hi, everybody. welcome to "the wall street journal report." now, maria bartiromo. we'll go behind the hype. lbj's legacy. politics, power and lessons learned. i'll talk to robert carrow. and is college worth the cost? an ivy league university president has some surprising answers. "the wall street journal report" begins right now. >> this is america's number one financial news program. "the wall street journal report." now, maria bartiromo. >> here's a look at what's making news as we head into a new week on wall street. it was the most eagerly awaited initial public offering in

recent memory. and on friday, mark zuckerberg rang the opening bell at nasdaq from facebook headquarters in california. on thursday, the facebook ipo was priced at $38 a share. the upper end of the expected range. it opened much higher than that. that valued the company at more than $100 billion, making it the largest internet ipo ever. company raising $18 billion on that ipo. the company began trading on the nasdaq on friday. take a look at how the stock opened and how it closed. the facebook anticipation did not help the markets much. by thursday the dow industrials closed at four-month lows, mostly on concerns about greece and weaker economic data in the united states. as well, concerns about jpmorgan. jamie dimon will have to explain himself in front of congress. the senate banking committee is calling on the jpmorgan chase chairman and ceo to testify next month on the company's big trading losses, now valued at possibly as high as $5 billion.

the company has lost some $30 billion in market value in a week. it looks like the possibility of additional economic stimulus by the federal reserve could be growing. the fed's open market committee releasing the minutes from the april meeting this week. more members of the fomc now say they are open to additional quantitative easing should the economy falter further. retail sales meanwhile inched up in april. weak clothing and building material sales helping keep that number low. facebook flies, the market tumbles. what happens if greece leaves the euro? a busy week and joining us to help explain what it means, richard bernstein, ceo of richard bernstein advisers. richard, always nice to have you on the program. >> thanks, maria. >> good to see you again. let's talk facebook. big day on friday, obviously. the company going public in a highly anticipated offering. big day for the stock. is this something the retail investor should consider buying? >> i don't think so and i'll tell you why. first of all we've seen massive outflows from equity funds is louisiana six, nine months.

it appears individual investors believe they've found the investment. so you won't invest in a diversified mutual fund but you'll invest in one stock? that doesn't make any sense to me. the other thing is i think, look, you want to be the banker in a town where there's no other banks and there's 100 lenders. you're the only one in town, you're going to get a great rate of return on your lending. what we have here is the exact opposite. we have 100 lenders and only one borrower, your rate of return has got to be over, it's supply and demand. >> in other words there's so much money going into this stock right now. priced at $38, it opened much higher, it traded wildly all day. is this going to have an overall impact on the markets? what does it tell us about what's going on now on the markets? >> it's somewhat limited. but i will tell you, our theme at our firm has been that people have been too bearish on the united states. and if is an indication people are starting to appreciate that there is growth opportunities in the united states, i would say that's bullish. >> there's money moving around

the technology mobility sectors. startups are soaring. entrepreneurialism is alive and well. >> absolutely. >> so that's certainly a positive. >> it is. and i think it's even broader. i think the united states is on the verge of an industrial renaissance. wage rates are competitive, energy rates are competitive, i think that's actually quite bullish. >> i want to ask you about that in a moment. let's get to europe. it feels like deja vu on europe. it was on the front burner for concerns. then people were feeling better about it because of the european central bank. now everybody worrying about greece leaving the euro. are you still optimistic about the market despite what's going on in europe, and how big of an issue is the european story? >> we are firm believers that we are in the early stages of long-term performance of the u.s. equity market. part of that is we believe we're going to benefit from the problems around the world. our ten-year note is 170, 180, all-time low this week. that's not because of problems in the u.s. economy, that's because of problems in the european economy.

