today. thompsoneueute i fororectiti a a 4.drop which youou te e ou walmart. it's tough to see h how the tailers are actctuayy dodoin walmart makepp abouout 10%f total retaillsales in the united stes. departrtntnt sries and a aarel rereililerare expepect to have be struggling t t most. discounters are oncecegagain expected to o seimimovement. costco i isepepted a slightht smallelerthan e expteted drop i thcocomp for memetore sales there. meantimeme, mimi up at 7:00 easterern, the bank of glglans decision on interest ras today. they'ree expececte to osost bo buying to courage lending out there. cocomi up at 8:30 eastern me, will seeweekly bless claims. capitol hill todaday, housese financialservices commititee will ldld hearings o on e role of the fed and thehe president'

prprososedinancialoverall.l. ifou think that's the nnew juju wait. therere much mororo come totoda >> are you reaea to do alththis we getetetl sales today, we're going to have g-8. we have a s sig better attack - >> not toto mention t tt t th se u is baback 'r're worried about whahat' g gi to hapappe come the fall. theeovovnment is t tryg to get prepared for thatat. >> we'e're goioi t to lk to the whipping dder for buffett's ncnch. >> $1.7 m milononas the winning bid t tha went through. we've g go much going pop. >> jobless c clas alone wldlde a busy thursdsd morning, tt there'e's m mucmore. i f fort t abt the jobless clms. we have a a loofof thingngsomom beforerethat. >> people want to know wheheth or not we shshou b be reading anything b bro i intthe fact that their launch was narrowower than expected. >> cayoyo readd a anying into theroroer economyrorom alalco there is an argument ououthther that it'ss n the gauge thaha i us to be for theeconomy.

yet their spments are p. >> finitelyonontaing ososts in t the ananti, sysy thursday shaping up t two minutes pasas6 oshg on t thi thurursd.. fufutus will rebebndnd a little t after -- actually, w we made up q qte a bit o grgrndnd. the mornrninas not lookingngll that otot remembeber, yesterday. we managed to close up about 14 points and may g get more titionater today. cky brought you up t t speed o everythihingththat coming. >> b buce inin,olks. > st oil upup $1.21, $635 bobounng from the 1 decline. ten-year no,, the yield there, 3.3 -- well, almost 3.35%. we'lll s just howute t the inflation n arars e around the cotrtr the doror i is boboding a littl bit.

ththe nnsown afterer that four-month high againstthehe dollar. fillll gold which has been hovering the l l 90000s, up bucks to $915.50. eve sedgwick isis on the scene in'aquila. steveve, people s say don't reao chch into that.. that may go prprogss, but very tttt progress. >>ca, i think yove hit t the nail o on eeheadad the g-8 - -- > hoa. looks like we've j jtt lost stee there.e. >> sometimes it isis d difcult gett signal. we'll gett sveve back in j jus fewwmomonts baug becausee e ha a lot t things going o onith the gg-8 but as you've e be t tking about, a lot gng on tss morning. >>hey managed to rucuc emissionony the year 205050 and it's theeaea term targets thaha they wereren able to cee to an

agreementwiwi.. otrsrs say t tha because president who - - >>who? >> yes. anything to get d dee here doesn't have a anyhipped in the sails. we m mayavave eve baba,, if i'm not miststak.. stste,e, wlost you for a a brie second, but t ontinue. wh were you saying? > yeah, rl, i don't t tnknk s an earthquake this te. at least i'm'm hininnot. what we're yiying is wveve got this 2020 rgrg, but the g-8 ha left a lot of detailsl which isn't t onheheable. congress is againsnstomome of te finerdeilil. no intererimlevelsls which is wt a lot ofof p pee wtete to see b that hasn't been m madfirmer. also, wehahavet gothis space sars, as well. is it going to be late bearing, as well? that's a movovinfeat. we've got an expanded day, 1313 g-14, but lolot of p pows would didisgawawayith thehe having rgrgs while tory mging and

devevelongng, wellll sothth debate wilill front an foremost today, as llll anddt's a d d where p psiside obobamteps tohe forefrfrt.t. he's trying to get reaeal proce and to sxanld on dohar,r, as we. i nt t t highghghght e pieceff daee d da that highlighthtththe necessity to keep retrade onhe agenen.. d d u see chinese aumobile saleles today? up 48%.%. >> june cocompeded with down 35 t t united ststat.. on of the majoror beneficiaries of that was gm.m. it was t largest foreign auto supplier into that market. if anything underlines need more world tdede it's thahat kid of data because u.u.s. manunuctcturs need itususas much a as e e re ofus. back to yyou >teteve sedge wi,, thank you for thatat look at ththat goeous live sh, by the way, i in la kwl la,

italy. erer otot looks likik classic met tererininan asese, huh? anand ee g-20 we'll goioi t to in p pitbubuh sghp they know how to pick thee places. >t's notust china tt't' concererneababou ththis hehedeveloping nanatis, ina d d yond are c conrned about ttttg any css t tirir tn to grow. right. >>t will be interesesti to o see. anange m merl has been this pipionr r ying to l lea into saying we neededo o ta about exit raragies even as the imf and the e wod d ba sayining, wwo whoa, we a a n nowre near fixing this problem. you have to have jjananes

trying to talk it i io the rket, butowowoooon isoo soon opioio >> it's s no only hee question at the g-8, butt around the glglob >> bo i is great to have you ba.. i w wdeder if you couldld summa in your own viewewowow mh good work, how much w wdd ietetng ocockethere and on the datate out exit versus staying onon some of these rategies, w whe are we r rig now? >> well,i i ink there's t key things t to focuson. onone whether they s sta totogeerern terms of k keengng e recoveryry o track. as you g gtlemen ,, the unemploymentumumbe are stiti pretty hh.h. soso o man'seaeadi iicicor isnonoth man's ls of velihood. but t thototr issue that is imimpoant is the developining wod. as your c comntnty made thee point,ououave to keep growth alll around the p poi because that's the onlnly waye'e're goig to get out of this hole.

i know t t vevelong world is key i iss forouou as heaea of thekkeynknk. there e e e the,though, in the veloped world who arerguing anand rhaps ghghtl so thatat, look, it's great to help y yr r neighborhood when n yo h hse is finene. but whenouourown house is on fire, don'n'yoyou ve to worryry ababouour own ro first? how do you come backck tththat argument?? > iis deaf tdly the case that one of the b btt things yo cacado for theeveloping world is make sure ty don't takeke their tows forgranted and that they kp with the rigig ststimusus policies, avoid prprottionism. bubu at the sasameimim evan knos th is a global criris,s, i will deloloa global dedesion. on everybody is i this body totogeer. and whwh y you talk out exit rarate, you owow while some ar moving towaward the door, some off t tho that are w weast arleleftnside a burning house

and that willrereat other obobms in the woworl >> t t draft s stament saysxixit rategies will vary f fro untry country, dependingng on domestic ecocomimic conditions d publicicfinances. does that m mea that a as these summititgogo and go,o, we are g toto he to continueo agree sasaee? >> ll, i think therere some of it.. obviououy,y,ermany has been partrticararlyensitive in terms its h hisry inerer of monetaryryololic and trying to kekeepudgetfiscal dciciple ead of an lection? ililyou want to ke th i'm ewehuhuand going andnd marketss are c conrnrn scoff yourr norma reformrm. to e eryrybo understands there is a nnd.

>>hehere iss a big d debe takin placacen the united s stas s abt whetetr r orot we need a sonon stimimusus package. we talked to economists yesterday who tos even talking abouout secondd stimulu in the uniteted atates is something that c cou c cate inflatioioryry pblems down thee road andnd tubublefor, agn, the trtreary bond. what do you think abouout atat debate? >> well, i thinknk e f report is that oy about15% othth u.u.s. stimumuluas beenextended. and that meanshere's a lot more to gogo. bebeeve that that m meyey will be valuabable i think it's premature too be talklkg g abt additional money for the reasons ththatouou mentioned.d. people also have to o veve a see of bududge deficit longer term, , weee going t to t back dedecontrol. so let's u uhat we have. i think ththe d d habeen doing very g goo job with its innovationon let's keep markets open.. les try to encouraragerorowt globally and keeeep fixing somef thprprobms we know are hehere whichh includes some of thee ne take care of the badd assets and the nknkinysyste a and some of the central and easternn europe thaha are at particular risk.

you mentioneded bassets. does it makes s nsnse to u,u, en, when you watch ththe administrationon pl l rward some ofhese lger term effofort health care, climatat ange, i me,, at t thi stage do you thihk we'v've lvlvedhe m mee pressing issues to the degree whee we canow address those longer rmrm issues? >> well, nono u.s. pridency ha the luxuryryooakake his or h he timing given what't'gogoinon in thth world. the presidentet someef these as priororits.s. i inink at they've said anan i think k th i i importanthahat theyololw through on is that however they handle thosee susuesthey do so a way t tha makes s rere that the country n restore fiscaldiscipline and that will makeke the monetary policyasasie and at the same ti, i think one of f ee messages they'llll hrrhereilill be thehe fus on the doha registration, tryiyingoo complee thatin 2010. so they'll beerying to do that, as well..

>> theararkehas wrestling in th earnings s seonon. doouou tnk the that revisiting expectatitionmamas sense?e? and if so, how much morore w w need to lower our expectatitis?? >> i thinknkhat yoyorere seeing there is that,ouou know,hehe is a a ltltle t of a sigh o of relief when f fananci markets broke their fafall and someme of the hugeananeties from last y you itemm was taken care of. bubu then i t thi people alsoo looked arounundanan they realiz, you know, given thehearge under utilized capacicity given t the esestis about where mand llllome from,, erereou can rely on ththe s.s. consumeme i the stst that m mos people think the recovery ismomo likely t to a a slow one. one of the things thth i try to emphasize and comes u um athis meing is that even with h that,

you have to mamagege some of the risks. wewe tked about protectionism, talked abobo the b ban issues. u u ve the x faor, the o o u never see coming, f exple, the influenza issue had that could verery llllome back. and the biggest onene that pple havevet t pa attention to is s h needed tdedeal with s seef the refinanaining sues in the developing worlrld. you know, we establishment that there'sbout 350 to $5 llion thathas tt recovered ov.. ifif tt doesn't ge rolled over, you'll have e rere bkruptcies, momore appearses in the developg world as we've seen. so part of f th challenge is s just forecast b,b, buttrtry to manage the downsnsidfafacts that you u e.e. >> you nono robertrt y just mentioned d a moment ago about w you think k ee fed hasdodo another goododjob. anotothe i iss h heris whether r t ben b bernke will be genen a sendnd tm as the h hea of the fe that's somethingnghehe white hoe

isulling over rht now. dodoou think he should bee given a second rm? >> oh, that't's not my cacall have a lot of reresptt for ben. i'i've obviously knowownenen foa number o oyears. and i, like a number of other people, have been impressed thth whatat he's done with financial markrket having somebodyy that has that season of story andd is w wilng be agile is eful. but i think thth btoto theasast bu administration and what obama's a ainistration ha d de in termsms otrtryi to keepththe im use husband going isalways e e ght ololic >> bob, it'salalys good to talk to yyou didid u u kn he's also from napervillele naperville, illinoiois. >> fwh, i did not. >> illinois. >>midwest. >> bob, we'll tk to you lar.r. tatakecare. >> my plplearere. glgl t to b wh h u. thanks.. earnings seasonn officialll

ops on a ueaea note. alcocoa veves hihierer aer reporting auarterly loss t tha wassmsmler thanwhwhat t t market had exexpeed. ining us right n now is chuck adford, partner affiliated researarchananagent. chuck,k,hehe loss was hehere bu it was a s sller than expected loss. what does t thiake you feel about the stock r rig now? >>it's a matter of cost ttttg. this c comnyny h been very prpresve. it wasas in n th f fir quarter it was in thth second quarter. some o o thoserere coststndnd control. butbasically, is osost. they're n sinin that much a far as economic recoveryryotothe than china andndhihinas truly cocoveng big time. >> theirir spmpmts were up over all of the company. ey do sayay t ty'y're seeining stabilization. you think this is a situation where you'rere auauay seeing growth in cha orare they

reresu resupppplyg?g? >> well, thehe cneneseave put in stimulus packaka especially to help w witore e ergrgy efficien appliancnc, , ca, and it's woworkg.g. i an, air-conditionerersales, aa loofof aluminum i in an air-r-coititner. yoyododon'think of a refrigeratatorerery, very stron. we'll seet t inhe june numbers enen they come o out i ta upup of ys.. bubut atat'sll very, very helpful. overheadad wee for grid, ve helpful. >> you know, yestereryy t wall street journrn w was pointing g ththat alcoa is longer a mpmpanthat you can ok at an gagaugas an onomy. y y think that's te?e? >>absosolulyly the e wodd economy. most off thehe earningss relateo ththe aminum pricecenn lolond. records dodott matter becauseou canlwlws sell a coododit nonow e may not wantto o hat.

