mortgage backed trades over everything else. >> okay. that does it for us live here from the salt conference in vegas. don't forget to catch more fast tonight at 5:00 p.m. follow me as always on twitter. and "power lunch" begins right now. half-time is over. "power lunch" and the second half of the trading day start right now. >> and we have quite an hour of power for you. talks to form a greek government fail again. so is this the man that the world financial community needs to fear right now? michelle caruso-cabrera is speaking exclusively to the greek socialist leader now leading the greek polls. two other power players causing some great controversy this morning on cnbc. number one, mr. dotcom. why henry wouldn't touch facebook with a 10-foot poll. and then steve rat ner, he says investors shouldn't buy individual stocks ever. i'm sue herera with simon hobbs down at the nyse. and tyler mathisen is at a special mutual fund conference

in washington. we'll hear from ty coming up. but first, breaking news on greece. the third greek leader this week to try to form a government says he's closing in on a deal. but this greek drama is far from finished. michelle caruso-cabrera just finished speaking exclusively with greece's new most popular leader. but he would not be included in this particular government. michelle. >> no. it is confusing. the man i spoke with this morning is alexis tsipras. we care about what he has to say because now according to dow jones, there are new polls today showing he is the front-runner if there are new elections in june. tsipras caused turmoil in the financial markets this week when he said in his opinion the greek bailout program is null and void. that led market participants to believe that greece could potentially leave the eurozone and return to its own currency. when i spoke with mr. tsipras this morning, he reiterated he does not want greece to leave the euro. instead, he made it clear he is willing to play a very high stakes game with the european union using the eu's intense

desire to keep the eurozone completely in tact in order to try and renegotiate the bailout agreement. he wants a different bailout package. one that restores pension and government salaries to their previous levels, one that restores the union's negotiating powers, restores collective bargaining rules, he wants more help from the european union either in bonds or direct lending to greece from the european central bank. i asked him how far are you willing to go? are you willing to have greece leave the euro? he wouldn't answer directly but said only very far. most of the interview was done in greek with a translater. i asked him if he wanted to tell an american investor something in english, what would it be? here's what he said. >> try together to. [ inaudible ] the austerity measures because i think the future of europe and the future of the whole world is not austerity. and i think that the future is not this barbarian way the greek

people went over the last years. >> he frequently refers to the austerity measures as barbaric. sue, we posted a profile of mr. tsipras based on an interview i'd done with him earlier in the year three days ago. it's been our most popular story for three days. if you want to read it, cnbc.com. you can have a lot more detail about what he believes should be the future of greece. >> michelle, thank you so much. let's go to kate kelly with breaking news. she's at the las vegas salt conference. an update on the yahoo! controversy. kate. >> thanks so much, sue. so just out is the latest press release from third point, daniel loeb's hedge fund, which has gone active on yahoo! and demanding the resignation of their ceo, scott thompson. they're reacting to news from ya hah hoo that they've set a record date now take place some time this summer, should be within about 60 days or so. the record date will be may

17th, which means shareholders in yahoo! or potential shareholders only have until may 14th to purchase or sell shares as they may see fit. of course loeb is urging people to buy shares or make sure that they have their shares at least through that date so they can vote in his favor and get some new directors on the board. and in his view get some value restored to the company. so, simon, you know, yet another sort of incremental move, but actually gives us a sense of what the timing will be on this meeting, which has been an open question. and really remains so. we just know that it will have to probably be within this two-month ban now. >> thank you very much. kate kelly there on yahoo!. another story with a very different take on facebook this lunchtime. one of the analysts that controversially helped the tech run up in the '90s with his bullish calls. he sounded a very different tone on facebook on "squawk box" this morning. >> would you buy into this ipo? >> no. >> you would not? >> no.

this is muppet bait. >> this is muppet bait? >> everybody knows about it. they're so excited. it's waited to go public. muppet bait. here's one big difference between facebook and google. google went public in a much earlier stage. they were still growing rapidly. facebook, the business is decelerating fast. >> henry blodget this morning. kayla tausche has been following the facebook story for us. how excited is wall street about facebook? do you hear this pessimism often? >> wall street's been building the bull and bear cases since the prospectous hit three months ago. investors i spoke with new york and boston want an end to the deal not because they thought it was a company worth 100 times earnings, but because they viewed it as a deal of a generation where growth -- unpredictable growth could be block buster and one of those areas was mobile. more facebook users using smartphones to poke and to like.

