out what the hatfields, mccoys, hawks, doves, find out. it's first in ten for car sales. auto sales booming. we're going to show you the winners, losers and why $4 gas may not matter one bit. hard to believe. we'll show you why. right now start your engines, "street signs." fed minutes begin right thousand. they a steve liesman. >> you characterized it correctly, brian. divided fed. not as much discussion about the policy implications of all this. i'll get to that in a second. better economic data seemed to have little influence on the committee's outlook. the committee was concerned over a global slowdown, fiscal tightening, weak housing market. those were the risks to the forecast. it tid still expect the economy to gradually gain strength. inflation was expected to run at or below 2%. now, check this out. a couple members suggested additional stimulus if the economy loses momentum. back in january that number was a little bigger. it was a few. some members this time also

warning of the possibility of an early rate hike. that's your hatfields and mccoys brian sullivan so aptly characterized. committee did emphasize the 2014 forecast in the statement depends on economic development. a number of members see ris tock the job gains as the year progresses. this was probably the most interesting discussion they had. there was quite a bit of debate, it seemed, about how real job numbers were. i sum prized it for you here. there's this debate we've talked a lot about. gap between the jobs numbers and the gdp numbers. several members cited warm weather helping out jobs. other members said you know what? the gdp numbers could be wrong. they could be revised higher. participants were concerned that rising labor, of course, could be inflationary. also economic but important debate about whether the economic potential has declined. in other words, is there less slack in the economy? on oil prices, they saw the surges mostly due to geopolitics

rather than to rising growth. the inflationary effects of high oil prices were seen as temporary. slight upward revision to gdp and inflation forecast. the committee discussed this idea, they didn't come to a conclusion, about publishing alternative economic scenarios and the potential policy responses in way of becoming more transparent. brian, i was surprised there wasn't more discussion of additional policy stimulus. not more discussion of what happens when twist ends. what there was was sort of like a dysfunctional family talking around the issue. they talked a lot about the growth outlook but not a lot about policy implications. >> you can see the reaction already in the market. dollar higher. stocks down a little bit as people digest this. >> back off the idea of additional stimulus. >> exactly. doing what they do best. jump to conclusions. >> first off, look at the dollar index to kelly's point. dollar index spiking. goldman sachs out with a note this morning basically saying the key thing we're looking for here is whether the odds of qe-3

decrease or are taken off the table. do you believe in this brief -- i know it's an early reading. >> slight decrease. >> they're still there. >> it's always still there. look, put up my fed camps chart. i got a little way of understanding all these fed camps out there. the even if camp saying more qe even if we hit the forecast. there's the only if. only if the economy deteriora s deteriorates. there's my last one, brian, for you. the no ifs, ands or qe camp. no more fed stuff no matter what. when i see the word "a few" become "a couple" pushing for more stimulus i would say a very slight decline in the odds of qe. >> usually fed minutes kind of -- not necessarily a big moment for the markets. this one in particular could have been. people were looking for signs on depails of quantitative easing because we're coming up towards the end of the current buying program. they have to start putting more signals out there about what the program will look like, what form it may take. why you're seeing such a

reaction, such a disappoint. >> i love your camps. >> which ones are the hatfields? which ones are the mccoys? >> there's the hatfields, mccoys, the arbitrator. negotiator between the families. you've got the even ifs, only ifs, never. let's say we were between the middle one and the top one before this meeting. do you think we've gone below that to between the only if and the no way in grandma's apple pie kavcamp? >> i don't think the hawk camp has strengthened at all. i think you've had a bit of a decline in the dovishness of the board. a lot of the board is in the only if. we're okay now. we're chugging along, 2% or 3% growth. if we end up with a one handle on gdp and a no handle on inflation, that's when you're going to be in, okay, we need to do more right now. >> everybody's sticking around. let's bring in some more

characters. jack caffrey. zain brown. kelly is going to be with us all hour today and tomorrow increasing the southern quotient by 33%. >> mandy is on vacation. >> no. stuck at newark airport due to lousy infrastructure. do you think qe-3 remains in any fashion still on the table? >> i think you listen to what the fed has said. they have been very consistent. they are going to remain helpful. you are raising the stakes under which you actually need to see real weakness in order for the fed to come along and be helpful. effectively it would be i need to see bad news before i start thinking about the cavalry coming to the rescue in that regard. >> but should investors who are hoping and betting on another round, right, they bought stocks because they think that the rising fed tide will lift their boats as well, should they eliminate that from their possibility or is it still a chance? >> i think there's a chance, certainly. but i think investors are paying a bit more attention to what's

