>> twok "on the money." i'm sue herrera in for becky quick. what the bond market has to do with it and what it means for your money. the man who helped pilot america out of the financial crisis. tim geithner recalls some scary days. >> you're in a plane. you're in the cockpit. the epgin is burning. >> you can't insure yourself against old age, but can you make sure you're taken care of? the debate on long-term care insurance. alan alda proves there are really second acts in america. the new role, the lessons he learned and what he can teach.

"on the money" starts right now. here's a look at what's making news. a wild and woolly week for both the stock and bond markets. stocks climbed on friday following the worst two-day decline in more than a month on wednesday and thursday. earlier in the week the markets had hit a new record high. that fall partly due to weak economic data. and partly because of declining yields in the bond market with ten-year treasuries paying less than 2.5%. that spooked stocks with concerns that bonds were signalling the economy is weaker than many thought. disappointing sales. rising .1%. economists had expected a .4% increase. the numbers always closely watched because consumers make up nearly 70% of the u.s. economy. earnings season is winding down. tech giant cisco beat expectations as did macy's,

kohl's, and the world's largest retailer, wal-mart, which fell a bit short. if you don't have a lot of cash in your wallet these days, you're not alone. according to a new report by bank rate.com, one in ten americans no longer carry paper money. nearly 80% have less than $50 on them, and half carry $20 or less. that cashless society we've been hearing so much about may not be too far away. it's been a confoozing week for stocks and investors. first a record on the dow and the s&p 50000 followed by a big sell-off and what appears to be a big battle between the stock market and the bond market. so which one is right and what does it mean for your money 1234 joining me now is john riding, chief economist at rdq economics. let's start with the battle that seems to be brewing between the bond market and the stock market. we saw interest rates go down below the 2.5% mark this week, which very few people expected. what is the bond market telling

us is going on right now versus what the stock market seems to be seeing? >> well, if you were to literally look at what the bond market is saying, you take out inflation, you look at interest rashgts they're falling, and that's usually a negative growth signal. same time, the stock market is hitting record highs, which is a positive growth signal, so these two markets are at odds with each other, and the equity investors are looking at the bond market that does the bond market know something that we don't should we be nervous here? >> and should they be nervous? >> well, obviously when a market is at a record high, there's an element of rethinking. if you look at profitability, profitability is strong. if you look at the economy, we're bouncing back from this harsh winter. we have some good numbers on housing. we've had some good numbers on employment. i don't think that the stock market is wrong on the growth story. if you look at the bond market,

we have some surprisingly higher inflation numbers this week compared to what the federal reserve would have thought a couple of months ago with inflation at 2% year-over-year. i think things are lining up for the stock market to be right on this one. >> what we do see is a market that seems justified in terms of valuations given the amount of profits. the stock market at a macrolevel looks relatively okay. >> you mentioned inflation, and we have started to see a little bit of inflation creep in. is it too much? i mean, the fed has wanted to see a little inflation come into the system. >> well, they have, and the problem with a little inflation is like going to a party and trying to have a little amount to drink. sometimes you may get a little

carried away and it welcome back hard to reign yourself in. that can be the problem with inflation. if it gets going, it can be hard to be reigned in. we have to think really quite remarkably where we are. 0% rates from the fed, and we are next month entering the sixth year of economic recovery, so it's really unchartered territory in terms of policy, and like many drinking sessions, they can end with a nasty hangover, so the trick is for the fed to take that punch bowl away and get out of this without having too bad a hangover, and i think inflation figures are saying and the unemployment figures are saying the fed should think about doing it sooner rather than later, and that's going to be a surprise for the bond market. >> yeah. ms. yellin, the chairwoman of the fed has said that basically maybe six months from now we might see a little increase in interest rates. do you think given the economic data that we've seen recently she'll be able to hold by that? >> well, her about six-month comment was from when the fed stops buying bonds, which we

expect to be around october, which will make an interest rate increase in march of next year. this bond deal is saying we think it's coming in september or october of next year. i think the not even taking what janet yellin said at her last press conference on the terms she said it, and so when the federal reserve meet next month, i think people will be listening very carefully because these employment trends, inflation trends i think it's a message that's going to surprise the bobbed market. >> all right. we have been forewarned. john riding, thank you so much for joining us today. we appreciate it. up next "on the money" did he save america's financial system or give away billions to the banks? former treasury secretary tim geithner recalls some scary days and an angry public. >> you could take out your favorite investment banker and slit their throat in the alley and the next day people would want more. >> and you've insured everything

from your home to your car to your health. are you missing out on long-term care? we find out if it's worth your money. as we go to the break, let's take a look at how the stock market ended the week.

