accountable for its actions and ceased its reliance on assurances that the federal reserve must manage the risk in a market economy." those are some of the strongest words out. i've interviewed thomas hoenig before, these are the strongest members from him about the need for the fed to arkt in the very near term here. >> what's interesting here is that, i mean, you know he's been dissenting, right? but these points are strong. they're direct. they are in the world of fed policy fighting words. and he put an actual rate out there. for the 1%. >> reporter: yeah. 1%. which he's had out there for a while. he gave that in the speech in kansas city a month or so ago. but the issue here is like a guy who's got kind of an outlying bet doubling down, saying i am even more confident that this is the right course of action, despite other members of the board not joining. that was pretty clear, by the way, erin, you remember from the minutes we reported yesterday, that hoenig didn't have a lot of

consent. that's why the markets viewed those minutes as that he was out there alone. >> if anything, the minutes yesterday seemed to underscore that the fed was not worried -- much more worried about deflation than inflation. steve, when you said he was focused in this speech today about how artificially low rates encourage bubbles, did he give any indication where he may see some of those bubbles percolating? >> he actually did, erin. he talked about agricultural land in his district. the tenth district out there. i hope i got that right. the tenth district. he said they're bidding about agricultural land, using leverage and sees all the signs around him of really what he calls capital misallocation because of artificially low rates. incipient signs of it, not rampant signs. >> that is interesting. agricultural land. that's something -- definitely worth us following up on. let me ask you, steve, do you, from all the people you speak with at the fed, see anything here? is it really just him?

or is he going to win anyone over? >> reporter: no, you know, i think people have kind of -- come his way is probably too strong a statement. but dudley talked about a sustainable recovery. bernanke said today they're not out of the woods yet. but i am hearing at the leadership of the fed they're more confident about the recovery. that will pull forward actions by the federal reserve when they feel the recovery is sustainable. i went back and looked at the statements from when alan greenspan changed course and called it a robust recovery. this is that kind of sense that it will stand on its own. hoenig does point out that he looks at the economy and sees growth not artificial from fiscal stimulus, he sees real growth out in the economy. that's, again, a key metric for fed officials to come to, or come to the decision to come to decide to change course on policy. i want to add one more thing, if you don't mind. >> yes. >> reporter: i know you have to run. we had steve here, who said no

matter what the fed does over the next couple of years, it's still going to be easy. let's put all of this in perspective. the fed may conduct a huge reversal, may hike the reserve to 50 or 75 or 100 basis points. it's still relatively easy for a good and growing economy. >> that is a dose of reality for mr. white to say 1%, please, chill out here. don't get too scared. >> reporter: or even 4% on the ten-year, which we had a great ten-year auction today. we're trading 3.90%. underlying inflation, 1%. rates are pretty tame right now. >> steve liesman, thank you very much. we appreciate it. he's been on the citi trading floor today for that auction, which by the way, when the auction happened, the market rallied on a stronger than expected set of results. so thomas hoenig now clearly the headline of the day. it is time to join team hoenig. time to raise interest rates.

we appreciate both of you being with us. these are fighting words, andy bush, from tom honig. >> they were. they underscore he is a little bit of a lone wolf out there. thank goodness he's out making the comments. when the fed was going through a recession and trying to figure out what to do, they didn't have enough people talking about what the implications were going to be for excessively low interest rates for a long period of time. i think they're starting to get it now. the question that the fed has to ask is, do we keep the conditions, monetary conditions that we established during a crisis, do we keep them going when we're seeing 5% gdp growth. the answer would seem to be pretty clearly, according to mr. hoenig, not to be the case. we certainly would see -- i think a shift from the fed coming up as we get more consistent employment growth going forward. >> scott, why not do what tom

hoenig add vo indicates, put swrest rate at 1%. not anything to be concerned about. it puts the market on notice. to stop thinking that mommy's going to come in and make everything okay, if you're making some bad, risky decisions out there. >> well, i disagree. i think the fed -- now is not the time to remove the monetary punch bowl. we've still got an unemployment rate in this country that's near 30-year highs. if you look at the economy and industrial production, still well below historical averages. i think the fed still has plenty of time to tighten monetary policy. i'm still quite concerned that the bank credit channel is impaired. and i think monetary policy has to remain accommodative until we get loan growth from the banking system. >> haven't we learned that having rates at zero, if that isn't enough to spark lending, that maybe it's not a rate problem? >> well, it certainly doesn't hurt. i don't think we want to remove the low rates right now. if you look at inflation, it's