going on with earnings. they've been paying much more attention to what's gone on with payroll. they're looking at what remains. as you said, an okay economic story in the 2% to 3% growth camp. price in the fact we live in a somewhat uncertain world. i think investors should be paying attention to getting more or less certainty and pay attention to what they're investing in. in this case earning streams and stocks rather than necessarily trying to handicap what the fed may or may not do. that's a path dependent discussion. >> zane brown, you wrote the markets were hoping for signs of more qe-3. you see stocks hitting session lows. yields jumping as people begin to walk back those expectations. how significant a move is this? >> i think it is significant in the fact that a lot of investors really ignored what bernanke had said in front of his congressional testimony. recall that both on february 29th and on march 1st, you know, he did not mention qe-3. the market was disappointed. basically did much the same

thing where gold dropped significantly. the dollar aappreciateuated. now we're seeing risky assets fall a little bit and the dollar appreciate all over again. it's just surprising that so many investors had expectations all over again that we might get an announcement that would truly indicate qe-3 when in the fed's testimony, bernanke didn't make any mention of it. >> zane, i think -- >> i think expectations were mislaid. >> i think they misread bernanke last week. i also want to point out at the news meeting yesterday at cnbc i tried to argue fed minutes were not going to be a big deal because i didn't suspect there was going to be a lot of discussion of alternative policy measures in it. i was right about that. but wrong about the market. i think what we're seeing here and what's instructive is that there was a lot of pent up demand inside the market for additional qe. so what we're seeing here is even though our cnbc poster is 33% probability on additional qe, there's more hot money waiting on more qe than we

suspected. >> you said you weren't sure it was going to matter to the markets. matters to gold bugs. look at that. vix, gold, all reacting on these minutes. >> do we want to keep the backdrop that this meeting did happen a month ago. a month ago we were talking about how it was the end of the bond market rally. i just wonder before people jump to conclusions about what the discussion then meant if they shouldn't consider what we've learned since then, the way markets look now and say is the fed really not going to come to the table here if growth -- >> i think the market misread bernanke last monday. i thought he said hold the line on existing accommodation. not new qe. a lot of guys are in this market. they have a position. they hear the data or commentary the way they want to hear it. he just said more qe. i didn't hear that. that's another story. the other thing is that they want to hear this additional qe, kelly, and right now it seems to be baked in. >> plus one for the toto song

reference. hold the line. zane, the dollar, we don't talk about it a lot. maybe it's not the sexiestmatte. moves gold prices, oil prices, the stock market to an extent. we're seeing the dollar move as well. should we view this if the hawks are starting to take over a little bit down in washington, should we view this as a chance to go long u.s. dollar, king dollar coming back, and by anything related to a stronger dollar and sell gold? >> not -- i'm not going to opine on gold. i do think that it is supportive of dollar longer term. maybe stocks are taking a little bit of an improper reaction. because if we were back on the 29th of february when we first got the news no qe-3, then it was reinforced as investors had time to think about it. if we don't get qe-3 because the economy is actually stronger, that actually supports the stock market. it should support stronger earnings and stronger growth. if that ends up being the case,

you could see more people buying dollar and supporting it for that reason as well. >> let's get -- real quick -- >> one quick point. we only have a couple week respite here. the fed is going to come back and have this policy discussion. it's going to be very public. it's going to start soon. crescendo up to the april meeting which is going to be key. >> bob, are you surprised the reaction of the markets? what are you hearing from traders? >> try explaining this to your mother. the fed talks about t possibility of rate hikes coming. all of the sudden the stock market drops dramatically because there's less chance of qe-3. it's one of those things that doesn't sound like it should be happening but, in fact, did. the first thing that everybody noticed down here was the bond market. yields just kind of, like, went boom to the upside. that was your immediate player. there's the 10-year. the s&p dropped. the dow dropped. down 40 points then quickly dropped down 100 points. dollar spiked upwards. this is one of those things, kelly, where let's put it this

