Skip to main content

tv   Power Lunch  CNBC  March 18, 2010 12:00pm-2:00pm EDT

12:00 pm
days of gain. dupont, boeing, kraft among the biggest winners. i'm sue herera, president obama finished signing the job's bill into law. how much will it aid the recovery. christina romer joins us live and first right here on cnbc. i'm michelle curusa cabrera. holding a news conference on their health reform bill and will reduce the legislation by $130 billion over the next decade. are those savings for real? we'll carry that news conference live, as well. here's what else is on the menu. i'm mary thompson. on the menu today, an early read on ceo pay suggests that bonuses were fewer in 2009. i'll have that story coming up. >> thank you very much, mary. let's get to the, mat action as you heard tyler talking about bob pisani. can we make it eight for eight? he's down at the new york stock exchange.
12:01 pm
>> the momentum is definitely there. a lot of concern we're overbought. new highs every day and advance decline line strong. you can stay overbought for a long time. i want to show you the euro dollar chart, a little bit of movement, gyrations here. here's the intraday here. the dollar has been strengthening really because the euro is weakening on concerns of a deal to help greece maybe a little bit iffy right now. let's put pressure on commodity and commodity stocks. bonds are widening and, of course, the spread between greek bonds and comparable other european bonds has been widening. this is the four-day chart that you're looking at. there you see it moving on the upside. that dollar strength put some pressure on commodity stocks and some of the big names out there. ak steel and bhp billiton. put pressure on natural gas and energy stocks as you can see here. tyler, back to you. >> we'll pick up with the other reporters in a little bit.
12:02 pm
you saw it first here on cnbc. president obama signing an $18 billion job's bill within the last hour. he put it into law including tax credits for businesses that will ramp up hiring. let's watch. >> a consensus is forming that partly because of the necessary and often unpopular measures we took over the past year, our economy is now growing again and we may soon be adding jobs instead of losing them. the jobs bill i'm signing today is intended to help accelerate that process. >> joining us live now from the white house is christina romer, chair of the council of economic advisors. great to have you back again, glad you could be with us. >> good to be with you. >> i know if my friend larry kudlow were here he would cheer the idea that there is a credit in this bill that basically says you don't have to pay the employer side of the social security tax for a while, if you hire somebody who has been out of work for 60 days or more or
12:03 pm
six months or more. i can't remember what the revision is. he would also say at the same time that the health care bill and other tax bills that are in train are going to raise taxes and raise the amount of money that's put in there. so, are you -- does this bill give with one hand and do the other bills take away with the other? >> absolutely not. so, let's start with the job's bill and certainly what larry would say is exactly right. we think a hiring tax credit is exactly the right policy for this time in the recovery. at a time when firms are starting to see their demand come back. starting to hire temporary workers. a little extra bonuses. taking away the payroll tax for hiring the unemployed worker can have a really big impact on how much hiring they can do. we think that is absolutely essential in a really good feature of this bill. >> mrs. romer, there were those who said we have thrown an awful lot of money, billions and billions of dollars at the economy in an effort to create
12:04 pm
jobs. the shovel ready jobs that the president has talked about and it hasn't had the type of effect that many people thought it would. what is going to make the difference in this bill, aside from the tax credit that you just, that you just mentioned. we've thrown an lawful ought of money with very little result. >> i will disagree with you on that statement because i think the money we have put in has been paying huge dividends, our estimates and those of forecasters across the ideological spectrum say what we've done has probably added about 2 million jobs as of the end of last year. we do think that this measure is one that is particularly cost effective. that's what the congressional budget office says. we do think, you know, what the president said this morning. we have a very big hole. we have some 8.4 million jobs that have been lost in this recession. the private sector is going to have to be the main engine of creating that. we're trying to help the private sector. >> can you answer tyler's other question, though. he had two in there. so you have this job's bill but
12:05 pm
then you have pending legislation like health care legislation which would actually raise the cost of hiring employees. why does that give with one hand and take away with another? >> let's talk about the health care bill and, of course, one thing we have just gotten out this morning is the very favorable congressional budget office report that this bill is going to actually help to lower the deficit some $1.3 trillion over the next 20 years. but, in terms of i want to really come back. i've said many times the health care legislation has been specifically looking at small businesses, making it easier for them to hire, retain workers by providing some $40 billion in tax credits for small businesses that want to provide health insurance for their workers. it's going to have an insurance exchange where they can get health insurance for their workers more cheaply. when you talk about new requirements, the law specifically exempt any firm with fewer than 50 workers. that's 96% of all the businesses in this country won't have these
12:06 pm
additional regulations and that's going to be, we think, very important for them in terms of their hiring and doing what they want to do for their workers, which is make sure that they're healthy and have health insurance. >> does this bill go far enough, though, to eliminate some of the uncertainty hat we repeatedly hear from ceos here on cnbc about the future tax structure next year. about health care, it's not certain that this particular health care bill is going to pass. a lot of uncertainty that is keeping people from hiring workers. does this go far enough to give them some security, some peace of mind to increase hiring? we hear that it doesn't. >> you know, i think the main insecurity or uncertainty when you talk to businesses is just where's the economy going? every day of this presidency we have been thinking about what we can do to help the economy grow faster, get back firmly on the road to recovery. today's job's bill that was just signed, i think, is going to be an important step in helping to
12:07 pm
make people understand that this economy is on the right track and on the right trajectory and we do think it will be very helpful in that. >> when you say it lowers the deficit when it comes to the health care bill, most of the costs is actually being shifted to the private economy. so, maybe the federal government is only going to spend whatever it is they say is going to cost, but do you acknowledge that the private economy is going to pick up a huge chunk of the bill and that is, indeed, a cost, maybe not to the federal budget, but to the nation? >> absolutely not. let's start with the budget and what the cbo numbers are saying is that it's absolutely going to reduce that budget deficit from $1.3 trillion over the next 20 years. the biggest deficit reduction bill since the 1990s. the other thing, i'd really recommend -- >> the overall cost of the economy. >> i was just going to tell you, they did a report that absolutely this bill is going to slow the growth in federal health care expenditures,
12:08 pm
federal and state health care expenditures and also our estimate was it was actually going to do the same thing in the private sector. those kind of delivery system reforms, the thing that rewarding quality over quantity. those things are going to spill over into the private sector, as well. we anticipate that it will slow their thoughts, as well. >> can i come back to a point you made earlier, mrs. romer. that is that the stimulus packages that have been passed in the past year have led to the creation of 2 million jobs. i wonder, but as i look at the numbers in the economy, it suggests that we're not actually adding jobs yet. so, when you say 2 million jobs, do you actually include there jobs that would have been lost but for that package. is that what you're really talking about? >> of course, right. we always know any policy you have to say, what does it do relative to what otherwise would have happened. there's no question. we were on a horrible trajectory when we took office. this was an economy that really was on the verge of another great depression and what these
12:09 pm
bills have done have raised employment relative to what it otherwise would have been by some 2 million so far. >> thank you for being with us. looks like you have a beautiful day down there in washington. >> it is a beautiful day, both with the weather and the job's bill. >> thank you very much. some sad news occurring, jerome york has passed away. let's get to jim goldman. he is standing by. >> first word of this sad news that he suffered a massive sureebial hemorrhage earlier this week tuesday evening. apple now confirming that one of its members of its board of directors, jerry york, has, indeed, bassed away from suffering of that issue there. he was the former cfo of ibm and chrysler. also well known for his work at general motors. he joined apple's board back in 1997 and was the longest serving member of apple's board. clearly extremely influential on
12:10 pm
the company, on steve jobs' steve jobs issuing a statement earlier today saying "jerry joined apple's board in 1997 when most doubted the company's future. he has been a pillar of financial and business expertise and insight on our board for over a dozen years. it's been a privilege to know and work with jerry and i am going to miss him a lot." that from steve jobs. jerry york was 71. we're still awaiting word from apple on if any changes are expected to the company's board of directors. but, meantime, the company's thoughts and prayers go to his family. guys, back to you. >> jim, thank you very much. >> a titan of american industry with a range from the automobile business to ibm and now to the innovative tech company we got. >> that's one of the things that made him so, the fact that he knew so much about different sectors of the economy. >> he's a guy who must have worked with some of the most
12:11 pm
colorful, cantankerous bosses of the past 30 years. >> and difficult, perhaps. >> to the folks, to kirk kerkorian. all the colorful ones. >> internal core made of steel to deal with all those personalities around him. >> a great number two. house speaker nancy pelosi and house democratic leaders are getting ready in just a few moments to hold a news conference on that health care reform bill. we're going to bring that to you live. that's ahead, plus -- >> power through it. why cash may be the fuel of choice for some domestic utility companies. which need it and why? and then the widening gap between white and african-american unemployment and what needs to be done to fix it now. the ceo scoring the health care bill. can it truly control costs and lower the deficit? are these savings for real?
