Transcripts For CNBC Power Lunch 20100106

now it's time for the call to action on stocks you need to watch during arch trading. cnbc's matt nesto is here with a look. hello, matt. ? hi, larry. check it out. another day, another new high for the s&p 500 and the nasdaq. the nasdaq is still five points sharp. 1138 was the interview day high and we're still 27% below the '07 peak of october of '07. if you take a look at the big drivers in this marketplace. once again the autos and autoparts makers led by ford and goldman sachs on the price target and the material stocks, aluminum, steel, gold and all strong and banks up for the fifth straight day and the energy stocks back to the fore again. they have been volatile in an up and down session. the slumpers, well, telecom pretty much all by itself and the down almost 2% today and the household and personal products also down about 1%. look at the volatility index. the vix at 1893. that is a new 17-month low. august of '08. some of the big-name movers and the big stock in the s&p today. fdo, family dollar, do you own it? probably not. it's been hideous. up and down and back and big day for the stock up 12% after better than expected earnings before the bell and fastenal. big s&p move for this name. ksu goes to sell at ubs and it's getting slapped down for 4%. it was down twice as much in early going thanks to that sell rating by ubs. that's it for me. >> matt nesto. thanks so much. that is it for "the call." i'm melissa francis. you have a huge show tonight. >> bye, mandy. i want to sign off. >> my a pol sxrees, mandy, i was so excited about larry's show tonight. >> we love working with you, by the way. >> will see you tonight on the kudlow report. john taylor at:00 p.m. eastern and now the key point is "power lunch" up next. larry, thank you very much. and well come, everybody, to "power lunch." i'm tyler math son with sue herera, michelle caruso-cabrera and dennis kneale. as you look there at the door of the private home of east hatham o connecticut, about his decision to step down and not seek re-election. this is a live shot outside of his home there. his poll numbers have started to fall following that financial crisis and then he came under fire. as you probably recall, for taking a discounted vup mortgage from countrywide, sue? >> and fellow democrat byron dorgan also deciding to not seek re-election and the departure of the north dakota moderate means the democrats will have to defend open senate seats in at least four states. so a balance of power shift could be under way which could affect a number of key initiatives that are pending right now on capitol hill and it will be fascinating to see how it all plays out and who decides to run. >> you mentioned the senate banking committee and financial regulation. he was one of the spearheads along with shelby. the question is what happens now to finreg as we call it shorthand here in the newsroom. will it be tougher or will it be softer depending on who fills those seats? >> right. >> what does dodd's departure mean for that stuff. cnbc's chief washington correspondent john harwood sgloins me with aimon jafers of politi politico. financial regulation, what happens now as a result of dodd saying he's not going to run? does this mean he tries to push xt person? >> he is going to push it, and i believe they will get it done with richard shelby of alabama and with barney frank of massachusetts on the house. michelle, i've always thought financial regulation was going to happen. democrats are not going to leave washington and face a tough 2010 election climate without that issue. it removes impediment with republicans working with dodd since working with him doesn't mean that we're helping a vulnerable member of the senate seeking re-election. this is going to get done. it is an indication of how tough it will be in 2010. obama will have a weaker political hand in 2011 than he's got right now. >> the psychological calculous of a lame duck changes a lot, right? doesn't this mean that dodd is far more likely to do what he thinks is right rather than what he thinks gets him reelected and what does that mean? >> you sound cynical as if senators don't always do what they think is right. there's no question here that retiring from the senate and announcing your retirement historically frees people up to do all kinds of things. they don't have the pressure of running for re-election and they don't have the pressure of raising money which is the key here in senator dodd's case with the banking committee raising a lot of money over the years from the financial industry. the question is what does it free dodd up to do? does he feel closer to the industry which he's historically been close to over the years or does he take a more populist tact that he's taken more recently as he does the finishing touches on this financial regulatory reform bill. >> i just don't know. we're going to watch this very closely. you would think that he would be free to do what he wants to, do the question is what does chris dodd ultimately want his legacy to be in the united states senate? >> this will be the last piece of legislation he'll put a stamp on. it's a huge one that will have lasting implicatiomplications. >> that legacy word is the key word. what chris dodd wants to do is to be very, very resultsor yented. if he'll be around and reelected you can kick the can down the road and say i'll take it up in the next congress if i don't get what i want. he does not want to leave without having this done and that combined with the democratic comparative means he'll figure out where the votes lie and move there. >> he could end up being tough or wall street where in the past he's been friendly on wall street. can we rewind a moment. the stated reason for his resignation, senator dodd is that he could have lost the re-election, so since when does this guy back down from a fight. is there no other shoe he'll drop that he's implicated in money and he's about to face it. no other shoe? >> we don't know of any other shoes and reporters are always on the lookout for other shoes. you're right. this is a guy that's taken it up before. chris dodd ran for president of the united states and he moved his family to iowa for the caucuses to run for that office. it was a long, long, long shot race, but he was willing to take it on. this one also looked like it would be a long shot race and maybe with the death of his close friend ted kennedy. >> i think there may be self-sacrifice involved and democratic leaders are eager to hold the seat and they'll have a better chance with the attorney general richard blumenthal. we'll talk more about -- >> senator dodd has approached the microphone. let's listen to what he has to say. >> in the neighborhood with all these people gathered around. happy new year and good morning to everyone. every six years over the past three decades i've invited you to my home to seek re-election on the united states senate. on each of these occasions i've begun my remarks by observing that every important journey in life begins and ends at home. today is no exception. what is different about today, however, is not to announce the beginning of yet another campaign for the united states senate, but rather to announce that after 35 years of representing the people of connecticut in the united states congress i will not be a candidate for re-election this november. i want to begin these very brief remarks by expressing my deepest gratitude to the wonderful people of connecticut for their remarkable privilege of being elected eight times over the past four decades to our national assembly. you've honored me beyond words with your confidence. there have been times that my positions and aks have caused some of you to question that confidence. i regret that, but it's s, cally important that you know that i have never waive nerd my determination to do the best job for our state and our nation. i love my job as your senator. i always have, still do. however, this past year has raised some challenges that insisted i take stock of my life. over the past 12 months i've managed four major pieces of legislation through the united states congress, served as chair and acting chair of two major senate committees, placing me at the center of the two most important issues of our time, health care and reform of financial services. i lost a beloved sister in july and in august ted kennedy. i battled cancer over this summer and in the midst of all of this found myself in the toughest political shape of my career. let me be clear, i'm very aware of my present political standing here at home in connecticut, but it is equally clear that any certain prediction about an election victory or defeater inially a year from now would be absurd. strange as it may sound, i'm not confident i would be standing here today making this announcement if these situation his not occurred. none of these events are circumstances, either individually or collectively is the cause of my decision to not seek re-election. yet together these challenges have given me pause to take stock and to ask questions that too few of us in elected public life ever do. why am i running? on a cold morning two weeks ago tomorrow i asked myself that very question. on the early, frigid dawn of december 24th, christmas eve with snow piled high along the streets of our nation's capital i cast one of the most important if not the most important votes of my years in the united states senate, a bill to fundamentally reform the health care system of our nation. an hour later i was standing on the virginia hillside at arlington cemetery where ted kennedy rests along with his brothers in eternity as he is in history, wishing that i could have seen the look in teddy's eyes as the united states senate took that historic step an hour before. i thought about the dozens of fine public servance, democrats and republicans who have joined me in serving connecticut over the course of my career at the local state and national level. i thought about the countless connecticut families, ordinary people with extraordinary koufrj and spirit whose lives have touched me over the years and whose stories have profoundly affected my decisions in the united states senate. i thought about the dozens of patriotic senators who had the privilege of serving at an institution i dearly love. i have been a connecticut senator for 30 years. i'm very proud of the job i've done and the results delivered, but none of us is irreplaceable. none of us are indispensable and those who think otherwise are dangerous. the work to make our nation a more perfect union began long before i was leched to the senate and it will go on long after i am gone. our country is a work in progress, and i am confident it always will be, that's why i thought about -- that's what i thought about as i stood on that hillside in arlington on christmas eve morning. that's what i've talked about with jackie over this holiday season and that is