the earnings a couple after the close yesterday and a couple before and really, two up, two down. and it's all about guidance. if you're given better than expected guidance, you're getting a boost in the market today. back to you. >> okay, thank you, mr. nesto. that will do it for us. thanks for watching everyone. i'm trish regan. >> i'm larry kudlow, see you tonight on "the kudlow report" at 7:00 p.m. eastern. and "power lunch" is up next. welcome to "power lunch." we are live from the cti and you just saw the big, wide pan of the wireless conference. the wireless revolution is here. why does this matter to you? you see this? this is a laptop, this is a

phone. but the distinction is dead. it's over. they are now one in the same. that's what this conference is about. all about how we do business and how we communicate. for the next two hours what it all means and how you profit from it. head honchos from sprint coming up and you see the big movement and tyler, it's exciting. >> you bet it is, michelle does vegas. i'm tyler mathisen the move towards dow 11,000 taking a breather so far today but bank of america, general electric and breauxing a boeing all bucking that down trend. >> i'm sue herera, should you be bullish on health care? a number of money managers say, yes, you should. that straight ahead and here's what else is on the menu. i'm jane wells in las vegas. 28 locations put the calories on the menu. if they're wrong, will you sue? one restaurant owner who put in a little here and little there.

she's concerned. more from her later this hour. market action and bob pisani kicks it off at the new york stock exchange. bob? >> positive or negative, tyler. home sales was out two hour uz go and now down four months in a row after a nice pop up in october and november. new home sales, existing home sales were disappointing yesterday, as well. let's look at lennar. good news out of one home builder and their earnings report was terrific. 18% increase in sales. that was a good sign. as you can see here, still on the upside for lennar even though its highs dropped around 10:00 as new home sale numbers came out. ipo market, another positive sign we had. three companies going public today. maxlinear big into broadband space. it opened at 17.95. still trading at 18.39. calix, old cisco guys.

price talk was 11 there to $13 and oep oens at 17 and still trading at 15.77. first interstate over on the nasdaq, hadn't had a bank ipo in three years and they priced at 14.50, slow end of the range and that stock trading at 16.19. bertha, how are we looking at the nasdaq? >> mixed day. nasdaq holding above 2400 and some strength coming from adobe and better than expected for the first quarter and the expected launch of its new product offering. that is given a nice little boost to the application software area. one of the other standouts today, starbucks. remember starbucks was having so many problems during the recession in 2008. they have cash and they're going to issue a dividend and first time ever and they also are going to buy back more stock. take a look at apple. a lot of people think apple should do something like that with its huge war chest of cash.

the stock keeps moving higher. i would imagine a lot of investors not that disappointed. finally, before i toss it to brian, take a look at genzyme. likely to have to disgorge profits. check out mike huckman's blog for more. >> thank you very much, bertha. we traded down pretty sharply after the inventory numbers came out from the briefly dipping below $80 a barrel. much bigger build in crude inventories than expected. the interesting take away while we bounced off those lows and now down 1.20 dollar and firmly above $80 a barrel. overall demand up about 3.5%. in terms of the whole complex. everything trading down today. bob, the weakest of all of those in that space. i also want to point out with metals and everything down, we, of course, have the stronger dollar. and eu summit tomorrow and fears

spreading to portugal. the dollar is the biggest driver today and we have a situation where silver is the weakest of the bunch. let's go to steve liesman on the jeffries trading floor in new york. hey, steve. >> hey, brian. yeah, bonds are under some pressure today, partly due to the better than expected durable goods data came in 0.5. but 0.9 on the transportation number and new numbers doing reasonably well. the bonds, the two-year is off yielding 106 up three basis points and then, of course, all a steepner and go up to the five-year, 250. and there's the ten year trading at 3.76. that's up about 7.5 basis points on the yield and, of course, that story about the ten-year swamp that the corperates are trading at. ten-year swaps at 1069. we'll be here all day and give you live coverage of the five-year auction and the $42 billion five-year auction coming

up at 1:00. sue, this is just an interesting company where i'm reporting from. a company that has picked up the slack from the chaos on wall street. there are guys here from bear stearns, lehman, all over. in fact, if i turn to the right, you can see the mora repo desk came over to jeffries. anyway, they're all, there they are behind me there. and it's just this company has added people, added balance sheets. standing up. there they are! there's the repo guys. repo desk back there. >> terrific, thanks, steve. >> i'll see you in a few minutes, sue. >> look forward to it very much. let's talk more about this market with our insider joining us is wolly white, the founder of wallace r. white company. he is a four-star fund rated manager and we are thrilled to have you here. >> thank you. >> we have been seeing this market march steadily higher with what a lot of people think is a considerable amount of

consistency and then there are those on the other side who say, yes, but, it's gone too far, too fast. we still have a lot of head winds. which side do you come down on, wally? >> i never know for sure, but it strikes me that we had a bungee cord effect and it stretched too far on the down side in march. it bounced up to something more normal. but i think our working assumption is that the market is going sideways in an erratic way for maybe another year or two because things -- it seems like the stocks are doing better than the companies. >> can you make money in a sideways market? >> sure, we love it. >> what is the strategy? >> our approach to investing is to really think like a business owner and think about what somebody would pay for the whole company. and that business value sort of acts as gravity. and the stock price can get way below it or way above it and gravity will pull it back.

>> does somebody else in omaha where you're based use basically that same strategy? >> i learned a lot by watching my neighbor. >> what is your, i wunonder wha it's like to be sort of in the same town as an investor there. >> every morning we look to the east -- >> kind of being like the third baseman on the new york yankees behind a-rod. >> what is your largest holding right now? >> berkshire. >> would you be adding to it now given its price? >> no, we're perfectly comfortable owning it, but like a lot of our stocks, we measure the price to the intrinsic value and a lot of them are in the 75%, 80% range. >> michelle has a question for you from las vegas. michelle? >> i'm here at the wireless conference and all the talk is how many more bites of data are going to move over broadband,

are you investing in technology at all? do you find value in that sector? >> well, we like companies that use technology because -- and we own some companies that are sort of low tech type companies. but when the product cycle is really short and we have to guess who the next winner is, u know, a year from now or two years from now, that doesn't work for us. we like to be able to see five or ten years out and have an idea at least of what the company would look like and buy at a discount. >> you like the market and you look at what a whole company is worth. the one thing we're hearing from a number of managers out there, there are still a lot of value even though we have seen companies and their stocks run. do you agree with that or not? we have seen some pretty dramatic moves in these companies? >> we look stock by stock and case-by-case thing and companies we think that are selling at 75 to 80 cents on the dollar we're

comfortable with gets us excited. but every once in a while the market hits an air pocket and some of our favorites go down 10%, 20%. >> do you want more cash than debt? does that matter to you? >> debt matters to the extent that it could cause a problem and we saw classic cases of that in the last year or two. so, we like judicious use of leverage. warren gets to use the insurance float which is another form of leverage. we're pretty sensitive about having sort of belt and suspenders of being able to cover obligations out two, three, four, five years. >> wally, thank you very much. pleasure to have you with us today. >> thank you. don't miss a very special "street signs." a special guest will help us navigate the dow's slow crawl to 1 1,000. erin burnett unveils it -- >> it is a sea turtle. >> slow and steady wins the race, right, michelle? >> not in technology and not in

wireless. you know, wally made a great point. he doesn't like investing in this sector because he wants to know who the winners are going to be five to ten years from now. that's pretty tough when technology is evolving so quickly. that's why it's often venture capit capitalists who are the early folks in this business. one of the best who tells us what the next great thing is and how to invest in private stocks in it. and later, a possible cure for housing's woes. take away the tax advantages of

home ownership. a food fight is coming up. all this plus the fast money halftime report.