yoyou ll too much,yoyoget a lower ppcece. but as far asas t the u.s., n ny much.. for examampl their sales to the automobile industry y e e mae 2% of sales.s. t very meaningfulul. they've been wororngng that dow. mae e it 5% ofof tirir fafaicicat pdudus. it's not that imrtrtt. ththrr biggest prododuc is the sheet thatoes intnto beverage cans and that depends on h how t the summer is. people drink more bebeernd cans during h hotwther. >> and soda. >hat's a he rtrt ofhehe business.. >> are yourarawi any ma'am row totododown conclusionsoror thths we'v'vhahad the b big fall o o the front of tubndnd we're going to b be along e bottom for quite wwhi.. very much lili 1982 when we had 11% ununemoyment. yoyou obobly don't remember that,, but that was a g gesesom timeme riod. real unempmpymymenmight have

bebeenlolor to 20%. wewe ce out ofit you kkno and we'll come out of this. >> but withlcoa hares, yeststery y e sharesalalli becacae e of smaller t tha expected loss. is this aa time when yoyowowoul tell people to buy in when you have alcoararadi at underunder 0?0? >> we,, it's donone70 o percent frfromhehe it was a yrr o. >> the a ansr r ye >> s. the e e stocksththat youou he e to buy when thth l loobad. nonow,i don't know what the new nonoalal i in the economy. i have to give a speech like e that. i i dot know how many pepelele 5 thth one locked dn. >> but a some pot, we'rere going to get recovery. have an increreeded population every year. the family formations are increasing. wean't get a alo with 6 million carsrs prododuc when w ' selling ne. atnenepoint,e'e're going toto have to go to ne and we'e're scpping 113.

ththe f did a study a abo recessssio a and how sluggish ty are. w we nt to thank you f f coming inn a a oiciciay kick ofofouour earnings seasasonwith. >> we know iss herehehener yoyore in the ccha,,chuck, y you know th.. >> e'e'schchai > your chairirtoday. anankschuck.k. > treasury is announcing plan toes invnves up to $30 billllion ppip and is n namg nine managers that parartnshship pioo notamong them.. they withdrew their application over concerns about how the plan wod be implemented. they also veve tpitch in their own $2$20 million in ordedero play. it will be interesting t t hear from p pim asoo whyhehey felt thth was notworth their me. >> i feel a aitittl left behind. do you know how many timimese'e' tatalk toohammed and bill and

they're holding out secretss on us. > > les get to theveverss rkrketright nonow. christine tan statandgg by in siapore, but first t to gff cutmore wiwithhehe l latt outof europe. hellllo. >> hello, bey.y. posititi t tur in theeqeqty sessions this morning. i think we're takiking a lot of our leaddff the u.s. futures. there's macro storiess forus,, banknkff england mmeengng rates ununkekelyo change, 0.0.5% at t ment. but t werorobay will hear about anotothe2525 billion pounds injected throughgh quantitative sing. and we'v've dd a a germrman off saying theyhihink ththat their economy may have comom utah of cession in the secondquarter. 's just somethining atat we're tching here. it's not an o offial reportut it i is s sething that's been a by aererma fifici. it's just somethininghat we're keeping in mind. let mejuju show youthe figures. th's where we standonon t european stegz at the e mont. in t terof the sectorr gaerers,

it is ththbabasi resouourc higie atat ts titime w w ono cistine in sisingore.e. >> hey, jeff,hat's fonks that. aixixedicture in asia kinding of fing into the backgrouound pulling these m martsts llerer. this aftfterhehe yen saked to a five-month higigh aiainsthe dollar. inouou korea,hehe spi closed flat. the centralal bank aes decisiono lee interest rates unchanged, they're having very lilitt impact.. hohongong climbing 0.4%. rerefirsrs and airlinenes got a the oil prices. in shanghai, totalff 847,000 cars have sold for t theononth still on ccna, the thinknk tank ysysconomy has bottomed anan willpopo 8% gwth this year. bey,y, bk to you. >> credits teen, ththanyoyou ve muchch. christine tata coming up on squawk, undnder

tetech c cputer network siege. government and finananci websites targeted. could north korea be behindndt?? "w"wt do you mean homeowneners inrance doesn't cover flfldsds?" "a few incncheofofater caused all thihis? ut i don't even live nenearheheater." whwhatou don't know about ood . includining e e fa that a preferrrr r rispolicy

starts as low asas $9 9 year. foanangent, call the n numr r onour screen.

lcome back. a sulul based computer cpapany warns a new wee of cyber attackss are seto hit south korea today.

authororieies spect north korea ofof spreading thatprogram. tataets included the itite house, treasusury the f, , nyse the nanasd and the washington post.. it's not trading opepetition at the nyse,e, it's the website for nyse. > leave it to the north kores toto think thatthat's how they'e going to ipple up financialally we shut down the website. wee going t ttatalk more aboutu thatat tayay and findd out w it could bebeononceing down the road, totoo. we'll tata to s somnenerom the white house about this.. also coming up isis mornrng,g, we'll have more on thehe t stories todaday,lulus e lucky winner o of lunchitith wawarr buffett. and woworl leaders gaththining today y atheheg- ssumt. we willletet theheeal orory om behind thehe csesedoor meetings. 'll be talking to tony fredo.o. wyou must be lolookg

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>> good morning,,erybody. wewelce to " "sqwkwkox" here on bcbc. i'm becky quickk along wiwitharr quintanilllla. joe isff but he'll b back tomorrow. g-8 leader res wideningththr circle. >> joioini us now, tony whoos joining us frfrom paris today..

hehe may w wd d upn the moon ne. tony, itit'srere t talngng to y. we have yet to talk to anyone whwho looking at t thi8 suitit and sayining it's anythig more than a te run rr g-g-20 in pittsburgh later on. >> i i wh h i uld give you a diffffert t ew on that. in a wawa thisg-8 smimis mistimeded. ey're on the calendaror yeyear and therere' nothing y yu can do aboututthat. but in a a wayay, it kind of ill-timed d beususe e leaders don't havave great informatitio right t w w anthe policies they puin place earlieier this year haven't had a changes to ke effect. soso you have somee ddisdedenc also, in termrmsofof wherehey se ee global ecomy gng. yohaha chancellor mkel taininabout exit s stregegs an you have prime minisiste own and sa coc sarkozyzyalalki

about stimulus and thenouou he esesidt obama somewhere in thee middle where 's'saying that ththe s.s.timulus p plaasasn' had a chance to take efefctct a yet t no closing t door onn stulus. so everyryonisis lookingororrd to thehe g0 0 in september. at's where tlm be more information on whahas s gog on. >> a karlrlovove has arereat opd in the journal toyy sayingng o omama can't bee trur with mbers. uuusushe the stitimussthrough congrere, , nohisdministration isis waiting topend the money. were at the cusp of critical crucial debabate and m obamamss words are uuntststwohy.. doesese e ne to get back hererei he wantstso o dend any additition s snding? >> ihihi it wowoulbebe reaeall ugugh defend additition spspdidingt this s meme. yoyohave to remember, with thth political enenvinmnmenwe're in ghght w and what's g gng on i in

cocongss and what's goingngon i cocongssss i difficult discussions over sndndg relatete health care. anwe have to remember that health care is thisdd mip administration's numbeber ee doststicpriority. so any discussssio of brging downwn deficits,, so, you kno, spending cu, a a en just, u u kn, real n nbebers on what the size of thedeficitss rightht w,w, really complicacate t lilitil mass for them thth respecto the health cacare debate. soso ion't expect to see thee obama administration comingng bc anand revising ththei numumrsrs any rerealayaynd showing what the e ueue se of the dicicit are and puttiting forth a credie plan uilil they gethrhrou health care.e. until then, i ihihink they're going to have theiriringers crossed andd hope erere isistt sosomearart event that forces their hands. >> so yorere nuying any of thphoto-ops w wrehey get the hoitals together and i i d't't think the drugmakers are g goi to makee this thingorore revenu

utral than we thohoug?? >>no. and even if yoyou do,o, enn if u buy those numbers, a and i thin you have t t be r reayy concept ekal of them. 've had legislation s reduce d cut spending t t doctors and hospitital i ithe past in the congngre e ery year just, y y ow, waves osose cost-t-cuining memeures. so, , yoknknow you have to t ta call o of atatith a ginin of salt. t let's just a asse that those savings are r rl. those sasaviss are over a n-n-ye budget window. we're looking atat tryingg to finance huge dedefitsts in the nenear term orr the next year o twtwo. this year alone we're going to finance more than fofo t tim the amount of spending thahan we ev have in our history. at's a real test f global bo markets and we're not t only ones who tryryin to fininc deficit spenendi.. otheronones are, also.

sohe world is a a wash in papape if there's aproblem, i it makes different for the nation n to coinue. but thee credibility ononhese nuerer they're nott e eve defending themny more. they're takiking wait a s see prproa on these things. >> how much a a y you willingg given emem at the veryry least toto? gm looksks lee it's going to coe out of bankruptcy fairlyy clea. lir rates continue tocome dodown corprpore e reads are narrowing. i me,, would you gee ththem at least, that they did r resees from the very worst case? >> yeah, lo, notot just thistt administraraonon. a lot of it wass carried overr fr president bush's administration to dl with the fincncl rescue inn paicular. i n'n'agree with the w theyy haleledgm and chrysler. i think there were l lot of

inequititiesn n thwayhohose companies wentntnto bankrurucyc court, but sure, they probababl have a chance t come out and d see successfulates dururin t best o of ururecollection cacausof the capital injections a andthther meaeasuso inctct stability intooininanal markets. so---- and ty continunuand augmgmendd some those pocies. >> toto, th administration rececent h haseen saying that -- ii n noteded y s say lot of the gogoodtuff was because of what the bush administratioiodidid. the obamaadmdmintrationhehe has enen sing recentlyyhat all of the babad ufufwas worse than they e eececte fromhat they inherited. i bes this is s th pitical bk and fortrt we expect, but ty're sasangng if youu guys has been h

work, we will haveve uhihid item. >> two o oththe ree people that tt thosese policiess inn p pcecn tim andenen erernae. i s s st saying ththat you know, these policies didid span e a admistration and esident-elect obabama at the time, you know, encouraged d congress to passss t t t.a.p. legislslioion. so, you know, i think wcaca all share credit fofo what was done there. i an, you knknow and w we' seeing - - you know, we'e're seg i in see of the economicic indicatorsrs t tha carl mementne >> thank you. tony fratto, thananyoyou r jojoing us. >> surere > you have an questions o

comments about a anyinin you se re on sqsqwkwk, e-mail usus. squawk@cnbnbc.m.m. > congngup,hehe world's bieses names and brightest minds on media converginininin california todayay. kept t thiining that each meeting g anant. atat iould have to fly. reading e-mails way totololong enen irew strong. network vividecacamelong. ♪ a s so m back no time to waste ♪ ♪ j jusclclk the mouse and d geththin done ♪ ♪ i shoululhahave changed things long ago o ♪ ♪ this technology sasaveththday! ♪ [ femalelennnnouer ] more collaborarati,, ss complication. th's's the human t learn n mo at cisco.com/newwaysys tdd#: 1-800-345-252550 tdd#: : 1-0-0-342550 "the dust mighgh settling... tdd#: 1-800-345-255050 th's great, but i'i'nonot. d#d#: 800-345-2550 tdd#: 1-800-345-2550 "i"iuess i'm just done witith? tdd#d#: 8080345-2550

