defought, let greece pay mistakes. this would be a huge mistake and we would not be talking about haircuts, as you say, but we would be talking about huge losses in all financial sector if greece was let alone in this matter. >> you say, they won't take a haircut, well they've got 300 billion euros of total debt, and there's no plan yet on how they pay that back. we're just talking about rolling over the refinancing at the moment. unless there's a plan to pay back all their debt, there's going to have to be restructuring, isn't there? >> well, actually, this morning it is 45 billion would be enough to cover the repayments up until february, if i'm not mistaken, february 2010. by then you have two scenarios. either the economic situation in the world gets better and then probably you don't have any need for additional money. from greece or from other countries in the eurozone. either you have a situation in which the world economy is slowing down significantly for the rest of 2010, and then you have a problem for greece

does not, however, imply that greece will default.it's gone to 10% in the last few days. indicating a significant chance of default. the debt crisis faced by greece has profound implications for other euros countries. they issue debt in a common currency. if one of them is able to pay its own debt, other euros-owned countries have an incentive to come to the rescue and protect the stability of the euro on which they commonly depend. in the long run, however, there can be an erosion of the incentives of fiscally stronger euros-owned countries to support countries. each time a euro zone country borrow more -- it's weakened this is important to the interest of the understand because the stability of the euro contributes to global economic growth and stability. regulations that severely restrict speculation and credit default swaps markets could have the unintended consequences of reducing market liquidity which raises trading execution costs for investors who are not speculating. and of lowering the quality of information provided by cre

>> we're asking greece to disclose numbers. as prime minister pop pan drew said in january, the biggest deficit of greece is the deficit of confidence and lack of trust in the numbers and in the statistics that the greece authorities have released over the past and the greek government is determined to come clean on that front. so clear figures, solid statistics, that's the first part. the second part is restore public finances because at the moment greece is running at a deficit of 13% of g.d.p. and as a debt to g.d.p. rashy which is in excess of 100%. >> rose: about 115 for 2009. >> and that has to come down on both fronts, how do they do that? number one by effectively collecting tax more and better than they have so far. and i'm not disclosing any secret. it was well known. number two, on cutting public expenses. and that goes to the general budget also to compensation. so it's a set of very harsh measures which are not pleasant, which are not pleasing the greek population but it has to be done because greece has to be on a

is the greater worry that the debt problem is spreading beyond greece or just that greece's issues are worsening? >> well, i think that if you tug on this thread, it will be a lot of other risks that comes through here. first of all, we do need a package and stabilize the situation. what it does do is this package that may come out this weekend reduces the tail risk of an outright default by greece, which is obviously a good thing, and we have seen the euro slightly stronger, but ultimately, there is a huge fiscal cost that has to be borne by greece and some of the southern european neighbors which for the outlook of the euro is particularly bullish. >> would you sell the euros then? >> in the immediate term of the next few sessions, you will see the euro higher and that is a lot of the shorts taken away from the fact that we are going to have eemergency funding in place for greece, but over the next two to three months, we could still start to see the euro continue to be weighed down by a poor growth outlook, and stronger u.s. rates. >> well, it is a good point. andrew, what about the

what is weighing on this market right now is greece, greece, greece, greece and whether it could get its financial house in order. i want to bring pisani in who is on the phone. >> sorry, talking to a trader. >> busy, busy, busy. let's talk about the greece situation and we were just saying a few days ago people had written it off and they weren't that worried and you look at a market down today despite the strong retail news. >> when you get an inversion of the greek yield curve that solicits a lot of attention and that doesn't happen very often. trying to talk greece, once again, off the ledge. this is the problem with these sovereign default issues and sovereign default concerns. historically, they don't follow in a smooth line and they don't get resolve and they get very, very bumpy and we're in a bumpy period. nonetheless, i think he has done a good job trying to reassure people that it is very unlikely -- >> what is that meant for the european mark isn't. >> look for national bank of greece. that's looking better and way off the lows. still down about 4% and germany is also off

and the rest is about the greece, greece, greece and more greece again. how much collateral damage on the fundamental side we're going to see. but in all honesty, there isn't a lot the ecb can do about it, except when you look at the collateral issue. we know that the ecb will review general collateral requirements and the haircut on collateral requirements and that could get interesting in the greek scenario. but again, it's a little bit of a sideline to the problem now. >> let's bring in darius, chief investment strategist at sjs market. derek, it's pretty clear, in the oecd countries in the states, in europe, in the uk, policy is going to stay low for quite some time. so how much is that liquidity that we're creating in the west going to keep pumping into the east to, in fact, create bubbles there? >> indeed, g3 markets will be on hold until at least the second half of next year. there will be more conversations for investors to sell short the yen, maybe even the dollar and to buy assets in emerging markets such as in asia. however, whether or not they

