all right. the street poll. are you finished with your taxes? 72% of you are like simon and are finished. 28% of you are like me and are not. >> you'll be done by wednesday. >> thursday. >> unless you file for an educati extension. >> right. six in 60. texas instruments, txn upgraded to outperform. the firm boosted its price target to 32 up from 24. archer daniels midland removed from the top picks live list. oh, my. the firm of citigroup has a buy rating and $37 price target on the stock. continental upgraded from buy to do nothing. >> freeport morgan downgraded to hold from buy at deutsche bank. the firm also reducing its price target on the stock to $95.

it had been $ $110. and best buy upgraded to market perform from underperform. >> all right. since regulation is so popular these days, i have something to regulate. i would like to regulate all those lists. because if you're getting top picks live and conviction buy then you've got a buy and -- it's all confusing. >> right. >> they think it differentiates them. what it really does is confuses. >> confuses. >> i would say if we're going to regulate, let's come up with all the banks have to have the same rating system. >> would you then have kind of like a grid system where you gave the same rating uniformly from all the suppliers for a certain set of data? or would you allow them to have the judgment? >> they could have their own sets of data. but what i would have is a buy mean you think the stock is going to go up anywhere from 10% to 20% or 20% or more. so buy, hold and sell is

consistent across the banks. institutional investors don't care about that buy. there you go. there's a regulation. >> run with it. that's it for "squawk on the street." thank you for watching. i'm simon hobbs. >> i'm erin burnett. have a good day. welcome to "the call." i'm melissa francis. trish regan is off. dow back above 11,000 as europe announces its latest plan. we'll discuss what it helps for other european countries in trouble like spain and portugal, not to mention california. >> california, new york, new jersey. i'm larry kudlow. we have martin feld steen and robert rice to discuss whether there should be a vat tax. i think you know my opinion. we'll also talk about whether the fed is to blame for asset bubbles because it is just too boring and wussy. we are "the call" on cnbc. we need cowboy monitorism.

the dow back above 11,000 as euro done -- also on traders' minds, the earnings season which kicks off after the bell today with alcoa reporting results. the dow right now is trading to the plus side by 23 points. 11,020.63. the s&p 500 also in positive territory by about 3 1/3 points. aig, titanium metals, st. jude the biggest percentage winners. nasdaq to the plus side by almost four points. about a tenth of a percent, 2457. let's head to bob pisani on the floor of the new york stock exchange with more. what's moving? >> the important thing today is they're trying to figure out where we should go with the earnings situation. the wonderful thing about starting with alcoa -- there's

three months on aluminum. $2,400. this per metric ton. do the math simply. about $1.10 a pound right now for aluminum. it's been coming off lows since the middle of february. it was below a dollar. it's been coming off. that's the good news. here's the bad news. on a longer term chart it was 3900, $3800. here's the good news on alcoa. those aluminum prices are up about 8% this quarter. alcoa is going to reflect that in its earnings report. we're talking about roughly 10 cents a share here. the bad news is the demand for aluminum still remains weak. a lot of people are pointing that out. on friday jp morgan downgraded alcoa largely on exactly that point. they announced last week charges on plant shutdowns. i think that would come off of the bottom line there.

also note health care tax treatments as well. there's alcoa. see for the last three months, kind of looks good. it's not. actually, it's the worst performer in the dow jones industrial average, down about 9% for the quarter. they're having a tough time moving out of their rut as alum numb prices have been slowly coming off that bottom. there's the big airlines. head of the international air transport association came out early and said we've got to have mergers in flies. companies have got to keep talking. that's moved up u.s. air. ual allegedly had discussions last week. larry, if you saw the comment from the airline pilots last week, they sort of put the ka bosh on a lot of these discussions saying they wouldn't support anything that wasn't in the best interest of the airline pilots. there's going to be a lot of opposition to any kind of mergers going on. >> all right, bob pisani, thank you very much. with the dow back above 11,000, the question now remains can it close above that level and keep the upper momentum?

if it does, could stocks be ready to break out in a big way? so let's talk to dean barber, president of barber financial group and tommy williams, president of williams financial advisers. tommy, start with you. i'm hearing a lot of talk about a correction on good profits and good revenues. we saw something like that in the first quarter. even though there's a lot of new evidence about a v-shaped recovery, what about this correction, tom? >> well, we've had 5%, 10% corrections already this year. we always have these in a recovery. i think the really important news today is the 11,000 number psychologically. larry, you know that 11,000 was only surpassed once in history back in 2006. we passed 8,000, 9,000, 10,000 before. i think this is a big psychological number. and i think investors now think, well, maybe i should have been playing this game all along. we'll see if everybody joins in.

