the market yesterday. >> and i wore my beige jacket in honor of the beige book, which is coming out in just a few seconds. that will do it for "power lunch." >> have a great afternoon. we'll see you tomorrow. "street signs" begins right now with breaking news on the fed. welcome to "street signs." i'm eamon javers in washington. the fed's beige book report on current economic conditions finds that overall economic activity continued to increase at a modest to moderate pace in january and early february. when asked to describe the level of economic growth, new york was the only federal reserve district to characterize it as slower. most federal reserve districts reported a slight increase in hiring, the fed said, echoing chairman ben bernanke's comments on capitol hill this morning, six of the federal reserve's districts reported increasing hiring in manufacturing. and some reported difficulty in finding skilled or specialized workers. looking sector by sector, manufacturing continued to expand at a steady pace across

the country, the fed said, with increased capital spending in seven of the fed's 12 districts. retail sales were higher than a year ago in the mid-atlantic and midwest and gains in auto sales reported in four districts. residential real estate activity increased modestly in most districts, the fed said. although new york noted slightly softer home sales. bank lending activity increased in six districts across the country. and the fed said that drought conditions and warm temperatures affected agricultural conditions in some districts. kansas city, dallas and san francisco regional banks reported higher crude oil extraction activity. and midwest banks reported greater energy and mining activity. over to you, mandy. >> thank you very much for that breaking news, eamon javers. let's take a look at where we stand at this hour. it's been a pretty manic day, better than expected gdp this morning boosted stocks out of the gate pushing the nasdaq over the 3,000 mark for the first time in almost four years, i should say. but the gains were erased as fed chairman ben bernanke testified on capitol hill as he made no

mention of possible further easing measures. now the dow slumped as many as 75 points on the back of that. as you can see, it's since clawed back to above the 13,000 mark, but sitting right on the line. let's get straight to the trading floors. bob pisani's at the nyse. rick santelli's in chicago. bob, what did you make it was around 10:00 a.m. this morning suddenly bonds and equities were slammed. surely the market isn't worried about tightening, are they? >> very fine trying to parse mr. bernanke's body language. point out what eamon was reading here. i read the comments on the beige book as moderately positive, a little bit more bullish. i think this is supportive of the general idea that the u.s. economy is very slowly improving. a point of course mr. bernanke made. remember what we saw this morning. we saw big dollar rally, we saw commodities move to the downside. put up the s&p 500 for me on our tell straiter. a lot of people wrote in and said, gee, if things were

looking a bit more grim, no qe-3, none of that's going to be happening, why did the stock market drop even more? put up the s&p 500. i think the simple answer is somewhat improving economy long-term should trump any short-term concerns about no qe-3 or a more not as dovish position for the federal reserve. so the bottom line is improving economy, that's going to be the most important thing. that's why the s&p didn't drop quite as much as some people had anticipated. move on here and show you the commodities stocks. while we did have a big rise in the dollar, commodity stocks dropped rather noticeably on that. i think you'll find some of that will be fairly short-term. bhp and everything else moved to the downside. there you see that. but here's a positive comment. look at some of the other sectors and you'll see, for example, financial stocks never really dropped that much. and all the big names you would think of in the financial group are to the upside today. believe me, if there was really longer term concerns about the u.s. economy, certainly see those stocks weaker.

i view the comments today as positive from the beige book. >> that's exactly the feeling i got as well, bob. stay right there. i want to bring in rick santelli. what kind of reaction is there in bonds to what did seem to be a moderately positive beige book? >> like confidence numbers become old when they are surveyed before a big move in energy, in many ways i think this beige book isn't as fresh as we'd like to think because of energy prices and i'll simplify some central bankers in the uk were very honest about it. i think quantitative easing all of a sudden doesn't seem to be the topic du jour for one very simple reason, oil prices. i think higher oil prices and the notion that quantitative easing has dollar denominated assets rocketing through the roof is enough to have three areas of the globe, the uk, the u.s. and the eurozone, all backtracking very quickly on quantitative easing, or at least pencilling it in for more on the calendar. >> well, at least let's hope oil

prices keep on continuing to the downside. we're now at $106. rick and bob, thank you very much for that. yesterday just to quickly recap, the dow finally closed above 13,000. for the first time in nearly four years. the s&p also closed above the 1370 level. and for a very brief moment today the nasdaq reached 3,000. last time that happened, the year 2000. but like so many milestones of late, we just can't seem to hold onto these gains. what is an investor to do? let's bring in some gentlemen. john, when i was reading your notes, it's any wonder we got to these levels considering you feel so many people are on the sidelines and not participating. >> absolutely. i don't think that we're seeing the retail investor in this market. i frankly don't even think we're seeing a lot of institutional investors coming into the market. >> what's pushed us up to these

