hi everybody, welcome to "the wall street journal repo " report", i'm maria bbartiromo. earningsgs season in full swing. the housing market. big numbers this week. what does it all mean to your money? the next war may be fought over this precious commodit it's scarce, it's vital to the world commodity, and it's not oil. wh it comes to feeding the world buying local may not be the best idea. one economistç who is going against the grain. "the wall street journal report" begins right now. >> this is amica's number one financial news program. "the wall street journal repo " report." now, maria bartiromo. >> i'll be back with the rest of the program in a minut first here's sue with some of

the stories in the headlines this week. here's a look at a new week on wall street. after a strong start to 2012, is the u.s. economy dipping into a spring slump? first a disappointing report on the weekly initial jobless claims showing the number of new filers for unemployment benefits is up 6% in the last three week weaker sales of existing homes in march underscored investor worry. the markets had a bumpy week. the dow having several days of triple-digit swings around the 13,000 mark. the corporate earnings picture is rosier, however, with more than 80% of companies beating analyst expectations. they include banks citigroup, goldman sachs, b of a, morgan stanley, as well as dow components coca-cola, verizon, johnson & johnson, microsoft, and ge. apple had a rough ride this week. shares of the world's most valuable company dropped 4% monday. then they rose on tuesday but stumbled 3% on thursday on

concerns of consumer demand ahead of next weweek's earnings release. e tech giant hit its most recent all-time high on april 10th. ford is betttting $5 bilon on c china. in its bgest industrtrial exexpansion in 50 years the automaker is building its fifth plant there and expanding the line of dealerships througut asia. foford wl builfb9jj passenger cars year in chihina byby theear 202015. and warren buffett, the world's third wealthiest man, disclosed to shareholders he has stage 1 prostate cancer. the oracle of omaha has not made public any plans for succession at berkshire hathaway. with radiation treatment beginning in july, mr. bufuffets prognosis is excellent. after a mixed week one economist is feeling optimistic. joining me now is mark zandy, chief economist at moody's analytics. mark, it's great to see you, thanks for being here. >> thank you, sue. good to be with you. >> we're in the thick of earnings season. some of the biggest companies are parenting a picture that's

pretty much okay. investors showed a lot of caution this week. what's your take on the health of the economy now? >> it's okay. i think that's a good word to describe it. nod boom times. we're not off and running. but growth is about 2.5%. that's pretty consistent with job growth that's 175,000 to 200,000 per mont so pretty good. not great but just okay. . i think we're doing okay. >> bumping along the bottom, if you will. what about the jobs picture? you predict the unemployment rate will be below 8% by year's end,elow 7% by 2013, what makes you optimistic here? >> profits, that's a very good reason to be optimistic about future job growth. businesses are doing very well. their profit margins are about as wide as they've ever been in the data i've seen back to world war ii. earnings are strong. earnings growth is slowing a bit but that's in large part because mf very difficult comparisons. i do think businesses are

becoming increasingly more confident with each passing day from the great recession and the nightmare of the recession. i think we're going to see businesses engage and hire more. >> yet 8% unemployment, people are still very concerned. the wage gap not getting any smaller. i wonder if there's a somewhat disconnect if you will between how people are feeling about personal economic stability and what the data tells you. >> well, you know, all the trend lines are good. we're moving in the right direction. the economomy is coming up on three years of economic recovery. we are creating more jobs. the rate of job growth is improving. but we dug ourselves a very deep hole in the recession. as you point out, 8 plus percent unemployment rate. that's well above what we need in a good economy, that's why people are still feeling very nervous and cautious. the housing market's still ver soft, house prices are still declining, down about one-third

from where they were six years ago. for most people their home is their most important asset. until house prices are feeling north nobody will feel great about the way things are going. >> that's understandable given the loss in equity so many people have suffered over the last few years. is there some good news here in terms of the consumers' bottom line? gas prices have been high but they seem to be stabilizing after ten consecutive weeks of ticking up. >> gasoline prices, they seem to have peaked. assuming that we don't see any turmoil in the middle east or something that might cause oil markets to rise. i think we've seen the peak for gasoline prices this year. so that's a big çplus. there's the stock market. the stock market, you know, it's hit a bit of a bump in the last week or two. but broadly speaking it's up a lot. so withinpitting distance of its previous record high. for higher-income households the most important asset f them is their stock portfolios so they're feeling a lot better. that's why obviously high-end retailing is doing best among