quite frankly, i would like to see greece go under. it will be the best cautionary tale for america and the rest of the european union and the rest of the world. until we get back -- it's a problem. >> what happens if that does happen because that is a key test for the euro or is it not a key test for the euro? >> it certainly is because they put together 16 countries and they made up a rule that your fiscal deficit has to be 3% of gdp and they, all the countries have shattered that on average now. so, we're going to continue to see tests of the euro zone. i don't think the euro and the zuro zone will fall apart, but i think the euro will trade lower -- >> you say short the euro. >> it's already at a new low. >> it's going to continue to go lower. >> a rule with no punishment. you go to the club and the rules in the club is you wear a jacket, you get thrown out if you don't wear a jacket. not in the euro zone, if you don't come with a jacket, come on in, we'll stitch you up in a jacket. >> greece is wearing a bathing suit in the club.

if germany and the rest of the european union help greece out, if greece is going to do what is necessary to get its economy back on track or will it simply set up a situation where the rest of europe will support greece? that's why germany wants tough conditions imposed on greece. >> there are politics involved in germany as well because they're having their own problems. what effect does this have on the u.s. dollar some. >> this is likely to prop up the u.s. dollar because what happens is that this crisis is going to create a certain amount of concern in investors' minds about debt issued by emerging markets and also the small industrial countries. the safe haven in the u.s.... in the world still remains the u.s. dollar. so any time there is concern about investments abroad, money starts flowing in to the u.s. because the u.s. government bonds are still considered the safest instruments in the world despite the rising u.s. debt. as money comes into the u.s. it keeps u.s. interest race low and helps us finance the deficit more easily. it will push up the u.s. exchange rate and make the

they've got more to do with greece monkey than greece. tonight we're peeling off the grecian formula. where's the darn bdracma when w need it. take bed bath & beyond, it reported a killer quarter, earning 86 cents a share when wall street was expecting 73 cents. this is what i call a genuine beat. bed bath & beyond is a housewares company, for heaven sake. all we hear is about how bad housing is. but the velocity of the housing turnaround across the country is huge. that's what bed bath & beyond is a play on. so what happens? follow me. its good news is hidden by grecian formula. the stock opens down a coup pennies, despite this amazing number at 44 and change. then it's up to 46 in an hour! when the formula comes off. all right, let's go to another talking head. or actually not talking head. this one is tjx. which massively raised guidance this morning off of a 12% increase in same-store sales. sure, some of the strength is from easter, but that's just pure consumption. tjx, let's go over to the charts. look at this. opens up pretty much

the crisis has cost greece. in "the new york times) -- "usa today" -- just as they look at some of the newspaper stories today. before our first phone call, can you suggest how this could grow beyond greece? guest: the contagion, so to speak, is already there. it is affecting the yields on the other the honorable countries, beginning with portugal -- vulnerable countries, beginning with portugal, spain. there is a small increase in the spreads that italy has as well. if you put these economies together, they would represent about one-third of the output of the european union. so this is not a small episode. of course, it has a major affect on the euro, which has decrease in billion against the dollar by about 10 percentage points, and that affects the ability of the u.s. to export, not only because of the euro, but because of the slowdown in the your area. -- euro area. of course, if the crisis escalates, as we have seen recently with lehman, and then you are likely to get spill over to other parts of the world,

and jessica, greece is the news after moodys' once again cut greece's debt rating four notches above junk status. is this fear still in the markets? the fear over greece is definitely still in the market. there are three issues we need to focus on. one, the problems in greece just underscore the structural inaccuracies of the european monetary union. secondly, a possible default in greece brings forth the reality that western nations can default on their debt. and three, i think that time is no longer on the side of the greece. back in march, greece was saying that it wasn't seeking financial aid, and now it seems as though it can't get financial aid soon enough. so, i think it would be fair to say that we can expect some sort of help from the imf quite soon. let's talk about overall stock market. yesterday one trader said that stocks were tired. do you agree? i do, i think that we had a really impressive rally up here, and the profit news is pretty bullish. i wanna say over 80 percent of the companies in the s&p 500 that have announced earnings have beat estimates. which is a positi

i'd like to go back to greece. that is a really, really big story and a great comparison for the u.s. what we have an economic reality facing political will. and it looks like the politicians in europe blinked. so far we're going to find out how it turns out. the same scenario could happen here in the states if you have a major state like nevada or arizona, say oh, wow we spent all our money, we're out of money, we can't pay. there's going to be a lot of political will to save them. just like it is in europe. so the lesson that's learned over there might be transferred to us. the greeks have behaved badly. they lied about their finances. they really have spent more money than they have, and they're going to get a bailout it looks like. >> but they're probably not going to get off scot free. the rates being offered are below market rates but higher than the normal imf funds out there. it will come with some austerity move or i guess they're not going to get it, correct? >> right, exactly. any time you take money fro