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who i in sun valleynd what are they talking about?t? julia bores nn is u early yet t again. go m morng to you. >> goodmomoining, rlrlorststins

aiain. good morning to o yo >> good mornining,ararl. sun valley's old rememe is h h jojoin by the elelit ththe e aralso sometata-up ceos makingtheir bubut. rkrk zucuckeererand sam altman, ceo oloopops.m.m. ceo'o's twitter evan williams i hehereoror t first timeme s company is s th subjectct o much discucussn n he b whether it's thee possibilityty o acquisition target a andtt has e potential be a big target. >> t tnk the question ththats s at play is is it a m modatat businessss o is it a huge business? it's clearlyly auge enomena. 's not that e expsive to un. alall youeeeed is a r ratativy momodete revenueststre in orderr m me it a goodbusiness.. >> another n attendee turning

hehes, lebron james.s. he said he would be openen t a pick up p memewith any of the didia moguls here.. but sports stars and business stars s ululdalldada a b bac set to my dls being done here. >> we're always on the prprou f acquisititio, , escially abroad, and t the i ithe potential to nsolidateanand scale is impoportt.t. so i thinkee bottom the o o and i believe that that pipipenenef opportununitisis gwing again. >>guys, thehess a lot offash th is floatingg around rere. microsoft t is sitting on $25 billion in c chh a a google whas about $1818 billion in cashonons lalae sheets.. wewe'lsee ifllll of that casash turns into any deals.s. > jululia thanank uu very mu. julia boorsrsti we'll b be sin here roughout the ayay >> cing up, nascar wasncnc ththe fasterrowing sport in amica. now itit thrhreanene b troit's d d rtune and byhehe last of bibiname sponsors. darren rovell s thensnsid

trtracofof a multibillion dolla bubunenessright after thisis. thth a at e top o of e e ho, long timee oma confidant j jim reynoldsilil join ththe uauawk inner circrc..

♪ i li to d dre right between ththe unun machine ♪

>> with its heavy rerelicecen rporate spsosohips, perhaps no sporteeeels theinin of thee economicicowowntn more thanan nanasc. our sportsts repororte d dreren roroveoes inside t track for an exexclivive look a at niniel americicanbubusiss. an u hado much fun reporting this ststory. >> a lot ofof fun. i' a real fa and azing accessss nascarar i facing a t of challenges from sponsorship to attendance to the implododing c mamafacturing bubusissss. raceceayayemain aes r rliling commmmeralal carnival unrnrivedi american s srtrts. >> gentltlenen, art your engigine >> every weekeken you have thih enmomousvent, 150,000 people, , twice the levelof aupuper bowl, enthusiasm, multi day event. people briringheheir rvs and fafamieses teteing, theooookos

and the e lelebrions. e m merananse around th -- >>whee!! >> it't's ll g toee the grtest spectacle everery weekend that goes on in theworld. >> every weekend from feuary to nonomber,anans show upp to se ththeifavorite driver bumumpe to bumpertt 18180 mileseserer h towards theeheheck agag. ere is the race that g gss round d an round andhahat' what lolot people think, i jtt don't t ge it. you know, y s s itanand you're imimprsesed thepeed of everything. ththespeople are having fun. wow. i'still trying tgegeover so o of that video. of course, it airs toninigh at 9: e easrn right herer o bc. yoyou t in the papa car,right? >> i gotot in the pace c car a ntntbout 120 miles per hr.r. >> youou d dro it? >,,nono, .. bododin who use to be a a ncaca driver whoho drs

e pace car, which is ptttty cool. buthehe turns are aminin and pulls up at 45 les per hour to into pit ro,, which i is ininrerestg. and then thehe craziest tng i did was -- and i i do thisllll r cnbc, , c coue.e. was theenzoilurnout allenge at theall-star racece whh h when they have a cououee of driveversetet in to makeke t biggest burnoutsnd blow the tires ofoff. >> y y g got in one o of thoses? >> i did.d. > and you hit thee wall. and i hit the alall. >> h how is it at i s satnext t yoyound i'm'mjust now ararg abt this? >> because i tryry to kp itit quiet. we hit the ll and hurt t t car. kyle busch who w was in the c c with me signed ee ccar >>ou told carr and you didn'tt tellme. >> can youou tk about t the vole athe raceways? it's notorormu e, but h loud is s it >> you need ealulugs

>> really?y? >> s.s. odod! dd sweating like i mn, i wowoulbebe 100pounds.. u're sweating so much beusus there's s so much on youou it's amazing. we go into it all. they're if t tububle from theca manufacturing tatandint. they don't't kw,w, gm andd chrysler, they n'n'know what the governmnmttr anyonee who's an outsidearticipant and everythingng tt't's ing on, whaa ththeye e ing to fd out about nascar.. >> having theororrate logo on f the -- >> andthth corporate logo -- they're actctuayy faring pretty wellll. the onlyththin that's reallyy happened is, y used t to havee one company pa $25 miioioto bebe oththehood for t the entir arar. now what yououavave alot of splits.. so tony stewart's car, we profilile nyny stewart, he has office depot andldld spicice. soso h split atat one dodoes60%f f th schedule, onone es 40% of the hedule. sosomeonon't c car they say, , s sti equals $$20 mimilln soy don't care asmuch. > y said you've beenen f fan for a long ti..

whwho'your favorite driver?? >> i really don't t ha a a favorite dririr.r. i just --ike the sport.t. ththe's not auyuy who i you know, who thihi is my favorite iviv. >> na fitpatrick? >> she's not in nascar.r. th would b bththe xt thing, if ninica goes i intnanaar. >> i d don w wasnascar, clearly. that's okay. we c't't wait. called -- t thefficial tititl i? >> "inside ack:efueling the business of nascar." you might enjoy it. . >> one hour? >>ne hour, yes. >> :00 dd 10:00 tonighght miming up tonightht a huge business ststor >> a lot t of fun. a lot of business. >> we'll see more lalate >> nanada capital ispoening up fororththeunun of alifetime, wiing the bid for the lunch. paying close t to $1.7 million. that money will go to the san

ancisco chaririblble foundadati. the winner of t thi bid. courtntney t the ceo off solit joins us.s. i said $1.7 million b butou actutulyly oy paid $1.68 llion, correct? >>es, we didid. >> we accidentallyyaiai $1.7 billion -- > iaiaibillion eaieier. ii rrrrted as soon n as s sai it. whiches a little veverping it. >> why did you pay t thi much? what do yoyou thk about t tss lunch h wiarren buffett?t? >> we probobab t tught about it fofor out four years. itit'sotot oortunity to meet withth o o of e rld's most succesessf investors, o one ofe brightest mindss in investing. that, we feel,l, a oncein a lifefememe oortunity. at the samame me, it's a a chan to give back and a c chae e fous to give e ckck t a handful of te opoplehat have h held us be suesesul and also to t glide fofountiti. it's a w wonrfrfulununtion.

wewe bng bigan ofhahatable foundation onn personal a and financiaial vevel. 's's awonderful way t to ve back. soe're very e exceded about the experience. >> have you ever bnnn these luncnche bebefo?? or thisasas yr first timee to acactuly bid? >> tss is the fifirs t tim we actually b bid i have to thank our parartn b bd whitite cacaus he was th one that got oinine and actually mamadehehe winniningbid. >>hat was your limit? did y y ve a pcece you wowoul't have goneabove? >> we did. les just say t thawe're happy we got itt rr the pririce wegog itit f b bause we're-- it'ss inin tt's a woererfu fofodadati it's going to. at the samam timet't' a once i a fetime opportunity.y. we're really loing forward to sitting down withh him. >>ou know, wehaha -- we talked to mr. bfefett occasionally on ou irir. he's very caidid wouldn't you say? talks about the dollalahat he t thiss about thehe w wor onomy, even specific sectors. what do you thk or what dodo yu hohopeou're g gngng to get beye wh p peoe can get whehe they liststenooim on televisisn n or

in wspapers? >> you know,w, salididaapapal h been doing --- we've been inin business for tenen yrsrs. if you look k o our investment team, we have a veveryalalend ininvement team and thehe experiencece o our desk i 18-pluss years. we beieinghrhrgh various commodity anand nanancl markrks, and we're in very, veveryniniqu time righthtowow. the way we investis we lookt macro views a and we belieieve you've got tooetet the mro themes right, and then you couple thahat with rorous fundamental analysis. we spend a l lotf timen n th crcr theme a our macro themes today arehahawe're hdiding into a a inflationary enviviroet andhahat mmodities and hard assetsts a t the plalass invest should be looking ,, which is canada's ackyard. athehe same time,, you do rigororous fundamental analysyso determine the sectors and ststragigiesou want to fococ o. warren's e expieiencand success ov t t last few dadad is enormously invnvalblbloo us.

his insightingsgs rspectives. so we're very intetereededn hearing g wh h hisiews are oon, you know,ththrecent events and ere the world is goingng >avaveou been sprpred by the pullback inruru oil over the last serer weeks? >ouou know, obviouousl crudel has hadd h hugrun. so, you knknowwewee expecting vovolalili going forward. wh i say that wee a b bulsh on xhocommodities and hardrdssst we try toake a ry long-term ew in our investing.g. we may have sht,t, mid an long-termm trtraties, d dending onon t position. you have to take a longer term view so we expect volatililit reign. wewe eect there llll b pushess and plbacks along the ay, absolutely. it's been a pleasasur speaking th you today. weeally appreciate your timeme. anthanks for j joingng us. > tnks for having e, becky. >> take cacare >> when weweomome back, we'llll isis mning's top sties.s. he's memberr prididt

obama's inner circle and j jam reynolds in cocot t inhe "squawk" b boaroro. we'll jojoinimim. like t to etetd...

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totoda alocoa shareses rising ashey kick off a make or break earning seonon wh a smallerhan expected loss. > we have a s sategy session on where yoyoshshou be puttinin your meyey ithis not so hot mmer market. is a sececon stimulus pl a odod iide our guest host, obama inner

circrcleememr james reynonold ad foererdeputy treasasyy sesecrarr roger a aman will w wei in on ththe secondtimulus debatete. and was north koreabehind thcycybe attacksvever the weekenen find out whahat eeovernment is doing to protect you andour momoy. homeland security secretetar jat napolitano ourrececon as the second hour of " "sqwkwk b" begins r rhtht n. >>welcome back to " "uauawk breakiking news. the b banf england out with their r desision onnterest rates.s. leaving it unchanged ass 0 0.5 we'll be bkkwith details o o how the backe england is going to expand that easing scheme, trying to g g the uk out ofof ression. but for t the time being the on big policy announcememtt i the boe anan steadytt 0.5%.

