improvement on the flawed rules that we have in place today. despite the furious effort of industry lobbyists to shape this legislation to their special interests. for those of you in the financial sector, i'm sure some of these lobbyists work for you and they're doing what they are being paid to do, but i'm here today specifically when i speak to the titans of industry here because i want to urge you to join us instead of fighting us in this effort. i'm here because i believe these reforms are not only in the best interest of our country but in the best interest of the financial sector. and i'm here to explain what reform will look like and why it matters. now, first, the bill being considered in the senate would

create what we did not have before and that is a way to protect the financial system and the broader economy and american taxpayers in the event that a large financial firm begins to fail. if there's a lehman or aig, how can we respond in a way that doesn't force taxpayers to pick up the tab? or alternatively can bring down the whole system. in an ordinary local bank when it approaches insolvency, we have a process, an orderly process through the fdic that ensures that the depositers are protected and maintains confidence in the banking system and it works. customers and taxpayers are protected and owners and management lose their equity. but we don't have that kind of process designed to contain the failure of a lehman brothers or any of the largest and most interconnected firms in our country.

that's why when this crisis began crucial decisions about what would happen to some of the world's biggest companies, companies employing tens of thousands of people and holding hundreds of billions of dollars in assets had to take place in hurried discussions in the middle of the night and that's why to save the entire economy from an even worst catastrophe, we had to deploy taxpayer dollars. now, much of that money has now been paid back. my administration has proposed a fee to be paid by large financial firms to recover all the money, every dime, because the american people should never have been put in that position in the first place. this is why we need a system to shut these firms down with the least amount of collateral damage to innocent people and innocent businesses. from the start, i've insisted that the financial industry, not

taxpaye taxpayers, shoulder the costs in the event that a large financial company should falter. the goal is to make certain that taxpayers are, never again, on the hook because a firm is deemed too big to fail. now, there's a legitimate debate taking place about how best to ensure taxpayers are held harmless in this process. that's a legitimate debate. and inicourage that debate. what is not legitimate is to suggest that the legislation proposed is going to encourage future taxpayer bailoutses, as some have claimed. that makes for a good sound bite but it is not true. in fact, the system as it sta s stands -- the system as it stands is what led to a series of massive costly taxpayer

bailouts and it's only with reform that we can avoid a similar outcome in the future. in other words, a vote for reform is a vote to put a stop to taxpayer-funded bailouts. that's the truth. end of story. and nobody should be fooled in this debate. by the way, these changes have the added benefit of creating incentives within the industry to ensure that no one company can ever threaten to bring down the whole economy. to that end, the bill would also enact what's known as the volcker rule and there is a tall guy sitting here in the front row called paul volcker who we named it after. and it does something very simple. it places some limits on the size of banks and the kinds of risks that banking institutions can take. this will not only safeguard our system against crises, but also make our system stronger and more competitive by instilling confidence here at home and

across the globe. markets depend on that confidence. part of what led to the turmoil of the past two years was that in the absence of clear rules and sound practices, people didn't trust that our system was one in which it was safe to invest or lend. and as we've seen, that harms all of us. so, by enacting these reforms will help ensure that our financial system and our economy continues to be the envy of the world. so, that's the first thing. making sure that we can wind down one firm if it gets into trouble without bringing the whole system down or forcing taxpayers to fund. number two, reform would bring new transparency to many financial markets. as you know, part of what led to this crisis was firms like aig and others who are making huge and risky bets using derivatives and other complicated financial

instruments in ways that defy accountability or even common sense. in fact, many practices were so opaque, so confusing, so complex that the people inside the firms didn't understand them. much less those who were charged with overseeing them. they weren't fully aware of the massive bets that were being placed. that is what led warren buffett to describe derivatives that were bought and sold as financial weapons of mass destruction. that's what he called them. and that's why reform will rein in excess and help ensure that these kinds of transactions take place in the light of day. now, there's been a great deal of concern about these changes. i want to reiterate. there is a legitimate role for these financial instruments in our economy. they can help spur investment. and there are a lot of companies that use these instruments to

that legitimate end. they're managing exposure or currencies and fluctuating markets. for example, a business might ed hedge against rising oil prices by buying a financial product to secure stable fuel costs. so, an airline might have an interest in locking in a decent price. that's how markets are supposed to work. the problem is these markets operated in the shadows of our economy. invisible to regulators and invisible to the public. so, reckless practices were rampant and risks accrued until they threatened our entire financial system. that's why these reforms were designed to prevent reckless risk taking. that's why we want to ensure that financial products like standardized derivatives are traded out in the open in the full view of businesses, investors and those charged with oversight. and i was encouraged to see a republican senator join with

democrats this week in moving forward on this issue. that's a good sign. for without action we'll continue to see what amounts to loosely monitored gambling in our financial system. putting taxpayers and the economy in jeopardy. the only people who ought to fear the kind of oversight and transparency that we're proposing are those whose conduct will fail this scrutiny. third, this plan would enact the strongest consumer financial protections ever. and that's absolutely necessary because because this financial crisis wasn't the result of decisions made in the executive suites on wall street, also the result of decisions made across kitchen tables across america, by folks who took on mortgages

and credit cards and auto loans. and while it's true that many americans took on financial obligations that they knew or should have known they could not have afforded. millions of others were, frankly, duped. they were misled by deceptive terms and conditions buried very deep in the fine prinlt. while a few companies made out like bandits by exploiting our customers our entire economy was made more vulnerable. millions of people have now lost their homes. tens of millions more lost value in their homes. just about every sector of our economy has felt the pain, whether you're paving driveways in arizona or selling houses in ohio or you're doing home repairs in california or you're using your home equity to start a small business in florida. that's why we need to give consumers more protection and more power in our financial system. this is not about stifling competition, stifling

inoovation, it's just the opposite. with a dedicated agency, setting ground rules and looking out for ordinary people in our financial system, we will empower consumers with clear and concise information when they're making financial decisions. so n stead of competing to offer competing products, companies will compete the old-fashioned way by offering better products. and that will mean more choices for consumers and more opportunities for businesses and more stability in our financial system. and unless your business model depends on bilking people, there's little to fear from these new rules. so, number four, last key component of reform. these wall street reforms will give new power in the financial

system. they will get what we call a say on pay -- a voice with respect to the salaries and bonuses awarded to top executives and the sec will have the authority to give shareholders more say in corporate elections. so that investors and pension holders have a stronger role in determining who manages the company in which they've placed their savings. now, americans don't begrudge anybody for success when that success is earned. but when we read in the past and sometimes in the present about enormouses executive bonuses at firms, even as they're relying on assistance from taxpayers or they're taking huge risks that threaten the system as a whole or their company is doing badly. it offends our fundamental values.

not only that, some of the salaries and bonuses that we've seen create proverse incentives to take reckless risks that contribute to the crisis. it's what helped lead to a relentless focus on a company's next quarter to the detriment of its next year or its next decade. and it led to a situation in which folks with the most to lose, stock and pension holders, had the least to say in the process. and that has to change. loet me close by saying this. i have laid out a wall street reforms. they will put an end to wall street bailouts and that would protect consumers and that would give shareholders more power in the financial system. but, let's face it. we also need reform in washington.