not a huge issue. in fact, core inflation is trending down sharply right now. inflation expectations are well contained. bond yields are still at historically low levels. wage pressures are siding with the 10% unemployment rate. i don't see the reason why the fed has to hurry in and hike interest rates. especially if the economy should weaken again the second half of the year. i think they need to remain at low rates here. >> andy, you know, i asked steve liesman whether tom hoenig said he saw a bubble forming now. he gave a specific example that he sees it in ak turl land purchases and there's a capital misallocation. likely referring to what he sees in his own backyard in kansas. how big of an issue is that, if true, and where else do you think we have bubbles? >> reporter: right. well, i think he's absolutely dead on. it's part of a play towards commodities, i think. when you get into grains and

buying the land that produces the grains, that's where some of this money flows to. you're never quite sure where it's going to pop up from. my guess is the easiest place for the excessive amount of money that's in the system would be to flow into some commodities, gold seems to be pretty but owant. oil as well. but that's the first place i would look. obviously the housing market is still under pressure. we're still seeing rising foreclosures. i'm not quite sure it will show up there. maybe in weird pockets, like agricultural land would be one place it would show up. the other thing i'd like to refer to is the inflation rate. right now, absolutely, there's no pressure there. wage inflation is actually running at about 1.8%. clearly not a problem. but not now that you've got to worry about, it's two to three years down the road. i want to remind everybody, the inflation that emanated from the easing between 2003 and 2004, yes, it showed up in the housing prices, but it also showed up in commodities in the middle of the recession when gold was at $150.

so you've got to keep that in mind, that you've got to start to look down the road, not exactly right now for inflation. >> scott, make the case for why you think -- let's just say tom hoenig is correct, that rates at zero are sparking bubbles at some places. why do you think it's worth taking that risk just to -- right now, that we're going to have bubbles somewhere to sort of make up for it in employment or in housing? >> well, i don't see a lot of evidence of bubbles right now. i think commodity prices are firming just based on stronger economic growth. in fact, i'm still thinking we're in the aftermath of the housing bubble bursting. in fact, we have seen long-term interest rates move up a bit which is an effective tightening without the fed having to lift a finger. i look at the housing market, still struggling to recover here. if we see much higher interest rates, that could unwind some of the improvement in housing and lead to further home price declines. i'm still worried about the downside risk to the timing and

on inflation going forward. i think the fed would be premature to start talking about hiking rates at this point. >> so from each of your perspectives, andy, you first, when do rates need to go up? i guess you'll say maybe they already should have. but what would be the right level for the fed funds rate right now? >> well, i'm going to go with hoenig and say 1% by the end of the year. i would say this, that at 25 basis points, or even less, .13 is where most banks can borrow back, they have incentive to borrow and lend long. you don't think they're going to lose a tremendous amount. actually what i would say is this, is that the market will run well before the fed decides to act on this. the fed will allow inflation to -- they'll run the risk of inflation well before they move. so i think the yield curve is the best to see what is actually going on in the markets. >> final word to you, scott, when do they go up, and to what level? >> i would like to see the fed move before december. in fact, i think it might be

2011, early 2011 before we see the first rate hikes from the fed. i really do think we need to see banks lending more. we still are seeing tremendous credit losses in commercial real estate, residential real estate. i think the banks still need to nurse the balance sheets back to health before the fed starts taking away the punch bowl and raising rates. >> i guess quick then, follow-up to you, scott, when they raise rates, are you okay with them saying, now everything's in place, all these things you listed, unemployment, et cetera, so we're going to raise 100 basis points in one feld swoop or something like that? >> you know, historically, past fed cycles, really the fed waits 12 months after the unemployment rate peaks before they start raising rates. that would put it squarely in 2011, if history is any guide. >> gentlemen, thank you very much. we appreciate it. now tom hoenig has laid down the gauntlet, let us know what you think. should the fed raise rates right now? you and team hoenig or not?