let's look at google's chart there. down $6 at 542 and change.

interesting about co-founder who talks about google's decision to walk away from its china search business and he says among other things in this "wall street journal" story that one of the things he was starting to feel about china after the olympics in 2008 was that the censorship had started to get ratcheted up. he having beenb an imgray from the soviet union uncomfortable and begin to remind him of the repression under the soviet rule which he and his parents had fled when he was 6 years old and that this was part of the int n internal conversation that went on and led, ultimately, to the decisions earlier this week. google now down 6 bucks a share. michelle? >> all very interesting stuff especially here at the wireless convention, tyler, where you can imagine everyone is talking about google's recent decision.

we are joined by rich wong. one of the leading venture capitalists around. so great to have you here and to help us handicap what's going on here and why it matters to the technology world. i want to get to the merging of the pc and the desktop and the laptop with the phone in a second, but, first, what do you make of this decision by google to get out of china? >> google is viewed as a company that has a lot of very high principals and don't be evil statement is something we talk a lut about in silicone valley and while it's a tough business decision, we respect the principals that they have of not operating their search business in china. i think we will comment as we talk about android phones. i think they will ship even if they don't have the surchs business. i don't think they're leaving china, completely, is my understanding. >> the distinction between the computer and the phone is dead. am i overstating it? >> no, absolutely not.

while there will be pcs and what is a phone is starting to blur. we talk a lot about these devices, smart phones. they have the same kind of computing power of pcs a year ago. it's absolutely blurring together. >> the framework came with my interview of the ceo back in vancouver. why are you making phones and getting into the phone business? he said i'm not getting into the phone business. i am in the computing business and the computing business is moving to these mobile devices, we're not even going to call them phones any more. that would bring up the ipad. the iphone and the ipad, do they eventually merge? >> this entire industry and the show is an industry that is shifting from voice services to data services. from telecom to internet. with that change, as you say, all the devices are changing and things that used to be just, things you could just talk on we find ourselves doing e-mail and

media service on, as well. >> sue herera has a question. >> rich, great to have you with us. it seems as though things are changing so fast. tell us where you think we are in the cycle. are we at the beginning of the technology cycle and the changes we just outlined with michelle? the middle? closer to the end? give me -- how much change can i anticipate? >> i think that we are the accelerating pace of change when you take this point about mobile data and the mobile internet that i talked about a moment ago. the concept of mobile internet started a decade ago but really when steve jobs launched the iphone that you have accelerating pace of that change. that's what we're seeing reactions to from products like android and the people will have to continue to react. >> cisco has compelling data points where the number of terabites of data being moved over right now averages 90,000 and within four years 3.6

million. that sounds impressive. however, all the wall street analysts say, but can you charge for that data? does it lead to revenue? right now you're subsidizing all of that mobile broadband experience because you're trying to get customers. are you eventually going to be able to charge for that or something that eats into cost and costs a lot of money to eat out infrastructure that you can't capitalize on? >> i think that is one of the challenges of being an operator. a lot of guests talking about their businesses and sprint and at&t and others and i think that is alchange. however, i do think new ways to make money. mobile advertising is an example. in the darkness of 2001 and the internet, advertising and digital is not going to work. obviously people like google proved otherwise. that will happen in mobile, as well. >> we have one of the new android phones here from samsung. i wondfer we can see it, i didn't warn the crew we are going to hold it up. scott cone had one last night, as well.

that means what? >> what that means is at a high level what it means is that the pipes have to get fatter. what is happening all these different devices are consuming more data than your old motorola razor phone. these networks were not designed so everybody is upgrading their networks and moving towards 4g and all that alphabet soup means fatter pipes and that's what we all need. >> richard, thank you so much. he'll join us in the next hour to help us break down other stuff. but a sprint guest talking to talk about the 4g network, basically fatter pipes. >> also ahead -- >> i said, you're right, that's what i want to know, too. do i need all this stuff? i'm happy with 3, but maybe i need 4. a financial firm known for serving those who protect our nation is coming off the best year ever. >> the chief financial officer of usaa joins us right here on

"power lunch."

here's a look at some of the most actives on the big board right now. citigroup on the list, general electric, sprint, nextel and ford. bank of america we draw your attention to right now because they, of course, are one of the biggest holders, remember countrywide? they got most of countrywide's underperforming loans and they are starting a new principal reduction program. they're the first major bank to do it. diana oolick is going to give us details on that. on the nasdaq, the old yellow freight, sirius xm radio and intel and applied materials on the list, as well. michelle, back out to you. >> hey, we're back here in las vegas at the wireless show. the ceo of sprint 4g matt carter is joining us. good to have you here. >> thank you. >> you're the reason the stock is up 5.5% right now. >> i wish i could take credit for that, no, it's about 4g and

our network and mew phones and just all of that. >> for the novice, what is 4g? why do i need it? as tyler and sue was saying, 3g seemed fine. it's not fine, not in your world. >> 3g is actually, perfectly fine, but you can just do more with 4g. faster, more things, more effectiveness. just a lot more things you can do. >> like what? >> for example, if you're watching a movie. when you watch a movie on your phone -- >> no, i don't watch movies on my phone. >> some people do, they video download things and it has that buffering and it's slower. with 4g, it's instantaneous. >> just like in the theater. >> just like in the theater. >> you have one of these babies right here. we have an audience that loves new technology. hold it up so chris our guy running our mobile cam here is going to show it. what makes this thing so darn special? the android platform. google's platform, why google's

platform? >> it is very good. why this phone, it has a bigger screen and a faster processor chip and it's just more. the other cool thing about it, which i actually like. it has a kick stand. if you want to sit there and have a conference call and watch videos and things like that. isn't that really cool? >> we're going to transfer that shot. look at that. that is a kick stand right back there. that is some old school technology from a bicycle that makes some new technology really, really cool. so, is this going to kill the iphone finally? >> so, i think what this really does, this is the phone that everybody is waiting for. iphone plus. we bring more to the party than what iphone has. we are bringing a lot more to the party. >> do you have, so, 4g makes your pipes fatter, faster, et cetera. but do you still need more room on the highway of cyberspace? do you need the government to figure out what's going on? do they need to auction more

spectrum and more rapidly so you guys have more room out there? >> the truth of the matter is, we don't return our selves with all of those things. we deal with what is right now. what we have right now is a lot of spectrum, a lot of data and a lot of big pipes and we're out there right now trying to really drive that agenda. >> tyler? >> i jump in and ask how many places would i actually be able to get the 4g speeds? in other words, if i'm up in the poconos somewhere, am i going to be able to get the benefits that you describe? >> you know, so, right now we're continuing to build out the network. and what we have publicly stated is that by the end of the year we will have 120 million pops, that means populations nationwide. so, wherever you may be, you know, you won't be able to get 4g, but it will take a little bit of time. we are aggressively moving around this and you should be able to get that into places you are. >> wall street has a big concern. you're spending all this money

to do all of this stuff but they're not convinced that you could charge for broadband service. right now it's a flat fee and we know there are people out there, people use the iphone and they're data hogs and downlo downloading left and right and they're paying a flat fee no matter how much they use. is there ever structured tiering? >> look, at the end of the day we're all about being prudent to our shareholders and we'll find the right pricing structure that will allow us to make money and charge a price that customers will find affordable. all of those things will come together over time. >> are you thinking, though, about a different price structure in the future? is that a possibility rather than a flat fee? >> we will respond to where the market is going and at some point in time we will come out with what we believe is the right pricing for our shareholders, our customers -- >> that is a definite maybe. matt carter, thank you so much. and congratulation on the 4g.

verizon guest coming up, as well, to talk about their move into 4g, as well.