way. if the fed is a little more optimistic on the economy, that should be good news for the stock market. i think steve's right. it shows there's too much qe-3 expectation still floating around. >> absolutely. rick, what do you think? what's going on in the bond market? what is it telling us? >> in terms of mark-- the 30-ye being a little stubborn up four basis points. obviously you've shown the dollar and stocks. the world down here is traders saw the same reaction they saw on the 13th. the statement was light on qe details. but hope springs eternal. some of the data started getting iffy. people get drawn in. it's not the last selloff we're going to see if there's potentially qe. it's not going to be the last time traders think we're going to see more qe. >> rick, dig into that point just a bit and we'll bring bob in as well. i think we've seen this movie a little bit before, haven't we? >> right. >> we get this.

see bond yields spike up for an hour, day, maybe a couple days. then one bad or weaker than expected economic data point and all of the sudden qe is back on the table. bond yields fall back again. rick, do you think in your heart of hearts this is a real long lasting turn? >> yes. outside of credit crisis 2, the sequel nobody wants, i don't think we're going to get more. i agree with steve's earlier comment. to finish out the twist in june might have its own logistical issues. outside of that, yeah, i'm pretty committed that i don't think the fed's going to be sprinkling any more dust -- >> zane and kelly i want to point out, how ironic is it that in this age of fed transparency we're still reading the tea leaves, counting the number of veins in the leaf, ridges on the end of the leaf. all of that stuff. we're still trying to figure out the fed can't seem to find its way to be transparent about policy. >> don't you find the fixation

on the lack of qe commentary or qe a little baffling? i thought the statement was fairly balanced. >> that's why you do what you do. i can tell you what i think the fed is going to do. i can't tell you what's priced into markets. i come on with the minutes fully meeting my expectation of not a lot of policy discussion but not really knowing that, in fact, there's a bid in the market on this lack of discussion about the policy. >> now you know. >> now i know. >> the statement specifically, i thought it was very balanced myself. specifically said members see risk to job gains as the year progresses. they talked about concern over the global slowdown. >> maybe kelly has a thought on this. a little less qe-ishness in it. >> the reaction -- jack, last word from you on this. we talked a lot about expectations. it seems to be what this game is all about. what does this mean going forward over the next couple of weeks, do you think? >> i think honestly we're caught in a little bit of a holding pattern, if you will, until we get to earnings season kicking off middle of next week.

the question i think then comes what are companies seeing? what are they doing? what are they anticipating? are they going to be a little more aggressive in capital spending or are they going to hold off given some of the uncertainty out there. economic surprises. i think that's been something in people's back of their minds. what have we priced in, what haven't we priced? >> bottom line, do you change your fundamental strategy recommendations to clients snood. >> no. not requiring assistance at this point. that's actually fwood news. >> gone back two weeks in time. >> you got the flux capaciter, too. one more guess for the octo box. could have made an appearance. >> septobox is cooler. >> zane, jack, thank you both very much.

rick, bob, thank you as well. steve, thank you. kelly, you're still here. up next, auto sales in overdrive. maybe that factors into the fed, right? and maybe, just maybe, high gas prices are helping car sales. and the economy like these trucks fell off a cliff. the big question now is why hasn't the road to recovery had more traction? ed lazear tells us why. don't worry. we'll also bring you the story behind this unbelievable video. tomorrow, this is huge. a big day for "squawk box." look at that line-up. barry sternlicht. eddie lampert. david bonderman. that's a huge "squawk box." kelly may get up before noon tomorrow just to celebrate that. >> just to watch. back on "street signs" in two minutes.

the nation's key financial regulators gathering in washington, d.c. they're voting on the new rule that could impact some of the country's biggest insurance firms, asset managers and hedge funds. it's happening at the meeting of the tragically named fsoc. acronyms aside, mary thompson is there. she joins us from the treasury department with a preview. >> reporter: as you pointed out, the rule being voted on by the f stability oversight committee before known as fsoc today will basically outline how they're to choose the nonbank financial

firms that are so big and whose businesses are so interconnected to others in the economy that any disruption in these firms' business could actually cause instability in the u.s. financial system. now, what it means for the firms that are eventually chosen to be called nonbank systemically important financial institutions, or nonbank sifis, for short, they're going to be regulated by the fed. how the nonbank sifis are chosen will be decided today. according to an october proposal expected to be very close to the final proposal being voted on today, is that the first step will include these firms being invited to the process by fsoc staff. basically they're going to issue a letter to these firms. then the fsoc staff will do a deep dive into all the public information available about the companies. step three will be follow-up questions and possibly a look at nonpublic information of these companies before a determination is made as to whether or not