"street signs" at cnbc.com. next on the show, are things getting so bad in certain parts of america, that america's towns and stadiums and schools will get run over with weeds like this city? do we have enough money to keep american towns alive? we're going to talk to new york's former cfo, bill thompson. has one of the largest bond companies in the nation. we'll talk to him in a couple of moments. sick of spotty wireless service? we've joked about this in the past. i offered to put one in my apartment. apparently it's going to happen. but guess what, you will be paying for it. the details coming up.

growing fear about a bubble in the municipal bond market. what does that mean for states in crisis? states like california, which i don't know who's more insulting, california or kazzic stan about the fact they have the same credit rating. jean wells is following the california story in l.a. hi, jane. >> reporter: hey. but you know what, it's sunny and 78 here. and it is not in kazakhstan. you heard a short time ago moody's downgraded l.a.'s credit rating a notch. the city of broken angels will go broke by the end of june unless it gets a promised cash infusion from the department of water and power. the controller said this will not affect bond payments. maybe l.a. is too big to fail. well, certainly we've learned

other municipalities are not yet. many investors are buying up bonds for tax-free yields. analysts figure there may be a bubble building and investors don't fully appreciate the precarious finances of some governments. by law, general obligation bonds are second in line in getting paid after education, which basically means half the budget would have to go unfunded. half the bills the state gets every month would have to go unpaid before g.o. payments are at risk. bank of america says over the last month, "uninsured cal state g-o bonds earned an excess return that was six times more than all the other states combined, 1.65% versus 24%." i know a lot of bond experts expect california bond prices to fall further, yield higher. holding back maybe until this summer when the state runs out of one-time gimmicks to cover

the deficit. by the way, erin, fitch has started changing the way it rates to the less stringent bond standards. moody's will start doing the same later this month. >> jane wells, thank you very much. let's follow up on that point and talk about municipal bonds, which so many people have been piling into. are they a good investment or a bubble. former new york city comptroller, saw over $100 billion in pension funds. he's the chief administer tr and senior managing director. you look well rested. >> feeling very good. >> ready to go back to battle. let's start off here on the last point that jane made. that some of the ratings at sis are now going to less stringent ratings methods to rate municipal bonds. some people might say, gosh, that has got to be a canary in the coal mine if ever there were on. >> i think it's always been very transparent and very open. i think that is always served it

well. i think it will continue to be that type of market, one that is open, one that is transparent, one that you can see. i wouldn't be that worried about any change in the way some of the ratings agencies look at municipalities. >> when you were -- now you're in the underwriting side. when you were back at new york city comptroller, you decided which ones made sense. >> when i was new york city comptroller, we were one of the issuers also. which is a huge issuer. it was one of the things that we were always comfortable with -- >> you could see both sides and you were in the new york market particularly. >> absolutely. >> now obviously jane was giving the example of california. how do you decide, how would one decide what is good, what is not? are there muni bonds that you're saying, i'm not touching? >> i think the municipal market by and large is a good one. as you look at california and the conversation we just had about that, and los angeles, look at states like new york, that may be going through fiscal stress, but their bonds and bond

ratings are still strong. why? because people stand first or second in line before everybody else gets paid. i think it's very safe, and something that -- one of the things i have to make a decision, what i was going to do after the comptroller's office, went to work for shank, which is, you know, eighth ranked firm in the nation. because the muni market is a strong one. you have to take that into consideration. i think it's a strong area. still an area i think people should be very comfortable with. >> so you buy when jane was explaining in california, that they're saying you'd have to have half the bills go unpaid, for example, before the general obligation bonds didn't have their interest payments paid. you buy that. is that a similar structure elsewhere in the country? are there places you buy muni and you're not first or second? >> in many places around the country, those who own municipal bonds, stand first or second in line. in a lot of municipalities, it is by statute. it is by law. it is by constitution. so i think that obviously you

want to do your research. >> right. >> but i think that there is still -- you're going to get paid before workers get paid. you'll get paid before education payments are made in a lot of places. it's a safe investment. >> unless you're up against the new york city teacher's union or new jersey. i'm joking here. on both sides of this, underwriting and buyers side, underwriting, where are you seeing the issuance come from? >> the build america bonds have been helpful. you're seeing volume increase. you know, in the number of places. so volume is up. people expected it to be down. volume continues to go up. you're seeing places like new york city, new york state, really new york state, a lot of issuance coming out of that. california, other places around the country are still serious issuers. >> and who are the buyers? when you're going out now and trying to get people to buy, has there been a shift, whether it be retail investor -- or who's buying? >> i think after you just watched a meltdown, and people are still a little gun-shy and

leery, those buying munis these days, it used to be senior citizens and those retirees, now it is people across spectrumspe. it's people who wouldn't, instead of going straight into the stock market, let me buy municipals. so you're seeing a wider range, particularly, on a retail basis, individuals buying stocks. or buying bonds. a lot more than ever before. >> bill thompson, thank you very much. we appreciate it. good to see you again. >> good seeing you. thank you. >> he does look much better rested than last time i saw him. next on the show, five days out of the box, already a big problem for the ipad. is apple killing its core of early adapters with too many bugs? we'll be back.

