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tv   Power Lunch  CNBC  March 3, 2010 12:00pm-2:00pm EST

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the past year. are they worth buying? stick around to find out. here's what else is on the menu. >> so when is outreach to republicans on health care actually outreach to democrats? try this afternoon when president obama talks and lays out his new health care proposal. we'll talk about that in a little while. i'm jim goldman in the silicon valley bureau. apple's big lawsuit with htc might be a prelude to a bigger case against a much liinger rival. could the real apple target actually be google? >> i'm julia boorstin in los angeles. viacom pulling its popular shows from hulu and cablevision and abc are still in a standoff over fees. these are just the latest battles in an ongoing war between content creators and distributors over the value of their shows. fascinating stories brewing there on the media front, but first let's get to the market action. bob pisani is back and kicks it off at the new york stock exchange. hi, bob. >> good to see you.
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greece has finally a plan to reduce the deficit and that's helping europe a little bit, but here in the united states some positive companies from u.s. companies are helping out. let me show you, joy global. they make mining equipment, coal, bullish comments on the coal market in the u.s. and china and the earnings were above consensus. bookings for equipment has improved here and us air has practically doubled in the last three months because revenues have improved. they did report lower traffic levels for february, but overall the key metrics are still in positive territory. dineequity, their merger of applebee's and ihop. bottom line here margins are improving and sales at applebee's are getting notably better. who would have thought ethan allen would have done so well here today. we saw them up strongly all throughout the morning. they've seen improving traffic throughout the year and yes, it's a cost-cutting story, but it's more than that for ethan allen and their sales are notably improving, several positive comments here today from u.s. corporations.
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bertha, how are we looking over at the nasdaq. >> it's a small cap story and that's the story today. the russell 2000 has outperformed the major averages and it's because of companies like novell, today, the biggest gainers in the small caps or one of them up 27%. the hedge fund has offered to buy up what it doesn't own, it's offering the company 5.57 and it's trading at 18 months high, well above that. take a look at others who that are leaders in the russell 2000. the water company getting an offer to be taken private by a group led by j.p. morgan and they're considering, that southwest water and nektar and lincoln education, and medivation, this is a company working on al alzheimer drugs and the placebo worked better than the drug in the trial and the stock down today nearly 70%. medivation, the stock there mdvn, mike huckman will have
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more on that later today. let's head to sharon at the nymex. >> oil prices are around $81 a barrel. will it last? we've seen bullish money come into the market since the start of the month and once again it seems the bulls have shrugged off the bearish data we got from the energy department showing crude supplies. barrel oil demand, the highest level since october between the 08. we're look being at gasoline demand being flat versus last year even with the winter storms that we had and refinery runs and yet they're up a little bit and they're looking at that data and also here in the options market paying close attention stephen shark of the schork report on prices below $70 a barrel versus 80 ore $85 a barrel. we're looking at a premium on those cheaper put, but here on the option, they're talking about the volatility in the back months, rick and that is key to watch. the volatility they're seeing in the fourth quarter sales and
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prices won't stay in this range for long. over to you in chicago. >> thank you, sharon. you know that number this morning, that series of numbers in the series of non-manufacturing was interesting. headline number, 53, best since october '07. the 48.6 on the employment index, best since april of '08. so we're seeing decent improvement there, but if you want to look at the treasurys story, you can see rates have crept up a bit although still in a range. the biggest story of all today the dollar, taking a beating and taking a beating as europe moves into its final trading hours. look at the charts, whether it's euro versus the dollar, it is up three handles from 3:00 in the morning when it started out trading in the 135s. it's over 1.37, a good chunk of that as they wind down their day. same dynamic for the british pound and a three-handle day and same dynamic. usually the yen goes the other way, but as you see that's the dollar/yen chart and it is taking a had the against the yen
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as well. >> thank you. greece today announcing an austerity plan to deal with its debt crisis. spain now looking for solutions to its own economic and financial woes. let's head across the atlantic using extensive network of reporters and anchors. guy johnson in athens and first to steve -- excuse me, guy johnson, we begin with you in greece. go ahead. >> reporter: yeah, michelle, let me pick it up, as you said 5 billion euros announced here in athens today. it is just the latest in a long line of austerity measures that the greek government has been forced to come up with over the last few weeks. it really has been backed into a corner. it has no choice. we have seen some demonstrations today. we're going to be seeing bigger demonstrations tomorrow, but largely the government has the backing of the greek people for the kind of changes he is proposing. he's almost putting the country on a war footing saying he's had to make unpleasant and sometimes unfair decisions, but he really
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doesn't have any choice at this stage. he has to deliver, but he's also been delivering some fairly clear messages, let's put it that way, to his euro zone partners. he said last night, you know what? we need to be able to borrow on the same rates as the rest of the euro zone or there will be catastrophe. today he said in cabinet, if we can't get help from our euro zone partners, we must go to the imf. tonight he said a similar thing as well. the message is going out. help us, we've done our bit and we need to get on with this now and make sure the pain we're taking is being something that's being reciprocated to you guys. the rest are watching very carefully what's happening here and they're watching very carefully over in spain and that is where we need to go next to my good friend and colleague, steve sedgwick standing by in madrid. >> reporter: absolutely, guy, because if you're talking about a 5 billion euro austerity package the spanish are talking about a 50 billion euro austerity package because this is a big economy. this isn't at the periphery of
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europe. the economy is worth 1.6 trillion u.s. dollars, that is toubl portugal, greece and ireland put together and they've got some pretty big structural problems here as well. 23 you add in the private debt to the public debt we're talking 5 trillion dollars, they have structural issues such as long-term unemployment. 19% of spaniards are unemployed and 43% of young people, 16 to 24-year-olds are unemployed. added to that, you've in a housing boom and bust as well which a lot of the regional banks are refusing to take a hit on and you've got quite a bit of a crisis there. 1.3 million homes unsold, on the market in spain. you can see the problems that the zapatero government has. the question is have they got the appetite to take on the unions and create a lot of the structural changes that are needed and, yes, this country, too, needs to go to the markets this year. 70-odd billion euros needs to be raised by the spanish government
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plus another 30-odd billion euros by the debt. sue, back to you. thank you so very much. let's stay in europe now and take aes can closer look at the debt and what's at stake for the currency markets. chief market strategist. ashraf, it's great to see you. the ratings agencies have weighed in, fitch and moody's anyway, saying that they think that this shows that greece is is indeed extremely serious and has taken some good steps in spain as well and is it enough to put a floor underneath the euro? >> it may not be enough, sue because it seems that these off the ear plans were so strict and so tough that i thought it was a plan by the imf the first time i saw that. it was the imf that had these sort of strict rule, but that's exactly what the greeks needed to do. they needed to have something off the ear enough to convince the credit rating agencies off
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their back and to keep them from doing another downgrade. so it was good enough to convince moody's. maybe later this week we'll see fitch and s&p doing the same thing and like some germans said today, these off taustere plans to be put past and then they have to be implemented. that's the key, they need to be implemented. >> ashraf? >> yes? >> we're showing it at 1.37 and what is the plan? if they don't what happens to the euro, if they do, what happens? >> well, you know, we may see some upside toward 1.38, only a break above 1.3850 in the euro will get us to reconsider this down move. let's not forget, when you look at the euro dollar, don't forget what's happening with the ism, we're quite good all across the board from the employment to gnaw orders. so that is a good reason for the federal reserve to remain hawkish, and to extend the decline in the euro towards the 1.32 level.
