patty, give me a ticker. >> ed. >> b.k.? >> fdx. >> grass sew? >> fio. >> weiss? >> long s&p puts. >> "power lunch" begins right now. halftime's over. the second half of your trading day begins now. >> indeed, "power lunch" does begin right now, folks. jamie, the whale and a room full of hot shareholders. i ain't talking the heat down in tampa. shareholders rejecting a plan to separate the ceo and chairman positions. we debated it here yesterday. that was a victory for dimon. we will take you to the sunshine state in 30 seconds. the justice department opening an inquiry now into jpm's $2 billion trading loss. perpetrated by the london whale. as president obama and treasury secretary geithner wage a war of words against wall street. sound familiar?

wall street taking it all in today as the markets are moving. sue herera is at the nyse to start our coverage of jpm. sue? >> indeed, thank you, tyler. investigators are getting their chance to grill jpmorgan chief jamie dimon over the bank's $2 billion trading loss. mr. dimon getting some key victories. shares of jpmorgan are up almost 3.75% at 37.13. in the last week the stock has been off as much as 15%. mary thompson's live at the shareholder meeting in tampa, florida, for us. hi, mary. >> reporter: hey there, sue. the meeting concluded a bit ago. it was a short, fast paced meeting with about a dozen protesters outside and plenty of security all around. we counted at least ten sheriffs cars leaving this complex once the meeting concluded. speaking very, very quickly at the open, dimon started with some comments about those trading losses. >> what this has morphed into

violates our own principles. we're here to serve our customers. >> dimon says the firm continues to work through the problems and that claw backs are a possibility. he also spoke with the press after the meeting, and he declined any further comment about the losses. he said the buck stopped with him and also said that the traders involved with those losses, that their pay was not linked to a formular that paid them with how much they made on their book. as for the shareholder comments, they were pretty much contained to concerns about foreclosures and mortgage losses. losses they say are costing the bank and homeowners far more than these multibillion dollar trading losses. as for the votes today, the executive pay plan did pass with 91% of the vote. a vote to -- or proposal to split the roles of ceo and chairman actually received a relatively high 41% of the vote. again, not enough to be voted in. lastly, there was a vote approving written consent for shareholders. it passed by 52%. as tyler mentioned, as the

meeting was going on reports surfaced the doj is looking into those trading losses. jpmorgan declined comment. >> we're going to talk to one of those shareholders down in tampa in just a few minutes' time. now to the washington side of the story. president obama, secretary geithner speaking out. john harwood has it all from our nation's capital. >> reporter: last week we heard from members of congress involved in the drafting of dodd/frank about their reaction to jpmorgan. now we're hearing from the administration. i should note the department of justice has declined comment on the report f o a probe. president obama appeared on "the view" and gave his assessment of exactly why this loss by jpmorgan shows the need for wall street reform. >> jpmorgan is one of the best managed banks there is. jamie dimon, the head of it, is one of the smartest bankers we've got. and they still lost $2 billion and counting. precisely because they were making bets in these derivative

markets. we don't know all the details yet. it's going to be investigated. but this is why we passed wall street reform. >> of course, jamie dimon and jpmorgan have been leading the lobbying effort to weaken some of the regulations of dodd/frank. tim geithner gave a speech at a conference this morning and made the case that if those regulations aren't followed properly, the taxpayers could end up on the hook. >> this failure risk management is a very powerful case for reform, financial reform. the reforms we still have ahead and the reforms we've already put in place. the test of reform is not whether you can prevent banks from making mistakes, errors of judgment or risk management. that's going to happen. it's inevitable. the test of reform should be do those mistakes put at risk the broader economy, financial system or the taxpayer. >> reporter: of course, sue, this merely sets up the contrast between the administration's view and that of mitt romney. he says we don't need dodd/frank. we can do it with lesser common

sense regulation. >> therein lies the debate. thank you very much, john. let's see if rick santelli has a way to solve the big debate waging between washington and wall street. some santelli solutions for us from chicago. what do you think, ricky? >> i think while the government is punting, these derivatives are punishing. it's easy. you know, we passed these reforms, dodd/frank, 22 months ago. we haven't even settled on a decision for what swaps means or what the term "hedge" means. to see timothy geithner, the poster for ineffective, have the nerve to castigate jpmorgan for trading in otc, this caused much of the credit crisis. my solution? you don't need 2,300 pages of overbearing reform. you just need to address otc, need to strengthen mark to market. if something is marked to model, you charge more set aside capital. it's all about capital and