12:12 pm
12:13 pm
12:14 pm
there is a flag raburn room on capitol hill where house democratic leaders, including nancy pelosi, will hold a news conference momentarily on health care reform. that bill has been scored by the cbo earlier today. those numbers are out and, apparently, it will cost
12:15 pm
something north of $900 billion over the first years. the dow basically on its longest winning streak since august of 2009. will it continue it today or will we see some profit taking by the end of the afternoon? let's gather our power lunch market insiders. phil dow with rbc wealth management and alan joins us, as well. phil, i'll start with you. the other day one of the things that steve grasso mentioned from the floor of the new york stock exchange is, yes, the trend is in tact. however, one of the big overhangs on this market is washington as it pertains to health care reform. you don't know whether to buy the health care stocks or sell the health care stocks and all of the stocks surrounded by it. how much does this health care bill and the events going on in washington, do you think, weigh on the market? >> oh, my guess is there are so
12:16 pm
many imponderables and this is just one of them. the deficit and other policy matters and potential inflation down the road and with regard to health care, my guess is we have a much weakened and much ownerous bill once it's finally passed. if it does pass, my guess is it will not impact some of the companies like biotechs and others -- >> that we originally thought it might. >> right. my guess it's less in general and i think buying any stock, any group of stock right now is kind of dangerous. i think you need to get down to the next level. >> you are, overall, bullish, correct, phil? >> yes, i am. >> alan, how about you? weigh in on the overhang from washington and also how about the way you feel about the market at this juncture given the run that we've had. >> i think it just alleviates a little bit of uncertainty. a lot of questionmarks and the market action is the best indicator and the markets new 17-month relative highs going
12:17 pm
into this. it's digested it and i think we're going to move forward. i'm also very positive, optimistic. if you look at the markets technically because we've been trading on technicals. we will go back to 1250 most likely in the s&p which was the breakout point from the fall of 2008 when we started the decline. the trend is very resilient and in tact. that's the march that we're on. >> alan, any worries about inflation. the cpi came in today and extraordinarily benign. very low interest rates and any worries about commodity prices going up as the economy gets stronger? >> that's always a concern. if you look at it, not really any inflationary pressures in our everyday life. cars, food, vacations. everything has gotten cheaper with the exception of health care. that's a whole political issue, as well. if you look at commodities, commodities have not even retraced 50% from this last big drop. where the stock market has already done so and some stock indexes retraced a full 100%.
12:18 pm
i still see a 20% upside in commodities, just to get back to that neutral 50% level where we've bounced off of those lows and gotten back to some more equilibrium. >> are you encouraging anybody to buy stocks that are exposed to the commodity sector? >> not particularly. i'm folkincused on companies th can lead the dividend. traded a discount to the market multiple about 14 with a yield that is actually better than the ten-year treasury. to me, that's the big opportunity. >> that's starting to pick up and buy backs are starting to pick up and that's kind of a two-edge sword with buy backs and do you view those as bullish signals? >> yes, i do. corporate cash now is 9.7% of assets and that's the highest it has been in 35 years. to me that is intriguing. strategic rather than fundamental and nothing kind of underscores anticipation more
12:19 pm
than merger and acquisition. you don't wait for the news and you have to anticipate the news. >> thanks, guys, appreciate it very much. >> once again, waiting for house speaker nancy pelosi to approach the podium there on capitol hill. talk about the results coming out and scoring the health care reform bill. this could get voted on over the weekend. high drama in washington as democrats and republicans battle it out over this bill. and also ahead, the power crunch. which utilities need to raise capital as a result of new regulations. analysts who covers those companies breaks out his list right here on power lunch.
12:20 pm
hosto 15% or more on car insurance? host: does charlie daniels play a mean fiddle? ♪ fiddle music charlie:hat's how you do it son. vo: geico. 15 minutes could save you 15% or more on car insurance.
12:21 pm
all right. let's join the house speaker and listen to their statements on health care reform on the pending bill. >> will save $138 billion in the first ten years and $1.2
12:22 pm
trillion in the second ten years speaks very eloquently to the deficit reduction that is in our package. that also strengthens medicare. we'll talk more about some other provisions in the bill and a little bit later today. it will be online. also speaking eloquently to the need for this legislation in terms of the health of america are the guests who are with us today. i'm very pleased that we're joined by ed morris, kimm, stella johnson and carolyn cuomo. their personal stories tell the eloquent story of why health care is needed to make america healthier, to lower the costs for america's family's budget while we lower the cost to the federal budget. we always said there were two reasons to do health care reform. one, it was about the health of the american people.
12:23 pm
to improve quality, to lower costs, to expand coverage. and to do so in a way that held the insurance companies accountable. second reason, of course, was to reduce the deficit. the president has said that health care reform is entit entitlement reform. there's no way that we could continue on the course that we are on. it's unsustainable in terms of the mountains of debt that will be heaped on to future generations unless we intervene with this legislation. again, let me yield to one of our guests today ed morris. ed is from north carolina and i want him to tell his own personal story. ed, thank you for joining us today. >> thank you so much. my name is dr. ed morris. my wife and i own a small business, franklin health and fitness. >> we'll hear from some more leaders. >> originally, that was the plan. they were all going to talk about it. and also talk about the gauntlet
12:24 pm
that was really thrown down this morning by mr. boehner who said we are going to do everything in our power to make sure that this house, that this bill does not pass. so, there was a war going on, john harwood, who joins us now from capitol hill on this. we were expecting to hear more from the speaker on the costs and the reduction she will hail it. i mean, the republicans this morning just said, this is not going to fly. any way, shape or form. >> they're wrong about that. it is going to fly because it looks like the democrats have the votes. you're right, sue. it is a total war situation. i think of this as kind of like the ultimate fighting mixed marshal arts phase of the health care debate. goung t gouge the other guy's eyes out and republicans will attack a procedure they used when they're in office. these guys are throwing everything they have at the other side and all the signs that we have suggest that the
12:25 pm
democrats who have the majority, significant majority will be able to hit .216. we'll see about that on sunday. >> i assume a lot of the reporters got the list and they're checking them off. how many are undeclared or undecided or not announcing this at all today unless they have the 216 checked off? >> a lot of people have not announced how they're going to vote. i don't think they have the 216 at this moment. i think they know they will have it by sunday. but look, michelle, nobody can be certain. this is one of the deals where it's so big that you're not going to know for sure until you count the votes. but i do think the house of representatives and the white house would not have moved all their chips to the center of the table and set it, set this vote for sunday, if they were not highly confident that they could do it. i think they've got about 200 right now. they've got to get the last 16 and i think they have a fairly good sense of where they're going to get it. >> yet, all of us, you included, john, remember that famous vote
12:26 pm
a couple years ago when the t.a.r.p. plan was brought to the floor of the house and people thought it was going to pass and very quickly and very evidently it turned out it was not. >> that is one, tyler, that i was wrong about. i said that was going to pass and it did not happen. but, then it got brought back and it did pass. >> that's right. after some concessions and after the bill went from whatever it was, 3 pages to 300 or whatever it was. let me drill down on this congressional budget office scoring which indicates in the first decade the bill costs something like $930 trillion, but that the deficit is $138 billion less than it otherwise would have been. how big an item is that in persuading people to vote for this bill? >> well, i think it helps because you start with a senate bill, which was the underlying bill that the house is fixing with these the so-called reconciliation and changes. that senate bill saved $118