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so the downside is still on. >> mr. laidi, when the greek prime minister says his country needs to borrow at the same rate as other euro zone countries, what is the political code there and is that literally plausible? in other words, why should his country be able to borrow if there is greater risk there at the same rate that germany or france or a more stable country should? >> if you go out there to sell something you want to convince the buyer. what he's saying, he said we need to be able to borrow out there but not at 300 basis points more expensive than the germans, but actually less. now the situation is that the austere plan could be expected to pass, but you guys were talking about spain. let's talk about spain just for a second. the spanish prime minister may not have the same support that the greeks have, and they just had their first strike in eight years. they're going to pass the same austere plans that they will
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lead to, that may not really pass, but going back to greece now. fine, the plan would be passed. will that be enough to get the greeks to go to the bond market and to raise the money that is enough to get them the 40 billion euros by may? so many questions lie ahead and yes, we could see the euro coming back up a little bit, but from a perspective, 1.3850 is is what you have to watch out for. >> the elephant in the room is sterling as well, and we haven't touched that and that perhaps is the bigger issue overall at least for the u.s. markets. at what point do we see a cratering in sterling more significant than we already have, certainly, that threatens stability in that country and as a result has repercussions here? >> well, at what point, sue, is really the pace of the speed of the decline. it's not really at one level. you know, last week we were at 1.53. this week we head to 1.47, that's a big drop. what is unfortunate for the sterling there is no positive
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surprise shocks for the sterling like in the euro. this austere plan is passed and the credit rating agency saying all is is fine. the bank of england has all, but said that they will add more qe and that's not good for the pound. >> qe is quantitative easing -- >> exactly. quantitative easing and the other thing is the slight growth that we saw in q4 gdp could dip back into the red in the first quarter and i'm not even talking about the political uncertainty with the parliament there which would give a good excuse for the traders to bring back down the pound towards the 1.35 level. let's not forget the pound is 8% more than the january low, so it has more down side. >> we'll let you go ashraf because you're a busy guy with everything going on in the currency markets. >> i don't get why they should be able to borrow at the same rate as everybody else. >> i don't know if he's politically posturing there saying that's what we have to do
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and he's trying to drum up a market for it as he -- >> he's trying to create a market for it. >> i stammer, but still ahead, more dealsers have the debt threat in europe. our market insorrieder will tell you which is the bigger driver of stock prices and we'll go off the charts with a stock up more than 3 had 00% since the bottom. stick around for the name sdwloo at 12:45 p.m. eastern time get ready for "the fast money halftime report" and matt nesto, what's beyond the big caps. >> i have hot cake, i have shovels and sofas, i've got pancakes and panties all flying here today. some big earnings and forecasts out there. i've got so much going on in the smaller and mid-cap patch and i've got answers coming your way. "power lunch" is back in two minutes.
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the dow has been up three consecutive trading sessions for the past five and has recent deal making been the positive factor there or will the woes of the global economy drag the markets lower is the classic bull/bear argument. right now the market's trading higher by 32 points at least as measured by the dow about one third of 1%. walter todd and tom coleman, vice president of mf global. mr. todd, the last decade was a
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bad time for large cap growth stocks. explain us to all why you think now is a good time for large cap growth and which companies you like in that category. mr. -- walter? >> again, to your point -- yes. to your point, the last decade was a very difficult one for large cap stocks. in general, the s&p was actually down about 1% annualized over that time period. we think if you look at the structure of the economy, of the cost of capital these companies paid today versus their smaller peers more domestic-oriented peers, we think it's a good thing to buy the companies with the likes of ibm, hewlett-packard, abbott as well, we think that you're getting the ideal growth at a reasonable price. >> we're looking at a list of companies that you like including pepsico, gilead, abbott, schlumberger, which i love saying, as you all know, and united parcel services.
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pick one of those and tell me why that is a classic holding for you. what do you like about it? >> walter? >> yes. if you look at ibm or hewlett-packard, either one of those, we like to look at stocks or growth at a reasonable price. so you like to weigh the valuation with the growth prospects and if you look at the companies they're growing consistently and not spectacular growth rates and 10 to 15% and they're trading at 10 to 12 times, throw in a pretty decent dividend in some cases and again, that to us is the ideal holding, but to your point, i think earlier in the prior conversation, you do have to keep perspective with the macro variables out there that are kind of jostling the markets over the past number of months, so you have good underlying fundamentals with the companies and you have to overlay that with the troubles in europe other and issues that they're facing. >> we do have two things that
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have been happening. a lot of deal activity and the concerns. what is the biggest driver here in the near-term? i think right now it's still the concerns over in europe. >> we're talking to todd. todd coleman. >> sorry, walter. i think it's the concerns in europe which as you've seen have started to cure themselves a little bit here. the euro's come back and the steriles has stopped its free fau, but in the big picture, we need resolution. right now we have ideas and budget proposals, but we don't have resolution yet and that will come over time. >> tom coleman, if i could stay with you, you, we also have the jobs numbers coming out and you talk to six people here and six people there and some are saying it will be extremely important and others are saying we'll toss out that number because of the snow and the bad weather. in your markets, how important is is that particular number and what are you anticipating in terms of the number? >> the number for our market sets the tone for the month. when we come in on the first friday of the month and we
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usually see the widest price swings. that being said we have been pricing in a weaker than expected number and the median was around 50. some economists have come up closer and down 120,000. so i think we're going see is we have a lot of expectations out there that are very wide and the market is going to take what it gets and it is going to be a volatile trade on friday because there are so many different expectations priced into the market and volatility remains so low that there is volatilitvola. you heard it here first. thank you, guys. >> todd and todd. both of the todds. >> you look at people that have similar names like that it's a nightmare. >> positive news from the adp and challenger jobs report. the big unemployment report coming out on friday you just heard how crucial it is. what should we be expecting? growing or slowing? >> or snowing. >> and is there talk of a double dip as well? >> and 33 stocks hit new 52-week highs at the open. here's how they are holding up now. three out of five on that list
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are still up.
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house democrats have selected california congressman pete stark to succeed on at least a temporary basis, congressman charles rangel of new york city as the chairman of the ways and means committee. as you probably know, chairman rangel under ethics fire decided to step aside for at least a temporary period earlier today. michelle? some positive data from the service sector, but it came with a lackluster outlook on the jobs market. cnbc senior economics reporter steve liesman joins with us more. steve? >> michelle, thanks. the adp jobs report was mixed from the worst days of the recession and still forecasting job declines in february. because of the weather, those losses though temporary, could be a lot worse than forecast.
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i'll talk about that in a second. first, here's the adp data down 20,000, right in line with expectations and they did revise down further the january number from minus 22 to minus 60 and then their you see the non-farm payroll estimate for the month of february, minus 75 and it could be lower than that because of the budget in february that data could be far worse. economists have been marking down those forecasts for jobs on friday mostly because of the inclement weather. >> we estimated that if the adverse effects of the february storms are comparable to the adverse effects of the blizzards that we had in 1996 in january 1996 that the bls report could be suppressed by anywhere between 150 and 220,000 jobs. >> those are big numbers especially for a country looking for more jobs. >> we did get a better than expected report from the institute of supply management and the index above expectations
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and business activity and new orders, the best data since 2007 and employment, the best level since 2006. still dallas fed president richard fisher tells cnbc he sees an anemic recovery. >> i've said this for a long time, a very gradual, i use the word anemic or tepid recovery. our people and businesses have been through a traumatic shock. >> we've seen weaker-than-expected results go right to the consumer and stronger-than-expected results when it comes to business and the winner of that tug-of-war will determine the fate of the economy, folks. >> don't move, steve. let's bring in jim o'sullivan, chief economist at mf global. jim, let me start with you. as steve points out we have the weakness and the lackluster jobs report today and it comes in the worst spate of economic data that we've seen in a year, right? especially when you look at consumer confidence and home sales. are we at risk of a double-dip recession? >> well, i don't think that's much of a risk. on balance, the numbers are still signaling improvement.
