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Welcome to power lunch. At the nyse stocks are sitting at record highs but as we saw, it was quite a battle 24 hours ago right here at the nyse. It most certainly was. We push ahead today on this big debate on High Frequency trading on power lunch. Where are the regulators . We talk to lawmakers who come at the issue from different points of view. We also have specialists to tell us what high speed traders look for. First, how does high speed trading fit into the overall market . Who better than bob pisani to explain all of that. I bet you can say that. Algorithm. I can spell it, too. The important point is a lot of people wonder when you go to your broker and actually push a button. Let me walk you through a typical trade. Critics of High Frequency trading say these traders are scalping pennies from investors but the truths a little more complicated than that. Lets use an example. Through your broker, you send an order to buy 100 shares of ibm. That order is likely routed to a market maker and the market maker is going to try to match your order with an equal sell order, likely from their own inventory. Now, in the unlikely event they cant match the order internally, it will be sent out to a Stock Exchange or possibly to a dark pool. Thats a private trading venue thats run mostly by brokerage firms. Now, there are 13 different exchanges out there and over 40 dark pools so its really crowded, though not all those dark pools are actually open to small investors. At the exchange or the dark pool, the order might interact with a High Frequency trader. The High Frequency trader likely bought the stock a penny lower a short while earlier and is hoping to sell it to you a penny higher. But its institutional traders that are especially unhappy here. They buy and sell large orders. They have been complaining that the pennies have been adding up for years and that the market moves around them when they try to place large orders, and thats making it more expensive to trade for everyone. Supporters say High Frequency trading provides shares to buy and sell, called liquidity, and that they are required to provide the best possible price at the time under s. E. C. Rules. Thats true, but it hasnt quelled the controversy that it does increase costs. I think its actually hotter than ever, the controversy. Lets talk more about this. Bob will stay with us. We will dig deeper into algorithms as a big part of the high speed trading. What do traders look for, how do they design that. Joining us is dr. George calhoun, hes with us on the floor of the new york Stock Exchange. Hes an industry professor and Program Director of quantitative finance at Stevens Institute of technology. And cnbcs dominic chu is with us because before he turned to his tv life, he was a trader in his former life. Gentlemen, welcome to all of you. Professor, when you design an algorithm, there are different types of algos as they call them here on the floor that you can design. How does it work . How do you put one together . Well, an algorithm is really just doing mechanically what the human market maker has been doing for hundreds of years, but it can do it so much faster. The market, the volumes in the markets have gone up so much. An example i like to cite is facebook, when they did their ipo, traded more shares in four hours than the whole market traded on black monday back in 1987. An algorithm is a mathematical formula that basically says when this happens, do this, is that correct . Explain how it works. It triggers certain activity. It can be actually a very simple procedure. It just says if this happens, then buy or if this happens, send an order or cancel an order. They are actually usually not all that complex. They are very simple but extremely fast. Go ahead, finish. I was just going to say, its the technology and the speed that creates all the risks that we are now coping with. Thats another question is whether or not with an algorithm, is it the speed that is dangerous or is it the person that is using the speed that is dangerous in terms of increasing volatility . Well, the huge distinction here is you guys are right. At its very core, an algorithm is a set of instructions. Its a very complex choose your own adventure story, if something happens turn to page 25. If you want to go into the wooded hole, turn to page 24. All these things happen at great speeds with these particular algorithms and the computers that have them. What the real issue for a lot of Institutional Investors is whether or not this kind of speed will have an impact on the market and their costs. At the heart of the High Frequency trading debate is liquidity. Whether or not these big institutional buy sell orders can find homes or matches for their trades. Oftentimes, its not just the fractions of a penny that were talking about. Its whether or not trades can get done at certain prices that dont impact the market or any shares you have to buy or sell behind it. If i might jump in here, one of the claims or the statements of fact in Michael Lewis book is that its not so much speed that is the villain here or the algorithms that per se are the villain, but rather the fact that exchanges have sold access to whats known as order flow. In other words, the High Frequency traders see what you want to do, pay for the right to see what you intend to do, and get that right and then are able to use