and the debate over these changes. the debate over these changes is a perfect example. i mean, we have seen battalions of financial industry lobbyists descending on capitol hill. firm spending millions to influence the outcome of this debate. we've seen misleading arguments and attacks that are not designed to improve the bill but to weaken or kill it. we have seen a bipartisan process buckle under the weight of these withering forces. even as we produce a proposal that by all accounts is a common sense, reasonable, nonideological approach to target the root problems that led to the turmoil in our financial sector and ultimately in our entire economy. so we've seen business as usual in washington, but i believe we can and must put this kind of

cynical politics aside. we have to put an end to it. that's why i'm here today. and to those of you who are in the financial sector, let me say this. we will not always see eye to eye and we will not always agree, but that does not mean that we have to choose between two extremes. we do not have to choose between markets that are unfedered by even modest protections against crisises or markets that are simeied by ownerous rules. that is a false choice. we need no more proof than the crisis that we've just been through. you see, there has always been a tension between allowing markets to function without interference and the absolute necessity of rules to prevent markets from

falling out of kilter. but managing that tension, one that we've debated since the founding of this nation, is what has allowed our country to keep up with a changing world. for in taking up this debate and figuring out how to apply well-worn principals with each new age, we ensure that we don't tip too far one way or the other. that our democracy remains as dynamic and our economy remains as dynamic as it has in the past. so, this debate can be contentious and it can be heated, but in the end, it serves only to make our country stronger. it has allowed us to adapt and to thrive. and i read a report recently that i think fairly illustrates this point, it's from time magazine. i'm going to quote. through the great banking houses of manhattan last week ran wild eyed alarm. big bankers stared at one

another in anger and astonishment. a bill just passed would rivet upon their institutions what they considered a monstrous system, such a system they felt would not only rob them of their pride of profession, but would reduce all u.s. banking to its lowest level. that appeared in "time" magazine in june of 1933. the system that caused so much concern was the federal depause lt insurance corporation. also known as the fdic. an institution that is successfully secured the deposits of generations of americans.

in the end our system only works, our markets are only free when there are basic safeguards that prevent abuse and check excesses and ensure it is more profitable to play by the rules than to gain the system. that is what the reforms we've been proposing are designed to achieve. no more, no less. and because that is how we will ensure that our economy works for consumers, that it works for investors and that it works for financial institutions. in other words, that it works for all of us, that's why we're working so hard to get this stuff passed. this is the central lesson not only of this crisis but of our history. it's what i said when i spoke here two years ago because ultimately there is no dividing line between main street and wall street. we will rise or we will fall together as one nation.

that is why i urge all of you to join me. i urge all of you to join me. to join those who are seeking to pass these common sense reforms. for those of you in the financial industry, i urge you to join me, not only because it is in the interest of your industry, but also because it's in the interest of your country. thank you so much. god bless you and god bless the united states of america. thank you. >> president obama making what some are calling a financial argument on financial regulatory reform speaking here in manhattan. maybe a mile or so north of wall street saying that ultimately there's no line between main street and wall street and going through sort of a laundry list of what financial regulation will mean, leverage, proprietary trading, consumer protection and

even compensation. john harwood and i have been listening outside here. we wondered where the laughter and applause was coming from and along with bob dimon there were some big union leaders inside, as well. >> fascinating the way he turned the end of that speech to a different version of the speech in which he broke into the national consciousness in 2004. there is no white america, red america there is one america. we're all rising and falling together. he talked about how it's a false choice to say it's a choice between unfettered markets and stifling regulation. we can do something in. between. that's what he's pussing and hi lobbyists and it reflects the conversation in washington where republicans and democrats are starting to come up with the outline. >> it is not the scolding that we were predicting ahead of

time, would you say he's asking for anything specifically? did it zero down to the half dozen issues or so that we mentioned earlier? >> it wasn't a transactional speech, it was more exhorting the audience and the rest of the country to pull together behind this thing that if it works out the way some democrats anticipate, you will have a deal at the end that will bring a significant number of republican votes and that will allow the president to say, look, we finally after all this ba partisanship we came together on wall street reform and that would be a significant asset for him and what kind of effect on the industry. >> are you surprised over time the house bill, the dodd bill, the agriculture committee's bill, it has gotten tougher. a lot of administration wither on the line. >> there's reasons for that. first of all, the president has a little bit more clout now that health care reform is passed. second of all, you have, just as you have the tea party activists on the right of the republican party, you've got the move on people on the left of the democratic party pressing

blanche lincoln of arkansas in a primary campaign so she put down a tough derivatives bill and also the case the democrats believe the longer this debate is going on, the stronger their position has gotten as they bring attention to their fight, framing it as democrats and president obama against republicans and wall street. that's not a good equation for republicans and that's why we may have a deal. >> ron joined us before the speech and we had to leave early to listen to the president, but, ron, i'm curious about your reflections as you listen to him and whether or not anything he said made you warm to potential regulation or not? >> you know what he said and what's going to happen is not going to be the same. i agree common sense regulation makes sense. and attack the root causes of the problem makes sense. but what's coming out of the dodd bill, 1,300 pages and i've read it makes really no sense. it's complex and it's froth with, i think the american public understands that when congress get a hold of something

and creates a 1,300 page bill i doubt it is going to be effective. let's talk about the root cause of the problem and let's talk about fixing it. >> ron, how do you take a subject as complicated as the financial industry and make a simple bill out of it? >> i can tell you how you do it. you deal with derivatives first. derivatives need to be cleared on a central exchange so you can't have a bunch of guys putting it on the precipice because nobody understand counterparty risks. you look at the fact that we've known for centuries that you can't have shorts against interests. create some sense of uninsurable interest. >> you think you can do all that on a couple 3 by 5 index cards? >> i think you can do it in less than 1,300 pages. i assure you can. it comes down to requiring capital and monitoring risk in a

system that's been an unregulated. the thing that changed in the last decade is that derivatives exploded and it exploded in an unregulated manner. you have to put sense and capital and monitoring to that problem and you can solve a lot of the issues on wall street. that's not what's going to come out of the financial services bill. >> heather, we want to bring in heather, senior legal and policy adviser for the afl-cio. chad also joining us to talk about the speech. heather, some of your bosses were inside the room. they, obviously, liked what they heard. it fits with their policy initiatives, but are they done pushing the president to the left, if you will? >> i think the afl-cio will continue this fight. we see wall street reform as a fundamental principal in making sure that working people are protected and that there's consumer protection so that our members don't get in trouble with tricks and traps and predatory mortgages.

we want to make sure strong derivative regulations so we don't have another aig-style bailout. banks are not allowed to get too big to fail and if too big to fail institutions and they do come to the precipice that we have a system in place that doesn't require taxpayer' money in order to prevent that failure from causing ripple effects. >> does the bill in the current form, or at least the one we think is in current form fit that? in other words, are you pressing him to be more aggressive than he already is. are you open to areas of compromise as they bring republicans in? >> we'll continue to press this bill because we want to see the strongest possible reform we can get. we see this as a good foundation. we're going to continue to press to make it as strong as possible and that's one of the reasons that president trump is leading a group of more than 10,000 people to march on wall street to push for strong regulatory reform and to make sure that people are protected and good jobs for the american people and aren't any more taxpayer bailouts.

>>om, how aboy ur rio to theee oom elemes of the reform have been proposed and opposing them is a top priority for the chamber. >> let me just say, we agree with the president that there needs to be reform and the president does deliver a good speech. but what is important to remember here is that we get this right. this bill will determine how our capital markets operate and how we create jobs and how we have economic growth. if we get it right, we'll have prosperity and if we get it wrong, we'll have stagnation. the stakes here are high. it's not about his speech, but about getting the bill done in the right form. so, we have five fundamental flaws and we feel there are five fundamental flaws in the bill that need to be fixed but we want to remind the president this is more than just about a speech, but about getting the job done. >> tom, talk realistically for us with a moment. we know this bill is going to become law. tell us realistically of the

flaws you see in the bill, which are the most likely ones you think the democrat and administration will be amenable with you on on making a deal? >> you know in terms of systemic risk we have prepaid fund and we have implied government backing and bailouts and that's something i think there's a lot of agreement on both sides of the aisle. you know, we agree with the president that what happens on wall street, main street are interconnected and i also think that a lot of people around the country don't want to have an economic j. edgar hoover checking in on the orthodontist. those are fundament changes that need to happen. not extending the power of government to areas that were really not part of the financial crisis. >> although, tom, the prefunding does not appear to be a big difference of principal because the administration agrees with you didn't actually agree the prefunding and it looks like that is coming out. >> if that happens, but there

are, we agree that there needs to be resolution authority. when you take a look at the volcker rule, it puts us at international competitive disadvantage and who says so? the eu says so. because they say they won't follow it. when you look at corporate governance in the bill, it's more about placing activist investors at the head of the line disenfranchising shareholders and more about payback than better corporate governance. we feel the state system should remain as it is. >> tom, heather, ron, appreciate your time and your insight coming out of the president's speech. thanks for your time. >> thank you. i believe we were going to take a break and get some market reaction with bob pisani and rick santelli. as we wait out here, you can see crowds are flowing out, people who were actually in the speech. later on, we'll go to san francisco and get a check on what the derivatives markets think of all this. you're watching cnbc special coverage of the president's remarks.

