is generated in the industry and the fines that they impose it is one 10th of their topline revenue. if you have an industry there's a reason why you want to be regulated. but that doesn't help to generate confidence in the system. i think the self-regulatory model doesn't work. what we should have, personally i would like to see a federal financial regulatory review board. a

what exactly is jpmorgan admitting that it did?well, they're basically accused of being the private banker for bernie madoff and enabling his ponzi scheme to continue, merely for the mere fact that they were concerned and they got their own personal investments out of madoff and he thought they were suspicious and something was wrong they allowed other people to be victimized. >> we heard this phrase, too good to be true, that's how it looked at least at the time. but the problem is, nobody said anything? >> yeah, the government basically alleges that for years, dating back to 1986, madoff had an account at jpmorgan chase and its predecessor entities and allowed hundreds of billions of dollars to go through and allowed very unusually suspicious transactions to go through and the bank never raised any red flags or concerns. but the bank was savvy enough to get its own money out when it became concerned before the fraud was uncovered in 2008. >> no individuals are cited. am i right the company said it doesn't believe employees knowin

kevin moved to ubs, and i followed him there and ultimately to jpmorgan chase. i was a trader for 15 years. i didn't want to just be a round peg in a round hole. so how do i continue this intellectual curiosity that, you know, from my formative years understanding risk of different products, different sectors of the market? to me, that was a way of growing my career. and so if i needed to take a step back in order to take multiple steps forward. that, to me, was a prudent approach. the world got very interesting in 2004, 2005, 2006 and beyond. i left jpmorgan in really '06. whether that was divine intervention or not, who knows? at that point in time, honestly, there were definitely signs of cracks in the system. could i have projected what would have played out two, two and a half years later? no, i couldn't. but there were definitely some signs of stress. and so as a result of that, i was in no rush to go take a job at another large bank. you can often times get into these large banks, but it's very difficult to actually get back out of them because they put t

. ♪ >> we are going to take you now to san francisco to jpmorgan conference.with me now, the of a pharmaceutical company focused exclusively on women's health. also joining me, jack cutter, pharmaceutical company that specializes in central nervous diseases. how is the conference going so far? what is the best idea you have heard? >> it is fantastic. there is no other conference in the world that brings together so many investors and pharmaceutical companies. i cannot believe the amount of scientificnd breakthroughs and investors all in one place. >> what is actually the best idea, the most i did -- most innovative idea you have heard? >> of course, i'm going to say novel approach to immunotherapy, but i'm a little biased. >> yes, you are. for what you have seen, what you have heard. on -- you areocus focused on representing your company, but in the larger picture, the larger theme, what have you heard? >> a lot of the discussion is about 2014 and whether there is a bias in the sector. is movement ine the biotech sector. everybody is trying to guess what is co

jpmorgan raised its price target. people are talking it's the race to $1,300, david. is like 1999 where we had some incredible price targets, qualcomm being the one. but i do still think it's very cheap. >> do you? this enthusiasm seems to have no bounds, which some might find worrisome. at what point will the company start to disappoint only because expectations have gotten so high? this stock is up 30% over the last 3 months. >> they have a big overseas business and they have a big european business. yoeurope keeps coming back, and google is a great play. they are beginning to monetize the new products and they haven't started how to figure out money on youtube. i'm on board and my travel trust the biggest position. >> you're on board? >> yes. second facebook deutsche bank says buy facebook ahead of the results, it's going to be a solid quarter. this is just a time of love. i saw yelp go up yesterday, zillow is having a move. li linkdin was downgraded. and workday a cloud play upgraded. david, people are circling back to traditional growth as the year begins. >> and

jpmorgan's relationship with bernie madoff. it's all about that. what did the bankers know, when did they know it and what is their responsibility and liability. >>> and a closer look at the unespecialun especial employment picture, looking at what may become a crisis. millions of americans lose the extended benefits but millions more are expected to be impacted this year. by the loss of the benefits. do the jobs these workers need even exist? first, let's check in with sue at the new york stock exchange. >> we have a lot going on today in "power lunch." if you're just tuning in, let's get you up to date on the markets. the dow jones industrial average down 43 points at 16,426 and change. the s & p 500 and nasdaq down 20 points, the biggest percentage downsized index right now. as for the gold market, after a volatile week last week, we're up two bucks. most of the metals markets hanging flat right now. in terms of interest rates, after bumping up against 3% last week, the ten year right now was traded last on the yield 2.95% and brent crude last t

