as sequester cuts start to bite, furlough notices head out to the 1st of more than a million federal employees. in today's cover story, why the government is considering unlocking your cell phone. plus, one trader is giving apple a second chance. and shiny new cars are rolling out in the midst of gloomy economic times. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. i'm bill moller in for angela miles. this is first business for wednesday, march 6th. in our first look: how 'bout that dow? wow! trading begins this morning with the main indexes above or within a hiccup of their all-time highs. it's the dow that's the star. its last record close was october 9th, 2007. it took nearly 5-and-a-half years to

claw its way back to a new record high. analysis is coming up with our trader. venezuelan president hugo chavez has died. he had been ill for a number of months. there is no word as to a successor or what the opporition plans. venezuela is an opec country and sells oil to the united states. and with president obama's cabinet nominations adding up, senate confirmation hearings are underway. yesterday the senate intelligence committee approved john brennan as head of the cia. the banking committee holds its first hearing next tuesday for mary jo white to be head of the sec. our trader today is jared levy with zacks.com. jared, where is your party hat? it's big news today. congratulations! you are part of this historical moment. let me ask you, though, are we now into the irrational exuberance zone that alan greenspan warned about years ago? > > you know, there are a couple ways to look at this. some folks are saying - and this is the truth - that a lot of retail investors haven't yet gotten into this market yet,

they are still reluctant. and if you buy that and you believe that retail investors are now going to storm in and push this market higher, then we aren't irrational yet. but at the same time, you have to realize investors - not just u.s., but around the world - have been putting a lot of money into equities, obviously, as we hit multi-year highs now and the dow eclipses its 2007 highs. but i am sort of caught in the middle. i think right now, what we have to look at is earnings. i think there are a good amount of stocks that have reached irrational exuberance levels, but there are another group that is still of value, and that is where you want to focus your energy. > it is funny when you contrast this with what is going on in the rest of the economy - jobs are weak, we don't have strong growth right now, and yet, is this corporate profits and the fed that we have to thank for this? > > really i think it is mostly the fed and a lack of an alternative investment. again, when you look around the world, where is the average investor going to put their money for a decent yield? you are not buying bonds, you are not buying europe, you are not buying china. you are coming here to the u.s. to buy u.s. equities in quality companies. if you look at earnings, too, earnings

were flat. they weren't that phenomenal. i think the fed has helped driving this, housing stability has helped driving this, and at least it's the best of what's out there, which, in my opinion, isn't great, but you have to ride the tram while it's here. > let me ask you about that train moving forward: what does it take to keep this going ahead now? psychologically, a lot of people think, oh, we've crossed this important barrier: uncertainty. > > well, today's adp report is going to be a key one to watch, and also friday's bls report. remember, from here, it is all about economic data. what we have on our side right now is momentum, and i think traders shouldn't be jumping in with all their money trying to buy stocks, but wait for those pullbacks, buy on the dips, and make sure that the economic data continues to at least be flattish to positive, because that is all the market really wants. but right now, the trend's your friend, and you have to follow it. > all right jared levy, you have fun out there today. thanks. > > thank you sir. it is technically illegal to unlock your cell phone purchased through a carrier such as verizon or at&t at the end of your service contract and switch the same phone to a different carrier. it's

considered a matter of copyright infringement. but as our cover story explains, that may change. it's considered by some a peculiar interpretation of copyright law. the librarian of congress, james billington, determined that "locking cell phones is an essential part of the wireless industry's dominant business model." it prevents us from legally buying one cellphone at a subsidized rate through a carrier and even after the service contract expires taking that phone to another carrier for use later. michael hodel tracks carriers for the financial data firm morningstar. "this is a situation where a technicality has been used to do something it was never intended to do." the obama adminstration says copyright law was never intended to be this restrictive. it's asked the fcc, commerce department and others to look into changing the law. if that happens, some predict the price of cellphones and smartphones may rise quickly. "it is no secret that consumers will pay more for phones, because the carrier isn't going to absorb the cost. they'll front-load the contracts so