simplicity. you know, when we talk about the spirit of a rule and then you read the 2,300 pages of dodd/frank, it's a bunch of loophol loopholes. the spirit of the law, you don't need every case outlined in legalese. leave it a bit gray so banks know they're in the gray and let ongoing legislation or ongoing forensics of every individual case tighten up that cloudiness. and last but not least, just do it. forget the meetings. this is why we have reform. not for the length, but to be able to satisfy a very simple need. let investors read the statements these companies put out and have a good handle on risk metrics. 2,300 pages, "f minus." back to you. >> good for you, rick. thanks. morgan stanley also holding a shareholder meeting today. ceo james gorman says he has cut risk at the firm dramatically. there was a small protest outside the meeting. no word of violence or arrests

there. in the last five years, morgan stanley stock is down 82%. in the last two years, down 46%. in the last month, the drop trend rolls on. morgan stanley down 16%. almost 17% there as you see. gap, sprint, boeing, time warner holding shareholder meetings, too. we're keeping an eye on them and we'll bring you any major headlines. right now in that group, stocks are higher each except for sprint nextel which is a penny lower. taking a look at how they're doing this year, kbap gap is up the most by about 50%. sprint higher by 7%. boeing flat. time warner down 1% so far this year. sue? let's head to matt teslock. he's with us as you know all week on "power lunch." there are four stocks. an eclectic mix. how would you play them now? >> let's start with gap stores. an interesting turn around story. very successful over the last four quarters. they've beat. one thing i would say, they've

raised guidance from 35 cents to 46 cents this quarter. that may damper expectations a little bit. cautious where they are now. a great run and great story. next with sprint, one thing to look at there was they re-elected dan hess to continue his role as chairman. they're giving him some more time to turn this story around. i think that's important. they may be a little late to the iphone party, though. we'll see how it continues. based on price it looks like it may have some upside. boeing here, very important ruling out of the government today with the import/export bank. i think that'll help them going forward. they do need to hold the 72.60 level. i think that's very important. otherwise we could see 70 in that stock. last but not least, tyler, i think it's time warner. i think very complex story here. but i think there's still problems with publishing. and i think that leaves a mark on them going forward. so as complex as they are, publishing is still the feature. >> thank you very much, math cheslock. the woman at the center of the news corp. hacking scandal

charged by police in london today. she spoke a few minutes ago and kayla tausche has it. >> police in london bringing charges of perverting the course of justice and concealing potential evidence after nearly a year-long investigation that began with the first arrest last july 17th. she and her husband returned for bail this morning in london. here's what the former ceo of news international said moments ago on those charges which will now be fought in court. >> i have to question today whether a decision was made on a proper impartial assessment of the evidence. i understand and know that there needs to be a proper and thorough investigation. and i am baffled by the decision to charge me today. it's nothing more than an expensive side show, a waste of public money. >> speaking beside her and before her, brooks' husband charlie who is also charged after throwing away a computer of interest. said he is not surprised by the

pressure on police to bring these prosecutions and believes the lack of evidence at least against him will be born out in court. as for his wife, he raised strong doubts of her ability to get a fair trial. ty? >> thank you very much. keep your eye on retail stocks, folks. several big names with earnings today. home depot meets the street. saks beats. tjx and dick's sporting goods out with results. jc penney getting ready to report. courtney reagan is our ace on retail. courtney? >> thank you, tyler. jc penney will be the main event later this afternoon. let's run down the e tail reports moving stocks so far. dow component home depot reporting profit in line with expectations. disappointing revenue and less than hoped for profit and sales guidance sending shares lower. completely different story for dick's sporting goods. the largest publicly traded u.s. sporting goods retailer handily beating the street on the top and bottom line and raising full year outlook. here's a surprise. tjx profit beats the street on

strong sales in europe. tjx raising guidance. the shares up about 7%. jc penney reports after the bell. the street is expecting a loss of 11 cents per share. the retailer no longer offers guidance, though ceo ron johnson expects sales to take a hit for the first half of the year. a complete transformation is costly. macy's cfo says it's taking share from jc penney, though it's hard to quantify how much. the big question is how much of a hit will jc penney investors tolerate and for how long. according to fitch solutions, spreads on jc penney have widened 35% over the past kwarlter compared to 7% cds widening of north american retailers overall. back to matt. ask him what opportunities he sees in retail. specifically on some of those stocks. >> right now one focus is obviously jc penney after the close today. i think when they announced the appointment of ron johnson at ceo the stock had a 20% move to the upside. we've retraced all that. we're back to levels we've seen.

