stocks pulling a big u-turn. maybe because bernanke seems to be confusing the heck out of everybody. hopefully he can explain what is really going on and we will ask him about the incredible historic stock rally. and my insane theory is probably wrong but we will debate it. let's get to steve and the headlines. >> the minutes of the april 30th papers say the number of participants of the fomc expressing a willingness to reduce quantitative willingness. i want to give you the exact language from the minutes. reduced downward as early as the june meeting if the economic information showed evidence of sufficiently strong and sustained growth.

decrease qe immediately. another said add more now. and another participant saying don't buy mbs, just buy treasuries. easing all but one member at that time supported a highly accommodating policy. this is interesting. there is concern exprezzed about market expectations they go on to talk about the economy and everything they say about the economy seems to argue for maintaining qe, not lowering it. the labor market showed some

improvement. business investment was slowing fiscal policy restraint in the economy. there was some concern that the economic recovery itself was slowing. i could go on with this stuff. the headline of a june tapering, you can't avoid that. the details of the report showed continued concern about the economy. i don't really have -- >> how do we square this against what bernanke said today. >> i thought bernanke was putting the market on notice that there could be something in the next few meetings if the economy, if the labor market were to improve substantially. >> you can see that the dough is up by 31 points going into what you just told us, it was up by 27 points. the s&p was already slightly negative. we started to see a down shift in the market today.

but you can clearly see the dow is holding steady. >> just to be clear a number of participants means everybody in the room. it didn't say a number of members that are voters. >> the dow has turned negative. >> it came off. you can't avoid that june taper comment. it's very important. >> we all know the fed is going to taper and will end this program eventually. the big question of what you bring up by highlighting june and for maybe our viewers and listeners that the time-line now becomes -- the question of whether it's going to happen is over. >> right. >> the time line is now everything correct? >> and the notion -- that is correct. in some member's minds we are closer to that moment than i think the market might have been led to believe at the time.

do you feel that what bernanke was saying earlier on. >> i think so, mandy. he did say in the q&a, he said in the next few meetings and the president of the new york fed in his speech and interviewed this morning suggested perhaps the next few months. so i think we're looking at a potential tapering in the next few months and probably around september. but in addition to the time line, which is what you mentioned, i think a critical element ispricing. are bond markets priced for a tapering? i am beginning to suspect that they are. >> i loved your tweet today. all of our mouths have two

sides. the chairman spoke out of both of them. basically i summarized it as well. >> today he seemed to be talking out of both of them and bond markets to begin with are the uber dovish statement on making progress in employment and negatives of deflation, etc. but then they caught the one sentence q&a response in the next few meetings. i don't blame him for the two sides kpent. you begin to with uncertainty. so the question coming forward is if the fed yields reflecting

a move, i would make the last point in terms of the pricing. ten year treasuries are have moved up. fed studies have shown that quantitative easing in total have lowered ten-year treasuries by 100 basis points. we have

>> hold that thought bill. i just want to go over to the floor of the new york stock exchange. it was you, bob, that was warning us yesterday about what new york fed president was saying and that is that traders could potentially overreact to bernanke's comment. is what is happening right now an overreaction? >> i think we are parsing every comment. we're going to have to get used to it. it is what it is. you saw -- let me try to turn

this around. instead of saying why are we coming off of the highs of bernanke comments, why did the dow go up 150 points? traders are traying to play both sides of the story. and then we have a lot of other people who keep tweeting me like did you see this? many want to want for stronger data. it's not going to happen. they get various ways in and out. utilities are notably weak

today. utilities have basically been for sale for a number of weeks. overall i think the market is fighting with each other and people taking both sides of the story. >> thank you very much. let's go back to bill. >> bernanke did a very good job of leaving almost every possibility open. inflation eats bonds. constant maturity basis. >> been buying $75 billion a

month. >> there has never been a more liquid period of time. there has never been a more valued period of time. that seds be cautious going forward. the prices and yields and bond prices as well. >> basically asking whether or not there was a possibility for a sharp reversal. we have been hitting record high after record high.