almost six years after the worst financial collapse in most americans' lifetime, timothy geithner is telling his story about his role in the rescue. it's a memoir about what he did and how he did it. ranging from a defense of big bank bail-outs to whether the market is safer now.

>> americans haven't lived with the risk of a major crisis since the great depression. they have no memory what it's like. what's the best way to think about it? you're in a plane. you're in the cockpit. the engine is burning. there's smoke filling the cabin. you have a bunch of terrorist on board. people somehow messed the plane up. they want you to come out of the cabin and like beat up the bad guys, but you got to make sure you land the plane first. >> we did transformative reforms to the system much stronger consumer protection, much better authority for the cops than we had before the crisis, and a set of protections against risk taking that make the system today a much more stable system. banks are forced to run much more capital.

we limit the size. no bank should be much more than 10% around the system. that's a much tougher constraint anywhere around the world. >> there's ail part in the book where you go to visit bill clinton. we talk about a couple of things. one whether there's a way to persuade the public perhaps that what you are doing is the right thing. what did he tell you? >> he said the basic reality -- it's sort of a human thing -- is that people wanted blood, and you could take your pick. you could take out your favorite investment banker and slit their throat in the alley, and the next day people would want more. >> were you surprised? he said that about lloyd bla blankfein. >> that was his example. >> to a more general point. the amount of damage caused by the crisis was just enormous. it was tragic. huge amount of damage. we're still living with the scars of the crisis today. he was making the observation that that amount of anger is

something that you can honor in trying to fix the problem, get the economy growing again. it's hard to honor and satisfy by going out and shooting people. >> to the extent that part of your job on the political side is persuading the public that what you are doing is the right thing tsh. >> it's kind of hard for me. >> if you could go -- >> i was not successful at it. >> if you could go back and to it again, is there something you would have done differently on that piece of it? >> think about it this way. i mean, it's not my natural talent. how can you convince people that something -- it was still so terrible, the worst recession in our lifetime, could have been worse. we had this other burden, again, which the things you have to do to protect people from worse damage, just are going to look terribly unfair. again, looks like you're wee rewarding the arsonists. >> it's been a little more than a year since you left the job. what do you make of where we are on the economy and what do you think of the markets? >> i think the country still has a lot of challenges, obviously, and we have very high rates of poverty. long period where the average of

median income has not been growing and tremendous increase in inequality, and the americans as a whole feel less confidence still, but even with those challenges, we're a stronger country today. we're getting stronger. we're gradually healing the damage left over from the crisis. i think in a relative sense relative to any of the challenges any of the major economies face, i think we're in a much stronger position today than we were before the crisis. >> our thanks to andrew ross sorkin and timothy geithner. up next, we're on the money. less than 8% of americans have it, and yet, the majority will need it at some point in their lives. find out about the one expense you're not planning for that could turn your finances upside down. then alan alda on the role of his lifetime. science educator, how a love of asking hard questions turned the actor into a teacher. what does it mean to have an unlimited mileage warranty on a certified pre-owned mercedes-benz? what does it mean to drive as far as you want...

for up to three years and be covered? it means your odometer... is there to record the memories. during the mercedes-benz certified pre-owned sales event now through june 2nd, you'll get complimentary pre-paid maintenance and may qualify for a two-month payment credit. only at your authorized mercedes-benz dealer. i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter.com/offer2.

