frankly a lot of these plays. i don't understand where commodities are going but i love to be buying assets in resource. if you buy something ten times more reserved than expects, you're going to need money. >> thank you so much for spending the time with us this last hour. anthony, tomorrow we have joel greenblat coming up. doesn't do much to any television, but anthony has brought him to us tomorrow. "power lunch" begins now. halftime's over. the second half of your trading day begins now. and welcome back to "power lunch," my friends. another day, another drop. but we are well off the lows of the day. sue herera in the middle of it all at the new york stock exchange. let me take you to the charts because this one explains the week better than anything else we could find. you see the slope over the past week or so? looks a little bit -- the sessions for the down, s&p, russell, nasdaq, if it looks a

little bit like an intermediate ski slope, not a bunny slope, but an intermediate coming down there a little bit, you got it. now take a look at one that looks like a double black diamond. if you're long oil, that would be the white line. look at the dip right there. that we would call a little bit of a cliff. look at oil coming down. down 8.5% on that june contract. gold also down. that would be the yellow line here a little bit more of a gradual bunny slope. sue, stick with the bunny slopes. >> trust me, i'm sticking with the bunny slopes, ty. all right, the big question down here today, although we're off of our lows is when is the bleeding going to stop? as always, it is important to note that there are a number of ways to make money in stocks even as they move to the downside. especially if you're in the short etfs. as you look at the board, solidly in the green all the way across the board. bob pisani's with me here on the floor. couple of divergences in the market today. >> yeah. >> the credit markets are hot. and that's why as you say you

worry when stock traders start to watch the bond market. >> they are. and it's the right thing to do. it's disheartening to see the u.s. equity market outperforming europe. it's outperforming a little bit. there are some problems. the transports, again notably weaker today. the transports never confirmed the new high of the industrials. transports hit a high back in july of last year. >> for those who followed the dow theory. >> that's right. >> that's a big component. >> and the credit markets. sue's right, stock traders when they're confused about global events watch the credit market closely. bund up, dollar up, australian dollar is down. that's what traders pay more attention to. and of course the spanish 10-year over 6% now. that's flashing a warning signal. essentially spain is now on verge of nationalizing its banking industry. >> we talked about that yesterday afternoon. spain looms large i think for these markets. greece is a symptom, not what the market is the most worried

about. >> good way to look at it. >> bob, see you in just a bit. speaking of the the credit market's yield on the 10-year falling to three-month lows. there's another auction today. breaking news from the bond market, rick santelli is at the cme in chicago. how'd we do? >> well, i'm a little surprised. we'll get to the great in a minute. the metrics $24 billion bit upsize from previous auction to $21 billion, not a reopening first time issue. yield, 1.855. where was wi trading? pretty much right there. so far so good. now if you look at the bid-to-cover, 3.11 10 auction average this was the worst since november. the directs were at -- what was the directs, doug? 15? 15, they were pretty much right on average. indirects were a little light at 38.7% below 42. we're going to give this one a c plus. i didn't like the weak bid-to-cover even though it priced about right. >> why? given the carnage that we've been seeing in the markets and

the flow into treasuries, what happened? >> if i look at it with a trader hat on, it isn't hard to see that there's a lot of buying going on in treasuries and maybe getting too aggressive in the auction you can always play it in the secondary markets. and i think one other issue is just generically look at the flight to safety more as a hedge. maybe we're getting to the end of the road on the hedge needs by the community against weakness in europe. >> thanks, rick. see you again in just a bit. ty. >> thanks very much, sue. gold and oil taking it on the chin again. sharon epperson is live covering it all at nymex. >> you showed that great chart, tyler, showing the six-day slide in crude oil. prices have come off of their lows a bit as the euro has stabilized. we're still trading around $96 a barrel. and that 96.30 level i've been talking to you about all week is key. that's the 200-day moving average. we need to see if oil prices will be able to close above that level. close below there very bearish. we did see a bit of a pairing of

losses after the energy department report that showed a big build in crude supplies. in fact we're at levels we haven't seen since 1990. it wasn't as big as from the industry report and we saw draws in the refined products. also keeping our eye on gold. that is the commodity to watch over the next 30 minutes or so into the close. and gold prices right now are trading right around where we started 2012. so basically giving up nearly all of the gains for the year. we'll keep our eye on that for you. back to you, tyler. >> sharon, thanks very much. to jimmy now. nat gas prices flying today. how do you play it, jim? >> there's a couple ways. nat gas story started quietly a couple weeks ago and each day gained steam. the reason i started buying is because i read articles about coal plantings switching to gnat gas. investors to buy the ung, i started buying that -- we knew it had to put in a bottom. wlie be surprised when it does?