levels? what's pushed us up to these levels? >> you certainly have rebalances that have gone on. fixed income did very well last year. equities did poorly. you have flows into retirement accounts that have moved it up, but as far as what we see in the mutual fund flow data, i just don't see investors excited about equities. they're still shoveling money into bond funds even at these ridiculously low rates. >> let's bring you in, peter. what would you say is the chief takeaway from this morning's semiannual testimony from ben bernanke and the beige book. put together what is an investor to do right now? >> well, the u.s. economy is improving albeit slow. but i think what we're getting out of at least bernanke on top of the ecb and coming from bank of england member today and rick said it before is that qe has kept us elevated. qe has lifted markets over the past couple months prodominantly. now we're seeing a rise in

inflation pressures and we're seeing backoff from qe. that's what's driving markets in my opinion predominantly up and possibly down over the last couple months. if qe is going to be backed off, u.s. markets in particular which have had an enormous run are going lower. >> did you really feel that just because there wasn't any specific reference to qe from ben bernanke that that means there isn't going to be further qe, peter? >> the average gallon of gas at $4 ties the hands of the fed. i don't want to pick within commodity and price level and say that's the case, but that is the biggest high profile one. you take that away from the fed, you take the ltros away from the ecb, the bank possibly stepping away and i think people would be in denial to think that's not going to have an impact on global equity markets since test the qe in fact that's lifted them so much over the past couple months. >> that's absolutely right. as for commodities, of course today we're seeing quite a selloff in gold, silver, oil and many other commodities, john,

how excited should we be about this pullback? is this presenting some kind of entry point for people that perhaps have missed out? >> well, you know, we've only had a very modest pullback today. so i wouldn't get too excited about that. but if you look at the commodities that have taken a beating today, i do like a couple names in that space. freeport machina ran. i do agree with peter, we do have to have some concern about having come too far too fast, but i still think equities are attractive at these levels. >> you also like diamond offshore. thank you for joining us, peter and john. let's check out now with seema mody what is happening at the nasdaq. and what else also is making headlines today. seema. >> thanks, mandy. here's what else we're watching at this hour. the transportation department delayed a rule that would have

rear cameras on cars and trucks. and james murdoch has stepped down as executive chairman as news corp.'s news international unit. rupert murdoch's son will keep his job as news corp.'s deputy chief operating officer. and general motors take a 7% stake in peugot. the two hope various energies will eventually save them $2 billion a year. back to you. >> thank you very much for that, seema mody. flat screens and flat soda. herb's double disaster time. herb. >> mandy, standing here i feel like i should be demonstrating a sodastream machine, not actually talking about their earnings. >> oh, that was famous, wasn't it? or maybe infamous now when you think about it. >> their numbers actually are pretty good. guidance was pretty good. stock's getting whacked because -- coming back a little bit because the company come back and said sales of its machines were actually up only 8% last quarter. this is a company that quarter after quarter has been 84%, 30%,

64%, 90%. that had people concerned. the company came out and said, actually, they sold into it. they had a stronger selling during the third quarter which could argue a little stuffed but said to sell through during the fourth quarter was really good which we expected because it was christmas. one to keep watching here. this is probably going to be a story we'll talk about for the next i would say certainly four quarters as we go through to see if this truly a fad or something people are going to take and use and reuse. also, universal display. this has been a battleground stock we've talked about quite a bit. they make screens used in phones. concerns about whether samsung renegotiated a contract. the company came out with modest beat in earnings and words about samsung had people thinking this isn't quite the deal we thought it was. a little too opaque. the company filed its 10 q and had some issues about samsung. just have you raise some questions. you can see the stock take a little hit here.

it's been bouncing around, but it's not a true disaster, but certainly one worth mentioning. >> i was just doing the math, and it's been nearly a year, herb, that we did that taste test with you and cramer on sodastream. i think a rematch -- an annual rematch is coming up. >> if we do it, i'm going to tell you something he gets blindfolded before he's in the studio so he doesn't have a clue what's going on. he had an unfair advantage. i might say that. >> oh, okay. them fighting words. coming up next on "street signs," the home builders are building momentum. what about what goes inside the home? is america ready to decorate the recovery? we'll talk to the ceo of ethan allen. but first. >> mandy's always talking about the singapore model. we had to come to see for ourselves. let's go check out singapore. >> buckle up kids, sully taking us on a whirlwind tour of my old stomping grounds to find out what makes singapore work.