how i came to the conclusion that in the long sweep of american history there are moments for each elected public official to step aside and let someone else step up. this is my moment to step aside. there will be time to reflect in more detail in the years i've spent in public service. there will be time to celebrate victories and mourn setbacks, share laughs and memories and to thank profusely the talented, tireless and numerous staffers many of whom are here today who have made my senate work possible, fwhau time is not now. my service isn't over. i still have one year left on my contract with the people of connecticut. one year from this week, our state will have a new united states senator. in the meantime, we have important work to do. so a few closing thoughts. i believe in bipartisan solutions, but i also believe you can only achieve those results with vibrant, robust and civil partisan debate. i'm a democrat and very, very proud of my party's contribution to the vitality and strength of america. i would never have had the opportunity to serve in the congress had i not had the support and backing of my political party in connecticut over these years. i appreciate the passionate party activists who have never, ever faultered and is a part of my efforts. i want to say thank you for my family for their tolerance of yet another generation of our family in the mitt cal arena and i'm earns specially indebted to jackie for her fierce loyalty, unyielding commitment to fair business and the unlimited capacity for needs of others. she has truthy been my anchor in these stormy political waters. there's nothing more pathetic in my view than a politician who announces they're only leaving public life to spend more time with their family. the result of this announcement today i hope will create that opportunity, but it's not the reason for my decision. i'm a very late arrival in fatherhood as many of you know, and i am told repeatedly by some of you here today that these young children of my grace, who is 8 and christina who is 4 will grow up very fast. so while these young ladies are not the reason for my decision, they'll be an incredible benefit of the choice i make today. on this, the 6th of january, the epiphany, 2010. i'm still driven by the same passions that motivated me to try my hand at politics so many, many years ago. and just as i've encouraged the people of connecticut, i'm looking to the future with a spirit of optimism and confidence and finally once again that those of you gathered here today and to the people across this great state of ours, i thank you immensely for the opportunity you've given me to serve and i thank you all very, very much. >> all righty. the senior senator from connecticut, christopher dodd, the son of a senator. a man at the center of two of the big legislativen deaf offers of the past year, health care and financial services reform announcing that he will not seek re-election. he faced a very tough run in connecticut were he to seek re-election and folks, that was a very personal speech. you were spot on from ted kennedy. >> and his battle with cancer over the years and he has two young children who obviously he has gone through one of those moments in life that sometimes we all do. >> john harwood and aman jafers are still with us. aim an, your reaction to the senator's speech. it was much more personal than some people were thinking. they thought it would be politically oriented in what he achieved and would hope to achieve, but i was struck with how heartfelt and personal it was. >> i agree with you, sue. i thought it was candid. he knows what his political standing is right now. that was not a mystery, but they don't often talk about that when they leave office the idea that they may be facing defeat. he was correct in saying nobody can predict a year ahead of -- almost a year ahead of an election who will win or lose, but he's got a very tough road to fight. it would be easier for richard blumenthal, the attorney general, who is likely to be the democratic now nominee and they have a better chance of holding the seat. >> it is as if senator dodd has been given one last year on this earth and he can say anything he wants. do you think the lame duck status will free him to be blunt and direct and say stuff he's been wanting to say his entire career and he has to reserve his legacy. >> he's currently thinking about legacy and you don't talk about the emotional moment standing on the hill at arlington where his friend is burred and thinking about history and family and these things without thinking about what your own legacy will be and there weren't a lot of tea leaves in that speech to figure out what that means for financial regulatory reform. i believe in bipartisanship. >> only with vibrant, robust and civil debate. >> i'm a democrat and i'm grateful for the democratic party that got me where i am. it is still very unclear. >> thanks very much, john and amman both. stocks are paring their losses after the latest read on the biggest part of the u.s. economy, the services sector, 3m and alcoa are leading the dow up a bit. bob pisani is at the new york stock exchange. >> thank you. there's no one down here, by the way who doesn't think financial reform bill will definitely be moving forward even though senator dodd is stepping aside here. a lot of companies are issuing secondaries last year. they did quite well. today one of them. this is the first big secondary of the year, beazer homes will be issuing 18 million shares. that's a serious dilution. some of the other once are down fractionally as well. continuing to get mixed messages on the economic front. the airlines generally have had good comments in the last couple of days. united and continental had good comments on the december travenlg and today u.s. air and amr, their numbers were below expectations and those are taking a bit of a breather here. agriculture complex and the same situation and the mixed message is generally improving and you get different things here. monsanto, simple story here. the receipt business, demand for seed asks corn, soybean has been down and revenue has been down as a result of the stocks here. mosaic, slightly different situation. big potash and fertilizer company and demand fell through the floor and volume slowly improving and pricing slowly improving. again, good news for them. >> trader talk.cnbc.com. rick, how are we looking over in chicago? >> there's been excitement in the last couple of hours in the treasury market and look at the 30-year yield chart and the interesting part is why. two reasons almost unanimously put forth and first is berkshire hathaway and they're getting the best days for global corporate issuance that when berkshire hathaway comes to the market, 250 million two-year floaters and 750 million 30-year bonds the assumption is immediately that they think rates are going higher and it's a great time to do this now and one of the reason rates are going up, and st. louis fed writing a research paper and katherine closon is the name talking about inflation and saying something along the lines of will it be the next dragon to stay. back to the gang of three. >> thank you very much, rick. >> appreciate it. let's talk more about the market specifically and gather our power lunch market insiders. chief investment strategy and john brady, senior vice president at m.f. global. car mine, i'll start with you. we do have the expectation of higher rates out there as rick just mentioned and a lot of people are focused as you are on earnings. do you think earnings are going to be better with good growth or are they being fueled by more cost-cutting? is the quality of earnings in your book going to be substantial. >> there's no question that the quality is going to improve. the economy is strengthening. fourth quarter gdp, the consensus was running around 3% probably at the end of quarter and it's closer to four. analyst expectations are way too conservative for the quarter. for the s&p 500 looking at quarter to quarter sequential growth of 1.5%. they are about 7% to 9% too low. >> really? >> oh, yeah. >> even when you take out financials? >> exactly. >> because i can't understand them. >> even when you take out financials you still get that kind of growth? that's the growth i'm looking at. that's basically where the growth is. the industrial side of the economy, pricing flexible sit improving and commodity prices are rising and the dollar's rising and that's signaling stronger growth here. i think things are improving and earnings have yet to catch up and we've had three consecutive quarters of better than expected earnings. john, does the higher interest rates at the long end, is it a good thing as carmine seems to suggest here? it's signaling higher growth or is it signaling something that we ought to be worried about? >> i don't think if it sig will nass much stronger growth. the market could be disappointed in the fact that growth, though it's better quarter over quarter and year over year will certainly not accelerate like equity valuations have since last march. we think the backup in interest rates most likely has to do with the supply story. uncle sam has quite a bit of issuance in the first six months of next year and the market's backed up a little bit in anticipation of an upgrade of supply. >> john, thank you very much. >> carmine, appreciate you being here. all right. up next, morgan joseph is going out on a limb. they are out with their list of six stellar stocks. last year's picks beat the dow performance big time. we'll name names on the other side of the break. and 37 new 52-week highs at the open. ford, the highest since june of '05 and radioshack the highest since june of '07 and the highest performance since march 2007 as well, each though they weakened a bit in the last couple of seconds. we're back in a minute with the dow up about nine points. what'ss of independent investors? let's ask. when you're trading a stock, every penny counts. i hate when the trade is done and you find out you paid more than the quote price. i want it at the price i expect. or better. td ameritrade's unique trading platform uses multiple market centers, to help you find the best possible price. i like those odds. i know they can't flat-out promise a better price. but they're always looking for it. they know what matters to me. every online stock trade is always $9.99-- not a penny more. and no maintenance fees. who else does that? are you ready to declare your independence? open an account today and trade free for 45 days plus get $100 cash. td ameritrade. independence is the spirit that drives america's most successful investors. hi, ellen! hi, ellen! hi, ellen! hi, ellen! we're going on a field trip to china! wow. [ chuckles ] when i was a kid, we -- we would just go to the -- the farm. [ cow moos ] [ laughter ] no, seriously, where are you guys going? ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! [ female announcer ] the new classroom. see it. live it. share it. on the human network. cisco. morgan joseph today unveils its six best investment ideas for the new year and if the track record is any indication, you will want to take careful notes. morgan joseph's picks from last september, we told you about it first here on "power lurch" have appreciated 30% since that time. bali technologies, flir systems. garm in, imax, rcn and tutor perini and now new picks. david, good to have you with us. >> thank you for having mow. why don't i take the first two. one of which is a repeater, great lakes dredge and dock corp. why these two? >> we really like bali because we think the casino industry is underinvested over the past few years and we think they'll have to make up for that in 2010 and 2011 and we think bal si picking up market share and valued at a 15 to 20% discount. >> is bali in china and macao? >> yes. they're all over the globe. >> what about your next pick. fl -- the great lakes. the great lakes dock corp. we like it because they're the jones act and they're the leader with the industry grew 30% last year and we think they'll continue to dominate that and we think a lot of the stimulus spending will help them grow in 2010. >> for novice viewers, what's the jones act? >> dredging has to be done by domestic corporations, correct? >> that is correct. >> and the barrier to entry is high so it's expensive for new entrance into the market. >> protectionism. >> you play it to your advantage, right? >> and you've got another strange pair here. you have the high tech stock, nuance communications and pep boys, manny, mow and jack. the car fixers. that's a desperate pick. >> correct. >> we like nuance and we think voice recognition will take off. >> they'll use it in health care to cut cost and if you're thinking on the mobile side we think there's a real opportunity as some states may pass regulation against techsing. we think voice recognition is more compelling. it is not a growth story, but traditionally, they have a service center business that's growing and they've cut a lot of costs and 60 million costs this past year and it will continue to do that. so you have growth with some value embedded in that stock. >> even though they're not the biggest brand in that space. i hate to say in that space, but autozone s correct? >> correct. they're a smaller company, but have a great opportunity to continue the turnaround. >> last two on the list. raytheon corporation and volcano corporation. raytheon is defense. you obviously see growth in that area, but how much? how much growth do you think is left in that stock? >> okay. we like that part of the defense industry because they're platform independent and they're growing nationally and their patriot missile is growing well internationally and that's the area that you want to invest in is the sensor networking side of the defense industry that they participate in. >> volcano corporation is medical devices. >> volcano is another one that has a real opportunity and it's a way to cut costs for hospitals and over $2,000 per procedure and we think that they'll be rolling out several new products over the next year and that should really help the stock. >> david, very quickly. we know you still like baliy. among the other six you mentioned, rcn, garmin, and tutor perini, is it safe to ashlgs summe you are holding on to any of them? >> we have lowered our price target on imax and on flir. we still like rc, in a lot. we think garm ibm has issues going long term. >> that was a sell. >> yes. >> david, thank you very much. >> thank you very much for having me. straight ahead, he is the tech genius who invented the synthesizer and voice recognition, what is on ray kurz weil's next big thing? we'll go live to las vegas and he'll tell you. >> coming up it's a $125 billion worth of advice for you. the chief investment adviser of credit suisse private wealth management will be here at the top of the hour to tell you where he's putting that money to work if 2010. >> coming up in just about 15 minutes 12:45 eastern time, you know what it is. the "fast money halftime report" with melissa lee. >> goldman sachs makes a bullish call and our traders give you the best picks on the back of a global economic recovery. the spending poll says holiday sales were better than expected and patty edwards checks in on the fast line to give us her stocks. the stocks she thinks will be better than expected. all that and much more on the halftime report. first more "power lunch" right after this. anncr vo: with the new geico glovebox app... anncr vo: ...you can get help with a flat tire... anncr vo: ...find a nearby tow truck or gas station... anncr vo: ...call emergency services... anncr vo: ...collect accident information. anncr vo: or just watch some fun videos. anncr vo: it's so easy, a caveman can do it. caveman: unbelievable... caveman: where's my coat? it was suede with the fringe. vo: download the glovebox app free at geico.com. he is the tech guru who invented voice recognition. what is ray kurzweil working on? what's his next big thing help he join us live from the consumer electronics show with our jim goldman. take it away. >> dinse, good afternoon to you. indeed he is one of the tech industry's top luminary, inventor, futurist and now he is joining us live to unveil on this program for the very first time your entry into easily one of the hottest sectors of technology nowadays. e-readers. amazon's making a killing with the kindle. there's e-reader from sony and now we have your entry the blio. >> yeah upon. something i wrote about 20 years ago and it's really here and we think it's the most advanced e-reader on the market. the software runs on any machine, ooh free and comes with 1 million free books and it's a step beyond e-readers as we've known them. why don't we give you -- >> take us quickly what separates this from what i have seen on the marketplace? >> first of all, it maintains the graphics as they are originally created by the publisher which is lost on most e-readers today and it has a lot of features that actually help you to read the book. for example, it can read out loud to you and synchronize the reading while it's reading and that makes it easier. it also will integrate web features so it will harness the power of the computer. >> it's graphically dynamic, too, this which is not something we're typically used to. >> it has a lot of animation. animated bookcases. you can flip from one-page to another with animation. and you can also then go to a view where you can just see the flat text. you get the best of both worlds. >> let me ask you this very quickly because so much competition in this space, two quick things. 1 million titles available with this technology and also i don't have to buy more hardware. this is a software solution. >> exactly. the computers are getting better. this is something i wrote about. you can actually read very well now on screens. there are a lot of new tablet computers here at ces that are wonderful for reading. you can also do it on your iphone, all of the things you just saw can be done on the iphone and you can zoom in and read out loud with this as well. >> okay. >> dennis, you wanted to ask a question, too? >> yeah. i see you're on a big laptop and a big screen, are you going to do your own kind of kindle-like device and is there too much competition and too much capitalism going on? do we need half a dozen or more different schemes? >> well, we have alliances with all of the major players, baker and taylor is our partner, the world's largest publisher and all of the major publisher, harper collins, penguin, simon schuster, wiley are providing books for blio. this will be shown and used by all of the major retailers. >> ray, really quickly before we let you go, there's so much convergence in technology and so much stuff that you've been writing about and talking about for 20 years. is there one technology today that excites you? one company that seems to be getting it more than any other as far as generating new innovation and excitement as far as consumer electronics? >> i think there's an explosion moving in this direction by lots of different players and we have alliances with many of them. so you will see these exciting features. we will run on every platform, and you can get -- you can buy books or use the free books and create your own library and use them on different platforms. you don't have to have a separate device just for reading. >> ray kurzweil, inventor and now the most recent entrant into the hottest sector in technology. certainly the whole world of electronic readers unveiling the blio. thanks very much for being with us. >> thanks so much. >> tyler? >> the ces show is one of the biggest events of the year and this year maybe even more so given all of the transformations that are taking place technology. tomorrow "power lunch" will speak with tivo's ceo, panasonic's chief technology officer about their new red hot tech toy, a 152-inch -- yes, you heard me right, 3d tv. >> wow! plus we'll have a special cnbc presentation "planet of the apps" a handheld revolution. we'll look at the global phenomenon in global technology that's creating billions in revenue and changing the way we live. it premieres tomorrow at 10:00 p.m. eastern, "planet of the apps." dennis' favorite title. selling scars tough enough, but selling them to buyers under 30 years of age is even more difficult. phil lebeau has exclusive results on a new survey on what to do to woo young buyers. >> in a little while, the fallout from the big google phone announcement. is it a game changer or ho-hum? we from have tech mafence for that. the long end of the yield curve on the move today. we have the dow jones industrial average trying to hold on to a modest advance and the s&p is down about a quarter of a point. we're back in a moment. what are you doing...? calling chase sapphire, seeing if we have enough points to stay longer. now? you don't have enough time... and you have to push all those buttons... no buttons, someone answers every time. yeah, right... bet you a massage... yeah, ok. hi, julie... i have a question about my points. hi, what button do i press for a massage? hello? new chase sapphire... you call. we answer. no waiting. just press right here... go to chase.com/sapphire. chase what matters. a man who played second base here some 45 years ago. actually, 47. ladies and gentlemen, mr. larry mccarthy. amidst today's financial turmoil, our sophisticated wealth transfer strategies... and philanthropic expertise ensure your legacy... is passed on to family or your favorite pastime. ♪ northern trust. wealth management. asset management. asset servicing. even though the dow jones industrial average has turned negati negative. 3 m continues to perform to the upside. 