>> i believe in the power of the free market. i believe in a strong financial sector that helps people to raise capital and get loans and

invest their savings. that's part of what has made america what it is. but a free market was never meant to be a free license to take whatever you can get, however you can get it. >> president, once again, pulling out his free market capitalism. john, dow is off 71 points, whether that's in response to the speech or not, he does feel the need to reassure people that he is not going the way of socialism as he is often accused of. >> sure. if he is going the way of socialism, i have to ask the question, why is the dow over 11,000 right now. so, look, the president, all democrats labor under the presumption that they are anti-business in the modern political environment that we're in, just as republicans labor under the presumption that they're callus and heartless to the poor. so, if you're a democratic president proposing regulations like this, you want to make it clear, especially if you have as much support as this president got from business, from wall street, from high-income

americans in 2008 that, hey, i haven't turned against you, what i'm doing makes sense. that's the argument he's trying to sell. we'll see how well he can sell it. >> bob pisani has been watching the market all day, even while the speech was taking place. what is going on? >> we're weak. take a look at jpmorgan and most of the banks sold off a little bit going into the president's speech about noon eastern time, but have since bounced back here. you want to know why the markets are so weak, we have a couple problems. earnings season started last week and stocks have stalled out. you're not being rewarded for buying on the dip, particularly what happened with goldman sachs last friday. and the big problem has been greece. i'm sorry to bring it up, everybody hates talking about it. it won't go away. like a drunk couple at a dinner party that stayed too long. there is greece. the two-year yield on their bonds up at 11% today. that got a lot of attention on the trading desks.

here's the issue here. referendum on confidence in the european union here and that key here is the dollar euro. once again, the euro is hitting new lows against the dollar. again, if this is an indicator referendum it is not a good sign. somewhere down the road sovereign debt is an issue. bit of earnings disappointments. we haven't seen this before, credit suisse and ebay, some disappointments on the earnings front. carl, back to you. >> thanks very much. joining us outside cooper union, long-time friend of cnbc, good to have you, jim. >> good to be here. >> you want to tell us what it was like inside? >> the president hit all the right chords and even some bankers showed up today. i think it was a measured speech and a little bit of admonishment and a little bit of common sense.

let's get this done -- >> let's get to the root what was posed by one of the tabloids today. this financial regulation proposal moving through the congress, will it kill the golden goose? >> i don't think it will kill the golden goose and some think it won't go far enough. on the other hand, a lot of steps in the right direction. better than what we have, particularly if we get the volcker rule and we see derivatives, standardized derivatives traded on exchange and, again, the devil is in the details and 1,800 pages similar to the health bill. so far wall street is understanding that reform is going to happen no matter what it does and most of the steps are good ones for consumers. >> what should we read from the fact that as this bill has gotten closer to enactment, the dow has done pretty well. do you see a big dow reaction to this one way or the other if it becomes lost? >> i'm not equipped to answer where the market is going based on a reform bill.

but i think, look, what american people want and what the markets want is a fair and level playing field where the rules are clearly and the referees are confident and we know the game is not rigged. markets will do what they're going to do. as long as the game is fair, everybody understands that is a good thing for capital formation. >> i don't know if we have gotten your take and the history has been written about a lot. but do you think, do you think they're to blame and you don't blame paulson for what happened back then. >> i am not going to comment on the case, but i think that, look, we're going to see, we're going to see more cases. i've been openly talking about the lack of criminal cases. i mean, we passed sarbanes oxley post-enron to go after this kind of malfesance. signed financial statements and they can't rely on the defense and i can't rely on what is going on any more. that seems to me to be a pretty natural approach.

with the lehman brothers report you have a road map and with what happened at aig, the civil case and it will stand or fall on its own merits, but there was a lot of criminality, in my view, that was going on at other institutions. >> but let me follow up on carl's question. a column in "the washington post" the other day that said this is a nonscandal. that the creation of these market baskets is done all the time and anybody buying them, anyone selling those are a buyer and vice versa and only people who made poor bets are the ones that lost money and that is their bank. >> we do have hindsight, which is quite clear. at the time when the deals were done, there weren't a lot of us skeptics and there were people who were buying these deals for yield. the whole idea of a synthetic not to get too much jargon was there was really no underlying asset. it was a bet. the seller, paulson, agreed to pay a stream of payments.

pay payments to the buyer and the buyer yauz going to get a yield based on his view of the market. everybody saw the underlying as elts that were referenced and set up at the time and i think that because the markets went down there is an impetus to look for scapegoats and i'm aware of that as a short seller, but i think we have to be aware, we can't throw the baby out with the bath water. derivatives in and of themselves are important for hedger and for every hedger there is a speculator. you need both in the marketplace and you need transparency and fairness. as long as you have that, the american people don't have a problem. >> blank fifein was inside and was cohn, did they have to be there? >> i think there were a lot of bankers in attendance today that weren't there last september and i think, you know, that's a good

thing. it's a good thing. again, a good speech and everybody left the hall thinking better of the president and foreign package and its chances and that there were a few extra bankers in the hall this time than last time. >> great. >> jim, thanks. >> thanks, guys. when we come back, what does the derivative's market think of all this? we'll go to san francisco as the president's special remarks continues.

welcome back to midtown manhattan after the president's remarks on financial regulation, we want to take you across the country to san francisco where our own simon hobbs is at a derivatives conference and they have been lisening to the speech, obviously, with great, great interest. simon, what's their take? >> well, i think the most important thing to say first off is if you look at the bill that went from the agriculture yesterday to the senate there was provision in that, but the derivatives funk s functions ofp five banks had to be earned off. people around here shuffled and they smiled and they just hope that isn't true and obama is true to his word and that the lobbyists and republicans will ultimately be able to plot that. two elements of the provision that will buy, carl.

that is the idea that these trades should go through clearing houses so they will achieve margin and guarantee the trades and people will be held responsibility for that in the open and choose a systemic risk. the other area much more controversial is that the idea of derivative trades would have to go through an exchange and a public print of what is going on. too liquid to go through like that and not good for the end user and these are the deals that are done in private and you can't push them into the open. you move the market and the market can't take it and the fundamental concern that there is a misunderstanding on capitol hill of the nuts and bolts of what derivative players ultimately do. as one person put it to me, it's a little bit like promising money to general motors going in and attempting to reordered the production lines. there's a certain exasperation that has to be said among the

swaps and derivative plays here in san francisco. >> simon, let me ask you this, it appears to me that the final deal will likely give the derivatives people you're talking to some of what they want, but not all of it. let me ask you this. if they had to choose between having the derivatives desk spun off from those major institutions or accepting the exchange trading, which obama cares about much more, which would they consider a better deal? >> well, i think they're just fundamentally don't believe that they will spin off those particular banks. as far as exchange tratding is concerned. it's really problematic. they don't think it will work. if they have to do it, they're resigned to doing it. they understand the industry is too big. >> simon, thank you for that. simon hobbs in san francisco, john, appreciate the insight here wrapping up the president's speech. on the other side of this break, the fast money half-time report.

melissa and the gang will break down the president, the markets and a whole lot more.