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unlike many numbers such as payrolls on friday, the data have not been affected significantly by snowstorms and it shows clear further improvement this morning including in the employment component which is still pretty low and showing positive momentum and leading indicators are still pointing up. >> steve, the question about double dip comes back to the question that you left us w right? the consumer business which is stronger and will leave us out of this, right? ultimately it will be business. if business can begin to do capital spending, we got a report from duke university where the cfos have seen 9% growth in capital spending and they also see strong profits. you hear a lot of businesses, i have to say a political line here, though, complaining about the political environment. if you look at the numbers, it has never been better for them and they're making money hand over first. i understand there's a lot of pain out there on the macro level but the macro numbers and it is very good for business out
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there right now. >> at the same time, jim, a lot of business leaders that we talk to every day here on cnbc say that the environment now in washington and the uncertainty surrounding certain decisions has kept them from making key business decisions like hiring because of the uncertainty about health care. >> and perhaps and certainly that's true, but the bottom line, you look at the gdp report in the fourth quarter and business investment in the equipment and software was up at an 18% annual rate and you look at the report and capital goods orders are trending up. historically, there's a correlation between business investment and hiring, if anything, the hiring numbers tend to lag. so i would look at the business investment strength as a positive, leading indicator for a pickup in employment over the last couple of months. >> there's a fascinating article that said the united states is basically looking at prolonged high unemployment, well into the middle of this decade. do you agree with that, that we're unlikely to go below 8% in
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unemployment any time soon? probably not before 2012, but even going down a point a year would imply pretty strong growth. you use law relationships and if gdp growth is 4.5% or 5% per year which is pretty good, you would get the unemployment rate going down a point a year. i think from policymakers' perspective, even a clear downtrend at a high level would be very encouraging. >> you know that's the bottom. you know this time it's different, it's definitely not. i didn't realize that. i'm going long jobs. >> jim o'sullivan, thank you. >> thank you, steve. straight ahead, matt nesto will join us and he'll go beyond the big caps and he's looking for mid-cap movers and we'll go off the charts. a stock up more than 300% since the bottom. stick around and we'll name the name. get ready for the fast money half time report. melissa lee, what are you watching? >> why beans, specifically soy, may be your best buy in the
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space and our traders put their ears to the wall concerning chatter around bank of america and the possibility of a dividend. that and much more on "the halftime report" at 12:45 p.m. eastern time, but first "more power lunch" after this.
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welcome back. we're almost half way through the trading day and the headlines at this hour, kohl's announcing it is opening nine new stores that will create more than 1500 jobs in five states. shares of ethan allen interiors up 15% today. the furniture retailer saying orders for the first two months of twepth 10 jumped 25% over the year-ago period. continental airlines says it is giving customers in coach the option of paying extra for seats with more leg room beginning march 17th. tyler, over to you. >> he's off the wall. he's off the charts and he's matt nesto. i'm off to the races. let's talk about shovels, sofas, pancakes and panties. joy global, a $5.7 billion market cap and it should be in the s&p 500 and it's not and it's in the mid-cap and the russell 1,000. the stock is up huge over the past six months and this is the fourth or the sixth consecutive quarterly blowout by an average of 20% above the estimate. analysts cannot get their hands around the growth of this company. very, very strong fourth
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quarter. on to sofas we go and that will be ethan allen. their written sales which they call, we call them orders, were up 25% and they're speaking at a conference in raymond james in florida today. the market is driving them higher here today. also we go to pancakes and that will be dineequity which is ihop and applebee's. the costs are down and profits up. the loss shrunk and i'm showing you this chart from that particular date which is may 4th. they're stuck and going nowhere and trying to get back above 35 bucks a share will be tough for dineequities and panties brings us to maidenform brands, mfb. amazing run. this stock has not had a down day since friday, february 5th so up and up and up she goes. 37% higher. mr. nesto, thank you very much. >> matt, obviously, there's a lot of support in that stock. >> listen, he's the one that did pancakes and panties. what do you want from me?
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turning a lot to a stock that has been off the charts. whirlpool surging 350% since the march low and adding more than 6% for a month. joining us now with all of the buzz is sam arquette, the analyst with raymond james. thank you for being here. >> thank you for having me. >> you have great regard for the leadership at that company, but it's also had quite a run which concerns you a little bit, correct? >> you're right. i've had a lot of admiration for the company over the years and the information flow coming out of them for the next couple of quarters will be pretty favorable. we're concerned about the multiple and the valuation based on the fact that price and mix have continued to degrade in the face of raw material reinflation and also the fact that a third of whirlpool's earnings in 2010 are from energy tax credits that as it stands are expected to expire by the end of the year and if that happens it's going to be difficult for the company
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to grow earnings in 2011. >> so if the stock has gotten a little bit ahead of itself you might not add to a new position, but if there was a pullback in the stock, would you commit new money to it? >> it depends on the definition of a pullback. if they can turn around the price mix dynamic, you've got big earnings power potential in whirlpool, yes. >> very quickly, what would you consider a pullback? what would your definition be? >> 15%, 10%, 15% would be terrific. >> thanks so much, sam. appreciate it. >> thanks much. >> next, apple, ftc charging cell phone patent violations, but is google apple's real target here? we'll get you up to speed on the smartphone smackdown. >> here are how the stocks of the two tech titans trading. 18el up by nearly 1%. google higher by nearly 4%.
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>> women come welcome to "power lunch." we have breaking news. bob lutz is set to retire on may 1st. we have just learned this. we called general motors, and it is not issuing a statement nor is it commenting on the reports. rob lutz retiring as of may 1st. >> when you have more, let us know. apple launching a lawsuit over htc over cell phone patents. the real target is google. silicon valley jim goldman is live in san jose with more.
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jim? >> michelle, good afternoon to you. you read this court filing from apple yesterday and google isn't mentioned at all, it's the message between the lines and all those references to so-called android products and the complaint that may be laying the groundwork of a much bigger action that will pitch apple against google. it might look a lot like apple's iphone and this goes far deeper that the handset and the operating system it runs violates no fewer than 20 apple patents some dating back 15 years and there in lies the rub because it complains both hardware and software patent infifrjment and google might be on the hook next deputying how htc goes which might explain why apple is going after htc first. the cell phone maker's pockets are not as deep as google and apple can outlast that company in court and that could force a settlement which could establish a precedent and make pursuing
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against google that much easier. the message seems clear that apple's action may officially be about htc right now, but apple is also putting google on notice. michelle, back to you. >> thank you, jim. still ash head in our next hour at 1:00, obama care, details from the president in less than an hour on his new new plan. will it cut costs or not? we have opinions from both sides of the aisle. the credit suisse will be in the house and how he manages the $125 billion. >> and melissa and the gang ready to go with "the fast money halftime report." we're back in just a short while. with fidelity, you can take your trading around the world, because now you can trade u.s. and foreign stocks online, in 12 markets, 24 hours a day,
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all from the same account, and settle in u.s. dollars or the local currency. plus, we'll guide you with international research and realtime quotes, so you can diversify your portfolio, wherever -- whenever. and we'll be on call around the clock, while you trade around the globe. fidelity investments. turn here.
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welcome to "the fast money halftime report," we don't follow the money, we are the money. the dollar backing off the highs has made way for a commodity rally. gold and oil picking up. your fast money crew today the monster, john najarian, jared levy, brian kelly of conundrum kelly and steve cortes of vera cruz. brian kelly, i want to kick it off with you, certainly dollar weakness driving this commodity
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trade here at this point, but is this something that you believe? i.e., do you believe that the euro has taken off? >> i think it's simply a relief rally in the euro. we'll talk about greece in a little bit, but you have to look at the commodities that are rallying here today. you look at oil rallies which has geopolitical tones under it and oil, which isn't the commodity that will rally. >> what's a commodity you want to rally? >> you want to see something like the grains rally. copper is rallying a little bit. that has got me excited, but i think that's still residual from chile. >> monster, what do you make of the comeback in commodities and do you think this is fragile because this puts doubts under the overall strength of the market. >> i think it goes back, melissa, to the issue with the wall street bjornal putting out the story about all of the commodity funds and all of the hedge funds getting short the euro. the more people piled on one side, you're going to have exactly what b.k. just described and that is a little jerk to the other side and then i think we
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get right back to work. in other words, i don't think the all-clear has been sounded not by a long stretch for the euro so i think you take advantage of the little blip to the outside of the euro and i think we get back to work and this thing breaks over 130. i don't want we had dead data this morning and we're seeing industrials move higher, and jared levy what do you make of the moves in the market. yes, the numbers themselves look freddie flat, but you do see pockets of strength within. >> there are, melissa and we continue to see the m and a activity which is a sign that money is going back to work and melissa, it's want just the private equity tomorrowfirms bu cashing, because they feel the stocks aren't cheaper here. the adp number and i would be concerned going into friday's number and the action has been bullish and i believe that's a side we need to lean on rate now. let's hit the chart of the day
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here because this is an interesting one and this has to do with commodities and you're taking a look at crude versus soybeans and the interesting thing here that the viewers should understand, stephen is that crude does an input with fertilizers and when fertilizer costs go up and people have faith that commodity prices will go higher and therefore they are willing to spend the money on fertilizer. that's sort of a relationship you have to understand to look at this chart. >> i do think the commodity story has legs unlike a couple of my colleagues here today and i think the price action, copper is particularly important and getting to this chart, the fact that grewed is trading below this well and it's bullish for commodities in general and the one that i'm buying is soybeans. i think the soybean market would catch up to the crude market and it will trade as it historically has in correlation with crude oil. >> is it a tighter correlation to crude than wheat which may use more fertilizer because they use more night ron edge. >> beans is your bailiwick.