you'll pay more up-front and the value of the phone will die at the end of two years." verizon, at&t and other carriers have backed the restriction as it stands now. the wireless association, known as ctia, a trade group representing cellphone companies, says an exception is not necessary because carriers have liberal unlocking policies - anecdotally, cell phone users say this often comes with a fee. this week, the library of congress issued a statement saying that the matter should be reviewed by congress. the sequester is about to feel a lot more real for some. the first furlough notices are in the mail and on their way to federal agency employees. the total number of days off without pay differs agency-to- agency, but it's expected that more than half of all federal workers - that's more than a million people - will have to take some unpaid time off. unless the people we elect to run the government fix things, this won't be the final round

of furlough notices. meanwhile, the case is still not closed on jp morgan. a new congressional subcommittee is delving in again, to find out what caused the bank's major trading losses last year. the new york times reports the investigation will likely point fingers at jp morgan executives. top-level execs could be called to testify before congress. however, jamie dimon will likely not be called to testify. jp morgan has no comment on the matter, but is cooperating with the subcommittee. the report on the investigation will be out march 15th. it's not just the dow that is posting record numbers - home prices are too. in january, the average price rose 9.7% when compared to a year ago. that's the biggest increase since 2006. data just released by core-logic shows phoenix saw the biggest gain, up almost 23%. the january numbers are the 11th straight monthly increase. only illinois and delaware saw no price increases. microsoft is bracing for a big fine from european anti-trust officials. those officials accused microsoft of not

allowing its users to access any competing browsing software. microsoft and european anti-trust officials had reached an agreement about the issue in 2009, but officials say microsoft did not follow the terms of the settlement. it will be the first time the european union has singled out a company for failing to adhere to a previous settlement. more than $212 million! not a bad take to leave a company. and that's just what the ceo of heinz could get if he leaves once warren buffett's berkshire hathaway and another investor buy the ketchup-maker. bill johnson's golden parachute would include cash, equity, bonuses and more. he's been ceo for 15 years. he oversaw 40 acquisitions and an expansion into emerging markets. buffett has said he hopes johnson will remain. but at 64, johnson says he's too young to retire, though he hasn't said what his plans are. charismatic dallas mavericks team owner mark cuban didn't have a winning day. a federal judge says the securities and exchange commission may

continue its four-year-old case against cuban. the billionaire is accused of insider trading for selling his $8 million of shares of mamma.com before news about the company became public. in doing so, he is accused of avoiding $750,000 in losses. cnn says the average college freshman takes more than 5-and- a-half years to graduate. that's a major hit on the family budget. some schools say they'll cap costs at 4 years. if you can't get your diploma in 4, the school will pay the extra tuition. sounds like a great deal, but there's fine print. if parents read it, they'll find lots of qualifiers. you can't change your major, no study abroad, and you may be forced to take classes at inconvenient times. also, the money doesn't cover dorm or living costs. ikea is getting into the hotel business. the swedish chain famous for its unassembled and inexpensive furniture is teaming with marriott international to bring 150 hip-but-affordable hotels to cities across europe.

called "moxy," the first one is expected to open in milan, italy, in early 2014. no word on whether you'll have to assemble your own bed. mcdonald's has invested plenty in coffee. now, it's turning to coffee beans. bloomberg reports that the world's largest restaurant chain will spend $6.5 million over 5 years to help 13,000 growers in guatemala. they will be taught best practices in how to produce more high-quality arabica beans. farmers will also be trained in sustainability practices. mcdonald's premium coffee sales have more than doubled since 2006. europe's financial crisis hasn't stopped luxury from living on in the auto market there. this week at the geneva auto show, car makers rolled out cars with class. chevy, which is trying to ramp up sales in europe, released its 2014 corvette convertible. meanwhile, lamborgini is introducing its veneno. with a $3.9-million price tag, it is one of the most expensive cars ever made. auto analyst kelsey mays says despite the glitz and glam, car makers are looking at a tough road ahead.