1.50 to 84 and goldman sachs making a bullish kull on the stock by adding it to its conviction buy list. >> the changing economy even has gen yers re-thinking their car buying decisions. a new survey about wah people under 30 want in their cars. phil? >> michelle, we shouldn't be surprised buz everyone has been so impacted by the recession, but clearly the impact on gen y and that's those between 18 and 30 is substantial. deloitte does a survey every year of these people and economics any that's the main reason that's driving when they're buying. that's the gen y set and because of that, and their concerns about economics, they're more interested in used cars. yes, used over new is where it's at when you're looking at a buyer between 18 and 30. what does all of this mean when it comes to the automakers who are always trying to lure in new buyers? well, they have to face the reality that the used slot where you will see the younger buyers these days because they're focused on affordability. gen y car buyers are considering economics any even overstyling and it used to be the opposite, but there is good news for detroit. gen y is still willing to give the big three brands a chance. >> they said, made in america and the made in america label or brand is important to them. so if it's made in an american factory, that matters to them. >> michelle collins who does the survey every year for deloitte. this you have it, michelle. when looking at the gen y buyers out there it used to be give me gajes and give me styling. not anymore. >> the used being new or is it new. >> i would assume that younger folks would have less money so they would always be going for used. >> that's a false assumption. >> it is. >> it was one of those they used to think as well and when you talk to people in the auto business they're a growing part of the new car market. i think a lot of people think they're living in mom and dad's basement. that's not exactly true. >> what happened to the green car? >> maybe that's the mileage part. >> that's the mileage aspect? >> money trumps green any day and that's what we're seeing here. they still would love to help the environment, but they still want to save money each more. >> all right. >> thank you, phil. still ahead, making investment decisions for the new year. we have $125 billion worth of advice for you. the chief investment officer at credit suisse private wealth will tell you where he's putting the money to work. three new reads on the jobs picture today and the big one is friday. >> should investors be looking for abupside surprise? job creation maybe on friday? we'll look ahead with the all-stars. >> up next, the "fast money halftime report." you can look at the markets and you can see that they're a little bit negative at this hour. with fidelity, you can take your trading around the world, because now you can trade u.s. and foreign stocks online, in 12 markets, 24 hours a day, all from the same account, and settle in u.s. dollars or the local currency. plus, we'll guide you 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free. that's our guarantee. they were so helpful and nice. they filed all the paperwork, and medicare and my insurance covered the cost. we can work directly with medicare or with your insurance company. we can even help with financing. if there's a way, we'll find it! so don't wait any longer, call the scooter store today. welcome back to "the fast money halftime report." we are getting to the heart of the action as it is happening. the latest round of avp data disappoints and there are a number of trades that are working today including metals, miners and retail stocks. let's get to the word on the street. our fast money crew today the ambassador jim seymour and jared levy of peak six and tom gored oven forex.com. this is a call we got on the desk for the past few weeks. it is the goldman call on the global economic recovery upgrading a number of industrial names including 3m, a lead or the doul as well as material names including the steel stocks. which one here would you put fresh capital into? >> think it was just disk based again. look at the nucor, aks have underperformed. mattel which is the largest player has been upgraded because they're slowing them back to work. they're increasing production. so the specialty meltals are what's most interesting. those are people like allegheny, ati and timet which is titanium, tie and we're starting to see stainless steel production which is a big part of the belief that the industrialized world is starting to take a hold. i think these trades still will hold and the whole market may not work and it will be a stock-picking year and we'll see that. >> let's talk 3m, getting an upgrade by goldman sachs and it is higher by 2%. todd gordon, what do you see in this stock? would you put fresh money to work here? >> goldman came out and upgraded it and it's an ism inventory over ratio and it's a buying opportunity. they said they're 8% undervalued in terms of valuation to their peers, but from a currency international exposure i think i'm long dollars and short yen. the new finance minister in japan will weaken the asian currency and that will create of a competitive advantage for 3m to its peers. i don't like it into the 85 technical resistance as well. >> do you trade alongside goldman sachs and if so, which names do you like the best? >> i'd like to go back to tim's question. >> such as what? what kind of alternative metals. >> i agree with tim, i think staying away from the big names like x and looking at the companies that have underperformed, he mentioned aks, if you like steel, but some of the allegheny, i like that call as well. we're actually looking bearish options activity in x and you know, melissa, it boils down to how much the stock has moved and it's not just what the companies are doing and how the masses perceive these companies and they're running into resistance and have been running up 10%, 20%, 30%. i think they're overbought a lot of them. >> specifically goldman sachs is upgrading worthing tob which is up 18% as well as schnitser steel. can we make the jump that if goldman is positive on a global economic recovery that therefore the consumer should be buying stuff out there whether it be in the u.s. or in china, somewhere in the globe. >> the short answer is absolutely yes. if you believe in the global growth and believe in the global economy which i have for a while now you have to start believing in the consumer and even the u.s. consumer which i've been negative on, but if you look at jobs number i know they were disappointing this morning but even in the ism there was growth and there were fewer jobs cut than before. so you're starting to look at the u.s. consumer that might have more confidence. >> absolutely. >> does this mean todd gordon, since you're the forex guy that the u.s. dollar is an uptrend? >> i own dollar yen right now. i think it's a yield play in the currency market. it's not driven more by risk on, risk off. i think it's an interest rate play. i like the ten-year up 4-2, 4-3% and there's a catch-up to do in the dollar exchange rate catching up to higher interest rates. >> if you want to trade it in the etf land that will be a short fxy. so personally, i like a higher dollar yen. >> if you don't want to go short in etf would you just buy the dollar index etf? >> it's a good question. i would stay long dollar specifically against yen because the european situation is so clouded right now, the yen play is a interest rate differential which is traditionally the relationship. so i like the dollar against the tep-year yield. >> we do have a lot of ground to cover. there weaker than expected earnings from mosaic and monsanto. they reported an 80% drop in profits for the quarter. also seeing pressures on margins like monsanto did. is that grandma's phone you're going to pick up? >> you want to know firsthand whaes what's going on. >> you said you would buy mosaic on the weakness and that looks like what people are doing. what are some of the other names you like? >> i don't care about 87% down in revenues from last year. he had hit the bottom on pricing and i think it's going higher. we learned that with the nitrogen and nonnitrogen fertilizers. i like fungi. not only are they processing soybeans and creating fertilizers but also distributing it straight through to the consumer. this is a name that's got exposure to sugar. that's another commodity that i think we're going to continue to see go higher. >> brian, what are some of the commodity type stocks that you like, especially given the winter chill we're feeling around the world? >> i still like the potash names. i'm long mosaic. taught i would use some of the weakness yesterday to buy it. if you look at the mosaic call, tim is right. pricing is going high. that 350 print in potash with the chinese looks to be a floor there. it looks like pricing of all fertilizers are going higher. >> a lot of research firms have been beating the drum on potash type names, the sellers that make the potash materials. >> intrepid potash. positive news on the retail front today. family dollar soars, better than expect earnings there and the latest spending data showing sales grew in a number of categories for december. the holiday shopping season. let's bring in patty edwards of storehouse partners. we have a lot of positive commentary on the likes of family dollar going into the holiday shopping season. would you take profits here? >> hi, melissa. looking at family dollar, this stock, even with today's pop is only trading at about 12 times earnings. i think they've been fairly unloved by wall street and the consumer is still really cautious. family dollar told us they are seeing people come into their stores at higher income levels. so i think that you want to play the consumer but want to be careful where you go. i'd stick with family dollar and then i'd look what came out in the spending pulse information. peril was weak. we know a lot of the folks in the malls were not going into the apparel stores. they were buying electronics gadgets. you you can still play an apple. we are going to continue to buy those gadgets. watch out when looking through the mall apparel retailers. pick up folks who are stronger. >> radioshack today hitting another 52-week high being added to the conviction buy list at goldman sachs. do you like this name? ever since they rebranded as the shack, things really started happening over there. >> you know, branding is everything when you start looking at the consumer. i think that they're doing a really good job with it. as we get more and more complicated smart phones, they spend time with the consumer to get it set up right and make sure they understand what's going on. i really think they've got an opportunity here to take it and run with it. i think you could probably play radioshack at this point. >> thanks so much for your take. i know tim likes the shack because of biz marquee. >> sorry. i'm not as familiar with the rap. you learn that on the streets of scarsdale i guess. let's move onto the next trade here. tech stocks in focus today. world's largest consumer electronic show