"street signs" is really going global today. we're going to be right back with our funnies on. in america, we believe in a future that is better than today. since 1894, ameriprise financial has been working hard for their clients' futures. never taking a bailout. helping generations achieve dreams. buy homes. put their kids through college. retire how they want to. ameriprise. the strength of america's largest financial planning company. the heart of 10,000 advisors working with you, one-to-one. together, for your future. ♪

now to singapore where brian sullivan has been all this week covering the annual ipo global leadership summit. the young president's organization just launched an exclusive partnership, it's made up of 19,000 chief executives who run companies that generate

all together $6 trillion in annual revenues. and you might know i lived in singapore for eight very happy years. well, it's really a model for economic growth. so brian had to find out for himself what are the secrets to singapore's success. >> mandy's always talking about the asian miracle, the singapore model. so we had to come here to see for ourselves. let's go check out singapore. construction here remains strong. another big building going up behind us here. there's so much construction, people joke the national bird is the crane. singapore's gdp is more than doubled in the last 15 years. in 2010 it was the third fastest growing economy in the world. in large part that coming from financial services firms like merrill lynch and citi group. unemployment here is only 2%. the population is young. they are hungry. they are aggressive. and they are optimistic about the future. and these young people are

demanding luxury goods. and they are demanding luxury living like that high-rise behind us. and they can afford it. incomes are up. and get this, the highest income tax rate in singapore is capped at 20%. washington, are you listening? and you know, when i ask about what the most important ingredient in this famed model is, you know what they said? air-conditioning. and they're right. singapore, one of the world's busiest harbors and one of the things you can find only in singapore, hundreds of ships waiting to dock. and we're standing at one of the most expensive resorts. that's the singapore model in 90 seconds. i'm wiped out. only one more thing we need to do. go up there to the 57th floor bar of the marina bay sans. there's a pool up there. and more importantly, there's a beer up there. >> you think he looks big here, check out how big he looked over there. great stuff, brian. nice to see my old digs as well. and we are not done with brian

and his global trotting yet. coming up in our next half hour, brian's exclusive interview with co-founder of facebook. if you saw the movie "social network" but he'll introduce us to the real deal. coming up on "street signs" at 2:40 p.m. eastern, teem e check it out. also check out the home builders. pulte, lennar, building momentum posting solid gains in what is a very lackluster market. yesterday on "fast money," the man at the helm of toll brothers gave us an indication of why these stocks are climbing. >> so far so good. we feel about the best we have in five years. not only are orders up 45% for our first quarter, which ended the end of january, but the first three weeks of february we're seeing orders up 43%. >> so if builders are getting more bullish, does that mean that we could be on the cusp of redecorating and getting a redecorating recovery?

running ethan allen interiors joins us from the consumer confidence in new york. great of you to join us today. looks like the home builders are doing well. to what extent will this translate into more demand for home furnishings? >> well, good to be on your program. certainly we have seen an improvement in consumer confidence. we have seen it gradually in the last six or nine months. and i believe that the news is good because of the fact that there is a greater interest in homes. and also we have cost benefitting not only from new homes but benefitting from the fact that people are spending more time in their homes. homes have become a haven. and decorating is important. and that's why we are benefitting. and also -- >> if we look at the last quarter ended december 31st, your sales were up 5.7%. can you give us any indication of what current quarter sales

are going to look like? >> well, of course we'll have to comment on this quarter until the quarter is over because we have still another month to go. but if you take a look at our last six months, sales are up 9%. and of course being a vertically integrated company, we have an operating leverage and earnings up 50%. and a lot of that as we have discussed is due to the fact that in the last three years this great recession gave us an opportunity to do many, many important initiatives, which is helping us position. >> right. can i just ask you, we've been talking a lot about the rising commodity prices. obviously things like wood going to make very nice products. lumber up 6.5% year-to-date. to what extent can you pass on those higher costs to the consumer right now? >> well, one of the biggest

elements of that is a petroleum based cost. we are vertically integrated company. we deliver our products at one cost nationally. so petroleum based products from fuel to fabrics to all materials that we use in manufacturing have gone up. now, we have been able to ab solve a lot of that because as our sales have increased, vertical integration has given us an opportunity to be more efficient. >> uh-huh. >> however, having said this, i think that one is -- should expect some price increases as we move forward in the next few months. >> got it. thank you so much for joining us today. joining us from ethan allen. and up next, the second edition of sesame street signs brought to you by the letter l. and a statin scare. warning for 20 million americans taking statin drugs including our very own herb to lower their cholesterol. many now wondering if they should stop taking them. it's a big story with a huge stock impact as well.