monetizing would be key, but it would be uncertain. and even facebook said as much itself. >> we believe mobile usage of facebook is critical to long-term user engagement. expect usz to invest heavily in our mobile product experience even if mobile montization will take time. >> the problem what was once a growth prospect is now categorizing as a revenue risk and waiting for the last diz closure before the ipo to do it. silicon valley investors have more of a stomach for tech and revenue risk. you can't decide anything about the price there just yet, but a lot of people hanging their hats on that disclosure and what it means for a risk factor. >> kayla, thanks very much. jim iuorio is with us. jim, if you could get your hands on facebook stock at the ipo, would you be a buyer? >> no. i wouldn't. it's always been a good business for me particularly to sell hype. no matter how much you love facebook, you have to admit that

some hype price premium is built into that price right now. i wouldn't touch it. plus, ipos in general when they don't have any sort of history as to chart for the technicals, you don't have that tool to lean on too. something like this a little more like gambling. i wouldn't touch it either. back to you, sue. >> jim, one more bit of controversy we would like you to comment on or weigh-in on, steve ratner, the chairman of will et advisors had this to say about the individual investor. listen. >> i'm not saying whether facebook is good or bad. i'm saying individual investors shouldn't be playing the stock market anymore than you should take out your own appendix. >> do you agree? given the dark pools that are out there, the flash crash, you know, the trading that's going on and the volatility, do you think he's right? >> i couldn't disagree more with him. if he spent one day on my twitter group, he'd see the sophistication and insight that some of these stay-at-home traders have.

the technology available to them is amazing. i'm not for one second saying everybody should quit their accounting job and become a day trader. that's ludicrous. but there are plenty of people that trade well. i think it's a silly thing to say. >> simon, you heard it. >> breaking news from the bond market. let's get to rick santelli in chicago. >> thanks, simon. we just auctioned the long bond. and it was the best of the three auctions by a wide margin. the yield 3.09. it was trading around 3.11 in the went in issue market. internals, $2.73 chasing every dollar's worth of securities available. that was the bid-to-cover. 10 auction average of 2.66, 33.8 indirects, 3% better than the 10-auction average. a little light on the directs at 15.84. 18%. that means dealers took about 50.8%. this is an a minus without a

doubt the best auction of the three. sue, it's all yours. >> thanks a million, rick. to brian shactman and a market flash. >> it wouldn't be a good "power lunch" without another reference to green mountain coffee. take a look at the intraday chart of gmcr. tyler's interview with starbucks ceo was asked about their new high pressure machine that's coming out and howard schultz said it will not compete with the k-cups. you saw a spike in green mountain. it went positive. then investors seemed to say, well, maybe not. back to you. >> that's putting it mildly. thanks very much, brian. politics in washington also an overhang for the markets lately. specifically new worries about taxes on dividends and capital gains which could go up at the end of the year. now a warning from the federal reserve. don't look to us to cushion the blow. here's our senior economics reporter, steve liesman, steve. >> yeah, sue, as washington and wall street increasingly focus on this fiscal cliff that's coming, the message from the fed has been pretty unanimous. fix it yourself and don't look to us to bail you out of what is a perfectly predictable and

fixable problem. doves like chicago fed president charlie evans and hawks like richmond fed president jeffrey lack er put it on as major headwinds for the u.s. economy and they both want to see the fiscal side, the administration and congress fix it. but they differ on how the fed could react. lacker says the impediments to growth are factors which monetary policy is not the remedy. monetary policy will not reduce regulatory and fiscal uncertainty. fed chairman ben bernanke has not ruled out more quantitative easing, but he talked down that possibility in relation to offsetting the fiscal cliff at his press conference two weeks ago. >> if no action were to be taken by the fiscal authorities, the size of the fiscal cliff is such that there's i think absolutely no chance that the federal reserve could or would have any ability whatsoever to offset that effect on the economy. >> bernanke fears a repeat of