>> the tapering could stop it or slow it down even if there is not a sharp reversal. >> ultimately it depends. i think the chairman admitted that these provisions, that these policies don't really stimulate real growth. that's up to structural changes. that's up to some extent fiscal

changes on the other side of the balance sheet. so, unless the real growth comes, then anything that they do going forward including the tapering basically doesn't do mu much. >> i'm going to be blunt. what is the most overvalued asset right now. >> you have to basically see what central banks have been buying the most of. >> would you use the b word? is there a bubble in treasuries and or japanese bonds? >> not a bubble until the fed basically pulls out of the equation and the chairman has told us that they are not pulling out and if they do taper

it will taper gradually. there is a bubble in 30 year treasuries but not a bubble in five year treasuries because the five year is dependent not just on quantitative easing but on the policy rate that the chairman has told us would probably be -- >> the stock market in a bubble. >> i don't think so. but it's certainly frothy. you know, to the extent that the companies are buying back 50 billion a month and to the extent that much of this qe is moving in that direction. you would have to think that unless real growth is produced in the form of two to three% real growth going forward. it means that 14, 15, 16 they may be mildly bubblish. >> mildly bubblish.

thank you very much joining us. we do have breaking news now with ge. you're in the newsroom. what are we hearing? >> i want to bring you some comments. he told the conference that an ipo of parts of ge finance are a possibility in the past ge has spoken about selling some of its value maximizing business within the finance unit. the company is trying ing ting that unit. when asked by some of the participants of the conference whether or not ge had any kind of time line, the ipo has been healthy. told the conference that if ge misses a deadline or a window for the ipo, he said it is his fault. the company has been selling off non-core assets of the finance unit including a number of real estate propertiesment bay sprop.

>> back to you. >> home sales are surging. car sales are strong. my probably completely idiot proof -- this could be bad news. >> we will dig in on that one coming up next. ncer) scottrade r clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company."

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>> if you have been house hunting, you know that the supply is really weak, and that means that houses are selling fast. in fact, faster than they have in nearly a decade. >> that's right. home sales were essentially flat in april. the big story was inventory. we did see 230,000 new listings come on the market. they were desperately needed but supplies are still well below where they should be. nationally, if you look, listings were up 12% month to month but still down nearly 14% from a year ago. listings down over 20, 30, 40% from a year ago. it took 46 days on average in april to sell a home. that's down from 62 days in

march and a normal average of three to four months. the difference is that this is all about cheap credit, not easy credit. so the wild card is more interest rates. the 30 year fixed has been rising steadily. and that is pushing the much needed first time home buyers out of the market. on top of that, you are seeing foreclosures fall. it is taking that supply out of the low end where the first time home buyers tend to be. >> we just heard diana saying obviously it has not been easy but it has been cheap credit. let's bring us back to what the minutes are telling us today and that is there is a willingness that we should be starting to taper maybe in the next few

months. is this going to hurt the hou housing market as we know it now? >> as rates rise, absolutely. we do need the first time home buyer back in the market. we are seeing steady signs in the housing market and that's what we like. you have to remember that the bubble was really a credit bubble this is about housing. there is a lot of cash in this market and the people buying the credit really -- >> i understand there are a lot

of them still to come on the market. >> look at the home builder stocks today. all of them are up because we got great news with existing home sales. this is a steady incline in a good housing market. prices are still relatively low and credit is still extremely low. we need to help people understand that it is really still cheaper to buy than it is to rent and there is a lot of renters out there. >> there is growing demand in the housing sector. target and walmart and others disappointed with their -- so here is my theory on the disconnect. if people are buying big ticket stuff like cars and homes they do not have the money to spend on other stuff. am i on to something or am i on something?

>> monday we were at dinner and all talking. i said do you think this is a theory that holds any water? and after your first glass of wine you said yes and after your third you said no. >> i think it has some merit. i have been describing the current consumer as a coke bottle consumer as opposed to the hourglass. now the middle is good. why isn't the top good? we know why the bottom is not right. but they are not buying my kind of product. they are buying your kind of product. they're buying new homes. they're remodelling homes and buying luxury homes. >> why are they not buying your kind of product? >> i think they see brian's kind of product adds an investment. they see my kind of --

>> luxury cars? >> they can justify those investments. my kind of product they think is frivolous. if you're buying a house and housing prices are still relatively low then you get this great asset you're buying. >> you say saving. we hear second homes again. second homes, third homes. they are now taking that money and that money is going elsewhere. >> how much is this stock market

with a record high. you are saying look. they like making lots of money. how much of this not spending and saving is because they don't believe it will last. >> i think it's more than that. i think they are nervous about the world in general. they are going this doesn't really feel great. the bernanke pump is what is driving assets. i'm putting more cash into it. i have got less cash than i have to spend on jewelry. >> is it bad for retailers? >> i think it's bad for high end retailers. >> i know you too well. >> right on one glass but maybe wrong after two. >> and right again after four.