we're closing in on half past the hour. we want to look at the other main headlines we're watching. general motors chief financial officer said the company doesn't need to see a significant improvement in industry sales to break even for 2010.

he says health care reform will have little to no impact on the company's bottom line and general motors still expects to pay back the american taxpayer and canadian taxpayer in full by june. obviously gm not the same as gmac. a stat worth noting, as the housing market struggles to recover, as tom hoenig says he wants rates to goup, mortgage rates are nearly at an eight-month high. the average 30-year mortgage rate, a fixed, jumped more than a quarter point last week, 5.31%, which prompted about an 11% drop for the week. apparently it's going to be an above-average hurricane season this year, which is the word from the colorado state forecasters. they've predicted 15 named storms, the atlantic hurricane season begins june 1st. over the past few years those forecasts have proven to are very right some years and

utterly wrong some years. bob pisani is on the floor. a bit of a comeback after a drop. >> reporter: that's because the ten-year auction went a lot better than expected. 3.90%. a lot of people were expecting 3.95%. we've been moving up. that was a pleasant surprise. yes, just 3.65% a little while ago. the 30-year mortgage you just mentioned up a quarter point? that's a big hof up. quarter point in one week. regardless of what the reason is, that's a big move up. the highest rate from 30-year fixed rate mortgages since august. the other thing that's important is greece isn't fixed. it's very annoying. it keeps coming back smacking people on the side of the head. that's why we saw the market drop earlier today. this is why it's affecting the stock market. it's creating weird gyrations between the euro, dollar and gold. look at gold. gold's up five days in a row now. that's a glv you're looking at, the etf for gold.

here's the five-day chart. up 4%. that's a pretty big move in gold. a lot of theories about this, but it's simple, really. the euro weakness is creating strength in the dollar. normally dollar strength is not positive for gold. gold bugs are seizing on this. i get the e-mails on it. they're screaming, this is a real sign that gold is truly strong now. when it moves up, even if the dollar is strong, the theory is when people who hold euros are really worried, they can't necessarily go into the dollar, erin, because the dollar, they're not sure if the dollar's going to be strong long term. easiest thing to do is buy gold. that's why it's moving up here. look at that. three, four, 5% moves. big move for the gold stocks. >> thank you, bob. next, gold stocks may be up. what should you be trading? jim cramer is right around the corner. we'll tell you how you're shaking out in terms of your vote on interest rates. with jim, we will talk about that. we will talk about god, interest rates and taxes.

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welcome back to street

signs. rick santelli here. we've been reoccupied with the ten-year note auction. a little better than yesterday's three-year note auction. there was something really different about this one. look at the charts. notice the yields started to fall. they started to fall a good half hour before the end of the auction. there was a lot of talk maybe something was going on with greece, or greek paper. but look at the euro currency. it wasn't really moving at that time. some more cynical people around me say maybe this was a bit of a present by the chin nooz, because mr. geithner, of course, is on his way to china. there's a lot of potential variables. if you're worried about your mortgage, and want to look to see if rates go higher, hearing about this quantitative oozing is over, be careful. it's still tracking with treasuries. how do we know this? the spread hasn't changed much, even though rates are up everywhere. but when you saw that chart, seven basis points lower in yield over the last hour and a half, guess what, mortgage

securities yields went down seven basis points as well. erin, back to you. >> thank you very much, rick santelli. obviously you can see the market pulling back again. as bob pisani saw the ten-year at 3.90%. tom hoenig put it on the table in a very, let's say strong way. he is not mincing words. he is worried about interest rates. we asked the viewers what we thought. every single person said they thought the rates should go higher. we're talking 1%, not go to 5%. >> you know, look. it's to be predicted. i mean, look, in every single big turn, back to 1936, '37, there was this tremendous dissent about what should be done. there's always been dissent. it's just that we were well massed under greenspan, who really controlled the dialog. >> now everyone's out saying -- what i thought was interesting