the debt ceiling debacle in august which he believes was a serious setback to the recovering economy. his comments suggest he doesn't want to let the fiscal authorities believe the fed's going to step in and clean up the mess. he has repeatedly expressed his frustration that too much of the stimulus burden has been placed on the fed. sue. >> thank you very much, steve. so, jim iuorio, come in here. how do you think we should play the stock market at this point if indeed we do not see more qe or a qe-3? >> the first part is i don't think the stock market agrees that qe-3 is off the table. and as evidence, i put the fact that it didn't really spill out that hard over the last couple of days with the european crisis intensifying. to me it seems people still think it's there. they have the luxury of talking hawkish as long as the last six weeks of numbers stay in the disappointing range. if that starts to progress towards awful numbers, i think it's back on the table. the thing at the end of the day it's the chairman, janet yellen and bill dudley are still ten towards dovish. so if i believe there's going to

be a qe-3, i would get into the canadian dollar, fxc is the etf for the currency, if for people who don't think and believe what the fed says, i think then it's probably time to sell silver. >> jim, thanks. simon, over to you. >> yeah. let's talk about some of the single stock story ths lunchtime. the fda is about to review a new fat buster drug tomorrow. arena pharmaceuticals is behind it. the stock as you can see has more than doubled. more than doubled in the past year. seema mody is live at the nasdaq with the latest. seema. >> simon, shares of arena are currently halted as the fda advisory panel reviews arena's obesity drug. there's a lot of anticipation behind this vote given the fda usually follows the recommendation of the advisory committee. obesity is a growing epidemic in the united states effecting more than 30% of americans thus the demand for a drug that is safe and effective is at an all-time high. the last time an obesity drug

actually hit the market was over ten years ago. three companies that are racing to get their anti-obesity drug on the market include vivus, arena and orexigen. the stock is up better than 30% this week alone and up 90% year-to-date. clearly a lot of people buying into the stock thinking that its obesity drug will get the green light. back to you. >> and we should point out that arena has more than doubled. if you picked up vivus, you also have done already well. that stock up 130% so far this year. thank you. let's move on. take a check on where we are with cisco shares today. the stock getting hammered on the comments we had last night from ceo john chambers on the outlook of course chiefly from what is happening in the public sector in europe. we currently trade at $16.96. sue. simon, coming up next, a very tough assignment for any cnbc reporter, but we sent gary

kaminsky accepted the assignment and he has followed the money all the way to the vegas strip. see what the big money guys are saying when "power lunch" comes right back. ght back. today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers.

welcome welcome back to "power lunch." brian shactman here at the markets desk. take a look at an intraday chart of salesforce.com. it is down more than 7%.

a lot of that weakness has to do with the weakness in cisco. but there is some analyst defense coming. raymond james says buy the dips here. ubs has come to the defense of the name, but it's obviously taking a hit. the volume on this stock, sue, triple the average daily volume already and we have a lot more trading to go. back to you. we're going to vegas, mike. >> vegas! >> you think we get there by midnight? >> we're going to be up by hundy by midnight. >> that was gary on the way to vegas. the only guy wearing the tie, by the way. filled with the big money players, so, gary, what are they talking about? what's the big scoop? >> sue, that was crazy. by the way a lot of your old friends behind me say hello. a lot of the chatter is about carlyle group. obviously a lot of private equity players are focused on what's happened there. the hedge fund managers placed a deal last wednesday, five down days in the market and finally broke the syndicate penalty bid of 22 yesterday around this time. let me point out that those that have bought the stock, bought

into the deal wanted to point out to me this company's going to report earnings middle of next week first time out of the box as a public company. what everybody will want to hear is what is the distributable cash as a public entity, how much of that will flow now to those public shareholders as it has done with the partners. i say stay tuned for this. i think they would be crazy not to have an upside surprise first couple of days out of the box as a public company. >> i would tenld to agree with you on that. overall, gary, are people optimistic out there? or are they worried? >> you know, i was just talking to kate kelly offset here, sue. and although there are a lot of these lingering european concerns and kate's going to be doing a hit on this later, most people are buying equities. and they're buying equities aggressively. they think stocks is the best opportunity to make money the next six months. >> it certainly isn't in the bond market anymore certainly. thanks, gary. >> even a lot of bond players are putting money to stock. >> that's interesting. that's a switch. say hi to everybody for me.