they are to be called nonbank sifis. it's a process that is expected to begin in the very near future. as for the meeting to vote on this, it's going to begin at 2:30 eastern time today. we'll have the highlights of the vote tally and also right after that a first on cnbc interview with deputy treasury secretary neil wolin. back to you. >> how will we know when -- how will we know what firms are chosen? which ones, mary? how will we know? >> reporter: we're going to know, some senior administration officials have said they would like to get that list out by december. that's why the process has to begin in the very near future. they're looking at the december deadline for that. >> mary thompson, we look forward to more reporting from that meeting. thank you very much. elsewhere, march auto sales absolutely killing it. maybe thanks in part to higher gas prices which were blamed for killing auto sales a few years ago. auto nation ceo mike jackson on "squawk box" this morning saying people don't have to give up

size or performance for increased fuel efficiency these days. according to edmunds.com -- here to break that down, ceo of edmunds.com as well as phil lebeau. i've been arguing for a while that $4 gas won't matter as much as it did because people are trading in cars for higher fuel efficiency plus other stuff like a payroll tax cut. do you buy the fact that $4 gas isn't what it used to be? >> i think that's true on a couple of fronts. you talked about the key one. that is vehicles today get much better gas mileage. even full-size vehicles like pickups and suvs get much better gas mileage than a few years ago. if you're coming into the market or thinking about buying a new vehicle higher gas prices could be just the trigger you need to get you to get actually out into dealerships and buying a vehicle that delivers better fuel

economy. >> another trigger is easing credit conditions. even sub prime coming back when it comes to autos. this is a factor? >> i think it is. we're seeing a couple things. the loosening of the credit requirements is certainly a factor. you've got to be careful about this. credit that was too loose got us into trouble. we don't want to see it loosen up too much. it's certainly helping the ability for consumers to get loans. it's definitely a good thing. >> phil, you've been all over this as well. who's winning right now? i noticed february imports made a big comeback. toyota did great again after their fukushima supply problems. are the imports back? >> they're back as far as being as strong as they were last year. listen, the supply has already been replenished within the showrooms for those japanese automakers who were impacted last year. you also have to look at the koreans. hyundai posting its best monthly sales ever last month. one last month with regard to the impact of $4 gasoline. because it's been a gradual rise, we haven't seen the shock to the buyer. if that continues, there's no

reason to believe -- or not the believe that there will be people who will continue to come into showrooms. it's when there's a huge spike all of a sudden, that's when people pull back and say, uh-oh, i'm not sure i want to buy a particular car or truck. as long as we see a gradual increase, i don't think it's going to slow down auto sales. >> people are more focused on maintaining credit after being burned by everything that happened over the last couple of years. trying to stay up to date on car payments. focusing on credit quality. from both the supply and demand side do you think these credit conditions have loosened significantly and this is dro driving te demand? >> to a certain extent. it's also freeing up people to go into the used market. again, this is all churning the market. once that happens, everybody's sales increase. >> jeremy, do you agree that hyundai right now is probably the single best performing car company operating in the united states? >> well, they're certainly in

the top tier. if you look at the results from march, chrysler has been on a real roll. their sales were up last month about 34%, 35%. that's remarkable performance. >> we got to go. who's stinking up the joint? >> the car company's whose share was down last month was general motors. they do seem a little vulnerable moving through the year. >> breaking news. on facebook. the legal battle with yahoo! taking another turn. julia boorstin with that breaking news from l.a. >> reporter: brian, facebook is countersuing yahoo! over patent copyright infringement releasing a statement along with the lawsuit saying, quote, from the outset we said we would defend ourselves vigorously against yahoo!'s lawsuit. today we filed our answer as well as counterclaims against yahoo! for infringing ten of facebook's patents.