i also like rgp. regency energy partners. in the last week and a half it was hit going ex-dividend and somewhat earnings. it's lost quite a bit. it has an 8% yield and that to me still looks pretty good. >> couple good ideas there, jim. one of the biggest investor conferences is underway in vegas. top names all under one roof. gary is part of team cnbc in vegas. gary, lots to talk about here. let's start with europe and how nervous people are about it. >> well, in one word, ty, with two words, i guess, deja vu. i think people cannot believe that here we are a year later and especially given what was done with the ltro in europe in december that we're once again talking about whether or not there's going to be a default. and if so, will it be an orderly default. a bit of deja vu. a lot of people thought we were over this months ago. >> roubini, surprise, surprise,

i suppose saying he doesn't think that the eurozone will be constituted as it is today inside of a couple years. explain. >> i was at that dinner last night. nouriel very opinionated there. that's no surprise. he is among a group of people who believe there is no way that breaking up the euro can be done in a way that will not create some sort of domino effect. there are many others on the other side that believe nflt it can be done in an orderly way. that's what makes a great bull/bear debate. nouriel obviously with a strong opinion. >> thanks, gary. we'll check back with you later throughout the day. sue. >> let's get to the bottom line on that for europe. with a man who's trying to get it fixed, a new segment on "power lunch" we call santelli's collusions. rick, in brief, how would you fix it? what would you do right now? >> well, you know, i'm going to use some of my floor population.

yesterday we were talking about one possible fix for europe and it revolves around gold, but maybe other commodities. have bonds backed by gold, or silver or maybe even oil. because at this point the fiat paper makes many nervous especially some of the paper in the periphery countries. >> right. >> another area, and this is an old one, sue, job reform. you know, there's still issues where, you know, you have to convert temporary into permanent workers after a certain period of time. we need labor reform in much of europe. this is much different than the u.s. we saw it happen in germany and we saw very positive results. if you make it difficult to fire people, you make it difficult to hire people. now, collective bargaining, that's a common denominator in the u.s. and europe. a country like spain 80% of their workers are effected by collective bargaining. big conflicts, big cost issues. in spain in particular because we're talking spain, one-third of their unemployed are industries related to housing.

like the u.s., they've had a huge housing bubble. if you want to bring jobs back, similar to the u.s., we need to do what we talked about with sullivan yesterday, job training. throwing money at people in construction that's probably not going to come back is a structural problem. we need to move those unemployed into areas where there's better job potential. >> some very good ideas, rick. thank you very much. all right. i just noticed we're about 25 points off of the low of the day when we came in here on "power lunch." so brian shactman has a market flash for us in a market that seems to be improving a built. >> yes. a stock off its high but quite high. look at shares of metro pcs briefly halted right after noon eastern time and then resumed trading again you see it up 16% plus. there are reports that deutsche telecom talking about a possible merger between t-mobile and pcs. that being a big spike in the stock. pcs came out and said basically we don't comment on rumors but the report said a stock and not a cash deal would remain a

public entity and deutsche telecom would retain interest. pcs is in play and giving spike to others like sprint and leap wireless as well. tyler, to you. thank you very much. by-product of the mess in europe is showing up in mortgage rates here. diana olick with that story from washington. diana. >> well, that's right, tyler. it's because they follow the yield on the 10-year treasury. it all goes together. so the mortgage bankers reporting average rates on the 30-year fixed at 4.01% last week. that's the lowest on that survey. on bankrate.com the overnight rate hit 3.87%. rock bottom rates are not juicing mortgage applications much. weekly applications up just 1.7% with refis up only 1.3%. purchase apps up over 3%, but down on a four-week average. now, the mortgage bankers say this year they expect the lowest volume of business in five years. that's thanks to a big drop in refis. offsetting low rates are higher fees. it's fha, big banks, you name

