people. >> he just offended the whole state of kansas. >> where my god daughter goes to school. really should be rooting for kansas. >> that will do it for "power lunch." >> we'll see you tomorrow, except for ty. "street signs" begins right now. and welcome to "street signs" where stocks are stepping lively into a new month and a new quarter. manufacturing in america continuing to rebound. but will it be eastbound and down because of europe and china woes? we're going to weigh it. you can score it at home. and avon suitor is calling. the company getting a big bid from a smaller private company. so will the big boys of makeup step up? more on this developing story in minutes. and fly me to work. a cutting edge way to get past all the traffic on the new jersey turnpike. it is now exactly street legal yet, mandy, but a guy can dream, can't he? >> we've been dreaming about it for a very long time. in the meantime the dow and s&p

on pace for multi-year closing highs. the nasdaq just a few points short. the dow is trying for its third straight session of gains. s&p touching a fresh multi-year intraday high. the highest in fact since may of 2008. and the nasdaq coming off its best first quarter since 1991 wu trying to avoid a five-day losing streak. and here's your stat of the day, the beginning of the week, historically april is the third best month for the dow, s&p and nasdaq. there you go. brian. >> in addition to what mandy talked about, global data really setting the scene today as well, right? and as we went to bed last night, things seemed pretty dog on rosy though private measures showed a slight deterioration in chinese manufacturing demand. the official chinese figure showed a rebound keeping the china hard landing crowd at bay. now, we woke up this morning to data out of europe where a pmi index dropped for the eighth straight month. and eurozone unemployment rose again. eurozone unemployment is now at 10.8%, which brings us to the

question of, what is more important globally for you and your money? is it china? is it europe? most people would answer china, right? it gets all the attention. but maybe not enough is being made about europe. case and point, a stat that is very easy to forget. china's estimated gdp is going to be about $11.3 trillion this year. the total european union output estimated at $15.4 trillion. in other words, europe 35% larger than china from a total economic viewpoint. right now at least europe means more to the global economy than china at least as far as total output goes. but does it mean more to global investors? let us ask one of our favorite guys, manager of the oak market international fund and somebody "smart money" called the best. you can smile. come back after a tough 2008.

you heard my point about gdp. the eurozone combined is bigger than china but has no growth. china has all the growth. what's more important to you? europe or china? or, b, none of the above? >> none of the above. as investors who are invested in businesses that have operations all over the world, what is important is the level of global economic growth. this is what drives corporate profitability, corporate sales, corporate cash flows. at any given point in time there will be soft spots in the world and there will be vibrant spots. right now parts of europe are very soft. >> uh-huh. >> in the emerging world, even though we'll go through highs and lows, is generally on a good growth trajectory. and meanwhile the world's largest economy, the united states, is growing at around 3% a year. and the world's third largest economy, japan, is also growing at over 2% close to 3% a year. so one has to look at where global companies are exposed.

and then consider that when pricing those businesses. >> i wonder when we look at the numbers that come out of china though, it doesn't tell the full story. i wonder whether there are also some soft spots in the chinese economy that show vulnerabilities that aren't necessarily grabbing the headlines. for example, large factories, large corporations are generally humming along in china. but look at the smaller and medium size enterprises, they're more credit constrained. they have a lot more struggles than the bigger players. is that a problem for us? >> data in general within china is not going to be the most robust accurate data. i think instead of looking at these month-to-month quarter-to-quarter, one has to take a step back and look at the chinese economy on whole. and we are still kind of in the early phases of its development. you know, this whole thing started in the late '70s, early '80s. and it's continued to increase. china is going through a very important transition from being

a primarily a production nation, a place where companies went to invest, where there was cheap labor, and they're going to transition more into a consumption nation. and while this happens, it is not going to be without pain. and you are going to see things like you mentioned. you know, the big companies at periods of time will be favored by the government and the big banks. and the small companies won't. but eventually what we will see out of china is good strong robust growth from here for as long as -- >> david, that is different than good strong companies, right? i look at your top holdings, most of them european focused. do you invest in the eight shares? do you find a way to invest in the a shares, the domestic chinese stocks which are notoriously difficult to invest in. >> this is our whole problem with emerging markets today, in general china in specific. the problem is you have to price in this notion of quality. strong corporate governments, good capital allocation, good