12:27 pm
billion over ten years. so, they consider those conservative blue dogs not only the house bill more fiscally conservative than was the senate bill more fiscally conservative than the house bill, costs less money and this bill is going to save more against the deficit than that senate bill. that is a valuable argument to use for them and they also will make the argument that two-thirds of the deficit reduction comes from cuts in health spending in a medicare program, in particular. one-third comes from tax increases. the cadillac tax and the high-income earners on medicare. >> does anything come from actually less spending on health care overall? >> well, the medicare savings are -- >> offset the spending on the other health care, right? >> yes. but we are talking -- >> the overall spending on health care actually doesn't go
12:28 pm
down. >> well, right. but the federal budget deficit goes down. >> two different things. two different things, right, john? the original mission of the bill was, "a" universal coverage to bend the true cost curve. we have not bent the cost curve. deficit neutral is different than bending the cost curve, right? >> yes, indeed. but there's no question that if you take 32 million people who don't have health coverage and give them coverage that is going to cost more money in the health sector. question over the long term is, not even these changes in medicare because they're going to have to be a lot more changes in medicare to make the medical program solvent. the real mystery here, i think, is whether the methods that the democrats have chosen to bend the cost curve over the long term are going to work. we don't know if they're going to work. the cadillac tax is one, the health service delivery reforms that democrats have adopted a bunch of pilot projects and hhs is going to be doing a lot of work on that. the medpac commission that will
12:29 pm
standoff on standard of care practices that might have an effect over the long term. those are all the big question marks as to whether, in fact, not over 10 years or 20 years this will bend the cost cut. >> thank you, john, very much. fascinating weekend on capitol hill when they expect to get a vote on that particular measure. matt nesto takes you beyond the big cats. then, off the charts with a skyrocketing 44% since last year's march lows. should you still buy it? we'll talk about that. coming up at 12:45 eastern the fast money halftime report as stocks go for eight in a row. h
12:30 pm
12:31 pm
12:32 pm
welcome back at 32 past the hour. almost halfway through the trading day. nike at levels not seen since its ipo back in 1980. that is a lot of sneakers ago. fedex saying the global economic recovery is broadening. barnes & noble upping the=á president of its website to ceo underscoring the importance of digital books to that company's future. i'm discussing shoes here
12:33 pm
with matt nesto, tyler. >> nice. >> here he is to take us beyond the big caps. >> neither of us have been in a shoe carnival, but we both wish we were in the stocks today. up almost 8% and closing in on a three-year high. they came in with better than expected earnings. 20 cents versus 12 and lower growth, higher sales beautiful thing in the forecast going forward for the first quarter a full 40% above estimates. look at that bounce from the bottom. 265% and always like to throw in some trivia. the largest shareholder owns about 25% of the company and also owns the jacksonville jaguars. >> oh, shoes and a team. that's a good combo. >> i did a little googling there, they're faming for their instore barkers. buy two for one get over here and spin the wheel. >> like a real carnival. >> there you go. >> winnebago. >> wait, i thought they posted a proft for the first time in two
12:34 pm
years? >> somebody top ticked this bad boy and first profit in two years. they missed a little bit on the revenue and people are definitely disappointed. winnebago. >> thank you very much. back to you, sue. >> thank you so much. from beyond the big caps to a name that has been off the radar but moving higher in this market. shares of pier one flying off the charts. last year on the brink of bankruptcy trading for little more than a dime. since then it surged over 4,200%. joining us now is brian senior officer and he recently upgraded the stock to outperform. good to see you again. >> thanks for having me. >> it is a stellar rise, but to put it in perspective at one point the stock was trading at a high of $25 and then took a huge dive and on the brink of bankruptcy, correct? >> that's correct. they were, they were, that said well they were really on the bripg about a year, year and a half ago. >> they couldn't roll over a
12:35 pm
bond offering. but on the other hand, they put in place in 2007 kind of a management reshuffle and they redid the whole organization and that seems to finally bearing fruit. is that correct? >> alex smith joined the company in early 2007. quickly redid the expense structure of the company and they close a lot of underperforming stores and, importantly, he worked in the merchandising and the success we're seeing at pier one now is bearing the result of the steps of the initiatives that alex put in place years ago. >> you put the stock in an outperform. given the percentage move, granted, up from a dime. how much more do you think is left in the stock? >> at least another couple dollars. a lot of people focus and that is a reason to be concerned with the stock here. that's artificially low bottom. the way i look at pier one, i think there's a substantial earning power in the company right now that is not seen in the results and really not in the estimates on the street and that will drive the stock higher over the next 12 months or so.
12:36 pm
>> is any of this on the continued move in the economy and specifically the sector given the mix of merchandise they have? >> the continued improvement in consumer spending broadly. i'm positive on the home in general. i think as consumers are coming back, they're spending more on their homes. pier one is definitely a beneficiary of that. it's a lower tick item, not something like a home improvement and much lower ticket item. >> thanks brian, good to see you again. >> thank you. >> see you soon. up next, the real state of ceo bonus pay. did corporate boards pay attention to the outcry or not? mary thompson has the latest report card. reviews the device that helped him survive the recent nor'easter. find fout it's right for you, as well.
12:37 pm
12:38 pm
12:39 pm
an early look at ceo bonuses suggest that directors are being more stingy in doling out pay. mary thompson joins us with more. mary? >> it looks like bonuses last year not only were smaller but also that fewer ceos received them. in a report released this morning the executive conference firm says the total bonus fell 12.6% in 2009 to just over
12:40 pm
$812,000. performance-based bonuses are those linked to metrics like cash flow fell 10.3% and discretionary cash bonuses dropped 20.5%. payouts are lower in part because the measures used to rate a ceo's performance are harder to manipulate. >> you're also seeing new metrics, which are coming in. you're seeing more of a move away from things such as net income into cash flow. why? it's harder to screw up cash flow and play games with it. >> fiscal years run from the end of june through the end of december and all firms who have revenue over $1 billion. tech ceos saw their bonus drop the most. service ceos the only one with higher payouts last year up 21%. consumer ceos getting the biggest median payout.
12:41 pm
and financial services ceo, their median payout in 2008 was zero. it jumped to $567,000 plus in 2009. reflecting the tougher stance on pay, fewer received bonuses and only 54.5% down from 2009. keep in mind, this is an early read of the 232 firms those whose fiscal years ended before december 31st actually paid smaller businesses while those whose fiscal years ended on december 31st, they pay higher bonuses. when you mix them together, you get a lower bonus but it suggests if the trend continues, given more company's fiscal year s end on december 31st, we could see ceo bonuses rise for 2009. >> 2009. >> right. $133 billion over ten years. that's the deficit cut that is in the democrats health reform bill.
12:42 pm
what about those savings? also ahead, what is it about actress' dates with oscars that spell doom for their marriage. sandra bullock the latest to join the list. the cost of winning academy awards and losing men. coming up next, halftime report.
12:43 pm
12:44 pm
12:45 pm
welcome to the fast money halftime report. stocks trading in narrow range as the dollars hit the highs of the session. can markets go for eight in a row or are we hitting a wall here. your fast money crew jeff and jj of t.d.ameritrade. we have to address this rumor. we did see some ort of market reaction whether it's because of this or not. but the fed might come out and raise the discount window. right now 0.75%. we have been putting phone calls out there and the longer the rumor is out, the less they believe it. steve grasso, what are you feeling here on the floor? what's the chatter? >> the same thing, but the other looming issue is greece. we've been kicking around that. they might have to go to the imf.