that access to beat you to the punch. Is that fair . Is that right . And if we fix that, whats to say we wont be soon trying to solve some other problem that may be an unintended consequence of the fix . I think thats absolutely right. I think the speed has happened to this market so recently that a lot of people are not ready for it. Those few that are, that have figured out how to jump ahead, theyre the ones that are getting an advantage right now. Those trading strategies are going to be fleeting. They can be corrected fairly quickly. They change very quickly. Yet for all this concern there is a requirement by law to provide the National Best bid and offer. Nobody can sell you something thats not the current price of the stock. Thats by law. No trading algorithm is going to go around that fact. But is the current price the price at microsecond number one or microsecond number five . Thats exactly the point. We are slicing time into such small increments that it becomes, i dont know, meaningless, but real time means something very different. Also, are those orders legitimate. Whether or not they are just 100 shares flashing for a microsecond and theres anything behind it. Remember, a lot of the market volatility with mini flash crashes and the flash crash happened because markets collapsed, they fell through vapor as some traders say because when times of crisis happen, some of these bids and offers, they disappear from the marketplace, causing gaps in the market that are then filled, maybe some time later. But volatility is going to be a huge concern. Maybe thats where the focus should be, not so much on the scalping aspect but where markets go in terms of the volatility or stability. That is an extremely important point. Professor, thank you very much. I will be visiting your campus tomorrow, as a matter of fact. Dom, thank you. Bob, see you in a little bit. As a matter of fact, friday, we go inside Stevens School of Technology Management and explore their quantitative finance program. By then i will be able to say the word algorithm. We are going to show you the facilities, the programs that stevens use to train wall streets next generation of traders and programmers. Looking forward to that very much. Ty . Sue, thank you. The s. E. C. Confirming there are several active investigations into High Frequency trading and heres what s. E. C. Chair Mary Jo White said yesterday during a congressional hearing. I think people would agree that there are advantages of speed but whats the impact of the advantages of speed. Is it harmful, is it not harmful, who does it harm if it harms. But these are all, you know, issues that we are very much reviewing intensively. Should high speed trading be regulated . Representative Peter Defazio is a democrat from oregon. What do you think, congressman . I think the Previous Panel was great. Its very complicated but they said should we deal with scalping or volatility, which is more dangerous. I think we need to deal with both. The regulators are looking at the scalping aspect. Volatility is a bigger problem and i think we should deal with it in the simplest way to deal with volatility is not going to be through endless regulations because wall street always figures a way around the regulations, then you have the new new thing, would be very simply to impose a very, very minuscule transaction tax which would bring a lot of the volatility and a lot of this useless high speed trading out of the market. Well, that is something that you have proposed, but a tax might well just be regarded by some of these high speed traders as another cost of doing business because the sums they make are by record, so vast that a little tax isnt going to stop them. No, no. When youre talking at the margins theyre talking about, a hundredth, a tenth of a penny per share, a three basis point tax would discourage a lot of that volatility and a lot of that High Frequency trading. Is this something that on the other side of the aisle we are going to hear later from a congressman who thinks that the industry itself will actually selfregulate, or that the marketplace will sweat out this practice. You dont agree with that . Well, we sure sweated it out in 2008 and 09. Marketplace self regulating didnt work so well. Everybody knew junk was out there, the collapse was coming, the house of cards. Michael lewis wrote a book about that, too. Seems only after someone pulls back the curtain do we begin to talk about what we need to do. This would be proactive. The European Union is moving down this path. Our Major Trading partners in europe. It would not disadvantage u. S. Firms and it would tamp down volatility everywhere. And in currency markets and commodities, you know, our real producers are really getting hit by volatility and commodities. I have talked to the airlines, the railroads, the farmers, and the end users of these products are being hit by volatility, which is, which really needs to be dealt with. Has the issue of fair markets, free markets, got any traction on capitol hill, congressman . Fair markets, free markets . I think we are all for it. But what you read in flash boys is not a fair market. It may be free for people to buy special access, anticipate calipers putting in an order for a million shares and quickly putting in an order so they only end up with 900,000. Thats not fair. The trade should be the same for me as for any institutional investor. It should