return structures. and then you have to think to yourself what are we willing to pay for it? and china in particular and emerging markets in general on a relative basis are not inexpensively priced enough for us especially compared to the developed world. >> then i have a question, because i've noticed goldman has cut its recommendation on raw materials. not just them but a number of money managers, hedge funders, they're all essentially bullish specks on commodities possibly because of other slowing emerging markets. are they going to get caught flat footed, do you think? >> i don't think so. remember i mentioned the chinese economy transitioning from that of producer to that of consumer. that is not exactly bullish for these raw commodities. i mean, they are consuming half the world's cement. half the world's iron ore. but after a while that rate of change of building highways and

building airports -- don't get me wrong, they still need more airports, but the rate of change is what is so important. at the same time you have so much new supply coming on stream in terms of iron ore and in terms of some of these raw commodities that just when you start to see the growth rate in chinese and emerging market demand perhaps slowing is when that supply curve shifts to the right, which may not be so good for the prices of these raw materials. >> okay. quick take on europe. your largest holding forever has been credit suisse. is it still? >> yes. this is a very, very sound financial institution which has two businesses. a very strong annuity-producing private bank. and they've continued incidentally to increase net money in that bank at around 5% a year at relatively stable gross margins. so it has been a good growth

provider. meanwhile, the investment bank unlike its neighbor ubs or some of the other investment banks avoided most of the pitfalls. so even through the great financial crisis you saw very low in profits out of combined entity. we still like it a lot. the management team there is doing all the right things. at some point the market will recognize it. >> bottom line, quick, david, if you have to pick emerging markets, eurozone, or the united states, one or the other, which would you choose in terms of packing your money in equities? >> i would say global blue chip equities. all the money still in bonds and fixed income because of the fright factor. there's hardly any money if you look at valuations and good solid well-run global companies -- >> but there's one in america you're invested in, right? you're 96% international. do you like any u.s. company enough to put your client's money to work there? >> i run an international fund for the most part.

i do co-manage some global product. but there's all kinds. a company like intel or wells fargo, i mean, there's some really, really well-run great businesses here in the united states that are significantly underpriced. and a lot of it has to do with the whole fear factor, that money is parked in bonds earning nothing. meanwhile we have equities at low valuations. and these corporate entities are still growing their profits despite moderate growth. >> david, thank you so much for joining us today. have a great day. >> you're welcome. >> it's truly a day. what is the mood on the streets, bob, with regards to what we can expect from the second quarter? since we're now in the month of april, one of the best for equities historically, what is this tug of war that's going on? >> well, the good news is china's helping with the pmi. but april is off to a strong start partly because of china, but just because april is

historically strong and traders know that. so they tend to invest ahead of that. look, the good news here is that the biggest in-flows of the year happen in january when you get new money coming in and right now in april that's because of tax flows coming into the stock market. april overall the last several years and for a while now has been the best month for the dow jones industrial average. not for the s&p but for the dow industrials. i think the only problem here, amanda, is april's followed by may. and may is the start of the worst six-month period of the year. believe it or not, this is widely believed on the street to sell in may and go away crowd. there is historical leverage as weaker as well as returns in the october -- november to april period we've been seeing. i think that's the only concern traders have. other than that we're off to a good start. >> indeed we are. hard to replicate the first quarter. bob, you are the only person at cnbc to call me amanda. you and my mother when she's very angry with me. we're going to have to change that somehow. >> just don't call me robert.

my mother calls me robert. >> coming up next, how to play the spring surge. and the sweet smell of rejection. >> avon popping after saying no to private company's takeover bid. what happens next? david faber and kayla tausche here to break it down. >> and should you ditch the big bad tablet for the smaller cheaper kindle fire? a top tech writer says yes and he's going to lay out his reason why. man: 1939 -- my parents ran across an ad for a hot dog cart.