12:46 pm
i think they're both equal concerns to traders and you saw the market tail off when you heard that fed discount window floating around. the chatter is, sell the market and sit on your hands and i'm waiting to see what is fact and what is fiction. >> i am getting an e-mail from a currency trader saying possibly they can do one in march and one in may. the fact of the matter is, just one month ago. the last time the fed raised the discount rate we moved the next day a grand total of four points higher on the s&p 500. you were there on the desk the night that that news crossed. a knee jerk reaction in the financials and then the next day it became nothing in the market. >> off to races, frankly, since. if you believe in history repeating it. i think the next day was an options expiration which is very similar to what we have today. i think a pretty reasonable chance that they do it but as we saw last time it didn't make a really big difference. it seems systematically they're on this plan. that being said, i think it's
12:47 pm
sort of interesting, at least right now where i sit some of the reversals you're seeing, specifically in the s&p and some of the other names, it's worth watching. clearly, the market has been on a tear, but today is one of the first days you get a glimpses of reverse and go down. >> we should note that the fed told us cnbc that it refuses to comment on any kind of rumor. what kind of option are you seeing when it comes to spdrs? >> right after this news came out from the fed we started to see aggressive buyers, so people are cautious as we head into this and as we head into the weekend when we have the health care vote over the weekend and things like that. a lot of things right now that could be unsettling for the market with expiration the next two days, you may see some, even though we haven't seen much of it today, intraday volatility but people are already celting up for it. >> certainly lots of reasons why the markets may be on edge, not just a rumor, a possible rumor
12:48 pm
about a fed, a possible fed move. jeff, you want to chime in here? >> melissa, you have to understand the market has been up eight days in a row. people have to take risk off' if you're smart, i came in and sold a lot of my positions today not because i'm scared of greece or china, which is weighing on my mind right now, but because of where the market has come from. it has come up and a lot of stocks are up 15%, 20%. >> where did you lighten up, jeff? >> lighten up in nike. i got very lucky on that. amazon, goldman sachs. those are the stocks. after they broke out, i took my profits, i'm not out of the market, just took risk off and i'm waiting for a pull back and wait in a position of strength to look for opportunities to buy. >> are you in that camp after all? you can't take money losing profits. >> i'll say this, these guys have been a lot more bullish and correct than i have. now this 1150 level which was to
12:49 pm
become support to talk a name like nike to back up what jt said, that quarter they reported was ridiculous. inventory down 13% year over year and margins crushed and now the stock is pushing up against all-time highs. we loved the name for a long time. it's hard to initiate a long position at these levels. >> right. if you're not a momentum player, as guy just stated, i talked to a bunch of pms this morning they love the stock and it looks great, but the problem is they wouldn't buy it at these levels. unless you're not investingn after hi fresh 52-week low, palm shares rising. j.j., what you are you seeing in terms of the option on the stock side of things. a volume so far today, higher than its average daily volume. j.j.? >> it's no surprise the stock volume is higher than its average volume. we're also seeing heavy buyers aft march 5 and 6 calls.
12:50 pm
the 52-week low yesterday, it's a great time for people to come in and take a cheap shot. you're talking about the 5s trading about 75 cents. 6s trading around 76 cents. these are cheap in money term options. earnings can't get much worse than what they are now. >> j.j. would admit -- i know what he's saying. but these are the types of things where you have to be willing to lose your investment in these options. we've had a couple of analysts that think palm is like a takeunder candidate maybe worth a buck. >> there was chatter, analysts said yesterday the smart phone launch on at&t, that could be delayed and also says that palm slashed its marketing budget for this launch. that's not necessarily a good sign. short interest on the stock, jeff, a whopping 44%.
12:51 pm
>> on a short-term trade that might be good for this stock but long term, everybody's been talking about this, palm missed the boat. we have apple, rim, even google getting into the phone. it's a huge hurdle for palm's stock to come back. guy is right. there's a great takeover candidate. >> a lot of these stocks are getting caught up in that. dell up in the last ten days, palm as well. nokia up 12% in the last ten days. a lot of these guys are going for the laggers. >> missed the boat on the business side of things. but at nine bucks a share, missed the boat in terms of selling itself. let's move on. burger king, stock rallying on the back, deutsche bank saying the stock price is attractive at these levels. the other day, steve, you said your pms were rotating and into laggards, like a burger bank. deutsche bay saying it's underperforming its rivals. >> in the last ten days, burger king is up 15%. guys are spinning out of the
12:52 pm
mcdonald's and buying burger king. that's the hedge firm money. the vanilla money is still in mcdonald's. you might see this reverse. a lot of these guys think the valuations are there but they're not. it's a short squeeze and guys looking for the beta chase to make up performance and try to get ahead of their computation. >> j.j.? >> it's interesting that we see from our retail traders, the last two weeks have been net sellers of mcdonald's and actually some buyers of burger king but more rotating into financials from there. >> we had our friend andy on a few weeks ago with the whole cke deal. talking about jack in the box, that got an upgrade, i think a name like jack -- i definitely don't know jack but i happen to like this jack. >> that's another look at the last ten-day performance in jack in the box. >> that was a nice call ahead of the goldman sachs call
12:53 pm
yesterday. bimple fell short of expectations. let's bring in tim. you still bullish on this name on this pullback? >> yeah, really bullish. the reclassification is norway getting back together. pushing to get an average price lower before the finality of this deal. one of the best companies in emerging markets. the stocks traded over $400 million today. it's the largest cellular provider in eastern europe. this is a great company and opportunity. >> and it's so nice that you let him out of time-out from last night. >> for now. he's on probation, though. "fast money" madness is back.
12:54 pm
we're putting the ball in your hands by letting you decides what's the best stock in america? voting begins right now. you can text madness and get info on how to play. we want to highlight a match-up here. fedex versus ups. >> clash of the titans, mel. >> speaking of fedex, which one you like better? >> we had mike cohen on last week. sort of what we're seeing, i got to wear the brown at ups. they don't make right-hand turns which sounds ridiculous. but you try to make a right-hand turn in the city. i like ups just because i got to wear the shorts. >> you can follow along with the tournament. so go and vote. --continues after this.
12:55 pm
i was active, eating healthy. i thought i was in great shape. so i was surprised when my doctor told me i still had high cholesterol. that really hit me, and got me thinking about my health. i knew i had to get my cholesterol under control.
12:56 pm
but exercise and eating healthy weren't enough for me. now i trust my heart to lipitor. [ male announcer ] when diet and exercise are not enough, adding lipitor has been shown to lower bad cholesterol 39 to 60%. lipitor is backed by over 17 years of research. lipitor is not for everyone, including people with liver problems and women who are nursing, pregnant or may become pregnant. you need simple blood tests to check for liver problems. tell your doctor if you are taking other medications, or if you have any muscle pain or weakness. this may be a sign of a rare but serious side effect. i thought i was doing enough to lower my cholesterol, but i needed more help. what are you doing about yours? [ male announcer ] have a heart to heart with your doctor about your cholesterol. and about lipitor.
12:57 pm
12:58 pm
welcome back to the "halftime report." we have confirmation that president obama is delaying his trip to indonesia because of the health care reform vote. so that vote could go into the weekend here. we'll keep you updated on the situation. steve grasso, kick it off. >> above 1150, buy in this market. >> j.j.? >> i agree with steve. they have to trade 1170 within the next two days. >> tom? >> i'm selling it on the short term. >> i'm with jeff. get flat and watch the tournament games. mel, i know you are. >> i'm all so there.
12:59 pm
going to say good-bye for now. >> we're watching the market closely and also basketball not the only game being played. john harwood bracketizing the pending health care votes. that's straight ahead plus a whole lot more. minorities and unemployment, african-americans have significantly higher and longer rates of unemployment than the rest of the population, even with the same college level education. a look at what needs to be done to close the gap. triaging the numbers. the congressional budget office estimates the dems' new health care bill will save $130 billion over the next ten years. but are those savings for real? plus, the business behind the madness, march madness kicks off today. we'll look at the massive cost to hold court and who will rule the biz of the brackets in the second slam dunk hour of "power lunch." it starts right now. >> welcome to the second hour of "power lunch."