be a level playing field. Really, what im asking, is congress of a mind to do something about what is described in Michael Lewis book, is congress of a mind in a very antitax house of representatives to add any kind of transaction tax, which you propose . Probably the republicans, theyre not interested in any taxation no matter how meritorious the end product investing in our roads, bridges and highways, whatever. No taxes. But the eu moves down this path, you see the reforms over there, you see they squeezed volatility out of the market. We have another flash crash, we have another Something Like 2008, the demand will be there. Weve got a solution but right now, i dont see it moving forward. Representative, thank you very much for being with us today. To dominic chu with a market flash. So shares of amazon are posting marginal gains on the day, up about half a percent so far. This comes on the heels of course of the worlds biggest Internet Retailer unveiling its new fire tv set top box. This unit which will stream video content is meant to challenge apples tv streaming product. It will be priced similarly at about 99. Amazon has said that the fire tv will be more powerful, easier to use than apple tv as well as offerings from rivals like google and roku. A controller can be bought for about 40. If you take a look at apple, google, netflix, they will all have competition with each other and it will all be about digital content. Sue . Thank you very much. We just heard from the congressman a second ago. We will get the other side of the debate on High Frequency trading when we speak with a republican lawmaker making his case for high speed trading. Plus, a massive 8. 2 magnitude earthquake off the coast of northern chile has triggered landslides, is cutting power. It sparked a tsunami warning as well. We have the very latest on this still developing story in just a moment. [ bagpipes play ] make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Your chance to watch full seasons of tvs hottest shows for free with xfinity on demand. Theres romance, face slaps, whatever that is, pirates, helicopters, piratecopters. Argh hmm. Its so huge, its being broadcast on mars. Heroes. Bad guys. Asteroids. Available only on mars. Theres watching. Then theres watchathoning. A developing story, we are watching a powerful 8. 2 earthquake striking off chiles coast, sparking a tsunami warning and forcing the evacuation of hundreds of thousands of people. The death toll miraculously low at six. The earthquake was so powerful, it was felt 300 miles away from its center in bolivias capital. There were tsunami warnings up and down the Pacific Coast of that continent, even as far away as hawaii. We are monitoring the situation and will bring you any new developments as they happen. Sue . Stocks ticking higher as the s p and dow transports all hit new alltime highs. Right now we have the dow up 15, s p up 3 1 4 and the nasdaq is up just under two points. The question is, where do we go from here . Lets ask Giordano Lombardo at pioneer investments. Welcome to power lunch, sir. Pleasure to have you here. Thank you for having me. How does the market feel to you . We get a lot of people on cnbc, some are saying im still finding value out there and others are saying im taking some money off table, weve gone pretty far, we have hit new all time highs in a number of key indices. From your perspective in putting capital to work, how does it feel . First of all, we have to recognize that the current Market Conditions are the result of the aggressive action of Central Banks in the last few years, that have pushed most Asset Classes so both equities and credit markets up. So going forward, i think that the key question is to understand how much value is left in the markets and we believe that in the equity markets, there is still some value to be left, to be found. In credit we find much less interesting or attractive valuations. Among the equity markets we saw quite big differences between advance markets on one side, in particular the u. S. Equities that covered a lot of ground and other areas such as emerging markets which instead we see pockets of value creating. Go going forward, we need to be much more selective than was the case the last few years. What about developed europe . There are a number of people that feel as though developed europe perhaps because it has lagged behind the United States still has a little further to go. Would you agree with that or not . If you are talking about equity markets, definitely yes. Because europe had much less favorable policy than the u. S. And as a result of that, the economic strength is much lower than the economic condition much less positive than the ones in the u. S. In particular, the fiscal policy, these austerity policies have been very much upsetting monetary policy. But equity market valuations are discounting a lot of bad news in europe so we think that there is value left. Yes. You know, let me ask you about the debates that we have been having. Yesterday we had a very spirited one here on power lunch about High Frequency trading. Does the impact of High Frequency trading concern you at all and do you feel, as others do, that it actually increases your costs . First of all, its a very important phenomenon that we follow and we recognize its a major force in the market. Having said that, since we believe that it mostly impacts the market movements