today. on the week down 2 2/3%. >> japanese markets in bear market territory from their peak, down 20% or thereabouts. that will do it for "power lunch." great to be with you. >> good to be with you. street signs begins right now. the papers are wrong, we are not turning japanese. american stocks holding strong as markets in japan tanked overnight. if the housing mortgage interest deduction goes away the housing market will go away with it. we've got a guest who says that's wrong. and cutting part of it may help housing. plus -- why drinking makes you smart and credit cars make you fat. ceo of a streaming music service says, bring it on, apple. he ain't afraid. bring in the fabulous michelle caruso-cabrera.

>> thank you, brian. stocks are higher for the first day in four. s&p trying to avoid the first four-day losing streak. this is impressive considering where we were when japan was down 6.5%. the industrials higher by 95 points, 15,090. nasdaq higher by 24. the s&p 500 is higher by almost 12. down to the floor with bob pisani, and rick santelli stand big to talk about the ugly auction we saw earlier. this looks pretty good when we saw japan plummet overnight. >> more importantly about the yen. the trend we've seen for weeks, the yen is stronger, as it was today, our markets have been weaker, bonds weaker as well. i hesitate to all call it a trend reversal. it's one day. the happ s&p is up near the highs of the day, the ten year is one and dollar/yen. when this is down, yen is

strengthing. this is breaking the trend. we're taking note of even if it's not exactly trend reversal. we'll need a few days to see that break down. transport stocks are up nicely. cyclical stocks outperforming consumer stocks. there's a good example. better than 1%. that's a good example of the risk. russell 2000 to the upside. here's something we haven't seen in a long time, south africa, austral australia, peru, brazil, all up one, two, three, close to 4%. we're not out of the woods on this japan thing. leverage trade here being unwound. no clear these tis. from 12,000 in 2 months to 16,000 on the nikkei back down to 12,000. if that's not the side of a mountain i don't know what is. better than 30% to the downside in a few weeks. back to you. >> it has been rough and tumble.

thank you, bob. lit turn to rick santelli. rick the government borrowed a lot of money a few hours ago but having to pay up in interest rates, aren't they? >> it's fascinating. we had two out of three auctions that were below average. yet we see yields at 218, off the 223 high, in terms of how little volatility outside the auction that we've seen today. the dollar/yen, two-day chart, bob's talked about. the dynamics of the trade didn't impact many markets. who's wagging who? hard to tell who's leading. i can tell you we know the areas to pay attention to, around 2.25 on a ten. 3.40 on a 30-year. volatility's tapered off. maybe the jgb was a good indicator last night. didn't have a huge range. >> i know. we've talked about how surprising that is. >> you know the japan tanked

overnight but 6700 miles away from new york. if you drive it's a little more. wall street doesn't care. should investors be more worried than they appear or are japan's woes to our benefit? joining us, president of permanent portfolio funds and from the morning star investment conference in chicago, charles devoe, cio of international value investors. to michelle's point, when we woke up, the nikkei's down, we're doomed. dow's up all day. do we care about japan or not? >> well, i think in the short term, the answer's obvious. u.s. market doesn't seem to care. i think long term on a broad level, though, it's very instructive as to the volatility and the degree of short-term moves you can have when money chases equities based on largely expectations or monetary policy and how fleeting that success can be. i think it's instructive for u.s. investors to look here when you look at run in our own stock

market, versus the u.s. economic activity levels in growth, there's a big disconnect. >> are you suggesting -- we saw japan go into a bear market and you're sucking it's driven that version of fed, pumping money into the system. is that similar to what could happen here? >> it's instructive as something that can happen. i'm not predicting it will happen. but i think a lot of the japanese move has been a short-term trade, a trade on declining potential rates and redirection of monetary policy. and it didn't have the expected short-term outcome with rising japanese rates. you've seen money come out of the stock market. i think it's instructive. i think it's instructive as to what could happen when you have to much of a monetary premium built into equity rises and that's at some level an issue in the states. the u.s. market outpaced economic growth. >> you buy international stock. are you buying japanese stocks on this weakness?