>> break outs. herb is going to be back with us to tell us why he thinks solar investors need to wear some serious sunscreen. >> and china going all american. we're going to tell you what's really behind the chinese investment movement in the states. and building the world's tallest building in less than a year. china wants to do it. the story is coming up. ♪ [ male announcer ] how do you engineer a true automotive breakthrough? ♪ you give it bold styling, unsurpassed luxury and nearly 1,000 improvements. the redesigned 2013 glk. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. at bny mellon, our business is investments. managing them, moving them, making them work.

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>> we have breaking news. this is a horrific incident. michelle is in london. michelle? >> really a bizarre violent attack today. in the middle of the day. sickening and bar baric. eyewitnesss say right next to an ar army. when two apparently knocked him over and got out and started stabbing and hacking him with multiple knives and machetes.

the suspects started running around asking people to take pictures. some of this was caught on tape in which one of the suspects is standing there. his hands covered in blood and holding a large knife and a meat cleaver. an eye for an eye and a tooth for a tooth. the suspects waited for police to arrive. some say they charged at police. they both were shot and take on the hospitals. the british prime minister is currently rushing back here from france to chair a meeting of the emergency response team tomorrow. he said there is a strong indication this was a terrorist attack. unnamed government sources say the suspects apparently were yelling god is great in arabic. >> we are continuing to follow this but thank you very much for giving us what we know. switching gears chinese investment in america is at a

record high and it is growing. our correspondent is here to show us why. >> we have been doing a series all day about chinese investment in the u.s. the u.s. is still the biggest economy in the world. much more stable than parts of africa and the middle east. what we hear is rule of law, lack of corruption. one example? international vitamin corporation is in new jersey and manufacture vitamins. this is the ceo, we had a long conversation and said have you ever been asked for bribes? like no, never. is that an advantage? and he said absolutely yes it is. >> you just focus on what you are doing. and your reward will be rewarded. this is purely a business relationship.

>> your hard work will be rewarded. you don't have to worry about connections. i had another executive say to me, i tell my friends back home, here it is amazing. you just have to be better than everybody else. >> look, chinese investors generally in the world would like to buy natural resources and technology. that's not happening so much in the united states because the u.s. government has nixed a lot of those. but the largest foreign investment last year? ever? amc theaters. you may be paying a chinese company. >> is there any political push back at all? >> only in certain sectors. >> only in certain sectors. you don't want to do too much because then you lose the take out premium. at the same time you have to balance national security interests. >> maybe not an issue? >> maybe not so much. stick around. i want to just bring in this

interesting story a chinese construction company is going to build the world's tallest building in only seven months. the world's current tallest building took approximately six years to complete. >> i have been -- i was in that building when it was just being completed before it opened to the public. it's a spectacular building. it's wide. it narrows out. the idea of a building of that height being built in a third of the time scares the you know what out of me. >> maybe they have so much cheap labor they can employ so many more people. >> i think it will be pre-built and stacked on each other like giant legos but you hope it's not more like jenga.

>> or an ikea building with one screw left over. >> there is definitely growing pains. we want to have the tallest building. we want to have the biggest dam. we want to have the most people. oh, you got that. >> you know why? they are an economy of 1.4 billion people. >> and they have to employ people in giant projects. >> they should have been number one a long time ago. what took so long? >> communism and poverty. >> if we can bring up the picture of the design. if anyone is wondering what is it doing in the middle of a field? that is because it is going to be doing in the middle of a field. >> a farmer's house. >> no one knows why it will be in the middle of a field. >> maybe you don't want to be near anything else for a reason. >> by the way you can see more about chinese investment in the

united states. a lot more material on cnbc.com. >> check it out. >> great stuff. >> up next, angry birds and angry herbs. >> which one is scarier? >> and yachts on a boat as well. the story you have to see to believe. you have got to stay with us. we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. lets you talk face-to-face and share whatever's on your screen. blackberry z10 with bbm video. built to keep you moving. see it in action at blackberry.com/z10

>> it is street talk time when we deliver happiness faster than dominos deliver a pizza. >> do you read everything on the prompter? >> you just told me to read it. >> look at that go. >> former ceo rival have become the new chairman. this was 24 buck stocks. not a reason to celebrate long term. >> up big on better than expected results. 437 million. >> a $30 stock in 2007.