. >> jpmorgan has now settled for i think $17 billion on penalties. jpmorgan -- is it a rogue bank? should jamie dimon be replaced? >> i come from a background of bankers. -- bankruptcy. bankruptcy is about families that have been hit by hard times, but it is also about corporations, big corporations. what happens when they hit a hard sell? when they get be organized in new money comes into financial situations, the are a lot of conditions that are put on their. -- on that. among the conditions are that there has to be business plans, a showing that the financial institution is not going to keep up its old ways. that often means that the ceo is replaced. >> in this case, the ceo should be replaced? >> the real question is, do you have someone who has shown that they understand there were problems in the past and that they have a different plan going forward? what jpmorgan and other financial institutions have done is they have continued to get bigger and load up more risk. >> do you think that the ceo of j.p. morgan has that understanding? should he be replaced? >> i'm waiting for h

jpmorgan could be forced to pay another big fine.d announce a settlement this week over charges it failed to warn about bernie madoff's ponzi scheme. >>> spain services pmi hit a six-and-a-half year high as new business returns to pre-crisis levels. >>> they nechinese economic fea down to a two-year low in december. the biggest concern by george solos is the downfall. >>> and a deep freeze for much of the u.s. >>> you're watching "worldwide exchange" bringing you business from around the globe. >>> a warm welcome to you. the start of the global trading week here on cnbc. we saw a bit of a pause last week for u.s. equities. the dow down .2%. right now we are slightly higher at the start, 23 points above fair value for the dow. the nasdaq at the moment is 3.5 points above fair value. and the s&p 500 is currently 1.6 points above fair value. the ftse cnbc global 300 is pretty fat, down a quarter of a percent. a bigger sell-off in ashave, the nikkei down 2%. here in europe we have been turning slightly firm,er, the ftse 100 is down .15%.

of america have joined forces with jpmorgan to help them avoid fraud. mr. foxx joins me from washington. thank you for your time. >> i appreciate you being here. >> how can banks avoid fraud? >> what we have seen is coming into 2014, just in the last quarter alone, we have seen about a 40% uptick in the number of banks utilizing technology tools to both cut costs and reduce the exposure to fraud. >> when my colleague was just talking about the blowback from $23 billion in legal fees, that is an astounding number. >> it is a number that almost is unfathomable. what we have seen as a real commitment this year, moving into 2014, of the number of adoptbeginning to technology tools to help reduce their exposure to fraud. banks have been involved in some form or fashion or even just named in a fraud that pulls them into litigation in order to clear their name. we are starting to see a real commitment on their part to adopting technology tools to limit their exposure to these frauds. >> how has your patent helped? >> we don't have 6800 patents like ibm got this ye

and in essence, for the next two years, jpmorgan chase has to keep its nose clean. there would never be any charges against them, wolf. >> let me turn to another subject that's just moving -- i know you're learning about utah. apparently they have decided in utah they are not going to recognize those same-sex marriages performed in recent weeks before a court ruled that they should put a stay on all those marriages. what's going on? >> reporter: yes. you and i were just talking about this a few days ago. and one of the questions you had was what happens to this -- about 1,000 same-sex couples who got married in the 17 days that gay marriage was legal in utah before the supreme court put a stay. just as we were beginning the segment, utah announced they will not recognize these marriages, so now these people are in limbo while we wait to see the state's appeal go through the circuit -- the appeals circuit court in denver. these people have to wait and see whether or not these marriages will end up being valid, wolf. >> we'll get more on this story as it develops, obv