dog: what's this? what's this? mattress discounters' memorial day sale ending? mattress discounters' but mattress discounters has the largest selection of memory foam mattresses under one "roof." comforpedic, icomfort, optimum, and wow, four years interest-free financing on the entire tempur-pedic cloud collection, even a queen size sealy gel memory foam mattress for just $497. the memorial day sale is ending soon. ♪ mattress discounters

it is the one thing that could make or break your retirement piggy bank, and it's long-term care. nursing homes, home health aides and therapists are a part of a $210 billion industry that can hit or your relative's pockets if you're not prepared. is insurance the best way to pay for it all? we'll find out because here to explain is personal finance reporter sharon eperson. good to see you. >> good to be here, sue. you may be covered financially in the case of a car wreck or house fire or disease, but what about insuring for something that's a lot more likely. old age.

should you buy long-term care insurance? >> we're all going to get old, and it's a protection. >> i've got parents and grandparents, so it's important for me to consider what it would be like to have to support them as well and for my children not to have to support me. >> unlike traditional health insurance, long-term care insurance is designed to cover services to those that can no longer take care of themselves, and pays for services to as them with activities of daily life, like bathing, dressing, or eating. >> protecting is a portfolio. protecting somebody else's standard of living or you're protecting the fact that i want to make sure that my assets are going to go to my loved ones. i don't want them to be ravaged by long-term care or the costlyness of going into a nursing home. 53-year-old accountant anthony ferraraa wonder whether it is worth it. >> it is a big decision for moat most people. do you want to spend money today on insurance, or do you want to spend money on things today that you want to? >> this type of insurance is

generally not for the very wealthy. with means to pay for long-term care, should the need arise. or the very poor who qualify for medicaid. those in the middle should consider several factors before paying for long-term care insurance. the cost of coverage can vary widery, so compare premiums. also, choose a plan that covers a comprehensive list of activities of daily living. and is portable, so you are covered if you move to another state. for ferraraa, family is his primary consideration. >> i have family who i would not want to burden financially or personally. it would be nice to leave your children something and not leave them with the burden of having to care for their mom or dad. >> this type of insurance may not be for everyone, but it is worth looking into. about 70% of those 65 and older will need long-term care. even in their own home or in a

nursing home. that's according to government statistics. sue. >> i know the price varies widely, as you said, in your report. do we have a little bit of an idea about how costly it can be? >> well, we know how costly it is to be in a nursing home, and that can range anywhere from $55,000 to $250,000. the average policy probably about $2,000 a year. that would give you about $160,000 in benefits, and then that would turn into about $330,000 by the time you're 80. it is something that is costly for some, but it's worth looking into. a couple of things you want to think about before you get into this policy. you want to think about the age you are. the younger you are, the cheaper it's going to be. you the auls want to look at the type of policy you're selecting and the type of coverage that is provided in this policy. are you going to be able to have at home care, nursing home care, assisted lig care? what will covered will is very spornt. >> is there an age at which it makes sense to do it and an age that makes not sense to look at it. >>est month people purchase these policies between the ages

of 50 and 60. usually around 50 if you are getting one from work. 60 if you are buying it at your own. the older you get, the of course, the more expensive it's going to be, but you can buy it younger. i've had a policy pour about ten years. it's something that i think is just important to insure for myself and for my family. it really varies as to what you can afford. the thing to remember, though, we've seen a number of long-term care policy rates go up. insurers are raising those rates, and they can't just do it on you as an individual, but they can do it on a group of people if they get state approval, and that has been happening. you have to make sure that you can afford this if it continues to go up, and also afford it if your income changes. >> sharon eperson, thank you so much. >> sure. >> you've given us a lot to think about. >> definitely. >> all right. up next "on the money" a look at the news for the week ahead. and the science of simple questions that aren't so easy to answer after alan alda tells us about his hallening to science educators to teach in plain english.

