it, federal and state prosecutors are shifting their sights to another credit rating agency, moody's. both s&p and moody's get paid to rate securities. those securities market to investors. critics say that's an inherent conflict of interest that really burns investors when things go wrong the way they did in 2008 when toxic securities imploded our financial system. now the government contends that s&p and perhaps others, like moody's and fitch, purposely assigned rosey futures, the very guys marketing those shoddy securities and to drum up more business. the defaults were the spark that burned down the housing market and brought on the worst recession since the great depression. seven years later, america is still picking up the pieces and for is once s&p and perhaps moody's will be getting burned. parent company mcgraw hill here is the rub, the company will probably claim the settlement as a writeoff and save up to $290 billion on its next tax bill and shareholders will ultimately pay the price and millions of stockholders who own part of mcgraw hill in their 401(k)s. all in the name of ma

moody's s&p, and fitch make up the three credit rating agencies. here's the part that gets stuck in your craw. the issue is that they get paid by the financial firms to rate the securities that those firms create and market to investors. that's like when you and i go to get a mortgage, we don't like our credit report so we can pay to get that changed. it just doesn't seem fair. critics say there is an inherent conflict of interest that burns investors. they accuse s&p and others of purposely assigning rosy ratings to mortgage-backed securities that they knew were not that good. those toxic securities nearly imploded the financial system. and s&p was insistent that they do not admit to the fact that they committed fraud. they have a statement of fact that basically allows them to pay this $1.4 billion without admitting or denying any wrongdoing. that does not sit well with me. but if they pay $1.4 billion, that speaks volumes. >> let me follow up on that. how much does this pay out hit s&p's bottle bottom line, and is it enough to prevent inflating

narrowly avoided -- moody's and s&p say they expect to see an increase in bad loans. strong u.s.s have raised the possibility of a fed rate hike as early as june. the probability of a rise increased significantly. the jump came as u.s. employers created 250,000 jobs in january, continuing what is the longest streak of games in more than 20 years. withhina is pushing ahead plans to ease trading controls. the move will help investors manage risk in one of the world's most volatile stock market. china has been trying to attract more sophisticated investors by allowing shortselling and marching trading -- margin trading. demand andomestic falling commodity prices have led to a record high trade surplus for china last month. we are breaking down the numbers. it really seems to highlight the problems we have been highlighting. >> and there are a lot of them. overseasthe weak demand. what really is leading to this record trade surplus is the continued weakness in imports, which means continued weakness in domestic demand. let's bring up exports first-grade we can see the extra picture.

now moody's and s&p said they expect to see an increase in bad loans with several developers report weak cash flows. a korean cosmetic maker is enjoying a benefit from k-pop fever in china. amour pacific bets is expecting sales in china to jump 30% as growing middle class spends more money on looking like korean stars. amour specific plans to increase the number of stores by 15 thrs this year. hong kong's n.p.r. is to be part of a consortium building a new subway line in beijing. the metro will have 29 stations across three major districts and expected to open in two phases. the new line will be one of four to be constructed in beijing this year. and those are your top corporate headlines it this hour. >> up next -- the labor dispute that shut down much of the u.s. west coast. it's having an impact on both sides of the pacific. that story for you coming up next. >> let's check on some of the stories making world headlines. north korea firing short-range missiles off the eastern coast, the day after state television showed pictures of kim jong-un testing the new ship rocket. coming after

the justice department says s&p along with ratings firms moodies and fitch knowingly inflated which ledo the housing meltdown of '08. while the s&p has not admitted wrong doing, they are paying 1.38 billion to settle the allegations and paying $125 million and $77 million to settle separate charges by the ceo. >>> google may be getting into the ride sharing business. google will unveil its own ride tailing service. that would put it in direct competition with uber. google was an early investors in uber and the services smartphone applications are based on google maps. google's chief legal officer, also a member of uber's board has reportedly informed of gook -- google's plans. >>> apple is planning to turn a failed iphone screen factory in arizona into a massive data center. according to arizona's governor, the tech giant plans to invest $billion into the may -- $2 billion into the mesa center. the governor says the facility will serve as a command center for global networks. >>> it turns out to killing a mockingbird will not be harper lee's only published book after all. she was a new

a ruble weakness after moody's joint s&p and downgrading russian debt to below investment grade blamingand an fighting in the ukraine. stephanie: thank you for giving us the european close. my partner erik schatzker -- my hair. i'm watching everyone around me. my partner erik schatzker is following all the action in europe. we sent him to athens to watch the reaction from friday's bailout deal. do voters think the prime minister went back on some of his campaign promises? erik: i have somebody better to answer that question than me. i would like to introduce you and bill to antigone liberal rocky. she is not part of the governing coalition. she sits in opposition. an economist who describes herself as a liberal and supportive of reform. antigone, thank you very much. >> thank you for having me. erik: you set them with the honest varoufakis to talk about the list of reforms he has to present to the eurogroup tonight. what did you talk about? >> we did not actually sit with him. we got this invitation that he addressed to all parties in support of eu -- greece's membership in the eu. to c