my mother said, "well, maybe we ought to buy this hot dog cart and set it up someplace." so my parents went to bank of america. they met with the branch manager and they said, "look, we've got this little hot dog cart, and it's on a really good corner. let's see if we can buy the property." and the branch manager said, "all right, i will take a chance with the two of you." and we've been loyal to bank of america for the last 71 years. [ crickets chirping ] [ traffic passing ]

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do check out shares of roundys. they're the pick and save cops and rainbow chains up nearly 8% after getting added to the russell 2000. cramer mentioned them on friday saying they had plenty of upside potential. they are a bit on the small side. a market cap just about $500 million, but you go. >> i love the name. as we have been telling you the first quarter was one for the record books and history says april normally showers the dow with solid gains. what sectors tend to spring to life? paul is here to tell us. paul, if i'm reading data right, the second quarter is also the time to put your money into a new car. why is that? >> historically autos have been the best performing group going back to 1990 when the current structure of the s&p groups was established. that is a little bit misleading. the group is only outperformed the s&p 500 half the time. part of the outperformance stretches -- is due to a big

surge in 2009 in april 2009 in the second quarter of '09 when the -- they were coming out of being practically bankrupt and then the market rallied strongly. so the autos saw very strong rebound that month. and that helps to skew the returns. but tech-related sectors have historically done well during april and the second quarter. and they've done it on a consistent basis. so there you may have more consistent returns and more likely outperformance this yarter. >> it's interesting because the more we go up, the more the nay sayers come out and say now we're doomed because we went up and you can't go up forever. which is it? momentum begets momentum and the more we go up the more we're likely to go up until some point, or the more we go up means we're doomed? >> you know, you have to take the gains we've seen and put them in perspective. the value of the s&p 500 is right where it was at the start of 2011 because we saw double-digit earnings growth last year and no returns in the market. so we're pretty much back to

where we were on 1-1-11. that's one way to look at it. yeah, you're going to get a little pullback at some point. that's without -- that goes without saying. >> maybe that would actually be a welcomed thing for those who perhaps missed out earlier on from the huge big gains that we saw over the first quarter. i want to ask you, you've got a few lists here. and you've got some stock picks, but you do say they're for those who are perhaps willing to take on more risk. >> yeah. some of these names -- we're bullish on the market. the names we wanted to highlight here are a bit more high growth, higher volatility names. so two of them are recent ipos. inve inventsense makes motion control. >> even though it's up 93% year-to-date? >> yeah. you look at a lot of these ipos that we've seen and they've had huge gains off where they are. and the growth -- the expected growth for this company going

forward is, you know, high double digits. for investors like we said earlier looking for a pullback to get in, this is a very decent time to get into that name. the other name was imper va. and just look at last friday's news with the data breech of global payments. hacking and security are major issue going on with companies right now, especially as more data goes into the cloud. it's one company that helps to protect companies against these sort of attacks. >> paul, thank you very much for joining us. >> thanks, mandy. >> avon turning down a $10 billion takeover bid. david faber's been following that story. that's his beat. what's new this this story? >> i just spoke to the chairman, the privately held beauty company today as you said, mandy, made an unsolicited offer to acquire the far larger avon after being rebuffed by avon and did so with the hope that a public offer will galvanize

shareholders to talk. he has received high marks for his work at coty and before that admits that his deal centered under a deal in which coty wanted avon to buy it. after receiving little interest in that deal, coty changed course and decided to pursue a deal to buy avon. it will not be reversed. his hope is that his company's offer of $23.25 a share will get shareholders to get the board already under pressure due to mismanagement of the company to let coty begin due diligence. still, it is not hard to understand why avon has rejected that idea given coty is less than half its size, does not have yet financing in place and no ability to try and unseat directors in a timely manner. he says that during their initial talks a few months back, avon bought into the strategic rationale behind the union of

the two companies, a union he says can drive growth given the share in beauty. the shareholders would not participate given it's an all-cash deal by a private company. at least a private company for now. he said should a deal become possible, coty would inject a substantial amount of equity as well as loading on deck to try to keep the company an investment grade company. by the way, on the f of being private, one last bit of news to share with you, i have spoken with bankers who tell me only last week right here in new york city coty held a bake-off of all the major investment banks for an initial public offering. it is hoping or was hoping at least to file as early as this summer. so a lot potentially going on with that company at this point. back to you guys. >> david, do you see a situation where coty's going to have to go public to up the bid? there's only a limited amount of cash, they don't have the equity to trade. how could they get a bigger deal done if avon says we'll talk but only at a higher price?