the u.s. is benefiting from the rest of the world's problems. short-term, yes, europe can drag down the market. long-term, i think it's bullish for the united states. >> if europe decelerates and we see this problem accelerate, we're looking at this debt crisis continue, greece is pushed out, doesn't that impact the u.s.? >> certainly from the point of view of multi-national companies, absolutely. we've tried to focus on more domestic, smaller and midcap companies that have no exposure around the world. >> that's important. >> that is important. >> that's where you want to be allocating capital. smaller mid-cap names that are exposed to the u.s. the federal reserve this week which released the minutes from the last week seemed to leave the door open to further stimulus because of europe. >> right. >> once again, they discussed the european problem perhaps impacting the u.s. do you think it's likely that we see qe3, what's your thought on the fed approximate with the ten-year at 170, it's less

likely than if the ten-year were at 250 or 300 or something like that. i think the fed is being handed a gift here. europe is doing quantitative easing for the united states. our ten-year is at 170, 180, not because of u.s. problems, because of european problems. we're feasting to some extent on their problems. >> do you think that greece does leave the euro? is that going to have a big impact? >> you know, it's hard to say. it's a political decision. probably in politics, who knows whatever happens. i think from an economic point of view, i think they probably have to. >> but it's a small country, relative to the other ones. and the worry is a domino effect, that portugal, spain, italy could follow. then you're in trouble. >> right. my guess is if greece did leave, that the european, the main part of europe, would really band together and try to make sure the whole system didn't fall apart. as each country falls out of the euro, it hurts germany. germany has been aided by a

weaker euro because of greece. their exports have become very competitive because of greece. as greece leaves, the euro begins to look more like a pure deutsche mark which will appreciate, that will hurt their export markets. >> what about housing? we're starting to see signs of recovery there. do you buy it? >> i think housing activity is definitely picking up, no question about that. but that's different from home prices. i think if people are waiting for home prices to go up, i still think you're going to be waiting a very long time to get back to '06, '08 levels. but that doesn't mean housing activity won't pick up and that's good for the u.s. economy. >> in light of all this how do you want to invest? what sectors do you like? how do you allocate capital? >> we're focused on smaller cap stock in this the united states. we want exposure to the domestic u.s. economy. we have very little exposure outside the united states right now. in terms of sectors, we're still defensive. we like staples, health care, utilities. much more defensive-type stories. >> what about technology? that's been an area that is

seeing lots of money flow. >> absolutely. i mean, look. >> would you avoid it? >> mr. zuckerberg is not giving away his company for free. there's rich valuations in a lot of the social media companies. older technology i think is worth looking at, with one caveat. i think you have to be careful about this. technology is the most foreign exposed sector. if the dollar continues to appreciate, which it has been doing recently, that's hard for them to overcome and we could see earnings disappoint if the dollar continues to appreciate. >> we've leave it there. rich, great to have you on the program. thanks for being on the program. up next on "the wall street journal report," what history reveals the legacy of president lyndon johnson. on today's landscape of power and politics. two-time pulitzer prize winner robert caro will join me. and later, as college graduates across the country assess the current jobs market, one school is betting big on a future generation of science majors. as we take a break, take a look at how the stock market ended the week. back in a moment.

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until it's not just lines you see... it's the world. and this administration today here and now declares unconditional war on poverty in america. from those words on the american economy, the 36th president has a legacy that lives on to today's political times. robert caro wrote "the years of lyndon johnson," the fourth volume titled "the passage of power" is just complete. the third consecutive "new york times" best-seller. good to have you on the program. thanks for spending time with us. >> thanks for having me. >> this is your fourth book on president johnson. let me ask you about focusing from the 1960 campaign cycle to

his first seven weeks in the white house. why this slice of life, more than 700 pages? >> well, because my books try to show political power. here we see a president taking over in a time of real crisis after kennedy's assassination and taking all the reins of government into his hands, and in that first seven weeks, ending with the speech you just showed, not only getting kennedy's programs started again, civil rights and tax reform, but also launching his own war on poverty. >> really fascinating. president clinton in his "new york times" review said about your work and president johnson's that power ultimately reveals character. what was johnson's character like? >> it's interesting that clinton said that because when you have enough power to do what you want, you find out what the man wanted to do all along. lyndon johnson wanted to get the civil rights bills passed, help poor people and particularly