>> for spain and portugal, both are in much better shape than greece. spa spain's death last i looked was below 4%. if portugal can get their deal done, they don't need this kind of package. i have to be honest. given the kind of pressure that's been on greece, i think posh ch gal and spain would be better off not taking a package from the eu than they would going after one. >> chandler, why doesn't anyone talk about the irish model? they have slashed spending brutally. in fact, they have taken down government salaries and pensions by a good 15%. they already have a very low corporate tax rate, mark. now they're slashing spending. isn't ireland the model for these sue therouthern european problems? >> i think some of these problems are much pr serious for the likes of greece and portugal and also spain. look at the irish stock market. it's done welcome paired to peripheral stock markets. as long as the prefry is cutting fiscally, that is not only has ireland, but also spain and portugal cutting spending and raises taxes, that this lives the periphery of

meanwhile, the european union said greece's 2009 budget gap was worsthan thought, almost 14% of greece's g.d.p. it looks like the third time wasn't a charm for u.s. airways and u.a.l., the parent of united airlines. u.s. airways said today merger talks between the two are off. it was the third time the companies have tried for a deal. but centurytel is dialing up a deal: it'll create a new national landline provider. the telecom which is being renamed centurylink is buying qwest communications for $10.6 billion in stock. >> tom: still ahead on the program, it's the nation's biggest auto dealer. autonation's latest earnings and the future of auto sales, from c.e.o. mike jackson. >> susie: encouraging signs in the housing market: sales of existing homes spiked almost 7% in march, turning around three months of declines. many of those home purchases came from first time buyers scrambling to take advantage of tax credits that expire at the end of this month. but those new buyers are facing some competitors. as stephanie dhue reports, in some markets, house hunters with cash are shutting out

united states is the leading economy, has nothing to do with greece.uson means is the high level of debt is a problem, is a problem for greece, will be a problem for the u.s., he's right. will be a problem for everybody. because that's the cost of the crisis. we escape the crisis doesn't mean you have no cost. and the cost is they increase the debt level. but if he means that the kind of problem greece is facing today can replicate in the united states, i won't buy that. >> would you say that the united states actually handled this crisis pretty well? it was early in terms of acting on fiscal stimulus, the auto industry. did the measures that were taken by both the bush administration and then the obama administration were quick, fast, massive, decisive. >> yeah, i think so. i think that, obviously, this crisis comes from what we didn't expect. i mean, the system, the united states system, but as soon as the crisis has been identified, as soon as, and probably the imf role plays into this, then i think the measures taken by both administrations were th

greece really could default!ropeans can't get it together and the imf isn't necessarily going to do anything either. >> who would invest in greece? >> that's not the point. >> it's the test of the euro. as goes greece, as goes part gal, as goes spain, as go the european banks that are holdinging all of that paper. >> the domino theory doesn't play out though. >> don't you think, sue and rick, too, or any of you, it is much more likely we'll see a restructuring than a default? >> i hope so. i hope you're right. >> i think we're going to see some smoke. i really do. >> do you, this time? in restructuring? how is that any different than a default? >> it's not a full default. we're going to restructure, you're going to take a haircut. >> we'll see. i hope you're right. >>> coming up next, thank you, ricky, thank you, bob. all kinds of companies coming up with products that are better for the environment and they save money, and they help the homeowners out. but do they actually pay off for the consumers especially wh

and the national bank of greece continues sinking to new lows on huge volume. while the dow industrials saw their biggest drop in more than two months, 3-m helped limit the losses. it was the best-performing stock inside the dow. it was the only dow component that was able to trade higher. in fact, 3-m was able to hit a new 52-week high. and as a sign of just how bullish the market feels about 3-m, it hit the new high on almost three times average volume. here's what helped: a big earnings upside surprise, as well as an increase to its predicted sales and profits for the rest of the year. new products, emerging markets, and growing demand from the auto industry and consumer electronics fueled the optimism. basic material stocks were among the biggest losers as the sector reacted to some earnings calls, including one from u.s. steel. steel stocks had been rallying as automotive and global demand has been picking up. still, u.s. steel turned in a first quarter loss, but it wasn't as bad as feared. steel shipments were up even as selling prices were lower. that co

greece's debt problems very much in the news this morning.ratings downgrade there and rumors of a possible new deal to help the european markets and help the euro. all the details from our london bureau. hey, carolina. >> hello, trish. that's exactly what is happening. very volatile day for greece today and lots of facts and rumors going on. let's start with the facts. credit rating fitch has just downgraded greece two notches from trouble b plus to triple b minuseses and keeping the outlook negative for greece and that's coming together with a new rumor that says eu officials are reaching a deal in terms of how the loans for greece are going to work, especially on interest rates and how much are they going to use as interest rates for these low ones and this rumor, i say again it's a rumor because only anonymous sources are saying it and it's not official information coming at the back of another rumor that says greece is getting very close to requesting a financial from the eu and imf. larry, back to you. >> thanks very, very much. i'll jus