1:00 pm
i'm tyler mathisen. gamestop, your biggest mover at moment, close to 7% higher. >> i'm sue herera. the cbo saying the current health care bill will save billions outfit deficit. we'll check the math. >> i'm michelle caruso-cabrera. new report by the joint economic committee shows the struggle for jobs particularly acute for african-americans with unemployment at nearly 16% compared to the overall rate of 9.7%. what's behind the disparity? what can be done to help the situation? thoughts from bill rogers and harley shaken. welcome to "power lunch," guys. good to see you. >> thanks for having us. >> good to be here. >> a lot of folks historically say, unfortunately for whatever reason we see lower levels of education among african-americans as a group and hence that is why they tend to overindex when it comes to unemployment. but i was struck by this stat from the joint economic committee. african-americans with a
1:01 pm
four-year college degree have an unemployment rate of 8.2%, white americans with a college degree, 4.5%. so there's no reason -- you can't look at education there for the difference. why do you think that is, bill? >> that's a great question. i'm glad you led in that way. typically, the knee-jerk response is, it's all about education, it's all about kills. but this gap has been around for decades. we've made improvement but there are still issues around the health of the overall economy, the macroeconomy. african-americans are the last in and the first out in a recession. there's what we call a spatial mismatch, that minorities live in areas where the jobs aren't being created and they don't have access to live in those areas or to commute to those areas. so it's a greater difficulty. and then for your less-educated workers, many young men and women have come into contact with the criminal justice system. so those are dramatic scarring
1:02 pm
effects. at the upper end on college-educated students, issues around choice of major, not doing math, which is a highly lucrative major -- >> harley, how about you? other thoughts on why we see this disparity between an african-american with a college degree versus a white american with a college degree? >> i think it really reflects a legacy of racism in some cases. it does show spatial mismatch -- >> what does that mean? when you live in certain areas, it's harder to get to work, that kind of situation? >> well, that, yes. but certain areas have been particularly hard-hit by this recession. for example, detroit, in detroit, the level of unemployment is 30%, about 80% of the city is african-american. if you count underemployment, the mayor of detroit says it's over 50%. that's worse than depression era unemployment. and, in fact, even though we have a fragile recovery that appears to be unfolding,
1:03 pm
unemployment for african-americans is likely to go up in 2010 and not come down for a long while absent some targeted effective action. >> bill, what can be done to try and narrow that disparity? can anything be done? does the new jobs bill that was signed this morning do anything that you think will help the african-american who is looking for work? >> the tension here is do we do -- pursue race-specific efforts and/or do we pursue race-neutral. i think right now, the administration -- i agree with their approach -- they've been focusing on race-neutral issues. and that is, first off, when i worked at the transition team, stop the bleeding, stop the bleeding, that is provide unemployment insurance benefits and provide health care, reduce the cost of health care. and so that was, again, stopping the bleeding. there's a stimulative effect with those expenditures.
1:04 pm
second now that you've stopped the bleeding, we're shifting to how do we stimulate the economy? it's the federal reserve keeping interest rates very low. it's now also putting money into states and local areas because there you have a double whammy, because african-americans are the minorities at the lower end of the income scale and they utilize many of these public services with the potential cut, they're now not getting served. but the public sector has been a key area where minorities have a stake in the middle class over the last few decades. this jobs bill and previous efforts have been focused on education and training -- >> bill, hold on a question. >> let me come back to the idea that -- apart from the idea that there might be racism at play here but that one of the key problems is that african-americans live in areas of low economic vitality or in
1:05 pm
some cases economic desperation. if you enhance the economies in those areas, do you thereby reduce unemployment and isn't that the way that you correct the problem? >> yeah, that's one piece of the puzzle -- >> harley. we're going to get harley in. >> that's an important direction and i think the administration is, in fact, doing some more positive things. i think they need to be done more rapidly. i think the scale needs to be increased. and i think we do need to target regions of the country whether it be detroit or san jose, california, where you do have high unemployment and that you -- >> do you do that -- >> need the kind of federal stimulus that will have an impact on hispanics and on african-americans. >> is it federal stimulus or is it targeted tax breaks that attract businesses to those neighborhoods, those city, those regions? which is better? >> i think you need both. but the direct impact of a stimulus that creates jobs is vital. the targeted tax breaks are important, but we need that
1:06 pm
direct creation of jobs. otherwise, 40% of latinos and african-americans will experience unemployment or underemployment this year. >> we've got to go. we have breaking news. i'm so sorry. good discussion, guys. we have breaking technology news to tell you about. >> at this hour, a new york federal court judge is releasing hundreds of documents connected to viacom's lawsuit against youtube. in its filings, youtube claims that viacom wanted desperately and tried repeatedly to buy youtube ahead of google but couldn't match google's offer. when viacom found out about google's bid, it tried to partner with google on the deal for youtube but was turned down. a source at youtube claims viacom's lawsuit might have been because the company felt jilted.
1:07 pm
youtube also claims that viacom hired no fewer than 18 marketing agencies to upload viacom content to youtube and that there was no way for youtube to know which clips were authorized to be there, that viacom had created fake user accounts to hide who was really uploading the content and that viacom itself didn't know which clips it had authorized and which it hadn't, even having youtube restore clip that is viacom posted but demanded be taken down later. viacom has a decidedly different take. in an e-mail between youtube founders wrote that youtube was, quote, aiming high. that in terms of the number of users and popularity, he wanted youtube to rank among napster, kazaa and others. other e-mails between top execs at youtube are about copyrighted material. and from south park could be unauthorized.
1:08 pm
a way to avoid the copy wrigrig might be to remove the "no copyrighted -- another e-mail shows youtube aware of copyrighted material that needed to be taken down but the founders question say leave these in a bit longer? there's plenty more. i'll be putting all this material on the blog. techcheck.cnbc.com including a financial breakdown of which youtube founders got what and when as far as the finances are concerned when google finally closed its deals. these numbers are absolutely astounding. you have to give it to sequoia capital. they made a huge investment. it's unbelievable. great, great read. >> great stuff, jim goldman. the nitty-gritty of the content battl battles, the distribution battles, what is the value of
1:09 pm
content? you see it play out in all those -- >> and be very careful what you put in an e-mail? why do people not know that e-mails live forever? >> especially techies. >> i'd like a little slice of that money. >> back to what matters. it is all about money. coming up a bit later, the congressional budget office has scored the health care bill. speaking of money, they say, see savings of more than $100 billion in ten years. are those real savings? you heard him yesterday on his continuing to-do list. tech columnist, mr. pogue, talks how he did it without power, water and heat and he does indeed deliver with the bluetooth review he promised us, next, when "power lunch" comes back. they find them at td ameritrade. trading's all about strategy. and strategy... is all about information. so i start my trading day... with td ameritrade's morning perspective.
1:10 pm
that's interesting... or, look at this... i can mine their weekly webcast for ideas. this is what i need. of course, ideas are just the start. so now i can drill down. heat mapping... heat mapping shows me where the money's moving. 2,500 stocks... one quick glance. cold... cold. hot! right there. look at this-- pattern matcher... pattern matcher spots technical patterns, automatically. wow, look at that. look at that head and shoulders right there. it's like pattern radar. pattern x-ray vision. plus, this amazing gadget... called the telephone. i can call td ameritrade anytime and talk trades, strategies. anything. that's where the action is. td ameritrade. built by traders for traders. announcer: trade commission free for 30 days plus get $100 cash, when you open an account.