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at 32 past the hour, welcome back. here are the headlines michael dell says the pcmaker expects revenues in china to approach $5 billion. this in address to suppliers in beijing today. chrysler says it sees march u.s. retail sales jumping 50% over last month but the automaker adds it expects a sales decline on a year over year basis. and jm smucker announcing plans to cut 700 jobs or 15% of its workforce over the next three years. the company, of course, known for its jams and jellies also revamping its supply chain to boost profitability. michelle? hey, welcome back to las vegas, tyler and sue. i'm here with tony malone.

here at the wireless conference. good to see you. >> great to be here, michelle. >> you are all excited because you have a 4g network coming and sprint beat you. does that give them a competitive advantage that you now lost? >> we're very excited about our deployment this year. if you think about the explosion in demand for mobile broadband, i would like to equate it to a resort community and the beach front property is spectrum and the luxury high rises are lt technology. >> that's your technology. >> that's our technology and we're going to launch this year covering a third of the nation, 100 million people are going to be covered with our technology by the end of the year. we're very excited about that. >> i will ask you the same question. why do we need it? what's so wonderful that will make that network a selling point so that people get your service versus others? >> well, just like years ago, voice, people did not want to be

tied to that landline device and they wanted mobile. same thing is happening in a mobile broadband, in a broadband environment. people love to do so much on their pc, on their laptop. they want to do that untethered. mobile broadband brings that to the marketplace and provides consumers with so much more capability. >> you have an android phone in your pocket, i know. you have an iphone deal coming eventually, right? >> i can't comment on anything with apple at this point in time. no announcement, there, no. >> is it safe to say that you guys still see yourself as agnostic when it comes to whatever platform? >> yes, michelle. i would say so. i think the android operating system is a great operating system. obviously, apple has done great in the marketplace and rim does very well and others. whatever the consumer wants to use, we believe our net local will be the network to provide those services.

>> as you roll out 4g, what equipment are you buying? what who are you buying it from? publicly traded companies that are going to get in part of that you're going to spend to buy equipment. >> our first deployment for this year ericsson and acatel lucent are the prime suppliers. >> they could use the help. >> they're great partners and doing very well in position. we feel we're going to be very successful partnerring with the two of them. >> does the government need to come forward soon and figure out where going to do with spectrum or can you deal with the size of the pipes you already have? do you need more room out there in space? >> we feel we're in great shape in verizen with spectrum. we have a 3g spectrum that we're putting to great use and tremendous 4g spectrum that will serve well for the years to come. down the road, a decade from now, do we expect to be very successful and will we need more

spectrum at that point in time? we hope so. but for the short term we feel we're in great position. >> thank you so much. good to have you here. coming up here on power lunch, we'll talk to john stanton. he is a pioneer in this industry. a lot of people you mention his name and their eyes get big and wide. what he thinks is the next great thing and where this industry is going, sue. >> look forward to it very much. meantime, the debate rages on over the reform law mandating calorie counts on eateries menus. what do the restaurant owners and the chefs think about that? >> jane wells has gone straight to the source. tell us about it. >> i'm jane wells. two very different retailers reporting earnings tomorrow. best buy where maybe we will get some outlook on the future of 3d tvs and the threat posed by walmart. also on the tech side, there's a little company called oracle

reporting.

well, you probably saw it here yesterday on "power lunch" a rock em, sock em report. it requires restaurants to post calorie counts on their menus. one owner of an eatery now

weighing in on that mandate. and jane wells is leer to tell us about it. hi, jane. >> hi, tyler. i must have had a little too many calories. i teased we would talk about earnings, which we will tomorrow. what this new law mandates is already the law in california. if you have a chain with 20 locations you have to put your calorie information on the menu for customers. at the cheesecake factory they have it on a menu they put on the table. what if you're not quite that precise. >> that's fete cheeny alfraido right there. she'd like to grow past 20 she's president of the l.a. chapter of the california restaurant association which supports the calorie information part of the new law, but, she's a little worried as "we're not robots where every block on the plate is a half ounce." >> my concern is those

especially in california, those litigious people that will come in and by a fete chino alfredo and then we'll be hit with a lawsuit because we didn't have truth in the menu. that's my biggest concern. i don't know if they thought that through where there has to be provision that it's a guideline. >> she also has mrenplenty to s about the new health care she's going to have to provide for her 400 employees including part-time waiters that work at two places. so, who covers them? we'll have that on the "closing bell" at 4:00 sg you had a question, sue? >> i did. it gets to a point that cooking is an art not necessarily a science, is what she's saying. in some kitchens you may add more cream to it or a little bit more cheese to the pizza which changes the equation and,

therefore, you may not have the correct calorie and fat count, et cetera, et cetera. what about her point about lawsuits? how legitimate do you think that is, jane, from what you have seen in california? >> california has the fifth worst climate in the country for loou lawsuits and litigation against companies. that is a real issue for her here and in other states. she hope there's is a leeway in this law which is still kind of unclear on how it will actually be enforced or mandated. she hopes the guidelines, there could be sort of a range. >> i'm not a lawyer, i just play one on tv, but it seems you could get around it by saying these calorie counts are approximate based on average serving sizes. but, who knows. people can sue for anything these days, i suppose. jane, thanks. >> all right, let's go back out to michelle. she has a lot more coming up from the ctia conference. you're in heaven, aren't you? >> i am. the second hour of "power lunch" has more guests including john

stanton. founder of wireless and now he's going into haiti. we'll talk about that.

welcome to the fast money

halftime report. stocks that flat line holdingen to yesterday's fresh highs. what is moving at this hour and that is the dollar hitting fresh highs for the session. first, your fast money for today. joe, brian and jera and mike of neural markets. yes, the dollar index overall hitting session highs today, guys. we want to focus in on the dollar yen because the move is most pronounced there. brian kelly, what would you make a move there? dollar/yen specific? >> the budget was released last night and, two, you got a look at the live rate in yen versus dollar. about a month ago it flipped and it's cheaper to borrow yen than it is to borrow dollars. and then, finally, the yen just popped above the 200-day moving average which gets a lot of big mac row and trend following funds into the equation. >> the carrie trade is back on. what does that mean for the equity mark snts. >> well, first of all, it seems

going into this year the dollar was going to remain cheap because it got beat up and not only knew but inspiring renewed growth preferably in europe and we're seeing just the opposite there. what that means is right now we're back to old school where you'll continue to see convergence trades and more emphasis on borrowing in yen and not necessarily buying euros any more or facilitating purchases because so much emphasis on the euro that the dollar will continue to have strength into the summer. >> joe, with dollar strength, you have to question the commodity trade at this point. gold hit six-week lows and inventory numbers and the overall dollar strength would mean lower crude oil prices and right now you're short crude, right? >> yeah. it all boils down right here. the euro, the euro today is hanging towards the lows all day. you're not seeing the usual intra day reversal we had in the dollar where the dollar is strong in the morning and in the

afternoon sells off and the euro backs away from the low. i'm a little concerned here that we are spending so much time in the low and i think for the commodity's trade, oil, specifically, you can be short against $82 as long as the euro stays weak, commodities stay under pressure. >> what is peaking your interest in commodity trade or ag trade? >> interesting one. it pushes everything down and crude oil, inventories were not favorable and way above the averages that are typical for this year in crude. one thing from a couple weeks ago i looked at getting short orange juice and looking to cover some of that trade now as oj has come off quite a bit. some of the other issues i'm paying attention to are the ad names in specific. the ones getting pummeled and these are the bigger ones. that's where i'm shifting most of my interests. >> dot the is for us, kelly, in terms of the currency discussion. you're still short based on the possibility of a widening crisis in greece and you're still short the euro, as well as a number of currencies there. are they all against the dollar