in addition to saying his point aggressively that he thought rates should go up, he thinks there's a bubble in the agricultural market. >> tractor supply did say some things today that were very aggressive. but soybeans have been down. i've got to be careful. i think the notion of the bubble is very difficult to quantify. given that the housing isn't in the cpi. i like to look at individual sectors of the market. i do believe steel's come up too much. that one's really ral idea. but that's chinese related. i think what matters here is we've been up for a while. there are guys that want to take some profits. but the data's good. the data's good. raise rates now. i made a lot of money when i was at my old hedge fund when the ten-year was at 7.8%. maybe i've just been around too long, when the rates go up 3.90% to 4.10%. >> it's interesting we're seeing

mortgage rates go up. then you look at -- >> oh, come on. >> while we're saying 5.31% -- >> i got a 5.8%. how did i get a 5.8%. i can't believe i got that. rates were too low. come on. that's an unbelievable rate. this is not 1957. >> yep. okay. jim, we've got a lot more to go. >> yes, we do. eog. remember when you and i were on, eog reported, the stock got hammered. they went and gave a presentation today which basically said, the guys are really an oil company. we're not that much in natural gas. and they went through a program, and people just ate it up. and this stock has not only made back what it lost, but then some, with some really interesting oil announcements. it's really important to remember that when stocks get hammered in this market, whether it be ralph lauren, eog, irvin

outfitters, whether it be staples, they come back with a better story and they move. family dollar didn't have a good story when the stock moved from 32 to 27. but there was a fabulous story this morning and that stock's ramping. >> that's a tough one. in that case, you know, those people are getting hit every which way. you don't have wages going up. you don't have job creation. and you've got prices at the pumps surging. >> family dollar has changed the mix. they've actually raised their mix. they've done holiday offerings and have better controls over pricing. family dollar is a good store. >> you would buy that store? >> it's a good story. so is dollar tree. >> i want to ask you about, there was a letter from god that everyone was talking about. >> my god? >> the second coming. so he wrote a letter and he said they didn't go against their clients. you know, reiterating the situation. letter good, what's your

valuation? >> it's classic goldman. i don't mean that in a negative way. in a positive way. goldman used to say, you'd ask them, what do you think about that buyer. they would never tell you about the buyer. are you doing this as a profile? is this a profile buy? are you doing this for your client? are you agency? and goldman would always tell you they thought it was a good or bad trade. we weren't paying them $10 million in commissions to just give them a check. you would say, what do you think of this? you'd also say, listen, if you're planning against me and i find out, i'm going to pull the line. there's consequences if you do this. and we all seem to think goldman can pull the wool over everybody's eyes. forget it. there's real consequences if goldman's going against its clients. i don't know why people think goldman can fool everybody. they can't. >> maybe that is the takeaway. they should -- they benefit from being behind that veil of perceived superiority. so maybe instead of taking that

veil down -- >> they're a hated firm. they made a lot of money. had they handled the pr right? no. i feel like the notion -- i wish more people were in the position that i am. having worked at goldman, more important having been a very large, multiple eight-figure client of goldman, to know that if they were going against me, i would have gone to the guy's house and explained to him the way the world worked. >> i'm glad you used the word explain. jim, when i see the coverage map on these ads -- >> oh, no. you're going on wilson? >> i'm just saying the coverage map says i'm covered. but i don't have that experience. i have the option of buying a little mini tower. i put it in my backpack or something and carry it around. >> that's a cisco product. >> who should pay for it, you or the carrier? >> i would prefer to talk about cisco. the carrier, that's like --

they're dividend-safe. >> i didn't mention a carrier. i just said a carrier. any old carrier. >> it looks like cisco has that device. >> do you think people are -- first of all, this is a question, will that device work? if it were that easy to solve this, why -- >> obviously there's a drop called problem. no one wants to acknowledge it, except for stop trading. >> except for stop trading. >> kind of like, no calls are dropped. paragraphda, rs are 100%. two reliable news organizations that continually put out honest and rigorous news stories. >> who is the celebrity who said his calls are never dropped? >> luke could use some time in the islands. >> we're going to talk about this much more in a moment. >> what about that company. >> i didn't say anything. okay. it's not randall on your show tonight. hold on. you can see this better if you put your 3-d glasses on.