but the message from greece is sooner or later the reckoning does come. host: what is your assessment of how washington has been responding officially? the president who has occupied the seat on pennsylvania avenue in this building behind me, this increasing concern? we seem to continue to spend, although we keep hearing about the perils of building up our debt. so what is happening politically that the response has been what it has? guest: the response has been entirely consistent -- which is, let us put it off. it is republicans, it is democrats. the republicans like to cut taxes but they don't want to cut spending. the democrats would increase spending but they don't want to increase taxes. you basically have a consensus even though there is an awful lot of rhetoric, but a consensus among practical politicians that they don't want to do anything unpleasant for their constituencies. it is understandable but the point is sooner or later, if you do so -- to much of that, evade these problems too long, there will be a reckoning and it will be imposed by th

let's turn to greece now. continuing to have problems and yet investors are not fazed. greece is going to get bailed out. i said it over the last few weeks and i will say it again. whether through the imf, whether through the e u, there's a political forces at work here. where certain people like angela merkel have to tell the population that they're not for this, but they're going to get bailed out. they've gotten the high interest rate they deserved. but, a country with a profile like greece, the globe cannot afford them to default on their bonds. ok thank you very much for your take on the markets. thank you. the chicago urban league is working on ideas that could help people who are struggling in this economy. the group met this week for its 2010 spring summit to talk about how to solve the education crisis that is leaving millions at an economic disadvantage. similar to schools across the nation -- some chicago classrooms, especially in african american communities, are in crisis mode as cities and states fall short on education funding. at this years spring summit

it tells you the amount of risk attached to sovereign debt in greece. by contrast, you know, you see german yields migrating down. now, if you do get confirmation either from europe or from the imf that there is some type of backing, 8% looks very desirable, but there are not that many people who are willing to take that kind of risk. particularly when germany is seeing its yield head down. there is some question about whether european growth can hold up for this year. >> are there going to be any equities towards generally high yields towards the end of the year? >> i think there is a big concern that as we move into the second half of this year, the profit outlook starts to migrate. the gdp outlook starts to soften. as we start to move into some aspect of the slowdown, the debt worries come to the forefront and you would, then, see the periphery markets in europe, their yields may remain a lot higher than you'd see the core of europe. >> okay. good to see you today. thanks so much for joining us, churam chaudhry, bank of america/merrill lynch research

look, the reality is this with greece. we've done a lot of smoke and mirrors, but at the end of the day, no one's come in with a suitcase full of cash for greece. that's what they need right now. so there is a chance that there is a default over in greece. i think the market is pricing it in. it's one of the reasons the euro's under pressure. i think the fxe, if you look at it, that should trade from the short side. >> stay with us, guys. we've got a second derivative way to trade the airline sector on the other side of the break. we'll be back with the "halftime report" in a moment. >>> as the mobile masses demand faster voice video and text, one stop stands tall, ready to tackle traffic. american towers chief tells us what's next. >>> our daily newspapers declared all but dead. tell that to the stocks because they delivered profits. >>> "under the radar," stock resurrection, all that, and more, tonight, at 5:00 p.m. on cnbc. >>> okay. let's get a trade to go. zach? >> looking a bit at memc, microelectronics, which is wfr

it was before greece. if money is put out to any country, it will be done, first of all, with specific approval from the executive board, which includes the u.s. in of the opposition. -- in a veto position, with conditionality. if the g-20 leadership agreed that this is the way to provide credit to avoid fiscal or exchange rate crises in countries around the world -- >> do you think this was a good idea? >> in general, having the imf available to avoid crises is a good idea. >> where will the money come from? this is our problem. we are bankrupt, too. along those lines, do you feel like, you go along with this commitment, what do you do when the state gets under the gun? like california and others, they are approaching a state that greece is in. we cannot turn down california. if we can bail out all these banks and they get off the hook and now they are making billions in their executive officers are cleaning up, do you think we would ever turn down california or any other state that gets in the same situa

you talk about fundamentals in greece.e united states of america, which is projected over the next decade deficits that are unsustainable? >>, of course, we should look at fundamentals and certainly take some hard measures. one set of measures has to do with financial regulations. and bringing a halt to what has taken place, as i said, without much serious watch and very often without regulation and quite often ot otc but under the counter because it simply wasn't visible, wasn't registered and not secured. and the other set of measures that we need to look at collectively is our public finances because in many, many countries around the world, and france is part of them, we have public finances that are not sound and solid if only because we had last year to invest massively into our economy when no one was investing and when we had to sustain growth and sometimes kick start growth. >> obviously we're going through a bit of a reset in our economy here. >> that's exactly right. >> to say the least and we're looking at tryi