"street signs" back after this break. ♪ [ laughter ] ♪ [ female announcer ] each one of us is our own boss. ♪ and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪

♪ our machines help identify early stages of cancer and it's something that we're extremely proud of. you see someone who is saved because of this technology, you know that the things that you do in your life, matter. if i did have an opportunity to meet a cancer survivor, i'm sure i could take something positive away from that. [ jocelyn ] my name is jocelyn, and i'm a cancer survivor. [ mimi ] i had cancer. i have no evidence of disease now. [ erica ] i would love to meet

the people that made the machines. i had such an amazing group of doctors and nurses, it would just make such a complete picture of why i'm sitting here today. ♪ [ herb ] from the moment we walked in the front door, just to see me -- not as a cancer patient, but as a person that had been helped by their work. i was just blown away. life's been good to me. i feel like one of the luckiest guys in the world. ♪ in honor of leap day, "street signs" brought to you by the letter l. check out these stocks that begin with the letter l.

that las vegas sands up about a percent today. but a nice pop year-to-date up nearly 30%. l is also for linkedin. the networking site up 38% year-to-date. the stock doubled on its ipo back in may. also for lockheed martin up about 10% year-to-date. and sticking with our leap day theme, which stocks do better in a leap year? scott wapner joins us with more. >> hey, mandy. thanks so much. our crack data team dug through the numbers and found some interesting historical stats for the past ten years the s&p right here has posted an average gain of 6%. an 8.7% gain for nonleap years dating back to 1972. that seems pretty good, right? if you remove 2008, the average leap year gain jumps to 10.9% beating the nonleap year's average. and similar trends can be found

over there on the dow. leap year show an average gain of almost 5%. 4.9%. but nonleap year show 9.2%. when you take out the pesky black swan, the leap year gain pushes higher to 9.2% matching the gain of the nonleap years at the nasdaq since 1972 leap year os only show a gain of 4.8% while nonleap years have a gain of nearly 14%. when you take out 2008, take it out of the equation, the leap year gains nearly double to 9.9%. here are the takeaways, on average the indexes perform positively during leap years with the s&p and nasdaq beating the nonleap year gains when 2008 is removed. so based on historical trends, everything we found points towards a gain in the markets for leap year 2012. mandy, nothing's guaranteed, but it sure seems that history is on the side of the bulls. >> nothing is ever guaranteed. not just in the markets but in life. thanks very much. >> death and taxes.

that's about it. >> thanks a lot for that, scott. a little child's play for you for today's sunshine stock. carter's up a whopping 10%. very nice today on strong earnings. the carter's brands seen double dij sales and double digit sales in oshkosh brand as well up 60% over the last year. well, coming up next on "street signs," big mutual fund manager bob ol stooen tells us about the one stock he believes is worth half its current value. and he's not shorting it either. and big gain on capitol hill today make baby bears from their slumber? who are we kidding? this is just a cute video. new baby polar bears. they're adorable. back in two. [ male announcer ] if you believe the mayan calendar,

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welcome back to "street signs." let's get the latest word on the street in today's street talk. markets are kind of flat out manic today. we have the dow crossing back and forth between 13,000, one of the big reasons, commodities. yeah. silver and gold, hello, both on track for their worst day this year. let's break it down with tjm institution services. everybody has their trojan

coin's worth of theories why silver and gold are down so much today. what's your theory? >> it started when the fed came out. they sounded slightly more hawkish than they have in the past. that can't be the whole reason. so to me when we trade gold, we know that it's susceptible to these market position whiplash-inducing swings. today's clearly one of those. think the ltro to be announced yesterday or today, a lot of people bold up on gold and silver planning on that announcement coming out and getting a pop and sell it. those particular metals were more crowded than normal. as soon as the lrto announced and negative direction by the fed and that's why they're wiped out. >> would you be selling gold and silver today? >> no. nothing realistically material has changed. at the end of the day we still have a very dovish trade. we know there will be these painful swings. we're supposed to be looking for spots to buy it if we really believe in the long-term picture