gets under way in vegas. e book readers expected to be among this year's highlights. jared levy, what do you like today? amazon saying it's got a kindle. so much to play. >> you've got three major players. you've got amazon, google and apple. microsoft, you know, we're talking about the tap, there's more of a buzz about that. that has been out since november 2. google is pulling back about $15. i'm anybody ling long at google and using bull put spreads. sell a 520 put spread in february, i believe that allows google some room to move. apple i think a lot of its tablet is baked in. i thought apple would retrace a little bit. i like selling the 200 puts in apple in february as i think it moves higher, as well. >> coming up in tonight's fast money, the ceo of imax joins us to discusses bringing 3 d into your living room. where is credit sweez butting all its money in 2010? . stocks wavering as investors weigh their next move. will higher rates, job fears put a damper on the market this year? we slice and dice the angles to give you the top plays in this tricky environment. and the weather outside was frightful but were the sales at your local mall so delightful? the streets top analyst reveals the retail wayne winners. plus, is moat row la getting its moto back? on america's market show tonight. fithe same tools the pros use, so you can be a disciplined trader. by selecting from eight advanced triggers, your order gets executed, even when you're busy. and with trailing stops to help you lock in profits and minimize risk, you can be confident in your strategy, no matter which way the market moves. find out why more and more active traders are turning to fidelity for a smarter way to trade online. trade like a pro. trade with fidelity. as small businesses are busy reinventing the economy, 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be a buyer into the close. by the way, on the 5:00 p.m. show, we'll talk why the fed keeps the punch bowl at the party in the fed minutes. >> brian kelly. >> to paraphrase tim, the market got what it needs. jobs, i'm a buyer. >> did you also grow up on the rough streets of scarsdale? >> my upbringing wasn't as tough as tim's. >> jared, buyer or seller. >> i'm a seller. >> todd gordon what, do you say? >> i'm a buyer. interest rates higher. i like the new finance minister in japan, likes a weak area yen. i like 1162. >> that does it for us. sue what, are you working on? >> a terrific hour straight ahead on "power lunch." what would you do if you had $125 billion to put to work? that's how much the head of credit sweez private banking americas overseas, he is going to join us. robert wisen stein will talk about that. the big buzz surrounding 3-dtv? and is google's new phone a game-changer or a snoozer. a tech two-fer is coming up. and president obama continuing his full-court press for health care reform. should taxes be raised to pay for that? that's our power grid debate. hey, everybody. welcome to the second hour of power lunch. it is a but/bear tug of war as it is so many days. stocks swinging between gains and modest losses ahead of the fed minutes out about an hour from now. we'll have all of that. of course, the jobs number later in the week. right now, the dow is off about 2.66 points. alcoa, boeing leading the drive to get the blue chips into the green. >> i'm sue herrera. gold set in rally mode for a fourth consecutive day. if you look at a wurn week chart of the metal, it's impressive. >> oil prices also rising today. cold weather has outweighed a build in inventories. crude higher by nearly a buck, gain of more than 1%, $82.75 per barrel. a weather channel meteorologist joins us for the latest forecast on the winter blafrt. >> breaking news involving the galleon insider trading case. scott cullen beams up the details. scott? >>. >> we don't have him. let's get to our market reporters standing by. bob pisani down at the new york stock exchange, roberto, how much of this tug of war is related to the jobs report on friday and whether or not it's going to show job growth? >> that's going to be the key mover of the week. although retail sales, december same store sales come out some of them late today and early tomorrow. that could be a potential market mover. we haven't had a lot of big economic news. that may do something. generally the numbers have been a little bit higher than anticipated. i want to talk about precious metals because next week, we are going to see the launch of two big exchange traded funds, a plum and palladium etf will be launching, the first for these precious metals. they're already exchange traded notes but these will be based right on the metal. there aren't a lot of platinum. take a look at palladium. this is just the last few days. you see the moves up here? because buyers have been anticipating that plum etf will create additional demand moving up some of these stocks whose prices are closely tied to the price of platinum. other ones here is, palladium, pal. take a look at the symbol pal here. there you see the stock has been moving up a little bit in the last several days in anticipation of what may be going on. let's go to scott cohn for breaking news on what's going on at galleon. >> everyone's got their ducks in a row, caught up of the major potential in the insider trading case. an neil kumar is expected to plead guilty as soon as tomorrow. we reported last week he had waived his right to an indictment, usually a precursor to a guilty plea. he is a former mckenzie and company partner who alleged by passed on inside information to raj rajaratnam, and it is likely he will be a major witness for the government. there's a plea hearing scheduled in that case tomorrow. we expect that that plea will be guilty. meantime, a bail hearing for raj rajaratnam that was scheduled for friday where he's trying to reduce his $100 million bail has been put off. apparently just a result of scheduling. as we reported last night on cnbc, prosecutors have said they expect to file a new indictment against raj rajaratnam, the so-called superseding indictment after getting word and uncovering new evidence that the alleged ill gotten gains were twice what they originally thought, some $36 million. potentially a major witness against raj rajaratnam, an neil kumar expected to bleed guilty tomorrow. >> thank you very much. let's get back to market coverage with the nasdaq. brian shack man is down there. a little bit of a downside there. >> we were positive right before you came on the air. you must beam a sell signal, only down about .2%. gainers are outpacing decliners. a story ticketmaster, tktm. take a look at an interday charts up big on the reports that the deal with live nation is going to go through. reuters is reporting maybe not so fast from the fed's perspective. the stock is still up 5% but he will selling off a little bit. i also want to talk about a few things in terms of online retailers. so much focus on google and apple. amazon down 175%, priceline 2.5, ebay 0.3. online retailers doing poorly. chips doing poorly today. amat up .4%. and intel one laggard in this space down 0.61%. >> oil up for ten days straight, brian. it's not just the weather, not just freezing temperatures sending oil prices above $83 a barrel earlier. it's fast money too according to traders i'm talking to. speculative money has been pouring into the commodities market and being put to work. oil prices up as we're seeing them right now. bearish data from the energy department, build and crude and in gasoline supplies. the distill lat draw was minimum is compared to expected. we are looking at prices up nearly $1. in the natural gas market, weather is a march fact. a lot of shorts in this market. we saw natural gas above $6 earlier and again, freezing temperatures, 25 and below in some parts of florida. that is having an impact on natural gas. also on orange juice futures. metals market, also on fire, rick, metals market, gold, silver copper all higher on the day. commodities bulls are running away with it. over to you in chicago. >> that fits right with the dollar index. the chart is down a little bit today but it's not so much the euro hovering around $1.44, a little lower actually. it's not so much the pound hovering around $1760 but a lot of the volatility has been the dollar/yen. look at a chart of ten-year note rates. rates are up. they're up about a half dozen basis points. you're about nine points away from the highest inter day yield in about four months. why? supply and data maybe. i'm not saying the employment picture is going to change but some have argued whether it's ism or the data we have today or friday, it's going to be better. maybe it's a stronger economy. no matter what reason, it leads back to issuance, nongovernment corporate issuance has been large. the names are smart names. it's causing anxiety as to why is causing some to sell treasuries to buy some of these other issues, as well. >> thank you very much, rick. here to share his investment advice on us, it's $125 billion, robert wisen stein is the chief investment officer for credit sweez private banking. it does have that amount of money under management. welcome back. happy new year. >> happy new year to you. >> ca kind of year do you expect this will be for stocks first and bonds second? >> i think it's going to be continuation of what we saw in the last half of last year, which was an environment where every time we got reports, whether they were economic or rangers reports specifically, they exceeded expectations. people have been very very tempered in terms of their outlook and it has not caught up yet in terms of reality. i think businesses have calibrated operating models into a very new type of world and did it quickly which is where i think that generally people have missed. these earning surprises we've seen and ratcheting up of expectations probably continues for the next couple of months. >> on bonds? >> in the near term, fairly flat rates. you've got to operate with an expect ration that rates go up in the second half of the year. that's not so positive. >> are most investors fundamentally underestimating the strength of this rebound? christmas sales coming out today. auto sales yesterday numbers up for somemakers. jobless claims beginning to ease. maybe it's going to be far stronger than everyone realizes. >> there's been a huge degree of underestimation. we said in the beginning of last year when somebody asked me what the biggest surprise could be, everybody was positioned for armageddon and anything could happen quickly and larger than expected. i think that's what we've been seeing. >> and we're so worried we're going to run out of steam. >> absolutely. i think we see that maybe going on in commodities. we talked so much about the january effect. some people have said maybe the effect this year isn't so much all stocks but commodities, as well. so many pension funds have a lot more ability to get into commodities. what about your clients? are you telling