the group is wrestling with the chris onis in greece that could unravel an improving world economy. >> we received the request for arrangements and we have been working closely with the greek authorities for some weeks and -- . >> while they at odds on banks to prevent the future crises, u.s. lawmakers are grappling with differences and repo form legislation. they're looking for common ground on a number of issues, including the bank -- bank banks from engaging in certain investment activities. >> it establishes cap -- and that any one institution is not so large, it takes the economy with it. >> reporter: republicans say the bill will lead to bailouts and why housing reforms are not in included in the current

kretzer money problems in greece were wall street -- >> money problems in greece were "the wall streetournalorry wall st. we will check with the bloomberg business report. >> ben bernanke telling an audience that our economy is far from being out of the woods. costco says its sales climbed 10% last month. we will get latest weekly jobless -figures. the airlines are discussing a merger. united is one of them. a 6% drop in volume -- value from a previous year for one magazine. and taking a look at baseball teams, the new york yankees were the most viable. the orioles didn't turn a profit last year. -- were the most valuable. the orioles did turn a profit last year. >> a new game will only be sold overseas. words can be spelled backwards. they are trying to attract younger players. >> not as smart players. we're giving it a little bit more variety. >> the rules will remain the same in america. you can apply the new ones to the original board. movie studios are stripping away bonus features. studios are blocking the action to go straight to the main menu forcing viewers to watch all of the

. >> live to athens on the latest to the bailout for greece. plus review texas instruments earnings which are coming up after the bell. this is "the call" on cnbc. >>> stocks getting a boost from strong earnings from the likes of caterpillar, whirlpool and humana. take a look at how the s&p 500 is trading so far on the day. it's essentially flat on the session. it's up less than one-tenth of 1 #%. take a look at the dow, positive on the day. up better than 35 points. three-tenths of a percent. finally the nasdaq, see how that's trading. also in positive territory although it's essentially flat on the session. trish, what's happening on the floor? >> you do have a lot of m and a ak at this time out there, also strong earnings. people reacting to that positively this morning. up 34 right now on the dow. i want to bring in bob. we want to talk about what's going on in the financial sector as a result of these concerns about financial regulation reform. >> the amazing thing, we still don't know what's going to be in this bill. they're taking things

everybody is buying into this v-shaped recovery, and they kind of discount bad news, we discount greece, we discount unemployment. we discount what we don't want to see and what we cling to you higher numbers and bigger advances in our port follow. it might continue, but come on, we haven't had a pullback. >> are we in denial? >> i think we are, and i'm not referring to the egyptian river. are we in denial? >> i think we are. >> i want to look at this soberly, coldly, seriously. i don't want to be overexuberant. i want to know your take. >> i think we're in denial about future risks. i think we're expecting a goldilocks recovery without blips in the road, and i don't consider that realistic. >> i want you to put some of the salt and pepper. some of this is precious of the chinese yuan, more salt is the grebe pull-up. they're pulling deposits out of the banks, it's dead in the water. more seasoning is view that growing bonds, and interest rates could go up? i'm talking about long-term interest rates. what are you thinking, mr. will you luskin. >> i think we have to get over the binary lo

we were talking about greece earlier.e were getting christine le guard saying they are going to pledge $6.8 billion to greece as part of the euro zone aid package. the uk would seemingly be heading much closer for a hung parliament and what that means for british debt. do investors have to fear that, or not? >> well, it's a concern. first of all, on the greece issue, we think they're going to have to trigger this aid package in the next three weeks. they've done a couple of bond auctions recently. they've gone fine, but there's not too much risk of that for investors. >> that's right. so -- but they still need to raise more and they've been talking about this u.s. road show and the greek finance minister yesterday was saying, it's still on, but there's no date scheduled yet. well, you know, they're running out of time. if there's no date scheduled for that, it's not going to happen. the so i think they're going to trigger this aid package and then the questions are is 45 billion enough? are they going to be able to keep u

>> we looked at the goldman sachs arrangement with greece. that is where we put most of our focus. we found in the 2000-2001, there was a contract between the greek government and goldman sachs which bike using exchange rates that were different from the market rates have the effect of modestly changing the reported debt ratios that priest reported to the -- the grease reported to the the european union. goldman sachs sold assets to a greek bank. they had the effect of distorting the numbers but there were relatively modest, about one percentage point. the debt to gdp ratio did not change greatly. this was well before the federal reserve was supervising goldman sachs. it was also before the end run episode where the -- enron episode where we strengthen our rules against the arrangements which are intended to have accounting impacts. they are designed to affect the accounting evaluations. we have discussed this issue with goldman sachs they have a much more elaborate procedure now to evaluate such possible deals to make sure they are not being motivated by accounting and other kinds