>> ooh, man, look at this. >> jim talks to bill marth. but next, we have a lot. put on your glasses. look how good you look in 3-d. >> i got a flu bug. >> you ate something -- >> i ate salad. apparently if you eat salad, you die over there. >> well, you just get a little dysentery. >> that's what i have. i have parameesium. >> nice. i don't know what's a more pleasant thought, that, or watching tiger woods in 3-d, in action. on the golf course. >> i hope we have a lot of tiger woods. >> we did yesterday, right here on the -- >> is the golf network talking right now about my cisco call? >> they're talking about the cell phone tower. >> probably going over why the market failed 60 points. but that's okay. because the golf network has to

deviate and do a lot of business. >> we're going to talk about this with two people who know a lot about it. >> would would that be? >> the personal cell phone towers, with two experts in the tech world. and really, who should pay for it. >> the amen corner. >> mm-hmm. we'll be right back. >> like no other match.

too -- some ipad users either have a weak signal or no connection at all. apple has posted some fixes on its website. keep in mind that 300,000 ipads

were purchased on saturday alone. and up to 700,000 over the first two days. at&t, verizon and sprint are the other main headlines offering mini cell phone towers, designed to improve reception. they will cost upwards of $250 on top of your monthly plan. i think that's a one-time charge, but i'm not sure. gentlemen, good to have both of you with us. brian, let me start with you, and let's start with this issue of the cell phone towers. we were just talking about this with jim. we should mention several of these carriers are doing this. verizon, sprint and i believe at&t. what is the point of this? they all say they have great coverage. they're admitting they don't by selling the mini tower, aren't they? >> what we call capitulation of a different kind. they finally realize they can't hit every residential area with towers. and because it doesn't pay off. there's not enough usage of

towers in residential areas. they're not going to throw billions of dollars into those neighbor hides. they offload carriage to you, the customer, saying you have a broadband line, if we sell you a microcellular tower, that get out to the network, problem solved. except we, users, have to pay for it. >> i mean, what is the image supposed to come up with? do i need to donate a room of my apartment as i offered to do a couple of years ago to do this thing? or fit it in my purse? what is the size of the, quote unquote, tower? >> it's not a tower at all. it looks like a wireless router you might have already in your house already. you plug it in, and it just sits there and does stuff. it blankets up to a 5,000-square-foot house in a repeated version, a copy, if you will, of your carrier's network. it is really a microtower, but it doesn't really look like that. and it connects over your broadband connection to the

internet to make what's basically a viceover ip call, like a private version of skype. >> paul, what's your point of view here? are customers going to do this? >> i think it's highly unlikely. brian's point is more or less the issue here is that you're bridging people over onto their own wireless networks to solve the problems the carriers have and charging the customers for it, which doesn't make a lot of sense. i think the risk here for at&t and verizon and others trying to push this approach, if they know the customer will think this through, i'm pushing the call over my own wireless network, there are handsets that do that directsly. when you're in your own home, it will put you on your own wi-fi network. i can make a call completely without my carrier. they punt people right off their services inside their own house. >> it sounds like they're trying

to get people to do their work for them. >> in a sense. peer-to-peer cap x. >> what's the other headline? the ipad headline. obviously it was a raging success over the weekend, brian. but we're now seeing some people who know a whole lot about these things saying that the -- it's very buggy and the service isn't so great. >> yeah, hard things to nail down unless you're going to do measurement and testing. i don't know if it's perceived or not, that's always a big issue. wi-fi is by no means a perfect technology. but the big question to me is can apple fix it with a software update, or is there something wrong with the wi-fi radio chip inside the ipad that cannot be fixed with an update. then they've got a big problem. either a crummy product or do a big recall and exchange program. >> that's the whole speculation. the way that it initially, why people were worried is there's some indication that it's not just about the signal strength as detected at the ipad, it

actually had to do with the orientation, that you would lose the signal. and for tech source, what that tells you if it's about the orientation, that tends to be a hardware issue. it requires you to return things. the fear is this something that can be patched in the orientation and things like that. or actually just about something to do with a driver or something you can fix over itunes. there seemed to be orientation issues which understandably spooks people. >> does this do any taint on apple whatsoever? final word, brian. >> if it is a hardware issue, that's a problem. because it's going to be a big hassle for consumers, and of course, a big cost for apple. if it's just a software update, honestly, we're used to things being buggy if they can be fixed with a firmware, like a software push. >> thank you very much. tiger's return. where did those crazy glasses go. in 3-d. the new way to watch the masters, coming up.