this is facebook's formal statement. after yahoo! filed suit against facebook for infringing on about a dozen of yahoo!'s patents last month. yahoo! did disclose -- facebook did disclose yahoo!'s lawsuit in a recent s-1 filing say it could have material impact. this is, of course, its big response. brian, back over to you. >> i'm sure that story will continue throughout the day. as i've always said, lawyers always get paid. that's why we should all go to law school, america. one thing we like about herb is that he's generally more right than he's wrong. he's made a lot of great calls over the last 12 months because the guy works his tail off. what we don't like about herb is when he's right, he continues to remind you. case in point, this next story. research in motion. once again, disaster du jour. you already got your dinner out of this. what else can you say to twist the knife in my back. >> stocks get hit because of comments by gene munster. he said they're going to go out of business. he was talking about long term. then they were hit by a patent

lawsuit where they're sued by nxp over some patents. i think what's interesting here and the part of the story that intrigues me is when they came out with the earnings update, with their -- some comments the other day, i think it was earnings, the ceo said -- now he's saying the company could be put up for sale. there are a variety of different things they're considering. when he first came out, remember, after he was hired, he put -- he said that was not going to happen. we know that company was not -- it's almost like they were living in denial. proof they were living in denial. they've got much broader issues. now you're starting to see it just every day. >> i know you remember this. six years ago this month research in motion settled a patent lawsuit brought by basically a noncompany. it was a shell company calmed ntp. for $612 million. you remember that? rim was valued so greatly that $612 million was just a couple patents. you wonder what their intellectual property portfolio really looks like.

where the value is underneath the hood at rim if any. >> here's a company that wants some of that. nxp wants some of that. this story isn't going away. neither is rim any time soon. as we pointed out the other way they have fabulous cash flow. fabulous balance sheet. just wasting asset. >> what's the move forward for rim from here? >> good question. they've got a lot of competition that's going to be hard to push off. they still have a business. we see it on the balance sheet. see it on the cash flow statement. it's just sort of declining. >> ironically, everybody you know still has a blackberry. >> i don't know if that's true anymore. >> it sits in my desk drawer. i physically possess it. i was given it. i had to receive what was given to me by the corporate parent company. >> i hope they're not still paying for it. kerx. bad drug test. more pain. that stock is down more than 12.5%. down almost 70% in the past weeks. again, one of its cancer drugs not meeting its primary ending test point there for the

multiple myeloma drug they've got going on. retail sunshine. check out conn's. up 16% today. 22% this week. it's just a small cap pay. about $530 million market cap. the stock is up 73% year to date. >> a very controversial stock. once it was a $4 stock before it came back on this big ride. 70 locations in texas. >> that's incredible. before we -- >> did you just pull that out of your head? >> he's the numbers whiz. >> he is. >> let's quickly show you the video of the day. takes place in norway. a tow truck was pulling a tractor trailer up a mountain road. the rig slid and both trucks tipped over the cliff, rolled 180 feet down the mountain. the tow truck driver was able to jump out in time. the rig driver went over the cliff. amazingly, he survived with just a few broken bones. i guess that's why we can show you this footage now. >> it is. we're lucky. we're not going to bring you

footage -- unbelievable. unfortunately more harrowing video to bring you now. video just coming in. this is live video. that is a monster tornado. that is in johnson county, texas. it is just south of dallas. this is live video, folks. if you're anywhere in johnson county, texas, get out of there. look at that thing. we're going to bring you more on its path, where it's headed, where it's going. unfortunately the weird weather continues. >> texas keeps getting hit with extreme weather. >> droughts. you've got extensive rains after that. now this. again, johnson county, texas, south of dallas. monster tornado. i'm sure our friends at the weather channel can bring us more. they're part of the nbc universal family as well. still to come on "street signs," shoveling profits. the big bucks behind one of the warmest winters on record. first, are we in the worst economic recovery in history? former bush economic adviser eddie lazear thames us why we're going down the wrong path in our road to recovery. "street signs" will be back in just a moment. ameriprise financial has worked for their clients' futures.