>> you got it. >> a lot more ahead. tyler is in d.c. with some of the biggest names in finance. ty. >> you know, simon, gary may be out there with the 1% or the 0.01%, i'm here in washington at the mutual funds annual convention, that's the 99%. 90 million individuals have accounts with mutual funds. i'll be talking to a couple of the big money managers when we come back. meanwhile, jane wells is talking calories in california. >> they call these boston cream. you know, this month dunkin opens its first doors in india, guatemala and california. do you guys like your donuts? we're going to talk later with the owner of this one franchise. how much it costs and what's the return on investment is later on "power lunch." er lunch." between listening to the numbers... ...and listening to your instinct duff & phelps finds the sweet spot

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between black and white answers... ...and 1,000 shades of grey duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. as you know, my partner, ty, is down in d.c. at the largest annual gathering of mutual fund industry leaders. he's joined of course by a very special guest. i miss you, ty. >> sue, thank you very much. miss you too. we're here with alan reid, he's the ceo and co-founder of forward management, the investment advisor for the four ward funds. great to see you. nice to have you back. >> great to see you, tyler. >> the top 1% of mutual funds get something like 99% of the fund flows.

that's another way of saying the little guy is doomed. you're one of the little guys, are you doomed? >> not at all. and we're actually glad to be some of the little guys. if you think about it, we're like the small american business. we're innovators, we're niche players. and we really drive the marketplace. we set the new standards. we've done that with alternatives six years ago. the big guys are now wanting to be us. >> your fund family, your group, specializes in alternative investments, not just long only. long short, real estate, boutique kinds of funds. is that the future of the fund business? will they all be copying you in three years? >> i sure think so. maybe not three, but i'd give it five definitely. we're starting to see some of the big ones come along looking at alternatives. the truth of the matter is america doesn't like to lose money. they want funds to go up when others are going down. they want what they call low correlation or zero correlation. so long/short commodities, one that's been a big attraction for a lot of people where it has a

zero correlation to the market. international real estate where people protect in a case the dollar gets hit. there's a lot of great opportunities. >> and the performance of many of your funds has been nothing short of spectacular. they've been good. >> we can brag about it. >> that's a good place to be. >> you're a sexy man, but there is a sense that mutual funds are no longer sexy. they're not hot. they're a little musty. they're an old man's game. mr. purple tie, what do you say to that? fair shot? >> not at all. the reality is there are some old laggards out there. there are a lot of them that are out there may be $50 billion. there's hard things to do when you're lugging around $50 million. we focus on niche areas where we can be special, we can do short positions. very difficult to do that on the long side. when you look at it, emerging markets is an area that we love. we think emerging market debt, which the whole asset class has been up about 50% as far as new money coming in in the last year.

we did a em long/short fund. there are a lot of opportunities out there. maybe the big brands woept be bringing big news. >> a little niche with a little heat. good place to be. let's talk about something steven rattner said earlier on cnbc. he basically said individual investors have no business moving in and out of picking individual stocks. he said they belong in index funds most especially. how do you answer him? is he mostly right? or a little bit right? >> i'd say a little bit right. i think many americans don't want to be average. it's kind of the un-american thing to do. do you want to be slightly below average? that's what you're going to get with an index fund by definition. we have a new fund called endurance. we basically go long/short. we buy apple, we sell short rim. there's a lot of opportunities out there. if you have a long and a short, you have two options, not just one. but if you think about it, index

funds are, you know, it's average. if you want to be average, it's a great thing to do. >> alan reid. >> tyler. >> no average. nice to see you. >> thanks much. appreciate it. >> we have more later, sue. meanwhile, back to you. >> look forward to it very much, ty. we're going to hit the floor at the nymex, gold, silver, copper, palladium, zinc, you name it. we got it back in two. back in tt for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade.