>> dean, do you agree with that? is it significant we're staying above 11,000 this morning? zpl i'm not going to put a lot of credit on that number of 11,000. psychologically, yeah, maybe there's something there. when you look at the reality of it, we've been in a ten-year period, a decade, where we've got the s&p 500, 500 stocks, not 30 in the dow, that are negative 17% over the last ten years. we focus on working with people who are retired or getting ready to retire, and they need distribution. they need income. so i think the bigger question is, do we have a sustainable recovery here, something that can last, and how do people get income from their assets for retirement, which goes to my biggest concern today, and that is the bond market. especially in the municipal bond market where i feel we could have a real liquidity issue coming later this year. >> what are you telling clients, then, in that situation? >> well, what you have to do is you have to be cautious. you have to be -- you could be cautiously optimistic. we've got some equity exposures. we're about 35% in equities in our portfolios today. if you're going to be in bonds

you need to be to the short end of the yield curve and need to be ready to hold cash for a while. if we do see this interest rate spike up, cash is going to be a great place to be. you can't just bury your head in the sand and think that bonds are going to perform like they have over the last 30 years. because we've been generally in a falls interest rate environment for the last 30 years, which is very highly unlikely to continue. in fact, it's virtually impossible with where interest rates sit today. >> on the other hand, tommy williams, you could sell bonds and buy stocks. i want to get your take on the v-shaped recovery boom which has been a theme of mine. numbers are coming in gang busters. will the earnings numbers show strong top line revenue from business sales? >> well, i would certainly think so. in the first quarter that happened. i think 80% of all the companies in the s&p 500 surpassed their earnings expectations. alcoa will be the big excitement tonight. i think that's right. i agree with your other guest.

this is not a time for buy, hold and hope. it's a time to be extremely proactive whether it's the bond market or stock market. i think the have-shav-shaped res pretty much a fore gone conclusion right now. if it's not a v-shape it's a square root sign. certainly not a w. i have to agree with your other guest the bond market looks like a good opportunity. i disagree -- >> a good opportunity or good opportunity to sell? you want to short bonds and long stocks? that's what i heard -- i thought that's what i heard from dean. is that what you're saying also? >> i think it depends on your objective. if you're a retired investor looking for income and capital preservation, i think municipal bonds are a great opportunity right now. >> i think it's pretty opposite of what the other guest was saying. >> then we get to agree to disagree, which makes it fun. but the fact is, i'm right. >> spain, california, new york.

>> you can't say that that's a fact. all that has to happen in the municipal bond market is you have to have one or two defaults. all of the money -- >> which looks really possible at this point. >> it's huge. what you wind up with is not a wholesale of defaults in municipal bonds, but a huge liquidity crisis. let's not forget bonds are traded on a bartering system. you've got to have a buyer in order to be able to sell. if you start having defaults which i think is very likely, you're going to have a run on the banks, so to speak. you're going to have people trying to get out of these municipal bonds. >> dean, there are no failures in america. >> okay, larry. >> greece, portugal, spain, illinois, new york, new jersey, california. >> we can just continue to sweep this under the rug for as long as we want to. >> everybody's too big to fail in this country. you know that, my friend. >> we just print more, right, larry? >> print, bail out and whatever. government control. and then just to soak it all up -- >> we never actually have to pay these bills.

>> we'll never pay them. we're just like europe. you we're going to have a value and a tax across the board. this is america. 21st century america. >> i think i'm going to move to bermuda. >> let me make a suggestion, then. >> pardon my cynicism. >> go ahead. real quick. we're going to go. make a suggestion. >> my suggestion is that you stick with someone like a franklin, some of the really big bond houses that have very big pulls. if you do have some defaults, the default rate is historically very low, but if you did have some your investors would be protected and those retirees could get those monthly checks. >> we got to leave it there. thanks to both of you for joining us. when we come back, what does the latest european plan to bailout greece mean for other european countries in trouble like spain and portugal? >> plus cnbc's special day long coverage on taxes america. we'll debate whether the u.s. should have the european style value and tax to offset our huge deficits. they're going to send it. it's a honey pot.

you're watching cnbc, first in business worldwide.