because if you look at euro versus frank, you can't, that's not a trade that is working if you're in the euro. >> absolutely. they're almost all against the dollar except i am in that euro frank trade on a bet that the swiss national bank is going to come in and intervene in the market. they haven't done it and testing my patientance and the market's patience. a host of currencies and i do think that the european situation is headed towards a crisis and then it will be resolved. >> all right, dollar strength today not a huge issue for the markets nor is the crisis out of greece today. certainty we are hanging in there, you know, i'm not one to be the glass half full kind of person, let's be honest here. joe, what do you make of it because very interesting note out today. fresh 18-month highs yesterday in the s&p 500 but only 16% of the index actually hit fresh 52-week highs and that may not be fahder for the bulls. >> well, i think the market's performance is rather impressive

over the last couple weeks not really having any quality participation whether it is the melt up or my theory that the market is accepting a phenomenal labor report figure. you have to have to be impresse the market right now. and the momentum continues to point higher. >> and the vix is up 6% right now. >> if you look at the correlation with the vix. the vigs tends to move exaggeratingly high. that translates into the underline fear. we've seen the atr, spx die out. that's the average true range. i believe that the market's waiting for the next earnings report. i like to do what's probable, not what's always going to net me the most amount of money. i think what's probable right now is the small retracement. i'm actually getting more bearish in the next couple of weeks. >> some may question this rally. one thing you can't deny, that is a run in general electric, the parent company of this network. fresh 52-week high. brian, at which point would you

start saying, you know what, maybe time to take profits here. >> just about right here. i've been long for a couple months now actually, since november. and it's starting to get up to a point where i've got a decent profit in it. last week i took off about a third of my position. today i'm going to watch it. if it closes in the lower half of the range, i'll probably take off another third. and then just trail a stock up from there. nobody's ever gone broke taking profits. at least that's what i've heard. >> that's true. bernstein raised their target saying they have view on the ge capital. trading higher in today's session? >> with what brian was saying, you're starting to get a pulse on the market these days, you're not seeing the short positions come in with great strength as much as you're seeing profit taking. two ways to boil down selling pressure. again, emerging economies, which were supposed to be the leaders, now we're taking a back seat to u.s. strength in equities. i'm seeing references in etfs

like south africa, eta, and you're starting to see a one and two-year top. i think the u.s. will be beneficial in that scenario. >> the ten-year u.s. swap spread turning negative for the first time on record. traders are seeking higher yields with riskier securities. brian, you look at this chart and you've got to trade in private equity. connect the dots for us. >> the ten-year swap spread is essentially the swaps rate less the treasury rate. when it goes negative is it says it's cheaper for corporations to borrow than for the u.s. government. we saw the headline with the cheaper rates than the government. what that says to me, is that in the eyes of private equity, they can borrow money cheaply. therefore, the u.s. market looks cheap in their eyes. so couple that with what's going on in the ipo market, and i think you've got a great place for private equity to come in here and put a bid in this market, wi some stocks and have an exit strategy. >> and the ipo market, that

means the equity firms have an exit strategy for the portfolio companies that they own currently on the books. >> right. and the valuation could go up, too. >> absolutely. all right. let's head to steve. we want to get more information on the $42 billion bond auction. steve is actually on the trading floor. hanging out with the traders today. steve, what should we be expecting? >> reporter: well, melissa, first of all, a lot of activity, really what one trader behind me called a thorough drubing in the market today. the ten-year is up by ten basis points. as you just saw, that swap spread went negative, $3.71, going down the curve. and the two-year up a little bit less. coming up in just a few minutes is that five-year auction. i want to come over here, guys, if you can. these guys right over here are putting in the jeffreys bids right now for one of the pri hear dealers. they're putting in a bid right now on the auction.

and they're going to make their stance going in as they must do. that's happening all over wall street right now. we're going to bring you the live results in about ten minutes. really what is a very, very active bond market going into this $42 billion five-year auction, melissa. >> steve will be all over that auction top of the hour. thank you, steve. we want to hit one stock moving aggressively today, and that is sprint. it announces its first phone called the evo manufactured by htc. made its premier yesterday. brian kelly, still room to run on this one. up 6% today. >> i do think there is more room on here. ahead of the curve on the 4-g network. a different technology than verizon. the verizon ceo talked about putting it out this year. i think sprint's ahead of the curve. that looks cool. i want one. >> on the other side of the break, we'll put our ear to the

wall and tell you what energy names are heating up.

welcome back to the "fast money" "halftime report." let's see what the chatter is in the options pit. what sorts of activity are you seeing here and how do you interpret that activity? >> devon energy, i've got to confirm, it's just a rumor at this point, cvx, we're seeing action in all of the calls all the way up to the 80 calls in devon. 28,000 calls traded versus about 1,000 of the puts. that's a ratio of 26-1.

how to interpret this? typically we see this sort of thing. it doesn't always mean a deal's going to get done. but certainly something to pay attention to. i think everybody looking at devon, look at the fundamentals before committing any dollars to this trade. >> the reason we report the so-called rumors, is they are moving shares in the market, whether it be the options or stocks. >> i like the s&p here. if it starts to dip, i see more buying. i'm long. >> jared? >> you guys are nuts. i'm a seller. >> brian kelly? >> as long as money's cheap, i think it goes higher. >> joe? >> you've got to change it up. do different things this year to make some money. commodities trade looks weak. there are other things like ge that you mentioned that are working. we've got twhy he's saying no. >> we are watching the market. we have the deputy treasury

secretary with us. neil will join us on why we must heed the calls for financial reform now. and stop trying to side-step it. that, plus a whole lot more. much more live from the wireless connection conference in las vegas. reading palm's future, is a time for it to fold or be sold. also ahead, wireless, is it the savior of the third world. the founder of trilogy partners joins us with the best areas of growth. and the wi-fi scramble. still looking for a decent correction? ruckus wireless is shaking things up. we talk to the ceo. look at that live picture of ctia, the wireless conference. we're sitting on the set. this is a huge annual wireless conference we're covering in the second hour of "power lunch." i'm michelle caruso-cabrera.

we're on the verge of a revolution in wireless. the distinction between your computer and your phone, it is going away as we speak. and they are all trying to capitalize on that here. we've got a great lineup of guests to talk about that. and whether or not bono is the worst investor in america. >> that is an interesting proposition. your phone is your computer, is your microwave, i love it. i'm tyler. oil hovering just above $80 a barrel after sliding lower, following this morning's inventory report. >> and i'm sue herrera. just moments from now, the results of the $42 billion five-year note auction will be coming out. it has been a difficult day in the bond market overall. some of that is related, of course, to greece. some of that is related to the strength that we see in some sectors of the stock market. needless to say, the bond market has been under some considerable trading pressure earlier this morning. steve liesman rejoins us.