it, it's all there. there has been a surge in refi demand recently thanks to new changes in a government program, but it still should be higher. for purchase apps, 32% of home sales this year were all cash, that according to a new report from realtors up from 29% in q-4 of last year. sue. >> diana, thank you very much. toyota's growth engine's firing on all cylinders. earnings jumping more than five-fold. profits expected to triple this year. stock's been in high gear this year as well up almost 20%. not bad. phil lebeau is behind the wheel for us with more. hi, phil. >> sue, we talk about the earnings earlier this morning, but the real focus, the projections from toilet for all of the fiscal year coming up, and take a look at the numbers they're putting out there. fairly impressive. especially you look at the volumes they're projecting. global sales almost $9 million. north america up 26% and a full year profit that will be essentially triple for what they posted for this year. when you look at their sales

twor, two areas of growth. north america the prius, look for about 300,000 in the u.s. in asia they expect sales to rise 34%. not a whole lot in china. when you look at where toyota is in terms of their brand globally, these are new numbers from ihs within the last hour. toyota number one last year. 6.41 million for the brand. sue, those are new numbers there. toyota expects the brand to sell over 7 million next year. sue, back to you. >> phil, thank you very much. all right. let's take a look at how toyota is fairing against their main rivals in the last year. toyota is down the least followed by honda, ford and gm down the most by some 30%. ty, over to you. >> sue, thank you very much. electronic arts expecting a weak quarter. we're going to head here from rival maker game act vision blizzard had a choppy ride this year. there you see it down a little bit. it's been up and down a lot.

pretty much gone nowhere over the year despite those ups and downs. julia boorstin with a look at what you need to know ahead of their results. julia. >> tyler, call of duties game sales and world of war craft subscriber numbers will be in act vision reports in just a few hours. shares of the largest video game maker are off about a percentage and a half. investors watch as electronic arts struggles to compete with social games like zynga's farmville. expected to report $556 million in revenue down 26% from last year on 71% lower earnings per share of 4 cents. that's coming up against tough comparisons to last year ago's call of duty black ops. the stock is sure to move on guidance after hours. those numbers will be based on performance of diablo 3. listening very closely for any information on presales because the company might already have a

sense of how well it will do as well as any commentary on their move into mobile gaming. >> julia, thanks. look at shares of pfizer at this point. the stock is down just about 0.5% at 22.10. the fda advisory panel is meet gt right now and reviewing the experimental arthritis pill. seema mody has more on that. >> that's right. pfizer is currently making the case for approval of its novel pill to the fda advisory panel. later this afternoon the panel will run through a series of votes and provide their recommendation. if approved, this drug could compete with the injectable drugs currently on the market. bottom line, if the fda advisory panel recommends approval, pfizer has a chance to add a significant amount of revenue to its top line. sue, back over to you. >> seema, the shareholder spring is in full effect down in charlotte, north carolina, right now. check out some video that we had earlier.

protesters being led away from b of a's shareholder meeting. if you think that looks contentious, wait until you see what's going on inside. before the break, five of today's biggest losers. goodyear tire topping the list almost 4% followed by gen worth financial. back in a minute. ♪ why do you whisper, green grass? ♪ [ all ] shh! ♪ why tell the trees what ain't so? ♪ [ male announcer ] dow solutions use vibration reduction technology to help reduce track noise so trains move quieter through urban areas all over the world. together, the elements of science and the human element can solve anything. [ all ] shh! [ male announcer ] solutionism. the new optimism.