how much time are they going to give him to turn this story around? i think macy's obviously is eating into some of their profits. i think jc penney has a ways to go. how much time do they give them? another stock is home depot. obviously they're not buying big ticket items yet. that leaves the question of home builders, how does that index fair, is it for real, how can home depot sell some of these big ticket items unlike the average consumer of $54 per visit. they need to ramp that up a little bit. that will help them going forward. >> thank you very much, matt. to europe now where ten days after winning the election, francois hollande becomes the president of france. he's moving into the palace. and before he did that, he lit a flame at the tomb of the unknown soldier. he also visited the arch of triumph. that's where the fun stops for hollande. he was on his way to meet with german chancellor angela merkel

in berlin when his plane was hit by lightning. no one was hurt. mr. hollande has to return to paris. when that meeting with chancellor merkel does happen, however, the european financial crisis will be quite high if not at the top of the agenda. cnbc's sylvia vadva will have a one on one interview with chancellor merkel tomorrow. we'll have it for you as soon as it's available. meantime, in greece politicians have failed again to agree on a governing coalition nine days after the election. it's looking more and more likely that they will have to redo that vote next month. greece is also continuing a last minute decision to pay bondholders who refused to accept a debt restructuring to avoid a default. as you look at the greek 10-year, we have seen a spike in yields after a big drop in yields earlier in the spring. ty, over to you. >> thank you very much, sue. cnbc out with an amazing poll of facebook users. it comes just two days ahead of the initial public offering. see how other users feel about the sites and all of those

advertisements. also coming up, your safety at the airport. it turns out a major security push has all been a big waste of money. today on the closing bell, jpmorgan's bill daley. more "power lunch" coming up. [ male announcer ] we began with the rx. ♪ then we turned the page, creating the rx hybrid. ♪ now we've turned the page again

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investors may be hot to trot over facebook's ipo, but a new apc/nbc poll finds the company is facing some potentially

unnerving roadblocks when it comes to montization. i think that means making money, kayla tausche, right? >> printing money, tyler. it's no secret that facebook has been successful as a product so far. its growth is explosive, usage is addictive. millions of people are still getting on board. but facebook as a company will need to make that money and a lot of it with a market cap greater than bank of america or mcdonald's. it's saddled with great expectations. right now its profit is from advertising. results from a poll carried out by cnbc and the associated press call into question how effective those ads actually are. of more than 1,000 respondents, 83% said they've never or seldom clicked on an ad on facebook. 57% of respondents, which is a majority, falling into that never category. on our cnbc facebook page, many of you responded saying you've never clicked on those ads either. believe it or not, advertising currently represents 82% of face back's revenue. its pitch to media buyers is that ads can be more targeted on

facebook since so much information about the consumer is provided by the consumer. that facebook says should mean they'll not only see the ad, but they've got higher purchasing intent, too. and analysts see e-commerce as a viable potential for new revenue streams in the future. but when respondents were asked whether they feel safe making purchases through the social network, the majority said no. that's not to say they don't trust the market for virtual goods. facebook's only e-commerce platform right now, zynga, makes up 18% of its revenue. will facebook keep up its skyrocketing growth as a public company if ads are found ineffective? chances are that's unlikely. tyler. >> very interesting story, kayla. thursday at 1:00, by the way, don't miss facebook: the social offering. it's a special look inside the company. we're going to talk about the risks for users and for potential stock buyers. we'll literally go inside the site to show you how they do make money and we'll show you