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malibu looking downright peaceful compared to the big twister in johnson county, texas. more on that and its path as the hour goes on. time now, you like that, one handed. street talk. our look at some of the big stories moving this tuesday. we're seeing very strong reaction to the fed minutes. you've got stocks trading near session lows. you've got the dollar spiking. you've got gold down big. you've got oil also moving down. maybe on that stronger dollar and the hawks coming out. look at that, folks. gold down 34 bucks an ounce on the june 2012 contract. let's talk more now about oil. sharon epperson with the details on that trade live from the nymex for you right now. >> we've been in a range here in oil prices for the past month. now we're at the lower end of that range. breaking below 103.60 here after, of course, those fomc minutes. of course, the fed saying there seems to be no inflation threat from oil. brent crude not that affected. the brent wti trade is another one a lot of folks have been focused on in this session as it's at a six-month high.

the real story as you mentioned with no inflation threat, inflation perhaps 2% or below for the foreseeable future. we're looking at gold prices down below 1650 and 1625 is the support for gold, brian. >> sharon epperson, back to johnson county, texas. south really west of dallas. these scenes are pretty spectacular. this is a tornado. it is a big tornado as you can tell. it is moving across the ground in johnson county. you can see it's moved into a populated area. that is a monster tornado, folks. these are live pictures. it is just south of ft. worth in johnson county, texas. let's hope everybody had plenty of advance notice. let's hope everybody has gotten out of the path of that tornado. it is certainly a big one. >> johnson county has a population of about 150,000 people, brian. >> yeah. it's a growing area around dallas. we're going to get you more on this from our friends and

colleagues over at the weather channel, certainly. again, folks, not the kind of scene you want to see on what is a beautiful day around much of the nation. it is a tough day in johnson county, texas. we'll bring you more as that happens. the recovery from the great recession has been slow. but is it the, quote, worst economic recovery in history? that is what former bush adviser ed lazear is calling our current economic situation. in fact, he wrote that in an op-ed in this morning's "wall street journal" saying today's recovery pales in comparison to all other recoveries including the one following the great depression. obviously that's generating a lot of comment and a lot of controversy. let us dig in. edward lazear. good to see you again. >> good to see you. >> if i go back to gdp growth from 1940 to now, you're right. the growth rates out of downturns have generally been north of 4%, 5% or 6%. if i go back to the period following 1930 there was a couple years of decency.

from '30 to '40 -- the great recession more comparable to that era. why are you so critical about this recovery? >> well, you know, my view is that if you look back at the depression, we had four very bad years. then we had a couple of very good years. we had another recession in the late '30s. then we came out of that one at very strong growth, too. that, by the way, precedes world war ii. i think the general point is this. what has happened in this recession is that unfortunately in all previous recessions eventually we got back to trend -- to the trend line. if you look at long-term gdp growth eventually we got back to that. what that means, of course, is that the recovery was sufficiently rapid to make up for the ground loss during the recession. the problem with this one, it doesn't look like we're on that path. if anything the gap is growing. it's not shrinking. we're 12% below where we should

be right now as far as gdp. it doesn't look like we're moving back to the path we want to be on. >> to top it off, i guess i'll agree with you then, even those other recoveries we didn't have nearly a trillion in stimulus. a couple trillion in fed easing on the back end. >> that's true. of course, you know, there are critics of how effective those policies have been. again, i think, you know, if we just focus on the numbers, look at the raw data, what we see is that we're not back on the path we need to be on. that's unfortunate because it does mean that we're still at a position where output and income is still quite low relative to where we should be. that's the problem. that's what i was pointing out. >> it's one thing to point it out. it's another to say we've got to do something about it right away. what should be done in your view? >> my view is we have not focused on the long term. the problem is that economists, none of the economists, unfortunately, have the formula down for this. economists in general don't know

how to fix the short run. despite anything that we say, we're not very good at getting the economy back on track in the near term. what we are clear is creating conditions for long-term growth. we should have been doing that, i would say, two, three years ago. had we done that i think our growth rate would be higher. >> can you be a little more specific? there's sort of two camps here. there's the camp that says the federal reserve isn't being aggressive enough. there's another camp that says this isn't about what the fed can do, it's about what should be done on the business side, regulation side. what's your take? >> yeah. i wouldn't focus so heavily on the fed. that's not my personal view of it. i think the fed did a pretty good job, actually, back in 2008 and 2009. the policy since then i think have not been especially effective. i don't blame that so much on the fed. i think you run out of bullets after a while. i was focusing primarily on fiscal policy, regulatory policy, in particular the very large expenditure in the size of

