IRS Targets Conservatives; Bloomberg Breach; Talking Markets
An informative and entertaining look at the must-see CNBC moments that will sharpen your business edge today, tomorrow and beyond. What follows are some notes and quotes from the biggest stories covered on CNBC on Monday, May 13.
IRS Targets Conservatives
The Internal Revenue Service is under fire after an agency official told a group of tax lawyers that it targeted conservatives for extra scrutiny of their claims for tax-exempt status. The IRS searched its database for groups that used keywords "Patriot" or "Tea Party" and that taught about the Constitution or challenged government.
"If you got the IRS operating in anything less than a neutral and non-partisan way, then that is outrageous. It is contrary to our traditions and people have to be held accountable and it's got to be fixed," President Barack Obama said during a midday news conference.
"This is going to change. The involvement of government and the IRS enforcement," CNBC's Rick Santelli said from the Chicago Mercantile Exchange.
"I share the outrage that, I think, every American does about an agency with the power of the IRS abusing it in this fashion and it's very scary and it's even more disturbing because the head of this agency testified before Congress that it wasn't going on when apparently it was," Sen. John McCain, R-Ariz., told CNBC's Maria Bartiromo on "Closing Bell."
The Bloomberg Breach
Bloomberg News reporters had access to sensitive information about customers' activities on Bloomberg financial data terminals, such as subscribers' contact information and login activity, all of which was used to advance reporting. The news, which broke over the weekend, is notable because the U.S. Treasury Department, U.S. Federal Reserve, European Central Bank and Goldman Sachs, as well as many other major financial institutions and central banks are among Bloomberg's clients. On Monday, editor-in-chief Matthew Winkler apologized for allowing journalists to use the data, calling it "inexcusable" and that customer data was protected.
"I don't think there's anything wrong with trying to collect usage data, but I do think there's something wrong if you don't disclose that first, then get the permission of those whose data you're collecting," former SEC Chairman Harvey Pitt told CNBC's "Squawk Box."
"Maybe I'm completely paranoid. I always feel everyone always sees everything. If you put it in an email, you should expect it to be put on the front page of the New York Times," host Jim Cramer said on CNBC's "Squawk on the Street."
"They need to be really, really transparent on the arch of the story, what the policy is going forward and how they can, you know, red flag the use of any unusual information on the news division," Tony Fratto, Hamilton Place Strategies, told CNBC's "Squawk on the Street."
What's Holding Back Stocks?
Although the S&P 500 index briefly hit a fresh all-time high on Monday, stocks closed flat. After Friday's record close, traders and market observers alike wondered why stocks are taking a breather.
"Our bond market is backing up and as of last night, so was the Japanese bond market and that may raise some questions about inflationary fears or whatever and that provides a perfect cue for a pause in equities," said Art Cashin, director of floor operations at UBS, from the floor of the New York Stock Exchange.
"I don't think the traders are that surprised that the Fed has a plan to effectively taper QE. We've been talking about that for some time. We know it's data-dependent," said Mike Harris, a technician at Campbell & Co., on CNBC's "Fast Money Halftime Report," referring to a Wall Street Journal article indicating the Fed will wind down its bond-buying program. "If you look at a chartist's perspective … they all continue to show a very strong trend to the upside."