them this is a good year to be in commodities? >> it's something people need to be focused on. a number of markets people have been underexposed to over the years. the growth in those markets, the importance of what's going on, there's a lot of cash that can still be reallocated in that direction. people have been very conservative in the last year in terms of holding back and committing into the investment markets. >> that goes to your transformational markets theory, which you gave us the last time you were here. people look at india and china and brazil as growth stories. you look at it as more than that, as a transformational change in the global economy. >> absolutely. there's a whole restructuring going on globally, the framework we're operating under. when you take a look, people are not allocating in that direction. it's a move of huge magnitude that's going to happen over a period of time but we're already seeing it today in a big way. so you take a look at, for example, emerging markets being 15% of global equity markets there are not a lot of investors who have that exposure in their portfolio. >> the conventional wisdom often was that america lifted the globe economically. i wonder whether this time the globe lifts the globe and the globe lifts america. >> well -- >> in terms of recovery. >> i think there are a couple things going on. it's not an all or one is what i think we have to start to accept. the u.s. economy is still important. it's easy to write it off. people like to talk about the u.s. economy becoming nothing. it is a large economy and it's very influential. >> stilt largest. >> it is. the markets although they are significant smaller, part of global markets they're still the largest single market out there. the interchange is different. china is a huge player. >> see the u.s. and china leading the global economy out of this. yet, europe has been outgrowing the u.s. that's going to reverse around. >> if you look what's going on in europe and earnings revisions in particular which is a key we need to keep an eye on, they continue to be brought down even today at the margin. >> in europe. >> yeah, in europe. >> my worry, robert, is we had such stellar gains in some of those emerging markets in the last decade or so, that the average investor will get in at a time when a normal retrenchment after that kind of move should be expected. so when you talk about the transformational economy, you're looking over years and years. >> well, yes and no. you have to take a look at the speed of change we've seen in every facet of life whether it's here, globally. and because of the way that technology works. you take a look at the consumer electronic show going on right now. the adaptation of all of this is so fast. that is what drives change and the seed of change. last year we saw changes in the economy that usually take years to get traction. it happened in months. i think that that's what we have to now actually accept as the measure of change, and that most people are not there. >> thank you very much. always enjoy you when you come here and sit down face to face with us. >> good to be here. >> you mentioned the consumer electronic show. hdtv was all the rage but that's so yesterday. 3-d is going to be the big buzz at the giant consumer electronic show in las vegas. is it all hype or is there a real business model in it? >> plus static about the google phone. you saw the announcement live yesterday on "power lunch." is this phone a game-changer or a yuan? we'll take a deep dive on tech coming up next. >> it's becoming a youtube favorite. oh, my, tennis star andy roddick gets upstaged down under by a coal lal love game. more coming up in empty calories. i call that a bear market. here's what else is on the menu. >> you could call it a bear hug. >> i'm diana olick in washington. as the housing crisis takes a turn for the worse, is it time for the government to give homeowners back the equity they've lost? what happened to moral hazard? we'll discuss. what are you doing...? calling chase sapphire, seeing if we have enough points to stay longer. now? you don't have enough time... and you have to push all those buttons... no buttons, someone answers every time. yeah, right... bet you a massage... yeah, ok. hi, julie... i have a question about my points. hi, what button do i press for a massage? hello? new chase sapphire... you call. we answer. no waiting. just press right here... go to chase.com/sapphire. chase what matters. hi, folks. welcome back. i'm matt nesto. check out mckesson and follow me. it is the third worst performer in the s&p 500 today. down 3.5%. its biggest one-day decline in ten months. it's trading 150% of its ten-day average volume. it was also downgrade this had morning by raymond james. walgreen's also reported weaker than expected is same store sales both in the front and the pharmacy and the total for the month of december. mckesson is taking it hard. abc amerisourcebergen, a competitor and cardinal health also weaker here today. mckesson with a big 3% giveback which is unusual for this stock. dennis, back to you. >> thanks very much, matt. we've all heard the hype by now, 3-did television is the future. this the kindle is the must have accessory. that is, of course, till the next generation iphone is released. we're getting headlines, dell announces a smart phone deal with at&t. where does the madness stop? which products are overhyped, which ones legitimate game-changers? thoughts from c-net's carolyn mccarthy and wired's dan do you mean mass. caroline, first of all, he was reading the reviews on the google phone which should be called google phone. is in that big a deal? to me it's just another smart phone. >> i think it is a big deal, more so from the business side than the consumer side because google is selling this phone with the option for consumers to buy it will without a carrier. granted it costs $530 without a carrier, but at the same time, that is something unprecedented in the u.s. cell phone market. think about the iphone, completely tied to at&t. iphone users love their iphones but love to complain about at&t. if this gets the carriers all riled up and it heightens the war between them to try to win over consumers, that could be a huge deal even if the nexus 1 isn't. >> dan, the question is whether anyone will spend $550 on a google phone when they can get an iphone far cheaper. >> the thing is with the iphone, you're locked into that phone for two years. you can't get out unless you spend a lot of money to break that contract. $200 to break that contract. so what the nexus 1 gives you is the frooem freedom to go to any carrier you want, pop any sim card you want into it. even if you're traveling internationally. >> is it a game changer? >> i don't know. i haven't played with it yet. it has a couple things the iphone doesn't have. an o lit screen which is brighter and shinier and cooler looking than the iphone screen. >> let's drop that. caroline, you guys are inside the techie space, you're just too easy. you love all this stuff. talk about 3-d television. i finally discover the hd television revolution and already i'm behind? >> here's the thing. 3-d television has been talked about for some time now. now we're seeing the industry say we're all going to put these out and put them out there. you've got 3-d televisions debuting at the show right now. espn is launching a 3-d channel, discovery, sony and imax have a joint venture for another channel. i feel it's getting pushed on consumers and definitely expensive. >> the hardwaremakers need another upgrade psych to keep profit margins up. here's my question. porn came first. i see no 3-d porn. >> do you want to see -- let me ask you this, have you seen a porn sta in person? they're fright fling looking. >> you don't want to see them in 3-d is your point. >> dan, do you think 3-d is here to stay? i say it goes nowhere. we want funnier jokes and better characters. >> the success of "avatar" has made it acceptable for consumers to go to the theater and get the experience. i think of the television, not to mention wearing silly glasses is prohibitive. >> waked. the home theater is now rivaling the movie theater in a way it never has before. >> yet we sold more tickets in nine than ever in history. >> i think that was escapism. what about those who have the income to spend and love having the home theater experience. >> i think that is crucial for the companies that are marketing 3-d television and channels is that first you are going to have to target those nearbyiches. it's going to be crazy sports fans in some cases or video gamers who really, really want the immersion experience and are willing to spend that kind of money on not just the tv but possibly the stairiol system, as well. >> they call it the department of unasked for technology. i agree 100%. >> they're both in that department as far as i'm concerned, both the 3-d television, i don't mean to interrupt, what the heck, and the iphone is in the category of things i don't need but probably will buy. >> eventually at some point when the prices drop a little bit. >> caroline, dan, thanks for being with us. you heard it here first, 3-d porn, that will make 3 d happen. >> dan, i don't know why you have seen a porn star in person,. >> can't avoid the porn stars at ces. >> and then they come do their hits on television from the main place. cnbc is the place to be. >> you seem to know a lot about this. >> for the live coverage of the electronic show in las vegas, we'll bring it to you all day tomorrow and friday. and tomorrow night, it's the cnbc original premiere of "planet of the apps," some of the creators behind them and how that industry has changed the way we live tomorrow at 10:00 p.m. eastern. >> dan was joking. ces every single year is right next to the adult video show. >> there are two conventions in town at the staple time and they are exactly across the street from each other. you don't want to know. just don't want to know. >> we had the porn documentary. serve still watches that. i think they shot some of it out there. 12345078-d. >> the u.s. is bracing for a dangerous arctic blast. snowstorms, are we talking about your neck of the wods woods? we'll get the latest forecast from the weather channel. >> jobs and the economy. three new numbers out today, all mostly positive. so does that mean you should expect an upside surprise in the big jobs report on friday? dennis says yes. we'll survey two top economists for their predictions right after this. please help me welcome a long-time friend of glencoe baseball. a man who played second base here some 45 years ago. actually, 47. ladies and gentlemen, 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their flagship telephone, the iphone and its operating system and certainly as dennis was just mentioning this looks to me like at&t must be getting ready for the moment when. >> they're hedging. >> when the iphone, they lose the lock on their platform. >> they're letting apple know, we've got some other girlfriends too. >> we can date around. >> probably a smart move. talk about frigid weather, on tap for much of the u.s. florida, that orange bowl, coldest in history. 