how much money those early investors in facebook will make. that's thursday at 1:00 p.m. on cnbc. but there's more. go to facebook.com at cnbc.com to register now for our cnbc webinar presented by kayla tausche. she's still here. she's going to be working hard all week. i will actually host it. tomorrow afternoon 2:30 p.m. that's tomorrow at 2:30. spaces for the webinar are limited. register now at facebook.cnbc.com. sue? ty, as you know, facebook has been pretty up front about the challenges it's having in the mobile space. at this hour google is out with new data on how people are using their smartphones. jon fortt joins us, and he has it first. hi, jon. >> smartphones are mobile computers. put that to rest. listen. 44% of u.s. adults, according to this data, have smartphones now. up 13 points over a year ago. which suggests we'll cross 50% before the end of the year. but the real eye opener here in

this data is what we're using those smartphones for. for shopping, the magic number is 35%. 35% of smartphone users bring their phones to research products on the go. 35% have changed their minds about buying something in the store based on that phone research. and 35% of smartphone users have actually bought something from their phones. that doesn't include digital apps. following that theme, local also rules here. 94% of smartphone users look for local information. 90% call or visit based on what they find. here are the stats google must really love. 89% of mobile users say they notice ads. the bottom line here, e-commerce behavior, especially local, is shifting from pc to mobile. the race is on among digital advertising and commerce giants including google, amazon, ebay and now facebook to capitalize on it. sue? >> jon, thank you. in a "power lunch" exclusive jason spiro, google's global head of mobile sales, answered three questions, three important

questions, that we put to him on how all businesses can adapt and embrace the global mobile consumer. take a listen. >> i think we're seeing a number of behavioral changes because people have connectivity everywhere they go. when they think of something, they can communicate. when they think of something, they can act on it. we're seeing a smartphone being used as a device to complement a tv experience where it can activate something they've seen on tv or they can share that. we're just at the beginning of understanding this and understanding how businesses react to that and how it might change marketing. and what has us most excite second-degree that the smartphone, the mobile phone, is a bridge between the digital world and the physical world we live in. i think when the data came back, we were looking at those emerging markets first. we were looking at markets where maybe pc penetration is not as high. the number that frankly struck me the highest was one-third of the population, the urban population in china, uses a smartphone every day. and so you see this from a sort of a browsing the internet experience or searching experience. this is echoed in brazil and

echoed in other markets. what you see is in many of these markets, the mobile phone, the smartphone has become the primary internet access point. a lot of the behaviors we're very familiar with are things that are now becoming accessible to a much greater number of people around the world. i think the facebook part is a question for facebook to answer. what i can say is that there's not a business out there that doesn't need to figure out what mobile means for them. google is betting really big on mobile. that's why we're trying to understand the consumer behavior and how to build experiences, whether that's sort of frankly an organic experience or ad experience that are tailored for what users want on the mobile phone. frankly that's a facebook issue, google issue and broad business issue. next, we turn to housing. while some markets are hitting bottom, the market as a whole is still a bit of a mess. so why are home builders so optimistic for a change? find out in two minutes.

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♪ and we know that it goes on and on ♪ [ female announcer ] you're the boss of your life. in charge of making memories and keeping promises. ask your financial professional how lincoln financial can help you take charge of your future. ♪ ♪ oh, oh, all the way ♪ oh, oh i'm bertha coombs with the cnbc market flash desk. bmc software. reports that hedge fund corvex could report a big stake in the company. that according to some wire reports. of course, this is the afternoon when we start watching for those 13-f filings. we call them the whale watching. right now the biggest hedge fund is columbia management with the biggest stake as of last quarter. back to you. >> thank you very much. new positive reads on

housing. home builder sentiment rising it tos highest level in five year. diana olick joins us from washington with the details on that. diana. >> that's right, tyler. builder confidence had been rising steadily throughout the fall and winter. but then it took a dive last month. likely because spring activity was pulled forward to that epgs exceptionally warm winter. this month back up. up five points to a new high not seen since may of 2007. we're still 21 points below 50, which is the line between positive and negative sentiment. let's remember that. current sales and buyer traffic each jumped five points. sales expectations over the next six months rose three points. three out of the four geographic cal regions saw gains. only the west posted a decline of two points. builders say record high affordability and a new record was posted last month, according to the realtors, is still fighting tight credit and tough appraisals. that's it, tyler. >> thanks very much, diana. we have one very angry jpmorgan shareholder coming up. plus, are we safe at the