hi, folks. i'm matt nesto. a is for apple and aig. up just about 4% here today.

give it an f for failure at 40. the stock on an sbrer day basis made a big push up to 40.50. then slipped right back done below it again. that's a big psychological barrier for aig. the stock is up now for five of the past six sessions. it's up -- done 80% of its ten-day average volume. up 60% since march 1st. it's had a big push here to try to get above 40 again. melissa, back to you. >> all right. big news across the pond. euro's own finance minister is approving a $40 billion emergency bailout package for greece. euro got a big bounce on the news earlier although it has pared back those gains. right now it's essentially flat on the session. cnbc's guy johnson joins us live from athens. >> reporter: i have to say the reason why the euro has given up those gains is there seems to be a number of questions now surrounding this package. this was meant to be the finance minister's turning round and saying to the markets, we are in charge. the markets as we all know have

a completely different view of politicians than politicians have of themselves. and it's going to be very interesting to see how this ultimately ends up playing out. we've got a number of big questions that still need answers. tomorrow, greece is going to auction some t-bills. six months, 12 months. how that goes really could set the pace of things here. if it goes badly and the bond markets have not exactly been playing bull today, we could see a big problem. greece is yet to activate this bailout. it could activate it tomorrow. if it goes okay they may wait and see what happens. the other big issue is germany. now, we thought on sunday night germany had finally said, you know what, we are on board with a rescue package. today german officials are saying, well, actually, what we think needs to now happen is that we need to get all of the european leaders together and we need to have a vote. it's not automatic. the market this morning assumed that this when activated by greece would be automatic. that is now not happening, it seems, according to germany.

there's some big questions still ultimately outstanding here. one of the big questions is what will the imf demand? some of the money is going to come from the imf. the imf is likely to demand even more -- greece is essentially going to be in depression conditions for really quite some time to come as they try and sort out the fiscal situation. if you think about it, the ecb is not going to be raising rates when the periphery of the euro is still in -- melissa, back over to you. >> guy johnson, thank you so much. let's talk more about the greek bailout situation and what it means for other european countries in trouble like spain and portugal. joining me is andy brenner, head of emerging markets at guggenheim securities. let's start with the essential question guy was alluding to. is this a done deal or not? >> it absolutely is not done yet. the amounts are fine.

$60 billion worth. it looks like more than enough. but the fact that the -- germany is playing like keystone cops again and saying they didn't agree, they do agree, we just don't know what has to happen. more importantly, i've still yet to see what's going to happen with the repo market. greek debt has got to be considered good debt in the repo market in order for the greek markets to survive and thrive. i've seen none of that yet. no, this deal is not done. >> mark, just give me your take on what andy is saying. the questions he's raising. because before we get to spain and portugal and california, new jersey, let's just say with greece, what does this mean? what does this actually mean? do we know? >> i agree with andy. i don't think there's been a lot of things -- not a lot of certainty coming out of this weekend. in some ways i think this is the third time the eu has tried to address this. the first time when the news first broke back in the winter, the europeans said, yes, we support greece to do this fiscal cutting. that proved insufficient. in late march they said we not

only support greece but we're going to come up with a facility. that was not good enough. this time they said we'll come up with a facility, here's the dollar value. it's still not good enough. i agree with andy. more closure still to come. >> andy, what are the implications for spain and portugal? >> for spain and portugal, both are in much better shape than greece. spa spain's death last i looked was below 4%. if portugal can get their deal done, they don't need this kind of package. i have to be honest. given the kind of pressure that's been on greece, i think posh ch gal and spain would be better off not taking a package from the eu than they would going after one. >> chandler, why doesn't anyone talk about the irish model? they have slashed spending brutally. in fact, they have taken down government salaries and pensions by a good 15%. they already have a very low corporate tax rate, mark. now they're slashing spending. isn't ireland the model for

these sue therouthern european problems? >> i think some of these problems are much pr serious for the likes of greece and portugal and also spain. look at the irish stock market. it's done welcome paired to peripheral stock markets. as long as the prefry is cutting fiscally, that is not only has ireland, but also spain and portugal cutting spending and raises taxes, that this lives the periphery of europe in a deflationary -- >> that's where i was going. the model here is brutal. these guys could be in a downturn for the rest of my lifetime. that's not going to help the euro. the euro zone. the currency. anybody. they're not privatizing. they're not cutting business tax rates. they're not really making the spending cuts. >> i think in the big picture, i think you're right. underlying this debt and deficit issues is a whole much trickier

