hi, everybody. welcome to "the wall street journal report." i'm maria bartiromo. he is the wealthiest man in the middle east, the largest individual foreign investor in the united states. when he speaks, markets listen. my conversation with prince awaleed bin talal alsaud. the shocking arrest of the president of the international monetary fund. an initial public offering rockets. and if you've been bitten by the travel bug, you're not alone. luxury travel on the rebound. just where are the rich and famous jetting off to these days? "the wall street journal report" begins right now. >> this is america's number one financial news program, "the wall street journal report." now maria bartiromo.

>> here is a look at what is making news as we head into a new week on wall street. wall street was partying like it was 1999 again this week with the initial public offering of the social networking site linkedin. the ipo was priced at $45 a share when it went public on thursday. it more than doubled by the end of its first trading day. the company does not make any money, but has revenue of $243 million. that was in 2010. linkedin is likely the first in a series of social media sites to go public. take a look at the stock which closed on friday after two days of trading in heavy volume. the former head of the international monetary fund dominique strauss-kahn is on bail. he was arrested for sexually assaulting a maid at a hotel and he resigned his post as head of the imf this week. a choppy week for the markets on soft earnings and economic news. falling and rising with the price of oil. more grim news for housing, though. housing starts for the month of

april tumbled by more than 10%, worst than analysts' expectations there are so many previously built homes still on the market that there was very little demand for the new ones. and a milestone for amazon.com. for the first time ever, the online retailer sold more digital books than print books. the margin about 5% since april. stephen wood is the chief northern american market strategist with russell and he joins us with his view on the markets and the economy. it's wonderful to have you on the program. >> thank you. >> let me kick it off with the shocking story of the head of the international monetary fund, dominique strauss-kahn. of course he know his arrest, his subsequent resignation, and he now is in new york on bail. what is the impact on the european debt crisis in your view? >> well, he is obviously an advocate of more bailout-oriented, more peripheral oriented policies. but ultimately it's not going to make that much difference.

it looks like the leading horse is laggard out of france. she is a very impressive woman. i haven't met her myself but she has an impressive resume. the imf institutionally, they are probably going to function as they should. but i think that one personality that might be modestly important. but ultimately there is a lot of underlying structural issues in europe. and i don't think that one man is going to make that much of a difference. >> christine laggard has been on this program. it looks like she is the front-runner to get the job. >> yes. >> a lot of moves in terms of investing. social networking sites going public. linkedin big deal on wall street. the stock more than doubling in the first day of trading. the company has revenues, but no profit. what is your take on this? does it feel like it's the beginning of another internet bubble? >> well, it feels like we're getting that kind of multiple with no earnings just yet. so remember when cash used to be a good word and earnings used to be a good word? if cash burn and earnings going to flip places?

i don't think so. i think we're going to be in an earnings dominated market. cash burn is not going to sell securities. one security position does not a trend make. so i would be a little cautious in drawing a trend out of this. >> so do we want to buy internet stocks right now or stay away? >> i think that might be a little premature right now. from our perspective, you want to be more growthy. i think you want to be more multinational in your perspective. so i think internet stocks right now might be a bit premature. >> and actually ipo. a big week for ipos. we're approaching the end of the qe2. the fed said the exit is going to happen from this extraordinary measure taken during the financial crisis. what impact do you think the end of qe-2 will have on the markets? >> i think it's going to be rather mute. this is going to be one of the worst kept secrets in bond market history. we know exactly the date, the time and the open market activities. so i don't think it's going to have much of an impact immediately after. i think that the bond market has priced in the exit strategy and

the fed is still going fob very accommodating for a listening time. you and i were hold enough to remember when 20 basis points was not that tight. how long is it going to take the fed in this environment even after qe-2 to go to 400 or 500 fed basis points. that's going to be a listening, long time. even with the end of qe-2, the fed is going to be very accommodative. we don't see any move until second quarter in 2012. >> what kind of year are you expecting, rest of the year for the stock market? >> our forecast is still up plus 9% on u.s. equities. we think that's achievable and a reasonable interest rate environment. it looks to be a little better than an okay year in u.s. equities. and we think interest rates are going to rise, but we don't think it's going to be a spike or a panic rise in interest rates. >> and of course we continue to see the markets move in the same direction as commodities. so as oil goes up, so does the market. it seemed a little counterintuitive. >> very counter intuitive. ultimately that's going to disassociate itself. you see weak dollar equities up. we know the dollar is going to

remain relatively weak against basket currencies. but as oil comes down and commodities come down you'll see that consumer tax come off. you'll see consumption stabilize and probably growth stabilize. right now you've got a lot of levered positions with institutions in the commodities market which might speak to this volatility. but ultimately that's going to be good for the economy when prices fall and i think it's going to be good for earnings. >> so you said you want to be buying everythings. what sectors do i need to be exposed to? >> right now consumer. there are good names if you really do your rsh. we think financials now that we've got regulatory. but do your homework and do your homework very, very well. health care, to kind of leven out some of the volatility. energy we've been trimming back for the last couple of months. >> stephen, good to have you on the program. thochlt. stephen wood joining us. coming up, he is the richest man in the middle east and the largest individual shareholder in the u.s. and in citigroup.