civil servants in greece are on strike. protesters gathered not far from where officials of the imf were discussing the details of the rescue package for greece. the leaders of the catholic church in england has issued an apology to the victims of child abuse by priests. the archbishop said the scandal brought deep shame on the church and the response of some leaders has been inadequate. this report from our religious affairs correspondent. >> it lies at the most powerful church, the vatican has built under a barrage of criticism. headlines have denounced it for failing the most will marvel of its members. >> -- failing the most invulnerable. today came an unprecedented apology. they shared responsibility for the abuse and the way it was covered up. >> we offer our heartfelt apology and deep sorrow to those who have suffered abuse, those who have felt ignored or betrayed. >> why such contrition now? pope benedict will visit britain in september as the church needs to take the heat out of this issue. just yesterday the pope

and obviously, somebody had turned the spigot off on greece a few years ago.ge of crafting legislation. we are just adding the problem. this world financial circumstances is giving us problems more quickly than we can come up with solutions to. >> host: west palm, florida. jeffrey, independent line, good morning. >> caller: good morning. i'm looking at the bailout, it does get my mood. i don't think that goes from risky behavior by being traitors. to me, it has to be reality in order to hedge that risky behavior. and if money is available i just don't see how even though it's not taxpayer funds, per se, taxpayers will link to pay for our five keys on the banks. so am hoping that does get renewed. also the root cause of the financial problem, is that going to be addressed as well, fannie and freddie come as well as the capital leveraging of the investment bank? >> guest: i think we're going to be dealing with the root causes, but i think it will be that economists will be arguing a decade from now as to what all the causes we were. we know what some of them wer

calling his country a sinking ship, greece's prime minister today formally tapped a rescue fund from the european union and the international monetary fund. the 45 billion euro aid package should start flowing early next week. it's the first time a euro-zone nation has needed outside help. so far, no oil leaking from that sunken drilling rig in the gulf of mexico. but there's still a ten mile by ten mile sheen of oil floating where the rig had been. two lawmakers are already calling for a congressional investigation into the rig explosion. >> tom: still ahead, elkhart, indiana. it's home to the nation's r.v. industry and 15% unemployment. that number has been dropping. an economic update from the heartland. >> susie: multiple choice: the economy is strong. the economy is weak. none of the above. reports released today on manufacturing and home sales as well as an eight-week stock market rally say one thing, but slow job growth and weak forecasts say another. so what shape is the economy really in? the answer, as scott gurvey explains, depends on the recovery alphabet. >> reporter: ba

another problem for greece. fitch ratings slashed its debt rating by two notches. the move comes on what fitch calls an intensification of fiscal challenges. while greek i.o.u.s are still investment grade, one more notch lower and greece's debt would cross into junk status. and u.s. supreme court justice john paul stevens will retire from the high court this summer. he's 89 years old. the retirement gives president obama his second nominee to the high court. last year, he appointed justice sonia sotomayor. >> tom: still ahead on the program: forget about dow 11,000. tonight's market monitor thinks we'll hit dow 12,500 this year. he's eugene peroni of advisors asset management. >> susie: if the recent pickup in mergers and acquisitions is any indicator, the economy may finally be finding its footing. the people who advise on that m&a activity say their clients are catching the buying bug. it was only last year that few even wanted to talk about deals. jeff yastine sat down with the head of an m&a advisory firm. while you've probably never heard of imap, you'll want

we are not greece, but greece is a useful lesson.u have massive debt, eventually you are creditors lose confidence. i think we are on the verge of having that happen to us. but there are things we can do about it. it may be a predictable crisis, but it is not unnecessary crisis. >> what is interesting to me is this talk about predicting a crisis, when in fact we are in a crisis, and i do not have -- i do not hear any discussion about it whatsoever. one out of three workers will be unemployed or underemployed at some point around this year. around 45% in some minorities. how about that for predictable crisis? we are actually in one. the discussion overlooks the fact that we have a very large recession. we have an out of control economy, not the government budget. david walker and i wrote an opinion that said the first set toward deficit reduction is actually generating jobs. -- the first step toward deficit reduction. that is a complementary path to deficit reduction. george w. bush said in a time of war and recession, you have to hav

we are going to talk more about greece which does get the rescue package it needs. what does all that mean for your money here at home? that's right ahead. >>> plus -- the comeback country. hey, maybe we're not doing so bad after all. we'll break down the real economic indicators. >>> then, your twitterama continues with super user arianna huffington and harvard business school students. they think they know what biz stone does not. >>> airline quality getting better? how could that be? phil lebeau has some surprising findings. >>> the dow breaking back above 11,000. but how long might it stay there? let's gather our power lunch market insiders as we look at a 20-point gain in the dow jones industrial average. craig columbus, chief market strategist with advanced equities asset management pnd a founder of protrading course.com. nice to have you here. craig, you think we may hit a little bit of a wall here in equities. primarily because of the competition on the interest rate. is that a correct read? >> that's right. we've had a 15% rally off the february low. that's