welcome back to "power lunch." brian shactman here at the markets desk where i'm looking at kimberly clark touched an all-time high today of $79.35. to put the gains in perspective, this is a yielder of about 3.7%. it's up about 8% year-to-date, which is almost the same as the s&p, but the yield is higher so it outperforms the s&p year-to-date. so slow and steady doing okay. back to you, ty. >> brian, thank you very much. police in charlotte, north carolina, keeping protesters at least four blocks away from the annual shareholders meeting of bank of america. protesters hit the streets early this morning, but police in riot gear were ready for them. so far no reports of mass arrests and no reports of injuries either. now to the contention inside the convention hall. brian sullivan with more on the shareholder spring down south in charlotte. >> nothing says anger like a giant paper ma sha hat. remember that, tyler. >> like the burger king guy. >> i'm against protesting, i just don't know how to show it. as funky as it looked outside, got heated inside as well. shareholders large and small made their opinions known, many

of them not happy. big shock there, right? high on the agenda, anger over b of a's loan modification process as well as management's refusal to review it. also on the agenda, what else, the stock price down 36% in the past year. now, ceo brian moynihan banging the gavel on this meeting after two hours even though, tyler, shareholders still had a lot more to say. one shareholder described himself as a former merrill lynch employee told moynihan "we were hoping for a ceo with strength who knew when to be contrite, instead, we got you." here's the best part, all votes went in favor of management including 92% approval on the executive pay package. boy, they're yelling, but they're not voting. >> yeah. they talk the talk, but not walking the walk. >> and he's walking out a ceo. he survived. and management basically has what they had before. >> his name is brian. >> hard to keep track of.

>> brian, thanks. sue. >> gentlemen, chesapeake energy getting into new trouble. now it's the use of its private jets being called into question. "the wall street journal" says the shareholder of the embattled natural gas giant says chesapeake is misleading investors accusing the company of understating the cost of personal jet travel given to top executives and also to outside directors. the paper says it could be by as much as $10 million a year. according to the faa, the company owns fractional shares in more than 20 different jets including a high end gulf stream. ty. >> there's a brand new and very optimistic report on american housing out today, sue. and we will have it for you. plus, see what analysts are expecting from tesla motors and whether it might be right for you to get into that stock now. all that and more when "power lunch" returns in two minutes. s. [ male announcer ] it's simple physics... a body at rest tends to stay at rest... while a body in motion tends to stay in motion.

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welcome back to "power lunch." back to the housing numbers game. we told you that interest rates are falling to record lows, but the other half of that equation is that home prices may actually be set to rise. yes, you heard me correctly. diana olick is back with those numbers. that's somewhat encouraging, diana. >> it is. home prices are improving, which is not to say they're rising yet, better to say they're stabilizing. several reports out today. first the realtors quarterly report saying home prices rose in 74 out of 146 metro markets

in q-1. that's only half, but it's up from 29 areas with improving prices in q-4 of last year. we'll take that. tight supply of home sales especially on the low and distressed end is helping prices. inventories overall were down nearly 22% in q-1 from a year ago. again, according to the realtors. if you look at some of the hardest crash housing markets, that's where you're seeing big gains. six out of the ten markets that fiserv expects to rise had price drops more than 50%. they claim prices will stabilize this summer and overall rise nearly 4% a year, that's a year, over the next five years. thanks largely to investors. now, the realtors say the investor in all cash shares of home sales continue to rise and will rise through the spring likely into the summer. tyler. >> diana, thank you very much. let's go to the new york stock exchange now and simon hobbs with breaking news. >> we've got news coming through from the 17 members of the eurozone, 16 more accurately.

they have decided tomorrow they will give greece a $6.8 billion that they had previously agreed. that means greece will be able to pay some of its government bills next week. it means it will be able to repay the half billion euro of debt that comes due. it's an indication that the rest of europe is giving greece a little bit of room. they're sticking by their agreement, they're sticking by the deal, tyler, as it stands at the moment. we're also getting a lot of pressure from the germans, from the members of the ecb to say if they don't carry on with the austerity, then they will not get further payments. for the market it clarifies where we are. we now know that the next action from any government in greece must be in june. that's when they have to enact 10 billion of euros of austerity measures. the question is can they get through the process of trying to form a coalition in the fractured state that they are? if not, can they have another general election and come through with the goods for the rest of europe in terms of voting for austerity in the two

main parties before june. june now appears to be a cutoff point. we haven't seen a huge reaction here down on the floor of the nyse. back to you. >> a lot of moving parts, simon. little carrot and little stick there. let's go to brian shactman for a market flash. >> fascinating dynamic, tyler. thank you very much, courtesy of breaking news producer robert hum, gold is down again. gold stocks usually follow with it. that's not the case today. almost all the gold stocks are up on strong volume. you have new mont, bar rick all up strongly on good volume. back to you, sue. >> thank you, brian. the market is starting to better itself a bit. now down only about 44 points on the trading session. some may be linked to the news on greece. we are counting down to the closes in the metals market. gold back off of its lows but down again today. when we come back, a live update from the nymex on the final floor trades of the day.