>> yes, over the past week or so, we have become net buyers again in japan. and that's following several-month during which as the japanese patient was moving up in a parabolic manner, we were heavy net setters in ja. . yes, many stock prices have come down enough that we are net buyers again. >> buying the whole nikkei? buying sony? specific stocks? >> no, we've always been individual stock pickers. our experience in japan and in general, individual stock picking can deliver much better results. we own -- you're right. we own mostly smaller, more domestic oriented names. like yahoo! japan which from february to april doubled in price. name such as temp holdings, cosmetic companies, all sorts of

names. light on the export side. >> sounds like you believe that ultimately this grand experiment in japan by the monetary policy leaders there in the fiscal policy leader there, you think it's going to work? do i read that into your buying decisions this week? >> not quite. what truly intrigues us with japan is not so much the new government policy abenomics. japan has. in a 28-year bear market and has become very cheap, 28, 25-year bear market. more importantly companies in japan finally are starting to pay attention to shareholders. companies finally are increasing dividend payout ratios, more companies buying back their on shares and they are, a few takeovers taking place. one thing of interest, we've seen activist dan lobe from a third point take a stake in sony and suggest a few things for the

company to be doing and interestingly, the company is, seems receptive to the idea. >> that could be the bigger surprise. not that lobe went after him, it's that sony appears to be listening, i used to work for a japanese bank. are you buyer of ja dmeeds equities today? >> we are not. i would say that from a valuation standpoint, charles is dead right and seems to have a prudent trade longer term. we play u.s. companies that have broader international exposure a lot of our holdings are in japan. but that not japanese centric. we're there but not indirectly. >> thank you for joining us. we are at session highs right now. so japan, big deal. who cares? 6.5%. >> you're a big deal in japan. i saw a guy with your face on a t-shirt. a guy who says taking away parts

of the mortgage tax deduction may help housing. >> it would give new meaning to the word ibanking. could apple's next big thing be a bank? how it would work. clients are always learning more to make their money do more. (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody.

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♪ [ male announcer ] universal studios summer of survival. ♪ when it comes to housing, supplies or lack thereof, big story, with demand coming back there's not enough homes to buy. that has pushed home prices higher than expected. that may be though about to change.

diana olick is here with the story. >> home prices have been soaring lately, largely due to that lack of homes for sale amid riding demand. but now new numbers are pointing to a shift. number of listings on zillow down 12% from a year ago but less than a 17.5% drop in january. now listings in all major markets are still down. but the drops improved in 70 metro markets between january and june with the biggest gains in phoenix, san diego, minneapolis. some of them uf over 30 percentage points. on the flip side, supplies tightened in las vegas, chicago, here in d.c. down 10 percentage points. the biggest drops in inventory are higher priced homes. bottom tier properties are close to seeing gains. this may be due to a rise in bank repossessions. foreclosure activity is down from a year ago. bank repossessions jumped 11%

from may -- in may from april, according to a new report from realty track. 33 states saw the rise with some quite dramatic, as you can see. >> i think this is the leading edge of a trend. we're not going to see bank repossessions as high as we saw in at the peak of this in september of 2010 when we saw over 100,000 in 1 month. but those numbers are going to inch up because this is a market where it makes sense for banks to get rid of this distressed inventory and sell it. >> so more bank-owned homes on the market could mean the spike in prices start to moderate again. >> just to put a fine point on it the difference between foreclosure is foreclosure sits for a while but the individual's still in the house, and repossession the bank says, time to get out, we're putting it on the market, doing something with it. >> we are talking about the final stage, the bank

repossession when the bank takes the home back, homeowner has to vacate the house, and the bank puts that home up for sale. >> got it. the general thinking is that if you take away any part of the mortgage interest tax deduct, you are going to slaughter the housing market. your next guest doesn't subscribe to that thinking. ben harris wrote a piece we came across, suggesting congress can limit parts of the deduction and housing will be fine. viewers, most of them probably disagree with your premise. make the case. >> here's the thing. coming out of a presidential election when both candidates, republican and democratic candidate, both went ahead and proposed a rollback to the mortgage interest deduction. we had a bowles-simpson commission, bipartisan debt reduction commission that proposed rollback of the property tax deduction, in addition to modification of the mortgage interest deduction. so it's important that we understand exactly what will happen in housing prices if we