>> they can go up. i have spoken to some bankers close to this deal. there's a belief they could load on more financing and increase price, but your point's a good one, brian. how high can they go in terms of leverage especially if they want to keep investment grade, that means much larger equity investment and he would not tell me at this point where that money would be coming from if they got to that point. and so, but going public is a long period, takes quite a while and then going to do a deal that's probably a ways down the road but nonetheless an interesting value proposition if it were a public company because you would say you will share in the benefits of this combination. not the case right now. this doesn't look to be going very far very quickly. but we'll see of course a big jump in avon shares. >> indeed we are. david, thank you very much. in the meantime kayla tausche has additional insight on this. you've been working the phones and could be one of coty's biggest gambles so far in the acquisition path. >> in the morning people were talking about a potential rival bid mainly where they were

trading to the offer. it's coming down and the market is starting to digest whether this is a real bid. obviously coty as david said would have the ability to increase that offer. maybe not substantially but at least to a point that might get the avon board willing to talk here. but remember the shares that coty's talking about offering right now are coming from the ben kiezer family. there is some doubt when you have a major shareholder selling their shares as part of a deal like this. they want to take some of the value off the table. as far as some of the other rival cosmetics companies go, think about loreal. they would have a hard time coming to an agreement if in fact they were interested in doing it. there were some rumors about three months ago, but these are trophy assets that these families convince themselves to go after. right now avon is not a trophy. >> is there any comment ri from analysts in this area suggest which would be the better fit as opposed to coty and avon, would there be a better fit like avon

and somebody else? >> what's interesting is what coty would need. majority of revenues come from outside the u.s. coty has its largest business here in the u.s. where it's headquartered even though a german family is the controlling shareholder here. as far as some of the other companies like loreal, that already has an international reach. this would be a great foothold for coty. >> and just to -- my wife runs part of the fragrance business for loreal, so i need to throw that out as a disclaimer. that said, this would be a big move for coty to get into cosmetics. they do justin bieber, j lo, sally hansen. smells like leather bound books and rich mahogany. this would be able to get more into the business side of business aside for being nails and fragrances.

let's not leave out our old buddy, ron pearlman, revlon. they've made a come back. he loves deals. you never know about them as well and estee lauder -- throw thouz those out there. >> there are a lot of companies that could be circling this company as it's going on. coty's intention was to make this public. don't count out private equity firms. if they're looking at this and saying avon is potentially going to be taken private, why shouldn't we take it private? the problem is if you have strategic interest, they don't have the cost saving. >> this story is not yet told. thank you very much, kayla. coming up next, heads up everybody. herb's ready to go with a disaster in the making. >> and a taxings concern. america pays the single highest corporate tax rate in the world. is corporate america just whining because they deduct all of it anyway? we'll debate and show you real numbers coming up. americans believe they should be in charge of their own future.

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nice to see you on the show. herb is here and you have a disaster in the making. >> io. wouldn't know today because the stock is up. past, present and future, the ipad dow jones industrial average ups total return etn better known at the gaz. play on natural gas. this is like the son of the t vix which i've been talking about over the past few weeks. barclays, the bank, has not created shares in this for more than two years. sort of makes it like a closed end fund. it now trades at around twice its net asset value, which can only mean one thing. look out below. this thing's volatile as heck and you've got to pay attention. why it's there? we don't know. but the smart people, the smart people i know all been talking about this one in the wake of the t vix. >> you know, if it's a son of t vix, it's a t vixen. >> i like that.