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head to the fast line and the liquidator has managed to fine a phone in disney world and he phones in. joe, we appreciate you spending the time with us wherever you're calling from, whether it be space mountain or epcot. >> the trade to me, i'm right outside buzz lightyear's ride. it's 50 degrees at disney and it's freezing, but if you look back to november when the dollar found its bottom and look at what commodities have done since november. the commodities have hung in there as the dollar has actually rallied. i think that's very bullish seeing demand coming back to the space. i still believe oil goes to 90 before it goes to 60. >> what kind of premium is in oil because of geopolitical fears? >> i don't believe enough, actually. i think people look at the situation with israel and iran and they believe there will be a benign ending to it and we all hope there will be, but supply could be disrupted atted end of the day at some point here in the next three to six monthis
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and think the market is underpricing it. >> i think you're exactly right. if there were geopolitical premium price in the crude we would see vices far higher in my view. >> to your point about the grains, when you look at a mean reversion trade, there's tremendous opportunity there. i would look at ag names, potash, and guy adami's look at freeport mcnamara back above 80 bucks today. >> enjoy it's a small world. it's one of my favorite rides. >> let's move on to europe breathing a sigh of relief. the greek government approved a sweeping new austerity program aiming to rein in a bulging deficit and secure european financial reform. bine, you've been playing the space closely. what do you do with the national bank of greece. >> i sold about a third this morning. i think we're starting to enter the act three of this play to use the greek tragedy theme. and act three is implementation. i think that's going to be a lot harder to do than it is to make
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the deal. greece and the eu had no choice. now they've got to implement it and get by an awful lot of strikes. i think this is a relief rally and then we start to head lower on the euro. >> i think we're seeing the last stages of the greek issue. the european banks have traded very well. about a week ago they stopped declining with the euro currency and i started buying europe. today is an important breakout day for me. if deutsche banc can close above $66, i will be a buyer on the close. >> this is an interesting one. shares of ford hitting a new five year intraday high. jared, have you been in and out of ford. for a long time, ford hit resistance at around 11. it's well above that at this point. does it still go higher? >> you've got to love ford's story, they've moved into the top selling, they eclipsed gm in sales. the weakness in toyota i believe
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will continue to benefit ford. they're doing all the things right. i continue to own ford although i'm moving from having an aggressive position into a covered call position, in other words, owning my stock and selling the nearest call against it in the front month. that's the way you play ford here. i don't know how much further we're going to rally. >> bk, you've got toyota. that's the other side of the coin. it is rallying today. >> right, absolutely. you know, my toyota trade was more of a trade. i thought it was over done. you had the hearings overdone. the think the better way to play this space is through the auto dealers through like an autonation and pen skeel auto group. you're getting the premium car dealership and premium cars. that's a much better way to play it. >> we should note all of those dealerships, an is up 1.25%. group one sales as of the end of the fourth quarter about 30% of new vehicle sales were in fact ford. that stock up 3.33%.
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let's put our ears to the wall here. this is an interesting sort of chatter that we're hearing in the options pits. bullishly betting on bank of america today. jared, what does the activity tell you? >> jon and i know a lot about this. it's important for to us factor in dividends. big warrants are being sold today. obviously the government selling their t.a.r.p. warrants for bank of america. there's two different warrants coming out, a and b warrants. we're seeing a lot of the action in january of 2012. if you look at the call electrical versus the put interest it's much, much higher. we're seeing a lot of buying in january of 2012. i think the dividend yield of bank of america is going to begin to increase, probably not this year. i like to get jon's take. i believe going into 2011, i believe they start to bring back their typical high-yielding dividend and we get back to normal. >>ful people thought the dividend were coming back this year, the strikes wouldn't be so
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far out, wouldn't be 2012. they would be in 2012 or 2011. >> i don't think anybody's better bank of america is going to make that move this year. that is something the leaps are good for is showing you the bets into the future just as the bonds have been an indication of whether or not we're going to see an interest rate increase. that went up close to 70%, by the way. an interest rate increase out of the bonds by the end of the year for the fed funds rate. >> want to move on to our big money trade where the institutions are making huge block trades. expedia is one yed, two trades of over a half million shares there. another big transaction this morning. stock was initiated buy equity. dr. j, what do you make of the action here? >> obviously, priceline's been hitting the ball out of the park, one of the few that is hitting the ball out of the park. i think expedia and some of the competitors that do have great exposure over in europe could be
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takeover bait and that's why i think you're seeing this. i'm not saying this is going to be an absolute, but i'm saying that the fact that you've got big money building a longer position day over day, that's a positive sign. >> got to take a break. more halftime" right after this break. >> cash rich companies looking to make a deal with a flurry of m & a activity hitting the market. we take a stand to find the next takeout target. plus the olympics may be over but investors are still going for the gold. is this commodity still your best bet? and a d.c. insider has the latest out of washington's probe into hedge funds big best against the euro. all that and more. fast money tonight 5:00 p.m. eastern on cnbc. because now you can trade u.s. and foreign stocks online, in 12 markets, 24 hours a day, all from the same account, and settle in u.s. dollars or the local currency. plus, we'll guide you with international research
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and realtime quotes, so you can diversify your portfolio, wherever -- whenever. and we'll be on call around the clock, while you trade around the globe. fidelity investments. turn here. ♪ well, look who's here. it's ellen. hey, mayor white. how you doing? great. come on in. would you like to see our new police department? yeah, all right. this way. and here it is. completely networked. so, anything happening, suz?
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she's all good. oh, my gosh. is that my car? [ whirring ] [ female announcer ] the new community. see it. live it. share it. on the human network. cisco.
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welcome back to halftime." time now to call the close.
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killer core tes kick it off. >> lower on treasuries, higher on stocks. >> i think the market is going to slump today. selling. >> jared. >> i'm selling into the number on friday. >> and jon najarian. >> i lovell capital, btain but the dollar is going to go back to gaining. that causes us to roll over. >> that does it for us on halftime. tonight, all the ways to trade. sue what, are you working on. >> we're going to be talking about that health care plan. credit suisse private banking cio, robert weissenstein on why greece also resolve itself but the emerging markets must now be considered integral to the bigger picture and your portfolio, plus a lot more. we get a checkup on health care. this hour, president obama announces updated reform legislation stem from the summit last week. what's it going to cost you?
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toyota dragging rivals back into the incentive game could throw the industry's progress into reverse. >> plus, the cost of content. viacom's daily show and colbert report saying goob to hulu. disney threatened to pull the plug on abc shows after they threatened to pull the plug on the oscars. we're not going anywhere. the second hour of "power lunch" starts right now. >> it does. welcome to the second you're of power lunch. i'm tyler mathis son. breaking in the past half hour, bob lutz, a design maestro, will retire from gm on may 1st. >> i'm sue herrera. rising dollar, dollar weekening. crude now above $80 a barrel. >> i'm michelle caruso-cabrera. we'll carry obama for you live. but first john harwood in washington has a preview what to expect. >> you should look at this event
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this afternoon as a continuation of what happened at that bipartisan health care summit last week and like that summit, it's not really about reaching out to republicans or getting republican support. it's more about firming up support among democrats. yed the president sent a letter to congressional leaders outlining some steps he said were concessions to republicans. here are those concessions. one of them is steps on medical malpractice reform, other are steps against waste, fraud and abuse in the system, equalizing payments to physicians under medicare. there's some republicans who comrachb regional disparities and more incentives for health savings account. it's clear from republican ret tick since that letter was sent they're not buying it. >> i've always found it pretty remarkable to watch the congress try to pass something that the american people have already said no to. >> and they're right not to buy it in this sense. these are not genuine attempts to get republican votes because
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the president knows he's not going to get republican votes. in the administration's defense, however, their argument is that the plan itself by being focused on the creation of an individual marketplace using a mechanism that mitt romney, then the governor of massachusetts implemented in his home state and mitt romney may run against him in 2012, it's fundamentally a market oriented plan. they've put in some attempts at cost control. we'll see whether those cost controls work. but democrats are now set on trying to move this through the reconciliation process in the senate and to get the votes in the house for the senate bill with some changes to it. we'll see if they can do it over the next month. >> all right, john. will president obama's health care plan cut costs or not? that is a big question. take a look at the op-ed in "the wall street journal" from congressman jeb hensarling and mike pence. time for a spending cap with teeth. joining us are democratic can congressman john mar 0 mouth.