> tss i whaha we wee pecting. there e we t tse questions, was the g-8 trying to fifirere o when t theshshld s sta plili back, when they should g get ou of these proroamamsuttataing pat. >fufutus have been in better shape in morning than we've enen recently. ththe tutus at last check w wer well aboveve fair vvue. dow futures off their highest lelevebut talklkinababt dow fures that aree better t tha 35 points above fair r lue. we'v've enen watching this closy because obviouslyhehe markrket are in a s steteof flux right nono yesterday ending mid. doww higher, pp slightlylower. let's get our top ories. ththnation's rereilers w whh theieir june numbers. thompson reuters estimating a 4.8 drop strippipingutut wmart. kekeit very d difcucult to fifigu out exactlyly what'ss happening with theseseetetairs because ththat a aut 10% of retata s sal. the depapartntnt storeresnd apparel raiaile are e expted to betruggling the most. discounters are expecteded t se

imovement. > > a mpany security company says adaddiononal waves cyber attacks arare expected too be ttttg major uth korean websites today. the company says it analyzed the virus s ntnt fods of internet trtrafcs to paralyze sououth korean and u.s.. websbseses. homeland securititsesecrary janenetnanapotano will beurur gugues and a a big summit conveg on swine flu. they'll meet tododay to dececee what to do ce fall. >> imime change exexpeededo be a majoreaeadle coming out ofofg-g-8 suitit coananieare trying to push a nededeal on global warming. steve sedgwicicisis standing byn italaly. he'seen following thoho meetings and h has an update rit no hi, steve.e. >epeporr: hi, becky. well, day twoo means it's nono loer g-8. we can move a awa from b bngng elite countries to a exnsion. th t te we havehehe likes of china, brazil,, india,outh

africa, , mecoco andd egypt joig totoy.y. this is an impmporntnt day forte president, presidentnt omama wi be hostingng the majojo econom fom.m. this is the biggest inheheglobe presenting around 8080% of carbonemissions. ey'll try reallyy hard to tt somemeining nailed dnn on climate. of course, the chinesee esesidt, who isn't here, he's gone back to st out domesesti unrere i inchina.. whether we're gogogg to getet something fifirmrorom thisemains toto bseen. let's take o o step back. what do w we really a achve yesterday? ththe g headline was reductiono by 2015rorom the g-8inin terms f carbon isissis. whereeere the i intim targets?s? where was the memeanism? wherere s s thcomment on cost? whwhe was thebaseline from m which we're going to wo from? some are saying g 's's 1990, so further back, somemeayay is a variable l lev.. a huge n numrr questioioor people tryryino work out whwhetr r 've hadomometng veryry ncrete that h pushed forward d fr lastt year. president bushshasasicly said,

yes,s,e'e'll consider thososlele yway. thisis i george bu o prevevususlyas set against committing the u.s.s. t the kind of f vevels all these coununtrs s re, once eyey aee to mething, h hav gogot g go back and s sel it a home and the p prededentas to try to sell thattoto congress and, indeed, the american n pele as wwl.l. thether big issue is douhar, we wewere speakingngo o th preside of the world bk earlier.r. what abouthinese and indian ying we're not going t to give you a f fir mmitment on carbon emisissis?s? he said it's's all ierrelated.d. u can't look at t thionon here and climate over herer you have to put thehem totothther it's a rgaining ch. >> thank youou f f ththat we'l'lchchecin with you later n a busy nurur in italy. our nt guest ownshe largest investmementananng firm inhe entire country. jim eynolds, also a meer of presididen obama's financeeam duringng h p predential campaign. he g gng to join us for thehe next cououe e ofhours. we're so glad you'u're here, j.

lcome back. easure.. ththanyoyo >> you'ree cching us a the beginning ofeaearng season. the e int's beenade that t the last earning seasason wt fairly llll f the m martsts because there was good preannouncememe, like w wlsls fargo, there were some surprise profits like c ci, and surprisingly n narwewelosses at o oth b ban. are we g gngng tsee a repeat in y y y? >> the e exptatatis are set. it's certainly -- they'v've enen moderated.d. and we d't't have high expectations for eararniss this ti out. so i think anything g on t the upside could be very, , ve g gd for the e maetetple. and i think we'reind of s s for a gogoodurprise lilikethat. >> where is - --owow is that happening? i mean, i it -"usa today," frt page storor about hohow the overdraft feesre a signinifintnt source o of venue. an, is itt dirty pool? arare ey king money throughgh dirty popo o or is it for real? >> i thihi it's for real. i think banks have to ,, in terms of earnings, p parcucurly in thehe fifincials, we areeeing

banking bececom profitable bbin. wewe'r sort of seeinghehem get back to basicics of b busess th rtainly are good f for their business but given the state o the consumer, ctainly ququtitionhave arisen because of that. ovdraft fees,prprea between cost of funds a and the c cosof credititedi i ow, have been a mar topic. that's'seaeay how b ban make ththeimoney, with spreread nonow, you cann---- >> whether y youike it or not. >> that's the natutureff that business. u can argue how wide t tha should be butt should deninily be there.e. they need to doohahat to me e fofor e other things on thehe otheher dede they certatain h hav as we rerepoeded widely, signgnicican losses that ththeyavavto deal wiwith and as we'rere dealing witit th coconserer n in so many areas erere ey have -- whehe t the -- whether there's lostst opportrtunieies do business, ey have to make it up wherere they make it up.p. i me, i think w we ould applauaud e e prits.s. >ouou kw, the last tee you re with u you idid youelt ibibtdetter, that had mamade it throuou t the worst pointf thsituation. y you feel likeke we're still

prprreressg or have we gotten kind of stuck in a ruru y youknow, beckcky, i think w started to b belveve that thini were going t t kind of movovein linear fashionon. i think we sort of go ourselves into that because thatat'shahawe wanted t to elel. folks likehe market totogogo up. they like interest ratates to g down. they want to be working. i think ourr eecections got way ahead of eealities o of what's really here. when i was lt here and spoke, we h come fromlevels,, a tutuatn where we were looking almost into the yss. the fourthth quarter of lt arar, first quartrter of this year. d we started to see a a we started to hearar the term gree shoots,,hich we hn'n'teard rlrlie i think that i still prprabably ing to continue. we w't't maybe se the third fourth q quaererhis ye,, or sis of it, vement in t tha rection, but solidly in 2010, which we weren't't thinking mum about that far ouout, we should prably see more of it.

>> therere'sdifference betetwe sayingngo o yourself, okayay, ee cocove's going to take longer an we thought. >> yep. >> is the differerenc betetenen that and aying, joessness is going to go soo high a and sy s high for s long ththat a a n wae of delinquencies is goioing to t us right backntntthe situationon we were i but even worse? right? i ananthere's some pele who believe that, whohorere n now lolookg for that. >> i'm not one ofof those.e. w,w, i think t tha the jobless situation,n, as theheresident incacateand now has been stated, we could see numbebers above 10%. and inmama stetes, theyilill are 11 and 12%. we talked about that. andd ion't think thohose shoulu be shococngng nbers except for the fact that expectations have been built up that we wououn'n' get thther particularlyararli on. >n part, by the w wtete hse and the fefe >> no dodoub abouttit. nonody had a ysysta ball atat uld fororeeee howough things could geget. we were -- everyboboasasjust reallyly looking out and sayayg how on you -- whatat cldld i lok like? whwh do we think it't's g goi t

look like? what do the forecasts incacate but tt having been said, is it likely we could geget ckck t whererwewe were last ye when wereasically in gridlocked, lockeded citit markets?s? don't think that's aememot-- at bebe, a remote possibility. > bause the adminintrtratn is t t gog toet a b bigank fail, right? that isis, they've drawn t tha e in the sd.d. >> that's s ofththe ble. that's'slrlrea been established. e bksks that were close to ililin nowowavave had much either.a.r.p. money or r governmentuarantees thatt they're certrtaiy y nogoing to that. and the banan that the rkrk pepeeieive to be clclos jpmorgrn goldman n sas,s,ore goon stley, the market beatdownwn, are very profitable. anan b banngng is veryry profit again. wewe sllll he to deal with whah we have tdedealith in terms of e legacy issues, but the banking business itself, papaicicully we tatalk about it last time, the vestment banking bbiness, the capital markets busineness of bkers.

it's a v ver pritable ppenono >> americann eressas on yesterday y anhehewas tatalkgg about a lot of the same thgsgs. it's too e elyly to call tss an economic recovery y t t thgs are loinin betette the banks willll bprprofable. he a ao o sa, thououghththat so reform could put a stymie on the return of c csusumecredit.. do you worry about th, see of ththe effffor o oreform, will i sl down this recovery? >> well, i think you canan't ma it to ownwner russ foror them t business, , u u cat mimicranane theieir sisine. i don'tt g get the sense t tt t adadmiststraon wants to go that deep. but o one ofof the issueses t t you dedealwith, and i think we'e going to leaea tdeal with and wee e arning to deal with is th t tha mixture o pititic and bubusiss, there's been a firm line there and i i always has existed. can be verydangerous mix.

papartularly as wewe veve congrs weigighi i in on how companiesee run, how much h catata goes int a company, and ttttin it to th.. i think thatat cbe dadangous. and thth c cou sort ofofross the line twtwn how a businesesruns its business and how gogornrnme thinks it shshou r r its business f f t the benefitff th people versus the b benitofof venue, growth and profitabililit so i think it's s popossility. we realllly veveo monitor it. >> what are the specifics? specific issues when it memeto relation that have concecern you? is it t inings raised by c cone or otherhihing that have be proposed by theadadmistration wherere u u y, wellll, this m me a little toooo mh?h? >> well, i t thi w wheyou look anything, whetheher it't' capping inintestst res, i think ththat a a susuehat outsidedeof, say, ve, verer egregioio 30%, 4040 language inn eded card applicatatnsns tt folks really

don't understand,d, i i tnk tha makes -- i think t tha makes sense. t i think when you art miomomaning what a spreaead should be or g getngng down to that level the diffefencnce between thth, i think ttt -- thth really, rerealets close to the line.. >> we e cattait. wee going to talk t to you m mor about sesendnd smumus and some of the former and current heaea of banks. a lot to gto this rning. >> it t wi be fufun. it willl be n.n. >> yim is s wi us throughouou te owow. if you havave any comments questions,s, iyoyowant to weigh , , gohead a e-mail uss at uawk@cnbc.com. wee e en watctchi t tho futures s dd u are talking g about the futures s in positive territory. dodon'fofoet, we have l haening this mornining. we're h heang from tailers, jobless claiaims at 8:30. l priceces the rise butt on the rise aerer steep dropoffs in recent days.s. you're talking about ghgh now 9 cents, 61.06$. >> alocoa s setng the steeor earning season. we have a strategy session y yo don't want to miss. an eluluve inrview wiwi

jonathan golitith n nex time now fofor today'safaf trivia question. wh top hollywood actor appeared a a depututy sheriff an uncrcrededed cameo i the1988 lm "young guns"? oof! i hope h he s s at insurance. afafla you reallylyeeeed these days. work it pays you casas....r' yeah to help withh evevyday bills ke gas, the mortgage... it's like insurance fofor ily living.s. so...w.wt't's called? uhhh aflaaac!!!! oh yeaeah!th's it! afafc. we've got you u unr r ouwing. a-a-a-aflalaaa

nowhehe answer to dadas lac trivia qution. what topop hollywowood actor appeared inanan ununcrited ceoe inin t 1988 fmm "youngns"? the answerer, m m uise. despite t market't's recent drubbing our nexext g gue says stocks are poised for a suained rally. heheren a cnbc exclusive, ing's chief mamark strategist, the formerer cefef sategist at b bea stearns. thank you for coming in.n. >> thank you. >> what is i iwewe s. why do you think stks are going to keepp rallyingng? >> i ihihinkt's sisile. it's about earninin.. the expectations arere t earnings a a g goi to go from e mid-50s tohe mid-70s. ifif yimply hit t tho

expectationsns,toto mamark's t t chchf. eastern n thcoconcn about consumer and ememoyoyme, we're moving tords a positiviv print on dpdp in the third or fourtrt quarteter. even ifft't's tepid recovery, you know,,hahat should be r rea great for cocorpatatprofits. sxsxinththat the story. > tt's something a lot of people are hopopintoto heaeahe momoneononhe sidelelin,, veveors hoping to j jum bk in with this,utut there a so many headadlis s d so many storieses that we sese e eve day. totodathth story is how house prices might be i impted by thee idea that a lot of these trusts th look the securitized mortgages are e seininat priric wawa below whatnyny bankouould e offering onhis stuff. what happenss themployment acununt ntinues -- the unemploymeme c cou continues t climb? w do you look through a a that and say, dononorry about it? >ell, i am worried abouout .. anand think there arere two isises. one isis, what do i see gngngon inhe next, you know, six months, you know, , in terms o a recovery in earnings anand an

onomy that's goingo start vivi out of recession, even i if it's a tepid rrecery. and then thererere the longer-term issueses. i'm franklyy c conrned about th longererterm. the underlyiyi causeseshaha caue babankg issusues bigg ers one being real estate, hasn't hitit t b botm yet. commereralal rl estate hasn't t t t. weonon'tnow what it's goingg to look like when unemploloymt t do go above 10%. there are absolutely kcoerns. i'm morere optimiststico o y in the e sht t tontermediate turn we'll have thihis run,veven thoh we've had a paususe latelylyana more concerned a as l looout i 2010, 2011 and beyonond. >> doeoes th meaea for beyond ththmarkets are always rwrwar of my looking, too. is the marartt gng to see pa that soo quickly that youneneedo turn around d an pick a anoer rategy quickly? >>ou need to be ssitive. i'i' h hadonversations witith folks whwho dede -- yoyoknow, w in '977 and '9'9 thougughthe internet bubblee w going to

rsrst d they lost their shirir waiting for it to happen, even they were right. i think that's the questioion. ifif you s t tho storm cuds, hohoquickly do you runor elter. i think k pelelere underestimating ththpopowe of this mass amount offtimulus to, yoyou ow,ull us ouout. llllstreet,analysts are alalady expecting a a pretty decent rececovy y earnings, something like 20% over th next year inararnis recovery. and d ju hittingng tsese number i inin will get y you to a a pretty g gd d ple as you're looking towards yeye end. anand enen you saw, u know,sosoe those stormloloud even,ou know, , the e eks ago as you started havingngntntert rates picking g up towarards4%. the market was s staing to say, wait, we have a deficititrorobl and all of sudden theyeyutut i baba o on the ckck burnrner you knkn,,e're wawatcngng reall clclosy on exactly the k kd of issues you're talkininabout. > are t the l levs where you ththin-- maybe we we were ready there in nene, where youu think the m martt will h a ceililinanan eventuallyhis longngererer chapter s sto will weigh on it?