hoping it is on a broader topic. >> greece. maybe the last one.in demonizing the imf and they think things will be worse. what is your message for the greek public? >> they are not the only ones in demonizing the imf. the greeks and others should see the imf as it is today. the imf is a cooperative organization were all the councils of the world come together to help those in trouble. today, greece, tomorrow, maybe another one. what is the imf doing? trying to advise on behalf of the entire international community, providing resources to help on behalf of the entire community. the greeks citizens should not fear the imf. we are trying to help them. >> let me intervene. we have dealt with two issues throughout the last two years and it was obvious that a number of countries it needed the help of the imf. there was an issue of stigma, coming from the late 1980's to the late 1990's. clearly the direction he has given to the institution, even before the crisis, let me remind you -- he was the first to call for an increase in fiscal spending, before th

walk away from it at least for the weekend because if you piece it together with its role in the greece situation, you know, there are a lot of reputational risks out there. >> it can't be good. >> there are a lot of reputational risks for goldman sachs, and if you look at that chart what you will see is there was no recovery. there was no recovery throughout today's session in the entire broader market. it was a return to basically risk off again. and we have not seen that in a while. the concern that i have is sunday night. how does asia react to this? that's why i don't think this is a one-day event. >> i want to go to the "fast line." gary kaminsky, former newberger berman managing director is there. gary, what was it like to be inside 85 broad street, of course the headquarters of goldman sachs, today of all days? >> well, not 85 broad anymore because they've actually moved. >> oh, right. old habits die hard. >> let me just sigh thay this, this is a serious matter. however, if we give it some sort of perspective, and i mentioned on the halftime today, let's go back to the ipo spinn

i mean, are you going to -- you're going to poland, going to greece? how do you unwind them? first of all, we don't have resolution authority across the globe. but we would have this authority in the united states. the idea is that you would set up a council with 24 hours, effectively of bankruptcy judges which would go in there and figure out, can we fund this thing? and the fed ended up funding lehman brothers for a week. people don't recall that. so they figure out a way, how to fund it using the prefunded -- >> what we would think of as almost dip financing. >> dip financing, if you will, and effectively, them they start unwinding it. but the question is, how do you jump ahead? >> funded by bank fees? >> in this case, they would be putting $50 billion into a fund on day one. >> and the concern, john, is how do we know that we get a commitment through that whole process that that bank is going to get shut down,ite? >> yeah. but they're trying to spell that out in the legislation to make it unequivocal that when you have a situation like that that requires the thing to be s

greece agrees to 24,000 euros of cutbacks.greece has agreed the outline of a 24 billion euro austerity package including raising the retirement age from an average of 53 to 67 in return for a euro plan. you could retire in greece at age 53? guest: you can, and you can retire in other places. the next club med countries are in the firing line. they have powerful public sectors in those countries. they symbolize some of the fiscal recklessness that has led up to this crisis. the problem with the politics of this bailout package is that it's going to spark big public sector protests, big union protests on the streets. no one likes to see their salaries cut. it is what they are used to. the bailout is the beginning, not the end. host: if greased tumbles or fall, why does portugal and the u.s. stock market go? where is the interconnection? guest: in terms of risk appetite. if people see a previously considered to be stable sovereign debt like greece within the euro zone, by all accounts, if they see it being treated like one of the

ca cutting 1,000 jobs and greece launching a u.s. bond issue in the next month hoping to raise between 25 $5 billion and $$25 billion alcoa joining the parade of companies to the tune of $80 million. michelle? >> lots of fire, julia. directed at the t.a.r.p. program and mary thompson says it's turning out to be profitable for the feds. >> some of the profits easing the t.a.r.p. pain and two parts are proving positive. those aimed at financial firms. snl financial tallied up on firms that repaid t.a.r.p. and found the treasuries received an annual return on 8.5% on these investments. over 400 banks and financial firms borrowed $244 billion through t.a.r.p.'s capital purchase program and the targeted investment program which was set for citi and bank of america. intended to strength on the financial system and bolster bank's balance sheets but it seems it's bolstering the treasuries, too. snl looked at 49 firms including morgan stanley and sachs that have paid $18 billion repaid in treasuries. netting $5.6 billion in profits from the s