set of issues. these kinds of physical measures aren't necessarily the same as boosting competitiveness. >> andy, what is the lesson here about spending beyond your means going forward? are countries just too big to fail? >> countries are too big to fail. you have seen it in iceland. generally speaking they are too big to fail. what it means is you have to get your ratios back in line. you really can't go above the debt to gdp on a yearly basis 40% to 50%. and you can't really get your global full debt to gdp ratios 80%, 90%, 100%. it just doesn't work. let me say one other thing. the 5% level they've determined is an arbitrary number. with germany able to issue as many two-years as they want above 1%, it would make much more sense to give it to greece as cheap as possible. there's no reason to penalize them as a 5% rate. because at the end of the day,

what france and germany are preventing here are preventing problems with their own banks who own a lot of this club med debt. >> gentlemen, we're going to leave it there. thanks very much for the update. when we come back, our special taxing america coverage continues. we'll debate whether or not a value and a tax is the best way to get the u.s. deficit under control. plus, is a boring central bank to blame for asset bubbles? that's today's "call of the wile" debate.

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mirant agreed to take over rival, rri energy. the company said they will combine to create genon energy. mirant share how olders will hold 54%. rri about 46%. and they are both trading up substantially today as you can see. last week white house economic adviser paul volcker is saying the u.s. should follow europe's lead and institute a vat or value added tax. is he right? joining us now, former labor secretary and cnbc contributor. also former chairman of the

council of economic advisers under president reagan. thanks to both of you for joining us. really quick before we get started, martin, let me start with you. you're a member of nber. they said today it is too early to call an end to the recession. a lot of private economists think it ended in june or july of last year. do you agree with that? >> i agree with the nbr's statement that we still don't have enough data to be sure either about the date or, in my judgment, about whether we are definitely out of a recession. >> does that mean you don't think we are out of recession yet? >> i think there's a risk of -- less of a risk than a month ago, but nevertheless, a risk, a that this economy could turn back down again. and if it did that sometime soon, i don't think we'd want to call the increase that we've seen in the last six months a recovery. i think we'd want to say that that was just a temporary rise in what was otherwise a longer economic downturn. >> all right.

robert rice, you heard marty feldstein on that. you're pessimistic in the jobs market in your op-ed piece in the paper this morning. wouldn't therefore a value added tax be an absolute bone crusher to this economy? >> larry, i'm not in favor of a value added tax for two reasons. number one, i think that any tax that hides itself, and a value added tax would be a hidden tax, because most of it would be on every stage of production up to a consumer goods. that means consumers would not really know how much they were paying. any tax that hides itself is not a good tax. it's not a democratically accountable tax. secondly, i worry that a value added tax, because it is a kind of super sales tax, is a regressive tax. it does not take a bigger bite out of the incomes of the wealthy than it does out of the incomes of the poor. therefore, it's a step backwards toward greater tax regressivity as is every sales tax. >> marty, do you agree with

that? >> i do. and i think one thing that reinforces it is that about half of all americans who file tax returns don't pay any tax. >> right. >> but they would pay a value added tax every time they bought something. >> but, gentlemen, we have to come up with half a trillion dollars per year in order to keep up with spending, in order to keep gdp -- the deficit at 3% of gdp. that's according to the tax policy center. how are we going to do it? if we just levy taxes on people that make more than $200,000 a year we're going to have to take the top level to 76%, which i don't think is very realistic. isn't everybody going to have to pay more taxes? >> as you said, in order to keep up with the growth in spending. maybe we could slow the growth in spending. >> that's a crazy idea. >> the other thing that i think we should do is to limit the tax cuts that the president has promised for everybody below the top 2 brackets.

>> really? i thought, marty, you wanted to extend the tax cuts because it hits on saving and investment. capital gains, the top earners, they do most of the saving and investment. i'm surprised to hear you say that. >> but, larry, if i could extend it at the top end, i would be in favor of doing that. but i would say that we don't want to have 100% reduction in the taxes as proposed by the administration for everybody under $200,000. that would cost more than $2 trillion over the next ten years. so fixing that would make us -- would take us a long way towards dealing with the accumulated debt. >> robert rice -- >> can i say, that i disagree somewhat with professor feldstein on this. it seems to me we can raise marginal income taxes on the top somewhat. we can't raise it to 75%. although let's remember under

dwight eisenhower, it was 91% the effective rate was closer to 60%. nevertheless, i think you could raise it sbomewhat. also i think it's possible if we focus on the part of domestic discretionary that is really public investment, that is infrastructure, education, so forth, separate that out, we don't right now have a separate capital account or investment account in the federal budget accounts, and focus on overall the debt versus gdp ratio, not get fixated on these absolute numbers, but look at the ratio of debt to gdp and get that gdp number up. >> we're not going to get it up by raising tax rates, my friend. that's the thing. i agree that denominator is very important. you mentioned 91%. let me go to jfk. first supply cider in the post war who took the top rate down from 91% to 70%.