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welcome back to "power lunch." brian shactman here at the markets desk. i want to take a look at archer daniels midland, adm, hitting a new high today of $33.98. favorable crock report bullish for adm. the stock is up 18% year-to-date. add on a 2% yield and definitely outperforming the broader s&p 500. simon, back to you. >> thank you very much, brian. meanwhile gold is fractionally higher but trading at almost lowest level for the year. let's get over to sharon epperson tracking the action at the nymex as we shut down the metals. sharon. >> well, simon, what's interesting about today's trade is the fact that gold is closing here basically flat on the session. yes, we are near the lows for 2012, but keep in mind the selloff that we've seen and the fact that gold is now up about $20 from the lows that we saw in

the previous session. a lot of debate going on about whether or not gold has lost its luster. we have barclays on one hand saying they are now lowering their forecast for 2012 down about 8% to $1716 an ounce. they say their struggles to find physical demand for gold and all the sovereign debt problems in europe. on the other hand goldman sachs is saying, hey, we are still going to keep our call of $1840 for gold this year. even though there's been a flight to the dollar, there's still a lot of weakness ahead in the dollar because of the weak economic growth that we're seeing here in this country and add to that, again, some of the sovereign debt concerns. so two sides of the coin there. the fact remains we are looking though, simon, at the gld holdings, they've been relatively flat. traders say that means new shorts have come in. today we saw a little bit of short covering. we'll see what the next session will bring. >> must be frustrating with the bulls with all the fears we have had from europe, bulls haven't been able to rally.

>> no, it hasn't. but the fact it's been trading as a risk asset, that's something barclays points out in their call today saying it's not trading as a safe haven right now. it's been trading as a risk asset. that's why they lowered their price forecast. >> thank you very much, sharon. sharon epperson at the nymex. meanwhile, let's focus on the moves we've had here down at the nyse. bertha coombs joins me. we've been making gains. a reasonable session. >> we have been. it's very interesting. a lot of people waiting to see what happened after the close over the last few days, the close of europe, we saw markets move up. they were lower going into the close. today we saw little bit of an inverse happen. you see a little bit of that dip around 11:30 going into noon. now we're getting headlines that the ecb officials are going to continue to fund greece until greece can and if they can get it together to get some -- >> after the elections when they can form a government. it's important. >> if that next round we actually do get some clarity on being able to form a government, right? we could go through this again for a second round.

>> or we could get a decision the rest of europe doesn't like very much. >> exactly. and these are the things people are talking about in a sense our cash and point in london the bookies have stopped taking bets on greece exiting the eurozone and everybody seems to be taking it as de facto it's going to happen. and yet we're not panicking about it. in a sense we feel like it's going to happen. it's inevitable, we don't know when. yet people aren't scared. look at what's happened with spain. they've partially nationalized bankia. they have to come up with more reserves. whether is spain going to get that? is the taxpayer going to come up when so many are unemployed. and the banks today on the back of that news are moving, financials here are also stronger today among the stronger movers keeping us up, tech is the downward spiral. >> i'm glad you mentioned that. >> and that is the collateral damage from europe. >> via cisco.

bertha, thanks very much. let's go to the nasdaq and check in with seema on how we're doing overall. obviously not just tech in your neck of the woods. >> we are back in the green for the nasdaq. cisco's weak guidance weighing on the broader tech sector since cisco did say business may potentially slow down, its main customer, cavium also trading lower. big headwind for cisco. it's a pretty similar story for price line. it beat estimates, issued weak guidance. the company being impacted by lower international bookings. one bright spot in today's trade is tesla. shares getting a nice pop. kind of a reverse story for tesla. it missed street expectations but raised its full year revenue outlook. stock up about 11%. sue. >> thanks, seema. toll brothers at a four-year high up some 35% this year alone. mortgage rates falling to record lows with freddie mac saying the 30-year fixed is at 3.83%.

but as rates go lower, getting a loan still isn't all that easy. diana olick now on your rates and your costs. >> hi, sue. that's right. even fed chairman ben bernanke said it this morning. some credit worthy borrowers still have trouble getting a mortgage. no question. credit has swung a 180 since the housing boom. we wanted to break down the real numbers. we went to bankrate.com with six scenarios and asked them to give us the monthly mortgage payment for each one. we based it on a down payment and fico score using a $300,000 home and a 30-year fixed. the first thing we were told is if you have lower than a 660 credit score, you likely cannot get a loan outside of the fha. now, let's start with a good down payment that is 20% down or $60,000 cash to spend. at 750 fico score, your rate is going to be 3.625. that's $1,094 a month.