>> especially if they were swedish. >> another disaster for your, herb. another name i've never encountered before. kerx, stock down look 66%. that is not a misprint. one of its cancer drugs didn't meet a primary point, phase two and phase three depending on what sort of compound of the drug they're doing a deal with. this is the risk we talked about last week. when you have a company that basically has a product, a biotech and it doesn't meet its end point, that is a tough day. >> the smartest guys in the world will tell you, the doctors will tell you, going to make it and then comes phase three, all bets are off through phase 3. a good old southern happy hour for today's sunshine. brown foreman, ticker bfb trading at all-time levels. booze maker behind big brands like jack daniels and southern

comfort. the booze maker behind big brands is currently up by 1.4%. and nearly 20% over the last six months. also coming up on "street signs," herb is still with us. and he's got the latest on the groupon accounting debacle. in fact you've been talking to the grumpy old accountant who saw it coming. >> later on, get your george jetson on. you can soon get behind the wheel of a flying car. that's right outside of cnbc hq. back in a moment. let's -- let's start over from the beginning. we were just driving along, comin' back from the lake,

and all of a sudden, ka-plam. it blindsided us. what is it? our college savings account. how do you think it happened? not sure. i think something we bought a while ago turned out to be something else, annnnnd, i remember a lot of other stuff in there had the word "aggressive" in it. is everyone okay? well, now, yeah. who knows later. ♪ we asked total strangers to watch it for us. thank you so much, i appreciate it, i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money ? if your bank takes more money than a stranger, you need an ally. ally bank. no nonsense. just people sense.

welcome back to "street signs." well, it is time for our street talk which is where we look at the big stories making headlines on wall street. you have now the second quarter, monday is perhaps the reason for the hopium to continue. stocks are up almost 70% after a time of positive first quarter with the dow, s&p 500 and nasdaq are all currently solidly in the green today. meantime, oil is gaining about 1.5% after positive u.s. manufacturing data that came out of the states this morning. we'll get to sharon epperson now at the nymex with the final trades coming in on oil. what are we looking at, sharon? >> we're looking at a $2 move in wti, crude futures closing right now near the highs of the session above $105. you mentioned the manufacturing

data, you got to also talk about the new money flows coming into this market and commodities across the board that may be fueling this trend as well. we have brent above $125 a barrel. and we're looking at big gains 2% or more in refined fuels, heating oil and gasoline futures as well. doesn't seem to matter that the energy department came out today revising their january forecast or january estimates for oil demand saying that in fact in january oil demand dropped by about 4.5%, the lowest level we've seen for january since 2001. so these high prices are certainly taking a toll on gasoline, mandy, but doesn't seem to factor into the future prices, we keep climbing higher. >> okay, sharon,ç thank you ve much for that. in the meantime this is a real clunker we're looking at today. groupon shares off shopping. late on friday the company increased its previously report of fourth quarter net loss and also cut its revenue. groupon you might remember only ipoed in november of last year and ipoed at $20 a share.

the stock is currently trading down 14%. brian. herb has been all over this groupon story, as you know, loyal viewer. and he's out with another great piece on cnbc.com today. and your next guest has always questioned the company and confronted the company's accounting issues head-on and early on. let's bring in principle analyst at redesign mobile and a tech crunch contributor as well. as well as our own mr. herb greenberg. herb, let's begin with you. and without getting sort of too in the weeds on what we're talking about here with this new s.e.c. rule and how it pertains to groupon, just tell us why our viewers should be upset about this. >> about what we're really talking about is if the jobs act goes through, there's a concern that they will let any ipo under $1 billion come in with some draft and have the s.e.c. review it ahead of time. that, by the way, effected groupon and makes you wonder going forward whether a company -- whether it would even matter if they did this. here's what's important, brian.