change the tax treatment of housing. so i wrote a paper. i did research and looked at what would happen if we implemented various, different reforms starting the president's proposed rollpack in the subsidy for mortgage interest. proposed to limit to 28%. that means if you're in the top tax bracket you're paying 40% on the top dollar the president would limit your subsidy to 28%. the question is, will this kill the housing market the answer is probably not. looking at maybe 0.2, 0.3 correction overall if we saw this limitation. >> that is because the vast majority of people buying their hopes don't hit that top percentage, right? >> exactly. high income taxpayers in the top few tax brackets make up a small proportion of those claiming mortgage interest deductions. limit to 28%, which would provide a benefit for top taxpayers but without killing

the housing market. i'm not talking about rolling back the mortgage interest deduction. if you took that away and took it away the deduction for property taxes, talking about 12% reduction on average across cities which is huge. no once proposing that. it's an awful idea. we can have a smarter mortgage interest deduction, stimulate housing instead of stimulating borrowing which is what the existing one does. >> how many hate mail e-mails have you received? >> i mean that sincerely. >> so first of all, i'm not proposing anything particular. but you know on real estate agents hereby's the thing, buying and selling a house is expensive. to i looked at transactions. >> it's twice the price of the next highest nation. >> yeah. it's outstandingly high. imagine what happened in the financial markets if it cost you 7% of a stock every time you wanted to buy and sell it. we have accepted this in the housing market. so i sort of bring up the point,

look, maybe you want to subsidize closing rather than subsidizing mortgage interests. >> we can't get any deduction from the mortgage interest but the government cuts me a check when i close to cover closing costs? >> one thing you can do is say, look we'll limit benefit to 20% which would be no change in their treatment or only a slight limitation. and we could go ahead and give people a check at closing. but even better subsidize home ownership. we give people 1,000 a year for having a child. we could give people, i'm not saying a certain amount but a subsidy for owning a home. >> when you subsidize something, people want, you know what happens? cost goes up. we see this in education. people -- >> we saw it in housing. >> but what he's saying subsidize closing costs. the banks will raise them to

above the subsidy because people still want it, right? happens all the time. >> the analogy, we had for a short period of time subsidy for buying electric cars. and so you saw resent on that. you expect like you suggest that the price of cars would go up. but it's good research saying benefit was captured by the consume zbrr peop consumer. people didn't want the cars. >> talking about what things people want. >> you had to convince people to buy electric cars. you still do. >> whether or not it's passed on to the consumer is for debate. you could give people 1,000 a year for owning a home which subsidizes home ownership instead of subsidizing taking out larger mortgages which as we know is a real problem. >> ben, a good discussion. first time on cnbc. i'm sure we'll see you again. thank you very much. >> my pleasure. >> interesting what he brought

up, i'm not saying too high or not, but real estate commissions here are 6%. you can negotiate down. europe they're 1.5%. we're more than double developed nation's real estate costs. >> everything work so slowly. >> i'm not saying the a better system. i'm noting statistic fact. if my brother-in-law who is a realt realtor, i'm a dead man. >> taxes. >> next up, the biggest economic story in america that nobody is talking about, except for us. the same storm system that triggered the dramatic flash flooding and rescue, rearing its ugly head in the northeast. how bad is to going to get? look at your screen right now. tdd# 1-800-345-2550 [ trader ] when i'm trading, i'm so into it, tdd# 1-800-345-2550 hours can go by before i realize tdd# 1-800-345-2550 that i haven't even looked away from my screen. tdd# 1-800-345-2550 ♪ tdd# 1-800-345-2550 that kind of focus... tdd# 1-800-345-2550 that's what i have when i trade.