of gold like i do, i'm looking at gld perhaps around the 163 level to maybe pick up more gold. and, yes, it's painful today being long gold. i feel that pain. i'm not ready to puke out of it yet. >> got it. jim, thanks for weighing in. >> thank you. >> a really big milestone for the nasdaq, it crossed the 3,000 mark for the first time since the year 2000. it's pulled back a little since then since hitting the level earlier on in the session. but helping to drive it to 3,000, the tech titans, apple, microsoft, oracle, intel and qualcomm. meantime amazon up over 1,100% over the last decade. and one mutual fund manager is now making a very bold call. we have him here. his name is bob olstein. he says amazon is actually worth half its current value. he's with us now as well as herb. why half its current value, bob? >> well, amazon's market capitalization's $82 billion. when you really rip their free

cash flow apart, you don't have anything cash flow. the company is growing sales by leaps and bounds since 2008. it's probably up three and a half times. and their earnings, free cash flow, all stuck at the same level. this company is highly overpriced. 8% returns on equity. the company sells at 10 times book value. companies like macy's selling 26% returns on equity and selling at two and a half times book value. >> but, robert, look. i hear you on this. but you get somebody like an analyst at bernstein and just the other day he says amazon, why it's undervalued, why he thinks it has a 12-month price target of $239. he sees margins expanding and you're coming out saying look at the cash flow. bob, with this kind of stock, nobody cares about the cash flow. they're looking forward. and they care about the growth they believe they're going to

see. >> well, the cable company said that back in the '70s, nobody cares about the cash flow. as you note to do, they sell on free cash flow. you don't care about the air in the room until i start pumping it out. okay. free cash flow is the valuation of the business even if you take their cash on the balance sheet, you adjust the cash on the balance sheet, you come up from $20 a share down to zero. this company has multiplied sales ten times since 2004. and, again, free cash flow is barely budged. maybe they put an incremental 1%. this is tomorrow's promise, eventually you're going to get real valuations, a real company here. >> we make that point. this is a real company. it's a company that's done a wonderful job building itself. but i look at it and i wonder when you look at these numbers and you're looking just at the numbers, do you sometimes miss out on not really understanding all the aspects of the business? they have a server business in here. it's not just selling products. they can spin that business out.

they've got other things going on. they've got the kindle business. we're not just talking about what we think of as amazon. people think this company is going to move out in another direction. it's going to continue to grow. >> it's pay up time right now. this company is selling at, i don't know, 100 times plus earnings. okay. and they've had no earnings growth whatsoever. free cash flow -- >> what do you mean no earnings growth whatsoever? >> free cash flow at zero. we have a table up there showing -- they are financing their business through payables through their vendors through crude cash flow from their vendors, that's got to eventually stop. and they're caught between the rock and a hard place. you see that the vendors, the book people, rebelled against them and pulled the books from them. >> don't you think really it doesn't matter until the company itself comes out and says, you know what, we're not what you expected. at that point stocks tend to fall. until that point, does anyone

really care? >> nobody cares right now until they care. i've been in this industry 43 years. i've watched this happen time and time again. this company is selling at ridiculous prices. if you buy at current prices and you have this as a private company, you're making a below 1% return. >> bob, with all due respect, when you make a really bold call like this, people are going to think you have an agenda. how do you argue against that? >> i don't have an agenda. the only agenda is we missed the stock. we looked at it in 2009 at $80 a share. and we looked said the stock is overpriced. now, with all due respect to herb, the stock's doubled and we've missed this. but we're not short. we stopped shorting a long time ago. this stock is overpriced. watch my call, showing no inclination to bring that cash to the bottom line. >> you reckon it will go down 50% over the next three years. that's your call. thank you very much for coming on. >> thank you. >> let's look at what's happening with oil. interestingly you might remember

it was down over most of the session. it reversed course right at the end there and managed to finish higher. it had broken below 105 briefly this morning. coming up next, talk of dividend tax hikes. is this a truly troubling hit to your retirement equation. and the hollywood version of facebook's co-founder. when we return, the real thing. brian's exclusive interview with the co-founder who talks candidly about the potential for facebook from here.