welcome back to "street

signs" with the daily realty check, i'm diana olick. mortgage applications dropped 11% as rates on the 30-year fixed hit 5.31%. and the re-fis were down overall 17%, and purchases were up flat .2%. and vacancies in mallings rose to the highest levels in a decade. 8.9% in q-1 and other vacancies in the neighborhood were 10.8%, and reits reports that consumer spending will weigh on the sector for another year. and 1.2 million households disappeared between 2005 and 2008 and driving the excess supply of homes. the mortgage bankers associates says that the overcrowding and the more than one person in a room increased five-fold. for more information go tocheck.cnbc.com. and now tiger in 3d is

trying to acquire a part of universal which cnbc is a part of. we have to disclose that. they are applying to the masters to make some rounds available in 3d and maybe this is why they are a stupendous company and any partner would want to be a partner of. darren rovell is in augusta with more. >> yeah, erin, if you don't want to pay more for that badge, this is maybe a new option, and comcast is distributing the 3d feed to the cable systems, and joining us is the advanced product development for comcast, mark. we know that the 3d household screens are not available yet, and why do this now and why it is worth it? >> well, comcast likes to always see themselves as an innovative and technology leader, so we have a great opportunity here. we are leveraging the network that we have in place. we have all of the equipment in place to deliver this, the set top boxes that we have in people's homes can deliver this

so it is a natural to work with the masters to bring this event into the home. it is the first national 3d broadcast of any type. >> do you have a idea of the total number of viewers who might tune in for the 3d vision? >> well, early adopters. anyone who has does not have a 3d pc or 3d television won't be able to have the option. we project there will be 1 million of these in the home by the end of the year, but it is for the early adopters at this point. >> i just read a "usa today" review that says that the masters in 3d blows hd away. we can't obviously show it, because the audience doesn't have the glasses, and it is not broadcast right this second, but how good is it? >> well, you are there, so you know that one of the most amazing things about augusta national is the dramatic elevation change, the topography and the golf course, itself, and

the con tours and the und undulations, and those cannot be seen in 2d. i was lucky enough to play the course once and view it, and you cannot be there any better way than watching 3d. >> mark, espn is committed to 85 total events. what is comcast going to do? i have 10 seconds. do you have a number as to how many 3d events you guys will do this year? >> well, it is too early to say, and we are talking to anybody and everybody who has 3d content and we are certainly talking to espn. >> mark, thank you for joining us. i will try to get a peek at the 3d and tell you whether it is better than the live out here. >> i can't wait to hear the review. >> okay. back live.

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well, markets right now are at the low es level of the session, and the dow is down 83 points at the instance and as you can see, yeah, 82 points, and all of this started, but the 10-year option is better than expect and the market back

almost all of the way, but sitting up to triple-digit loss. we will see how it closes on the "closing bell." welcome to the "closing bell." we have breaking news from the federal reserve at this hour on consumer credit, where it resumed the decline in the month of february. you will remember that january, we broke a string of monthly declines in consumer credit that had dated back to the beginning of the recession which is september of '08, but it resumed the decline in february after the increase in january. consumer credit declined at an annual rate in february and both components of the report declined, revolving credit or credit card loans and down hefty 13.1%, and auto and student loans, the nonresolving portion was down 5.6% as well. and looking at the components, commercial bank reduced the credits as did other sources of financing, and financing companies and credit unions and

savings institutions. so not good news on the consumer borrowing, but this is a piece of them getting the balance sheets back in order. maria? >> well, steve, let me get your thoughts on what happened in the market. you are standing there at the trading desk and citigroup, that auction is not as well received as some people would like to see, and it is impacting the market worse than we expected to see, and what are you hearing on the desk? >> well, the credit auction was in terms of received very well, in terms of the fixed market took it, and maria, you are right, the equities market didn't like it, but maybe they got spooked a little bit about the hoenig remarks, but i am not sure. it turned around and it looked like you blinked your eyes and the market took a dive to the south. unclear on the desk here what caused it, maria. >> thank you, steve. we will get back to you as we continue to follow thchlt i'm maria bartiromo, and we are here on the "closing bell," a market deteriorating here,