welcome to the fast money halftime report. lousy earnings and impassion speech of financial reform from the president. but the next battle for the market will come after the bell today as microsoft and amazon report. let's get you the word on the street right now. karan finer and guy of drake and

capital and tim and steve grasso of stewart frankel. karen, it is a pleasure to have you here in person on set. a rare appearance by you mid-day here. what did you make of the president's speech? seems like he hit a lot of important key words for wall street. i believe in a free market for one. but what did you make of the speech overall? >> i haven't gone through every line of it, but seemed like it was lacking somewhat. i would have thought that he would come out with something more aggressive. i would have thought the banks would have rallied on this because there wasn't any bombshell in here that i think would really cause a panic. >> look at the intra charts of the market. we are seeing a tick to the upside right now. financials across the board pretty much were down about a percent. as we went into the president's speech and now making it a little bit higher. steve grasso, what was the reaction to the speech? >> everybody is in a wait and see mode right now.

we're still waiting on the collateral damage out of goldman and moody's got a subpoena yesterday and still waiting on the chips to fall and to rush into them is a little prechumr. >> from where you're sitting, what is the reaction? >> couple days goldman put out their earnings and they rallied a little bit and thigh were hit. the reality is, of course, the earnings will be great from these banks and reality set new problems looming and didn't have the punch in it that i thought it would and the speech was released a couple hours ago and a relief when it was out and now we think we have more time with the banks and that's why they have drifted back a tiny bit. i still don't love it. >> lloyd blankfein he was at the speech with gary cohn. is there a buying opportunity at 1 foit 57 or south? >> not because they did anything

wrong. goldman did not break the law at all. they may not like them, that's not a crime. but i think technically friday set up an extraordinarily,ñ.ht bearish day and to the down side and monster volume on saturday and monster earnings report and headed down to 1.50 and then i'd take a look at it. this has nothing to do with reputational risk and to me it's more technical play. >> we'll leave financials in adjust second but an interesting chart here. evr is the ticker on this and trading up almost 2% throughout the speech. its ceo sitting in the second row. just saying, just saying. let's move on here and talk about the broader market. steve grasso, moodo's, once again, coming out down on greece. is that really a what is dominating the trade today? >> if greece is dominating the trade today, it should all be bought because any selloff we had on greece rallied right back. the goldman trade has longer legs to it and profit taking

versus anything fundamentally. >> hold on a second, couple years ago didn't we think frtrie a was the lowest rating. greece, i know we're is sick of the greece story and it does chase money down into the dollar and the thing that is interesting the derivative trade off that is is the dollar rallies a little bit and two stories. another punch from europe and the global demand for crude story has a little bit of a wet blanket, plus the dollar rallies a little bit off this story and that's why we're seeing crude down and names like halliburton and options activity with people buying puts and that. that's the chain i'm seeing. >> let's bring in dennis for his take on financials, as well as the greece situation. dennis, jim highlighted the strength of the dollar and the weakness and commodity stocks. we're not seeing a flight to safety in gold. what is the trade here at this point? >> i think, actually, in the last five or ten minutes you

have seen a pretty strong rally in the gold market. it has come up from its lows. it has come up as crude has come up from its lows. do i think all of this is a response to the president's statement. i thought the president's statement was as populous as he would like to make it, reasonably measured as he is capable of doing, but, nonetheless, i don't like it because it means more government intervention and i think long r good thing. >> the turn in the gold market, dennis, how would you interpret that and what would be your trade on gold? >> the same trade i've had ton for a long period of time. i want to own gold not in dollar terms but other currency terms. that continues to make new highs and i'll be loaning gold in yen terms, sterling terms. >> dennis gartman, thank you. >> the hedge fund community is very predatory, as you know.

if they catch whiff mr. paulson is liquidating any of his gold positions, they'll absolutely run him up. just a thought. i don't think gold's performance today is that inspiring. see how it closes today. >>. let us now move on. the market's one bright spot, a lot of restaurant stocks are higher along with a lot of the retailers. karen, what do you make of this? there is a lot of interesting data points but nothing necessarily that would say, you know what? 2% higher in jcpenney or 2% higher on some of the other names out there. >> i don't know if it is just rotation out some of the names. the medical device space getting hit hard today. maybe that has investors turning to consumer stocks. but across the board, restaurant space is amazing to me. just just mcdonald's. they put up very good earnings but cheesecake which we talked about. it was a bad trade, been up a lot higher since then.

they all seem to be levitating. cake reports tonight. i wouldn't be shocked if they can -- the expectations are so high, i wouldn't be surprised if it came in a little but i got to get out of the way of that one. >> president obama in his speech said we won't have a recovery until both wall street and main street actually feel the recovery. here we have the markets telling us that the consumer is back and spending at restaurants, hotels, marriotts, spending at the retailers. what do you make of this? >> i believe in the cover story but the fact it is going to be a v-shaped recovery with unemployment hovering around 10% and us not getting any better data out of the labor market to me seems like that's why i like the names that are kind of middle of the road, like kohl's, target. things like that to me seem to be better play than the higher end. i think that there will come a realization that this isn't your father's recovery. it is not going to be straight up. >> absolutely. let's also talk about the credit card names because they are

going to be reporting after the bell. capital one financial, as well as american express. another read on the consumer. if you look at the performance of these two stocks over the past two months, they're both up 17% a piece. steve grasso, do you like any of these names based on what we've already heard from the likes of the citi and bank of america? >> i always like the transaction-based cards. mastercards and visa. i'm out of my visa. had a nice healthy profit approaching 30%. you can never laugh at a profit, you got to take it off the table. that's what we're seeing across the board, taking profits off the table. worried about risk at this point. >> steve makes a great point about mastercard. that's something american express, what a great franchise. that stock has doubled since july effectively. their master trust data i think they came out with on april 15th was pretty good. i think you'll see a pretty good quarter out of american express. don't know if that turns into a

rally in the stock, but i think the worm has turned a little bit for those guys to the up side. >> remember their most important characteristic, they're not a bank so they're not on the naughty list. they're in the sweet spot of financials that you don't have to worry so much about. >> let's do a quick take your position. karen, your shareholders in microsoft, what do you expect given some of the reports we've had recently crossing technology today? >> we could see a great number, yet not a great reaction. i wouldn't be surprised to see a great number, and i hope we have a little bit of follow-through. just like the first quarter earnings, good numbers weren't good enough. i think they need to really have very strong numbers. i'm also -- >> quickly on amazon. >> i don't get it! it is a great company. i just can't play on that one. >> i'll just point to netflix today, all-time high earnings.

halftime report is next. earnings frenzy not slowing down yet. on deck, the names of the heart of corporate and consumer spending -- microsoft and amazon. all the live action off the company's calls. plus, it's time to get schooled. for-profit educators are in for a rocky ride as washington battles the renewed rules and regulations. devrie gives our fast money crew a lesson in learning tonight, 5:00 p.m. on cnbc. ♪ well, look who's here. it's ellen.

hey, mayor white. how you doing? great. come on in. would you like to see our new police department? yeah, all right. this way. and here it is. completely networked. so, anything happening, suz? she's all good. oh, my gosh. is that my car? [ whirring ] [ female announcer ] the new community. see it. live it. share it. on the human network. cisco. money halftime report."

time for a special "bring your child to work day" edition of "trade to go." a lot of special traders are joining us today. william kaminski, what's your trade to go? son of gary. >> north carolina. because my brother james is going there. >> karen, you've got your two

twins here. >> william, what do you got? >> hasbro. >> i like tj maxx. >> ross? >> i like the yankees. >> that is a good one. that does it for us here on the halftime report. on tonight's "fast money," we've got all your after-the-bell action on microsoft as well as amazon. steve, what are you guys working on? we're watching the market very closely on power lunch and in addition, we're watching greece. is it going to make it? are we looking at a sovereign debt default? that plus a whole lot more. a financial meltdown. a government bailout, and huge bonuses. main street is fed up with wall street. will president obama's financial regulation be enough to restore trust in the markets? microsoft reports after the bell. windows 7 have enough mojo to

beat apple's latest innovation? and lane bryant bust. abc and fox put up a fight over the latest ad deeming it too racy. discrimination against the full-figured? we'll chew on this food for thought. a double-d hour of "power lunch" starts right now. welcome to "power lunch," everybody. people on wall street are so worried about greece at this hour but seemingly feeling a lot more at ease with the president and his push for financial reform. earnings should be in focus. amazon and microsoft are set to report after the bell. another sign the crisis is further in the rear-view mirror. wall street is ready to get back into the mortgage business with no government training wheels. we'll explain why it is so important. couple unusual volume movers in stocks.