nice to see you, sir. >> reporter: yeah, i'm in a great place for this auction, sue. we're waiting for those results. it just came in. how do you grade the results here? >> somewhat weak, steve. especially considering we had a decent concession going into the auction. trading at 2.57 1/2. what's the total percentage? 10.7 direct. 39.7. tell us in words there, what is that telling you about the strength of the auction? >> that the street took down a higher percentage of this auction, than is normally the case. looks like a pretty weak participation by real money and investors. >> reporter: how about the recover? do we know what that was? 2.55. how do you grade that? >> again, looks a little bit weak relative to the recent

history. >> steve, why is it weak? >> reporter: why do you expect -- first of all, the bond market has been under a lot of pressure today. is that a reflection of that? >> definitely. >> reporter: some guys are saying this is health care, an issue of people are starting to understand that health care may mean an increase in the deficit. >> that's true. there's also concern that about china and foreign investors, whether they're going to be pulling back, concern over the upcoming currency manipulation talk coming up on april 15th. maybe they pull back from the bond market. >> reporter: what about the strong economic data? >> if you look at the numbers, it didn't look that strong to us. that didn't add anything to the market. >> hey, steve? >> reporter: overall, what grade would you give it? i know that's rick's job, but i want to give you the chance to do it. >> b-minus. >> reporter: that's charitable. b-minus. >> c-plus. >> reporter: okay, c-plus. >> i wonder if you could ask

your guest whether he thinks this is china flexing its muscle? we've had a lot of chatter about china this morning. is this china flexing its muscles ahead of that april 15th deadline? >> i don't think so. it's really hard to tell. you know, i'm not going to comment on what investors are going to be doing, or potentially doing do be in the market. people are concerned that the bid by foreigners into u.s. treasuries will dissipate. so, you know, the results that we're seeing today are certainly adding to those fears. >> reporter: chris, what happens from here? now you guys are sitting on how much in terms of bonds. now you go out and sell that in the market right now. is this positive for jeffreys in terms of its book? >> without commenting on what our position is and what we've done, in general, it's a good result for the street. dealers particularly buy bonds in these auctions, so we got them cheaper than where they were trading. generally if you were short ahead of that, that's a good

result. for investors, that's a good result, too. our job is to distribute these treasuries. trade around, hedge them versus other instruments, get investors to participate in the market. >> reporter: real quick, all the supply comes to market this week. do you expect things to smooth out next week and maybe ease off a little bit? >> i think so. don't forget, we also have $32 billion seven-year auction tomorrow. and two weeks after that, we'll have three-year notes, ten-year notes and bonds. >> reporter: thanks, chris, for your help. >> the bond market sold off a little bit more after a very rough early morning session after the results of that auction. let's go back out to las vegas, and miss michelle. >> reporter: yeah, we're going to keep people up to date on the bond market even as we are here live in las vegas at the wireless conference. one of silicon's valley's leading venture capital firms. good to have you here. >> thank you, michelle. >> is bono the worst investor in america? >> i think -- >> let me back up. bono, member of one of the founders of elevation partners.

a venture capital firm that bet a huge bet on palm. now analysts predicting palm goes to zero. >> i'm not sure i can directly answer the question on bono, but what i would say in palm's case, while they are in a difficult situation, the pressures of the iphone and other devices coming after them, that is a very smart intelligent team running palm. the designers are extremely experienced designers. and it's viewed as a great software platform in silicon valley. if you're a company that needs to compete with the iphone, palm could be a good asset. i'm sure there could be a number of large phone manufacturers. >> here's the thing, when you read the analysts' reports that predict palm is going to zero, they make the presumption that nobody's going to buy that platform before then. when do you think that purchase happens? it could happen after the stock goes to zero, right?

>> i wouldn't presume to guess on that specifically. we know analysts are always correct. but you know, i simply say, it's viewed as a powerful software that competes with people like android or iphone. >> windows mobile ever going to make it anywhere? >> windows 7, yeah. windows 7, or winphone 7 i think they're calling it -- >> you remember the name. >> i think they just switched it around. it is impressive new phone. but it does appear, in my eyes, that it is a little bit later to the game than they should have been. i think even steve admitted that. >> there's another obsession i notice with teenagers on their mobile apps. location, location, location. i post on twitter and suddenly there's a link exactly where in the world i am via a gps function. is anybody making money on that? >> absolutely. i think what you're pointing out is the most buzz companies in silicon valley are in this

location check-in space. a company based in new york called four squares, as an example, that you check in when you go into bars and establishments, and your friends can find you when you're out partying, or wherever one spends their time on the weekends. that type of application has been talked about for a long time, but companies called koala, are startups making that happen. >> nothing publicly traded here yet for the average person, right? >> not completely. i'd say to some degree, navdtec is a provider of maps. but for the most part, the companies i'm speaking about are private venture capital-backed companies. >> richard wong, good to have you here on "power lunch." i don't want everybody to know where i am every single second of the day. that's crazy. >> just your friends and your mom. >> i don't know why, but the thought of tiger woods crept into my head when that concept came up. >> exactly. >> richard was really terrific.

that was really interesting to have him. i could spend a whole hour with him. the mortgage principal forgiveness program. diana has the news on this. this is a big development, isn't it. >> the treasury department as you say reacting to news today that bank of america is starting a principal writedown program for its most troubled borrowers. "their new initiative can reinforce our broader efforts to provide relief to homeowners and is consistent with our own housing policy principles. we will continue to identify new ways to refine and improve these programs and urge other banks to move ahead as well." principal writedown has been a huge debate in the troubled mortgage industry, and sources tell cnbc the treasury is in fact working on a component to its $75 billion mortgage bailout plan. as for the b of a plan, it targets subprime pay option arms and certain two-year hybrid arms. no 30-year fixed there. the loans must have a principal balance of at least 120% of the

value of the home and borrowers must be 60-plus days delinquent. and earn forgiveness over five years up to maximum 30% increase. they have more than 1 million delinquent loans on its books. but it will affect only about $45,000 for $3 billion in reduced principal. it's a settlement with the state of massachusetts that b of a will apply to all 44 states now in the 2008 b of a countrywide settlement. the loans must also meet the criteria for the government's home modification program. we're going to have an exclusive interview with b of a's chief later today. >> diana, how soon before other banks decide, or may decide to follow suit with that? are they going to wait to see whether or not the principal reduction works in getting people back on track or not? >> i would -- i don't know for sure, but i would say they're not going to wait. if bank of america is doing this already, and we do hear some linklings that the treasury may

put some plan forward. if they gave the bank some kind of incentive to do principal writedowns, then i think you would see more banks jump onboard. but we know there's been more and more pressure for banks to get these loan modifications to work and part of that is going to be principal writedown. because the modification programs right now are not working well. >> what keeps people from just not paying their mortgage for two months? and then qualify, correct? or do they have to already have been delinquent? >> you have to be 60-plus days delinquent already. and you have to meet a lot of the -- all the criteria for the government's home affordable modification program. it's not just for folks who say i'm not going to pay the mortgage. you have to be well under water on your loan. you have to be also late in your payments already. and you have to have one of these very specific types of loans. again, as i said, not your 30-year fixed, not a lot of the loans that are out there in trouble now. these are specific pay option arms and some of those old subprime loans that have gone bad. again, it will only affect about

45,000 loans. we have to see if others jump onboard. if the treasury gets onboard with something like this, then it would have much more widespread effects. >> thanks, diana, very much. look forward to your interview later today. usaa basically caters to the u.s. military and their families, doing right by those defending our country and defending its clients from the recession, producing the strongest year ever for its members. the cfo joins us first on cnbc. michelle? >> we've got john stanton coming up e. he's founder of trilogy partners. he's going to be talking about expanding into haiti, of all places. it's going to be exciting. come back. we're live from las vegas at the wireless conference right after this on "power lunch."