in the short term. We try to not to be influenced by these anomalies in the short term. Being long term investors, our stock specific decisions do not have to be influenced by these anomalies in the market, if any anomaly is created by High Frequency trading. So its a very important thing to follow but we are not overly concerned. All right. On that note, thank you so much. Thank you. Ty, up to you. As you remember, if you were watching yesterday, you saw an explosive exchange on power lunch between flash boys author Michael Lewis and bats Global Markets president bill obrien over High Frequency trading. Lewis says the market is rigged. Take a listen. Its great to see bill throw at brad the idea hes doing all this to promote a Business Model. He said that and also said shame on you. How do you react to that . I will say it again. I think hes outrageous. I think hes part of the problem. Heres what s. E. C. Chair Mary Jo White said about the market. Are the markets rigged . They are not. How can you be so confident . Sorry, got a hearing. So is she right . Is Michael Lewis right . Representative mike conaway is a republican from texas. He is chairman of the house subcommittee on general farm commodities and Risk Management which oversees the commodities exchanges. Congressman, thank you for being with us today. What do you say . Do you think the markets are rigged, specifically the equity markets . Well, thanks, tyler. Appreciate being on your program. Doesnt really matter whether i think theyre rigged or not. The evidence ought to drive what we decide to do. So what im for is a rational thoughtful process for examining the issue and understanding the phenomenon and seeing what it does and doesnt do. One thing we ought to try to avoid all the time here in d. C. Is the ready, fire, aim scenario that sometimes gets ginned up with a media frenzy. Its all about getting the facts. This is a relatively complicated area, pretty niche piece of it although large in dollar terms, not that many players involved. Im being told the folks on the other side of the issue who say High Frequency traders would argue narrowing spreads help these focus who are professional investors with their yields and their operation. Lets get the facts. We clearly have one side of the story thats being promoted the most but i would rather have both sides of the story as we look at any necessary regulat n regulations if necessary. I take your point. We in the media love media frenzy, by the way. We live on media frenzy. So let me go back to one of the fundamental questions here. That is whether the presence of High Frequency traders who have access to whats known as order flow can see what you want to do before you do it, whether that creates a fundamental unfairness in the markets, whether you go so far as to call them rigged or not. How do you come down on that . To the extent that you understand it because youre right, it is complicated stuff. It is. Well, frontrunning as we typically understand that phraseology, is already against the law, against the rules. We need to understand exactly what theyre doing. Something that you can do manually that is legal that you can also do at lightning speed doesnt automaticly make that illegal. Understanding what these phenomenons do and dont do with this High Frequency trading is incumbent on everybody who is trying to weigh in on this decision. That exchange you had yesterday among the combatants, i dont know is helpful in trying to get the actual facts out on the table as to what we need to do or not do. Examining whats happening, understanding it, seeing exactly how the Business Model works, i also quite frankly have great confidence in the market selfcorrecting itself in this regard. So any time you have one person taking advantage, the market corrects itself and moves in there. You have separate regulatory agencies involved. Getting the facts what High Frequency trading really does and doesnt do is important to how that might or might not need to be regulated. Your fellow house member was on a few moments ago and he urged as one way to correct the problem of the incentive to High Frequency trade is to put a transaction tax. Let me guess, you would be against that . Well, yes. I could categorically against that. This is an idea that comes up from time to time. Chaka fattah from philadelphia, pennsylvania also has a transaction tax. No. This should not be used as an excuse, whatever regulatory scheme might be there, to raise taxes. It was interesting that he would take that position because Michael Lewis, the author of this book, argues that transaction costs are higher. This would simply make transaction costs higher and individual investor would be hurt. Mom and pop investor who is investing for the long term, their costs would go up which would require higher return on their investment to make anything so transaction costs of whatever amount should not be part of this conversation. Okay. Thank you very much, congressman conaway. Appreciate you being with us. The republican from texas. Sue . Shares of mankind have been soaring today. Right now, they are up 73 . The company is getting a major boost for its diabetes drug. The cfo joins us exclusively to explain. Thats ahead. Plus coming up, a babyinspired power pitch. These little ones can be incredibly cute but buying for them can be incredibly overwhelming. We make choices easy by showing you your friends