>> here are the stories coming up that may impact your money this week. we'll get earnings frults home depot, target, best buy, gap, and hewlett-packard. wednesday the federal research will release its minutes from april's open market committee meeting. the 9/11 memorial museum in new york will be open to the public. and your favorite hbo shows will be available on amazon prime in an exclusive licensing deal. on thursday existing home sales for the month of april are due.

also on thursday, facebook will hold its annual shareholders meeting. on friday we'll get new home sales for april. sometimes asking a simple question does not necessarily lead to a simple answer. actor and science enthusist alan alda is here to discuss his new role as founder of the flame schalening, where scientists attempt to answer deceptively sept simple questions and are judged by thousands of 11-year-olds. alan, it's great to see you. >> thank you. >> i am so enthusiastic about this project of yours. one, because i have young children who are almost 11. tell me about the flame challenge and one of the questions this year is what is color? >> it is the question that we've asked scientists to explain to kids 11 years old, about 11 years old, in a way that the kids can understand it. the kids are the judges of the entries, and we had these wonderful videos of the kids evaluating the entries. you know, where they get to say,

you know, that is a good explanation, but it's not as good as it could be. this gives the kids so much of a sense of power over the process. they're actually consulted about the process of learning, and as a result, they're far more interested in what they're doing, and they question the scientists' explanations on the basis have whether or not informative or enough. you need more information here. one kid said, you know, it's okay to be funny and to appeal to 11-year-olds, but you don't have to be silly. he said, you know, we're 11. we're not 7. >> that's right. don't talk down to us, right? we're big kids. >> and what's so -- i started this contest as a worldwide contest, and we had scientists from all over the world submitting entries on video and written, you know, in words. i did it to -- not to teach kids. i did it to teach the scientists how hard it is to say something so that an 11-year-old can

understand it because if the 11-year-old can understand, it then i'll be able to understand it. >> you said to me just a few minutes ago, if you know it well enough to explain it simply, then you can engender enthusiasm for science. >> that's right. >> and for learning in general. it's not just science. it's the learning process. >> and what we found is the kids are so involved by this process of evaluating the scientists that they learn more about this than they ever would have. it's called the flame challenge because the first year we said to scientists explain what a flame is. second year we said explain what time is. very hard. this year what is color? and i'm seeing videos of kids knowing so much more than i would have expected them to know. >> now, i want to turn to your being a proponent of science. your name is on one of the buildings at stonybrook university, and basically you have become a prop onel de guzm guzman -- proponent of science

education now. >> i read about science almost -- that's almost the only thing i read about. what i have found is that it's very hard for the most interesting science to get explained to people like me who are curious, and a few years ago i came up with the idea, what if we scientists during their science education all during the time they're being indicated to be top scientist that is we teach them to be top communicators at the same time and i went around asking universities if they were interested in that, and the only one that picked up on it was sto stonybrook in new york, and we now have what they now call the alan alda center for communicating science at stonybrook, and we're teaching not just there, but we're -- we partnered up well dartmouth and we're partnering up with other universities so that we'll have a network of centers around the country, centers for communicating science where scientists will learn to speak

to us in a way we can understand, and, by the way, they won't just speak to us, they'll speak to policymakers and members of congress, people who have to decide on their funding, and they'll be able to speak to one another and understand one another across disciplines and collaboration will get better. >> alan alda, many people know you from your years in "mash" -- on "mash" but now you will be known as the gentleman who introduced millions of children around the world to new science. >> it was fun to talk with you. appreciate it. >> thank you for coming. that's the show for today. i'm sue herrera in for becky quick. thank you for joining me. keep it here because we're "on the money." have a great weekend. by bright eyes ♪ you're not just looking for a house. you're looking for a place for your life to happen.

female narrator: the mattress price wars are on the mattress price wars are on at sleep train. we challenged the manufacturers to offer even lower prices. now it's posturepedic versus beautyrest with big savings of up to $400 off. serta icomfort and tempur-pedic go head-to-head with three years' interest-free financing. plus, free same-day delivery, set-up, and removal of your old set. when brands compete, you save. mattress price wars are on now at sleep train. ♪ your ticket to a better night's sleep ♪

>> the following is a cnbc original. >> come along on a ride with us. we're about to take you to a place unlike any other... >> let's go. >> all right. >> ...where marijuana is legal, and the scent of money is in the air. >> first time i've smoked a joint in a long time. >> go ahead and take it easy. it hits really smooth. >> and i no longer have to feel like a criminal. >> that's right. >> i'm not doing anything wrong. >> kevin and rachel are pot tourists, oh, so happy to be a mile high. >> welcome to colorado. >> in colorado today, the start of a brand-new industry.