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congressman yar mouth, what's going to happen next and is a health care bill going to pass congress over the next 30 days or so? i give it probably a 70% chance right now. what we're going to do is pass the senate bill and then by reconciliation, the majority rules concept, we're going to change that bill and add the things that republicans have asked for and eliminate some of the provisions in the senate bill that everybody hates like the special treatment of nebraska. so i think we've got a great chance. >> congressman blackburn, your leader boehner says the people don't want it, but if the congressman votes for it, doesn't that show that the people do? >> no, the american people do not want this. they have been very clear that they do not want a government takeover of health care, which in essence is what this would be. the other point on this is senator conrad said that you can't use reconciliation to pass most of the health care bill. he said that on sunday.
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we know that that would be kind of doing an end run, if you will, around what the american people want. we cannot afford this bill. it is too expensive. and '94, my home state of tennessee made a gamble, rolled the dice on having a government run health care program. >> if we can move on to congressman yarmuth, excuse me milton friedman, freudian slip, we had warren buffett on earlier this week. he said originally he was support i have of what is happening in congress. now you had two missions, universal coverage and controlling costs. his concern congressman is that there's nothing in this bill now that controls costs. >> well, there are a lot of mechanisms set up which over time will control costs and will slow the rate of increase in costs so we don't have 38, 39% premium increases like we're getting with the system we have. >> what mechanism is that. >> for changing the way
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rereimburse providers from a fee for service system which encourages the overutilization of health care is something that ends up rewarding results. it's been tried many, many places an. >> it's never worked. give me an example of one place it has worked. anytime you gamble near term expenses for long-term savings and you incentivize use by giving health care credit card to everybody, the savings never materialize. it didn't in tennessee. they didn't in massachusetts. they didn't in. >> maine. there is no example where it has worked. >> congressman blackburn is, there any aspect of this health care plan that we know of now and, of course, the president is going to detail more of it later on our watch that you like, that you would support, that you're enthusiastic about? >> there are some things i would like to see, addressing medical malpractice across state line purchasing. i am glad to see that they're beginning to say, well, the bill that they have had is not going to work. but they still have a $1
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trillion bill and if history repeats it self, as it has, with other government-run systems, it is going to quadruple the cost. so instead of a trillion a year, you're looking at 4 trillion a year. what they think are cost mechanisms do not work. there is not a place that they have worked. >> congressman, i love the idea of being able to buy across state lines but if you make the same plan for everybody and you mandate it, what we saw in massachusetts was with all the mandates the premiums keep climbing even though in theory there's a market for health care. >> they probably aren't climbing 38% like the present system. >> yes, they are. >> again, we're working on a process. we get in the cbo score, we get no benefit for the long-term savings and preventive care and all those things. >> it won't be there. >> and we still lower the debt by over a trillion dollars over the next 20 years.
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>> so john harwood. >> where have you ever seen an example of that? in tennessee, their government-run plan soon ate up 35.38%. >> and you still have tenn care. why don't you eliminate it, marsha? you still have it. why don't you eliminate it if it's so bad. >> john harwood. >> you do not know this issue. what you have is the government-run plan does not work. >> this is the republican talking point from last february in a frank lutz memo. this is far from a government takeover. the american people don't -- the american people don't want the characterization they've been making about this bill. they want what's in this bill. >> the american people don't want what they're trying to force on them. >> i'm trying, john harwood. i'm trying. actually john harwood, i think what we have just witnessed on air is indicative what the president is up against in trying to get this thing through and if this is any example, does
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he have any hope of getting a health care plan through? >> well, he does because. >> how. >> you there are more john yarmuth than there are marsha in the congress right now. on a couple of points they made, look, this is not a government takeover of health care. this is fundamentally a centrist approach to a democratic goal. orthopedic, we do not know if it's going to control costs in the long-term. we have a very poor track record of doing that in this country. there are methods of trying it. they're pilot programs. you have this cadillac tax although it's been delayed. that's very much an open question. both sides have arguments here, but ultimately, democrats are now trying to govern, something they've been trying to do for a long time. >> just a reminder that the president is expected to speak at 1:45 p.m. eastern time or thereabouts. we'll carry it for you live. congressman and congresswoman, thank you very much.
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>> they need their own show. >> they need their own tv show. >> left jab, right jab. >> there you go. there you go. all right, well there's a little bit about uncertainty about health care and other issues. it's been hurting the markets according to our market insider today. joining us once again at your request and ours in the studio is robert weissenstein, the chief investment officer for private banking america at credit swois. perfect example of what's been happening in washington. we hear from a lot of people that's an overhang on business, on markets. do you agree >> he absolutely. this lack of transparency, i don't know how much versions of this health care bill have been out there at this point but you almost stop learning what the proposals are because it's going to be something different when it comes through. how can a business make plans, rehire people or hire new jobs when they don't know what the environment is? you can't play a game without the rules. as simple as that. >> are you convinced it's so bad
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it could forestall the recovery? are there that many businesses not hiring because of that? >> this affects between the health care bill and what's going on in the banking and oil industry, it's about 20% of the -- about 20% of the workforce. >> can i take you down the path a little bit. if there is a bill that gets passed over the next 60 days and enacted into law, that takes away one bit of uncertainty. >> absolutely. >> and then do we know, we don't know how it's going to ripple through the economy but probably can make smart bets will b which companies are going to benefit, which are going to suffer the most. >> the bottom line is, you may be an optimist with the 60 days, i hope you're right. when you finally get resolution, whether you like that resolution or not, businesses can manage against it. you can make a decision against that resolution. and the opinions -- >> then we have to look, don't we, off the horizon. there is the expiration of the so-called bush tax cuts the end of this year. the president has said he's going to let them expire.
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in an election year, in a feeble economy, that's the next big worry, isn't it? >> i think all of this feeds into this uncertainty. we talk what's going on in greece and athens. right now what's going on in washington has a less clear outcome. i can't get over how quickly things went from this stable sort of environment where the democrats certainly held control over virtually everything. this is just months ago and look what's going on right now and how uncertain the outcomes of the elections now are and changed the balance of power. it's fascinating watch all over the last two months. >> do you have to wait for the events to roll out before you can investor make decisions right now and choices right now? >> there are some choices you can make because there are trends that are going to transcend the short term market. going through the credit crisis, tafs serm a severe period. but when you look to the other side of the trade, the path may be rocky but there are things that you can do. >> like what. >> very, very strong trends in place.
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we've talked about on the show in the past about global restructuring. that means you end up with geographic areas becoming significantly more important, whatever the resolution is on the health care bill. the emerging markets will continue to move in the direction they have. significantly more important from an economic standpoint and the markets are much smaller than what their gdps would lead them to necessarily be. >> how do you tell clients to invest in emerging markets. do you have them buy adrs here or ets? >> the great thing about today is there are so many different ways to get exposure to the different investment themes. it isn't just buying stocks on those exchanges. it can be anything from etfs, smaller businesses you couldn't access that are premarket situations. you can invest in the fixed income currency side of it if it's a commodity driven economy which many of them are. so there are a lot of price points that you can pick along the allocation wheel to get
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exposure. >> speaking of the commodity play, we've started to see a lot of action in the commodity markets. i assume if you're bullish on the emerging markets as you have been, that you believe the commodity story is intact even though it might not be as hot as last year. it was one of the plays last year but the continuum is there? >> yeah, and last year it was a play because it had been so oversold. we were in a period of armageddon pricing. we're still at that point. i think the one thing that is interesting is between the emerging markets and the commodity themes there tend tend to be fairly small representations in most people's portfolios. that creates incremental demand. >> we still see people gobbling up fixed income treasury. is that a bubble? >> i think we've got rates eight low level and they'll kim to stay there for a while before we see an increase that's a year-end type event. the bottom line is, there is
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still a sense of discomfort with the markets, still a premium being played on liquidity. i think that premium liquidity will continue for a period of time. >> one of the things you said to me the last time you were on is the correlation -- this is why it's fascinating talk to robert because you think differently tan a lot of people and you're looking at the ereader and its impact on commodity prices. why. >> if you think about it, you're looking at it and trying to figure out how many units everything companies made is going to be sold. the reality is the ereader means they're not printing a certain number of books which takes a certain amount of paper to print those books and timber is an asset class and falls in the commodity space. so some of the historic relationships that we have had aren't going to continue. >> i want to get one quickie in about etfs internationally. should i be concerned about them able to track closely as i want
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the marketplace? in brazil or india or whatever? is it a worry. >> well, it's a worry if you don't do any homework, it should be a worry. the reality is, there's so many etfs out there, you need to know what the underlying it. people go into the market believe is it's more generic than it is. there are so many exposures that you get. know what you buy and figure out what the tracking error may or may not be. some track closely and some don't. be aware as with any investment. >> robert, nice to have you here again. >> good to see you. >> always interesting. >> thanks. >> all righty. up next, time to round up the all-stars and take the realtime pulse of the markets for you. plus, today is the birthday of a major financial individual. we'll tell you who that is after the break. >> and just a reminder the president is going to lay out the final details of his health care plan at about 1:45 p.m. eastern time. it will fall on our watch. we'll bring that live to you. and "power lunch" is back in a
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flash. but we're also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won't- hurt-a-bit business. because we don't just work here. we live here. these are our families. and our neighbors. and by changing lives we're in more than the energy business we're in the human energy business. chevron.