recommendations. Will the panelists be oohing and ahhing . Metals markets are starting to close right now. Lets get a look at where things are standing. The gold market up 11 on the trading day despite the fact that we have a very strong stock market in terms of the transports and s p earlier this morning. In terms of all of the metals markets, once again, the Copper Market continuing a gradual rebound. We have about a 5 1 2 point gain in the platinum market today, the palladium market. Ty, up to you. Time now for the power pitch where entrepreneurs of Innovative Companies get 60 seconds to make their pitch, then our panel of experts decides whether they have what it takes to become the next big thing. First time a parent walks into a baby store, they are handed a list of 100 to 150 products they have never used before from brands they have never heard of. I looked up at this ten foot tall wall of baby bottles and promptly had a meltdown. We are showing them what their friends have already figured out. Im the ceo and cofounder. For first time parents any purchasing decision feels high stakes from a 300 car seat to a 3 pacifier. Those purchases average 5,000 on new products in year one alone. We make the choices easy by showing you your friends recommendations. If you were looking at a stroller you can see your College Roommate loved this one and your cousin wished she had never bought that one and why. We are a year old startup and are already collecting new reviews on top products on our site at three times the rate of amazon. 30 of our users are sharing reviews and they rate ten products on average. Its a well known fact that product reviews increase conversion rates. So brands and retailers are eager to work with us to make consumers friends reviews available on their sites and in their stores. We are closing the gap between where people share and where they shop, putting trusted word of mouth recommendations at consumers fingertips. Im mandy drury. Allison is on the right side of your screen. She can hear us but cant react to us just yet. On our power pitch panel today is deborah jackson, founder and ceo of plum alley dot co. She is an expert in building capital after spending more than 20 years on wall street fundraising for clients. We also have kent bennett, a partner with bessemer ventures. Amazon acquired it for half a billion dollars. Kent is also the father of an 11 month old little girl, max. Okay, guys, lets huddle up. What do you think, deborah . We know we trust recommendations from our friends more than we trust recommendations we read that are anonymous or from people we really dont know. Its very powerful to combine the two. To have products at a time you need them, recommendations from your trusted sources. I think its a very big opportunity. What about you, kent . Amazons a tough competitor and they have tons of reviews so the number, sheer number of reviews is going to be a tricky thing for them to combat. Thats one question. Then the ageold question with Consumer Internet companies, how will they get the traffic, how do you get the eyeballs to show up to their site . They feel there are already a number of communities out there where people can discuss and share with their friends and also a number of recommendation sites. How does she actually monetize all of that in one site. Come have a seat. Great to see you. Thanks for joining us on power pitch. Thank you. Kent, would you like to ask the first question . One of my rules is not to compete with amazon if you dont have to. What stops them from turning on some similar functionality that makes their site competitive with this . The engagement level that we are seeing is honestly through the roof, that in the month of january, we looked at a top 100 products on weespring and chaired to the number of new ratings on amazon and beat them in every product but 15. Deborah . How are you going to drive traffic to your site and how are you going to engage with these very, very busy women who have children and demanding lives . How are you going to draw them in, make recommendations and keep them engaged . Its reality and really relying on our existing user base who are very, very passionate to spread the word. Its the same problem that our Brand Partners are facing, that they are relying on word of mouth recommendations, dont have a way to capitalize on them. You charge a Monthly Subscription fee to those brands. How many of those brands have subscription . We just started selling brand subscriptions in the last month or two. We are at about a dozen so its about 1,000 per month. We are discounting that for some of the pilot partners right now. Is this constrained to infant products or can you go to all categories with the same concept . We see parents as the entry point, especially new parents. Its a time when they are shifting all their purchasing decisions and we are grabbing them then but are growing into the categories they care about. For us, next up is toys and apps. Guys, we heard what alley had to say. We have to decide whether we are in or out. Kent . There is real pain here and its exciting. Im in. What about you, deborah . I think people have the behavior now. They need to go a little closer to home. They want actual recommendations from people they know that are like them. So i see that potential and i think alli is going to figure out how to get there. So im in. Before i pay some money for this investment, i