now, a 660 fico score will up your rate and barely different from your monthly payment. now, drop your investment to 10% or $30,000. if you have great credit and your rate is just a bit higher at 3.75%, but you will have to pay mortgage insurance. and that's going to bump your monthly payment up to $1,425. with a lower credit score, your rate goes up to 4.125%, but, again, just a $50 difference a month. it's the insurance that's the big difference here. and it's not the credits. let's say you have to go with a very little to -- little down payment, you can't do none. you will go to the fha. that's 3.5%. you need $10,500 down and your rate will still be low at 3.75 with good credit. but you have to pay the monthly premiums. and that's bumping you up to $1,642 and that does not include the up front premium of 175

basis points on the amount of your loan. interestingly, with a lower credit score, your rate and payment barely go up at all. now, remember, on top of down payments and fees, you have brokers commissions and closing costs. right now 25% of americans have a fico score below 650. now f you missed all the math, it's all on the blog. go to it, realtycheck.cnbc.com. >> thank you very much, die ya na. to brian shactman and a market flash. >> yahoo! the market gift that keeps giving. kate kelly presented that letter from third point. they basically need to own the shares by may 14th if you want to get in on that shareholder meeting. look at that intraday chart. people aren't waiting for the 14th to get in on this story. and the stock is at the highs of the day trading at 15.53. >> thanks, brian. diana laid out the good credit/bad credit scenario in housing. good credit or not, some people in the u.s. cannot get without

flood insurance. marry thompson is joining us with more on that. >> the national flood insurance program is set to expire on may 31st. if congress fails to okay a short-term extension for the 18th time since 2008, there could be added turmoil in the real estate market. the national association of realtors estimating without flood insurance, 1,600 transactions will be canceled or delayed each day. back in june of 2010 when the program lapsed for about a month, 40,000 sales were stalled. the flood insurance program is $18 billion in debt to the treasury. the government, the backstop for a program set up in 1968 as prooiflt insurers fled the flood market. the result of below market rates charged the 5.6 million policyholders. now both the house and senate have reform bills as does the administration that wants extension to year end so it can finish this plan. but surprisingly right now, or maybe not, lawmakers are at an

impasse. the democratic majority fears republicans will add amendments to the bill repealing parts of dodd frank. without a vote, there's no reform. and a lack of a vote may mean there will be lack of support for an extension putting added hurt on the housing market. sue, back to you. >> mary, thank you very much. let's turn to jim iuorio. would you play housing at this point? how would you do it? >> i actually am. and i'm long hov. and this is more than a trade. it's more of a longer term thing for me. the thing that amazes me the most about the housing stocks is some experiences 75% loss of revenues over the last couple years. and even within that some figured out a way to make money. that shows amazing resilience and amazing ability to adapt to the current situation. if it goes above 2.15 add more to that. and, again, this is a longer term trade.te >> some have had big run-ups. >> yeah. they had a big run-up and traded off hard and today it's starting to come back again.

>> all right. thanks, jim. simon to you. >> let's recap some of the oh big headlines driving the session this thursday lunchtime. coty up from 23.25. warren buffett's best of my recollection shire hathaway joining the group. kindle owners will now be able to lend harry potter e-books to each other. encouraging more people to use the device and sign up for amazon's prime service. and p&g shaking up its business moving its global skin care unit to singapore from cincinnati. asia is now the fastest growing beauty market in the world. meantime, up next after leaving more than a decade ago, dunkin donuts is opening again for business in california. and guess who is beating a path? our own jane wells. >> simon, they call them munch kins. they're not donut holes. what does it take to get the license to open the first dunkin

donuts in years? cost about $400,000, then there's license fees. what's the return? we'll talk about it when we come back. i have twins, 21 years old. each kid has their own path. they grow up, and they're out having their life. i really started to talk to them about the things that are important that they have to take ownership over. my name's colleen stiles, and my kids and i did our wills on legalzoom. [ shapiro ] we created legalzoom to help you take care of the ones you love. go to legalzoom.com today and complete your will in minutes. at legalzoom.com, we put the law on your side.