live in the financial capital of the world. whwhwhwhwhh

the obama administration turning up the heat on financial regulation reform. the treasury secretary out with a piece in the hill newspaper today saying, we need financial reform. we should not wait for another financial crisis before we fix a broken system. in the speech at the chamber of commerce's capital markets event, he took the chamber and other lobbying firms to task for campaigning against the financial regulation bills that are moving through congress. >> there are four financial lobbyists for every member of congress. all told, it is one of the most

expensive special interest campaigns in history. we believe that the fight against financial reform is short-sighted, and misguided. >> time for another cnbc exclusive. joining us from washington, where he has just wrapped up that speech, is the deputy secretary of the treasury, neal wolin. mr. wolin, welcome. what was the response in the room there at the chamber of commerce, which is one of the lobbying firms in washington? >> tyler, i think the response was polite. people here expressed a desire to get on with the business of enacting financial reform this year, which we welcome. we certainly think that's an important bit of progress. and we want to make sure that, in working forward, that we have loopholes closed, stronger consumer protection, that we end once and for all the too big to fail problem that we have been working on now for more than a year. >> senator dodd and chairman

frank earlier today at the white house said, among other things, and when i spoke with chairman frank on sunday night, he said that he expected that we would have a bill signed into law by memorial day. do you agree? >> well, tyler, i'm not going to comment on the exact timing of legislation. but i think that both chairman dodd and chairman frank and the leadership up on capitol hill understand the importance of this legislation, and the need to move forward urgently. we in the administration look very much forward to working with members on the hill, as they try to bring this over the finish line as soon as possible. >> when it goes over to the finish line, mr. secretary, will it include the volcker rule or not? >> well, certainly, sue, the legislation that was passed through the banking committee earlier this week includes this. we're very pleased about that. we think it's an important element of making sure that we manage systemic risk in the system. >> but is it a deal breaker? >> i'm not going to lay down

specific deal breakers, sue, here on television. it's obviously an important element of our proposal. it's something we feel very strongly about. we're very pleased that it's in the senate bill. and we expect that it will stay there. but we'll see exactly how this plays out as we go forward. >> are the consumer protection provisions of both of the bills, the house and the senate one, sufficient from your point of view? >> i think, tyler, that the consumer provisions of both the house and the senate bill are strong. as the president said, and secretary geithner said in their statements last week, we want to make sure that those provisions aren't weakened, and that in certain ways we work toward strengthening them. we want to make sure the consumer agency is independent, that it has the capacity to write rules and enforce those rules across the financial system. >> mr. secretary, do you feel as though you kind of have the wind at your back, you have the momentum now that health care is done and the president obviously

had a big success, a big win on that? how much momentum do you think that has given you on what has turned out to be the thorny issue of financial reform? >> well, sue, i think we are making progress. i think the fact that this passed through the banking committee the other night is evidence of that. we have legislation, obviously, that's passed through the full house. so i think we're making good and important progress. we understand we still have a ways to go. and we want to make sure that as we bring this bill, or as chairman dodd and the leadership of the senate bring this to the floor, we continue to stay on top of the substance, making sure that it's going to protect our financial system and the american economy overall. we think we're going to continue to make progress along those lines. >> do you expect that this -- the bills that ultimately will be passed will have bipartisan support? >> i certainly hope so, tyler. i think it's not for me to say whether they'll have bipartisan support, but i think you've had

wide expressions, increasingly wide expressions from members across the spectrum, that legislation will happen this year, that they want to be supportive of it. so we're looking forward to bipartisan support. but as i say, we also want to make sure that this legislation, when enacted, has the appropriate provisions to protect american consumers, and our financial system. >> mr. secretary, a final question to you. one of the worries of the analysts that we've talked to on the street, is when we resolve the too big to fail issue, given the global interconnectivity of our financial system right now, can we be sure that the provisions that are currently on the table that address too big to fail, will work in a global environment? because it doesn't just work now if it's a domestic unwinding of a financial institution. we saw that certainly during the economic crisis. but you still have, you know, multinational corporations doing business all over the globe. >> sue, i think it's a very important issue, a very

important question. the too big to fail provisions like the rest of the provisions in this legislation need to be coordinated importantly at the international level. we've been working within the g-20 and other international forums to make sure that happens. i think we've been making good progress along those lines. and we will continue to make sure that as we develop standards in this country, they're met by framework of international standards that work on a global basis. >> deputy secretary wolin, thank you very much. >> thank you so much. >> you bet. despite the economic uncertainty we've been going through, the continued recovery of the financial services industry, usaa, whose mission is to help facilitate the national security of military families, basically getting its best year ever in the year 2009. so what might they be doing better than the rest? what's their strategy? joining us first on cnbc, usaa's chief financial officer, kristy. what strategies did you employ that helped you weather what was

one of the worst financial storms in history? >> financial success at usaa really starts with the unique relationship we have with our members. we're actually owned by our members, those militaries and those families. that's important. because when the markets get choppy, we don't have to trade off the interest of shareholders with the interests of our customers. they're the same. what that allows us to to is focus and manage for the long haul and do what we do best, which is facilitate the financial security of our military men and women and their families. >> you take accounts from people other than the military? >> some of our products are open to the general public. our investment products are -- >> mutual funds have been very good performers. >> yes. in fact, our precious metals and minerals fund is the fund of the decade, recognized by libert tonight. if you look at the equity funds across the board, 75% -- or all of our mutual funds, 75% of them outaveraged over ten years. >> we're hearing you mentioned precious metals. obviously the commodity play was

a big play. and reaped some big rewards. but what were the trends, or the trades, or the strategies that you think you employ that allow you to serve your customers and those military families so well? >> regardless of what the style of the fund is and what we're investing in the company, we want to understand exactly how we're going to make money on any instrument. for example, we haven't had to divest ourselves of subprime, because we never invest in it. we looked at it several times and it wasn't clear to us that the models made sense. so we chose not to go into that. we really focus on long-term sustainable earnings and make sure that we're getting paid for the risks that we're taking on any investment that we do. >> i wonder what you think -- i assume that usaa does not trade for its own account, does not have proprietary trading per se? >> we do. we have an insurance portfolio for both the property and casualty and life insurance. >> as you look at other financial services companies and you look at the turmoil that they have gone through, and by extension, the entire system has

gone through, what do you think? >> well, you know, i think if you focus first on doing what's right, which is the theme of our annual report this year, we always focus on our members first. we really keep things pretty simple. you know, over the last few years as the financial markets expanded, people got kind of in love with the idea of making money. the real key, though, is can you keep those gains when the market goes sideways. we always focus on both. what are the opportunities in the market, where can we capture those markets, but more importantly, how are we going to hold gains if things go sideways. >> one of the things we saw was the reach for risk. how would you say your client tell breaks out in terms of risk tolerance? in general, are they more conservative investor? or one that wants to reach for risk? >> in general, our customers are going to be a little more conservative than average. we also have products that are more aggressive. equity products and that sort of thing. but in general, they're going to be more conservative. we're also, in terms of how we manage the company's assets.

now, financial markets are all about risk and rewards, so you have to take some risk to get reward. in 2008, when the standard & poor's was off, we made money. we did that by going out on the risk curve, taking equity positions. we protected the gains when the markets dropped. >> congratulations, kristi. nice to have you with us. >> thank you very much. and do not miss a very special "street signs" coming up in about 35 minutes. a secret guest will help us navigate the dow's slow crawl to 11,000. erin burnett will introduce you to that sea turtle today at 2:00 p.m. eastern time. >> that is one unique tees. not so secret, john stanton, the founder of trilogy, founder of western wireless, doing a lot of work in haiti. we're going to talk about china and the situation with google. all that and more. unlike me, he's not very

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the war of words escalates between icon's $6 per share takeover woefully inadequate. icon, he doesn't see it that way. he says the company has failed shareholders for years with a stagnant stock price. that he'd like to juice up.