would like to wait a bit longer. For the moment, im out. Sorry. So two ins and one out. What do you think . I think thats entirely fair. A lot of investors are hanging back to see what happens. Youll be seeing some exciting stuff from us. I certainly hope so. We wish you the very best of luck. Allison downey of weespring. That is todays power pitch. We heard what the panel had to say. Now we want to hear from you. Log on to power pitch cnbc. Com and leave a comment or follow the conversation on twitter. We would like to update you on one of our past power pitchers, the worlds first socalled smart thermometer. The Company Recently received a 100,000 investment from one of the panelists, angela lee of 37 angels. Congratulations to the team at kinsa. Sue . Absolutely. I wish that service weespring was around when my little kids were around. To the bond market right now and rick santelli, who is tracking the action at the cme. Ricky, how do Interest Rates look right now . Well, tell you what, if you are looking for higher yields, the train is starting to pull out of the station. Five years usurped their 1. 74 yield close today. Lets look at the five year. Broke out, took out its january 22nd high. You could see we are now at the highest levels should we close here, i look at everything on closing yields, since september of last year. Lets move down the curve. Lets look at ten year. Ten year is now comping to early january. If you look at the 30 year, it isnt really playing right now. Thats the point. Fives to tens today alone flattened two more basis points and it continues to be a flattener even though rates are moving mostly proactive short maturities. Lets look at the euro at the ecb meeting tomorrow. Two day chart simple to read. We are below yesterdays lows. We are going into this on the weak side and look at capital and how it may be affected by this spread. This is our ten year versus their ten year. You can see that at this level, we havent been this wide, this much difference between the two yields, since the end of the last century. Tyler, sue, back to you. Microsofts leadership laying out a vision for windows. Josh lipton live at the big event in san francisco. Josh . Reporter yeah, here at the Microsoft Developers conference, Satya Nadella is about to take the stage. You hear them proposing a more flexible vision for the company. Two key updates today. One, windows phone. Microsoft unveiling a new personal digital assistant, sort of their version of siri. It will help you do searches, answer questions, basically help you get things done on the phone. Microsofts share of the mobile operating system market, still pretty small, around 3 according to idc but with new features, they are obviously hoping to jumpstart that share. Also, key updates for 8. 1, windows 8. 1. Again, you heard the same things, trying to make it more flexible, more easy to use. Now it will be easier to use, for example, if you have a mouse and keyboard. Windows still a critical property for microsoft. Its been the foundation of their product line for 30 years and is still a cash cow. Its a multi billion dollar business, generates about 30 of their profits. Satya nadella just about to take the stage. We will have a wrapup of those comments coming up later on street signs. Tyler . Josh, thank you. Watch out, netflix and apple. Here comes amazon, firing up the battle for your living room. Will amazons latest gambit be a game changer . Plus shares of mankind soaring 75 , getting a major boost from its diabetes drug. The cfo joins us exclusively next. At your ford dealer think . They think about tires. And what theyve been through lately. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit card at the big tire event. See what the ford experts think about your tires. At your ford dealer. Your chance to watch full seasons of tvs hottest shows for free with xfinity on demand. Theres romance, face slaps, whatever that is, pirates, helicopters, piratecopters. Argh hmm. Its so huge, its being broadcast on mars. Heroes. Bad guys. Asteroids. Available only on mars. Theres watching. Then theres watchathoning. Welcome back to power lunch. Intuitive surgical is building on yesterdays big gains. The stock is once again one of the biggest gainers in the s p 500. This morning, Jmp Securities upped its rating to market outperform from market underperform rating and raised its price target to 700 a share. Thats the highest target on the street. Bank of america also raising its target to just 550. Isrg shares now up 20 just over the last week so a big day, a big week for medical robots. Sue, back over to you. Sure is, dom. Also a big day for mannkind. Shares soaring after an Fda Advisory Panel recommends approval of the companys inhaled insulin treatment. Joining us for a cnbc exclusive interview here at post nine is mannkinds cfo, matt pfeffer. Welcome. Congratulations, a 75 move or so in the stock is quite an endorsement at least by some investors who own the stock. Tell us about the drug. This could be lifechanging for people with type 1 or type 2 diabetes. Its basically like a little puffer. It is. I brought the device with me. Excellent. Its a very small device. Most people compare it to Something Like a whistle. It holds a cartridge of insulin on the inside. You would change that, one huff per meal, usually, take one inhalation and youre good to go. Its a very simple, discreet, easy to use device. It also offers