moody's and s&p have you at 26 billion euros plus worth of debt as well. how do you grow the business with that debt profile and can you do it without acquisitions? >> we -- even though we accelerated the investments, we've been able to have a recurring of about $1 billion. then we bought spectrum which is always good. both in brazil. we were in argentina at the time. we want to deliver a good can company, so we brought in ar jen argentina which counts more or less for 900 million euros. it's important that our recurring operating is extremely solid. so this gives us the possibility to increase the complex and focus it. of course not to ask to deleverage, we launched a very important new efficiency plan both on owe pecks and traditional so efficiency will pay half of the bill. and a part of the operating will dedicate it to new investments. >> just to con ferm in terms of your relationship with the ratings agencies and what they want to see from you and what you want to do in terms of getting back to investment grade, that's not the priority now, though. >

moody's. >> yeah, that's true. liz: i have to ask why? because, when you look at these companies that have been the ratings agencies, s&p just settled, from situation. you know moody's might be next. why are you still holding on to moody's? >> it's a fantastic business. is s&p incidentally. they're payinging a a big fine. s&p is wonderful business. takes no capital. it has pricing flexibility. i can't, if i sell a bond issue i sell one in another month or something, i need moody's rating and standard & poor's rating and i can't negotiate with them. >> won't sell any of your moody's stakes. >> we haven't for a long time. we have $2 billion worth. liz: your biggest stake is coca-cola. >> wells fargo is the biggest but coke is up there. liz: coke, one of your business loves, but warren, it is losing that important connection it had with its customer versus the product. it is struggling. i stopped drinking diet coke. i hear a lot of people saying i'm trying not to do that anymore. you may drink it every but are you worried that the company lost its way a little bit? they're rolling out fancy milk and things like that. >> there are 1.9 billion

moody's. warren: that's true. liz: i have to say why. when you look at these companies, s&p just settled from the crisis era situation. you know moody's might be next. why are you still holding on to moody's. warren: it's a fantastic business. so is s&p incidentally. they're paying a big fine. but s&p is a wonderful business. it takes no capital. it has pricing flexibility. you know, i can't -- if i sell a bond issue, i'll sell one in another month or something like that. i need a moody's rating and standard & poor's rating. >> so you won't sell your moody's stake. warren: haven't for a long time. liz: your biggest stake is coca-cola. warren: wells fargo is the biggest. liz: right. but warren it's losing its important connection with its customer versus the product. it's struggling. i mean, i stopped drinking diet coke, and i hear a lot of people saying, i'm trying not to do that anymore. you may drink it every day. are you worried they've lost their way a little bit. they're rolling out fancy milk and stuff like that. warren: 1.8 dlon servings of coca-cola sold today. it'

s&p adding 25. the nasdaq 39 and among the interesting stories today, bill mcgraw-hill up 3.5%. moody's up 3% on the s&p settlement why the government. plenty of green on that map today. >> staples and office depot among the gainers as they talk mergers. meanwhile, a big rally in oil, maybe even an important rally if we believe rick santelli. we always believe rick santelli. jackie deangelis is at the nymex. tell us about what happened today. >> good afternoon. $53.05 is where we settled, just under $3.50 gain today. 7%. hard to believer that last thursday we hit $43.58. a couple reasons for the move higher. the first is the refinery spike starting to spook some traders but also the news of the cap ex cuts and rig declines are impacting the market. people are starting to forecast that u.s. production is going to decline in the back half of the year. still there are those out there who say not so fast. this could be a head fake. we don't always see prices move lower in a straight line and this could be a technical bounce to the upside. some people making a quick profit. we could see that

for its role in fueling the sub prime mortgage melt down, the justice department says s&p along with rating firm, moody and fitch knowingly inflated ratings for risky mortgage investments. that in turn led to the housing melt down of 200 a eight and triggered the crisis. s&p not admitting any wrong-doing, but they are paying about $1.38 million to settle those allegation. >> consumer financial protection bureau adds the department of education al reimburse students taken advantage of by predatory student low pro -- loan program. operators of the now de funk core inch ian column ledges provide about $480 million in debt forgiveness to students who took out risky private loans. >> sued core inch thee and which required student to make monthly payments while still attending school. >> 5:26 the time w low interest rates and cheaper gasoline to motivate them, consumers went car shopping. in a big way in january. new vehicle sales rose 14%. to more than 1 million vehicles. best january in nine years. car buyers bought few deals out there, but also, attracted by popular new vehicles. gm led the way with a 18%