1:11 pm
1:12 pm
welcome back. bob pisani down on the floor of the new york stock exchange. the stock market, the little engine that could, every day up a little bit. take a look at the s&p 500. we'll get a little bit of options activity in the next 24 hours. it will be the quarterly expiration of options and futures. there's the s&p 500. 1150 and 1170. you see movement up towards 1170. maybe a little bit of activity. s&p 500 rewaiting tomorrow. more information on that later on. a fairly tough morning for the euro here. concerns that a deal to help
1:13 pm
greece might be unraveling. the euro moving down. the dollar strengthened. a little bit of pressure on some of the commodity stocks. a stronger dollar, sometimes you get pressure on some of the commodity stocks. some of the big iron ore companies to the weak side. financial stocks have weakened midday. but we have huge run-ups in the last couple of weeks, particularly in some of the big regional bank names as well. tradertalk.cnbc.com. mike? >> we just went ever so slightly positive here at the nasdaq which is up 6.75% this month. a whole bunch of stuff is going on. i want to tick off everything we have going on. teva up 4%. osi pharmaceutical, higher on continued speculation that's going to be a bidding war for that company. hu
1:14 pm
athena health down. this is a small company but it won fda approval of its sleeping pill. sue, back to you. >> thank you very much, mike. you might recall yesterday, david pogue explained how technology helped him get through the recent nor'easter that hit the east coast and allowed him to continue doing his job as a tech columnist. what he was doing when the power, water and heat went out was reviewing a new cell phone earpiece for us. >> reporter: ladies, do you find yourself wishing you could make hands-free calls in the car? are ordinary bluetooth earpieces tooer in di to wear? >> what, what? . >> reporter: do you find yourself wishing -- >> i heard you.
1:15 pm
i'm not used to hearing disembodied voices in my kitchen. >> reporter: ladies, do you struggle to understand people on the phone -- >> excuse me. excuse me. can i see a narrator, please? what are you pitching exactly? >> reporter: look, it's the new jawbone icon bluetooth earpiece. >> i kind of hate these things. kind of look like a crazy person muttering to yourself. >> reporter: it comes in six high-fashion designs and you can install your choice of six high-fashion character voices. the rogue -- >> four hours of talk time remaining. >> reporter: the bombshell -- >> i'm armed and ready to go. >> reporter: the kelsey grammar sound-alike. >> ta-ta. >> well, that's different. >> reporter: now how much would you pay? but, wait -- >> there's more -- >> reporter: how do you know these things? yes, the jawbone icon is the first earpiece with apps. >> really? apps as in iphone apps?
1:16 pm
>> reporter: well, kind of. you can install one at a time and only have five to choose from. hold down the talk button to trigger the app. dial my voice. >> dial mom mobile. >> reporter: leave yourself reminders using services like jot or dial-to-do. >> remember to pick up kids at the end of the summer. >> reporter: the jawbone. [ [ sounds great, has some of the best noise-canceling technology in the industry. >> i'm sorry, cheryl, i can't talk to you right now. i'm in the middle of doing my laundry. >> you are? i don't hear the machine running. >> it's this noise-canceling earpiece. >> i don't know. 85 bucks is a lot for an earpiece. >> reporter: but cheaper ones don't automatically adjust the volumes so some calls aren't too loud and some too small? cheaper ones don't put their battery gauge icon on the menu of your i poen. >> well, okay. >> reporter: that's going to be $85. >> and that's $500 for you to
1:17 pm
use me in your ad. >> reporter: right. i tell you what, you hang on to the jawbone and we'll call it even. ladies, do your teeth have unsightly coffee stains? >> there you go. >> did the audience lose audio as well -- >> no, it's youreepiece. >> you need the jawbone thing. >> coming up -- >> straight ahead, the volatility of the dual vs. is there enough to make for a winning session. and the oscar love curse. reports season dra bullock is getting blindsided by her husband's affair. can successful men handle even more successful wives? anncr vo: with the new geico glovebox app...
1:18 pm
1:19 pm
anncr vo: ...you can get help with a flat tire... anncr vo: ...find a nearby tow truck or gas station... anncr vo: ...call emergency services... anncr vo: ...collect accident information. anncr vo: or just watch some fun videos. anncr vo: it's so easy, a caveman can do it. caveman: unbelievable... caveman: where's my coat? it was suede with the fringe. vo: download the glovebox app free at geico.com.
1:20 pm
welcome back to "power lunch." i'm bertha coombs. the government says we only saw an 11-foot drawdown -- gnatgas hitting a six-month low on that report and dragging down the rest with it. oil still has health in their -- >> we're going to interrupt bertha there because we're having a little audio difficulty with her microphone, the connection down there to here. let's transition to market volatility.
1:21 pm
everybody seems to be talking about it. it's at a 22-month low. the vix at 16. our next guest says options volume are much higher than normal. let's bring in john. john, great to see you. >> thank you, tyler. >> regular trading volume low. but options volume higher than it has been. what does that tell you and what should i do? >> well, it means that both institutions and retail investors are definitely back. speculation, of course, for take ofrs. but there are a lot of institutions that have gravitated towards the leverage they can get with options and the contracts continue to move very rapidly across my screens all day. that's volume up like this. 2 million more contracts a day over the last seven days than the average. >> are the contracts, relatively
1:22 pm
speaking, buying added leverage or are they trying to protect against gains -- to hedge against the possibility of future losses to lock in as an insurance policy, some of the gains made? >> tyler, you're giving it away because you're a pro. that's exactly what they're doing. what should they be doing? exactly that. a lot of the institutions are out there aggressively buying hedges against the portfolio gains they've got right now. what that does, of course, is it lifts the volatility in the outer months so that while you're exactly right, 16 is what the vix is in the front right now, it's higher, higher, higher going out to april, may and june of this year. so that's an indication of people doing exactly what you said. they're not leveraging up to get more exposure. they're using the options to protect the downside from where the market is right now, hoping to lock in those gains. >> does that mean that we necessarily see increased volatility in those further months out when we finally get to them? >> i think, michelle, eventually we do see some volatility pops.
1:23 pm
based on the vix options, because, of course, we've got derivatives on derivatives on derivatives here, the vix options are projects that we could see a pop of up to 20% in the vix over the next four weeks. i wouldn't be surprised, given that we've got this big catalyst coming our way this weekend with the health care vote, and there could be other things like what's going on with the euro and so forth, euro continues to weaken, i think that potentially puts more pressure on commodities. a lot of the big cap stocks are exposed to commodities. >> and what about the commodity etfs? are you seeing large moves there? there's this whole rumor of a discount rate hike. >> that's been moving. the dollar is moving some of the commodities. what are you seeing there? >> sue, i'm seeing the gold etf basically flat. in other words, bets are being placed on both sides of it. nobody's directional. but they are very directional on the uso, which is of course,
1:24 pm
oil, and they're betting that that goes higher. on the other hand, natural gas which can't seem to get out of its own way, they're betting on the downside there. those are the three most active etfs for specific sectors in commodities. >> jon, thank you very much. great to have you with us. he'll be monitoring this evening the palm call. the stock of the staffing and consulting services up around 90% within a year as the more businesses turn to temps in a down economy. should you throw a few quarters at robert half? we're going to rerun the numbers. taking a closer look at the $130 billion deficit savings that the cbo is associating with the current version of that health care bill. we have a very healthy power grid debate on tap for you, too.
1:25 pm
hi, ellen! hi, ellen! hi, ellen! hi, ellen! we're going on a field trip to china!
1:26 pm
wow. [ chuckles ] when i was a kid, we -- we would just go to the -- the farm. [ cow moos ] [ laughter ] no, seriously, where are you guys going? ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! [ female announcer ] the new classroom. see it. live it. share it. on the human network. cisco.
1:27 pm
welcome back to "power lunch." here are some of the stories we're following at this hour. excelon owners threatening to shut it down rather than building new cooling towers required saying the renovation
1:28 pm
is more than the station is physically worth. greece warning ll be forced to turn to the imf if the eu can't agree to a bailout plan. and porsche overtaking u.s. and japanese rivals, according to j.d. power and associates annual survey of reliability. as the markets soldier ahead, let's get a little more thought about it and head back down to the floor of the new york stock exchange. steve grasso of stuart frankel is standing by. i want to go back to something that jon najarian was talking about. trading volume on the floor of the exchange is low right now but the options volume as you look down into the spring deeper is quite high. are you seeing that, and what do you draw from that? >> i draw from that that people want to stay long in the markets so they have to buy protection so they can afford to stay along in the market. it stands to reason his premise.