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welcome back. bob pisani on the floor of the new york stock exchange. take a look at the new booths here opening on monday. we'll have kutone and company giving you a tour of that on monday. what's moving here, did you see small caps, mid caps, russell 2,000, a 15-month high. important metric here because the small and mid caps have been
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outperforming the big caps in the last several months. same situation with the mid cap index, mid hitting a new 52-week high. the nyc, upstairs a lot of investors hearing presentations. stocks have been moving up midday. they're breaking out the money they've been making on the life business, derivatives business in europe. finally the material stocks up all throughout the day. those are your market leaders. trader >> the market leaders when it comes to tech today are the networking gear makers, jdsu a big performer. jim cramer is positive on this. a lot of positive call action and the march kaws are very much in the money. cisco moving higher helping to boost the overall. google one of the big caps, of course, today getting its estimates raised over at jmp to $650 for a price target. they think the estimate is way better than expected on better ad search. biotechs the best performers of
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the day. am lynn started at a buy, nektar is higher on earnings and osi continues to entertain the unsolicited bid. $57 was the bid they had put in prior. $52 doesn't seem like such a great offer. >> here i'm watching prices approach the highs we've seen for 2010, not just in gold but crude oil, as well. a number of factors. the dollar helping gold a bit and the alternative currency being gold. a lot of people want to be in that. add to that geopolitical concerns and the gasoline rally continues. when you look at gold, look at the gld. we've seen inflows in the last day. a lot of investors wanting to get into that. as you look what is happening to commodities in general, that dollar weakness having an impact across the board. rick santelli to you in chicago.
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>> before we get to the charts, freddie mac the other government sponsored zombie out there priced $5.5 billion three-year reference notes. see if there was any hedging that might move the markets a bit in fixed income. now let's go to the charts. one month of r-10s and european 10s. i continue to want to have you monitor the spreads even though both rates have gone down, look at the left side of the chart. the overseas rates have taken out the left side of the chart. making more historic damage. chart of the dollar index, just in one day set us back one month. we haven't been at these levels on a close of the dollar index since february 3rd. tyler, back to you. >> thank you very much. new york governor david paterson in more hot water now. the state's public integrity commission says the governor violated ethics laws by accepting free tickets to the 2009 world series in new york. the governor who has already
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announced he will not run for a re-election could face a $100,000 penalty. his office hasn't issued any comment just yet. >> it is so much fun having him be governor of new york. we'd like to take a moment to wish charles ponzi a happy birthday. the notorious con artist duped investors out of millions in 1920 and '21 with a pyramid scheme ta promised to double their money. 90 years later this type of scam is still known as a ponzi scam. he probably wasn't the first financial con man, certainly won't be the last as we know. tonight an all new "american greed" uncovered refaeli's story of fame and a multimillion dollar windshield. >> follieri is making a name for himself and soon he's got the daengs of an up and coming in hollywood. actress anne hathaway. outwardly follieri is the picture of success. he has a famous girlfriend. a luxury apartment in trump
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tower and a thriving real estate business. but his life is built on a series of lies. behind the scenes, his business is failing. >> an all-new "american greed" tonight 9:00 p.m. eastern time. raffaele follieri. >> keep saying that. >> straight ahead, 0% financing for five years. cash on the hood, incentive madness back in the auto biz. isn't that what got them into trouble in the first places? meanwhile, ford's not buy foog that game. check out their stock, it's up 3%. and a snappy 600% since the bottom. we're back in a moment.
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as we get some early reports
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headlines really that the national highway traffic safety administration is reporting that some of the cars that allegedly had been fixed by toyotas may still be having some sudden acceleration problems, a story we're going to follow. automakers have been trying to kick their business back into business using incentives yet again but now toyota is causing them all to fall off the wagon. they've given it up for a while but phil, they've gone back to it because it's convenient. >> it's to be zero% march. what we are seeing is some of the amazing deals the automakers are offering. ol% basically across the board. toyota is the company that is driving this incentive war. jpmorgan out with a note today bringing up the question, is this good for the auto industry and toyota? they say the incentive war will put pressure on price package.bark clay's saying new incentives could impact
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profitability for the automakers. how? take a look at this calculation. when you add in 0% versus where they were last month, the difference in terms of what it costs themakers is substantial. essentially looking at $4600 versus where some of the automakers were a couple thousand dollars lower. that's a big difference. but it's not hurting shares of toyota. the stock is up today in large part because sales yed down just 8.7%. well, that was less than what people were expecting. they thought the sales would be down 15, 20%. bottom line, guys, incentives for the month of march are going to be through the roof and going to be sweetened. you're going to see cash on the hood and maintenance programs offered. the dealers want to deal right now and this is being driven by toyota. >> tell us about these just coming out from nhtsa in the last ten minutes, these statements about some of these cars still and the fixed even though supposedly fixed. >> yes there have been anywhere between seven and nine, check the website on a regular basis,
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seven to nine reports around the country from people who have had their cars fixed as part of the recall for unintended acceleration saying listen, we're seeing some cases where cars are speeding up and we're trying to step on the brake. nhtsa put out a statement saying it has contacted consumers about the complaints to get to the bottom of the problem and make sure toyota is doing everything possible to make sure vehicles are safe. if owners are still experiencing sudden acceleration incidents we want an to know about it. guys, the scary thing about this for toyota is that we're in a he says, she says area. if somebody says i'm still having unintended acceleration and toyota says we fixed it and there's nothing wrong with the electronics in the car, the question is how do you prove it. that's going to be the real question. most people i've talked with at this point are saying it's unclear if you'll be able to problem that. >> let's continue the conversation and talk about incentives. jim hall is auto consult with
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2953 analytics. the statement's coming out of the nhtsa about reports from people that the cars are fixed. how problematic is that? >> phil nailed it. that basically it's an issue of he said, she said. if you think about it, a car is a very complicated machine and a hammer is a very simple one. i don't know anybody trying to drive a nail that hasn't hit their thumb. people make mistakes. >> why would you then go buy a toyota if indeed even the fix doesn't work? who do you think the consumer -- my point is. >> who do you think the consume ser going to believe. >> the issue is the consumer here. the thing is some of these may in fact be user implemented problems and some may be they don't have the fix. until you find out, this is more of the area where toyota is between the concept of being able to sell cars and just having to fix them. until it's resolved, this is going to happen when another company does this or they have another fix. the problem is nhtsa for the
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longest time and possibly rightly so was accused of being the car companies' lap dog. now they're trying to say look, we're listening to people. anything na comes in, they basically do an investigation on it. it makes it tough to debug some problems and in other cases it will bring to light problems somebody may not have seen. >> how lasting do you think the damage, and phil for you as well, the damage to the toyota brand and reputation will be? i ask that in light of the fact that the stock is still higher than it was a year ago by a long shot. and up 4% in the past month. is the market basically saying, in the long run this thing isn't going to make a difference? >> in the long run it may not if they resolve stuff and can get some serious closure to the issues. because if you think about it, in this town in detroit, seven, eight years ago, ford was dead on its feet about, a decade ago because of the explorer roll over problem, firestone tires. now they're the darling of the industry you. said earlier, stock up 600% since the low.