"the euro crisis has affected a lot of automakers in the region. consumer confidence is down. auto sales have dropped 5 years in a row. now they're at a 17-year low in 2012, and they've continued to fall even in the countries where things aren't supposed to be that bad - countries like germany. in february, auto sales fell year- over-year by 10%, so even the stronger markets are starting to crack." french car-maker renault told reporters this week that it's likely the european auto market will not pick up for the next 3 years. the television landscape continues to shift, and internet-delivered tv is the coming thing. netflix has found huge success - that is, profits - in producing and distributing original programming like "house of cards." it's following up with 4 more series. soon you'll also be able to watch shows through the xbox video game console from microsoft. analysts expect programming to eventually come from aol, sony - even twitter. in a few months, amazon will release the 1st of 4 comedies through its amazon prime instant video service.

coming up, more and more careers can be found in technology. but where in technology? we talk with a top futurist. and the unintended consequences when congress tries to put a stop to corporate welfare. that's next on first business.

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to start helping students in your community, visit boostup.org. talk about unintended consequences. it was in 1986 when congress overhauled our nation's vast and complex tax code. one aim was to do away with fat corporate giveaways through the use of certain tax- exempt federal bonds. not only did this write off not go away - it's use has grown. louise story wrote about this for the new york times, and louise, you talked with a number of analysts, and they said these bonds are nothing more than a goverment subsidy for corporations. > > the bonds are often part of economic development programs where localities are trying to incentivize a company to expand and create more jobs. the problem is, for a lot of these bonds, there isn't tracking of whether there are jobs, and a lot of analysts we talked with said that a lot of these companies would have done these projects even without the bonds. so therefore, that is how

they came to say that it's really more like a subsidy. > what kinds of companies are taking advantage of these bonds? > > we did an analysis looking bond-by-bond, and we could see which companies the money was for. and in fact, we found the company that has received the most of these federally tax- exempt bonds is chevron. so, chevron, they made $26 billion in profits last year. so it is not a struggling company. we think of these taxes-exempt bonds really as being something to help out cities and states meet their public needs. but the companies we found were chevron, exxon mobile is a big recipient, shell, goldman sachs here in new york city, bank of america. all of these big major companies have benefited from these sorts of tax-exempt bonds. > all right, louise, if the intent of congress in 1986 was to get rid of some of these corporate subsidies, and if the intent of congress today is to cut spending, what is being done to get rid of this once and for all? > > there are some really prominent analysts and economists out there who are calling for reevaluation of this. the bipartisan policy center, which is run by some veteran people from the federal reserve, they have said that if you got rid of companies using these tax-exempt bonds and other private entities using them,

that it could save $50 billion over 10 years - that's 50 billion with a b, so it is a lot of money. it is on the order of some of these cuts we are talking about. and this is part of a much bigger picture of ways in which we subsidize companies through local and state budgets as well as the federal budget. it is coming at a time of tight budgets, so that is why it is so important to evaluate what the public is really getting from these deals that go to companies. > louise story with the new york times. thanks so much. > > thank you. what if you could look into the future to find where the good jobs will be? we'll do the next best thing and talk with a futurist about that, next on first business.

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a brain injury, get screened. while there is no degree or certification for the position, there is actually a job in being a futurist - one who analyzes what was, what is, and gives a pretty good educated guess as to what will be. their wisdom is greatly prized by corporate executives. one of the top futurists, with a pretty good track record in his predictions, is this guy. he's new york times bestselling author and advisor to some of