the government, the deficits, all of those things. >> you're saying that's more important than what the federal reserve has been doing? and going forward that's where we should be looking instead of to the fed? >> yeah. those are primarily the factors that affect the long run. if you accept my premise you can only affect long run growth that's where we need to look. tax policy is extremely important. not only do we have high torp rat tax rates, but our structure is not very good. we need to make that much more efficient in order to stimulate economic growth. we should be focusing on that. the long-term debt increase is an enormous problem for the united states. i don't think we can overstate the importance of that. that's true, by the way, you know, the good thing about the rhetoric in washington is that both sides recognize that now. whether it's the republicans or the democrats. >> do you think that's true? the president spoke two hours ago, ed. he said a lot of things. he specifically talked about how the republicans, you want to,

quote, this is his term, gut the epa budget. he was talking about, you know, harming the environment. that goes back to a regulatory issue where he's basically saying we've got problems, but we need to keep spending on government programs like the epa. nobody's saying we don't. is that an example of sort of the misplaced priorities in your mind that this administration has? we still have, what, 4 mi14 mil unemployed. >> that's correct. again, i think we're confusing two issues here. one is the regulatory aspect of the epa. the other is the size of the budget. i think those two are pretty much distinct. i don't think the president was arguing that we should increase the size of the epa in order to stimulate the economy. what i guess i would focus on and when i said that there are positive things going on in washington, everybody now recognizes deficit is a very serious problem. everybody recognizes the growth and the size of the debt is a very serious problem. obviously they have different

ways of going about fixing those problems. i don't think there's any disagreement on that issue right now. >> all we hear about is, you know, sort of rolling back tax cuts on the top call it 2%. which is estimated to raise $700 billion in additional revenues over ten years. which is $70 billion a year. which is effectively the same that the u.s. loses in medicare fraud. we've got a $1.2 trillion deficit. we're talking about, you know, trying to fix things on the margin by raising taxes on a couple hundred thousand people. >> right. i certainly would agree with you there. if you use the president's numbers and just focus on the size of government as we go out a couple of tech kads, there's virtually no way we can fix that problem with tax increases. we're not going to get there with taxes. that's just a nonstarter. we have to focus on the expenditure side. unless we're willing to go to something like a v.a.t. or major

change in our tax structure which i hope we don't do. i think you're completely right on that. that's, to my mind, a bit of a red herring. >> let's talk about fixing 10% of our problem without addressing the other 90%. we got to leave it there, ed lazear. thank you for joining us. want to take a look at the market. saw a big move on fed minutes that broke 42 minutes ago. look at u.s. equity markets. the dow at 2:00, right when those minutes came out, people dove into them. steve liesman's analysis. everything more hawkish. may be good for the economy. bad if you're expecting a qe-3 based bounce. dow down 130 points. nasdaq and s&p also lower. back to the breaking news, the tornado on the ground in johnson county, texas. that's just south of ft. worth. brian norcross, he was going to join us there from the weather channel. you're looking there at the wreckage. some of the aftermath. the storm has apparently dissipated. looks like people in that county were given a heads up before it

struck. hasn't been an f-5 tornado in texas in a couple of tech kads. brian i believe is with us now from the weather channel. brian? >> i'm here. >> what can you tell us? >> well, we know that we've had two tornadoes under way. possibly a third in the metroplex there. one southeast of dallas. the pictures we've been seeing out of kxas are that tornado that's moved near the lancaster area which is in the southeast part of the city of dallas. which is the east side of the metroplex. another tornado which we believe from radar is still under way moving toward the arlington area to the west of dallas, to the east of ft. worth. there's still a tornado warning in effect in the area of the ballpark there in arlington and throughout that central part of the metroplex. everybody should take cover there. as far as we know, that storm is still under way. yet another storm seems to be developing to the west of ft. worth. with a line that's coming through that will finally clear all this out here in the next

hour or so. so three areas of concern. one southeast of dallas which seems to have dissipated. another to the southeast of ft. worth moving up toward arlington. in that central corridor involving tarrant county where ft. worth is. another to the west of ft. worth. another possible tornado developing there? >> are there warning systems in place to tell people in those regions what they need to do if they're affected? >> they're on continuous coverage in dallas. good pictures of the one to the east. people have been warned. early indications are significant damage from the tornado in dallas county. the one that moved southeast of the city of dallas. we don't have any reports in on the other ones at this time. the initial reports are that people were warned. well warned of the tornadoes this afternoon in the dallas/ft. worth metroplex. >> do we have any reports of injuries or fatalities?