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let's move on. check this out, folks. what we're looking at is a shot of formerly known as sears tower, willis tower in chicago, struck by lightning. amazing photograph! >> so cool. >> maybe the willis tower is shooting lightning up in the sky to defend against alien invasion. >> that's what i was thinking. >> terrifying rescue in iowa last night but a happy ending. family trapped in suv after severe storm triggered flash into thing. took abhour to get that girl and two adults on dry land. great job by first responders. nobody was hurt. it has made its way to the northeast. extreme weather events causing $110 billion in 2012, the second costliest year on record. it's not just our imagination the weather's been quote, crewy. it is weird, right. >> one way to put it. it has been crazy. a lot of folks are traveling this time of the year, it's end

of june, folks want vacations under way. talking about severe weather plaguing that drive along interstate 95 from d.c. through the carolinas. this is a new watch in the south from tennessee into northern alabama. northern georgia. this goes until 8:00 eastern time. we could see dangerous high winds, frequent cloud-to-ground lightning and possibility of hail as well. you can see that we had quite at thunderstorm complex move over new york city with lightning. reports of someone getting hit by lightning. a house fire caused by lightning. look at all of the thunderstorms continuing down toward the south as well. good news for new york, as well as philadelphia, where the u.s. open is going on, they are playing golf because the rain got out of the way. you can see more rain tacking place across upstate new york, albany. severe storms, yellow represents counties under severe thunderstorm warnings. so we're not done yet. we still have a chance of more severe storms in the red zone from d.c., atlanta. we're talking about a lot of

rain here. in fact, even in new york city and southern new england, 3 to 5 inches of rain. >> kelly, thank you. one of the most important but unh heralheralded stories. steve liesman is here with just how big this is. i was in mexico they can't stop talking about this. terrified of this. >> they should be. canada, less. but also most importantly saudi arabia and the middle east. >> yes. >> let me explain. the latest numbers on u.s. oil production and imports not only history ex-they threaten to change the global game. bp said u.s. oil production rose the most in its history in 2012. total energy production reaching all-time high for the third year in a row. imports are down. exfors are up. and u.s. energy efficiency is making record strides. goldman sachs chairman lloyd blankfein just this morning saying americans are not focused

enough on this good news story been. >> if i had to pick one theme that's underexploited in this country i would say it's focused on energy. we're in a position to be a net energy exporter in north america. we could hurry that along and that has great implications for not just the cost of energy but manufacturing in this country and by the way, geopolitical in terms of treasury that's expended to protect our import of oil. >> oil consumption is down and has been down. four of the past five years. in part due to economic weakness but also rising energy efficiency spurred by higher prices. big changes how the u.s. grows with less and less power, energy intensity. it measures the energy it takes to increase growth. falling almost 5% last year. the most since 1983 when prices

were last very high. add it up, the u.s. petroleum deficit $13 billion, smaller than it was in '05. fewer billions overseas and could mean a shakeup in global alliances and the global flow of not just oil but cash. >> i told you i was just in mexico, they are terrified of this. this is what they cannot conceive. they used to think they were competing against cheap asian labor for manufacturing. they think they may be competing against the united states for manufacturing jobs because energy's so cheap here. >> there is still labor advantages. >> sure, sure. >> but if you have a reliable and cheap source of energy which is in natural gas, that's a huge plus for them. and then the question is, how much do we care about how many planes, aircraft saudi arabia has when and if we don't need them so much for oil? >> on a different note, mexico, it goes along with the conversation the largest oil field is in saudi arabia. the second largest oil field in

the world is in mexico. it did 3.4 million barrels a day, about a decade ago. it's doing 2.5 now. >> they don't invest. >> no investments. the point is, mexico from an energy perspective used to be a leader. still kind of is but it's on the decline rapidly. >> michelle and i have been at this game for a long time, me, longer than michelle. you can tell from looking at us. >> i look younger because i am. >> the birth of the railroad. what happens sick sick cali. the government takes it over, oil production declines, they open it. we are seeing early steps about opening up mexico -- >> to point you're making they're talking about changing the constitution so that way foreign investment can be allowed in mexico because they realize they're going to be so uncompetitive compared to the united states.