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you know, it seems i've been saying this every day this week. but gold hitting new lows once again. lowest level since last december. very tough sledding not only in the gold market as prices start to close right now but also in a number of the key commodity markets which include copper. gold down $3.50. equal to about a quarter of a percent on the trading session. you can see from the chart we've had a falloff just in the last few minutes. silver is down better than 1% on the trading session. in july copper, we're down almost a full percent there as well. on worries about the yeurozone, of course. bob pisani joins me here at the nyse. that's weighed on a lot of the energy stocks, too. the growth story -- >> that's right. that segues very well into the commodities play. oil down again today. maybe nat gas is trying to find

a bottom. oil is down again. energy stocks are again a drag here. we're at the lowest levels of the year on most of the big energy names. right across the board whether you're looking at service names like halliburton or some of the big diversified oil names or whether you're looking at the exploration production names like apache. all of them are down 2% or so. again, these are the lowest levels for the year. same situation with the big material names. again, this is the global growth play when you get slower demand for oil or slower demand for steel or anything, any by-product like that, you get weakness there. alcoa, u.s. steel, cliffs natural. freeport on the downside. sue, you mentioned gold. gld sitting near the lowest levels since going back to july. this is, of course, the gold etf. the world gold council will have quarterly report on gold trends out on thursday. i'll be reporting on that. very interesting to see what the trend are right now in gold. >> bob, thank you very much. you're up to date from the noor of the nyse. let's go to the nasdaq where

seema mody is following the action. >> barclays capital reiterating an overweight rating despite npd's report that showed apple laptop sales falling in april. barclays still seeins a lot of value to be unlocked internationally. that's a stock on our radar. amazon getting an upgrade by credit suisse. the firm seeing an addition of fulfillment center as a plus for amazon's profit margins. aside from that, the biotech index hitting a new record high this morning. a look at a couple of the companies fueling the index including amylin pharmaceuticals. back to you. >> thank you very much, seema. to chicago once again. rick santelli is back this time to give us an update on the markets. tracking the action at the cme. hi, rick. >> hi, sue. if you look at 1.78 yield on a 10-year as you look at this intraday chart, it really hasn't moved much in the last several hours. the reason why it's not moving much is probably there's not going to be a lot of volatility because there's not going to be

really a lot of change in the balance sheets of countries and banks overseas and states domestically. think illinois. think california as being poster children for a lot of what ails the country. if you open it up to a chart that goes all the way back to september 1st, you can see third week in september is our record low yield. about seven basis points lower on a closing basis. you can also see that we're trading at levels we haven't seen since october. 2-day chart of bunds shows more dire picture. now in the mid-1.40s and continue to find buyers. last chart, this underscores what's going on in europe. a french bank. i could show spanish ones as well. credit agricole. where are they trading? all time lows. back to you. from the jpmorgan annual shareholders meeting in tampa we are ginned by peter skillern, executive director of reinvestment partners and an advocate for mortgage reform and

the crackdown on predatory lending. i hope i pronounced your last name correctly. i'll stick with peter from here on out. describe the meeting today and what the mood was, what went on in there, how you saw or perceived mr. dimon and the other executives who spoke. >> tyler, there are about 300 people in the shareholder meeting. a lot of them being chase employees. they've chosen tampa in order to kind of reduce the number of outside agitators as well as people inside who might raise concerns. the mood was rather somber. unlike in the past jamie dimon was not his boisterous, talkative self. not the master of the universe that he normally carries himself as. i think he's been chasoned by the more than $3 billion in losses from the derivatives. the large public criticism that his bank doesn't have the accountability mechanisms in place to ensure shareholders protections. >> you are obviously a

shareholder. you have called for separating the roles of chairman and ceo of the company. that motion did not pass today. what will you do now? do you think your messages are being heard by mr. dimon and others? >> i'd like to point out that 40% of the shares cashed were in favor of the resolution. that's an enormously high percentage in most shareholder votes and sends a strong message to the chase board of directors that there's a need for reforms. i'm actually optimistic that they will ask jamie not to be the chair. elect an independent. even though the motion -- the proposal failed in the majority. >> you feel that your -- your word is being heard by the people who matter, namely the people on the board. what else is of greatest concern to you right now about jpmorgan? its lending practices, its mortgage workouts, et cetera? >> my number one concern