48 degrees at kickoff. the weather channel's bill keneely joins with us more. bill? >> hi, tyler. how you doing out there? looks like a cold reinforcing shot coming for florida as well down the road here. there's snow crossing kansas city now. 18 degrees. snowing there. kansas city for five days in the month, 23 degrees below average. another cold shot of cold air comes in. low pressure in iowa. trailing cold front drops into arkansas, tennessee. watch out nashville. huntsville and birmingham and eventually atlanta, probably the atlanta time frame between about 5:00 p.m. thursday and midnight thursday night. there could be a little snow out there to the tune of maybe an inch in the atlanta area. it's not going to take much either as arctic air ushered in with north winds comes on through. folks in atlanta may see an inch. nashville an inch or two. we'll be watching this unfolding for the tennessee valley. then behind all that, guys, we've got cold air, lots of cold air diving its way down. we will unload on the southland. so the low comes east as it does turning sharply colder in the missouri valley. then diving down through the texas, oklahoma area. then we'll watch atlanta probably holding in the 20s with wind both on friday and again on saturday. critical days in florida. sunday and monday. back to you. >> oh, my goodness. i don't know about that. no thank yous to you, bill. >> shares of usairways falling on news of december traffic figures. the carrier says about 4 million passengers flew last month down 7.4% from the year ago period. passenger miles fell to $4.5 billion. here's a look at how usairways are trading today, lower across the board maybe in response to the fact we're getting close to $83 a barrel on oil. >> when oil rises, those guys fall. >> there was positive economic data out today. ism nonmanufacturing index move above 50 indicating some growth in the services sector. the adp report showing private sector lost about 84,000 jobs last month, down from 145,000 in november and the outplacement firm challenger gray and christmas said that layoffs fell to the lowest level in two years. does this all mean we could see an upside surprise in the jobs report on friday? joining us are dean mackey, at barclays and jim e' sullivan. dean, i'm going to started with you. we're hearing a lot of chatter about a possible upside surprise in friday's report. are you in that camp? if you are, is it already factored into the market. >> we are in that camp. we're looking for a 25,000 job gain in friday's report. it's hard to know exactly what's price into the market right now. but i do think as we move over the next several months, the pace of job gains will surprise market expectations. >> jim you're not so convinced. why? >> big picture wise, i agree. i think the trend is toward improvement here and it's a matter of time before we get positive numbers on payrolls and probably stronger than people are looking for. however, these trends don't always unfold in a straight line. i think the trend was weaker than people appreciated after the november money. and then there are some technical reasons. the weather was unusually cold in the second week of december, the sample week. there's a tendency recently for the first print to overstate weakness followed by revisions up later. >> dean, we've got the u.s. census bureau hiring new workers and definitely in december or january, sometime we're going to have the first month of positive job growth. talk about the multiplier effect and how the bigger part is it makes the rest of us feel a lot better when we start worrying about losing our job. >> i think there is a sentiment effect when payrolls turn positive. i think more important though is the fact that income already has turned positive. labor income rose significantly in november. it's been rising gradually for about the past eight months but we think that's going to be accelerating as we move through the first quarter. that's what drives consumer spending is actual income growth more than sentiment. >> jim, if that income growth is up, that could fuel inflation. i don't want to worry about inflation. >> that's a big debate what determines inflation. i'm come down on the side that the unemployment rate, the high level of slack in the economy will put a lot of downward pressure on inflation despite what's likely to be solid growth in the year ahead. >> thank you very much. >> thank you. and the release of the fed minutes less than an hour away. the economic data has been market moving. and, of course, those fmomc minutes could be market moving, as well. details and analysis on "street signs" 2:00 p.m. eastern time. >> how is this for a book title "how to make a fortune from the biggest bailout in u.s. history," catchy, huh? ron insana will tell you what he thinks are the seven greatest investment bargains out there. >> we're going to talk about the market with ron, as well. right now down two points on the dow jones industrial average ahead of the fed minutes at 2 p.m. t p.m. eastern time. we're back in a moment. some of the big winners notice dow today, even though the average is flat, alcoa, boing, 3m is, bank of america all in positive territory. will the recent market upheaval leaving many investors weary and wary where to put money. even in the bleakest moments, there are opportunities. joining us a special guest. contributor ron insana, author of "how to make a fortune from the biggest bailout in u.s. history." congratulations, my dear. >> thank you. >> it's a terrific book. you have a lot of strategies in here. what i liked is you broke it down into different categories. there's real estate, distressed debt, municipal bonds. there's tips. it's all the categories t t we've been talking about collectively for the last year. >> and stocks, as well. i think sue and michelle, as you know, when we've been going through this together for quite a number of years, there's kind of a generational opportunity to take advantage of the chaos and dislocation we've seen in the last 24 months. it has come at great cost with a lot of pain, but you know, market history tells us when we hit inflection points, there are also extraordinary opportunities particularly in the hardest hit asset classes. >> give us a teaser. seven great investment bargains such as. >> if you don't own a home, residential real estate is as depressed an asset class as you see probably in the rest of our lifetime. it would be highly unusual to experience this again in our lifetime. you have an $8,000 refundable tax credit from the government which you could put toward a foreclosed house, a house that sold short, a new house, whatever you're going to buy. if you go to henderson, nevada, san diego, california, phoenix, arizona or florida where if you live in the tri-state area, at age 60 you have to move to florida, there are 80,000 condos for sale in southern florida. there are a variety of opportunities in primary residential real estate and as an investment. >> the bank stocks are also on the list. but some of them have had quite a run. >> as you know, citigroup from $97 cents to $5 and back to $3.60 today. once the government said they were not going to nationalize citigroup or let any of the top 20 banks fail, this was a one-way bet, something we know from market history that you buy banks. five to ten years from now, even despite the rally since march of 2009, they will likely be much, much higher than they are today. >> especially with the steep yield curve. >> banks are printing money at the moment and as they become more comfortable lending, they'll make money. right now they're making money on tradingen other activities. you've got a 400 to 500 basis point spread. borrowing at zero, mortgages at 5, that's huge money for the banks. >> you talk about tips, inflation index, treasury securities. the reason i put that on the list to talk about is the fact that we have one of the st. louis fed presidents talking about whether or not inflation is not the dragon that needs to be slain if not right now, soon. >> i don't have an inflation worry, sue. as you know, i think our bigger risk still is deflation. should there be a policy mistake somewhere that sends us back into recession, i doubt it. i think this year is a big year for main street. the economy grows more quickly than thought. i agree with jpmorgan maybe there's a turn in the jobs picture this friday. but if we don't deflate, tips are a perfect investment. inflation treasury protected securities. but you do get compensated for rising inflation rates by the government. rather than trying to buy a nommal treasury bond which goes down in value as the economy recovers, you can buy a t.i.p. or you can buy the tifrlg i.p., the tip fund that's an etf. >> good luck, ron. i can't wait to read more. >> actually, it's an easy read. i found it to be an easy read. >> we tried to appeal to all classes of investor. >> dennis, over to you. >> thanks. aol and time warner a decade ago, the deal was hailed as visionary. creating a giant media company unparalleled resources. today former ceo jerry levin has been apologizing for what was one of the biggest merger blupders of all time. dave faber looks back at the marriage from hell. >> have you had one of those of your own. >> one, yeah. >> george, could you bring a martini over to the table. >> he said that with such feeling. looked like you were going back in time. >> there you go. >> method acting. >> dennis this month actually would have been the ten-year anniversary of the union of aol/time warner. but that deal didn't last a decade. the two companies officially splitting up last month when aol was spun off. jerry levin suffered a dramatic fall from power after running the largest medial company in the world but he had already suffered an even greater personal trauma, which he shared with me during a recent visit to santa monica, california. >> in june of 1997, levin's 31-year-old son jonathan, a bronx high school teacher, was shot to death in his apartment by one of his former students. >> it took a real toll. he and i shared the same birthday. he was teaching at taft high school, something that i not only respected but was really important. >> some believed levin would not be able to continue leading the media empire but he soon returned to his job. >> i mean, even after i had the worst traj ji that could happen to any individual, i didn't stop. i just went back and worked harder. i went back to work in less than two months. and i was fiercely determined to kind of exorcise the pain by working. now surely that couldn't have been good for me. or for anyone really. >> for more on levin's candid reflections on his regrets both personal and pro philadelphia as well as an inside look how a deal with so much promise went so wrong, tune