telecoms trading something like $780, because they're talking a deal. a trip down to the pit in moments. and president obama makes the case for sweeping financial reform. the question now is, did he do enough to soothe the souls of disheartened investors and wall street executives? frequent cnbc guest and powerful market voice jim chanos seemed to think so. >> a lot of bankers were in attendance today that were there last september. that's a good thing. it was a good speech. i think everyone left thinking better of the president and the reform package and its chances and that there were a few extra bankers in the hall this time than last time? great. >> question is, will this actually help restore trust. joining us, allison dean, founder of dean's wealth management and roger lowenstein, author of "the end of quality." thanks for joining us, allison. roger will join us in a few minutes. allison, that gives you the

stage, if you will. did he do enough and do you think that especially in light of the goldman sachs issues that are out there, that trust is being restored? >> i think the three things he focused on today do wind up getting passed in the bill, if they do, that he will do a lot to restore confidence. one of the more important things is transparency. the big issue that really results from this crisis is this enormous mushroom and magnitude of the exposures and how interconnected all these firms were. by really forcing transparency of derivative transactions, that goes a long way. >> a lot of people say what's pending on capitol hill would not have prevented the situation that it allegedly took place with goldman sachs. you've written about this and you have some very interesting opinions on not only goldman

sachs but wall street behavior. >> well, i think first, it certainly would have. because the first thing that this would do is to put derivatives out in the open. of course, the bill now would force it all to be traded in plain vanilla, generic contracts. you couldn't have a john paulson going to goldman sachs saying, design one like this for me, if that's what happened. of course this is just an allegation. >> yeah, it is just an allegation. >> i think the broader point is, we had this system of disclosure that worked fine, set up in the 1930s, for registered securities and we've had these new instruments, derivatives, that were developed outside the framework of our existing disclosure system. so the big thing in this bill and the speech would say, hey, we need a new set of regulations to bring these new instruments inside the tents. >> but roger, in your op-ed, you make it even broader point that will not be addressed by this. because even if we put derivatives and make them transparent on a clearinghouse, you don't like the idea that

wall street which was there to raise money for capital, for industry, it instead just plaiz placed bets on pieces of paper. it is nothing more than gambling. that's a really good point. elaborate, please. >> that's right. you don't see that in the bill. my point of that op-ed and the point i'd make now is what's the real function of wall street? the social function is to raise money for industry, for shipping firms and steel mills and tech firms and for real estate. and stocks and bonds do that because you're investing in the actual productive capacity. >> but what about the absorption of risk? that's another key thing. the buying and selling of risk. derivatives exist because farmers want to know how much they were going to get paid for their wheat before the season actually happened. and somebody else said, i will buy that risk. i will foot that risk instead. that's another crucial role for wall street. >> it's fine with the farmer, because he's really got the wheat. right? so he's got something to insure. but when john paulson -- if we

use his name since we knew he made that bet -- says i want to insure against the housing collapse, he's just making a bet. he doesn't own these mortgages. >> i'd love to get you in here and pose the question this way. we're talking about trust here. can you really restore trust in wall street so long as the country views it generally as a big casino where there are these fundamentally unregulated bets, gambles, wagers, being made on derivatives by parties who have no stake other than a desire to gamble? >> well, if there's transparency, you can see what they're doing. if you increase the capital requirements, and if you don't protect them, should they make bad bets that go awry so the taxpayer doesn't have to fund their bad bets, i think that's goes a long way. what we think the social role of wall street is to go out there and raise funds for corporations. the reality is these are public companies and have the responsibility to shareholders

to maximize possibility. the spreads are so thin these firms have had to evolve into somewhat more risk taking than they had to 20 or 30 years ago. >> to use parody of logic, then you would outlaw naked puts and calls. >> i'm talking just to tyler's point, when you talk about derivatives with no underlying asset and just gambling, lots of people buy puts and calls and they don't own the underlying stock. a lot of derivatives we talk about are nothing but puts and calls and the underlying outfit is actually a fixed income instrument. >> why do you think i say i would outlaw it? >> i'm talking -- tyler was talking about that. >> fundamentally i have no problem with something where it is a synthetic cdo like that, with banning it. i see no problem with that at all. i don't buy the high-minded argument that this is about the flow of capital and that we have to encourage flow of capital.

it's about -- >> you should just have stricter capital requirements? >> what's the difference? >> i might well go as far as to say ban puts and calls, naked like that where you have no stake in the underlying asset. >> i would want to sus spen where there's -- the instrument is synthetic, there's no real instrument beneath it, no real bond, no real stocks being traded, no real money going to industries and where the party making the bet has nothing to insure. it's really akin to taking life insurance ot on your neighbor. >> are you confident, roger, that what's going to come out on capitol hill ultimately will benefit the customer of wall street, whether you're talking about the individual investor or the institutional investor or the person who's doing business with goldman sachs? the worry that we're hearing from the street is what might come out from capitol hill, it is 1,300 pages long and it might

not remedy the situation. >> in advance of every financial reform, wall street says we won't be able to live with it, it is going to end trading and free markets as we know it. in the 19 -- in 1934 when the securities act was passed, investment firms declared a strike. they would not float new issues. there were no new issues to float because it was the middle of the depression, but they said this would be the end of capitalism if they had to actually disclose what was in the stocks they were peddling. they learned to live with it. they will learn to live with this. the important thing in the reforms isn't that the public understands every last detail of tr derivatives. if they're traded on an exchange, if there is transparency, if they don't call up and say, "by the way, us, too." >> we may be on the verge of a crucial event in the financial markets. the first residential mortgage-backed security without any government backing in two

years. redwood trust has filed a term sheet with the s.e.c. they say they're going to try and sell $222 million worth of r&b, we haven't seen one of these types of securities come to market since may of 2008 when the markets grew terrified of buying anything with mortgage-backed securities unless they were backed up with a government guarantee. redwood is able to sell these government-free securities. if they are, it could mark return of mortgage securitization on a wider scale. 255 loans in this rmbs. they have an average credit score of 768. none of the loan is for more than 80% of the value of the house. the average is 57%. the value of the house, the average loan, $933,000. and redwood says they're keeping the riskiest kinds of mortgages and these are all underwritten by citigroup. let's talk more about this. is this the first deal of many or just a flash in the pan? also joining in the discussion, tom deutsche, he

heads up the american securitization forum. still with us, alison deans. tom, are we going to see a lot more of these or is this just a flash in the pan? is this the full-scale return of securitization? >> i think this is the initial trickle that you're seeing in mortgage-backed securities. people are putting their toes in the waters before they jump in. over the next few months, you'll see a few more deals here and there, but any mortgage-backed security that contains only 255 loans, that definitely doesn't change the landscape right now. where 90% of the credit flowing to mortgage loans is on the balance sheet of the government for fannie, freddie, fha. >> one thing i noticed about this, michelle, you just said that no loan in that package is for more than 80% of the home price, look at what the fh sachlt doing right now. in elkhart, indiana, 13% unemployment. they're giving 3% down payment loans. where some private guys are

doing 20% and private guys have learned their lesson. government has not, if you judge from that. >> would you agree, tom, it is at least an encouraging sign and with parameters that are much more conservative than what we used to see? if you have to have a start, this sounds like a pretty good one. >> it is extremely positive start. the credit quality underlying loans is tremendous. i think there are a lot of people in this room who would have difficulty getting one of these loans because they're very high credit quality. >> roger, is this kind of security the precise opposite of the type of security that was involved in the famous paulson/goldman/deutsche -- whatever the bank is over there? >> a, they're real loans. b, they're better loans. 57% loan value is a very positive sign. if it means that at least for now, bankers have learned some lessons or it means the capital markets have learned some lessons. but it poses a very interesting question because you talk about fannie and freddie.