continues to be accountability. the foreclosure crisis and the problems in servicing are -- stem from a lack of accountability in the origination and the servicing and reo disposition. that's -- the company's lost $28 billion to date and has more than $8 billion of nonperforming loans on its books. you know, that's a much bigger challenge than the derivative loss. but both issues demonstrate that there wasn't accountability in how the bank was being run. that accountability starts at the national level. >> all right. peter, thank you very much. we appreciate your being with us. sue? >> very interesting interview, ty. nomura analyst glen sure is out with his new research notes on the big banks. he joins us here at the nyse to tell us more about that. glen, you said you had to do a lot of banking 101 explainers to the ordinary people out there that you run into about what's happened at jpmorgan. and the risks that other banks are taking.

tell us about that. >> look, it's a very mainstream issue similar to what happened in '08. needs explaining literally down to the basics of banks take in deposits, make loans and have a securities portfolio with the excess cash that they invest to earn money for shareholders. but also use to hedge the risk that are in other parts of the organization like their loan book. >> you have a buy on jpmorgan chase. weigh in on the trading loss. and the bigger issues that they may have on their balance sheet, which our shareholders just talked about. underperforming loans, things like that. why do you still have a buy on the stock? >> we have to take this into context of the overall story, right? i think the jpmorgan buy thesis, despite this horrible trading loss, is -- here's a company that even in tough times is earning $18 billion, $20 billion of earnings a year. has a group of six excellent businesses with great management, despite this trading

loss. and has some of the largest capital ratios in the business. a lot of cash that's being returned to shareholders through a 3% dividend yield plus buybacks. now a much lower, unfortunately, valuation. the story there is actually intact. and they execute very well in the businesses that they're in. this loss, there's no sugar coating it. it stinks. but it's not context of the capital ratios that they have, it actually did the job. the fortress balance sheet did the job it was supposed to, right? this is not '08 where companies are losing a year's worth and multiple years' worth of earnings. this is a portion of one quarter that they noticed, they the corrected, and are working their way out of. and they'll still only make $3 billion or 4 billion tlrs this quarter. >> you still have confidence in the management team led by jamie dimon. >> i have a lot of confidence in this management team. it's not just jamie. if you go to the next level and look at each of the business people that operate each one of

the businesses, they're excellent. you look at the changes that they're making in the cio group alone, they moved someone in that is a superstar in the investment banking co-running the fixed income business that knows these securities cold. they moved them in. moved matt into now control the risk and get ahold of the portfolio. at the same time, they have the ex-cfo in mike cavanaugh to come in and make sure he gets ahold of everything that goes on as well from what happened, how did we get here, how do we dig our way out. >> let's work through other names. you like goldman. you have a buy on goldman and a buy on citi as well. what are the fundamentals that support that? >> i do. i'll tell you this, in the right here and now it's a tough time to be recommending them because there is -- i'll call it a mediocre at best amount of capital markets activity going on while people question the strength of the u.s. economy, while people question what's going on in europe. so activity levels are pretty low right now. and you have this reregulation

conversation coming up. >> exactly. >> so right here right now today, it's difficult to get a portfolio manager to jump up and down and want to go out and buy a big ugly financial company. >> you stuck your neck out. what about reregulation quickly. does dodd/frank get toughened up? >> at the margin absolutely. >> how does that affect their ability to make money. >> let's go back to the original example. jpmorgan has about $1.1 trillion in deposits. $700 billion in loans. 3 $375 billion in security portfolios they use to make money for shareholders but also hedge the rest of the risk around the company. in a nutshell, my gut is, is in the end dodd/frank will be toughened up to put more controls over what they can and can't do with that securities portfolio and at the margin they'll make a little less than they used to make. i remind you, the cio portfolio was 6% of revenues in 2010 and