> yh. i'm not t okokinfor a specific veveon the dow or levelnn the s& what i'm reallyy looking f for this run, i think,k, the market is going continue e unl l there's someme k kin of disrupuponon. >> a didisrtiti? >> ah. e market seemed quietet bween e fall of beaear and the f fal f lehman, so ifyou don't have major creditissue, some kind off a major r rulatory isissu on health care, for e exalele you ow, we donon k knohow we're going to financece ts.s. so if we havee something ttt ooked the market, we s that with the l las j port. thlala job rertrt basically said to the markeket- toto t th mamarks and investors, and rightfulullyo,o,ou know, maybee this r recerery n't going to be as s smoh h an qqckck. maybe a s slo throughghhe mud totord recovery. i ink the market a actlly got r rht to kind of cool down little t. up 0%0%. you u kn, , e n new wasn'tasas good.. that's why i thinkhihi claimss report today is s imrtrtt to see, you kkw,w, howeaea is that bs report. you know, we're all watching the

sameme thining. >> go ahahd.d. >> jonathan, may i? you know, y youee indicatedd t thth ststimusus i sort of gtiti an working a ttle bit. ananththe economy is seseemglgl th r rig track.. are you concerned at all autut what we'repependg now dd the impact on thee deficit--he dedefitsts i latereryears? oh, it's's - i think that'ss t bibiggt problem. i have a young iern who works fome and i thanked him yesterday fofor yiyingor all the enendi we're doing today. ififou look at in08, the deficit was s $500 billion. in this year it's s ining to be clclosto $2trillion. and it's going to bee about $ trillion of deficitt spendingngr every year f f t theext ten years,s, rghgh. yoyou ow, there's'so o go solutionono o hoto fund it. wewean can the chese to f fdd it for u us, which woulde nicic if they'll do that,and they'v'v been doing that rr a whwhil >> or w we can raisererenue at home. >> w we n n ise revenue, taxes go upand stock mamark a and

consumers s enen'toing to like that soluluti.. oror we can have huge osteriritu 50% is on tranansf p pments, memedirere, dicaid,ththat anan yocacan ardetirees and bebeneciaries. ththe'e's great long-term solution.. the question is, as we were just tataining someone, can y y keep kicking ththcacan down thehe ro and how farr c can we push out reckoning?g? we've known this was a a issue for r aong time but this recession realallyururd the heat up on thehe ki of iseses >> t tnn arehehe ldldbu right, the people who are sasayi,, you need to b b buyinggold, otherr mmodities, oil, becaususe a of those things are g goi t t rise as we get into t ts s inationary enviviroenen >> the lasast reree eks will tell you no, b b the questionon is, are youu ing to havave inflatioio i thinkn the longng run,n, thewy th -- e ery t tim you've e d d these deficicitoblems, going back to the romoman u t a ttle less gold i thatoin anand uu basicical print a litte more money withh w wt you have.. what do you gege you get inflation. howeweve i if u said to over

the next two, three years, w wld e e unploymentevevel with the capacicityn n thsystem, , seems asff there's relyly no ininationary risk. soso t risk down the road isis that w w inflalateururlves outuo this a a take the eaeasy way ouu but t i stst don'tee the market having infnflaononor a while. so it may be a fool's gold,d, y owow, rally in t tmsms o gettin ininto gold owow i inink nger tm it'ss a a concern, probablblththe y we may gogo. >> thank yououoror cing in todaday. >> thank you. >> enjoyedalking to you. >> en we come back, is america ready for anotothewawave of swine flu? plus the latest on ththeyber atatcks in south koreandnd the u.s. maman,haha is tting a aulully inrereing. we'll l ta to homeland sesecuty secretaryanet napolititan out those issues and see others as well. > later on, the disisssssio about this n nee for aecond stimulus package. aotot o conflicting statatentnt and opinions. wewe'ldebate the need for another onon whether or notothehe crent one is workingith an obama

ininsir. andd evercore roger altman anjames rejdz.

any questitionoror ouought? we wouldldovove hear from u via eail. our dress, sqsqwkwk@cc.com.

whenen w come back, ross perot jr. talks abouout inina.

>>gogood thursday mornining. welcome back t t"s"squk" on cnbc. a check o o marketets, f futesee beenenrerett positive as the markrks s arnd the world trying toebebou from a rough few sessions. the e ft i itrying to come back from six straightt days dodown oil l reboundingg afterosing 18% from the akak of thehear. omomow jones futures,,we're up about 20 popoin.. lateter today wee will get jojobls s clms, probably the biggest number. chain ststor sales a are trickling in and b bk o england left interesest tetes unchanged. 'r'rhanging with jim reynolds from loop ccapalal o one of t t closest people w we talkoo from e obama admininisatatio there's sosoucuch scussion right now, jim,about the second stimulus package. karl rove with a pieiece out today. and o othnecdotal evidence about how the money ha bnn speneninin rural areas, n not u eaeas. going toistricts heavily f the e prididt. does he e ne t come h heend defend i it? >> i wouldn't gogo tt t fa

andayay that. i think aot ofhediscussion on the imulus, the currentnt stulul, is a h heahyhy didiusussi. it's a goodd d dcussion. particularly in lighghofof wt's going on i in e e onomy right w.w. i think the p pac theyinindited it would go ou they're sort of moving along that pace.. i ththin h h they owown before what they knowow now, they rtrtaiy would have moved icker. >> it was hard - -- it was rush job as was, ght, just to y to get it done. >> thahat'cocoect. ani i thk that the discussionn that i've seseenlslso froromhe u.s. confereree e of mayorshat some should f fddtsts way ba more io urban ararea as opposed to rural eas.s. ththat p probly a lototff naatate, that discscusonon. >> we'll talalababou it mororehs morning. 's's o of the leading topopic weddress here every rning.g. alalthghgh w got a new one toda. h 1n1n may nototbebeaking headadlis,s, b at this very hour ththe amam administration willlb hoholdg a smimi on p preriring fo a poibib second outbreak. ining us with a eview of

that, janet napolitano, homeland curity secretary joining , i believe, fromwaininon. madame secretary, good mororni.. >> good mornrnin >> talk withusus about the susumm, why it happening, is based on yy intelligence out what may beomomg down the pike or a we trying to be prprcriptive here? >> what wrere trying to do isis make sure that eveveonone prepared bececau thisflu,he h1n1 has n nerer ally disappeared. itisappeared from the media t it has been ongoing g t the united states.s. anit's pdicted we have tuallybout 1 million cases. we're actually watching what's ing on in the southern hesphere where flu asas is haeningnow. predict itwiwill cycle aund d and cocome b bk to the ununit states in thee fall. so t tod we're workikingitit ates,chool districts, we'rere working in coordinanati aoss ththe untry to makake sure t th people really y ar prepared d fa flu outbreak. . >> so what are the c conetete

elements youwant to -- ishihis about makining sure that stockpiles of tamiflulu are goo enough? diststritition good? that people get f f shots inn adadvae? what are youou hininto get out th? well, the department of healthth a h hum servicess is wowoining make sure therere is vaccine ailable, that it's available and tested a a s saf and that work k isoioi on now. but we're workingnono withhehe privatate ctct,ith particularly schools because isis a affts school-agededkids, to make sure they prepare for what couldld ppen, a a h hig absentnt r ratfor several weeks, hahang-- being able to teach kikidsho may havave tay home for a feweeee at time, ntnt to make e su s stes, locacalieses a preparing for a high r rat of absenentesmsmnd th can contitiee their basicc governrnntntal operatioions enn during the mididst of a a fl

pandemic. . >> madame ececrery, i think there are a lot t ofquestions, and i don't know h m man aners authorities have at ththis int, but how concernededrere you ththathihiwill come bacack a a mumu more virulent fashion? people who got t t flu early this time around, d do y y thin they would b b immunehe second goround? and how efctive are anyny rurus -- or vaccinationssoioing to be at preventing this s fl f you tatakeheheime to go in and get a flu shot?? >> rit.t. well, theeaccine they're testinin o obvusly, is aimeded this hh1nstrain. so we w wld presume iwowoulbe effectcte.e. i think we rely onon t scientists t to llll uthat. that's what they'reesting w. they doayay tt particularlrly adults,lder adults w who ve had the flu before, do have some resistance to any y ty o of u, even if it's nototpepecically e h1n1, and at could be heful. interms of lletlity, we really don't know. odds are this may not behe

1918 t typofof virus, which w w ghghly lethal and swept through ththe ited states and swept through the world. but weanan't actuallylycocoun tt out. so our planning is occurring a all levels. a lot of peoplele g s sk but not ve s sic lot of pple get sick but they're pretty si. and a lot of peoplpl g get sickd there's a highlethality. we need torerepa at t al levels beususe ght now we really don't know. >> thehe other big topic o on te table today, sepepare e om the summit, is -- a are these cybyb attacks s analal the reporortsld us too believe, w we' ttol eyey'rsomehow being routed through south korea, potentntiay from pyongyang, affectingnghihig as "the e shshinon post," the nyse. cayou tell us what you k kw w about that? >> llll,the department o of memela security is highlyy involveded iresosoining those infifilttitis through our -- what we call ourur cert teams. they'vee b bee involvedd

continuouslyly throughthat. beyond that i n't want t speculate on the sourcee ofhosee papaicicul attacks. i would say pursuit to president obama's directive a aththe beginnining t ts term, t the whole isise e of cybyber attack cyber protectioion,hehe integri of ourybyb n netrks has been a high prioritity rr . . >> what -- guess, eeou backtracking the reports that is north koror-b-bas or u're not wiwiining address that at this point? >> well, i jt prefer not t respond. i i prer not to spulule. i don't't think that's veryry helpful at this popot t inime. what i do know,w, howeweve is t this whole issueofof cyber attatackoror wt's going on the cyber world isiselelately neanansomething we're wkiking at a variety of levels.. >> howamaming to the degree it has been damaging, vevehese attacks bebeen? is it irir to even ca them o o chacacteze them as an attack? is it moreff a disruption? we got a rease fromhe ny yesterday y sangngt didn't affect trading orations buttt

diaffect the website. how worrieiedrere youbout actutulyly infiltrtratg g e whes ofof cmemercthemselves? >> we, denial of service tacks, which hat these are, whererehehe attack gss in and t teseso stop access,s, e alwaysys a problem. they're not new. wee had them before, a at didiffent levels. this one, foununaty, has not interrupupteanany functions at l, that i can discern. but,t, agagai this is jtt one o what we thinknk is gogtoe oning -- an ngoing setet o issues for uus. how w do w w protect ee cyber rlrld,he computernetworks, pele's privacy onon the computer networksndnd protect them against these e ty o of attacks? >> you t too so heat earlierern theeeaea for sosome suggestiono and i h he i'mharacterizing it e e ght ayay, that th terrorism as notion is n n entirely a foreign issueue,righ? i i mean, a lot of i it can be-t has s enen historicallyly home. when it comes to terrorism o