>> and we have got 103 for the set-up. not just sony. >> no. it is also known here as kyocera. it made a deal with the public mobile. it's the highest level for kyocera when it was a $160 stock. look at it go. >> people of japan are turning pale. >> rovio is a very -- it's working to turn angry birds and bad piggies into a media empire.

>> in terms of your operation, you announced that you will publish and promote third party games. >> so expanding beyond your iconic games, does this indicate that you are concerned that people might get sick of the characters, of the angry. >> say again? >> what are you trying to do in times of int s of entertainment

>> why make movies and animate ed ed. >> i love that. thank you very much. coming up, yachts on boats. how the ridiculously rich just got a lot more ridiculous. >> plus get some summer thrills with a theme park. first let's get bill griffith on what is coming up on the closing bell. >> i don't know. i'll have what they are having today.

hp is set to report earnings after the bill. we will have the earnings, instant analysis and more. and fame, fed critic is back with us again today. we will find out why he says this fed has fuelled a rally that could end up hurting investors in the long run. maria and i will see you. could be an eventful last hour. stay tuned. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers.

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>> a willingness to reduce qe in june. but there were differing views on the evidence that will be needed to start such a process. we went into the minutes. we were up by 27 points on the dow. we are now down by 61 points. particularly the nasdaq is up by over 2%. on to bigger and better things. rolling out the love train. a singles only subway cars.

can't decide if this is fantastic or fan tasically terrible. but if you have the love boat, why not have the love train. >> as long as it gets there on time. >> really? >> like a living breathing craigs list. the unofficial start to summer is here. that means theme walter parks, roller coasters and $12 funnel cakes are all the rage. part three in our business of summer series. >> i think the latter point, the funnel cake is my favorite part. nothing suz summer like a roller coaster or a water slide. how are the theme walter parks getting you on them? six flags adding three record breaking thrill rides around the country. >> sea world has a completely

new penguin exhibit. a theme park is not just about getting people in the door but getting people to spend money while they're there. >> we have seen guest spending increase on a per capita basis and really nicely, our spending is not exactly but close to 50% on tickets and 50% in park. >> strength at theme walter parks. driven by significant growth. attendance rose 8% during the quarter and per capita spending was up 10%. ceo brian roberts called brian roberts a stand out. but the business does not come without risks. the economy, the weather, competition. one says that each park has carved out a unique segment of

the market so they are going after different customers. >> i wouldn't view them as going head to head. i would say more that they have segmented the market and doing more of divide and conquering. >> no matter how you slice it, theme parks are a big business. analysts expecting them to attract more than 300 million people, bringing in more than 11. $5 billion in revenue. >> that is absolutely amazing. >> speaking of thin walter parks. right here on cnbc. >> all right. up next. herb is back and he is raising a big red flag on solar stocks. >> and both this is proof that the world's wealthiest have just way too much money. yachts on a boat on deck. we went out and asked people a simple question:

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solar stocks have been on fire. check this out. first solar up 87%.

solar city is up 116%. and that, my friends, is only over the past month. herb greenberg is back raising a red flag on that one. >> this definitely catches my attention, catches anyone attention. you see the stock, solar city, especially, on cnbc, i go out and say, this is the poster child for the nutty behavior these stocks are having right now. and what's interesting about solar city, elon musk is the chairman of this company. he's the biggest holder of this company. i think it gets a little over the elon musk coverage. but there was a great report today by an analyst from raymond james, who you're going to bring in in a second. and he basically points out, he thinks it's irrational exuberance. this analyst has been extraordinary at calling things what they are in the past. so i -- take a look at what he says, and i think it's significant. >> absolutely. let's bring him in right now. it's raymond's pavel multinov. great to have you with us. what is it you are seeing and

hearing about these companies that does not at all jive with the bullishness in the stock movements. >> i talk to people in the industry all the time, and there is such a stark contrast between how the stocks have acted and what the underlying fundamentals of the business look like. the reality is, we saw, you gave this example, ja solar. this is a stock that ran up 70% in one day, because its gross margin was 6 percentage points. we saw stocks go up 20% on no news at all. that is the very definition of a bubble. and although, you know, some companies have beaten estimates, generally jumping over a very low bar, but even when that happens, the idea that it warrants, as you noted, stocks that in some cases have doubled within a month is just, is really quite -- >> this is herb. one thing i liked about your