as we mentioned earlier in the show, gold's having another tough day. off of its worst levels, but we hit lows not seen in more than four months.

the close is happening right now. and sharon epperson is tracking the action at the nymex. i wonder whether the news out of europe will help going into the close or hurt going into the close, sharon? >> well, it looks like it's helping, sue, as the euro has stabilized a bit, we are looking at gold prices that have cut their losses for today by half. we're down about $10 it looks like here for the close around $15.94 an ounce. keep in mind traders talk about the fact in 2008 and 2009 -- rather 2010 we saw this reverse correlation between gold and the euro. now they seem to be trading in tandem. traders are wamping the euro carefully for what happens to gold prices. we are looking at support right in the upper range of 1500s. keep in mind we ended 2011 right at 1566. also keep your eye on silver. even more weak than gold again following that euro connection. back to you. >> thank you very much, sharon. stock market's improving itself just a little bit here. we've rallied about 20 points

off of the lows of the trading session. nonetheless, the dow may post its biggest weekly loss so far this year. industrials, financials, transports some of the biggest losers. let's get to the trading action. bob pisani is here. it's impressive we've been able to rally off the lows. >> 20 points as we had the announcement that greece will get the next tranche of that aid 5.2 billion euros. it's getting better throughout the day. in fact, we're at the highs of the day essentially right now. i want to point out that the natural gas stocks are finally showing some life. this has been months in coming, but it's relatively pure paying natural gas stocks like cabot and southwest and ultra doing well. apache has oil as well as nat gas in their portfolios. the point is all this group is doing well. one thing i'm worried about transports are continuing to

underperform the market. that's telling us still there's worries about the global economy. >> thanks, bob. appreciate it very much. ty, back to you. >> sue, thank you. we heard from toyota, the auto giant blowing away earnings estimates. tesla now gearing up to report after the bell. the stock hitting a 52-week high recently. phil lebeau back with us with what investors need to know ahead of those results, phil. >> tyler, it's all about the conference call and about where tesla stands with its next two models. here are the numbers to expect after the bell. again, people aren't really payings attention because there's not a lot of volume there. what people are focused on, what tesla has to say about the model-s. it's the next model starting in the high $50,000 range. it comes out -- the rollout is expected by july. whatever color they give us in terms of whether they're on schedule, orders, deposits, that's what people will be looking for as well as any color we hear from ceo e lan musk

about the model s. it's all about the conference call with tesla. >> phil, thank you so much. cisco also reporting after the bell today. analysts are looking for 47 cents a share, $11.58 billion in revenue. the stock is now down more than 7% in just the past month. it is up in the last year, however. but look at the stock against the nasdaq in the past two years. not a great performance. down some 25% while the nasdaq is up some 30%. maria bartiromo will be asking some very tough questions, as she always does, today on "closing bell" she will be speaking live with ceo john chambers. ty. >> sue, thank you. let's head to jim iuorio now about tesla and cisco. why don't we start with cisco? how do you trade it? >> i got out of my shorts in cisco today. we've been talking so many things over the last week, one thing we have on the background is earnings tend to be good. cisco with the 7% downturn, the risk now to me seems to be to the upside. when the dust settles in the

overall market, i would be okay with being long a little bit of cisco. they have cash and they make money too. >> let's look at tesla. when i think tesla, i think tucker, but maybe tesla's one that will breakthrough. >> i like tesla. they might be the story of the future, but i honestly don't think they're the story of the present just because the product is too expensive. >> jim, thank you very much. u.s. retailers looking to china for growth. the question, will it work? stacy woodlets, president of sw -- what does it stand for? i wonder. she's live at a key conference in london. stacy, good to have you with us. why is china so important? and can it deliver on what everybody seems to think it will, and that is be the sort of tide that lifts these retail boats. >> right. so last year at the same chinese luxury conference everybody was touting china as the savior. going to offset u.s. slow