>> everybody cheering what chavez did. everything's going to rust and fall. we need to bring in h.w. plainview. i have a milk shake, i direct your milk shake. >> took two years in russia for them to privatize these oil companies and turn around the decline in oil production. >> then russia made a deal to buy it back. >> you know what? five or six years, it's going the other way. >> who's going to invest? who's going to invest to russia after what they've done with the companies? here's the price we're paying you. >> brian, tell in tomorrow in the deal's right. >> they have no memory. >> they would be in tomorrow if the price is right. i share your sentiment. >> it's no different. >> what's different here the u.s. trade deficit falling, global cash is changing. >> music's on. rare upgrade for blackberry.

find out why credit cards are make you fat. >> ceo of a streaming music service says apple, bring it on. markets sharply higher. [ male announcer ] with wells fargo advisors envision planning process, it's easy to follow the progress you're making toward all your financial goals. a quick glance, and you can see if you're on track. when the conversation turns to knowing

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the street talk segment. does that make you a street talker? >> better than the option. >> fast moving stock stories of the day. blackberry. >> street runners. blackberry up to a buy from a sell. that's a big jump. they cite better than expected sales of blackberry, ten handsets. target goes to 17 from 13. folks that bought the z ten they like it a lot. blackberry doing well. >> h&r block. >> yeah. fiscal fourth quarter profit 242 a share.

revenue short. earnings rose a little bit because of strict cost cutting. fewer people filed tax returns or through h&r block. look at that. bad news maybe not as bad as some thought. >> great year. spectrum communications. sprg. >> every day we try to find a name we haven't found. >> or can't pronounce. >> maybe they had a different name in the past. semiconductor company looking fabulous. up to buy from hold. target goes from 23 to 24. spreadtrum,'prd, small cap mover of the day. >> web.com group, wwww. >> it's not webmd. it's web.com. main registration. >> like a go daddy. >> as far as i understand it. >> got it. >> not to the consumer. provided web service, blah,

blah, blah, registration, investor meeting. raising target on www to 28 from 24. they see accelerating rev now for web.com. >> sell gene and gilia. >> upgrading c. lgen from 140. gilead from buy to hole. likes evaluation. celgene presented positive data. cramer has love it as well. >> i thought i talked fast. you are good. >> i don't want to. i have to do. like the micromachines guy. >> breathe. supreme court handing down a big rule on human gene patents. bertha? >> big ruling, michelle. a decision straight down the middle of genetic innovation. a court ruling naturally

occurring human gene is night patentable. a test that angelina jolie took prompted her to undergo preventative mastectomy. unanimous decision. laws of nate and abstract ideas are not patentable. validating five of myriad's patents on the brc a1 and 2 genes. thomas continued a synthesized form of dna does not present the same obstacles of patentabilitien myriad hailed the decision. the president and ceo said, we believe the court appropriately upheld our claims on cdna and underscored patent eligibility of method claims ensuring strong intellectual property protection for our braca analysis tests

moving forward. the high court ruling eliminates further legal risks. >> patents are subject to expire here in the next two and three years, respectively. myriad has a plan to come up with a product that will supersede brac analysis, making additional legal challenge perhaps moot. >> the split decision is good for myriad and the players. in general, the court reinforcing the underlying premise of innovation. but also not block things so you can't patent a gene. >> i would patent your gene. i would file it. you'd have to pay me royalties. >> every time she breathed. >> i don't know if you read this book, the immortal life of henrietta lax. >> raises questions.

>> the guy who didn't own rights to his own liver. >> you also want to encourage this tup ype of research becaust does help a lot of people. >> my recommendation was in the book pipe was one of the first people to read it. i had her on the show. thank you. census bureau out with a big sign oh the times. deaths exceed births among nonhispanic americans for the first time in a 100 years. it gives you a sense to the changing demographic of america. >> i read numerous counties in america where whites are minorities. we have a changing face of america. >> i was born in gar deana, california, raised in downtown l.a. look at my school pictures, l.a. was ahead of it, right? wife went to public school. downtown in chicago. ogden elementary school. it the way it's going to go.

fantastic. >> food gets better. more variety. >> my people, irish we didn't have money for food. >> who wants boiled potatoes? >> happy blooms day. >> right. >> sunday. i will be in chicago. >> cool. herb raising a red flag about herbalife. >> plus, how songza is turning up the volume on streaming music wars. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade.