report, when you compared what you're hearing from the public companies and the private companies. when you get to solar city, people want to say, but this one's different. it's a disruptive company. so it deserves this price. what do you think? >> solar city, i like the story, and i think elon musk is a great executive and really an industry legend. but, solar city does not deserve a $3.5 billion market cap. this is a company that generated cash flow of $60 million last year, maybe they'll do 100, 120 million this year. 30 times cash flow is not a rational multiple, even for a company that's growing the way this one is. >> pavel, we have to leave it there. but you know what, we have been warned. pavel, thank you very much. herb, thank you for raising the red flag. meantime, the man who once called global warming a crock of you know what now wants to buy

an electronic car company. phil lebeau on that. >> we're talking about former vice chairman of general motors, bob lutz, interested in buying fisker automotive. lutz unavailable for a comment ton this proposed bid. vl motivative has the $180,000 car. why the interest in fisker? well, three firms are bidding for fisker automotive. fisker stopped buying the karmah late last year. they also borrowed $192 million from the department of energy just two weeks ago. here's what bob lutz had to say about the hype surrounding electric cars. >> the way the media were dealing with it two or three years ago, and it's, of course, the government was helping, but it was like, everybody's next car is going to be electric. and you knew that that was manifestly impossible, but, you

know, a lot of people were carried away by the hype and way too much easy government money was given away to far too many companies who, by the way, did not all spend it wisely. >> so what are the desirable assets of fisker? you've got the tooling that's already if place for the karmah model, which, by the way, lutz and others all say is gorgeous and they love the design of the car. you have the electric car technology. that's what the chinese firm is interested in. and a dealer network that's already in place. brian and mandy, whether it's luxe and the chinese or somebody else bidding foristicer, there are assets there that are of great interest. >> and phil, tesla news today, paying up. is the doe loan paid up? are they done with that? >> maybe not official until later today, but if not today, tomorrow, $465 million repaid. and they are the first one to completely pay off their d.o.e. loan. to our knowledge, nobody else has completely paid off their loan.

>> and of course, musk announced to that via a tweet, a sign to have the times. thank you very much, phil lebeau. >> up next, yachts on boats. enough said. [ musick ] i knew there were a lot of tech jobs available out there. i knew devry university would give me the skills that i needed to make one of those tech jobs mine. we teach cutting-edge engineering technology, computer information systems, networking and communications management -- the things that our students need to know in the world today. our country needs more college grads to help fill all the open technology jobs. to help meet that need, here at devry university, we're offering $4 million dollars in tech scholarships

for qualified new students. learn more at devry.edu. [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ] vietnam in 1972. [ all ] fort benning, georgia in 1999. [ male announcer ] usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection and because usaa's commitment to serve military members, veterans, and their families is without equal.

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migrate from the caribbean to the mediterranean and some of them do it by boat. that's right. it's called yacht transport. more than 4,000 sailing and motor yachts will cross the oceans this year on an even bigger boat. it costs up to $200,000 per yacht, but yacht owners say it saves them time and money compared to sailing a yacht across the atlantic. now, the biggest yacht shipper is called dockwise. they just launched a megaship for carrying yachts. it's called the yacht express. here's how it works. shis very cool. the boat is semisubmersible, so the cargo fills up with water, the yachts dry in, they're fastened down by underwater divers, the water is drained out, and the ship sets sail. the process is reversed when they set sail. yacht shippers even allow a passenger or two to ride the yachts while they're on the ship. that is riding in style, when you're riding on the yacht, on a boat. that is the ultimate cruise. >> why pay $200,000 to transport, why not just pay the money, get another yacht in

another port or multiple yachts all over the world? >> there's an idea. there's a business idea. multiple yacht carriers. >> yep. thank you for watching "street signs," everybody. >> it's the trickle-up theory of yacht economics. "closing bell," the most important hour of the trading day with captain bill griffeth is next. hi, everybody. we're into the final stretch. welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange. this market pulling back. fears that the federal reserve could begin to taper the economic stimulus measure sooner than expected. >> i'm bill griffeth. this is shaping up to what could be a potentially very important market day. we had that big rally on the open this morning, good housing data, the fed report from chairman bernanke before the joint economic committee, but then the fed minutes came out, and it reversed itself, and we could have what's called a key reversal day, which we'll talking about coming up in a little bit here. are we changing direction?