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nobody is irreparably damage as long as they fix it and move on. we have to see if toyota can do that. >> for all of the complaints that are out there, there is an overwhelming majority of toyota owners and i hear from them on a regular basis who have not experienced any problems at all saying you know what, i stick by my toyota. i've had no problems at all. there's a large amount of consumer loyalty to toyota built up. it's going to take a long time for that to erode. clearly there are people afraid of going near toyota right now. but the fact they only dropped 8.7% after all the publicity and stopping sales at the beginning of february, that tells you something about how much brand loyalty has been built up. >> you said it's going to be 0% march. >> yep. >> how qualified do people have to be to get that rate? the credit crunch we're hearing is still out there. they may offer 0% but nobody's going to qualify for it. >> i wouldn't say nobody is
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going to qualify. a lot of people will qualify. is it the glory days of five years ago when you'd have terrible credit rating and get it? no, but a lot of people will qualify. >> all right. jim hall, thank you, phil lebeau thank you. >> we are coming up on the half hour. time to head to the big board and get steve grasso's forecast for the rest of the market action. >> then off the charts once again, a stock up about 300% since the bottom. yes, 300%. michelle's going to give you the name. plus. >> we are waiting for president obama's statement on his health care plan. we're going to have that live. "power lunch" is back in just two minutes. with fidelity, you can take your trading around the world, because now you can trade u.s. and foreign stocks online, in 12 markets, 24 hours a day, all from the same account, and settle in u.s. dollars or the local currency.
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right now, we have a modest gain in the market. let's talk to steve grasso about that and what he expect in the latter part of the trading session. greece has addressed its issues. spain seems to be trying to do the same. so that at least hurdle is. >> huge, huge, huge bullish sentiment coming into the market just off of that on the heels of that. >> what do you do in this market right now? >> still have to wait. yesterday we discussed that $11.25 level in the s&p. we need to close above that for people to feel good about their purchases in this market. >> are you one throwing out the
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jobs report this friday because of the weather or are you going to take it at face value? which one? >> always have to look at it to a certain extent but i think there is that aspect as mrs. summers said that we're going to get the snow issue will have an adverse effect on the numbers. i truly think most traders managing money are going to discount friday's numbers and just as i said yesterday, treat it as a one off and not let it really make the deciding factor on whether they're going to buy in the market or not. >> what do you make of the commodity play coming back in such a big way? how much competition for stocks? >> we're looking at a lot of m & a activity. where is that activity going to center? probably around the commodity space. so it gets people inspired to cover their shorts and to get long in that space. that trickles through the whole equity space. >> all right. >> it's going to be a positive. i don't really think of it as much as competition as just fosters the higher market. if we close above 1125 in the
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s&p that, door opens back up to 1200. that's where you want to be back into this market. >> 1125, duly noted. turning,000 to a stock that is off the charts trading at levels not seen since its ipo in june of 2000. intuitive surgical. it surged over 300% for one year, nearly 20% year to date. joining us nowles, health care strategist with mailer tabeck. into youive surgical has a super duper cool robot they use in surgery called the da vinci. what bhaks it so great? >> basically you can now do procedures minimally invasively you could never do before which gets people out of the hospital faster and gets them well better basically. >> is it for only one particular kind of surgery? where's the growth coming from? for more and more things or. >> absolutely. that's a key to the story. they started out initially with
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prostate techtomy, moving into hysterectomy and any number of procedures unheard minimally invasive years ago, we're getting are now becoming accessible to minimally invase i be procedures. >> the stock's had a huge run. what kind of valuations are we talking about? would you buy at these levels? >> we would. but two cabbates. first it's volatile. second, we look at this as an owner. if you just look at it as a one-year out, it's 50 times forward earnings. that will scares people off. but quite frankly, we see the next decade or so of tremendous growth. and this actually helps the health care system because it lowers costs. so it's one of those things that lowers costs and improves outcomes. if we had ten intuitive surgicals we could probably save the health care system money. unfortunately it's just for this set of surgical procedures. but we need more of those. >> all righty. les, thank you for the insight.
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thanks. >> sticking with the theme of staying off the charts, we'll go beyond the usual suspects and take you to spauler names that are big movers today. matt nesto is the guy to do it. >> i've got a new theme for you, power lunch memory lane. remember yesterday we were talking about sotheby's, ticker bid. monday they had great earnings. tuesday there was an upgrade and strong call to put ratio suggesting some buying. we're another 7.5% higher and they've now done more than 8 million shares so far this week. they do on average about 1 million a day. clear huge buying volume and pressure pushing the stock to a two-year high in the face of a 13% short interest. memory lane item two, you probably recall dennis kneale's disclosure about his bedside sleep apnea machine. of course, you do. a moment we're all in therapy over it. rmv is the ticker. in the face of all the 52-week
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highs, that's so ordinary. this is an all-time high. the stock is surging forward in the mid cap, in the russell 1,000 and it's up 6% since dennis's disclosure. we talked about it on february 5th after their better than expected earnings. lastly, quickly, this this is a chilean pulp play. they have 8% according to credit suisse of the world pulp market. buckeye i technologies make absorbent cellulose from cotton and wood, think diapers, baby and the stock up 16 is% week to date, up 500% in a year. back to you guys. >> thank you very much, matt nesto. >> all righty. "power lunch" will be back after this break. >> first we want to take a moment to say good-bye to a member of our nbc universal family who unfortunately passed away late last week. omar ferguson was a dedicated employee and one of the kindest men you will have met. omar started with cnbc in 1991. he was in our commercial
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integration group at that time and part of the launch of msnbc in 1996 as a master control operator. then he moved back to inglewood cliffs to be part of the launch of the nbc universal network operation center and most recently part of the team that successfully launched msnbc hd masser control. he was a lovely person and he will be dearly missed by everyone who had the privilege of knowing him. with an a+ credit rating in good times and bad, sun life financial should be famous. we're working on it. so you're seriously proposing we change our name to sun life valley? do we still get to go skiing? (announcer) sooner or later, you'll know our name. sun life financial.
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hey can i play with the toys ? sure, but let me get a little information first. for broccoli, say one. for toys, say two. toys ! the system can't process your response at this time. what ? please call back between 8 and 5 central standard time. he's in control. goodbye. even kids know it's wrong to give someone the run around. at ally bank you never have to deal with an endless automated system. you can talk to a real person 24/7. it's just the right thing to do.