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please look at your skroen. a royal smash. the royal princess crude ship, $2,000 bottle. the royal princess the largest of princess cruises complete with 28-foot glass bottom viewing gallery, 1,780 luxury state rooms, spa, casino, 10 restaurants. >> apple entering the streaming music business. people worried about pandora, but pandora's not the only player in the space. i prefer songza which gives you play lists not based on artist but activity. for example, what are you doing? making dinner, i want to hear

1960s r&b, it will create the list for you. give it thumbs up, thumbs down. he is 16. >> 29. >> mr. roman. >> thank you very much. >> sorry, sir. i apologize. i was jamming out to one of your play lists. appreciate you coming on. you do it differently. you don't have to know an artist like horace silver. i am making dinner, i want to hear jazz, it comes up. >> we did research that told us what people want from music is lifestyle. they want an easier way to get out of bed or throw an awesome cocktail party. within you figure out what artist -- >> it's tedious. >> people are lazy is what he said. >> people appreciate -- >> what's your most popular -- do you call it genre or mood or play list? >> we have popular content that you expect like around waking up, driving, working out. >> driving music, wake-up music. >> exactly. getting lucky music is popular

around the weekends. >> what's on that play list? >> we should talk about that later. >> tell herb later. one called papa as a rolling stone, rolling stones is the band. >> barbecuing, right? >> apple's in the space. you're not running off. why not? >> i think there's every reason to think apple's going to do a great job at building internet radio. the interesting question is not who about what. what is internet radio trying to do? is it trying to make things you're doing ever day better . >> a graphic we created on the wall. take the picture there. this remains me when cars were invented and there were tons of car companies. there are tons of guys like you doing streaming radio. how are you going to survive. >> everyone else on the board is trying to play you music that sounds like music you already know you like. >> how do you know apple is not on to you already?

they're going to do the same thing in. >> from the product announcement, you have to put in the seed what song, what artist do you want to hear. we obviate that step for our users. >> what about the artists? do they get paid? >> we fall under the same license as pandora. >> can i hear taylor swift or not? i can't hear taylor swift on spotify. >> any artist. >> pandora bought a radio station in south dakota which is an odd move but it does are to do with rollties. how do you see the royalties situation shaking out in the next 24 12 to 24 months. >> a lot of lobbying on both sides. how do we monetize it better . >> my next question. do you make me listen to ads while the music's playing? >> we don't do ads in the middle of a play list. when throwing a party or getting lucky -- >> why do you assume it's luck? >> could be skill.

>> how do you make money? >> we have a native advertises solution that is better for brans and users. working out with nike, waking up with dunkin' donuts. >> or getting lucky at dunkin' donuts. >> tapping, working out with nike, not interrupted but soundtracked by this. >> thursday, play music for working in an office, safe for work music. >> important. >> you're not going to have stuff that lyrics that some people like herb might consider offensive. >> exactly. >> he's got andrew sisters blasting from the cuba cal. >> this is orson welles. >> i'm only 29. i'm going to download -- downloading this after the show. >> very cool. >> that's why we asked him come on. i have to give you credit. you've done something that other people haven't done. and it's -- it is doing work for people right? making them say, i don't have to

sit and -- you know we -- i was a music snob, right? >> still are. >> probably had big speakers. >> i still. i have them. look at my big speak, baby. very cool stuff. thank you for coming on. thanks for playing along with these insane two there me, insane. mr. roman. still ahead, could that giant tech company called apple become a big bank? plus -- how your credit card is making you fat and offcamera discussion. about the size of our speakers. at honda,

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he's back. another red flag on herbalife? >> lot's call the anatomy after stock sudden rise over the past few days report surfaced that california congresswoman linda sanchez urged the federal trade commission to investigate herbalife. now in theory that could be a stock rattler, because it could spark interest from other lawmakers. but this is where this gets interesting. with the stock possibly vulnerable, this morning, pr

firm blank blasted a copy of an over the top bullish report from herbalife yesterday by tim ramy. his report came after the company we leased results after neilson story that shows herb yl life has real customers. than today, after the stock started rising, ramy issued yet another report. this one saying the shirt covering begins. he went on to question whether bill ackman, like 20% interest, is covering the deal. we don't know what the heck ackman is doing but i tell you, if he, covering the short, that would be kind of bearish because suddenly there goes the short squeeze story that people have been hanging their hats on. and could you make a case, which is interesting, that people said the ftc will not investigate this cape because there is this rich hedge fund guy and they don't want to help him out. >> i have one other quick thing