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coming up on "street signs" at the top of the hour, defending the individual investor. all of you out there taking on the pros every day and making money. jim cramer's going to join us with his unique perspective. also intel stock up nearly 80% over three years from chips to pcs, the company to lead the next revolution. we have intel's cfo. and p&g moving part of its beauty business to singapore.

all those things coming up 2:00 p.m. top of the hour. back to sue and simon on "power lunch." looking forward to it, amanda. 18 minutes away. meanwhile back to tyler at the ici mutual fund conference in d.c. where he has another big player from the mutual fund world. you are stacking them in today, ty. >> we absolutely are. they're lining up here like coming into reagan national. joining me now is ronald o hanley, he's the president of fidelity asset management. his division has $1.6 trillion of money under management. some of it our own because our 4rks o 1rks k provider, but the average balance in your company right now is -- >> the average is about $75,000. >> $75,000. >> median lower than that. >> a year ago you came out with

a study saying americans have need to set aside $250,000 for their medical care alone in retirement. that's a huge gap. are we looking at a tragedy waiting to happen? >> tyler, you're laying out what the real issue is. and it is a big social issue here. americans are severely under saved for retirement. part of the problem goes back to that we had a three-legged stool called pension plan, social security and other kinds of savings. and we're really down to best one and a half-leg stool. the average american now entering the work force will not participate in a defined benefit plan. >> no pension. >> and we just don't know about social security. we don't know about the long-term -- >> so what's going to happen? >> i think this country needs to have a comprehensive form of retirement. this is as important a social issue as health care or any other one facing us. and what we've got to look at is a comprehensive solution that involves a decision on what we're going to do about social

security and the role it's going to play. and mechanisms put in place to encourage more savings on the part of the individual. what we've moved to is a system now where the individual needs to take more responsibility. if that's the case, we need more mechanisms -- >> but it's at a time when people are going jobless for longer. they've had to dip into their 401(k)s and borrow against it and those 401(k)s have suffered major setbacks in the market twice, two times. it's a huge deficit. >> you're absolutely right. >> i'm not arguing with you. i'm on the same page. >> you and i are on the same page here in inerms of the issu. averages -- let's get apart from the averages and look at people that are actually fully invested continuing to contribute to their 401(k)s. those people actually did well. >> they stayed. >> they stayed in. exactly. when we look at the average 401(k) participant, look at where they were in the middle of 2008 and then of course 2008 came and their balances were

decimated. guess what? >> they're back. >> by the beginning of 2011 they were back where they started from because they continued to save and they continued to asset allocate. >> i want to turn to the question of the next week, and that is facebook. i know that a lot of your funds own facebook. facebook came to fidelity earlier this week. you weren't in the room because it was oversubscribed and you said let the other guys that know what they're doing be there. >> right. >> how many of your funds own facebook? will they be buying? they have the private shares, will they be buying on the ipo? and how will you allocate who gets how many? >> well, several of our funds own facebook, the private placement, which we've had now for quite some time. our analysts have been following facebook before it was on anybody's radar screen. so we understand that company well. in terms of whether they're going to be buying, that's the portfolio manager's decision. we'll see when the ipo comes out, but this is a company we follow closely. and we'll see what happens assuming that we are buying, we

have an allocation system that works basically on the size -- >> so contra fund gets and this one gets. >> right. an allocation system so every fund and every shareholder is allocated fairly. >> individual investors may own facebook and not even know it. ron, thank you very much. great to be with you. thanks. sue, back to you. >> thank you, ty. it's been a long wait, but now california is getting a taste of what east coasters have come to love, dunkin donuts. the first opening up since the company left in the 1990s. jane wells is at a new location for it, camp pendleton, speaking to the guy who won the franchise license. over to you, jane. >> sue, they have jelly filled donut holes. but people are nice, they have to ask for the coffee to be black? do they know that? do they have to say i want it black? >> no. >> okay. but if you want it black, you have to say that here, right? >> yes. >> okay. i did not know that. i'm learning it. it's kind of like if in and out

opened in new york. it's the same kind of rabid fan dom here. the guy that owns this dunkin donut says squares per square foot are ten times normal. he owns a total in 49 states. a lot are like bill taylor. >> coffee doesn't compare with other coffee places around here. this is kind of cool. >> morning. >> al is a san diego native. he owns this one franchise in california. he owns -- had his own other franchises. he's surprised at the strong brand loyalty with dunkin and says the pick up in sales are actually a leading economic indicator. >> you see people going off to work now whereas a year or two ago they didn't have a job. you're seeing a little more skip to their step. a little more dialogue in the stores. there's more of a community