3.5% in 2011. a lot of that is just normal income for the bank. you're not taking away that much net earnings power even in a tougher regulatory environment. >> good to see you again. come back and spend more time with us, okay? >> will do. a big exclusive on "the closing bell" with maria bartiromo. jpmorgan vice chair bill daley. we'll get his take on the trading mess and financial regulation looming large. 4:30 p.m. eastern time on "the closing bell." first to jane wells for a news alert. >> hi, sue. nbc news learned that in this continuing mystery over what's causing some pilots to appear to have oxygen problems on the f-22 defense secretary leon panetta is placing further restrictions on flying the f-22 until they can figure out what's going on. the defense department saying at least 12 pilots since april 2008 have had problems with the oxygen system. developing symptoms of hypoxia. he's order all of them to remain

within a proximate distance of airports. all f-22 patrol missions over alaska will be ending. he also wants to accelerate installment of a backup system and have monthly progress reports on efforts to identify the problem with the current oxygen system. of course, two of those pilots famously went on "60 minutes." the f-22 made by lockheed martin just delivered its last f-22 a couple weeks ago. this is a very expensive jet that has not seen one moment of combat. back to you. next, a billion dollar government program to catch terrorists. but is it really worth the cost? scott cohn investing at oakland airport in california. scott? >> tyler, if you dare, take a close look at my face. can you tell what i'm feeling? we're going to meet a psychologist who says he can based on the tiniest of facial expresses. says he can teach that to airport screeners. and guess what? the government has bought it with millions of your dollars. is it for real? we'll take a look, coming up.

k,. we have product x and we have product y. we are going to start with product x. the only thing i'll let you know is that it is an, affordable product. oh, i like that. let's move on to product y, which is a far more expensive product. whoaaa. i don't care for that at all. yuck. you picked x and it was geico car insurance and y was the competitor. is that something you would pay for year after year? i, i like soda a lot but for a change of pace...

and people. and the planes can seem the same so, it comes down to the people. because, bad weather the price of oil those are every airlines reality. and solutions won't come from 500 tons of metal and a paint job. they'll come from people. delta people. who made us one of the biggest airlines in the world. and then decided that wasn't enough.

coming up next on "street signs," jpmorgan feeling the heat over tradergate. we talk live to new york city's top financial watchdog who wants to claw back jamie dimon's bonus. plus, dell 100,000? yeah, you heard me. we push the guy who made this very bold call on why he says that history is on his side for this kind of upside. and we all know you shouldn't text while you're driving. but now a move in a town outside of new york city to ticket walking texters. all in the name of safety or maybe something else. we're going to debate that. now it's back to sue and tyler on "power lunch." see you top of the hour, folks. >> thank you very much. it is a billion dollar

federal program aimed at catching potential underwear bombers and other terrorists at airports by analyzing their facial expressions. the big question now being raised is, is it worth the cost? our senior correspondent scott cohn is in oakland, california, with more. hey, scott. >> hey, tyler. this is one ot airports where this program has been used. facial expressions and other things. tsa for obvious reasons won't say where it's being used currently. sounds great to look a passenger in the eye and see if they're a potential terrorist. that is if it can be done. it's a billion dollar program developed soon after the 9/11 attacks and rolled out nationwide five years ago. >> how are you today? >> good. >> reporter: nearly 3,000 so-called behavior detection officers or bdos in 160 airports. looking for what psychologist paul ekman calls microexpressions. tiny, split second facial movements that he says can betray a passenger's hidden

feelings. it sounds almost too good to be true. >> yes. but it -- it is true. what i've tried to do is to take all of what i found in that 40 years of research and translate it into separate tools so it's available to people. because it was the taxpayer who paid for all my research. >> reporter: the tsa has paid more than $1 million to dr. ekman who showed us the online training course. >> what did you think that was? >> reporter: i have no idea. there is more to the spot program than dr. ekman's microexpressions. but government auditors question the science. and, more important, whether the program works. at least 23 times the government accountability office found suspected terrorists moved through spot equipped airports undetected. dr. ekman says that's because there aren't enough trained officers. >> if congress would give them the money, they'd have enough bdos to man every airport. they don't have it now.

>> reporter: but university of utah psychologist david raskin says there's no way to observe microexpressions in the chaos of an airport security line. he calls ekman's program a waste of taxpayer money. >> i was not surprised that he sold it. i was surprised that they bought it. >> reporter: are you selling hope over science? >> well, i'm not selling at all. i'm not in the sales business. so i object to the idea that i'm trying to sell this to anyone. >> reporter: of course, dr. ekman will sell you his program online for $128. now, for its part, the tsa says this is just one layer in the security system. and they don't use the microexpression part in the security line, although ekman says that is a lost opportunity. they say -- tsa says there is now a study that shows this is more effective than random screening, but the gao says this spot program for -- for screening passengers by