what saudi prince awaleed is doing with his money now. he'll join me next. later, are luxury vacations back in vogue? we'll take a logistic at the latest trends in travel. as we take a break, a look at how the stock market ended the week.

he was a company chairman at age 14, and a billionaire before he was 30 years old. today the largest individual shareholder in the united states, the largest individual shareholder of citigroup is the 26th wealthiest person in the world. grand son of the founding king of saudi arabia and renowned investor prince awaleed bin talal, your royal highness, it's wonderful to have you with us. >> it's always a pleasure to be here. >> thank you so much for joining us. what a remarkable time in the middle east right now.

how is the arab spring reshaping the region? >> well, it's still a developing story. as you know, two presidents were toppled in egypt and tunis. now we have major crisis in yemen, libya, and syria. still, these are developing stories. we don't know where they're heading. even tunis doesn't know where they're heading. but it's a developing story. i think it's going to take some time. revolutions usually take a year to two, sometimes two years before the final outcome is known. our region is still very promising. >> what are the popular attitudes in saudi arabia right now? talk to us about what the people want and how the royal family is addressing it. >> no doubt with what is happening in our region, we are -- we have complete chaos and confusion and anarchy, unfortunately. the rule in saudi arabia is very concerned about that. we are -- saudi arabia and king

has recontracted his contract with his people by having good social programs in saudi arabia. and right now saudi arabia is looking at the potential of having a new laws enacted to protect people in the system. it's a wake-up call for all the region. and saudi arabia is not immune from any of what is happening. and i hope and i'm sure the king will begin looking at some political reforms in saudi arabia. >> let me ask you, your highness, about the events of the week. of course president obama meeting with prime minister netanyahu on friday. and president obama this weaken endorsed the idea of building a palestinian state based on the borders dating back to the 1967 six-day war in israel. is this two-state solution viable? >> this is the only way to go to resolve the palestinian-israeli situation. it's very important for the states to follow through with obama's speech. >> of course prime minister netanyahu was very upset by this.

so i wonder what the reaction was in the mid east to netanyahu's upset. >> i think the middle eastern situation is very clear. all arab countries would like to have peace with israel. actually, the arab league in its 2002 meeting that gathered in beirut, lebanon, they came up with a proposal whereby the they explicitly, explicitly i repeat the potential for having a relationship between israel and arab world, provided they have peace in the arab world. so i think the arab world headed by saudi arabia and the king of saudi arabia came up with that proposal. ten years later, nothing is happening. i think the ball is 100% in the arms of mr. netanyahu to fulfill the u.n. resolution that was enacted after 1973 war. >> let me ask you about osama bin laden. your family made head lynn head

headlines suggesting your house contributed money. was your house involved? >> freedman is my friend. and these days, especially in the crisis that the arab world is facing and the whole world is facing, the last thing we need right now is to have the relationship between the biggest country in the middle east and the most important country, saudi arabia, and the united states which leads the western world, to have the relation between both countries focused only on oil, although oil is being important. basically is way, way, way beyond oil, mr. freedman. that's what i tell him. >> you have been a wonderful investor, very, very savvy. your investment in city group goes back 20 years. the bank returning to profitability last year. do you think it's on the right track to return capital to shareholders? how are you feeling about that investment right now? >> i believe citibank is definitely on the right track.

being announced last quarter. and i believe the enactment, the reenactment all schmymbolic thi year, through the process or by some share buyback. the banks crisis is behind us and over completely. and thank mr. vikram for doing a good job with citi and having it go back to where it should be a long time ago. >> would you endorse the takeover of citibank? >> i think what citibank has done lately, it's better citibank remains independent because the shareholders have to begin reaping the benefits of their patience in the past years. i believe any takeover of citibank or a merger doesn't make sense right now, unless, unless there is a viable proposal from an entity that can offer something. although i doubt that. >> where else are you investing?

you're the 26th richest man in the world. where do you see opportunity? >> we're a holding company. we're a holding investment company. we have only 20 people. very similar to mr. buffett's policy and strategy. a small number of people in head office and being very lean and mean. we are looking all over the place. whenever there is an opportunity and we get involved, we are very dynamic. we are very much on the move. so we're not somewhated to only one country. the world has a lot of opportunities, be it in china, india, in europe, even america, by the way. >> and africa? >> africa, full-fledged fund over there that africa, and is very activity. and our partner is the southern wealth fund in singapore. >> oil prices. dropping in recent weeks, but still of course 40% higher than a year ago. is there a point where saudi arabia will need to increase production? is your take on where oil is right now? >> saudi arabia came publicly

after the latest jump around 85 to go above 100. and that happened when libya -- libya's production went out of the market. saudi arabia i within immediately, 24 hours that we'll be able to 1.5 million barrels. it's really more supply needed. there is still having the price around $100. >> $100. now you have said that between 70 and $80 is where you would expect or where the country would expect to see oil. but just to be clear, it costs saudi arabia what, $4 to $8 to produce? >> saudi arabia's production cost is built in dollars for sure, but they have to make money because they have projects in saudi arabia and we have to take care of our people also. any excess of $10 gets plugged back into the system and any excess we have for our fund