s in brussels. a little bit of moody tiredness maybe? >> i was asking about market reaction.e expects it or is hoping it to be positive. there wasn't any conclusion. we do have two important outcomes coming out of it. one, we understand the difficulty of the task. the difficulty of what you're going to do to have greece stay in the program or extend the program in some way. two, jon, this millibar more concerning long-term the concern that varoufakis might not be able to cut the deals himself. there was a remarkable scene last night. thinking they had a deal. about four hours into the meeting heading down to his car waiting in the parking garage getting a call on his phone and getting a message that he has to maybe go upstairs. upstairs, mr. varouva kinch s had taken the noor again. he didn't know what to do. he was waiting in the parking garage. left. you this spectacle of finance ministers leaving while some were still inside. talking about how there was no deal. at that point, the euro dropped. earlier it was up a little bit on optimism of a deal. today we're going to sort

moody's predicting an increase in lpo's at property firms following kaisa nearly missing payment. ss nearly 10 developers have we cash positions and debt maturing in the coming months. fitch saying that the president of a chinese bank is under investigation, underscoring management and political risks. very interesting. >> these quick departures have been very indicative of concerns of the troubles there. thank you. >> we are going to look at some corporate headlines so far today. >> alibaba is hosting -- hoping to boost the use of its mobile operating system by purchasing a state in a smartphone maker. the $590 million investment will see their os integrated onto meizu;''s hardware. in china, nine out of 10 mobile's run google's software. mtr is part of a consortium building a new subway line in beijing. there will be 29 stations across three major districts and is expected to open in two phases. it will be one of four to be constructed in beijing this year. jaguar land rover will recall of two 104,00 cars in north america after safety concerns. u.s. regulators published notices hi

. >> as part of that agreement, s&p did not admit wrongdoing and we told you the justice department is in talks with moody's over similar conduct. >>> the net neutrality debate back in the spotlight as zek is set to unveil a proposal to change the way it oversees high speed internet service. two guests tonight with opposing views on this very important topic. todd o'boyle with common cause and he favors regulating the internet as a utility while scott cle land a broadband consultant and president of his own firm disagrees saying this move could in fact break the internet. we should point out before we begin that cnbc that produces "nightly business report" is owned by the broadband provider comcast. let me begin with you, mr. o'boyle. this is a very nuanced topic. it can be eye glazingly complex, frankly. but at its heart, it goes to the question of whether broadband providers, as i understand it, ought to be able to charge different prices for differe speeds. why shouldn't a broadband provider be able to charge a, quote, data hog for using so bandwidth? >> broadband providers should be in the business of d

moody's out with earnings second best performer in the s&p 500 today.t was a beat as well. >> yeah. i was going to say hotels if simon were here, he'd talk about how disciplined the hotel industry has been about not overbuilding. but it was not something people were thinking about a year ago. pandora 18 cents, meets estimates but revenue was a miss and it was in fact the guiding down for current quarter revenue and a slowdown in advertising revenue growth. probably the worst percentage loser of the morning down almost 19% now after the bell. >> also watching buffalo wild wings. i know sally smith, the ceo, was on earlier this morning on "squawk box," somewhat of a disappointing quarter but investors like the look of january seams which came in very strong thanks to obviously sporting events and also those chicken costs weighed on buffalo wild wings coming in a bit high. looks like buffalo wild wings is encouraging for this current quarter, stock up more than 5.5%. >> i'd be remiss if i didn't mention verizon of course engaging in a lot of asset sales ye

s&p hitting new highs around on track to record levels. i'm joined by charlie gasparino, monica crowley, online opinion editor for "washington times." fox news contributor. she is very business civil john lonski, moody'shief economist is with us as well. what did you make of what she said? >> she is listening to the market. the market doesn't want a rate hike anytime soon. melissa: no kidding. >> no threat of high every inflation. the hard to believe the zero percent fed funds rate has been with us since dees 2008. melissa: wow. >> that throughout the entirety of obama's tenure. we had zero percent fed funds rate yet the economy is still performing in subpar manner. melissa: great for investors. great for rich people. great for fat cats. >> the wealth gap has grown significantly. our viewers have done pretty well, have to admit. melissa: we're happy for you all there but still. >> i just wonder, now here is the big john would know better than me. wonder simple rate hike would be good for savers, right? and how much could it really hurt the markets? why would the markets trade off dramatically -- melissa: because it could say that the government believed in the economy. >> you know interesting response