observation techniques still is not scientifically proven to spot potential terrorists. sue? >> okay. scott, thank you very much. interesting, to say the least. bertha coombs is joining us now with a market flash. >> we are watching pandora, sue. near the highs of the day. the company spoke this morning at the jpmorgan tech conference in boston. appears to have gone positively well. of course, today is kind of a social kind of day with groupon's earnings being so good ahead of facebook's listing. take a look, a lot of the social media companies are up. groupon, of course, up the most. zynga also doing well. pandora, though, sue, 11 months ago, opened at $16 a share where they priced. back to you. >> thank you, bertha, very much. listen up out there. warning. there are four minutes during the trading day where you should not, i repeat, not play the market. we'll tell you why and when coming up next on "power lunch."

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power rundown time. jon carney is cnbc.com's net net senior editor, nut nut senior editor, whatever it is. eamon javers a nut if ever there

was one is here as well. eamon's big story topic one today on high frequency trading. he's been reporting on why individual investors should not trade between 9:58 a.m. and 10:02 a.m. trading analytics firm nanex says that's when they see an increase in a hit and run type of trading before major economic releases. so, eamon, is this, number one, ammunition for regulators to clamp down on precisely this kind of trading? and is it yet more evidence that the little guy doesn't stand a chance? >> look, the expert who gave me this tip is a guy named eric hundr hunsitter. he say this is a rule of them. there's so much activity before the major economic news events you want to stay out of there. you could get a quote very different from the price you end up buying at by the time you actually just physically execute your trade during that period of time. the answer is he would say that regulators in washington need to pay attention to what's going on

in this hft space and watch out for the little guy a little bit. if you don't have 100 million bucks and a super computer you may not be able to play at the level these guys are plays at. >> jon? >> we know the markets are rigged against the little guy. you probably shouldn't be trading all that much anyway if you're a little guy. over and over we're seeing this in the markets. the high frequency trading is the market right now. they make up 50% to 90% of the market on slow days. you're not going to get rid of them. so you have to trade with caution because we have to deal with them. >> i don't know about you, sue. i think that when you trade and you try and take on and play in these big pools, the sharks are going to get you. >> i think that's absolutely true, ty. i'm still not -- i'm still not sure why some of this isn't front running. i think that's obviously a big topic of discussion that we need to have at some point. because some of these guys are getting the information quickly. they're profiting in milliseconds. i just wonder, you know. >> hasn't the fed clamped down

on some of this with their interest rate thing? was it the labor department? >> department of labor. slightly different issue there. they're changing the rules on how the jobs number actually goes out. they want to make sure everybody gets that information at the same time. >> washington's war on wall street. the president saying jpmorgan's recent $2 billion loss shows the need for wall street reform and more regulation. what, jon, does wall street really need? >> look, i wish that we could regulations that would fix these kind of problems, but the truth is, even under the strictest interpretations of the volcker rule, jpmorgan chase probably could have done this exact trade and lost this exact amount of money. >> exactly. >> all right, eamon. quick thought? >> if you ask some of the folks inside the obama administration they would say there's a wall street war on washington. not the other way around. from their perspective, they feel like they rolled out all these rules and wall street fought them every tick of the way along the line. they don't like that because they say that when you look at what happened to jpmorgan, you're seeing an example of why the obama administration wanted

to put in dodd/frank in the first place. that's the president's argument. >> our current obsession, zuckerberg and facebook. mark zuckerberg about to be a lot richer come friday. donald trump joined "squawk box" this morn ing. he was concerned about one thing regarding zuckerberg. if he gets married to his girlfriend, will he have a prenup? the donald should know a little bit about this. what do you say? prenup, no prenup. >> if he loves her, he should go in with no prenup. i don't have a prenup with my wife. if she divorces me she'll get $27.53 or whatever's in our bank account at the time. >> i would go with the prenup. >> no, no! romance, love! >> i'm all into romance. he needs to protect himself. what if she decides to leave. what if he's the perfect husband, she decides to leave. he needs a little protection. divorce laws make it very easy to leave these days. >> marriage is a risk arbitrage. ahead, we get down and dirty in today's disaster du jour to find out if you should mine the

beaten down coal stocks. that's coming up after the top of the hour on "street signs." we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations,

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