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viacom yanking the daily show and the colbert report from
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hulu. disney threatening to pull the plug on abc shows after cablevision threatened to pull the plug on the oscars. what is the value of content and who should pay for it? julia boorstin is in the middle of the melee. >> that really is the billion dollar question. there's more content out there than ever and more ways to watch it. so content creators are demanding higher compensation and distributors both tv and online are pushing back. viacom is pulling its comedy central programs from hugh will you next week including two of the most popular shows on the site, the daily show and the colbert report." sources telling me hugh will you wouldn't pay enough to make the deal worthwhile. it would make sense psychiatry come would not want to giveaway shows online. but that's not it. viacom will continue to offer "the daily show" and colbert report" on their own sites for free. they can post more ads and keep
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all the revenue. hugh will you cannot respond to questions, the company just saying contract expirations are a fairly regular occurrence. while the negotiations failed, talks are on going between cablevision and wabc over fees for that channel. again, the issue is the value of content. abc points out that cablevision charges consumers for basic an broadcast and compensation for its new york area affiliate. for the first time demanding compensation. there is huge pressure to resolve this before the oscars. people want to be able to watch the oscars especially in that key new york area where cablevision has 3 million customers. a source close to the negotiations tells me advertisers are putting big pressure on both sides because they want to make sure they don't lose viewers. back over to you. >> julia boorstin, thanks so much. >> we are expecting the president to begin his health care proposal update at any moment. we're bringing back john harwood to handicap some of the issues
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he'll put forward. i go back to our debated earlier that we included you in and there is so little common ground on this particular issue, and you just wonder whether or not the president's going to be able to pull this off and get this through. some people say he can do it in 60 days. others say it will never happen. >> there are two ways you can approach governance in a divided like ours. one is you have some sort of bipartisan compromise and you get votes nets both parties and leave the wings to themselves. the other is one party gets enough votes they can get their program through. that's the only option for the democrats to move this forward. there is not going to be a meeting of minds between democrats and republicans in any broad sense. it's about a democratic version of president obama's goal that he ran on for two years that can pass. and i think they're in the process, the summit was part of the process of democrats getting back up on their feet after
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massachusetts. now this letter that the president sent yed, again as part of a public relations campaign to in essence, bring democrats along and convince the public that he's open to ideas. but it's really at the end of the day about getting democrats to line up behind him. that's what the next month is about. >> john, what's the worry of the democrats? we know republicans aren't going to go along with it. are the democrats worried they're not going to get re-elected next time around if they pass it. >> that's precisely what the president is trying to overcome within his caucus. there was a flurry of panic after the massachusetts race. the panic has sort of subsided now. you still have a deeply worried democratic caucus running in a season of double digit unemployment, very unhappy electorate. lots of concerns about spending and the federal budget deficit. and what the administration is trying to argue to those members is, however risky you think it is to vote for this big trillion dollar health care plan, despite
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all the attacks from republicans and conservatives, the riskier thing is to fail and have this congress be a total failure on this score just like the democratic congress was in 1994 when bill clinton was the president and they were turned out of office and the republicans took over. >> speak sense to me. i've kind of stopped listening. the people who oppose this plan say it does nothing to address costs. the people who support the plan like the president say, oh, yes it does. it will result in less spending than we would otherwise have had but for this plan. what's the fact? >> the people who say it does nothing to control costs are wrong. however, we don't know if what they're attempting to control costs is actually going to work. we have a track record in this country since world war ii since we went to employer-based health care of huge health care inflation beyond the normal rate of inflation. this health care bill that the
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administration is proposing, and democrats are trying to get through, contains really every significant idea that health policy experts think might control costs. can they guarantee it's going to happen? no, they cannot. can they be highly confident it's going to happen? no, they can hope it's going to happen. try these things, find experiments that work, expand those experiments and i do have to say that the one thing the health policy experts agree would help is this cadillac tax on high value plans. that was pushed into the future. it's still in the bill but pushed into the future so that diminishes the amount of cost control that might be in this plan. >> we're watching the ceremony there in the white house, john, where several white jacketed presumably health care professionals -- think of the brilliant deduction that i had there. here comes the president right now. why don't we watch and listen to his remarks. >> thank you. thank you very much. thank you.
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thank you so much. all of you for joining us today, and i want to thank julie, barbara, roland, stephen, renee, and christopher standing behind me. physicians, physician assistants and nurses who understand how important it is for us to make much needed changes in our health care system. i want to thank all of you who are here today. i want to especially recognize two people who have been working tirelessly on this effort. my secretary of health and human services kathleen sebelius. as well as our quarterback for health reform out of the white house, nancy-ann deparle.
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we began our push to reform health insurance last march. in this room with doctors and nurse who's know the system best, and so it's fitting to be joined by all of you as we bring this journey to a close. last thursday, i spent seven hours at a summit where democrats and republicans engaged in a public and very substantive discussion about health care. this meeting capped off a debate that began with a similar summit nearly one year ago. since then, every idea has been put on the table. every argument has been made. everything there is to say about health care has been said. and just about everybody has said it.
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so now's the time to make a decision. about how to finally reform health care so that it works. not just for the insurance companies, but for america's families and america's businesses. now, where both sides say they agree is that the status quo is not working for the american people. health insurance is becoming more expensive by the day. families can't afford it. businesses can't afford it. the federal government can't afford it. smaller businesses and individuals who don't get coverage at work are squeezed especially hard. and insurance companies freely ration health care based on who's sick and who's healthy, who can pay and who can't. that's the status quo. that's the system we have right now. democrats and republicans agree that this is a serious problem for america.
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and we agree that if we do nothing, if we throw up our hands and walk away, it's a problem that will only grow worse. nobody disputes that. more americans will lose their family's health insurance if they switch jobs or lose their job. more small businesses will be forced to choose between health care and hiring. more insurance companies will deny people coverage who have pre-existing conditions. or they'll drop people's coverage when they get sick. and need it most. and the rising cost of medicare and medicaid will sink our government deeper and deeper and deeper into debt. on all of this we agree. so the question is, what do we do about it? on one end of the spectrum, there are some who suggested scrapping our system of private insurance and replacing it with a government-run health care system. and though many other countries
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have such a system, in america, it would be neither practical nor realistic. on the other end of the spectrum, there are those, and this includes most republicans in congress, who believe the answer is to loosen regulations on the insurance industry. whether it's state consumer protections or minimum standards for the kind of insurance they can sell. the argument is is that that will somehow lower costs. i disagree with that approach. i'm concerned that this would only give the insurance industry even freer rein to raise premiums and deny care. so i don't believe we should give government bureaucrats or insurance company bureaucrats more control over health care in america. i believe it's time to give the american people more control over their health care and their health insurance. i don't believe we can afford to leave life and death decisions about health care to the
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discretion of insurance company executive boards alone. i believe that doctors and nurses and physicians assistants like the ones in this room should be free to decide what's best for their patients. now, the proposal i have put forward gives americans more control over their health insurance and their health care by holding insurance companies more accountable. it builds on the current system where most americans get their health insurance from their employer. if you like your plan, you can keep your plan. if you like your doctor, you can keep your doctor. i can tell you as the father of two young girls i would not want any plan that interferes with
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the relationship between a family and their doctor. essentially my proposal would change three things about the current health care system. first, it would end the worst practices of insurance companies. no longer would they be able to deny your coverage because of pre-existing conditions. no longer would they be able to drop your coverage because you got sick. no longer would they be able to force to you pay unlimited amounts of money out of your own pocket. no longer would they be able to arbitrary and massively raise premiums like anthem blue cross recently tried to do in california. up to 39% increases in one year in the individual market. those practices would end. second, my proposal would give uninsured individuals and small business owners the same kind of choice of private health insurance that members of
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congress get for themselves. because of if it's good enough for members of congress, it's good enough for the people who pay their salaries. the reason federal employees get a good deal on health insurance is that we all participate in an insurance market where insurance companies give better coverage and better rates. because they get more customers. it's an idea that many republicans have embraced in the past. before politics intruded. and my proposal says that if you still can't afford the insurance, in this new marketplace even though it's going to provide better deals for people than they can get right now in the individual marketplace, then we'll offer you tax credits to do so. tax credits that add up to the
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largest middle class tax cut for health care in history. after all, the wealthiest among us can already buy the best insurance there is. and the least well off are able to get coverage through medicaid. so it's the middle class that gets squeezed. and that's who we have to help. now, it is absolutely true that all of this will cost some money. about $100 billion per year. but most of this comes from the nearly $2 trillion a year that america already spends on health care but a lot of it is not spent wisely. a lot of that money is being wasted or spent badly. so within this plan, we're going to make sure the dollars we spend go towards making insurance more affordable and more secure. we're going to eliminate wasteful taxpayer subsidies that currently go to insurance and pharmaceutical companies. set a new fee on insurance
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companies that stand to gain a lot of money and a lot of profits as millions of americans are able to buy insurance. and we're going to make sure that the wealthiest americans pay their fair share on medicare. the bottom line is, our proposal is paid for. and all the new money generated in this plan goes back to small businesses and middle class families who can't afford health insurance. it would also lower prescription drug prices for seniors and it would help train new doctors and nurses and physicians assistants to provide care for american families. finally, my proposal would bring down the cost of health care for millions. families, businesses, and the federal government. we have now incorporated most of the serious ideas from across the political spectrum about how to contain the rising cost of health care. ideas that go after the waste
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and abuse in our system, especially in programs like medicare. but we do this while protecting medicare benefits and extending the financial stability of the program by nearly a decade. our cost-cutting measures mirror most of the proposals in the current senate bill which reduces most people's premiums and brings down our deficit by up to a trillion dollars over the next two decades. brings down our defity. those aren't my numbers. those are the savings determined by the congressional budget office which is the washington acronym for the nonpartisanen independent referee of congress in terms of how much stuff costs. so that's our proposal. this is where we've ended up. it's an approach that has been debated and changed and i believe improved over the last year. it incorporates the best idea


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