-- goldman saks arrangement with greece.hanged to 100%. it was not a large effect but there was in effect. before that happened, this was before the federal reserve was supervising goldman sacks and before the enron episode, following which the fed and other supervisors strengthened our rules against the arrangements which are basically and tended to have accounting and tax to affect. we have discussed the issue and they have a much more elaborate procedure to evaluate such deals to make sure that there are not being motivated by accounting and other appearance issues. we believe in that situation that they divested that position in 2005. on the credit default swaps, we have not found large positions in u.s. banks but we have not addressed the question specifically of using cds to manipulate pricing which would be evil and inappropriate. that would be more and sec issue. exposures of u.s. banks through direct holdings to european governments is relatively limited. >> are you satisfied with the solution europe has reached? do

first of all what's happening in greece is what america is on the way to doing as well.it is so heavily in debt that they can't pay their debts. and that's exactly the direction that this congress and this president are going. >> we'll talk about that in a minute in the next block. in terms of the financial bill, you have been concerned, some republicans have raised concerns you don't think the language is ironclad. that as you read the bill could potentially leave taxpayers on the hook for some intervention. is there progress being made? some democrats concede and others say it's vague enough but there's negotiations on that. are we making progress? >> the reason we're not ready for this bill to go to the floor is we have just had an experience with health care reform in which not one republican amendment was passed, not one republican vote was a part of this process. now we are trying to have a part in this process. and we have been promised negotiations before the bill would go to the floor. and i think that if time is given to us, we will be able to do that because w

but really, greece is more important than that. and they'll work their way through this. this is a near-term concern. again, it clouds the issue that we really should be focusing on, and the mantra we're using here at federated is stronger for longer. and i know about 1565, but i'm like my other guest on the panel, we're bullish as well. we have to watch we don't let these clouds with ashes get in our way to see what's really the good news just ahead. and i feel for the people across the seas. >> all right. fritz, what part of the market do you like best here, if it's going to continue to go up? >> well, mark, i suspect the economy-sensitive sectors in the s&p continue to out-perform. and i start with financials, because i think they have the furthest to recover. industrials, materials and, importantly, consumer discretionary. and i think probably energy comes along at some point, because i think the oil price is probably headed higher. >> all right. thank you very much, linda and fritz. have a great week. >> thank you. >> cnbc's senior economics reporter steve liesman jo

as greece is of the eu. greece is facing a default or something like that. and they're all coming in from the european union, imf, to bail them out. >> you presume that when the day of reckoning comes, andrea, that a population will face up to the facts that we're out of money. we're going under. and yet, in greece, riots are breaking out in the streets bays they don't like that their benefitses are being cut. >> i don't think is anal gas because of the size and what greece is. greece is, economically, a state -- >> it's 2% of the eu. >> a province of the eu, so it is as though one of our states, california, for instance, which is an eighth or a ninth of our economy -- >> which we'll be bailing out. >> which we'll be bailing out, so just think -- >> a lot of interesting fews this morning. >> i'll tell you what, the untold story about the stimulus package is the fact that it saved a lot of states in the short run. but in the long run, so many states are upside-down. unless this economy starts to grow in the next six months to a year, you'll have bailouts, i t

look at what isç happening in greece.cted a year or two ago that greece would find itself essentially bankrupt with its hand outgoing around europe the poor man of europe with its hand out. europe feeling like it's got to bail them out because they are part of the eu and all that we don't know where all of that will lead. just the bailing out of that one country might lead to other ramifications. we don't know how high the tax rates can get there. we don't know how great the welfare state can be. we don't know to what extent they can pass law us. french areç passing law us and restricting free speech i never thought i would see in our lifetime. >> sean: put your pundit hat on, your adviser hat on. you have run senate races, you ran for president. you had a good run you had a lot of support i know you would have liked to have gone further. >> now that i'm out of it, i have become smarter, i have all the answers to the questions and solutions. >> sean: you say that half in jest. but you probably acquired a lot of wisdom in

. >> given my greek descent, have been reluctant to bring up greece in this session. is there anything in the greek situation that in any way suggest parallels between us? what do you take out of what is happening there? >> they are all parallels and there are significant differences. let me tell you the different as quickly. the greeks situation is one in which there has been profligate deficits for years. when they went to the euro, the presumption was and it happened that exchanging the drop, for the euro would lower their interest rates and it did. what it also did which is the other side of the balance sheet is essentially to raise the basic exchange rate to wake non- competitive level because as inflation is more rampant in greece and germany, they will get -- increased than germany, they will get a non-competitive level. this is creating a major problem. clearly, we are not in that position where we have a fixed exchange rate. we have a variable exchange rate. we do it with extraordinary access to the rest of the world's savings because we are the reserve curre

, s&p also downgraded greece sovereign rating. and that, of course, dramatically affected those two events. you see moving down in germany and ended down 2.7%. the s&p 500 weakened as that happened and we have stabilized now that the european markets have closed. rick santelli in chicago, the big thing that i seem to notice here is that now greece had been able to use their sovereign debt as collateral with the ecb and now it seems they're going to be barred from doing that. that is important. >> it is getting important. why markets are getting crazy. some debate as to all the rating agencies have to bring. so, there's a collateral question. i wouldn't say it's a black and white answer that it is for sure in good collateral and if it is deemed it isn't good the euro could change it with their euro agreement. it's been a wild day. if you start out with the currency. the currency is now a fresh low close going back to kind of april, may of last year. if we look at interest rates in the flight to safety and look at a boon to ten-year