lions gate says they're ignoring a growth record. michael burns will be a guest on "fast money" at 5:00 p.m. eastern today. hey there, tyler. i'm here in las vegas at the wireless convention. john stanton is the founder of trilogy partners. he was the founder of western wireless. and he joins us here to discuss a number of things. i want to talk about the big story right now, though. >> terrific. >> pretend you're eric schmidt. do you make the same decision as he did getting out of china? >> technology will will out over guns. he's creating a crisis between hong kong and china, that's not necessarily good for hong kong. and it's not necessarily good for google. he can stand up to the chinese in a far more effective wan than i think he has. >> how about when they say, gosh, it got worse after the olympics. it started to remind me of soviet russia. my family left soviet russia for a reason. >> over time, go back to voice

of america in the cold war, fax machines in tiananmen square, we've seen technology overcome dictatorship. the tweeting in tehran last fall, last winter, made a huge difference. we're seeing that today. we can make a difference. even in countries like china. >> i know they went in there saying, okay, we think by providing information at least some, it's good. but what if inadvertently they enable the chinese government to find dissidents because they hacked into their system and helped locate people. >> in the long term you've got to be willing to take some losses, some casualties bluntly in order to succeed. >> wow. >> you've got to be willing to take on that government and be willing to make a difference. >> wow, that is a pretty tough position to take. i don't know how i feel about that. i'm going to think about that more. let's talk more about haiti. a big wireless provider in haiti. >> we are. >> you founded western wireless who did work in rural areas. i suppose that gives you some advantage in haiti.

how's it going there? >> haiti has been devastated. it's been horrible. but the wireless businesses that have been providing services have gotten people out of the rubble. we're texting vaccine information to people who need them, texting information on where people can get food and water right now. we've done a lot for our employees. we lost five members of our team. two-thirds of our people are homeless. we're operating a tent city for about 1,200 people right now. it's an enormous challenge. but this is an opportunity for haiti. haiti can rebuild as a country having an infrastructure that in effect gives it a second chance. >> you highlight something that the wireless industry, people are going to laugh, has a very soft spot in my heart i have for the wireless industry, because i see what it did for latin america. for years if you were in the home of somebody with a phone, they were rich. because the government controlled the rollout of land lines. they were going to ensure everybody got one, but of course they didn't. luckily when the advent of wireless came along, almost all

of those countries had liberalized their economies. now we see ubiquity, wireless in the deepest and poorest parts of the world due to great competition. >> well, haiti's the perfect example. after 50 years of operating, the haitian telephone company had about 11,000 phones for a country of 10 million people. 3,000 unionized employees were providing that service. they could practically go -- >> 3,000 employees working for 1 11,000 phone lines? >> exactly. we see a total of over 3 million wireless phones in just the ten years that we and our competitor have been operating in that country. bolivia is a country we've been operating for about a decade. we partnered with a co-op. they have a fractured set of wire telephone companies. they do a better job than haiti, in part because of the cost, and in part because of the role the competition plays. we've been able to provide dramatically more service on

wireless. >> are you going to make money there? >> yes. >> okay. that was a pleasure. i'm still thinking about your responses on china. >> you've got to do something. >> guys, back to you. >> michelle, thank you very much. and i know you have a lot more coming up as well. but coming up here on "power lunch," back here at hq, we are going to talk about the cnbc russell investment manager survey. almost 200 professional money managers weighing in. and guess what they're most bullish on -- health care. we'll talk about that in a minute on "power lunch."

welcome back to "power lunch." here are some of the stories we're following at this hour. the euro sliding to a ten-month low following portugal's debt downgrade. the consumer product safety commission recalling more than 1 million baby slings made by a company called infantio. massachusetts attorney general announcing a $3 billion settlement with countrywide financial. michelle, over to you. >> we have something very exciting.

sa lynna lowe, president and ceo of ruckus wireless. we're hooking up her wireless mike right now. she joins us here on set. thanks for joining us. we heard the wireless conference. you have brought a prop that we're going to show people here. this is a wireless radio? >> yeah. wi-fi radio. >> what does it do? is this like the wireless thing i have in my house so i can get onto the internet? >> this is a whole new generation of wireless radio that can go around interference, obstructions like walls and furniture. so that you always get a clearer signal. and the net result is that the coverage is much farther. and you get a more reliable user experience. >> it's a smarter product than what i have in my home already? >> not just in your home, a smarter product than what you have at work, what you have in hot spots. it's a new generation of smart antennas. >> who is buying this? am i buying this, or are networks buying this?

>> so we market to service providers as well as enterprises. >> how much does one of these cost? >> it depends. for homes, it can start as low as $20, and for a large service provider infrastructure, outdoor wi-fi, it can be a few thousand dollars. the key thing is that compared to today's cellular 3-g infrastructure, this is a lot less expensive. and it extends the coverage of the mobile internet to now all the masses. >> does it replace the 3-g? how do i think about it? >> it definitely augments 3-g/4-g. but it relies on the spectrum that is limited. that's why some people complain that they cannot get onto the network when they want to. wi-fi uses unlicensed spectrum. and so it's a much lower cost way of giving more wirelessly to

people. the thing is, because it's unlicensed spectrum, the air is dirty. anybody can put up a wi-fi radio. and so having a radio that can navigate around interference -- >> if there were more of these in new york, would people like michael wolf stop writing columns that say at&t sucks because hits iphone doesn't work very well? >> yes. and there will be this in new york. we are working with customers that are putting it in downtown manhattan. >> okay. well, congratulations to you. this was a lot of fun. good luck with this product. because we all want to be able to get on the internet faster and quicker when it comes to our cell phones. >> absolutely. >> thanks. >> thank you. >> good to have you on. >> michelle, thanks. a new survey of nearly 200 money managers finds they're most bullish on the sector you might least expect right now. >> taking away the tax advantages of home ownership. would it be like dropping an a-bomb op our malfunctioning real estate market or not?

incredibly destructive, but perhaps ultimately very effective at putting an end and a bottom under the housing market. we'll talk about that in a minute.

sglunchts before we get to the russell survey, a little promo for "street signs." you are not going to believe what's going to be on the set at 2:00. with erin burnett. >> the guest is special. >> hopefully not hungry. >> mm-hmm. >> all right. back to the markets.

russell's latest survey showing investment managers are still feeling the pain and are reacting strongly to any new negative news. bullishness for non-u.s. developed equities concerned about the debt crisis in greece. with more of the results eric, the chief investment officer for client investment strategies at russell investments. welcome back, eric. nice to see you here. >> good to be here, sue. >> greece is certainly one as spent of things. but the unemployment situation here in the united states also looms large over this survey, does it not? >> it does. when you look at it effectively eight out of ten managers believe the unemployment rate will be above 8% at the end of 2011. i think managers are expecting a very slow job recovery in this overall economic recovery. >> i presume, eric, this explains in part why they are as negative as they are about anything tied to the consumer? >> well, i think there is a little bit of that. i think there's some profit

taking as well there. consumer stocks have done extraordinarily well over the last year. so i think there is a concern over the consumer. i think what we're seeing right now is it's very likely business spending will lead this economy in terms of its improvement for the next few quarters. >> and why so negative on non-u.s. developed equity markets? >> i think it really it's two things. a concern over europe and japan. japan is rolling back into a recession. europe has some obviously debt crisis they need to figure out. that also ties into the concern of the dollar potentially strengthening. a very good chance the dollar is going to win the least ugly contest this year. >> that's what really matters is the least ugly. one of the sectors they're most bullish on i think might be a surprise to many of our viewers, and that was the health care sector. >> yep. >> at what point was the survey taken, and do you anticipate that the results would be different now than they were then? now that we have health care reform through.