>> we have not gotten any reports of injuries or fatalities. >> can you tell us if it's unusual to see this much activity in the area? >> we're getting to the point of the time of year, this would be where we would expect the tornadoes into april in the southern plains. this would be more average than those tornadoes, the big outbreak we saw back in march. get to april, now we're in the time of dwreyear when tornados expected. >> when was the last time we saw tornadoes like this around dallas, in this area of texas? >> there have been -- i can't tell you the year. i know there have been significant tornadoes in the dallas/ft. worth area. we don't hear about tornadoes hitting cities very often because if you go look at your google map, you'll see that most of the map doesn't have a city there. right? tornadoes treat cities and open spaces equally. there aren't in terms of land area, cities don't occupy that much land. it really is just sort of being unlucky when a tornado hits a

populated area. >> we're showing those trucks. those are empty semitractor trailer box rigs. weigh six to seven tons. you see the weight of the storm. sort of a live view a couple of moments ago, live view that brian norcross's point about the severity of the storm. it's the middle of the daytime, folks. >> look at that. >> look at it. certainly looks like it's dusk or nighttime. we'll keep you up to date. brian norcross, weather channel, thank you very much. on deck, back to business. we're going to talk about the hidden management fees that could squeeze your profits in etfs. me herb is getting out his special fine print decoder ring. you want to be around for the decoder ring. >> when we're back.

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all right. a very different weather picture here in the states. last month was the warmest weather in the country and it came after a nonexistent winter.

combine the lack of snow with an early spring and maybe, just maybe, you get a big opportunity for cities around the country. jane wells is in malibu. jane wells, what is the story? >> brian, i'm taking one for the team today. a tornado in texas proves that mother nature never stays nice for very long. still, over $100 million potentially budgeted across the country for snow removal has yet to be used for other services, disasters, or to pay down debt. they are seeing opportunities for savings even in the nation's capital. >> march acted like april. now april is acting like march. and we are all confused. >> well, yeah, washington, d.c. officials tell us so far they have had two, meaning they have $900,000 budgeted for storms that never blew in. michigan d.o.t. has spent 13

million versus 21 million last year. west virginia has spent 26 million versus 58 million for the budget. now, where can you see opportunities? well, if the savings is used wisely, perhaps it can boost muni bonds. the market is currently, quote, so overpriced, be finding good muni buys in this market has been difficult. obviously this a win-win for taxpayers but what may not be clear is the savings you get in the snowy states in those cities isn't happening where they are going to have disasters in the spring and summer. it's not like it transfers down south. >> no. and the storms could have big clean-up costs. thanks for that report. coming up next on the "closing bell," the warm weather is a boost for retails but which names stand to benefit the most? herb, you are hot and bothered about fees, hid ken fees as you call them popping up

in etfs which many call is a low-cost vehicle. >> low fees are among the claim to fame for etfs is investing in other etfs. the best example is the tech agricultural fund launched last week. it says the expense is 4.2%. go to the fund prospectus and there's an estimate of 1.6%. >> the good folks calculated it to be higher. the difference, like all funds to funds, including spenss from each of the funds in the fund -- in its fund and in this case this is a fund that invests in court funds, wheat funds, soybeans, and in sugar. if you want more detail, check out my story on cnbc.com. >> is there any way for

investors to easily find out what these hidden funds are in etfs that they may be buying or have bought? >> sort of. you can find it in the prospectus. >> that's what i said. easy. >> nobody reads etf prospectuses. >> but they would be amazed what they would find in there and i think it's important. they are just dense. i sympathize. >> that's it. it's to read the prospectus. >> or ask. do what you can do. but you have to know, especially, remember, i'm talking about fund to funds is where you are going to see the hidden costs. >> and i tell you what, if they use a registered investment adviser, a wealth adviser and they don't know and they haven't read the prospectus, maybe they ought to think about getting an ria, right? >> absolutely. >> herb, thanks. coming up, a final check on the market and plus new details on the tornado in texas. we'll take a break. we'll be right back.

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all right. we've got to end it on the texas tornado. it went through johnson county. it hit hard. it threw trucks up in the air. >> it was more than one. >> yes. and we are getting reports now of what's called -- and i did not know this, a hook echo, which may be a sign that the tornado is reforming around dallas as well. certainly a big storm, kelly. >> dallas ft. worth airport is another concern.