growth. and this year things are not as bullish certainly at the conference. if you look at europe, certainly we heard from fossil yesterday. things are terrible. even luxury is coming down here. so the question is, can chinese strength offset it? the simple answer is probably not. most u.s. retailers have very small exposure to china. it's only about 10% of business. >> so relatively small. so who is most at risk? which companies? >> so the companies that are most at risk are the european companies, actually. so if you look at a burberry, they have 41 exposure in europe and then china, which is about 10%. so really china is just not big enough to offset the weak bs in

europe. >> stacy, thank you very much. let's head to brian shactman. >> ak steel had a full reversal after announcing they're raising prices on their carbon steel products. passing along some cost pressures to the consumer or the corporate industrial customer. either way people see that as a sign of some strength. it's been a tough year for steel. sue, back to you. >> brian, thanks very much. i want to quick reset the markets and look up at the board. we're down just only 30 points now on the dow jones industrial average. we've paired our losses by another ten points or so. we were down only 20 points a few minutes ago. and utilities are positive and volume doubling the down volume. looks like the internals are improving. let's get up to date on the headlines. 1:35 p.m. on the east coast. shares of dean foods flying today. the top dairy company hitting 52-week highs after beating profit estimates. best buy trading at lows not seen since december of '08. and radio shack trading at

all-time lows back to january of 1968. there are some bright spots if you look. disney, hershey and spice maker mccormick all hitting new all-time highs at one point in today's trading session. ty. >> thanks, sue. a rare move for american ceos sending an open letter to treasury secretary tim geithner. one of those chief execs is here next to tell us what they want and why. plus, rupert murdoch's news corp. invoked in scandal. why in the world is the stock up? answers when we come back. of how a shipping giant can befriend a forest

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ty. >> sue, thank you. news corp reports numbers after the bell today. accused of being unfit to lead his own company. you'd think news corp's stock would be hammered in all this. but check it out. it's actually up about 8% this year. so why? kayla tausche knows. kayla. >> well, ty, last july news corp announced a $5 billion buyback for the next 12 months to divert cash and show investors the weakness from the phone hacking scandal was actually a buying opportunity. as news corp shares stayed range bound, they spent $2.5 billion or half the program buying shares at an average of $16.77 a piece. but this year as news corp shares have risen, s.e.c. filings show the company is still buying. those relentless headlines from london hit the shares premarket and they deemed the stock a buy once the u.s. day opens.

january was slow going. if you look at this chart, activity occurred on roughly half the days of that month. each time targeting about 500,000 shares and spending about $10 million a day. but in february, buying occurred nearly every day rising to a million shares a day, doubling spending as inquiry ramped up with the police commissioner testifying with "culture of illegal payments at the sun" and james murdoch leaving. in march they bought every day but the first ramping up again in the first week and then again on march 13th following the second arrest of rebecca brooks. in early april james resigned as board chairman at be sky be. share buying spiked on the 10th of april at 1.25 million shares just that day. and on april 19th, a uk parliament committee announced it will publish its hacking report calling the elder murdoch "unfit to run the company." buying on that day doubled and

would stay above a million shares a day for the rest of april. of course market rumors about the murdoch stepping aside, newspaper earnings have sure lu moved the stock as well. but the move upward and constant buying means investors hope to push for evidence for change won't get any and perhaps the new criticism is the company's draining $20 million a day on its own stock. tyler. >> fantastic reporting, tkayla, thank you very much. ceos writing a letter to tim geithner not to raise capitals and gains saying it's going to hurt our economy and job growth. john harwood has more. hi, john. >> hi, tyler. you know, warren buffett may be echoing the administration's tax priorities around the country and the administration cites that constantly, but many in business are very concerned about what's going to happen if the bush tax cuts expire, iran administration gets its way on capital gains and dividends. look at the targets the administration has set.