secretary geithner has just in a sense opened the debate and said he thinks there's going to be a role for fannie and freddie down the future but what should it be? the country has never really squared away on this issue. should we go to a real free market and just skaterize t ise mortgages the government will bear? >> the reform bill making its way through congress, there's no fannie. is there? >> no. the biggest dilemma, maybe fannie and freddie do serve a purpose but the fact they also had shrld interest in mind so they had a profit motive while they also had the government subsidy, that created all the problems. alison, would you recommend that your clients buy one of these? what yields would you demand? >> can't think of yields offhand but i do think it is a very high-quality product. my sense is buyers are going to be much more aware, they won't

care at the rating. people are very wary of owning mortgage-backed securities. it seems to me as if the market is going to start having more of these coming out. >> privately financed offer came out with great parameters, no financial regulation was required to do that. we didn't need any new rules. they learned their lesson from losing their shirt last time, roger. >> well, after a storm you'll get good lending. this always happens. bankers get silly, go on a wild mania, they lose their shirts, they're bailed out. the first loan they make coming out in the new era, sure, then they're careful. but let's see if this loan works, then the next loan to value 65%, then we're seeing this move. >> i can't tell you the number of times -- maybe this is too personal for this power lunch -- that i've said "i will never drink again." bankers have said that since the beginning of time.

>> thanks, everybody. appreciate it. on that note, stocks are still lower at this hour but well off the lows earlier in the session. greece earnings, economic numbers all proves to be negative for investors today. greece's debt downgraded by moody's after the country revised last year's budget deficit upward. public workers in greece have gone on strike to protest the cuts in government funding. bob pisani is at the new york stock exchange and rick santelli at the cme group. >> we got a couple of problems here today. we haven't seen these in a while. one, you are all sick of it, but greece just will not go away. one trader called it the drunk couple at a dinner party that stayed on too long and they won't go home. they don't understand they're not welcome anymore but it still sits there. the other problem -- this is kind of unique here today, tyler -- is we haven't seen earnings disappointments at all this earnings season. we're getting them today, whether you've talking about abb or even credit suisse, ebay was

disappointing, baxter was disappointing, qualcomm was disappointing. six, eight companies that kind of disappointed on the street. just didn't make the numbers. a lot of these stocks have run up rather nicely today. if you don't get close to what people want in the numbers, they sell off pretty hard. i think the president's comments overall were not as harsh as some anticipated. that might have helped the markets a little bit. >> bob, right now the two-year in greece is yielding close to now 11%. that's unsustainable for them to have to service that debt at 11%. >> right. >> the word that's going out is we actually may be looking at a sovereign debt default. what are the implications of that? greece, as you mentioned, has been overhanging here but these kinds of situations very infrequently end on a happy note. this one doesn't look -- portugal lost 2%, almost 3% today. spain is on the downside by -- on the close by better than 2%. those are not good signs. >> right. you just answered your own question there, sue.

the contagion issue is the problem. can you see what's going on with the euro. euro is at its lowest level of the year against the dollar right now. that's essentially a vote on confidence in the your onto hold together and on the risk of contagion which you just talked about very well. the answer is the contagion risks are higher. i do think it is appropriate to point out that the whole subprime thing and the prime thing is actually not a bad analogy. everybody said greece is just a tiny part of the eu. >> what about all the securities, all the investors and banks are holding? i mean that's going to be large. not only that, what about the paying off of the swaps should they go into default? is there enough set-aside? have they overleveraged. >> everybody's learned their lesson, rick. come on! >> rick, don't you think that governments in europe are better able to react to greece and deal with this than they were over a year ago? >> are you kidding? you think these governments have

a handle on any of this? >> more than a year ago. >> no, it's getting worse. >> if we're not going to drown in 100 feet of water, we're going to drown in 50 feet of water. >> rick, today's the first day the markets kind of looked up and said, wow! greece really could default! europeans can't get it together and the imf isn't necessarily going to do anything either. >> who would invest in greece? >> that's not the point. >> it's the test of the euro. as goes greece, as goes part gal, as goes spain, as go the european banks that are holdinging all of that paper. >> the domino theory doesn't play out though. >> don't you think, sue and rick, too, or any of you, it is much more likely we'll see a restructuring than a default? >> i hope so. i hope you're right. >> i think we're going to see

some smoke. i really do. >> do you, this time? in restructuring? how is that any different than a default? >> it's not a full default. we're going to restructure, you're going to take a haircut. >> we'll see. i hope you're right. coming up next, thank you, ricky, thank you, bob. all kinds of companies coming up with products that are better for the environment and they save money, and they help the homeowners out. but do they actually pay off for the consumers especially when you go to sell that house? it is a real value in going green. the answer might surprise you. plus, china's known as a major polluter but there is another side to this story. we'll show you a side of china that you've probably never seen before on the other side of this break. 

the multi-billion dollar potential in green construction is pitting home builder against home apraeser and a fight to find a real value here in this improving environment. diana olick has that story for us. should be interesting, diana. >> reporter: that's right, dennis. good news is that green home upgrades have fallen in price dramatically. the bad news is, those upgrades are still not showing up in home values. whether it's solar panels, geothermal heating, low-flow

toilets or showerheads, the value to the environment is enormous, but the dollar value to homes still lags way behind. >> appraisers don't understand what geothermal is or what its value is so that up-front investment cost that you have is not recognized by an appraiser. to them a furnace is a furnace is a furnace. >> reporter: she says home builders like herself want to offer consume aers fully green package, but since banks aren't recognizing the value, they aren't willing to finance the 10% to 15% additional cost of even a basic green home. manufacturers like kohler on the leading edge of the estimated $100 billion green building industry say appraisers are behind the curve and cutting into their business. >> certainly if consumers aren't aware of the benefits and have those realized in terms of true appraisal values, that just makes our job harder. >> reporter: but appraisers argue their job is to mirror the marketplace and they say, so far, consumers still demand

granite over green. >> they are concerned about green. everybody that's in their social consciousness. but today they haven't started to recognize that in terms of paying more for it in their pocketbook. >> reporter: now this homeowner in d.c. put in green upgrades, including these incredible solar panels, just four years ago. he says if he had done it today, he would have paid about 40% less. the trouble is he admits he's not going to see that resale value go up here in d.c. he might see it better in california where people see more of that and therefore demand it. for more, go to the blog realtycheck.cnbc.com. >> speaking of energy and green, to say that china is growing fast is an understatement. but it needs energy to fuel that growth. when the world looks for a poster child for pollution, it often looks to china. the pollution is tangible. it is literally hard to breathe in beijing some times of the year. but that is not the end of the story on the other side of the great wall. tonight on "beyond the barrel," the race to fuel the future,

andrea mong reports on the other side of china's massive thirst for energy. the country has become a green giant. >> reporter: in environmental circles, china's known for being a serial polluter. but there's another story to tell whether it comes to energy production for this giant country on the other side of the great wall. green cities. built around new technology. >> all of the energy will be used up. >> reporter: in a city of a half a million people, 90% of the rooftops are covered with solar panels providing hot water to the people living here. the growth of china's wind energy sector has been nothing short of spectacular. ten years ago the industry was nonexistent here. by 2004, there were six local wind turbine manufacturers and that number grew more than ten fold to nearly 80 this year. tonight at 8:00 eastern, see

more of what china is doing and what other leading countries around the world are doing. and find out when alternative energy will really make a dent whether it comes to america's energy needs. "beyond the barrel, the race to fuel the future." tonight at 8:00 eastern. up next, microsoft's mojo. they report after the bell. microsoft and apple. in a few minutes, abc is refusing to air a lane bryant lingerie ad featuring plus-size models. is the ad too sexy or is abc discriminating against full-sized women? you decide. we're back in a flash. national car rental? that's my choice.