in tonight, "the breakup of aol-time warner." >> you see the pain he still has 12 years later and that he even survived such a horrible tragedy is a time up. i admire him for that. talk about what's left of time warner. so aol is gone. time warner cable is gone. one of the last piece stz magazine group, like 100 magazines or more of the old time group. what about the chances this year they shevl that baby and get rid of it. >> i haven't heard anything recently that indicates a deal is in the works. certainly you have to believe that that is a strong possibility. you have to find a buyer. i don't believe it's something they would look to spin the way they did aol. is there a private equity buyer? certainly a few years ago you would argue there would be. will there be now. >> i thought when perl stein went to the carlyle group -- >> engineer something like that. >> that was the precurser. >> he may have said no to something like that if he was smart. >> a smarted call three years ago but now who knows. >> your point's a good one. time warner ultimately will be a movie studio and a lot of cable networks. >> yeah. >> and not much energy with the magazines has emerged. thanks very much, david. >> key event happening minutes from now, house democratic leaders meet with the president at the white house, the sitdown all about health care. president obama wants it passed and passed quickly. should congress raise taxes to pay for it though? that's our power grid debate. >> the markets are standing right now, beak a flat day but within those big barometers, there is today, as there always is, lots of activity. we'll be right back. the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won't- hurt-a-bit business. because we don't just work here. we live here. these are our families. and our neighbors. and by changing lives we're in more than the energy business we're in the human energy business. chevron. 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[ male announcer ] james, the jet-setter, can call from just about anywhere in the world with the international tour. and matt has the customizable htc hero with google -- giving him access to thousands of apps. [ tires screech ] bringing you the first and only wireless 4g network, as well as the most impressive lineup of phones. sprint. the now network. deaf, hard-of-hearing and people with speech disabilities access www.sprintrelay.com. ideapad. welcome back to power lunch. have you seen work thington industries today? if you haven't, man, you're missing something huge. the hottest stock in new york up 17% on the big board. look at that, best day ever for the steelmaker. they came out with blowout earnings, 29 cents a share versus a 7 cent estimate. 3.4 million shareholders can't be wrong either. it's five times the average daily volume pouring in to worthington industry. it's also at a 52-week high. back to you. >> sounds good, matt. we are minutes away from the president meeting with house speaker nancy pelosi and congressional committee leaders on health care reform. here's what former u.s. comptroller general david walker said about the bill earlier on "squawk box." >> there are positive things. the insurance reforms, the fact that you're getting more people covered, the fact you've got pilots and an independent commission, but they won't get the job done. the fact of the matter is that all the tough choices are being punned. they should have started with cost first. >> that means paying for health care reform. how do you do that? do you raise taxes? squaring off, mark walsh coheft of left jab and chris edwards from cato. you both have 20 seconds to make your case. chris, 20 seconds. >> david walker is right. there should have been more focus on cost reduction in this bill. tax hikes have no place in health care reform. we've got $500 billion of tax hikes over ten years. paying explicit taxes and $1.5 trillion essentially in a tax in the mandate on individuals to buy insurance. that's about $2 trillion in taxes over ten years. obviously, that's going to damage the economy. >> mark walsh, 20 seconds why you think this is a good idea. >> this is a marriage from hell with the current tax policy and at 16% gdp for health care, it has to go down. this bill will overtime reduce the overall health care costs of the aunts and to finance this bill, we have to raise the tax rate on wealthy individuals. we have to pay for it with tax hikes. it's the only way to save cost over the long haul. walk ser right today but wrong in the long-term. >> how does it lower cost over time. >> right now insurance companies are only insuring people that are healthy. by forcing them to cover people that they would deny coverage, you insurers to try and look at making people more healthy reducing overall costs. right now emergency rooms are servicing millions of people. we can't sustain that. gdp percentage for health care costs will rise. >> chris, mark makes the assumption the reason costs are going up is because of the uninsured. a lot of folks thing it's too much insurance driving up costs in this country. >> that's true. we should have reduced the health care exclusion in the tax code and use that had money to lower overall tax rates. to get back to mark's point about the top income tax rate, the house health bill hikes the top income tax rate by 5%. obama is already increasing the top income tax rate by 5%. that means in places like new york and california, the top u.s. rate is going to be 55%. that is going to be the third highest in the industrial world after only sweden and denmark. united states should not be in a position where it's one of the -- where it has one of the highest tax rates in the world. we're supposed to be the free market low tax country. this goes in the wrong direction. >> it's funny to remind people under dwight eisenhower, one of the republican favorites, the tax rate was well north of 50%, as well. having a high margin is tax rate for wealthy people does not mean and you healthy nation. these are special times with special needs. health care has to be addressed now. this is an important part of gdp that cannot continue to grow. we can argue today whether the cost structure was punned down the road. but if we don't do something now, the cost of health care will cause all tax rates to be higher. >> you're going to get enough money out of the wealthy to pay for this. >> absolutely. they are enjoying far too gad a vacation that the prior administration shoved down artificially. it's time to pay the piper. >> chris, mark? >> it's ridiculous. times have changed so dramatically from eisenhower's time. every country in the world has drastically cut income tax rates because of globalization. if you hike taxes on medical device manufacturers and wealthy people, the money will move to cayman islands, switzerland and elsewhere. it's extremely damaging. increasing taxes in our global economy. >> mark and chris, good to see you. we'll have you back. good discussion. >> happy new year. >> nice job. up next, after a run of positive reviews, disappointing reports on the housing market. are we looking at another leg down in real estate? i hope not. does the market still need government support from the feds. >> we're working the markets head of those fed minutes. the market's holding pretty steady. they want to see what those minutes say. we're down three points on the dow jones industrial average. we're back in a moment. esesesess >> as you look at housing stocks, three out of four of them down. the latest reports causing nervousness about the health of the economy and the recovery therein. federal reserve's trillion dollar program to help the mortgage market is coming to an end. so the question for the court today is is another housing crisis ahead in 2010? die and olick what, are you finding? >> the signs clearly aren't looking good. you saw that with yesterday's index. the 16% drop in november for this index based on contracts signed for purchases shows as soon as the first time home buyer tax credit was extended, buyers dropped out of the market. the index had been rising steadily since january and sales surged in october as buyers thought the credit would expire at the end of november. suddenly no more rush to get under the wire, not to mention all the demand was pulled forward. the next shoe to drop is the fed pulling out of buying fannie and freddie mbs. >> the fed ends credit easing. the tax credit expires largely at the end of april and a lot of foreclosed properties make their way to a sale. a lot of bad things coming together. that's why i think prices will begin to decline. >> mortgage rates will go up when the fed stops buying fannie and freddie. you can see the effect on mortgage application volume falling steadily. the four-week moving average down 31% from a year ago. and re fis down 57%. should the fed step in and keep rates artificially low? some are calling for the government to subsidize principal write-downs on troubled loans to stop the foreclosure crisis which would put a floor on home prices. but there's the whole moral issue that i suppose we could get into or not. for more on that, go to realitity check.cnbc.com. >> mortgage servicers really into that. >> i got an e-mail from a money manager who said i don't want the feds to step in. i want prices to fall farther so i can buy a new home. >> there's your answer. let it be a healthy market where buyer and seller, demand and supply is at an equal pace which is not where it is now. >> thank you, diana. we're counting down to what is a potential market mover, the release of the fed minutes. maybe why we seiche indecision in the markets right now. at the top of the hour, they're going to come out. >> the tennis star andy roddick gets a higher profile on youtube, look carefully. >> you don't have to look too carefully. >> i think that was planted by quantas airlines. >> we'll be right back. >> with a dose of empty calories. it doesn't cover everything. and what it doesn't cover can cost you some money. that's why you should consider... an aarp medicare supplement insurance plan... insured by united healthcare insurance company. it can help cover some of what medicare doesn't... so you could save up to thousands of dollars... in out-of-pocket expenses. call now for this free information kit... and medicare guide. if you're turning 65 or you're already on medicare, you should know about this card; it's the only one of its kind... that carries the aarp name -- see if it's right for you. you choose your doctor. you choose your hospital. there are no networks and no referrals needed. help protect yourself from some of what medicare doesn't cover. save up to thousands of dollars... on potential out-of-pocket expenses... with an aarp medicare supplement insurance plan... insured by united healthcare insurance company. call now for your free information kit... and medicare guide and find out... how you could start saving.

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