you have a situation where groupon came public, it's had all the accounting scrutiny it could have and it still came out after its first quarter saying that it has somewhat of another problem. this has been one accounting stumble after the other. >> yeah, but according to the article anyway, which on aç si note i found interesting that in the "the wall street journal" article written over the weekend, everybody was reachable except for the s.e.c. they could not be reached for comment. so there's your government weekend thing. but they basically said proponents said, well, listen, this will prevent what's happening at groupon. people have a chance to sort of dig in, they have a couple week period to really look through it. you disagree. >> it will help more deals, they feel, happen and create more jobs. where are the auditors? that's the question you always have to ask here. the auditors came out in this latest revision of earnings of revenue the company's going to have and effectively said there was material weaknesses. what's new about this? where have they been? when did this occur? >> come in on this conversation.

i'm wondering whether or not this company was even ready to go public when it seems they have a lot of problems getting accurate and reliable financial reports out there. >> i don't think it was. there's just been a lot of fundamental flaws with their numbers all throughout the process and went through something like seven or eight revisions of s-1. in each step they altered fundamentals of their accounting and just didn't make any sense. >> it's interesting, rocky, because in your latest post aside from your april fool's day joke, by the way, on march 31st you wrote wi groupon may be poised for collapse. and what you call them is a receivables factoring business. they're not a coupon company, not a sales company, not a web company, they're receivables factoring business. explain why you say that. >> what they do in u.s. and canadian markets, they go out to businesses and they say we'll cut you a big check, we'll give you money up front within the first 60 days for six months to a year's worth of receivables. and then you'll essentially pay us back over time over the course of the year. what happens is businesses will

get their money the first 60 days and then they will go out of business or have other issues and groupon ends up with a lot of refunds. that's what drove the statement we saw on friday. >> is there any danger that this is going to tar everybody in this space that you know as we start to question the numbers coming out? groupon always questioned the business model that a number of the high-flying so-called new tech companies or social media companies, they're all going to be under scrutiny from here as well? >> i hope not. groupon's an exceptional case. a terrible accounting situation. their same auditors did the facebook s-1 and i went through that with a fine toothed comb and couldn't find much wrong with that one. >> what's the end game for groupon? where does it go from here? >> right now as the business is structured, i see it going to zero. they need to fundamentally change their core business. the fundamentals aren't there. >> still back to something interesting, rocky. you mentioned the same auditor that did the facebook ipo and you couldn't find anything there. but you still have to wonder then in the end when somebody is paying a big fee and they want

to get aggressive as may have been the case here that they'll push it as far as they can until somebody raises a red flag, which is obviously what happened here. and you just wonder how it got this far. and then you end up with this revision. how many revisions are we going to have with this company until the regulators figure it out? >> i don't know. that's a very good question. i'm surprised earnest young hasn't walked away at this point. >> rocky, thank you very much for joining us. >> thank you. >> still ahead, the flying car. guess where it is? right outside in cnbc's parking lot. >> but next up, pre-flying car, the u.s. now king of corporate tax rates. we're going to dig in on @r(t&h% hurting may be companies. and we'll show you what the real effective corporate tax rate is because we all know about deductions. what are they really paying? we've got a number from a nonpartisan, nonbias group, and they'll tell you what that number is. but only if you stick around.

they have names like idle time with free enterprise punsfee like hugh and crye, and smash records. and one saturday a year small businesses remind a nation

of the benefits of shopping small. like the way david kaplan at shell lumber shows you how to use a chop saw. then invites you back when the warehouse becomes the community theater. or the way camille russler of ever after travels the journey from despair to bliss with every bride to be. on small business saturday 100 million of us joined a movement... and main street found its might again. and main street found its fight again. and we, the locals, found delight again. that's the power of all of us. that's the power of all of us. that's the power of all of us. that's the membership effect of american express. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced.