l types of retail categories. >> you bring up the stock market. one of the reasons being cited for the move in stock prices over the last couple of weeks is the expectation that the federal reserve might do more to help the economy. the board, the federal reserve board, meets this week. what are you specifically going to be watching in terms of the announcement from the fed, and then there's a news conference with the fed chief after that? >> you know, i don't think they'll make any change in policy, that the economy's performed reasonably well, okay. inflation is pretty close to the federal reserve's target. so i don't see any reason for them to make a change. what i will be watching, though, is how they characterize the economy and whether their tone with regard to the onomy's outlook, they're also going to release their updated forecast for the economy, whether that has changed in any way from what they gave us a few months ago. >> overall, you're pretty optimistic. but what keeps you up at night? what concerns are there out there for you?

>> there are plenty of things to be nervous about. we talked about gasoline prices, that clearly is one. europe is another. that hasn't been nailed down yet. european policymakers are going to need to do more. and i don't think they're going to do that unless they get pressure from financial markets so that's an issue. of course, the foreclosure crisis is ongoing, house prices asç i mentioned, and then theres the fiscal cliffthat's coming next year. policymakers don't act, we're going to have some pretty significant tax increases and spending cuts that will be hard for the economy to digest. so there's a lot to be nervous about. but let ayme say, this sue. all these things i'm nervous about, i am less nervous about than i was six or 12 months ago. so they're still, there but less pressing than they were. >> we'll leave it on that note. thank you, mark, pleasure to see you again,n, markzandy. now back to maria for the rest of the program. >> thahanks so much, sue. up next on the "the wall

street journal report," water, water, everywhere.. the most abundant resource on the planet. but is it in danger? does the foodie culture overindulge when it comes for expense? the economists with the eats and big business. take a look at the stock market at the end of the week. off f vietnam in 1968. mine over the south pacific in 1943. i gogot mine in iraq, 2003. usaa auto insurance ioften handed down from generation toeneration. because it offersrs a superior level of protection, and because usaa's commment to serve the military, veterans and their families is witithout equal. b begin your legacy, get an auto insurance quote. usaa. we know what it means to serve. why t erectile dysfunction get in your way?

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welcome back. in some parts of the world it is more valuable than oil, gold, even diamonds. it is crucial for economic development, necessary for life, and it's being depletedç at a rapid rate. it is of course water. a new film "last call at the oasis" is based on the book "the ripple effect" by author alex

prudehome. good to have you on the pal. you call water the defining resource of the 21st century. by 2013, some 36 states will face water shortages. why is that? >> many reasons. we have a population growth going on and we have climate change happening and between those two things, wewe're usingp water at unsustainable rates. you know, witness last summer when you had 14 states across the southwest suffering record-breaking droughts and wildfires. the very same time, in the midwest, mountainwest, you had record-breaking floods. people think that's a one-off, it's really not. this is the hint of things to come. and we're going to have to learn how to adapt to them. >> globally the lack of fresh water is causing extreme tension, we know that. you've got tension in many countries. you say wars could be fought over it. are there specific countries you're watching? >> yes. the corner between china, india, and pakistan is a very worrisome place because there, they're all

trying to suck away the himalayan snow melt as quickly as possible. the middle east is always of concern. the koreas are a concern. even here in the united states, we have states that are fighting each other over water supplies. as parts of the country dry out, other parts of the country get wetter with climate change, these tensionsns are going to rise. >> i want to ask you about the u.s. but first let me hit on china for a moment. 70% of theç water in china, undrinkable? >> pretty much, yeah. china is a rapidly growing economy yet the achilles heel there is water pollution and water availability. they have something like 20% of the global population in china, but only 7% of the water supply. they're planning massive water diversions, big dam projects. but these things come at huge costs, both economic and environmental. and so water really could be the thing that hobbles them. same with india. >> and with limited fresh water