poor people of color. >> how would he fare in today's legislative environment where we've got such infighting? when he came to office, was he able to get both the civil rights bill and a major tax cut through congress? of course, these are issues that we're still talking about in 2012, which is actually so fascinating. >> you know, people who talk about this ledge slagislative d being unprecedented really don't remember. from 1938 until kennedy's assassination, the midwestern republican conservatives kept him in the same deadlock. johnson broke that logjam in the seven-week period. >> amazing. you started living with lyndon johnson in the 1970s. are you still learning things about this man today? >> yes. i was astonished for this book to learn the sheer legislative genius with which he got, for example, the civil rights bill started again. >> so what are your big questions that you hope to address in the next volume? >> in the next volume? >> yeah. >> well, the next volume will be

very darker in tone. this is really about the finest moment in lyndon johnson's life. when he takes over the government and really asserts himself and starts these wonderful programs moving. the next volume is how vietnam comes to gradually overshadow these programs and how his presidency really ends, not in triumph, but you might say in tragedy. >> wow. so that is going to be a lot darker. >> yes. >> when will that be out? >> did my publisher ask you to tell that question? two or three years. >> what about publishing right now? are you seeing a lot of changes in publishing since you started? so much information flow happens all the time. we're in this huge digital movement. what's the value of digging deep as you do today? >> well, you know, if you find out something, i'm trying to talk about political power in my book. if you find out something about how it works and you try to explain it to people, and you manage to explain it to people, i don't say i have but that's what i've tried to do.

you don't want to explain to just one generation, you want the book to last. for me, i've been writing books for 40 years. my first one was called "the power broker." the greatest thing for me is to see college students reading it on the subway in new york, going to columbia, nyu. that's why you want something -- that's why digging deep is worthwhile. if you can do it, it endures. >> what can we learn from all of the study that you've done in lyndon johnson's life and how he approached big problems? what can we learn today? should president obama be taking something away from those years >> i'm not giving president obama any lessons. i happen to think he's doing better than many people do. but johnson, he conceived that the function of the presidency was to, as he put it, to write it in the books of lore. he said, we've been talking about civil rights for a hundred years, it's time to write them in the books of law, to get legislation passed. that was his idea of a president, the lawmaker.

>> bob, always great to have you on the program. we so appreciate it. the book is terrific. congratulations. >> thank you. >> robert caro joining us, "the passage of power." up next, how 11 acres of new york city real estate is worth $2 billion to the ivy league. cornell university comes downstate. is it building the school of the future? and you can find us on facebook. wsjr with maria. in the latino cy the word that we use is jubilation. as you're getting older, you should be able to do the things that you love.

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one of the members of the ivy league is going high tech. cornell university was recently selected by new york city to oversee the development of a new metropolitan campus devoted to the technology field. david skorton is the president of cornell university. david, it's wonderful to have you on the program. >> wonderful to be here. congratulations on all you're doing. >> thank you so much. i am thrilled to have you because this university is going to be something to talk about. we'll get into that in a moment. but the big front and center issue right now for so many of us is the expense of college and the steady increase that we're seeing for many american families. cornell runs about $52,000 a year. why has it become so expensive and keeps getting more expensive every year? is it because technology? what are we paying for? >> there's a whole bunch of reasons for it. technology is certainly one of them. you're 100% right about that. there's also this concept that people always want the best of everything. we want our students, our children, to have extracurricular activities and facilities and residence halls that are all good.

there's another concept, and that is that we like the relatively small student/teacher ratio, which means it's very, very hard to increase productivity if you have a human-intensive industry. some of the market forces don't work that well in some of the campuses. for example, the overwhelming desire to get our children into what are perceived as the best schools mean that the lines are so long, even when the price goes up, it doesn't have the usual market forces. cornell, for example, we've got 38,000 applicants this last year for 3,200 slots. so with that much excess demand, if you want to look at it that way, usual market forces don't apply. for a lot of the reasons the price has got up. >> let's talk about student loans, how to pay for it. student loans have become a political issue. like so many other things. so interest rates on some loans set to double july 1st. what are you hearing from students and prospective students about this, about these loans, their ability to pay for their education, and whether or

not that's dictating their behavior in terms of foregoing school? >> there certainly is a change in this generation. as "the wall street journal" itself reported the last couple of weeks, the number of years of education that young people are getting now compared to their parents is less than it was a generation ago. >> wow. >> less than a generation ago. >> that's scary. >> it is scary and it's scary for the future of the country. because of innovation. because the 21st century needs these skills that you can only get with an education. to get back to the issue of loans, we have to do everything we can to keep the stafford rates low. it took me -- i'm sort of the american dream. my dad didn't even finish high school, he was a russian immigrant. in one generation, a lot of wonderful things happened to us because of education. it took me 20-some years to pay my loans off, it was the best investment i ever made. nonetheless, this is a big burden.