weight loss e expensive. so to save some money, i just got the popular girls from the local middle school to follow me around. ew. seriously? so gross. ew. seriously? that is so gross. ew. seriously? dude that is so totally gross. so gross...i know. there's an easier way to save. geico. fifteen minutes could save you fifteen percent or more. so -- tell me again what happened. i was downstairs making coffee, and we heard it.

it just came crashing through the roof, out of nowhere. what is it? it's our ira. any idea what coulda caused this? maybe. i just sorta threw a little money here, a little money there. and i loaded up on something my dentist told me was hot. yeah. ♪ i'm bill griffeth here at post 9 at the new york stock exchange. coming up on "closing bell" do we have a big show for you coming up at the top of the hour with a trio of interviews. black rock's larry fink explains why he feels investors should be

100% in stocks right now and barclays ceo bob diamond and philadelphia federal reserve charles plosser why he thinks might be undermining investor confidence. we look forward to seeing you here at the top of the hour. see you then, mandy. >> thank you very much, bill. looking forward to it. in the meantime let's look at staples. down almost 10% today. in fact, down exactly 10%. the stock was up more than 10% though ahead of earnings. the office supply company beat estimates, but they negated that fact after making two pretty pessimistic comments about the united states and european economies. so complete giveback of all of the original gains. in the meantime it's time now for your retirement equation with some headlines that could impact your plan. 68 is the new 65. i'm sorry. it's sad. bad news. but it really is. a new survey by human resources from towers wattson finds that nearly 40% of u.s. workers plan

to delay their retirement with a majority putting it off for at least three years. well, here's a downer. if you are old and you're alone, you're likely to die broke. a report by boston college says more than half of all elderly people living alone have less than $10,000 in assets when they die. the upside, elderly couples are likely to have more money when they go. well, president obama's 2013 budget is taking aim at dividends you aren't the president's proposal taxes on dividends would go up from 15% currently to as much as 39% for households making more than $250,000 a year. so how does that impact your retirement equation? let's bring in president of arcade yan asset management. great for you to come to the set today. >> thank you. >> you're basically making nothing on savings sitting in a bank. you get almost nothing for treasuries. and now if you're going for the other so-called safe place to park your money, a nice stable dividend paying stocks, you're

going to get whacked on that as well. >> i think as a matter of public policy we have to think through this idea of raising dividends. capital gains a little different, but i would make the argument they should be the same rate so companies don't make decisions about how they spend their money as far as investing in their company or paying it out. but with that said, you know, retirees and anyone hoping to retire is saving money and getting nothing on it. and now the government's saying we're going to even tax the little places we're going to let you make money. think about it. a lot of people are piling into dividend stocks the way of getting yield. so now if we're going to take away half of that yield to some cases that's not going to be good. will that push people to take even more risk? >> but this is only going to be for those who make $250,000 or more per year. so i guess some people would say, i guess they can afford it. realistically, what percentage of the population would this be affecting? >> i would like to broaden that out. i would be interested for the viewers out there to ask themselves how many of them are supplying college education for

grandchildren, maybe helping paying mortgages for their own children, i mean, it's tough all around. it's the trickle down effect that can really effect people. plus, let's face it, people will change investment decisions. will it push people out to more risky investments if they're not going to get a return -- an after tax return that's respectable which might jeopardize their future savings. as the government's grappling with these long-term systemic problems that we have to pay for our retirement, they're taking away our ability for our money to work for us to do that. >> not just the individual, the mop and pop retirees that will be perhaps pushed towards risky investments, we're talking like money managers as well will go into more growth-oriented stocks and risky assets, right? >> certainly that's potential. i'm less concerned about that. that's the ebb and flow of the markets. granted it would be less attractive for dividends. people building a nest egg, saving for their future. we've been asking this country people to take more financial responsibility on their own. so if we're going to keep interest rates at a level that

is not going to allow you to make any money, people can't live on 1% income. so they're going to naturally push for more. >> the government is going to have the burden of paying. >> pay now or pay later. we want our populous to be better positioned to fend for themselves later on. we can't pick their pockets now and can't make them make riskier investments proven prudent and explain to them, oh, wow, you should have known what you were buying. they said i couldn't live on 1% so i took a shot. that's not public policy. >> ken, thank you very much for explaining that to us. >> thanks for having me. >> back to sweaty singapore where cnbc and the young president's organization announced a new partnership. it was at the leadership summit where sully snagged a very big and exclusive interview today with the facebook co-founder, eduardo saverin. you'll probably remember his character. he had a big falling out with marc zuckerberg but walked away with a stake around $2.5