presence within our cafes now. we were there three years ago when the lines weren't as long and the dialogue wasn't as positive. >> nearly all dunkins are franchised, franchise direct says a license costs about $40,000 to $80,000 and you have to pay about 10% annual growth sales. the first dunkin in guatemala opened today. don't expect anymore in the near-term in california. this is a very slow rollout they're doing. this is one-off because it's a military base. for the foreseeable future, you'll have to drive to camp pendleton to get the k-cups. >> i fell into that trap, jane, when i first came to new york. i asked for a regular coffee and i got milk and sugar. i said i wanted a regular coffee. >> medium regular in boston is two creams, two sugars. you got to know that. >> all right. like totally, man, whatever. >> thanks, jane. appreciate it. coming up next when we come back

on "power lunch," why adding apple to the dow would be good not just for the market but for the whole u.s. economy. plus, the new face of chanel. and it's not a woman. ot a woman. high schools in six states enrolled in the national math and science initiative... ...which helped students and teachers get better results in ap courses. together, they raised ap test scores 138%. just imagine our potential... ...if the other states joined them. let's raise our scores. let's invest in our teachers and inspire our students.

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brian shactman here at the markets desk looking at ywn. hit an all-time high of 51.74 earlier today. up 36% year to date. the reports out there that puts on this name are getting very expensive. some people out there think the run is about done. but it's still pretty impressive today. back to you, sue. all right. power run down time. indulge us in a rhetorical question. imagine if apple was added as a dow component for these past three years. what impact would that possible 2,500-point boost to the average have meant to consumer confidence and to the economy? well, ty, what do you think? if you look at the domino effect, people might feel better if the dow was moving up that much. they might spend more. you buy it? >> i'd feel better if i was 7 and could dunk like blake griffin. i point out this, remember when the dow added three big tech

stocks about a decade ago. microsoft, intel and cisco. what's happened to those stocks since then? not very much. >> very good point. simon, what do you think? >> i think it would have been had a huge effect and it would have been a lot more lasting than the qe attempts we got from ben bernanke. >> the only point is the dow jones industrial average is supposed to reflect the economy as a whole although you could argue -- >> i'll take it. >> right. you could argue -- >> apple is the economy as a whole. >> some people would. all right. topic two, earlier on cnbc former auto sdar said main street has no business on wall street. >> the individual investor should not play the stock market anymore than they should take out their own appendix. >> ty, i found your earlier guests' comments about index funds very interesting. he basically said if you want to be average, go ahead. >> well, let me tell you what i think on this.

i think index funds as a core holding ought to be in every individual's portfolio. they are low cost. the risk really isn't that you'll just be average. you'll be way below average. that you won't match the return of the s&p 500. >> right. >> i think an index fund is a great core holding, but then i think it is reasonable for individuals to spot around with individual stocks or individual managed funds to finish the portfolio. >> but i think his point, simon, was the fact now that you have flash trading, now that you have dark pools, the individual investor -- >> yeah. he's assuming you can't watch cnbc, you can't do your own research and you don't stand a fighting chance. i don't think that's the case. i think the retail investor is brighter than many give them credit for. i think that's why a lot of them have stayed out of the market. >> for example, the retail investor who said i like

starbucks and bought starbucks would be rich today. >> or apple. >> good point. >> all right. brad pitt has just been selected as the new face of chanel number 5. the first time in history that the house has chosen a man to represent the fragrance. and if i may weigh-in, i think they picked the absolute perfect person. gentlemen? >> i'm amazed. let me go first, ty. i'm amazed it took so long. simple question, you're trying to sell perfume to a woman. are they more likely to buy from brad pitt or another woman? you know what women are like with each other. seriously. >> and i'm just crushed that i wasn't chosen yet again for one of these wonderful things like the sexiest man alive. i have been waiting for "people" magazine to call for years and years and years and they've never called. now chanel has compounded the felony. >> ty, you know you're the top of my list. >> your time will come. >> indeed it will. >> coming up -- i'm waiting, i'm getting old. >> coming up on the program, the coo of msg will join us.

the stock's up 41% so far this year. stay with us, "power lunch" thursday. thursday. s tio-y siin lxtes zemethan a porsche panamera s. the 429 horsepower genesis r-spec. from hyundai.

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