current rate of 15% on capital gains would go to 20%. current rate of 15% on dividends would go all the way up to 39.6%. that's the top personal rate. so you've got 18 ceos now sending a letter to treasury secretary geithner saying if this happens it could spark a new wave of volatility in financial markets and reduce america's competitive edge overseas. so this is going to be a talking point in the campaign throughout the year. the administration says it needs the money to finance some of its spending priorities. and republicans are going to be hitting them hard. >> john, thank you very much. go ahead, sue. >> thanks, ty. joining us right now is one of those 18 ceos asking secretary geithner not to make the move on taxes and dividends. he is president and ceo of american water. welcome, sir, to "power lunch." nice to have you here. >> great to be with you. >> you make a number of points in the letter along with your fellow ceos about why you think this should not happen, how it might derail u.s. economy. but of those points that you make, which do you think is the most compelling?

which do you think will resonate the most if any of them do with the treasury secretary? >> well, it's hard to narrow down to one. let me just do two very quickly. the first is the potential of putting at risk the economic recovery and reducing the amount of capital that can be invested in critical infrastructure in the united states and promote development overseas. the second one i think is the recognition that on the dividend side many working families and retirees count on that income stream as part of their critical cash flow. and i think putting a tax on it at this time not only impairs their ability to have the income that they need to live on, but also reduces the amount of capital that can be invested in critical infrastructure. >> we tend to use the tax code -- or congress does, to encourage things it wants to encourage and discourage things it wants to discourage. but here it would seem as though congress is using the tax code to discourage something we ought

to be in favor of, namely investment. but let me try this out on you because it happens to be my opinion on this. i believe that we ought to tax income once and ultimately we ought to get to a system where all income -- all income, is taxed the same. no advantage for capital gains, no advantage for dividend, but lower rates on everything. >> on a personal basis, i got to tell you, i'm a fan of a well-considered flat tax. the difficulty is we don't have that. and so to start to try to take dividends back up to an ordinary income tax rate under today's tax code when it already is subject to double taxation is going absolutely in the wrong direction. i agree with your premise at the start. >> you make the point in the letter basically that you think that this tax, if it does indeed go through, would inhibit job growth and lead to a destruction

in the job market. how so? >> well, let me give you an example that's personal to my company. i'm largely in the utility business. we serve 16 million customers, water and waste water, throughout the country. we are spending $4.5 billion to $5 billion in critical infrastructure upgrades over the next five years. the limitation that i've really got on that level of investment goes to the rates that people will pay. if we have to pay more for capital, in terms of a cost of capital, that means i can invest less and hire fewer people to get the same done. because i've only got so much room that the regulators will allow and the customers will say, yeah, i'll pay that for your service. so what it does when you increase the cost of capital is it takes precious capacity away from other things like investing in critical infrastructure. >> do you believe fundamentally that our deficit and debt problems overall can be solved

without raising revenues? >> on a personal basis, i believe that there may be a need for some revenue raise over time. but the proportion that needs to be done off any revenue raise versus that needs to be done off cost mitigation, cost control at the federal and state side, is vastly heavier on the latter. >> we appreciate you being with us. let's head to jim iuorio to ask him how he's playing dividend stocks in light of this looming matter, which could mean that your tax rate could go up to really above 40% on dividends when you throw in the 3.8% surcharge or tax on medicare that's coming. >> i just can't imagine they're going to pass that tax. so i'm playing it as if it's not really going to happen. there are three dividend stocks i'm looking at today. i've been looking at a lot of dividend stocks over the last year. i like campbell soup today, it's

a bunker trade metaphorically for seeking safety. they make soup. this next one, apple as a dividend stock. we have to get used to talking about it that way. the reason i like them is essentially because they're apple. they're on the cutting edge. they have a ton of cash and they've come off a little bit. i think it's a bargain and the multiples aren't that bad. third thing, merck, i like the sector of health care. it's one step out and people might start moving out there. they pay healthy dividend from a technical aspect coming into a trend line. back to you, sue. >> thank you very much. brian shactman with a cnbc market flash. >> seems a daily occurrence i look at first solar because it seems a daily occurrence it hits an all-time low. today hit an all-time low of 16.05 and interestingly bounced off of that and had a full reversal and leading the nasdaq 100 right now. just went positive a few minutes ago. perspective on first solar,

tyler, a year ago this stock traded at $130 a share. now it just tipped over $17. >> brian, thank you. coming up, the irs could end up refunding more than $25 billion to tax id thieves in the next few years. the outrageous case of your tax dollars going missing, next. look, every day we're using more and more energy. the world needs more energy. where's it going to come from? ♪ that's why right here, in australia, chevron is building one of the biggest natural gas projects in the world. enough power for a city the size of singapore for 50 years. what's it going to do to the planet? natural gas is the cleanest conventional fuel there is. we've got to be smart about this. it's a smart way to go. ♪ a living, breathing intelligence helping business, do more business. in here, opportunities are created and protected.