cybebe aacks or anything l lik th, , anhing thathrhreans the u.s.,, doyou f fll that the thatat i more withininurur o borders or o outdede >> i i tnknk wneed to prepapare both ways. that some can berom outside the u unid states and some can be homegrown. the whole issue for us not the whole issue butut a bibig i is too epare, to l lrnrn momo, o work very closely wiwith the prprive sector, wchch controls most of theseetworks a,, yoyo know, t dot-org tytype sites and protect the t-gov type si.. to figigur out what the next wave,, technique will bebe and t aheaead i i >> apprerecie e yo time this morning. good to see.e. >> you thank you. . >> janet napolitano. . inina' central banansasays lendndinininhe firstst hf f 2009 wasas teeee tes that off te memeeriod in 2008 leading some economists to wawarnf a crediti bubule as china seeks to attract

business andoutmaneuverrthth glglob recession. ining us from b being is ross pepet jr., the chairmrmanff pert systems in thellllod corprporioion. it's great t tsesee you this morning. wenow you have beenn v ver busy in chihina ov the last couple f daysys, miming out with t two anannocements. ononababou a alal tohehe airline -- improveirirli reservation systems and alalsoo takeke orr the healthh care ininfoatatn syemems and help improve ththin inn hunan provinince tell us about t the e twdeals. >hahat'right. well,, becky, it's been very gogoodtrip. it's exciting.. the team hasonone areat job in china. we had very good meetings in hunan province,ood meetings with goverernojojoe d a strong teteam if you look atat hltltcare in chininitit'sike health care in the united s stas.s. a huge aunt of money going inintoitit perott systems is nur ononin technology, we have a a great systememerery ll received inin cnana >> you know, y mentioioneitit's very similil t to at's happening

inhehenited states. but i terms o of e e gornment momoy,y, how much is beingg suppliliedoory to changehings and update the system in chinin? hohow d that compare to the united states? >> i ihihinkif you cpapa the size of f ee chinese economy, about $3.5 trlion, and ty put overer $600 billllio to thr ststimusus pkage, tn they put another 2525 billion intnto h hh carereform in chinina. veveryewew people reaeazeze t amamou o o moneyeing spent o on ececony y th size, itit dwarfs e stimimususackage we have in the united states. >> and what's the sensnse atatyu get hoho wililli - or h much willingngne t tre is to work with americacan companini overseasas cpapani? what's b bn n yo experience? >> it'ssbeen very open. everywhere i'v've gone,e,pen ar, great reception. they wantt ererans, they want amican companies. and literally every memeining ie been in i the past t thr days,, th'v've beenlmlmos the perfect les call.

thclclie likes the prododuc they want us w welmeme bk back. i i ldld o team, i sdd the biggest problem you u ha,, you won't be able to ramp u to take care of the demand we'veveeen ov here.. this economy i i turing very quicicy.y. >> ross, whenidid you start rking on these deals?s? how longng d i itake to pull ththesthing together? we've been in xhin that o ove 15 years. is current round, i'veveeeeen working on thesese 1momohs. this current ininitiivive. and i i s s he 18 months ago. veve been back a coletimes. i've been meeting wi with the minister of health, and prprosute from thehe top down, have the g go eaea to improve health care in cnana andt't's a veryxciting initiative for us.s. >> ross, we are a a fainined by thehe gwth story inin china. looks incredible fromm t ts side of the planet. the government is trtrngng t hod back theunrest omom those w w have less. i mean,ththers a hugepapart o o

thee countryryhere there's poportrty. now this report t th morning th t thi-- according to the australian government, this emplploy o of rio tinto is bein held for, allegedly,trying to steal state secrcret does t tss st of illusustreehe risks of doing bususesess that part of f thwowod? >> i i d don see it as a a sksk. i'veve rdd about tseseststors anani'm not well briefed on either one. i can spepeakfrfrom my experiene it's beeeen ryry posititive ver open. ee business leaders want t us the political l leerers nt us. i've been told, you know, pntnt blk, we want americanshere. i think they r rlllly want to brace the american business community anand veve u u over h. and i'dd rommend t to all amamerananusiness, if y youavav the right prpruct, you should come. th need it. and then t the u.s. economy nee us t toee aroundd the world seseing u.s. products arououndhe world, which w wrere dng. it's goingng t how w b bngng our e ecomymy acack. ereric businessmen and wowome have got to be out hehe,, promoting amereric >> you knono ross, what's your pepersctive of where t this s stand inmemeri right now with

e health care debate that't's shaping p?p? howikikel is ittyoyo think wee ee some s sorof significant change made to the heaealtcaca process s inhihis untry? > imean, t theeaealt care i extremelyy complilicad.d. myonly concern about heaealt care reform, it't'sosoomomicated wewe n'n't move very qukly if we're going to fix it andreformm it withohout snding a huge amount of onon. so i wouldadvise, go slslow be very careful. when we do rerm itit, do right, makakitit bipartisan ando something that can reallyyelp health care long term inouou ununtris my aice. if do it t fast,i'm afraid 'll come back anan make some mistakes.. >> and en you ok at t alalrnrnates that have beenpupu out t so farhahat are considered inn congress, istt yo sense thosearare ving too fast?? >> think it is minin fafast it's such aaig piece off our economy to rereke in 90 days. mymy advice isoo owow be careful, letet dott rightht. you kw, we aperott systems

are verynonoedgeable on the health care reform. have a great teteamdvising our team. they're hearing oror opopinn.n. we a need toenen our opinionn into whington so wecan do is right. w we' about to run o outff timemeututquickly, i know y you have a a kinds ofdidierent businesses you're ininlvlvedin. 've been watching ththe slide in oil priceses. if you look at mmmmody prices, es that come as a s surisise to you? i i not surprised at all with commodities. whwe h another bubble in commodities, i'm'm n sure.e. the globalcocono is slow. itit'soioi to be china, india, the two bigpowerhrhouss that help pull us out. there's plenty of oioil he world. ththers s huge amamou of naturl gas in the wod.d. ththerararelenty of commodities t t world. m not surehy it went up. so i expect itit t go backkdn.n. that's where we hadour bebe. . >> ross, weant to tnknk y for your time totoda it's's bnnreat talalngng tyou. we'll see youbaback here in n e united s stas s on. >> gooood. >> thank you. cominin up, 787 billion j t noenough?

former deputy treasury s sectata ror alan sounds on o whether it's t te to statart plplanng a second stimulus. joe's's o f f the day. we'll have this s rnrnins stocks to watatchigig after this. ñ i'm peter jacobsbsenanand ve lost 31 pounds o onunutrystem. dan n manononfluenced me yeah, i'll take creded mto . for peter jacobsen. intrtrodining e all-new nutrtrysystefor men,

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let's take look atstocks w wat this morning. rning seasonicicki off in

fufullfoforce. we've bebe hring from alocoa. me out with earningings afterer the bell. th is t theirst dow cponent toto rort. thee news was bter than thee streetet h b bn expecting. they did r rorort a loss of 26 cents a shshare. when you s str o outome items, bubut at was a smsmleler ss than had bebeenntntipated. 38 centstsas the lososs m my analysts were l lkikingor on that consensus sisi not to mention ththe oo telling analyss he thinks alhe weak demand fo alumininum may be coming t tn end. theyey a seeing some snsns off stabilization.n. that's helping the stk.k. that's why y youee it up so sharply.y. goldman sachchs,haha company upgraded t taa buyfrom eutral, bank of amerera/a/meill lynch today. thcacar t increreas to $1 fr $144. merrill l al raising goldman chchs'econduauaer eararnis s per arare, to reflflec what the say areignificantly btete tradadg g prciple gains, inststnt banking revenues anand ththat plays in a lot to what y say, too, jim, you've e be seseei o outhere, that environment, c corctct >> eexaly. exactly.y.

>> target on ldldma now isis $175 -- $1. >> businins s ishealthy. it's really great ririghnonow terms ofofhehe core capapit markets, invesestmtt banking business, the vanilla biness, ththclclie business, the flow sisine. it's w wl.l. >> do you believeve atatonuses ththerarare ing to be closeseoo what t the paid in '07 to e eac ememplee? >> i t tnknk tt's a verery good popoibibily. >> does thatat smm odd t u?u? given what w we' living in?? >> no. my view on bonuses, t thi it's been way overplayed.. i think k th w wl street nunuse this small group off people that mamake t ts momone certainly well oovelayed. ifif y asksk the average americ woworkg in pennsylvania, ohio, liliis, if he really cass whwhat trader on wall street makes? i'd probably say he doesn't. bubut at he really c car ababou is his b, feeding h his family, his futurere, s s 40k) and thth's's wt he should care ababt. and thesese ys that makekehe ouou of money they make, itt happens to be - -- that's the

bubusiss that thehey' n.n. grt writers make moy,y, great acacrsrs mee mmon, athletes. youu d lebronn jeses on rlier. >> h hakes somemoney. he makes some money, oo. i think it's we ovplayed. >itith at in mindnd l's'sove on to ---- we lolove t ts next topic. wiwi $787 billionon slotted for stimulus and economicic signs potitingo a weak recovery someme are arguing t t d defitit mayay more diree and requireore immediate attention ththanee igiginly thought. ining you ishe formerereputy seetety of the treasuryry, unundeand chairmanofof evercore partnersrs rerer alaltm.. goododoo he you back on the program.m. good morning to you. >> good to s you. >>ou know,ifif anyone were ththinngng mbebehe green shoot thry was alive a andvalid, ththy just needd tololo at your op-e fr "the jojourl"l" entitled w ne t traise taxexes soon. you say thisis -- this recovoves going to b btetepiat best. it's going to o be o of the most chchalnging chaptersn the cocotrtry'history and we'lle

payingng me e inaxes. >> let'spuput it -- let's put i context. washington f fac o onef the most ffffict fiscalal policy chleleng any ofss will evever haveve seen b bause at one leve the economy is going to ak. i i ppppen tohihi ee goldman sachchs rerest, which, for exple, is 1.2%eaeal growth next year. by i infenen about 3% in 2011 is the likikyy path. so atne level ththecomy's goingg te w wea a one should tt withdrawwtitilus. but atat aththerevel we're fafacixtxtradinary deficits. chcharger than most americican have yet realizeze again, quoting goldman, ththei forecast is that the a avegege annualalefefic for the nexex t years, the average, wille $9 billioio and that at thend of the ten-yeye period, our n natnanal dede w wil reach about 83% o

gdp, a a level we lastawaw in 12 wi the set of worlrld w war ii anand veve nowherere nearly approached since. so you havee a collision betwew the need fortitimus on the one hand and t the need to rucuce dedecicitsn the thth. itit's e eraraornarily difficul. ththe esesti is not whether we reduce the dicits, in other r words, put togetheher a d defitt reduction n package, but when ww do it and how we do o it >> and t thensnsweto that is? i i memean do we need to o bealg about exexitatat a? well, u ultately, when we do thatatththe ount deficitit reduction necessaryy will bo lalae e th it will heeo c cee in part fmm the endingide anin part fromom the revenue side. u can't do it all on one o or the other. > roger,onone thessues that viviouy that you mmented on anand atat talked about is that theececomy right now is in trouble. certainly thee administration hs made aggggssssiv moves to srere itit up, keep people working.