the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪

i'm bill griffeth. coming up on the top of the hour on "closing bell," burger king with a new menu. how this potential food fight could affect your investments in the fast food industry. and talking numbers, a top chart expert is explaining why he's calling for a correction in the s&p 500 this quarter. and we'll get the outlook for social media start-ups with one of the early investors in facebook. that and more. maria and i look forward to seeing you at the top of the hour from the new york stock exchange. mandy, see you then. >> we look forward to it, bill. let's check out illumina. this board has rejected a revised takeover offer worth $51 a share. it turned down an earlier bid. the ceo says the new bid

dramatically undervalues the company. >> happy national tax freedom day, everybody. if you paid all of your taxes in one lump sum, you would have to work until today from the beginning of the year until now to make enough to send to uncle sam for the average tax bill. on another tax note, it is official, we are number one in america. unfortunately, we're number one in corporate tax rates because japan is cutting theirs. and they're the only nation above us. so now that is officially putting america as the highest headline corporate tax rate in the world. let us bring in will mcbride. analyst at the nonpartisan tax foundation as well as our ownç rick santelli. i don't need to tell you how this is going to go. i'll say the highest corporate tax rate in the world, 75 million people write-in, yeah, but no company pays anything thanks to deductions. everybody pays zero. that's the way it works. what is the average effective post deduction corporate tax rate in america right now? >> well, it is 26% according to

the latest numbers from the irs. and that does -- that is after deductions, credits, loopholes, whatever, et cetera, whatever you want to call it. that is in line with other studies by the various government agencies that come up with similar numbers. >> 26%. where would that put us? somewhere still i would imagine in the top five or ten even post-deduction. >> that is correct. we pulled together the most recent legitimate studies, there's about 13 that have been produced in the last five years or so that did this cross country comparison of effective tax rates paid by corporations. and as with the statutory rate, the u.s. ranks very high in terms of the effective rate. so we typically rank in the top five. and typically we're actually second behind japan. but as you noted, now that japan has lowered their statutory rate below ours, we should be close to number one if not number one. >> rick santelli, how much of an

argument do you see to lower the corporate tax rate here in the united states in order to be competitive? what's the trade-off here? we'll take in less revenue for the country but is that far o outweighed by the potential gdp for more to çgrow. >> this is such a disingenuous argument. and i disagree with our guest. a lot of research out there says the effective corporate tax rate for 2011 is much lower than his mid-20s. and i would contend that just to lower this is going to be political father for both parties. but unless you really tackle the deductions, the loopholes, the credits and the offshore tax havens, tweaking the headline number is like rearranging deck chairs on the ship titanic. >> rick, usually i agree with you and i agree with your macro point. depends on how much money you make. and will can speak to that too. how much money you make as a corporation depending on what your deductions are -- >> but that's the whole game. it's the big boys we bailed out

that get all the big benefits. >> my friend, you are from illinois, you are from the poster child of this because we also have state corporate tax rates. your governor's been raising those, right? and we've had many companies threatened, thankfully not many have acted on it, but threatened to bail on your home state because of this. >> yeah. well, we have democratic leadership for generations. and it hasn't turned out any better than michigan. >> i would say that the numbers you're talking about the current year 2011 and that's probably right. but it's speculative at this point. the numbers i have from the irs are from 2008. that's the most recent we have. >> yeah. i just saw as low as 12% to 13%. >> well, you're right in the last couple years it particularly has been bonus depreciation or 100% expensing which is reduced corporate taxes significa significantly. we can assume that's short-term to provide stimulusç for this current recession. that has reduced taxes for sure.

we don't know what the rate is. >> rather than argumenting about whether or not it's the highest in the developed world or we need to lower it or less competitive, et cetera, wouldn't it be best just to make the tax code less complex? there are companies out there spending years trying to resolve tax issues, correct? >> that's absolutely correct. some of these cases stretch more than ten years in the tax courts. and there's these net operating losses which carried forward or back sometimes five years and longer. depending on when the law -- which law -- which year because this law changes quite a lot from year to year. >> uh-huh. >> so these corporations are in limbo for many years very often. we don't know this year -- we won't know what corporations are paying in tax this year for probably another three or four

years. >> very interesting. will and rick, thank you very much for joining in on the conversation. >> thank you. >> well, also big on taxes tonight launching larry's ten commandments of growth. thou shalt lower taxes. and thou shalt not regulate. that is tonight 7:00 p.m. eastern right here on cnbc. >> thou shalt watch. >> that's good. we like that. thou shalt not change the channel yet because the show's not over. returning the new ipad. why to send it back and which to get instead. >> sthsk around. are trading throughout the day. and advanced charting lets you customize your views and set up your own comparisons. our ipad app can help refine your strategy or even find a new one. i'm velia carboni, and i helped create fidelity's next generation ipad app. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades and explore your next investing idea. ca refu l,