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power run down time. brian sullivan joins us. jim iuorio is with us. first irs watchdog claims the agency missed billions in fake tax refunds, thieves using stolen identities. it could cost you $26 billion over the next five years. surprised? >> no, i'm not surprised by the irs making mistakes. but please don't audit me. what i am surprised by is this, 940,000 tax returns were filed last year with fake names or identity thieves. 940,000. there's a lot of crooked people in america. >> i bet most of them, jim, requested a refund, right? >> i'm sure they did. >> we can assume that. >> i don't think there's a lot of checks being written. >> 100%. >> i don't have to research that

at all. i think realistically this is a symptom of the whole. everything is too complicated. the tax code is too complicated. we talk about a flat tax, i'm not sure that's the right way to go, but those sort of things to simplify it makes it easier to monitor. >> i get angry when i hear things like this, when i hear things like medicare fraud costing half a trillion dollars. people ripping off the system. >> all we hear from the president is raise taxes on the 1%. >> if we could get those moneys taken care of, we wouldn't have to raise -- >> stop making mistakes. >> next, priceline reporting after the bell. shares hovering near a 52-week high. jpmorgan raising target to $810 on priceline. "street signs" has a key analyst on the stock in the next hour, but it's a topic number two for us right now. priceline just keeps on clicking. is it as good a company as apple? does it deserve those kinds of price sns. >> mandy and i are going to ask the analyst. i dug into the numbers, i think

priceline seems small here. i think of them as the name your own guys. they're huge in europe. by far biggest internationally. their net income, tyler, has gone from $140 million in 2007 to an estimated $1.6 billion this year. valuation a little more rich than expedia or orr bits, but they've been killing it. and the stock's been killing it. >> the problem i have is ease of entry into this business. i know it's not like we can start it up today. but it's not that difficult. they shouldn't be compared with apple. i'm not shorting it because i've learned my lessons from the green mountain coffee thing, i've shorted it twice and lost my money. but i think it smells like a bubble to me. >> smells like a bubble to you. >> what do bubbles smell like? >> former lead singer of "the village people" wins a court battle to reclaim the rights to that '70s -- there it is, disco anthem. let's listen. victor willis, in case you're wondering, he was the policeman in the group, will hopefully

give him a shot at millions in royalties that that song has generated over the years. i say young man, what do you say to that? >> it's y.m.c.a., give it a v. for victory. victory for artist that probably got taken advantage of when they were young artists, right. tom petty has now filed a request. you're a struggling singer, the music business changed but back then they had all the power. you got nothing for your music. big win for musicians. look at that boogy down. i can see you -- >> the beatles, stones and village people, they've created a great joy for me over the years. >> jim, i like you, but never ever again put the village people in disco -- don't even associate them. >> do not put the village people with the beatles or stones. >> let it bleed. >> we'll leave it there, gentlemen. thanks very much. young man. all right. this story still getting everybody fired up. bank of america's offer to cut the principle on some underwater

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just a few moments ago i mentioned that the market tone had improved. indeed it has especially for the nasdaq which is trading in the green in today's trading session. not by much, but we'll take it for those bullish on this market. as for the dow jones industrial average it is now down about 29 points on the trading session. kind of stuck in a range between a loss of 20 and 30 points. we've been seesawing back and forth for that. in terms of s&p, last trade on that down just about 1.75 points on the trading session. ty, looks like things are better for the bulls. >> nasdaq right on the knife's edge. jimmy iuorio, what are you buying here? >> it's going to sound boring, but i like southern company, utility. and i like clorox. i think that's where money's going to go to. >> good stable good companies. ring around the collar for you. good