what would youou do dififfentnt now to avoid some t t dicits thatatouou'r talking aboutn the outyeaea?? >> i don't believeve tss,, mid- '0 is the moment one would address this. e focus now should beegegeing isis stimulus out intnto the bloodstrtreaofof the econonomy inintaing, by the way, the monetary stimulusus, whichhe deral reserve isururing d keeping g e e pel to the metal t tt. > sthe size of the stimulus okay. you're saying maybe gettt out faer? >> no.o. i think that,actually, everything that can beonon to get this type of stimululuut i s bebeindodone by its n natee it's nototasasfa as peoeoplmimit li. only a autut 25% of will tutual have been spent. by this, i mean the spependgg stimulus. by t endof 2009. that's the nataturof it.t. it really isis n p psible to spd d th up. bubui i dot have any quarles th the approach beingakak

ririt t now. in an economy a as ek as this, e focus should be on stimumulu the point is, hovever,hat over the medium term, that m mht be 2010 or 2020, , wel have to confnfro t the dicicit because pressurewiwill arriveerorom eitr both of mainn ststre, the amameranan public,, financiala markets to doo so. at some e inint at pressure becomes irresistible. exacactlwhwhenhat moment s i i don't knknow i i lilief it's certain itit w come. >roger, here's what chrisisod said about the stimulus s paage. frankly, it wa't'ts targeted i it should havee been. the aoao says t t ates are using it to fill theirirududt gaps r ratr r th invest in long-term prprojts. you'rereatatised with theayay 's's bng spentnd distributed bubudie-hard docrats in coress are not?? >> well, carl, i'm n n a an pert on precisely how t the s stilul

tuing out to be over the stst few weeks.s. i d d't have the d da a toake that judgmgmen but i think ththisss evolvingg otrr fiscall stimuluss p proams modernn arican history o o recentnt htoto haveevved. r example, complaints about states fillingngheheirwn budgege holes with ststimusus tt heherwe might have been used r roads and b briesesnd so forth,h,hahat' the w it's happened histotocacallin the past, becausee a weak economy likeke ts,s, ste and local budgets becocomeerery weak. look at new yorork state, look lifornia. th's's wt states and localities do.o. by the way, , u u wa themoo d thth b becse oththersese they'l be -- they'll b b raising taxes or c cutngpependg and t thass contractionary. as you can hear from m th muc, we're running t of time. we l lk k foard to t talngng to you agagn.n. roroge altman wi eveverre. w wklkly joblesssslaims in half an hour's time. formerr nationall economic

council dirirecr r rryininds on everything frfromololical power plays to ththe eded for another stimulus package a and whetetrr berernke deserves ananotr tour of duty. more ands r a smarter way totoraradenline. only fididely y ts you back-test yo s stregies against t e ente portfolio of stockcks. plus you'll l geadadnced, customizabableraradi platforms. and yoyou tt the kind of execututio you'd expectct fm m fility... ...with a dedidicad d spialist to talk ababou even your most complexexrarade theyey'levev help expedite ththe cocountransfer process. trade like a pro.. ade with .

u undstanding the economimi ndition. >ruruths, there was a sreading ofjustowow bad an economy wewe inhnhereded. >> ratatheththanay misread, we had incomplete ininfoation. >> former white house adviser larry lindsey y tess u why a stulul sequel would be all wrong. >> "squawk boxox" clcluse - ththpulse of the csumer with the ceo of walalgrnsns and powe player, the chief off xexelo the company getting hostile to keke a deal. . more breaking newsws ojojo. the weekly jobless claims report on the way at 8:3030 eteternime. "squawk box" begins ririghnono

>>good morning, everybody. lcome back to "squawk box" on cnbc. first in busininss worldwdwid i'm beckcky icick along w wit cl qutatalla. joe's s of today but ourur gsts ho r runthe largest majority ned investment banking firirm in thununit states. jim reynolds is here,, ee co-founder andceo o of loop capital markets.s. he was also a member of president obobamss finance team riri his presidential campaigngn. jim, we've got a l l to t tal ababoutoday. > s se do. >>e love havining youhere. >>we'll talk more aututhat's ppppeng in the economynd investstme nking. befoforee e o, let'sakake look at the future right owow. you'rereoioing to see e th thos w futures a up 41 inints above e fa vae. we've bebe watching all this. dodon' ffgeget, you haveobobss aiaimsn the way. that weekly r rept is coming o t in less than half an ur or so. ththat could ha a aig impact o whwher trading adads today. > > t's get to so of our t stories. ththe ckcke e eland has l lef it's key interesest ratechchand at half a percent.t. sosomenvnvesrs were surprised thbank did not expand its asassepurchase program. > retailers are repeptiting theieir neneales numbers this

mornrng.g. we've been listeteni t taot of these numbers s congng outut. already wewee e hed from costco. it reported a 6% drorop in same store sales.s. that was in l lin wh pepections. limited, the retailer, sasales drop grereat t tn expected 12%. we should poioi outhat walmart,t,hehe bgorilla when it comes toetailing -- 10%. >> they are noononge giving us monthly sales so t thapuputs skew intntwhwhat you can get f monthly nnbebers climate change i a majaj headline comomin out of the g-8 susuit. we've e be liststining that a morningg awell. let'set saight to steve sedgwick inntata and he's s giving us the pdpdes. good morning, stevev >> reporter: good d moininto you agaiain,bey. wean put aside t the g-8, we stopped that bit. noit's a bona fide w wor etetin you havevehehe b powersshere all without the presididenofofhihin but brazililia,,indians, chininee delegation, sosout ricans, all those key natition

stll showing some g groh in thee rld but we all needed t to get boboarififueer going to see any progress on climate.e. this accord w wesaw yesterdayay from the 8 about t the massivev cuts, 80% cut by 2020,, within 4 hours we're seeing thehe cracksn it because bann ki-moonon sd d g-8 has s nogogone far engh to close thee gs between emerging world and the delelop n nioions as well. obama's tutuededround and said, look, thereressstill timeto get a a al done. totodaisis h day in the spspliligh of course, hihisirst g-8,he g-g-20as h his firstigig confereren internationally.y. that was back in april. then there was so muchch hope then. well, now he's brokering a deal, ping to stay with t m mor economomicballrooms, 17 othe biggest emimittss i the globe. gordon b bwnwn t talngng about other major issuendnd thats the e fa t ts is tecond wake-up call for the world onomy. the e prlelem there seem to be

some out there who arere determined to prpres t snooze buonon. >> appreciatatthat, ste,e, who's in i ita during the g-8. joinininusus with mee on the g- and the rumblingng on the cocon stimulus, larry lindsey, formem natitialal enomic counsel director joioins us from oututs th ne e whe picket fence. 's good to seeyoyo again. >>ood to sese you again,n, carl. congratututitionon the twins. >>haha you very much, my manan. let me - -efefor wealk secondd imimul let me back youupup and lklkbout the one we alreadady have in place. it is eitherotot working, it's workrkin b but it's tooo s soo s the resusult o it's jt too soon to know eieith way. doou havave an ansnswetoto whic its? >> we,, i think it'soing exactltly atat everyone predici itououlddodo every major budgetet analyly i both parties, congressional l budget office, said that this stimulus, ththe y y was coconsucucd, wasn't timely, wawasn targeteddnn jo, and, ththerorore,asn't goingoo

ststimatate e economymy. lo and bebeldld, it ddidt.t. itit w a political document. it wasas n well ought out ononic policynd we're sing the effectcts that nnow >> it's be four monththsnow. dodoes it happenn -- is it too o to call the veverdt?t? >> well, o of ccrse, theheerdic a alws out. you never know whahaththe futur is going tohold. t as roger altman said, what pppped is what peoeopl t thoht would happen. all the money w absorbed by state anandloloca budgetet that's where the m mon w wen it didn't t i inthelping woers. itidn't go into heheining employers. and so it was n n focused where it shouldd h hav been focused, which was on job crereatn.n. and i thihi that's what the proboble is. and so i thihinkt't' working extly the way one would expepect it to work. think it's working a l ltltle morere sloloy y th even i it ss expected t twoworkut the meyey is going where they sent the money, which iss to stateteanan local governments who what state and locall governments

always do with itit, which is absorb it in ththrr own budgeges rather than use e t to contribe to the economy.y. >> youriginally tugug of the 800 or sso, 787, we e wodd get another $500 billion in value. you now think that wasas t t titimiic? >> yeah. i i thk the way -- we hahad penciled in 500,0, ge e the benenefiofof t doubt. okoklike the number is gogg b bender 300 so far. papayi $800ililli for $30300 billion benefit t relyly wasn't smart way to s snd it. >> we'rehehere wi j j reynolds. the administrationon h t tfind anotothewaway defend this paage, are they not, oveverhe ne f few weeeeksndnd mths? >> e essticertainly theyeyavave address it.. larry, i ha a question. hohoststly when statate get fun anand ug theirir orarang budget, that could b be argued ---- mitigatesththneed for laying off folks and d matataing a job. dodo y not describibe to that? also if f yowowod comment, eaeaseon would you have donene anything differentlyly ierms , , say, taxcredit,, t tax

edit portion of this vsusus th stimulus rtrtn? ahah, ihink what ---- the tax credit pororti,, what i'd suggested backcknn january -- b e way, i like ththe size o o it. the e adninisttion used me as a supporter of the size of the paagagback in january. i think whwh we should h hav doe he the payroll tax. weould have cut it in half for two yearsoror t sameemomot of momoyy r a $50,000 worker that would haveve mnt $1500 their pocket, , t t $450. in addition,n, t employer would have gottenn $1500 as well l to help keep t t worker working. think that was a much h beerer way to use t ts s amnt of money. i think it wouldldavave lped on the ememplmeme side. it w wou h havcushioned the blow on t t hsehold balance sheet and alsoould he e heed corporate cash flolow as well, business casasflflow i ththinthth's where the problem is. atat'seally what grows the ececomomy. that'shat i think stimulus is suosos to be about. instead, i think thehe state an lol govevemement are probablyy

the most recidivist of ll the placeses y c c send t t money. >> larry, when laurura tysonsay wewe nd another onr when gogornrnorendell comes on our ogram, like esesteay, and sa we could usenonoer $200 billion but this timimereaeall really targeted, , arhehey sending real t tri balloonsrr isishat talk a overdodo?? >> i t thit's erdone. i i dot think politically it has any chance in cocongss. i don'n' think the admdmintrtrin reallyly wtsts tpropose another e because doing so would sisicay admit that the firstst one failed. so i thinknk wrere going t to use e e.e. if i cannusus bk awayay from the politics, ouough because we borrowededo o mu money, $80000 billion too get $300 billion of befit, if you go out w wit another stimulus packckag now it will shoho t theond rkrk. i inink the federal l gornrnme is alreaea abrbrbg the free sangng in theociety.. e e on way w wll get rere borrowing iso aually crowd out privatate acvity. i'm m tt even sure at this poin

that aseseco stimulus would be econonomalal beneficial even if itit w well targeted. >> let's talk about bernankeke - >> b bteter to get right the first titime >> one wouldd are thatat. the joururna weighs i on bernanke sayining 4343 of66 prie sector e ecomists e endse his reappointment.t. in trade, theonline betting si, gives him 6060% odds o o tting another toururofduty.. isise going to getnene or is floating janet, allen bldede's name -- >ake me 47ut of 4848 he s shodd beeaeappnted. he's'sonone great job. i ink it's a difficultt ca for the adminisistrioio i think ththeyl l prably make it in thefall. good governmentt would suggest threreapint him but t tnn agagai t ty do have to make a a political call here e w wel and i wouldn't want predict that onone. >> larry, , wh you lookatat some of the other names th are bebein tossed aautut, carl justt

mentioned llin, blinder,r,omom ofof these people beinin memente buwhwhatbout larry summers, what do you think aboutt the job that he might do in n th position? > well,, i served on the fedl reresee b brdrd with boboth ala and janet.t. both are fine people. they'd be fine chairman.n. veve kwn larry summerers,ee wereren graduauate schoolol've known him forr -- i d d't't wano do the mathh -- veryanany arar eaeach would do fe as chaiairm.. in thissituation, i thinkk you've got a c chamaman place whwho s s do a fine job, who's really l lrnrned ll, as anyone would in that t ndnd of a situation. this is an precedented situation. he has the k knoeded basee now that's really irreplacaceae.e. d d i ink it would be foolish fothem not totorerepoint them but, again,, it's aololical call. >> i remember late l lasear ththatou saidutut were gng to be the next bigproblem. you pointed thth out to us on th showefefor anyone el didid. there e ululd be arurunc with consumer credit, pplpl wouldn't be able to gett auto anan