that was a huge catalyst for the boom in the 1960s, which, by the way, lowered the budget deficit. >> larry kudlow, are you endorsing 70% marginal tax rates? i am shocked at your radicalism. >> i'm endorsing the drop, as you well know, from 91% to 70%. that was the right direction. kennedy was my high row. reagan took it from 70% to 50% and then all the way to 28%. why don't we just cut spending? for example, the american enterprise institute just came out with a plan, a 15% reduction in the excessive government workers salaries and pensions would save about $40 billion a year. >> wait a minute. >> why don't we go to that kind of approach instead of more taxation. >> you and i talked about this before. i want to get professor feldstein's take on this as well. the biggest spending in the federal budget is obviously medicare, medicaid, also social security and defense. everything else, domestic discretionary is really very,

very small. we do have to worry about entitle reform, particularly medicare. but i wouldn't mind some major trimming of the fence expenditures in years to come. >> marty, what's your take on this? >> on the spending side, the big issue, as professor reich has said, are social security and medicare. they're going to get to be bigger and bigger. what we need to do is to stop financing those 100% by taxes. what we need to do is to move to a mixed system in which we combine some tax finance in order to give it that kind of stability with an investment based bar. if we do that, then we don't have to raise taxes in the same way. i think hast the direction that we should be going. >> let's leave it there. thanks to both of you for joining us. cnbc's special coverage of taxing america continues on "power lunch." one-half a bipartisan team on

its tax reform bill. on "the closing bell," are closing corporate tax loopholes bad for america? that's all coming up. when we come back, some on wall street say the fed's boring predictability is to blame for asset bubbles. >> cowboy monitorism. plus, on "the call," planning on taking flights soon? you'll want to see the latest airline quality ratings before you do. we'll have the surprising numbers.

welcome back. let's get you caught up on the markets right now. off our highs of the session but still in positive territory. the s&p is up better than a point, about .1%. the dow hanging above 11,000. it, too, is off its high. 11,010. the nasdaq to the plus side by about a point and a half. barely positive. european markets closing right now. they are, too, in positive territory as well. looks like it's going to be a day in the green for them. not by a whole lot. larry. >> the fed has repeatedly said it won't raise interest rates any time soon and they've stuck to their word. is that really a good thing? a note from deutsche bank this morning says the bank's predictability during the 2004-2007 tightening cycle actually prompted investors to

take more risk than they normally would. here's what jeff lacker told steve liesman last week. >> i don't think vagueness is the answer. i think the thing for us to do is to communicate clearly that it depends and it's going to defend on how economic data come in, how the economy behaves and how things look at each meeting. >> the phrase was used constructive ambiguity. is that something you think is a good policy? >> i think history has been unkind to constructive ambiguity. >> yeah. but kathy is an old friend of mine. i'm just -- i'm calling it cowboy monitorism. the question is, is the fed too darn predictable? or as some would say, too boring? let's go to cnbc's steve liesman and former director of monetary affairs at the fed.

vince, let me go to you first. i want wall street traders to be scared to death that the federal reserve will have both guns drawn like a cowboy firing away and the street will not know either when the fed is going to go or how tough the fed is going to be. that'll keep wall street honest, and i don't want the fed to be an accomplice to wall street. what's your take? >> i think president lacker had it right. you don't want to give a blanket promise to keep rates low for a long time. it should be a conditional commitment, not an unconditional one. you do want some predictable part to monetary policy. so investors can price in longer-term assets. but you don't want to be completely predictable. >> steve, is it predictability that caused that bubble or was it just rates too low for too long? >> i don't know that it was predictability that created that bubble. i think there's a lot of thing ts out there. i think if you had better regulatory supervision on the

front end you might not have -- whatever problems were created by monetary poll say being off the mark would have been severely reduced. what's so funny? >> larry was just groaning. i was laughing at him. >> i was going to ignore that. i will point out that the idea of a precommitment is something that used to be unusual for the federal reserve. but now in at least three of the last four cycles, the fed has relied on precommitment. for good reason. right now by precommitting it thinks it will have more impact on the longer end of the curve. the question is, does the fed rely on precommitment too much? >> vince ryan, unless the wall street traders are scared to death of the central bank, they are going to keep taking these risks. that was the problem with the so-called measured pace in the middle 2000s. the fed never really tightened. they never scared those guys. they never had their guns drawn out.