resources, how do you think this plays out? do you see water privatization as the future? who really stands to profit from this? >> water privatizing goes way back to thnapoleonic france. now it's become a global business. water privatizers play themselves down as if they're a boring utility, but the fact is these guys are aggressive players. they're spreading through asia and they're in the states. in the best-case scenario, privatizers do agreat job by fixing up the water supply and providing it at a reasonable cost. the worst-case scenario, they have been known to gouge their customers. the difference between something like water privatatizing and th oil business, which people make the comparison, is that you can't drink oil. water is an essential resource. we all need it to survive. the question is really an ethical one. is water common, like the air we breathe, or is it a commodity

like oil and gas that we extract, process, and sell on the open market? experts tell me it's a little of both so we have to t@eat it as a special case. we definitely have to price water more intelligently. much of the water in this untry is essentially free so there's no incentive to use it efficiently. on the other hand, if you price it too high, then people can't afford and it you're playing with people's lives. and so, you know, a corporation's job is to look for profits. if you're trying to profit off an essential resource, it sets up a very delicate situation. >> it sure does. >> i think we can perceive it with privatizing but under a watchful eye. >> what is the danger to large cities and water supplies? let's talk about the u.s. for example, in new york. the pipes in new york, 140 plus years old. >> yeah. >> you need an infrastructure build. >> exactly. you've talked about this on your show before. infrastructure is sort of the 800-pound gorilla nobody wants

to talk about. you're talking about trillions of dollars of needed repairs and upgrades and nobody wants to talk about that because it's too scary. these pipes in new york city were state of the art over a century ago, now they're at the end of their lives. wee getting to a point we really need to invest. it's not only pipes. it's things like dams and lev levees, as we learned during hurricane katrina when they collapsed. these are big, big projects, they're very expensive. yet if we don't invest in them, we will suffer. >> what about fracking? natural gas in the news these days, as well as a controversial way of extracting it, hydraulic fracturing or fracking. will fracking seriously impact fresh water resources? >> it can. in places like pennsylvania it's been known to crack open the rock under ground which allows toxins inç the fracking fluid migrate into people's wells or allow the natural gas to migrate into people's wells. you've probably seen the photographs of people lighting

their tap water on fire. just recently there was a rig explosion down there in pennsylvania. this is affecting states across the country. wyoming, north dakota, texas. this is a very controversial subject right now. part of the problem is that fracking not only pollutes water, it also pollutes the air. now, i personally believe there may be a way of doing some fracking that is less harmful, but wait we're doing it now, it doesn't make any sense. we need to take a step back, take a look at this, come up with more environmentally sensitive ways of doing this that will allow us to use a cleaner fuel like natural gas. >> when do you expect this to sort of blow up or become crisis situation? most people are not aware of the seriousnesess of ts issue. >> yeah. well, right now you have so much natural gas being available, you actually have a gas glut. which is a huge change fr a couple of years ago. there's a lot of money flowing

into this sector. and it's going to blow up sometime in the near future because there's so much attention being paid to it. >> great to have you on the program, thanes so much for talking about this important topic with us. alex prudehome. up nextxt, matters of taste. an economist who thinks the amamerican diet has impacted ou innovation. share tips for how to find a go an airline's job, is to take you from where you are... to where you need to be. and we're not just talking about points on a map. with a more intuitive delta website and mobile app... and the momost wifi equipped planes. we let you be everywhere at once. innovations like these are extending our reach and now, even at 30,000 feet y can still touch the ground. [ male announcer ] aggressive styling.

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they have it wrong when it comes to today's eating economics. george mason university economist, bloer and "new york times" contributor tyler cowan joins me now, author of "an economist gets lunch." good to have you on the program, thanks for joining us. >> thank you. you're not a fan of some of the current food trends out there. what are for example food snobs as you write and what do you think is wrong with them? >> often food snobs are people who use the food world to feel better about themselves. they'll glorify local food or slow food when in fact those practices don't do much for the environment. i think we need to take a more rigorous look at food using economics. >> do you consider yourself a foodie? >> i am absolutely a foodie and i have been for most of my life. >> you say big agribusiness and industrial food companies have gotten a bad rap. what's good about huge food ñi companies? >> the era of cheap food is arguably the greatest human achievement of all-time.