>> yeah, they were taking it a couple weeks ago. i think you would probably not see a notable difference. at the end -- really, what happened, i think, over the quarter was, the worst-case scenarios for corporate profits that they had feared in terms of legislation were actually not in -- likely about two weeks ago to be in the final legislation, and weren't in the final legislation. i think that certainty about the worst coming off the table actually led to the increase in bullishness. >> bearish on u.s. treasuries. >> yeah. >> explain. >> well, i think there's two concerns. i think one concern is that there may be some inflationary late in the system in the longer run. i think that's a more modern concern. i think the real issue is supply issue. we have a tremendous amount of debt and there's going to be a lot of treasury supply. i think managers are concerned particularly in the long end of the curve about the kind of supply that's going to be hitting the market. as well as some of the credit rating issues around the u.s. treasury. >> so they're worried about the u.s. treasury debt ratings?

they're worried about the u.s. debt rating itself? >> i think they're concerned about treasury rates moving up. particularly in the long end of the curve. i think it's going to be a combination of a lot of supply, which will have to increase the yield to get it placed. i think there's latent concerns over the press that you're seeing about the triple a credit rating of the u.s. >> what about high yield bonds? the results were pretty strong, yet we hear from other money managers they're very cautious because almost everybody right now likes the high yield bond market. >> yeah. it's done extraordinarily well over the last year. as spreads have tightened dramatically in that sector. i think what you're seeing right now is an expression of two things. one, even though the spreads are narrower, there's a big running yield advantage in high yield right now. and because of the more certain economic scenario, at least in the minds of these managers, a greater likelihood those companies will be able to service that debt going forward effectively. it makes the running yield advantage more certain and high yield more attractive for that purpose.

>> thank you, eric. appreciate it very much. >> you're very welcome. >> very interesting. so is the answer to the housing crisis taking away the tax advantages of home ownership? the write-off for your mortgage. i can hear you howling already. we'll talk about that when we come back. tdd# 1-800-345-2550 that's why, at schwab, tdd# 1-800-345-2550 every online equity trade is now $8.95 tdd# 1-800-345-2550 no matter your account balance, how often you trade tdd# 1-800-345-2550 or how many shares... tdd# 1-800-345-2550 you pay what they pay what everyone pays: $8.95. tdd# 1-800-345-2550 and you still get all the help tdd# 1-800-345-2550 t you expect from schwab tdd# 1-800-345-2550 millions of investors. one price. tdd# 1-800-345-2550 at charles schwab... tdd# 1-800-345-2550 investors rule. tdd# 1-800-345-2550 are you ready to rule?

housing is still in the dumps. sales of new homes falling to the lowest sales level pace last month. a "new york times" article declaring the case for ending the mortgage deduction, saying we need to make mortgages less attractive, and that that is one of the lessons of the sector's bust. we're going to be joined shortly by rob cox, u.s. editor with reuters breaking views. right now we have the president of san born mortgage corp. my suspicion is that you would not like to see the mortgage interest de tucks taken away. but lots of countries have, and their housing markets are just fine. >> i think it's the timing of it. i think the timing of this couldn't be worse, to propose

this kind of solution. in fact, it would just make things far worse than we've ever seen. i think they should just come off the table, and i can't even believe this is written. >> it was actually proposed not long ago by a group of economists that were brought to the white house. but at the same time, you make the point that the timing is bad. is the timing bad because the mortgage deduction is one of the principal deductions that people use, and many people are looking at higher taxes, so it would be a tax increase on top of a tax increase, or there are other issues with it? >> all of those reasons and more. i mean, right now, we had to create the tax credit to get people to buy, get the government buy over $1 trillion of mortgage-backed securities to get rates down to get people to buy. people weren't buying, not because they were afraid values would drop, that their investment would go down immediately, but they were also worried about the economy and their job. what kept them in is the low rate of deduction and tax credit. if we pull this out from under them, that will have the prices

fall. anyone thinking they want to buy will not. >> if you gradually withdrew the mortgage interest deduction, wouldn't you be taking away -- you would be taking away some of that government inducement, or subsidy into the housing market, and do you buy the idea that the less you sort of falsely influence the market, the better the market can function? >> not with this. here's why. because most people when they're buying their first house or second or third house, their payments usually double. and the ripple effect of what the housing market does for the economy, i mean, it drives the economy. so people go to lows, go to home depot, repair their homes, make additions, buy furniture. this is proven in this country to work. to say we have a problem now, and this wasn't the cause of it, that we're going to change this? in midstream? it would be a huge mistake. >> rob cox, who joins us now from breaking views. what do you think? is the idea of removing the

mortgage interest deduction a good idea economically? >> of course, it's difficult politically but you could phase it out over time. i know it's really good for mortgage brokers to have this and really good in that respect. but, you know, this is a complete distortion of the tax code. it's a distortion that incentivize not saving, but taking on more than you can chew. that got us into the whole problem here. that is exactly the problem. because there is a religious fervor about home ownership in this country, which i'm sure keeps my friend in the mortgage broking business. why not give people the chance to deduct the cost of education. that's a really good idea. but we don't. instead, we do home ownership. >> i'd like to respond. >> sure. >> first of all, if you look at what home ownership does, people build equity, equity they can borrow against or retire on. that's a good thing. it's an incentive to save. >> and what happens when that's negative equity? they walk away from it. it becomes a taxpayer problem

when the banks have to foreclose. and they lose money. and we all end up spending it. it's a distortion of the tax code. it's the wrong message to send. >> can i respond to that again? >> sure, go ahead. >> if you look at what happened -- it wasn't the mortgage tax te ducks, or a paper lender or fannie, freddie loans that i deal with, it was the subprime, the no income verification, 125i9d loans. that's where your problem is. don't take something out that helps middle america. >> it doesn't just help middle america. if you look at the way the tax code works, you have to be among the richest of the americans to actually take advantage of the tax deduction over the standard deduction. so it's really just the wrong incentive. it says only if you're rich can you take advantage of this. >> no. >> and it says you don't have to save money. >> michael, rob, we have to leave it there. a rich and interesting discussion. we'll come back to it soon again. thanks, guys. so while michelle is in vegas, the big question is,

where's apple? food for thought. straight ahead.

welcome back to the wireless

show in las vegas. "power lunch" live here. food for thought, this is the wireless convention. and yet one of the biggest players in wireless is not here. my colleague scott cohen is here and has more on the 800-pound gorilla that is not in the room. scott? >> michelle, i'm a curious reporter. i've never been to one of these shows before. i've been looking at all the apps and all of that. i thought i would talk to apple and see what they're up to, but apple's not here. but in a sense apple is everywhere. it is sort of the apple in the room, we'll say, because you have all kinds of apps, all kinds of people trying to emulate the iphone. the hugely successful iphone. so why would it be that apple would want to get rid -- would want to eschew this conference? maybe it's because they can't. >> i think their product is so

unique, and there's a mystique and aura around it that makes it different. i think their strategy is to set themselves apart from the competition, so why join them and make yourself a part of that competitive environment. i think they're setting themselves a different standard at a different level that sets them apart. they've been very successful at it. >> apple, of course, won't say why it doesn't come here. the company doesn't even go to its own mac world convention which is all about apple. but they have a lot of their own marketing things. >> everybody's talking about them still. >> exactly. they don't have to be here. everybody else dukes it out. they set themselves apart. it's pretty amazing to see how far apple has come. >> and interesting to see the competitors come forward and really push their -- what they hope are the iphone killers, such as the samsung, and you had on the sprint phone last night. >> everything looks like an iphone. >> they all act exactly the same, you're right. >> look, they don't have to be here. again, they won't say