this comes courtesy of jpmorgan chase who is obviously putting on the conference, which is this. so far this year, i know it's extremely early in the calendar 2014, but 94% of health care stocks have outperformed the s&p 500. in other words, they are outperforming and they are outperforming in a big way, and a number of those names have been on cnbc all day and will be here this hour as well. coming up in a few minutes, we have one of the biggest biotechs of them all. their ceo will join us. also, the $21 billion company perego which recently moved its headquarters to ireland. we will talk about them and how they are skiing teeing the cons economy. then another name not familiar, a company that is not a biotech per se but makes its money finding office space for biotechs. got a greater than 4% dividend. a.r.e. is the ticker. that ceo coming up as well. we'll be here all hour. i would say sunny san francisco but i don't know because i'm inside this hotel. >> a little bit like us inside the studio. sounds like we have a whole lot more than just the hour will afford us but we will d

second jpmorgan's deferred resignation agreement. a big deal for them, because they aren't bidding to committal charges, not a lot of banks do that. >> the former finance chief testified that dc- bernie mado's former workers ask for payment in diamonds. they cleared a pulmonary vote in the senate this morning. the bill would reinstate jobless benefits that expire december 20 for another three months. congress voted today because they failed to act before the holiday break. 60 senators voted to move ahead with the debate on the measure. the exact number two avoid a to avoid a-- filibuster. as a beginning and get that far, here's the president after the vote. >> unemployment insurance has been a vital economic lifeline. for a lot of able it is the only source of income they have to support their families while they look for a new job. folks who not full -- are just sitting back, waiting for things to happen. they are out there actively looking for work. >> one vote that also nearly dated, janet yellen confirmation of the 15th fed chair

sfwh what are your expectations for jpmorgan here?think what we're going to see with jpmorgan is they're going to have continued lower credit costs. on top of that, their lending division, their commercial lending division all year has been breaking records. we expect to see strong commercial loan growth, as well. but you have the issues with the lower residential mortgage refinancing activity and the impact that will have on revenues this quarter. >> it's had a strong value, though, hasn't it, since november? what's the risk that even if they don't disappoint, there's a real top side of expectations not to see weakness in the share prices here, surely? >> i think you're right. since the big settlement of $13 billion, the stock has rallied very nicely and i think investors are now understanding that the credit -- or the legal costs are starting to finally be put behind them and that's a real positive for 2014. you also have capital markets at jpmorgan as you know are very important and that's going to be a tough quarter this quarter.

dagen: breaking news from jpmorgan chase earnings call. the bank's chairman and ceo jamie dimon talking about babe reaches and that the credit card account, it is a big deal, not going away. calling on banks and retailers to come together to battle these attacks on the heels of a report saying the attacks on personal information tied the markets are just the tip of the iceberg. security experts telling leaders of the retailers could be coming out with similar reports about reaches over the same time. connell: we have talked a lot about it on our show. remember the hackers stealing nearly 15 million credit and debit card numbers, tjx 2005-2007, then it went on from there. best buy, j.c. penney, on and on, similar experiences or infiltrations in recent years and you add to the more recent newsweek and there are the stock prices we had today, jamie dimon, tip of the iceberg. dagen: you covered online attacks and cyberattacks, what do you think of the way they handled it? the breadth of the attack at target was breathtaking for sure. connell:

jpmorgan are big players in that.is some of a moving piece but if you look at the core of the business, you are going to see revenue dropped by over 16%. even revenue at the equities division will probably jump. if you look at the costs within jpmorgan, it wasn't for pesky litigation and compliance, they are spending over $2 billion on compliance. this gives you the scale of the new costlier that is going into banking so we have that litigation and 2014 -- in 2014. jpmorgan -- it was only last week. billion lossr $2.6 for dorney made off -- before madoff.mad there was a great statistic. five fargo issued one in of the mortgages in the united states. we are expecting them to take less of a position in litigation. j.p. morgan earnings will fall and wall street -- and wells vergara will -- wells fargo will fall. thet factory appeared in fourth quarter, mortgage volumes will be dropped by over 40% and refinancing volumes dropped by over 60%. review ofppier his the business and probably looking for big reserve releases all

jpmorgan. >>.clarify that. >> everybody is saying that, you know, made a big thing out of it, barclays in china or somewhere overseas but from what we understand goldman sachs interns slept on toilets due to work requirements there, as they were carrying out -- i have nothing to do with that banner. my producer did it. lori: we embrace it. >> we should point out as they were doing god's work for lloyd blankfein these poor interns were forced to sleep on toilets of goldman sachs. ashley: they just fall asleep? no one was forced to sleep there. >> they may have very nice toilets at goldman sachs. i remember john thain spent 30,000 -- lori: on his own personal. >> $30,000 on his and was fired not long after it was disclosed. i don't think each toilet at goldman sachs costs $30,000. we have covered here through the fox business network into the extensive network of sources -- ashley: go into the toilet. >> investigate telephoned reporting. that goldman sachs interns are forced to sleep on toilets. lori

he is always the very qualified to run a firm ilike jpmorgan.his segues into is there a brain drain. goldman sachs is cutting their bonus pull down. does that mean they are losing the best people you go it jpmorgan pays jamie dimon less, does he go somewhere else? point, exactly, you are not raising your own capital, there is no better job in the world and working on wall street. where else can you get paid even less than you get paid? even if goldman sachs cut its bonus pool, where is there anywhere you can get paid anything like on wall street not risking -- >> here are the numbers on it. goldman sachs in this last year, i believe the second lowest they, or the compensation ratio is the second lowest since they went public, but if you average it out, each employee at goldman, would still be owing -- earning about $300,000 a year, compared with the average american -- >> that is better than the nfl. >> what if that have to do with anything? what i am saying is in terms of -- >> what is that have to -- >> i am saying, compared to the americansco

the decision by the jpmorgan board but we're getting this from jpmorgan insiders.ork why jamie dimon deserves a bonus and one that is bigger than 2012 from what we understand. he should get a pay hike for 2013, at least that's what insiders are telling us. they expect this pay hike, which 90% of it is a bonus. that how wall street guys get paid, small salary, big bonus. they expect it to be bbgger than 2012. he learned 10 million in 2012. in 2012 he took a 50% pay cut from what he earned in 2011 which was $21 million. we should point out here is their case. jpmorgan execs argue that dimon inherit ad problems. took over wamu. they paid 20 billion in fines. taking over wamu and bear stearns during the financial crisis. even madoff they're saying occurred before -- adam: not going to challenge on that one. >> occurred before he became the ceo of the combined jpmorgan chase. he will also argue that the majority of the bank's regulatory problems, there was a story in the journal today about another bond probe or whatever, but they're saying the 345 majority of their pro

and how big is that to jpmorgan chase? >> well, the issue, as your previous story said, it's not jpmorgan chase. it's officers and directors who make decisions, and corporations are fictions, so the officers and directors made a fortune by engaging in these frauds, and they caused huge losses often to the shareholders when they did so, and then when they get caught, instead of the officers and directors paying or being prosecuted, they pay nothing, it's to the bank, or the shareholders, so it's a triple whammy to the shareholders, simply for the senior officers. >> so it's not paying to the senior officers. i guess there's some admission, okay, we're going to pay a $200 million fine here, but they're not admitting that no one knowingly at this bank did in any way assist. what does that mean? is it a confession? an admission? where does this fall? >> it's structured not to be an admission and to be useable. it's designed to essentially have no affect on the corporation. beyond the fact again that the shareholders will have