a lot of additional advantages that we are quite happy awith. It also, you take it before a meal or as you start the meal, but one of the facts that i thought was interesting is that it gets absorbed into the system much faster than traditionally injected insulin, correct . Thats exactly right. Thats probably its most important feature. The convenience aspects are important, too. We hope that that will ultimately lead to better compliance. But its the kinetics, the speed with which it gets up to peak action in the body, then the speed with which it goes away which is what you want. It mimics more normal human physiology in that way. There were some concerns that the panel raised and that is, perhaps they will want more information on that, the impact on the lungs because it is an inhaled substance and how long do you have to work on that before you get the final okay from the fda . Well, that remains to be seen. We expect that those kind of requirements will be postapproval requirements which is fairly typical. We have data going out two years and beyond at this point which is a pretty good time. You would hope that anything might show up in that time frame. To be safe, you always follow for a long period after and track patients very closely, because safety is always at the forefront of our minds, as it is at the fda. We want to make sure nothing comes up later. You know, the markets, the diabetes market, is huge. This is an epidemic in the United States. Type 2 diabetes particularly, type 1 perhaps less so. But still, this is going to be a huge market for your company. It absolutely is. Its a huge and unfortunately, rapidly growing problem. We are up to about 26 Million People in the United States with diabetes. Thats about one in every 12. Its not a trivial problem. But all the statistics say its getting worse at a rapid clip. Its clear we need new tools. We hope this will be a nice tool in the armament. Can you identify what kind of boost to your bottom line this device would be . Remembering we are still in Development Stage organization without sales, you would say infinite in that sense. Well see. It is a huge market. We think its a multi blockbuster potential product. Its your primary product right now but what else do you have in development in terms because you try and treat chronic diseases. Thats what your company it is. Our founder is famous for going out and finding unmet medical needs and finding solutions for them. This is a good example but not his first. We do view this as platform technology. We can take this technology and apply it to a lot of other potential disease targets or things, anywhere you want very rapid action and you might otherwise have to inject something. Obvious things would be things like pain. We havent been too forthcoming for whats in the pipeline but rest assured understandably so. When you are ready to do that, we hope you come on power lunch with us. Congratulations. Nice to have you with us. Lets go back up to you, ty. Getting paid to find the person who replaces you at work. Is this a good idea . Plus amazon unveiling a new streaming device and making it available today. Will it resonate with users in an already crowded space . That is all coming up. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. In todays Yahoo Finance question of the day, u. S. Private job growth accelerated in march, so are you more confident in the jobs picture . 21 of you say yes, were on the steady incline but 48 say no, we have still got a long way to go. 31 say we are doing okay but im not confident about long term growth. Very mixed results today. Step forward into the light, my friend. It is power rundown time. Bob pisani and Michelle Carusocabrera with us today. Several topics on the agenda. We may be seeing some fallout from yesterdays discussions. The Michael Lewis book, reports that High Frequency trading firm is postponing its ipo. Bob, what do you make of that . Is there a direct connection . Oh, absolutely theres a direct connection. Goldman sachs reports that they will be selling their floor Market Making unit also is a big impact on all of that. On High Frequency trading its very simple. We just need to make sure that the regulators have enough information to be able to look into abusive and manipulative behavior. I dont think High Frequency trading itself is an evil. This is so much ado about nothing. First, these firms are trading four or five decimal points out. To say they are fighting over pennies, they wish they were fighting over pennies. Fractions of pennies. Fractions and fractions thereof of pennies. If this is such a hot, hot thing, Virtu Financial is going public with a valuation of 3 billion. Candy crush got a valuation of 8 billion. Virtu is a supermarket. They are trying to make it up in volume. Its a tough business. Give me a break. Fractions of pennies spread out over billions of shares. A lost vt of volume. They are trying to raise 250 million. Heres the thing. Its consistently profitable High Frequency trading. Know what that means . That means so many more Market Participants are going to get into that market, they will go farther and farther out, they will eat each other alive. They are. The profitability has dropped dramatically since 2009. Exactly. 7 billion in 2009. 1. 3 billion today. Say that again, bob . Sorry. In 2009, High Frequency firms revenue about 7 billion. Total revenue for all of them. In 2013, it was about 1. 