another banner day for apple. trading around 616 buck as share and today consumer reports named the new ipad itsen to tablet which is interesting because rb they came on and warned about the heating problem. turns out it wasn't enough to sway the viewers from making new apple tablet its best buy among tablet. >> but not everyone is happy about it. >> why i'm returned my new ipad andç buying a kindle fire. it's picking up a whole lot of attention on the web and it's got our attention too.

rick is explaining. >> thank you for having me. the new ipad, i was very excited to see what apple was going dom up with this time. i got caught up in the new high definition screen and all that. what i found is after i bought my $600 new purchase home, i was a little underwhelmed. the screen was very pretty, yes, but was it a massive improve&? definitely not. the cameras are super flewous for me. and i got to thinking is this $600 well spent, and in the interim i got a chance to play with the amazon kindle fire and decided that i really liked that smaller form factor for things like reading and listening to music, watching videos, and that sort of thing, and i really -- you know, the price difference is hard to ignore. it's $199 versus $499 at a bare

minimum to get into the new ipad. >> if i'm hearing correctly, it sounds like it's just incremental improvements, a few more bells and whistles. knoll reeve lugsal. if that's the case, what is the case for macroprospective and stock? >> i think you hit the nail right on the head. this was very much an incrementalç product, evolutionary, not revolutionary product. make no mistake. it's a wonderful device. i just thing there's such a huge price discrepancy in getting an ipad versus a kindle, that it may not make sense to get the bigger tablet and as far as the stock is concerned, obviously what i've said has not made any impact on what app sl doing. i'm not going to lose any sleep over it. i think they'll be okay. >> i think you brought up the point when you talk about users.

like my father wants to read -- he's not going to play angry birds. i don't know how to read so i want the ipad and the big apps. it depends what you want to do. if what you mostly want to do is read, it sounds like you want the kindl fire. >> for a reading device, the kindle fire is the winner, or any tablet that size, 7-inch fact ter, it's so much more comfortable to hold while sitting in bed or in a chair. the ipad is a little too big, too wieldy. >> the apple got ahold of the feed when he started bashing them. >> omnipotent. another big movie about jobs is in the work. "variety" is reporting that ashton kutcher will play steve jobs. i think there's a pretty good

likeness. he'll start shooting in may. this movie is different from the bigç film which will be based walter isaacson's best-selling biography, "steve jobs." up next, the flying car. you've been waiting for it. we're going to deliver. the jetsun's dream is here and it's actually in the cnbc parking lot.

. this is awesome, right? it is plane, but it is also a car. you've got to check this thing out. this is a terrafugia. the name of the company is transition. >> the chief technical officer, carl, is rolling up the wings as we speak. carl dietrich, the ceo was explaining to me earlier. i takes 45 seconds to close up or extend the wings out. it is both a plane and a car. it is not a gimmick. if you were flying, you could go up to about 450 mile, driving, 650 miles. it's very light. >> if i want one of these, and i do by the way, how much will it set me back and how do i get one? >> $279,000 is the price. >> it's a bargain for a plane. my three or four planes were more expensive than that. >> it's like flying a piper cub.

carl was explained to me. it's no different. there don't have to be safety regulations. it has been certified. >> you can't just land on the roof of cnbc. >> you have to take down from the street. you have to be certified as a pilot and take off from a landing strip. it is plane first and foremost but it's also a car so you have the convenience if you fly somewhere once you fold up the wings you can fly off. >> so the primary use is a plane. >> look. >> look how small it is. carl on the inside has been a champ for us. can you open the wings for us? it takes 45 seconds. >> you can't alternatively cruise down the highway. >> you could, but would you want to? there's not a whole lot of space. this is for the person who has an airç strip outside their ho, they're going to fly off to