one quarter little bitty teensy weansy interest rate hikes didn't stop anybody from taking excessive risks. you were there. it's got to change to when volcker was running the fed in the '80s. he would scare the living daylights out of wall street. >> he's still pretty scary. >> i think it's an argument for being more aggressive about the stance of policy. that is when you see a need to tighten, tighten a lot rather than beat it out in 25 basis points at a time. they used to call chairman greenspan quarter point al. that was for a good reason. policy was very -- >> is there any chance ben bernanke is going to do it differently? >> in the news business, if you can think of this story today, you ought to write it today rather than wait for tomorrow because somebody else will do it. the same sort of thinking existed when -- if you knew where you had to be, why wouldn't you do more of it right now. >> just go to it. >> larry, i just have a problem here. you are arguing for a government

agency to be less transparent and more capricious. i will tell you -- >> i plead guilty. >> and you need to consider -- >> the long-term goal is to keep the value of the dollar and our money and the inflation rate low, which is good for economic growth. i just maintain that too much transparency here is wrong. and i just -- here's the deal. i want wall street to be scared to death of the fed. the fed should not be their best friend. the fed should be their biggest enemy. and i think that's one of the issues as we move ahead. >> larry, i'm going to make a bold prediction. >> i think it's high time we have an open discussion about this. >> my bold prediction is bernanke will be a little less transparent in his second term and will rely a bit more on the surprises to the market to -- >> scared to death. >> i don't know about scared to death. >> how can you be a little

surprised? it's like a little pregnant. >> i think on the way -- >> that's what -- >> larry -- larry, on the way up the fed will get benefit out of being a little bit less predictable. >> i don't want a little. >> vince, what would that mean? >> on the way up the fed's going to be more aggressive. they want to be symmetrically aggressive. they'll raise them quicker on the way up once they get started. now, i do think, however, that chairman bernanke has likely going to decide that if you're going to be aggressive when you start, you can actually delay when you start. >> wait. that's a key point. so you think that although he might bark a little louder, he's going to be wussy before the barking starts, is that what you're saying? bark later but wuss now? >> so if you're a big dog you don't feel the need to bark as much at the beginning, i think

is the theory. >> have you ever -- >> that's a very important point. credibility of the fed goes a long way to damping inflation expectations. if the market believes that the fed will control inflation, it needs to do less. >> we've got to leave it there. >> end too big to fail and make wall street scared to death. >> never going to happen. >> cowboy monitorism. >> on either count. thanks, guys. >> john wayne would do this right. >> when we come back, this stock is up 30% in the past year. it's hoping to hit a home run with baseball fans. our darren rovell has the story. up next, we have new ratings on airline quality that may have you think twice about which airline you can fly. (announcer) we're in the energy business.

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california pizza kitchen confirms that it's up for sale. the restaurant operator says it now expects to earn 10 cents in the first quarter up from a prior forecast of 5 cents to 7 cents. right now the stock is trading up very nicely over 1.5%. melissa, we love california

pizza kitchen. new numbers out on airline quality ratings may be hard to believe, but carriers are actually doing a better job. taking a look at airline stocks right now, see how they're trading oen the day. all in positive territory. united up almost 5% on the day. let's go to phil lebeau who has more from chicago on a look at what's behind the better service. phil, really? better service? >> this is a real chicken and egg question, melissa. the question is whether the airlines are doing a better job or have we become so conditioned not to expect much so that when things don't go well, we don't complain. no one's going to listen any how. according to the airline quality ratings, mishandled bag complaints dropped almost 20% last year. customer complaints on a number of factors were down almost 16% and on time performance was up. what went into these results? a couple of things. first of all, airline complaints are down because there's less congestion. remember, the airlines stripped