3 billion, as i recall. Its dropped because volatility is down. Thats not a recipe for success. They are having a tough time. Lets move on to amazon. We could stick here and probably enjoy ourselves and entertain the audience for a few more minutes. Amazon unveiling a set top box called fire tv. It will stream video games and music to the set. Its a crowded space, folks. Lots of people have these things, roku has its dongle which is an odd name for a product like that. Look, i have had apple tv, i do have amazon prime, in theory, i have never been able to use the amazon prime with my vcr. Its too hard. Its not elegant. If this is a more elegant solution, these things have to be super, super easy. Apple tv is super easy. Amazon so far is not. You do a lot of photo stuff. Exactly. Bookmaking. The amazon player works very well on my kindle. I like that a lot. I do have chromecast. That works very well. A dongle is a generic term. Not a trade name . No. The question is what do they offer thats new and value added . Like michelle said she has one thing, i have another. What does it do for us . Theres the bell. They dongled us right out of here. Latest ceo fad is paying ceos to find their own successors. Wall street journal reporting 16 companies divulged links between the chiefs performance awards and their succession plans. I suppose this could be an incentive. You find the right guy, we will help you financially. Yeah. You make sure the transition goes smoothly. Im kind of divided about this. I dont have a strong opinion. Bob, quick thought . Ridiculous. Ridiculous. It is a natural function of a ceo to help find a successor. What else you going to do, pay the guy another million if he can find eye ba buddy of his . Stupid. Good point. Thanks, guys. Appreciate it. Stocks giving up earlier gains but still some winners today. Huh, fifteen minutes could save you fifteen percent or more on car insurance. Everybody knows that. Well, did you know bad news doesnt always travel fast . clears throat hi mister tompkins. Todd . Youre fired. Well, gotta run. Geico. Fifteen minutes could save you fifteen percent or more. Olets say you pay your tguy around 2 percent to manage your money. Thats not much, you think except its 2 percent every year. Does that make a difference . Search cost of Financial Advisors ouch over time it really adds up. Then go to e trade and find out how much our advice costs. Spoiler alert. Its low. Really . Yes, really. E trade offers Investment Advice and guidance from dedicated professional financial consultants. Its guidance on your terms not ours thats how our system works. E trade. Less for us, more for you. At your ford dealer think . They think about tires. And what theyve been through lately. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit card at the big tire event. See what the ford experts think about your tires. At your ford dealer. These days, everything is done on the internet. And tomorrow youll do even more. Thats what comcast business was built for. Slow dsl from the phone company was built for stuff like this. Switch to comcast business internet. Then add voice and tv for just 34. 90 more per month. And youll be ready for tomorrow today. Comcast business. Built for business. Welcome back to power lunch. Take a look at the surge in myriad genetics. The street had be expecting medicare to slash reimbursements but the cuts ended up being smaller than anticipated. Todays jump has taken the stock to its highest levels in nearly five years. Its up about 12 just today alone. Sue . Well have a bigger market check in just a second. First lets see whats coming up on street signs. Mandy . We were arguing back and forth over the merits of the evils or the good things about High Frequency trading. Everyones got their view at the moment. We are kind of taking it from a different view, trying to work out who exactly is profiting from it and are they maybe now profiting less than they were before. We will explain that and delve deeper. We have also pondered whether apple just should buy netflix if its serious about streaming music. The next question is maybe apple should buy pandora instead. We will talk about that and of course, lots more. Power lunch is back in two minutes. Join us top of the hour for street signs. T signs. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Welcome back to power lunch. Ive got some breaking news here on coca cola. Got just off the phone with David Winters, owns two and a half million shares of coca cola. He is questioning the dual role of the chairman and ceo of coca cola. He is angry about the Compensation Plan to be voted on at the next Shareholders Meeting andupped the ante, questioning the dual role. Coca cola says our board is satisfied that combining the roles of chairman and ceo has served our shareholders well over time and will continue to do so. Just looking at coke shares, pretty much unchanged from the latest between David Winters and coca cola. Back to you guys. That does it for us. Thats right. Street signs begins right now. What is the value of a millisecond . It is the question that has lit up wall street and main street and it is the question that brian and i try to answer today. Indeed, it is a day where the s p is making new record highs. Hello, everybody. Welcome to street signs. Thanks very much. Its been about 24 hours now since that epic

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