billion. i think that's probably worth a falling out. in the meantime he now lives in singapore. and therefore brian caught up with him. >> thanks, mandy. you know, one of the heaviest hitters here at the ypo event is ud war do savererin. he's the co-founder of facebook. we did a fire side chat closed door for the members. but we also got him to agree to come on camera, answer a couple of questions. by his own admission, this is the first television interview that eduardo saverin has ever given and gave it exclusively to cnbc. the question i asked him at the top of course had to do with facebook. i asked him very bluntly how big he thinks facebook can be. >> i think you can really be as big as we can imagine. there's really -- if you look at the company itself and the space, it's in the very early beginnings. and there's just a lot of things to get done. what facebook had really done today is it allowed us to have identity on the web. now there's our passport. and that includes a bunch of

different things that we do such as our social graph, the people around us. >> is it going to come from user growth? meaning 800 million up, or getting more from each of the current 800 million users or combination of both? >> in terms of user growth you have the limit of world's population. i think both will take place. i think it will expand in terms of user growth. but i think really one of the things that's fairly unique is we just touched the surface in terms of what type of applications and uses the social graph and what facebook has done can help with. >> you've been heavily invested in consumer apps, helping with credit card processing, shop savvy, another consumer application to sort of ensconce people's lives in a rich media format. why are you going so heavy on the consumer side of the web and apps? >> because i think right now it's truly lacking. even though facebook has grown this big, in terms of the use that you can go and take your friends with you or you can take your interests with you and make that efficient, it's just in the very early beginnings.

so there's a lot have to be done. you need to perfect the payment infrastructure both in terms of fraud and in terms of the facility for you to actually pay. in terms of shop savvy, you need to really bridge as an example e-commerce between the brick and mortar sites and what's happening on the web. and with your friends. there's a lot of things to be done. so that's one of the areas. and there's so much to focus on. >> so there you go. eduardo saverin speaking exclusively to us here in singapore. obviously sees a lot of growth in facebook. says it's going to come from new users and existing users and talked a little bit about some of the new investments he's gotten. we'll bring you more from the ypo summit right here in singapore certainly tomorrow. but back to you, mandy, on the set of "street signs." right about now i'm actually sleeping. >> i would say he would be. it's probably about 4:00 in the morning over there. in the meantime, coming up next, new warnings from the fda about cholesterol lowering drugs. what impact will this have on

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we've got the arrows all pointed to the down side. coca-cola, jpmorgan and home depot are the biggest winners. and win resource on the nasdaq, first solar, meantime, talking about this stock just yesterday is the big drag. the food and drug administration out with new warnings on statins, or cholesterol-lowering drugs. the fda said it could raise a patient's risk for diabetes and cause memory loss or confusion. does it mean people like our very own greenburg should stop taking statins. and what it will mean to the mau pharmaceutical companies. i believe you've had a lot of calls from concerned people ringing up, in particular worried about memory loss. just how concerned should they be is this. >> well, we don't want the

public to overreact to these warnings. these are small tweaks to the label of statin drugs. they are not major new problems. we've known, for example, that statins do push up blood sugar a little bit. we've known that for four or five years. that means that a few more patients will cross the threshold for what we call to be diabetes. but the actual increase in blood sugar is quite small. people should not be overly concerned about this. similarly, with this memory loss, confusion problem, it's very rare. it's entirely reversible. and overreacting to those warnings could actually cause a lot more harm, because these drugs are mainstays in our ability to lower the risk of death, stroke and heart attack, which are really big concerns. >> herb, when you saw these fda warnings come out, what did you think in terms of your taking these statins? >> i thought i would immediately call my cardiologist and

internist, which i have done. i thought the lipitor has something to do with my not making sense on this program as some people think. i said, how about if i take a six-month break, have my blood tested twice over the six-month period and see what happens. >> essentially, you know, there are a lot of benefits of taking these statins and they outweigh the concerns. is that a correct way to put it? >> that's right. your partner got the best advice. i need to be frank here, that if you have an indication for taking a statin, i mean, someone who has a very good indication, it means that you're at risk for pretty serious cardiovascular effects. and if you take the statin away, and you have a heart attack, that's not a good thing. and so some caution is required here. you know, there's always an overreaction to these things. these drugs do not cause diabetes. they raise blood sugar a little bit, which makes the diagnosis a

little more common -- >> let me ask you a question. when you see that your cholesterol's down to 130, and you see that your particles are