the biggest companies around the planet, daniel burrus. ceos use your good analysis and wisdom. you are now coming forward with some insights that can benefit the rest of us. tell us about this in terms of technology. > > absolutely. what i am launching today, based on my book "flash foresight," is a list of 12 certainties that will impact every career and create new ones. and i use the word certainties very intentionally. you see, we live in an uncertain world. we don't know what is going to happen with europe's economy, we don't know what is going to happen with the stock market, we don't know if you are going to get laid off or not. so with uncertainty, you don't have the confidence to move forward, invest, start a company, hire people, or know what courses to take. certainty, on the other hand, gives you confidence. let me give you a quick example of certainty: right now it is winter. we know next will be spring, followed by summer. we know there is 3g wireless, 4g wireless, and we know that's not it, there is going to be 5g wireless. and we know that smartphones are not going to get dumb, they are going to get smarter. and 78 million baby boomers are not going to get younger, they are going to get

older. so if you really look at all the things you can be certain about, you have some amazing power. so today, i launched a list of 12 certainties - again - that will absolutely shape every career going forward. and it's important, of course, to take a look at that list and make sure you know what's on it. > that's interesting, because as you go through the tea leaves as a futurist, i would have thought you were looking at sort of the complexity of science and technology and social behaviors and whatnot. these certainties almost seem like common sense. > > well, you know, when you hear the future, you know it. for example - and i just gave you some simple ones - so again, i work with the biggest companies and ceos on the planet, and yet most people think the world is uncertain. but it is not. there is so much certainty it is amazing. as a matter of fact, when i've launched this list, i got together with devry university to help launch it, because they are one of a number of universities that are actually integrating this list of certainties into how they prepare students for the future so that they know they will be having a good future verses preparing them for the past. as a matter of fact, if you want to even look at that list of 12, you can go to the devry website, devry.edu/certainties, take a look at that list, and what you will find is an amazing list of certainties that can help you know what career direction you might want to go or what new

class you might want to take so that you are not laid off. > "flash forecast" is the name of the book. daniel burrus is the name of the forecaster. the futurist. daniel, thank you so much. > > thank you. apple and gold - both widely watched. but instead of watching, is it time to make a play? we'll see, next on first business.

let's close out the show, as we do every day, with chart talk. we are talking today with tim biggam. he is the market strategist at moneyblock. that means you're a pretty smart guy, tim, so let me ask you about apple. now that the froth has worn off, how do you play this stock? > > froth has worn off to say the least. in fact, some almost panic set in over the past week or so. the stock looked like it bounced off that $420 level pretty convincingly here - about a 2.5% yield down at that level as well, so, on a value basis, apple, in a few short months, has gone from the growth stock up around $700 to a value stock down around $420. so, we like it going forward here. we don't think that big type growth will come back, but, on a valuation basis, looking at trading under about a 9 on the forward basis, and that's x- cash, they got about $42 in cash, so, a lot to hang your hat on down around these levels. > ok, aside from the cash and the technical things, what do

you think the company is doing to make it catch your eye? > > you know, really i think it's more of a valuation play here. they still will be making money going forward, albeit not at that level that everyone had hoped for a few months back. but, they still are a money machine. their margins are still nice to say the least. so, i think they will continue to just grind it out here and make money quarter after quarter. some new products in the pipeline, certainly with the new iphone coming out and rumors of apple tv, the watch, and so forth. so, apple always seems to be able to kind of make cash quarter after quarter. at these levels here, i like the valuation a lot. > real quick tim, on gold, you have been watching that as well. commodities have been soft. you say this might be a hedge here? > > absolutely. i think somewhere around the $152 level on gld, which is the gold etf. kind of a double bottom down around there, and if the market

signals that all is clear in the economy, we will get some inflation back, and gold is traditionally the inflation had. gold trading at kind of the lows we have seen over the past several years, so, adding it to the portfolio here for the people who don't have it as a portfolio play, or as a short- term trade i think makes a lot of sense. > all right tim biggam, you have a good trading day out there. > > you bet. thank you. and that's a wrap. tomorrow in our movies and money segment, the bumpy road for warner brothers. but there's something on the horizon that could result in picture-perfect profits. from all of us at first business, enjoy your wednesday. as sequester cuts start to bite, furlough notices head out to the 1st of more than a million