1:29 pm
>> but -- i don't mean to put words in his mouth. he saw it, i think, as a more cautious signal that they want to lock in or protect gains. you see it as a way to enable them to stay in the market and buy more. >> right. you can look ate -- i make the blanket statement because we were just talking about sheer option volume. you don't know what exactly -- i don't know what he's talking about as far as granulairty of it. i think people want to stay in the market and use -- >> i had that in my cereal this morning. adds you look to april, may, june and beyond, do you expect that volatility is likely to go up and do you think in any sense that the rally is vulnerable? >> for me, i thought we were going to start to sell off. the market is usually six to eight months ahead.
1:30 pm
i thought when we were all looking at higher taxes, i thought the market was going to come in around that time period at that level. june, let's call it june-ish. but with china, with the sovereign debt issues, with higher taxes -- when you see us all fall off a cliff, we might have taken that off the table. i do believe the market has the ability to trend higher. it has been trending higher. we have to stay above 1150 now. that's the support level you have to watch. if we break below that, you want to sit on your hands a little bit. a lot of geopolitical stuff out there and a lot of stuff with health care reform that still has traders sitting on their hands. >> steve, thanks very much. >> thanks, tyler. now to a stock that's been off the charts and might be off your radar. robert half international more than doubling since the lows last march and adding nearly 20% year to date. joining us from las vegas where he's been attending a staffing
1:31 pm
entry conference is mark marcon. good to see you, mark. it's such an interesting story right now because we just had the jobs bill signed this morning by the president trying to create more jobs. but what you're seeing is a trend towards more temporary part-time staffing which plays into the strength of this particular stock. >> it absolutely does. essentially what we're seeing is early signs of an economic recovery. a lot of employers are still uncertain about the sustainability of the recovery for a number of the reasons that were previously mentioned, including higher taxes that are coming up, uncertainty about the health care bill, things of that nature. and so from that perspective, a lot of companies are saying, i need additional workers. i've cut back to the bone. now things are starting to trend back up. but rather than hire somebody on a full-time basis and have the risks that's associated with that, let me hire somebody on a flexible basis. >> they want that flexibility. also, in addition, this company
1:32 pm
is moving aggressively in the international arena, which you think gives them a little protection, if indeed we do see a double dip here in the united states. >> yeah, roughly 30% of their revenue comes from overseas markets. it's an area that they recently started concentrating on to a greater extent over the last five years. they have a long ways to go in terms of international markets. >> so there's growth there. what about the medium and small-sized businesses here in the united states? the jobs bill this morning, designed to give people tax credits but you mentioned the uncertainty there. and for small and medium-sized businesses, it's a big expenditure to add somebody to the payrolls? >> it is a big expenditure. that's way it makes sense for smaller businesses to turn to temporary workers, in particular during this cycle because we have unemployment rates that are at generational highs and the quality of the labor that's currently available at best we've seen in decades. so they're not sacrificing much by turning to temps.
1:33 pm
they're getting really good people and the additional flexibility. >> you have this rated as outperform the 52-week range goes from 1645 to 1376. if indeed your outperform is borne out, how much higher do you think or what's the price target on the stock? >> the current is $33. looking out towards 2011 earnings, nobody's pricing the stock based on what they did last year or what they're going to do even this year because these are cyclically sensitive companies so you value them like cyclical companies and look at what normalized earnings could be over the course of the coming cycle. assuming we avoid a double dip and we're in the new normal philosophy in terms of what this economic recovery is going to be like, assuming we have an extended recovery that's slow and grinding, we do think that over the course of the cycle they could end up surpassing their prior peak earnings of
1:34 pm
1.89 and go well beyond that. this is a long-term growth story. >> thank you, mark. appreciate it. we want to go beyond the big caps and find the smaller names that are big movers today. >> avis budget, it's the spawn of what used to be sendent. if you take a look at the company, you're swinging toward the fences, up 9% right now. big, giant jump. 220% of the ten-day average. it was spun from sendent in 2006. upgraded to 15. they like the turnaround in the industry and they think also that the comparable rentals, if you will, 7,000 car and truck rental stores in seven countries. more than 25,000 employees. bachelorette number two is
1:35 pm
medcath. number one in the small cap index today. this company put itself in play at the beginning of the month. it's up 60% on a month to day basis. and deutsche bank says buy it. it's going to 17. >> they run heart hospitals? >> yes, ten of them in seven states. and deutsche bank says if we sell these things piecemeal, they'll gain more money. and another big buyer, look at the holders on this stock, blackstone owns 5%. not them guy, as they say. >> matt nesto, thanks so much. breaking news now. a federal judge has swatted the fly on the wall over misappropriation of time-sensitive information. morgan stanley, ba -- the judge
1:36 pm
imposed a permanent injunction on the fly. read on trading floorz and in newsrooms for its wall street buzz. geico turns to the big boss for a marketing video that it hopes goes viral. warren buffett looking a lot like axel rose of guns 'n roses. >> that's warren buffett? oh, my goodness, he's crazy. >> i think he's had too many cherry colas. i think that's the sugar. it's the sugar kicking in. >> that's a music video featuring geico employees, no geckos there singing about how everything they do is all for you. after showing it to employees last month, geico quietly posted the clip on youtube. it is not an instant hit, however, after almost a week. it has less than 1,000 views.
1:37 pm
if you want to hear buffett attempt to sing, you can see the video, all of it at buffettwatch.cnbc.com. for warren as axel. >> every rose has its thorn. >> this is very true. instead of march madness, it is health care madness. john harwood bracketizing the plays and the votes needing to push health care through. and aetna canceling its investor meeting. it looks like the company's ceo doesn't want to go toe to toe with reform protesters. national car rental knows i'm picky.
1:38 pm
so, at national, i go right past the counter... and you get to choose any car in the aisle. choose any car? you cannot be serious! okay. seriously, you choose. go national. go like a pro.
1:39 pm
not that long ago, many families were priced out of an overheated housing market. but the times have changed. get the facts at remax.com. today, the dream of owning a home seems more attainable than ever. nobody sells more real estate than re/max. visit remax.com today.
1:40 pm
we were just showing you shares of aetna there because tomorrow they were supposed to hold an investor meeting in person with investors. they have now decided they're going to do a conference call and they're very specific about why -- the political climate. they don't want to be physically in a place perhaps because of protesters, et cetera. >> we've had the ceo on "power lunch" several times. and i specifically asked him when he was in davos whether or not given the environment in washington right now, whether or not he and its employees really felt under the gun? he said, yes, in a way we do feel demonized. so i can understand why he would cancel this. although it's going to be interesting to see how it plays out and what the reaction is. >> house speaker nancy pelosi said, we're going to hold the health insurance companies accountable.
1:41 pm
so they're clearly in the targets of washington as they try to move health care reform along. >> the stock has been doing well because as one of our guests said earlier, even if this bill does get through, it's much less onerous to some of the entities involved in it than it was before. >> there's no public option in there. >> and the insurance companies, let's not forget, are going to pick up a lot of customers, one way or another. >> absolutely. they would have to. >> not as many as they originally thought because they lowered the penalties on individuals. there was pushback -- so maybe not as many as they thought. >> but still a lot more. >> more subscribers. are we ready to move on to basketball? our senior washington correspondent, john harwood, bracketizing this weekend's pending health care vote. hey, john.
1:42 pm
>> it is marng madness time not just for the ncaas but for this health care vote. bout 200 votes, they believe. he's got to get the last 16. we came up with some brackets to be the sort of sweet 16 in effect. it's not the only 16 people being considered. there's probably 40, 45, 50 house members who are still on the fence. but these are some of the people that would be affected by those cbo numbers we got today. let's look in particular at the freshmen. a whole bunch of freshmen. we listed four of them. a couple from ohio, one from new mexico, one from florida. suzanne kosmas. these are people elected with barack obama. he's going to try to pull in their votes. the blue dogs is a group that will be influenced, the white house hope, by this cbo projection today. jason altmire was at the jobs
1:43 pm
tax credit bill-signing. he's somebody who's been very concerned about the level of the deficit. you've got some retirees there who -- people who don't have to worry about 30-second ads against against them. brian baird of washington, john tanner of tennessee, bart gordon of tennessee, marion berry of arkansas. democrats think they can get at least a couple of those people to vote for the bill. then you've got veteran members of the democratic team, these are people, paul kanjorski, marcy kaptur of ohio, a couple of errs. these are people who need to function in this environment. they know all of their colleagues, the people playing the gail around them, depend on this going through for their political well-being. and that's pressure on getting people to go along and stay with what nancy pelosi and steny hoyer want them to do.