and just e-mail the report to me that one of the bush league things because you see promotion yl activity by penny stock firms sending out reports by analyst. that you typically do not see by sophisticated companies. >> here we are. >> thanks that make you go hhmmmm -- >> and make me more riled. >> could your next credit card come from apple? not apple bank, apple the tech company. you know, the ipod maker. that is generating buzz on the street after a story on the street.com. joining us now, analyst tom forth. also colleen taylor. colleen, ladies first on "street signs." do you believe that the pass book feature which i just use for airline tickets at this point, will become a big mobile payment system for apple some

day? >> you're right. this is not exactly new third party apps have been doing this for a while. bump, you mentioned. square, which is a start-up, but a big one. google tried with google wallet. making this into an android operating system. people haven't completely signed on. i think people are nervous about the security of using their phone for their credit card. it took decades for people to get used to using a credit card from cash. so making the leap from credit card to smart phone, but if anyone with do it, maybe it is apple. >> they are already, by virtue of itunes, where do you think they will go to? >> they have all of the pieces in front to do more on the payment front. many accounts with credit cards. by way of comparison, paypal has

128 million. i think by minimum the apple store is the retail store of the future. you pay with your smart phone and cashier usees a cab let, ipad. so i think there's an opportunity. pass book is the first step -- >> do we get to apple being a bank? are we talking about the possibility that i'm getting a mortgage from apple? no. >> i don't think we will have apple currency. i don't think we will have loans directly from apple. i think those will still be visa, master card, even paypal, bank of america, traditional lenders. but i think apple is a conduit, especially on the payment side, is a natural. >> colleen, i'm thinking of zoon point. remember that? nobody else does, either. the mobile payment world kind of like our song discussion a moment ago, is getting more and more disburse. do you think apple can bring everybody under the same umbrella? >> exactly. could be a consolidation play

here. i agree with tom. this could be long-term apple could be doing something like this. but we have to remember that payments is really difficult. when you get into payments, this is why banks are big huge corporations and they do one thing. for apple to be a consumer electronics company to being a bank, financial business, i don't think that's going to happen. >> clarly there is room, right? still in the country, maybe starbucks because of the way people can pay for coffee at this point. >> apple, i mean, they excel at making everything easier for the consumer. if you look at the emerge of digital payment, no one has come up with something today that is so easy and compelling to use, that's apple's forte, pardon the pun. so i think they have an opportunity here and something they could do to drive the stock higher.

>> all right. great discussion, guys. thank you so much. do appreciate it. >> i'm lapping because of something sitting in front of me. could your credit cards make you fatter? economist say you are more likely to pay with fatty foods with a cred ut card. there is a weakened impulse control when you pay with plastic. you are more likely to pay for healthy food in cash. >> and so up next, break out your credit card because we have found, hold it up, michelle. that is a -- that's a doughnut, folks. >> that's like my entire hand. >> that a doughnut and we will consume this doughnut in 30 seconds or less. >> like a pie. you obviously paid for this with a credit card. >> that was shipped to us from texas. the story behind that don't us -- >> and why it is orange. >> it is a little orange. all business purchases.

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yeah, there you go, folks. that's a glazed doughnut. sorry, just wanted to lock through the hole. this is a normal sized doughnut. this is probably slightly larger than a normal size doughnut. this is the doughnut. round rock doughnut company in texas, outside of austin. >> put them next to each other. >> there you go. look at that, folks. this is a doughnut. i assume it's for one person. want it thank the folks from round rock for sending this to us. >> comes in chock lot or glaze, it is orange glaze, that's why it is orange. i want it taste it. >> go ahead.

all you. >> oh, it is going to be delicious. >> you're diving in? >> you eat food on television. >> we took a picture of this. our producer, she was ready to eat it already. >> all right. >> take care. >> how is it? hi, everybody. good afternoon. welcome to the "closing bell." the dow industrials well on to breaking a three-day losing streak. triple digit rally right here. scott wapner at headquarters. >> i'm scott wapner at cnbc global headquarters. we are watching this market closely on today's show as we always do. stocks fairing remarkably well considering the carnage in japan overnight. that market officially if bear territory. the next domino to