because with national, i roll past the counter... and choose any car in the aisle. choosing your own car? now, that's a good call. go national. go like a pro. at the end of the day in sitka, alaska, the fishermen bring in the catch. and cargill brings in the sea salt to help them preserve it, shipped in an efficient supply chain to save the fishermen money and their catch. this is how cargill works with customers.

welcome back to "power lunch." at the nasdaq, investors are trying to figure out whether some of the big guys are giving us mixed signals. ebay has come off of the lows since the market has moved higher but ebay is warning as lower outlook, it gets a sell rating on that disappointment. meantime, great results from starbucks and netflix, both today are upgrade. analysts are expecting pretty good results from amazon after the close this afternoon. also mixed signals when it comes to the chips. s sandisk more than $1 billion in revenue, blowing it out of the park. novell also looks pretty good but qualcomm is the biggest drag. each drag is outnumbering all that positive up-side move.

in biotech, more warnings on their earnings. amgen lowering its demand on the health care reform impact. >> we want to dive deeper in microsoft and how mr. softy compares with apple. could apple's market cap be making a move past microsoft some time soon? shares of apple shooting higher than microsoft in the past year, outperforming it by quite a bit. joining us, head of research and our silicon valley chief. is apple overvalued? you must pick one, sir. >> microsoft is undervalued. nice and easy. we think they've got a lot of momentum. pc upgrade cycle. they don't get any respect for it and they certainly dominate that market. >> intel came out with good

numbers. usually when intel does, microsoft kind of does, doesn't it? >> i think there is a lot of optimism going into these numbers. peter is right, when you look at the opportunity ahead of this company, there's been so much talk about where apple goes from here and the amount of market that's still left out there for the mac. when you talk about just the upgrade cycle alone, you've got something like 900 million computers around the world that are still running xp or vista. that according to pacific crest is a $50 billion opportunity for microsoft. even if the company attracts three-quarters or half of that, you're still talking about enormous money that this company is still standing to make. that's just on a consumer level. then you've got the server and enterprise side. >> jim lays out a good set of facts but there is this other ingredient -- emotion. people don't like microsoft and they love apple. >> well, not everyone. if you look at market share stats even amongst teenagers, college students, et cetera, you would say, apple's got to have

90% market share. well they don't. amongst college students it can be as high as 50%. there is still a very, very strong group that like microsoft. they want it for all the applications. they like it for the road map, for the price. there is a lot of reasons here. so mac certain sli on fily is o. apple is certainly on fire. >> peter, you sort of aernsed half of dennis' question very clearly. one would think you thought microsoft was undervalued. you would buy. your price target is? >> $34. >> from $31. about a 10% move. would you buy apple at today's price and how high do you think it would go? >> we have a $35 on apple. >> that sounds like from an undervalued standpoint you think apple's more undervalued than microsoft. >> we do. we think there is a lot more upside, lot more catalyst, lot more excitement. you continue to get margins going in the right direction and you get multiple -- is it as simple as that apple innovates better than microsoft?

>> in the last ten years, no question. they've crushed the innovation cycle, latched on to the media side, the cloud computing side, itunes is a powerhouse. >> we have to leave it there, gentlemen. thank you very much. move right now to steve leisman at the break news desk. cnbc has learned of a previously undisclosed high-level meeting treasury secretary tim geithner will hold this weekend with international officials to push the issue of international capital standards. among the invitees, the federal reserve, fdic and canadians, french, chinese and financial security board to the meeting this weekend. the reason there aren't more names down below is there wasn't room but there are more invitees. this is a very broad meeting. geithner will also raise the national capital standards issue in separate meetings with koreans, japanese and hopes to have it be the beginning of this

international push geithner's doing to get it in motion. they have not decided and will not discuss what ratios they have. but be assured geithner is pushing for higher standards, internationally, than those that exist now. real quick, this is separate from the financial reform effort that's going on here in the united states. this is an international effort to get all banks to agree to higher standards, leverage ratios and capital ratios. >> where is the meeting and when? >> i did not get my invitation yet, tom. i don't have the time or location of it. but it is in washington again on the side of the imf meeting. >> the reason washington wants everyone else to go along with it, because if they don't go along with it, we see our banking institutions move offshore. right? >> right. but it is also interesting to point out there will certainly be higher standards that agreed to. the united states banks are closer to those standards most likely than the european and other banks are. >> thank you, steve. appreciate it. straight ahead, mike huffman tracking the stocks beyond the big caps. then it is time to go off the charts. amazing amazon, the company

reporting after the bell, trading at an all-time high. should you buy it or not? two minutes' time, we'll give you an answer.

the dow in the back stretch of this trading day coming back just a little bit. welcome back to "power lunch" as we look at some of the stories we're following at 36 past the hour. us airways ending its tie-up talks with united airlines. centurytele looking to buy quest communication. and two economic reports find home sales rose sharply last month and jobless claims fell last week. michelle? we want to go beyond the big caps, finding smaller names that are big movers today. mike huffman is standing by with those. >> i like to do theme stuff so i'm doing lunch box for "power lunch." in addition to starbucks, the coffee giant, a big food chain is providing more anecdotal evidence after rebound in consumer spending. that's made shares of chipotle mexican grill hotter than its namesake pepper today. the chain served up way better than expected earnings.

they made $1.19 a share versus 95 cents analysts thought it would. jeffries calls what's happening at empoet -- chipotle an emphat return of the company's stock. up almost 12%. a huge move is driving the s&p restaurant index to a new high, right now up 1.3%. the back-to-back to back positive earnings out of mickey d's is moving a whole basket of casual dining stocks, including cheesecake factory, panera and darden which owns red lobster and olive garden are all trading at new highs today. panera said sales are up 10% at company-owned stores. first quarter. it reports its earnings april 27th. but more evidence there that people are spending money. >> in a better economy perhaps. thank you. next, the big comcast deal. major commitment to going green,

including signals in entertainment shows as well. we'll talk about all that and more with nbc universal ceo jeff zucker. "power lunch" is back in two minutes.

to mark the 40th anniversary of earth day, universal is raising green awareness around the grolobe from ecothemed tv shows to using green materials on our production crews.

jeff zucker is here to tell us about it. good to see you. for the investors, the key question is, how is the deal with comcast proceeding? are you still hopeful to close it by year-end, fourth quarter, and do you see any impediments that you might not have foreseen a few months ago? >> no, tyler. we're in the middle of the regulatory process. it is proceeding pretty much as we expected. we think it is still on a time line to close some time later this year in the fourth quarter and i think all signals point to that. obviously we're working through the regulatory issues that the fcc and doj are looking at and we feel comfortable and confident that everything will be fine and on target. >> no foreseeable snags there. let's move on to the questions of sort of the greening of the network. it is an interesting thing. it is across all of the properties of nbc. i'm wondering whether what began

as a kind of public-spirited approach has now transformed, morphed in some way, to a selling point to advertisers. in other words, do we -- does nbc, and do other companies for that matter, use an initiative like universal is green, or green week, to sell ads? >> yeah, this is no question about it. obviously this is something we undertook three years ago. we actually formed a division called "green is universal." have a significant employee base within that. we did it for initially because we thought it was the right thing to do. we wanted to make a major commitment to green and to the importance of that to society. we wanted to use our air time and our resources to make sure that we were doing right by society. it's turned into green is green. which is the fact that advertisers now want to be part of it. this is the sixth week, green-themed week that we have done across all of our properties at nbc universal.