out a number of flights in the last year. fewer people means it's going to be less of a chance for the airlines to make mistakes because there are fewer flights. also these new fees that have been put in place for checking an additional bag, sometimes even your first bag, that means that the airlines are handling fewer bags. they're going to be less prone to make mistakes with those bags. quietly the airlines have been hiring workers, meaning there are more people behind the scenes to help customers. believe it or not, the airlines are making a concerted effort to do a better job. >> they have fewer seats to get it right with. and they want to make sure that they can make their revenue projections. and it is a tough time to do that. and i think they realize that they have to treat the customer better than they have in the past. >> so who do the best job? who does the best job at treating customers right? hawaiian traditionally number one or number two is number one this year followed by air tran, jet blue, northwest. the top four are all the same. southwest now moving up to north

five. melissa and larry, i know when people look at these results, they're going to sit there and say i had a terrible experience flying a month ago. there's an element to being conditioned to not expect much. therefore even when things don't go well, we're not going to complain. it's only the really bad mistakes people feel compelled to call the d.o.t. about. >> i can feel the e-mails pouring in. phil, that begs the question, if the perception isn't out there that things are better, does it really matter that things are better? people have to feel like it's better to want to fly more, right? >> i think so. i think we're also in the process of changing what we want from the airlines. i think in the past it used to be, well, i think i might enjoy my flight. i'm serious. i think people are now starting to realize it's a mode of transportation to go from here to here. >> it's going to be painful. >> nothing more. >> phil lebeau, real quick, what do you know. senator schumer wants a bill that will prohibit charging for carry-on bags as per this debate we've had for 16 straight days on spirit airlines here on "the

call." can they actually do that? will they actually do that? >> it's an interesting move. when you look at that spirit airways promotion, and that's what it is, it is a promotion in order to get more people to buy. they basically are stripping out charging you for the flight. they only charge a penny or $9. they're stripping that charge out, but they're making it up by charging you more for carrying on bags. >> melissa, i'm surprised you haven't said anything about spirit today. >> you're the one that's all fired up about that. >> we'll wait and see. "power lunch" is coming up at the top of the hour. michelle ka ru scaruso-cabrera s live from the harvard business school. >> hello, larry. listen, we are trying to answer one of the key business mysteries of the decade. does twitter mean business? this week, twitter expected after years of nagging to finally announce a business plan. some way they're going to make some money, perhaps. we're going to help them out. we're here at the harvard business school with some of the

best and the brightest. they're going to tell us what they think the business plan for twitter should be, how they should make some money. believe it or not, harvard business school has a professor who specializes in teaching classes about social network and things like twitter. arianna huffington is going to join us. she's starting a new stand alone huffington post exclusively for twitter. it's all about twitter. i know melissa knows all about twitter, larry. you should join, too. it is an -- >> i used to twitter. >> i haven't done it a lot lately either. >> i did some twittering. i felt that i was frittering away my twitter time. >> thank you so much, michelle. can't wait to see the show. when we come back, going green from the ballpark to your backyard. >> our darren rovell at wrigley field in chicago with the story. >> reporter: writingry field's grass sure looks nice. this company is betting that you'll pay to make your lawn look like this.

that story's coming up next only on "the call."

welcome back to "the call." the number of homes in foreclosure reach aed a new recd

high in february of 3.31%. up 51% from a year ago. the total number of delinquent loans and reo or bank owned properties now stands at $7.9 million. economist robert shiler writes that evidence for a sustained recovery in housing is equivocal at best. he cites a big drop in prospective home buyers and lack of consumer confidence. "the wall street journal" reporting one bad quarter could wipe out the latest gains. goldman sachs estimates 7% of commercial loans will eventually go bad, but banks have only booked losses for less than half that. check back with the realty check. up next at 2:50. until then, go to the blog. melissa? >> diana olick, thanks so much. time for our "call to action" on the stocks you need to watch during afternoon trading. cnbc's matt nesto is here with a look. >> i don't know how fired up you guys are about this marketplace. it's a very tight trading range we're in here today.

the old saying lead, follow or get out of the way. nobody wants to do any of it here today. take a look at it, there's not a single sector of the ten economic sectors, not a single industry group of the 24 industry groups that is up or down more than 1% here today. the vix, my friends, the 15 handle is at its lowest level in really about three year. again, the weak dollar trumps all. that's allowing us to push higher here today. the the 11,000 debate rages on. we hit it. are we going to close above it? the tight ranges we talked about. the smid-cap m & a deals continue to trickle out. we saw some in the power space. also want to show you the hot, heavy and high. vm ware, cina, st. jude, sara lee, and same for nyse euronex.

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