we're now feeding billions of people around the world more than ever before. agribusiness has played a critical role in doing that. we do in some ways need to regulate it better but foodies should startwith an appreciati for cheap food anding a ra business. >> what do you think about the state of the american dietight no in some c casesheap food i is equal to the wrong foods and obobesity. what does itay about us, the way we eat? >> i don't like junk food. i don't recommend junk food i think we eat too much junk food in general in this society, we need more moderation. but i don't blame agribusiness for that any more than i blame the waiter. it's a decision of consumers. >> you've got interesting tips on finding good food in unfamiliar places. tell bus them, what are they, and have you used them? >> all the time. i've used them my whole life. on then you should look for places which are hard to find, it's a sign they have informed

customers. competition works so if there's an ethnic cuisine with a lot of restaurants in that area they're competing against each other, it's probably high quality at a low price. in general, ethnic restaurants, you need to signal to the waiter that you're a serious person, that they should cook their best food for, rather than them thinking you want something bland and ordinary. >> "the great stagnation" took on the state of the american economy a few years past the worst of the financial crisis. what would you say is the outlook for the middle class today? >> right now we're emerging from the recession at a very slow rate and this is likely to continue for the foreseeable ç future. the core problem is that we have been innovating at a slower rate since the 1970s. the rate of progress has slowed down. we are now too afraid to take risks and we have lost some of our entrepreneurial spirit and we have overregulated ourselves. >> these are sort of the issues of the day, if you will. you took a position against the advantages of technological advancement in the great

stagnation. what role do you see technology playing in the u.s. economy? >> right n now we have one extremely dynamic sector, that's the internet and communications. and that's been fantastic, of course. but we need in more areas have comparable advances. we're trying to run a new economic revolution on really just one engine, on one very dynamic sector. if you look at the 1920s, virtually every economic sectot was that dynamic. >> tyler, let me get your take on how food has changed over the years. given what we are seeing at the beginning of the interview, you said we're feeding so many more people today which is al real positive. tell me about that. >> well, the very fact that obesity in the united states is a much bigger problem than hunger i think says it all. hunger in developed western nations has seesed to be a problem. the next frontier is to have high enough agricultural productivity so that people in afafrica, people in iindia, sim aren't hungry any more. but we're not there yet and

we're overlooking those problems ofoften in an effort to be tren or to be cool. >> tyler, good to have you on the program, thanks so much. >> thank you. >> we'll see you soon, tyler cowan. up next on the "wall street journal" rept we'll take look at the news that will have an impact on your money. where to hang your hat if you are the ultra-rich. those things the wealthiest can't do without.ç and development. some new members of thteam will be introduced.. and you? well, you're the chief life offir. you just need the right professisional help you take charge. ♪ got torotect the environment. the economists make some good p points. we need safer enerergy. [announcer:] who's right? they all are. visit powerincooperation.com.

for more on our show and guests check out wsjr.cnbc.com. look for me on twitter and

google plus @mariabartiromo. look at the stories coming up that may move markets and impact your market. first quarter earnings are out from exxonmobil, at&t, boeing, caterpillar, chevron and merck. tuesdathe nation's realtors report the new number of homes sold in the last month. the monthly s&p shiller report index following g home prices i 20 cities out tuesday. wednesday the fed's open market committee wraps up a meeting on monetary policy. ben bernanke wil hold a p press conference as well. on friday, we get the first reading of gross domestic product for 2012's first quarter. the gdp is the broadest measure of the health of the american economy and typically a market mover.ç what makes a town tops? the wealth report compiled by citi and frank research polled individuals with assets of more than $25 million on which cities around the world are the most important. considering economic activity, political power and the price of luxury housing. here's the list of the top five.

london, new york, hg kong, paris, singapore. interestingly, when asked which cities will be important in ten years, numbers three, four, and five are all in asia. beijing, singapor shanghai. a sign of our timimes. that will do it for us. thank you for joining me. next week join me for mohammad el arian. keep it here where wall street meets main street. have a great week, i'll see you next weekend.