more than 40 of our programs and brands are participating this week across broadcast, across cable, at our theme parks and across our film unit. they're all participating. the fact is on the television side, advertisers, great advertisers like walmart and honda and seventh generation and sun chips have all come forward to really put their money down. >> how much incremental green does green turn into? >> it actually is significant. we believe that we have seen the most incremental dollars that we would not have otherwise seen as a result of this commitment to green, and we're obviously talking in the millions of dollars, and it is a significant commitment on the part of these advertisers reaching into our commitment to this topic. we do it twice a year. that's real money and i think it's been a real success. >> i think, jeff, it's the integration of the message that is subtly put in to prime time programming and the like that has also been extremely effective, has it not? you're pushing the greenishtive

but you're not lecturing to people either. that's been extremely successful. >> i think that's the key to the success, sue, which is that i think people don't want to be hit over the head with this. i think it is more about subtle messages, about the ecofriendly purse that they're using at 30 rock. it is about the things that are organically placed in the story lines. hitting them over the head didn't work. we realized that early on. but i think the subtle messages in each of our programs, jim cramer has actually done it on cnbc where he's been talking about stocks that are ecofriendly and green in nature. things like that i think have turned out to be much more useful. >> but it's one thing, though, jeff, to give a public service announcement saying this is one of our personalities and urging you to be green. when you start to put it inside the programming and subliminal messages in the scripts and do it across 40 products, it starts to seem a little orwellian.

americans are ordinary people. what did you think of the episode of "the office" where they made fun of the metal canisters you're supposed to have for water instead of disposable bottles. they were kind of making fun of the green movement. >> dennis, i know you aren't speaking about yourself when you talk about the ordinary americans. >> never, not at all. >> exactly. listen, i think your point is right. first of all, we encourage each of our programs, each of our brands, each of our channels to participate in this. but nobody has to. there's no orwellian doctrine that says you must do this. we support it, we encourage it, but there's nothing that -- nobody has to do anything they don't want to do. having said that with regard "the office," i mean i think that we also do think it is important to stand for certain things and there are -- there are ideals that we bring to the table that we think are important and i think that green

being one of them, we acknowledge that that's something that's important to the company. we want to stand for something and i think it is a place where we want to be. with regard to your specific question on "the office," look, i think what's great about this is that each of those programs can come to this project with their own point of view and, listen. we make fun of ourselves all the time. and i think that's one of the best ways to talk about things. we encourage that as well. >> that's why we all love "30 rock" so much. it makes so much fun of ourselves. jeff, michelle here. on a different topic, out in l.a. they're talking about a new product that was once reported by a financial institution where you can actually hedge the outcomes of revenues when it comes to movies. there is a lot of controversy about that. do you think that's a good idea or bad idea? have you thought about that at all? would that help universal when it is producing movies? >> should g-capital get into it? >> there are a lot of questions there, first of all. i would say that the first thing that would help us is we need to

make sure that we make the right selections on our own to produce great movies. once we do those, then what everybody wants to -- how people want to place their money and whether or not those films are going to work is certainly an individual choice. our position on it thus far has been that we want to see more information on this before we take a more formal position. >> let me ask you, jeff, a question about television or broadcast more specifically television programming. it seems to me that really the most successful shows could be described now as family-focused programs. "glee," "american idol," ""dancing with the stars" or "biggest loser." these are things that you watch with your family. is that the future of broadcast tv? >> i think, tyler, i think it is a great observation and the fact is broadcasting, if it is going to continue to work and we think that actually broadcasting is incredibly strong.

the pipes are working. you just mentioned five programs that attract large audiences and i think that that's incredibly exciting for broadcasting and i think the future of broadcasting is actually very strong with respect to that. i think -- the programs you just identified, the reason they work is because they are co--viewing opportunities for parents and their children and i think as programmers, we all need to take a lesson from that. there is a reason that those are the most exciting and popular shows on television. you can't just appeal to one small segment of the population if you're going to be a broad broadcast show. >> you know, jeff, also, universal studios is unveiling its new harry potter attraction down in florida. and i wonder, with the economy coming back, what are we seeing in terms of the theme parks? are you confident that the economy is indeed on the way back and am i going to like this new harry potter ride or will it scare the heck out of the kids? >> a couple things there.

we think that the signs at our theme parks are quite positive. attendance has been very strong at both of our parks here in the united states, in hollywood and in orlando. i think that is a sign that the economy is coming back. with regard to the wizarding world of harry potter, sue, i want you to bring your kids down there, they will love it. >> i'm sure they will. some of the footage is amazing. >> i think this is going to be a spectacular park that's really going to change the dynamic for us down in orlando. we have two great parks already in orlando. this is going to open in islands of adventure in orlando for us and i think it's going to be a spectacular addition to the orlando theme park world, and, sue, i want to make sure that you and your kids are down there. >> we will be. maybe we should take "power lunch" on the road. >> hey, "power lunch" from harry potter? >> i'm there. >> you tell fast-bender that you want it there, we'll make it happen. >> i think you just did! >> i want to conclude with one question, jeff. you grew up in the news business

and have observations about it. i can't remember a time over the past six, seven months that nbc-universal nbc-universal has been the subject of more news accounts, even you personally has been the subject of those news stories. i wonder how a news man you think those stories rate. how many of those are fair? >> tyler, i think we're running out of time here. listen, it is a fair question. i think we have to recognize that we live in a society where -- we live in a blogosphere world, an online world, we live in an immediate world, a cable news world, we live in a world where everybody -- everybody has access to news and information. obviously there's tremendous amount of interest in the news business itself. nobody loves covering the news business more than the news media. the fact is, that's just the world we live in today. with regard to its accuracy, i think that's what makes places like cnbc, nbc news, "nbc

nightly news," programs and brands that stand for accuracy, stand out. much of what is written these days is not entirely accurate. much of what we read is speculative and rumors. but that's why you have to know who your source is and you have to rely on a brand that stands for something. i think cnbc is the perfect example of a brand that stands for something that can be counted on. and i think those are the things that are going to become more valuable in a world where everybody says they're a journalist. >> we'll take that, jeff. thanks very much. see you at universal. >> great to be with all of you. coming up, we'll talk more about this market. plus, it is a tech bellwether that recently hit an all-time high. we're not talking about apple. up 150%. >> is it time still to get in on this stock that's off the

charts? we'll tell you after the break.

the "wall street journal" has learned of the transocean oil rig that was on fire off the louisiana coast where 11 workers were still missing and the coast guard was searching has now sunk. that transocean oil rig has sunk. according to a spokesman from tranocean, does not appear to be any more of that rig visible where they are continuing to locate the workers. back to the markets right now. amazon.com, let's go off the charts. aaron kessler, a senior internet analyst, you like this stock. have you a buy on it. why? >> we like the long-term prospects for amazon. we think they're a 25%, 30% long-term growth company. increasing margins. amazon web services, prime, kindle. a lot of key drivers for amazon

enabling them to double the market growth. >> trading over just $150 a share. what's your price target. >> right now it is $160. we think there is potential upside on higher estimates. but right now we still are recommending amazon. >> and there's the opposite side to that trade. amazon is obviously taking market share but who are they taking it from primarily? >> we think primarily it is offline. online is still growing 15% versus offline low single digits. i think they've gained share from ebay the last few years. offline is still the key driver. only 5% market share overall. >> buy on amazon. appreciate it. who's going to do this story? dennis? >> we'll do "food for thought" now? >> talk about the lane bryant ad. abc network reportedly rejecting the lane bryant lingerie afternoon d citi citing cleavag.

some are saying you're just uncomfortable with a heavier woman and want a smaller model. look at those victoria's secret ads. >> racier than this. >> there is no such thing as too much cleavage. >> what was she just checking on her blackberry there? just wondering. >> we should have asked jeff zucker if he thought there was too much cleavage in that ad, if he would have kept it. >> once you open the door, once you take an ad from something like a victoria's secret or a leather lingerie company that has rather