1:44 pm
>> we're going to be watching it. cbo giving a big boost to the democrats' hopes to pass health care. the health care overall will cost $940 billion over ten years and shave the deficit by $138 billion over the same time period. are those savings for real? squaring off on the power grid is mark walsh and tony frato. mark, let me start with you. we wanted to bring up whether the savings is real. it's dependent on cutting medicare. but we've seen that over the past five years, congress hasn't put in medicare cuts that were supposed to be put in? we were supposed to see one on april 1st. what makes it this time around congress is going to cut spending in medicare? >> they're going to be forced to by the overall savings this new bill will imply. i think for us to doubt whether cbo numbers are real or not is kind of a little bit two-faced on the republican side. they always rely on cbo --
1:45 pm
>> i didn't doubt the numbers. what's going to make them cut numbers this time around? >> it would cost less by 2% over the first three to five years and then a 3% to 5% overall cut in medicare spending over that full decade. to your point about whether congress will have the will, so to speak, to do what it takes to make sure medicare is healthy or not, it's important for this bill to pass. it gives them the air cover to have the will to do this -- >> mark, they've had lots of air cover. they had it in statutory law, they had guidance, they had reports, conference report language saying they were going to do it and they don't do it. they go one way worse in this bill in which case they take the doctor reimbursement which we know is going to cost hundreds of billions of dollars over the next ten years and pull it out of the bill as though paying doctors through government-sponsored health care plans has nothing to do with health care. it's a fraud.
1:46 pm
and it's not cbo's fault. they have to deal with a product that senate democrats gave them, that's in the reconciliation package. this is what they have to deal with. >> i'm always confused and concerned when i hear that they didn't do it before. last time i checked, the very republicans voting against this very, very intelligent bill are the ones that didn't do anything about it from 2000 to 2006. they controlled all parts of correct me if i'm wrong -- >> in fact, tony -- the prescription medicare part d bill was under president george bush. and i remember it was pretty poor under that one as well, but that was passed by a republican, i should point out. >> sure, sure, sure. the cbo scoring was really off on medicare part d. the program came in well below cbo's cost estimates. and the democrats who are critical of medicare part b -- >> what about unfunded liabilities that was given out to all seniors regardless of income -- >> i think if you want to say
1:47 pm
that medicare part d should have been paid for and if that's a criticism, i agree. >> should have been paid for. >> i agree. >> should have never happened in the first place. mark, keep going. >> if i might suggest that we're a little bit in the weeds on that. i think it's interesting to talk about specific medicare part d -- >> i would think you would be interested in the hypocrisy on the republican side where they complain about extending benefits when it comes to health care and yet they did the very same thing. >> i'm suggesting to discuss this specific feature, the bill is a little bit in the weeds. what i'm suggesting is what the conversation should be about is the fact that this bill is going to reduce the deficit by 1 pptd $2 trillion over 20 years -- >> that's silly, mark. >> why is it silly to say it covers millions of new americans -- why sit silly to say this? i would argue that the conversations have been silly about this bill. there is no payment for abortion. >> tony, last word.
1:48 pm
>> show me one cbo projection that has been correct over ten years. if you want to cite a $1.2 trillion number to me, show me one in 40 years, show me a cbo projection that has been accurate. >> we're going to talk again on monday. we have to see what happens over the weekend. it is going to be a white-knuckler. thanks, guys. just around the bend, the oscar love curse. sandra bullock wins the covets statue, then finds out that perhaps her husband was coveting another. turns out she's not the first best actress to find herself in this particular situation. >> i don't know how to transition from this to our best sports reporter, darren rovell. he's been our best guy and he's been watching basketball today. he'll have scores and the business behind what it took to get all the teams to the tourney when we return. as having to decide to go for it? at the hartford, we help businesses of all kinds...
1:49 pm
feel confident doing what they do best. by protecting your business, your property, your people. you've counted on us for 200 years. let's embrace tomorrow. and with the hartford behind you, achieve what's ahead of you. ♪
1:50 pm
1:51 pm
♪ there's a little beyonce. fresh off her oscar win for "the blind side," "people" magazine reports that sandra bullock has split from her husband. that break-up just the latest in a long line of hollywood husbands who can't seemingly
1:52 pm
stand being upstaged by a little gold man named oscar. let's hear from nicole at "the daily beast." is it that these guys can't handle the success of their wives or is it the pressure of spending months where one spouse is away shooting and they're at home being ignored? what is it? >> yeah, i think the pressure in hollywood -- the pressure on any marriage, there are all kinds of pressure. but in hollywood, it's much more extreme because success is just so -- first of all, it's an intangible thing and you're constantly being reminded of it. when you're married to a star, it's not like being married to a ceo of a plumbing company -- >> we just have to reference the woman here who is described this morning in "the new york post" as a tattooed hell cat. the home-wrecking tattooed hell cat -- >> of jesse james and sandra bullock. this is apparently the whom he was allegedly cheating -- >> looks a little like gene
1:53 pm
simmons. >> how much is because so much of their lives evolve in a public forum? you do have pressures in a marriage, certainly. on wall street, you have many wives making more than their spouses. but it doesn't all get played out in public. >> right. in hollywood -- exactly, exactly that. it's very public. every time these people leave their homes to go to starbucks, they're mobbed by the paparazzi. even before you get to the academy awards, there are ten different other award ceremonies where the spouse is dragged along on the red carpet -- >> these guys are mad because they're not the ones getting chased by the paparazzi. right? that's what it comes down to. >> right. with hillary swank and chad lowe, with reese witherspoon and ryan philippe, they're married to other actors. it's that much more acute for them to feel that the spotlight is not on them because they're used to it. so it causes -- >> by the way --
1:54 pm
>> this phenomenon goes back to ronald reagan and jane wymand. when they got married, reagan was the bigger star. and then jane won an oscar and they got divorced that year. and reagan got clipped, maybe i should list johnny belinda as co-respondent. there's a historical precedent here. >> thanks, nicole. >> how did you say that? tattooed -- >> hell cat. oh! that made me feel good. >> never thought i'd hear you say that. i think i'm blushing a little bit. it's my read. the ncaa men's basketball tournament, as you know, is under way. but not without some very expensive traveling. our darren rovell is here to give us an update and tell us about how the ncaa got those teams to their various locations. >> exactly.
1:55 pm
march madness tipping off about an hour and a half ago. let's get you to those very important scores going on. close for florida and byu. how about robert morris? only four times a 15 seed has beat a 2. one of the most interesting business stories is the fact that the ncaa arranges last-minute travel through a travel agency in waterloo, hachlt called shorts and they bid out the contracts. they were eight bus trips because teams within 400 miles of the venue must bus. two teams are on commercial flights costing $51,500. and 51 teams are on charter flights from a variety of different airlines that cost $2.6 million. keep in mind, this is all just one way to the tournament sites. for more on how the whole travel process works, check out my blog. >> the cost of jets must have
1:56 pm
gone down because no ceos are using them anymore. >> you can't fit 75 guys on a commercial flight. we'll be right back after this short break. (announcer) we're in the energy business. 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.
1:57 pm
1:58 pm
1:59 pm
welcome back. we've got a modest advance in the dow jones industrial average. we may be able to make it 8 for 8 at least in the dow jones industrial average. like to see a little bit more participation from the s&p 500. we are up above key technical levels that steve grasso and some of the "fast money" guys say may be significant on a closing basis today. >> the vix, still very low right now. >> i love that observation by najarian earlier about the options activity being much higher. that will do it for this hour of "power lunch." the tattooed hell cats say so long. >> "street signs" is next with ebb ebb. it is 2:00 on wall street. stocks sticking close to 18-month highs. we are higher for the dow.

121 Views

info Stream Only

Uploaded by TV Archive on