reserves. because our country is dependent on oil for its export, for its budget and gdp. >> and by the way, so is the world. >> but we are a bit more so. >> nearly 65% of the staff at kingdom holdings in your home are women. this is contrary to what is happening in the region. women are not even able to drive cars. you supported the first female airline pilot. will there be a time when women have a greater role in public life? >> by the way, this number, 67% is higher than many u.s. companies also. >> exactly. >> having said that, saudi arabia is moving in the right direction. women are being incorporated in the system and society, be it private sector, public sector. saudi arabia is a very conservative country. it takes time to change, but change is happening. it's happening also very fast. >> your highness, so nice to have you in the program. >> same to you, maria. up next on the summer

report, summer travel season about to take off. the latest luxury destinations. what the vacations of the world's wealthiest mean for you.

vacation season about to get underway for wallets of every size. after two years of travelers holding back on discretionary spending, is luxury travel on the rebound? joining me now is steve deluca, vice president and publisher of "departures" magazine. the magazine exclusively for

american express, platinum and centurian card members. steve, great to have you on the program. >> thanks for having me. >> wonderful to see you. so you have a fairly high-end readership and audience that took some 19 million business trips last year. tell me what you're hearing from that customer today about luxury travel. are things back? >> things are definitely back. as you said, the american express platinum and centurian card members who we serve, they love to travel. 98% of them actually have a passport, which for an american consumer that's extremely high. only about 20% of all americans have a passport. our leaders love to travel. and one thing that we're really seeing is that they want to travel afar again. during the recession, they pulled back a little bit. you know, travel a little closer to home. what we're seeing is that they want to go to far-flung destinations like asia, where there has been an explosion of luxury offers. >> so how is the hospitality industry sort of pulling out all the stops to grab the attention of the high-end traveler, make sure they spend their money? >> pulling out all the stops is

exactly what they're doing. >> right. >> we're seeing this incredible growth of luxury properties. but the way to really do it is about service. luxury at all levels is really about service, service, service. and we're seeing them add more and more amenities to make it more comfortable and to meet the expectations of this very demanding luxury consumer. one of the things we're seeing is the integration of technology into the whole process. >> ipad and things like that. >> absolutely. i just came back from paris where i stayed at the brand-new shangri-la hotel. it's a fabulous property. and instead of checking in at the front desk, actually when you walk through the door, they know who you are, and they whisk you to your room and check in on an ipad right there. so much better than standing in line and waiting for someone to check you in. >> that's really interesting. >> and i also love this great story about what is happening at the montage deer valley in utah. they actually have a dug on the property. so if you're traveling with your family and your kids miss fido, they can actually play with monty.

and it's really become a popular amenity that they have. >> canine ambassadors if you will. we talk so much about emerging economies. you mention china, the brick companies, brazil, russia, india, china. what is the market like now in those regions? >> incredible. definitely at the high-end. you have to spend a lot of money to get though those places and to do them right. and most americans if they're going to go are going to go for a listening period. this is why it's become a great destination for the luxury traveler, especially a place like india. seeing great growth of new hotel offerings. and great infrastructure. and we see their big hotel chains like taj and oberoy spending to attract the american traveler by building new properties, upgrading existing properties, recognizing this is the high margin customer and they want that. >> we just spoke with prince awaleed and they have a number of properties around the world. what about europe? that's been stuck in the mud for a little while on an economic basis. that still the case as it

relates to travel? >> well, americans have a love affair with europe. they can go to paris, they can go to rome, they can go to madrid over and over again, and matter of fact our readers do. that is the good news for them. but those countries have to start investing more to keep up with the world-class properties that are being built in the brick countries. basically, brick has upped the ante, and europe has to step up to keep up. >> steve, good to have you on the program. >> thank you for having me. >> thank you so much. steve deluca, "departures" magazine. up next on "the wall street journal report," we'll take a look at the news this upcoming week that will have an impact on your money. and walking the walk with the newest members of the workforce. my advice to the graduating storm.

for more on our show and our guests, check out the website, wsjr.cnbc.com. and i hope you follow me on twitter. find me at @maria bartiromo. the stories that may move the markets and impact your money this week. tuesday aig is expected to price the shares of its re-ipo. this is the first step in the government extricating itself from the company that received more federal bailout dollars than any other. thursday we get the second reading of first quarter gross domestic product, currently showing a growth rate of less than 2%. and on friday, the figures of total personal income and spend willing be out, as well as the university of michigan's latest reading on consumer sentiment. finally today, i was honored to be the commencement speaker at st. john's university in new york this week, where i received

an honorary doctorate degree. as 350 graduates begin to make their way in the world. >> life begins now. fight for your happiness. it's your life. own it. congratulations to the class of 2011! >> my bring attended st. john's. so being a part of the day for the red storm was really like coming home for me. my thanks to st. john's university. that's it for the show today. thank you so much for being with me. my guest next week noted investor mario gabelli. each week keep it right here where wall street meets main street. have a grea the internet on a plane! are you from the future?

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