during the recession when the chances of getting a job are less, even for those who are educated, we have to do the best we can to lower the cost of running the universities, so that the price of college will be down. in the meantime we have to stand up and make sure those loan rates don't double. >> my favorite story of the day is cornell building this $2 billion technology campus on roosevelt island in new york, partnering with techneon, israel institution of technology. tell me about the plans. will we see eventually 2,500 students here? >> yes. when it's fully built out, which is going to be a couple of decades, during my ninth president as cornell. we'll have around 2,000 students when it's all built out, about 300 faculty, on roosevelt island. we're not going to wait until 2017. we're going to start teaching this fall, the fall of 2012, in temporary space in manhattan that we'll soon announce. >> new york city and the bloomberg administration kicked in $100 million for the project. you and techneon chose to work together.

tell me the legacy you're hoping for. you say $30,000 to 120,000 jobs created. a big range but how do you come to these numbers in terms of job creation? >> over the years, it depends how many spin-off companies occur, what size companies they are, what size. right off the bat, of course, there will be construction jobs and jobs related to getting the campus up and running. but we fully expect 500 to 600 spin-offs over the years as we go forward. that's not just dreaming. that's based on our record. the last five years, from '06 to '11, cornell alumni started 2,600 companies worldwide. capitalized to almost $11 billion. and at techneon, i believe pound for pound or kilo for kilo, is the best entrepreneurship shop on the planet. 4,000 startup companies in haifa. more companies on the nasdaq related to this institution than the whole european union combined. so this is a win for everybody.

>> my thanks to cornell president david skorton. up next on "the wall street journal report," we'll take a look at the news this upcoming week that will have an impact on your money. and the class of 2012 heads out into the world. my advice for tomorrow's business leaders today. [ explosion ] [ crunches ] [ explosion ] [ crunches ] [ explosion ] [ explosion ] [ male announcer ] pringles... bursting with more flavor. [ crunch! ]

business leaders today. punk rocker pioneer joey ramone would have been 61 years old this weekend. inspiring songs by such an iconic musicians has been truly one of the coolest honors of my

life. i'll be sharing memories on this american original on twitter and google plus this weekend. i hope you'll follow me @mariabartiromo. thank you, joey, for writing that song. now a look at the stories coming up in the week ahead that may move the markets and impact your money. tuesday the nation's realtors report the number of existing homes sold last month. wednesday the sales of new homes, a real window into what the housing market is doing right now. and then on thursday, the latest report on durable goods will be out. those are consumer products meant to last three months or more. heavy-ticket items. and finally today, a tip of my cap to the class of 2012. congratulations. at the commencement ceremony this week for my alma mater, new york university, i was thrilled as a trustee of the school to escort honorary doctors of law and supreme court justice sonia sotomayor to the exercises at yankee stadium.

the next day i addressed newly minted mbas at the stern school of business graduation. the commencement speaker, a fantastic opportunity to spend time with the next generation of leaders and innovators. >> find your passion. whether in business, in nonprofit, in starting your own company. change the world and innovate. believe in yourself. do what you love, have confidence. you are exactly where you're supposed to be. >> congratulations and all my best to the graduates this spring. that will do it for us today. thank you for joining me. next week, the travel season begins. where to find the best value for your vacation dollar. each week, keep it right here where wall street meets main street. have a great week, everybody. i'll see you again next weekend. [ donovan ] and i thought "i can't do this, it's just too hard." then there was a moment. when i decided to find a way to keep going. go for olympic gold and go to college too.

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