do you see an end in sight? >> well, i think r probably anotherear oroo we're prably going toto seee autos bounce alolong about w whe they arare w. think n norl l r america uld be abtt 14 millionon units. we had about three y yea off 17 millioiounits. so we tt aun below 14 f f a whe e order to work o the excess supply. i think ultimatelely the credit problem m llll be sosolv. is not solvedd no the paper imomovi but whenen y actually into a a to show room, if youou don't veve vy goodod cdidi you're not g goi to get an auto lo. that's t te e acss the board. so t tnk the auto industry i is going to be in rouou s sha for a while. >> larry,y, before we let yo g you are catching us on the beginning o of earning eason.n. opoplere going to be looking these companieso figure o out whetheher n note're goingo see some real end mama created as thenventory storyasasse us

by.. is that going to hapapn n inhe second halalf? >> i don't'thihink we're going sesee dd demand. the big problemem t the economy gogg to h havisis tt third ququteter rsonal inmeme disposable personal incomeme i going to about $100 billion lolow at it was in t t cond quarter. inindddditn, households h havo sa me.e. if y y'r're g getng ssss incom and you probablyly wt t to increase your savings, itit esesn'look too gdd for consumptptn.n. so w we y get an inventory bounce but ion't think w wrere goining to he aururgen growth in t theececd half of the year. wouldn't see one until the middle off 2010 obably w whe ususehd income is back upup to thevevel ithohod be and when households haverepaired their bance sheets. > ight. larry, good to talalk you. it lookss gorgeouss there in sa ddler, georgia.. we shohouldodohe show the.e. >> not thatt wre asking for a a invitation, but hint ntnt >> you gs areinvited. 's's a tough lifee but somomeo'

goto do t.t. >> yeses. 's's smer. larrrry,e'e' otalk to you later. coming up,he oo wall greens as the head of t the drugstore giant s saks out o on the health o oththe.s. consumumr what washingtoton'rerefo efforts cocod d me to his mpany's boom line. ey jusust raised its dividend. also, t joblessss claims repoports s ming up a 8:30 eastern today. at 8:40 eastern weavav an exclusive enter rue withth t c c of powerr playeyer exelon. >>and wilbur ssss and hihis tetest toxic poportity. going g be talkikingbobo the pipppp. he'l'll veves details.

right now, alall ererhe country,

discover card custstomss g

>ththe statutus oo is simply unacacceabable rising cosos are c crueses us. they're crushing fafamieses crcruss businesses.. crcrusngngtate budgets.s. and they are c cshshinthe health carere iususy itself. >>hat's vice presidenent joe biden mamangng cments abouthehe reform of thenation's heaealt cacareystem undergoingng rhtht w.w. here now th his reaeactn n a cnbc exclusives ggory watson, walgreens president and ceo. we want toto tnknkou for your meme.

>t't's great to be he,e, eck. let's talk first about thahat didend announcemenent cacae if you lookacack at w whas s en haening over the fst half, there's something g li$46 billion in cuts to divididen ththat came, onlyyonsumer stapas in the sececonhaha are rsing dividends. whwhy d d u raise your dividend and how did you do i i >> we feel good t tha we w wee able in this s ugugh cocomy. 'r'repending off an awful lot of cash. thisis i i our 76th yr of offering a dividend,,3434th ye of shshin an crease.. wewe tugug it was the r rig thing to ddo. asouounow, we made e e e decision to slolow storegrowth. 'll slow it dnn to 2.5% 3% from 9%grgrth last ye.. 'r're nfident in ourstrategy. we think the r rhtht thing to d is rewewar our shareholders at this point in timeme wh a dividend increase. >> and when y you hearhahat vic president biden hadoo sayed

about the chgeges that are coming to our alal care sysyst, what's walgreen doing try toto pfoform for at?? > well, i i tnknk there's tw ways we look a aitit. i think, obvioususlyasashe administraraonon tes toover more folksththat a are --onon have i insanance coveragage tod, obviously a coco to that a a focus on cost. on t thi we're doingng and i ththk anyone in health care i i probobab d dng as well is the focucuonon reducing costs. and we hadan iueueve we kicked o o justt last yearr ere 'r'reooking to reduce c ct by $1 billionnnthe nextwowo yearsrs anand 're on tarargeor th.. i i inink e opportunity side of it for us is we'rere r reay focused. ii t tel my folkslocally, you know, the sanands a a shiftinin health re. i i ink that creates strategic opportunities for a a loofof us. and i beliliev wre welll positioned with ourr p pce in te commununieies ross america and ourharmacists whorere on the frfronline to reallll offer new solulutiss a and help lorr cos d d lp the adadninisttion

providideccccs to the new folks. >>reg, jim reynolds here. >> y, jim, good to see yoyou. >> thank you. greg, obviouslyly w wgreens stos are every place. anancertainly innhe communities.s. one big part of t thi alth care reform, one aspect o o iit, is certainly reducing costs. what is wgreens doing t to reduce thehe ct t of, say, esescrtion drugs n now >> jijim, good qution. ineneral what w wery to do is pupush generic druru for evyon. think that's the b bes way to wer prescription cos.s. mo prescription plansns spopo th a as well. i think aoooo thing, there's a lot of lowowerco-pays foror prescription drugs, forr generics. addition to that, what wewe'v done in the lalastyeye forhe 45, 46,000 a amecacans who do n have insuranancewewe launched a prescription savings club card, whwhicisiseally adirect nsumer prescription cacardff

our own. we've got nearly 2 millilion people on .. it's broughtht a affdadablriric on prescription drugss t to a l of folks. weo think t tha a a the adnistration does cover t tse fofolkthat donon h he c covagag todada t thawe'll be lele to continue to drive generic ilization and helelp duducerug costs. ow d do you dohahat for the cacarditself?? is this the same thing as acting in a big p poo likea big plploy, you take all of ththee people and y get lower prices beuse you have a large g gupup of people? >> withh r escription s savgs cl card, what wveve done iss laununchtt a put aormula together that d dris generic utilization as mucuch w w can. i inink ing directly to the consumer has really beenen a positive force.e. think as far asrerescption beneneficoverage, the good tng is most p pla today realize that generic c ugugs d theosos of generic drugugs are just efficient as brand name ugug. i inin there's a real p phh to

momore generics. >> the b b phahaaa companies lie don't atat, the ones p ping the bimoney to pu the dgsgs t begin th. the'e'big concernrn i w move to nationalized h heah h care,ou won't see as much velopment, ch new drug deveveloenent becausus itt won't b be as profitable. doou worry about t ttt sosoone with a background in phpharcycy >> i thinknkhehekey going forward, and i t thi onene of t president'seyey pririipiple to health care rerefo i more toward health andwewellss and prevention offhrhron didiase. need % of patieientofof a chronic drug a noncompliant,, which means t tyy sp takining i or are a day or t late. i think the w toelelp not only the american consumer andnd americanan pieie but a as ll as healal c carcosts in nenel, is to really help dve better compliance andndadadhence of prescrcriponon dgs.. whwhheher at's a generic oa a

brand name d dru t thas good for e e paent and good for thee cost -- - >> you mean they stoto king it because theyey c't't afford ? they can't aord to continue? > well, avavariy of reons, beckcky. in some c ceses they can'tffffd itit, t in mt ceseshronic drugs can be what wecaca asymptomatat.. you take a chronic ug for high cholesterol. u may not -- uu may n n feel bad so you s ski dose o or you rgrgetor you - -- or youou lala two or three days. at's not good because it drives up costs ----ededic costs dodownhehe road. ababet, for example, is prprably one of the mosost challengining diseaseses, most costst diseaseses we havee as a countrtry. it's a didiasase that canane corolled completely through compmplicece o prescription drugs, w witpepeop testing their bld levels, eir a1cevevel and so fthth pelele a just fofoetful. for r so r rean they justt d do take it anand so forth. pharmacists -- ththathere our pharmacists can plalay a ro to h hel people stay - --

>> i it' hd to demand a change human behavior.. we would love e to have youuaca to talal about this aain. walgreens is going to be in th middle of that. ank you for urur time. >>hank you, becec.. lolove to be back. we have anothexclusive inin, the ceo of e exl.. ♪ look at t ♪ so blessed withth spiration ♪ i don't know much ♪ b but know i love you ♪ and that may be ♪ ♪ all i neeeed ♪ to know (aouncer) customers loloveee aircrafs momo as much as we loloveakakinthem. nonovaon today for america'a's momoow.

> coming up,p, the most up to dada n numr on labor mamaet. bless claims isnext. the numbers and ininanant action when we e coinin.

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>let's take alolookery quickly atat srereof tatarg. the retailer is actually traradi hihigh this morning aftertt camenn with same s sto sales lolow expxpectitis but it gavav us some s sonongeguidance that habebe expected.. they say theherere looking a at seconduarter earnings per share toto b at least 64 cecent that's where t theststimes are ririt t no as a result ththattoto is trtradgghigher. $38.84 to 387 after clososinat $37.26. relt from retataerers have been a bit mixed. it been a aoss the brdrd a litttt mixed today.y. targetetththattock is trading ghgh sxit the fact it came i in wiwithsame storesales weakeker

than expected. . we're getting thee welyly joblesesclclai in a f fewsecond. this report's b bnn getting more and more i imptatants the weeks gogo by. rick s sanlli has that newews f usus rht now. >> reporter: the bell l ju tolled. guess s wh, , pepeop,, we are dede i say under, 600,000.0. a l lot ununde 565.5. 56565,0 for revised 617,0000 ththis is a massive, massive d. now, let's loooot the other dede t the streetet. the ctitinug claims behindnd u raraed up to what ielelie is the new record, 6.6.72 millioio. lalastooook this week, 883. so wee h hav the good andthe no so gogood ththeplplit decision on ts looks likequities arespiking a bit higher. inintestst res are moving slhtly hhehe so they'repapang attentioninin so rpepectto the drop itial. thisis irereal going to fuelhehe debatete ter t t st labor repoportthth increreasob losos

and h howhat pontially affectctedhehe p psyee of soman equity trers. ju like the bank o of eland totoy y wa a big deal. th didn'tincrease their a aetet cucuency plan. their dollar definititel taking hihitoy. >> rick,k, let's bring in jimo t his reaction too the jobless claims report today.y. jijim,his is good news. markets reonding to it very well. bubut isththiss a we're weekwhwh u u lo back a a t july 4th hoday? how much i impt t es that have and what are traderss thininngn? annonojust t the knenee-rkrk reactitionroromnow? >> i'm h hing the estimates gugurethat in. least that't's what the markett will sayay rhtht now. the markrketanand good nene.. acall camee o out yesterday wit less thahan d d ws and it changegeththe od. the e whee thing that t the cloud of negatitivi w was last weweek u umployment mbmber so any hint of gooood news s ou thth a areis going to be viewed as great. yesterday wass a a interesting y to me. we sawththe whole risk aversion

where people gotot out oftocks angot inin t theong end of t t treasury group.. it wasn't thatt ngng a we were woworrd about it being aisky place to be and d whpepersbout us d dngngrang. the risk a aveioiofeels better ththant did a while ago.o. goas off $15. the e still riskk inhe rurry rve. two things inow less bad, ev arguably gogood thatat emems ke we're going t sttt talking about grgrnn sots agn.n. >> okay. there you go.. 're lookikingtt jcpcpeny y ing under. came in with a a dropin same store salessutut not a a strongs pepect, 8.2.2% down, nott the 3%3% t street was lookingfor. weust talked abouout tarart.t. ri, , en you look around an see the strength of f th consumr i impvement in the coconser, dodo y t tnk that's sething yoyocacan ng your h hat on? >> reporter: i'm g goiith lalarr ldsdseyn this one. ththisorning he spoke about the extra money consumererarare goi to h havcocomped to a year ago. the numbers are smler. ani i ink that's key.y.

alalsowe wanttoto put an terisk on th drop iinitial. it was a holiday environment. oror ausustmts in seasonalalits. so we're goioing to let e economists picick isis one apar but itit i ssible that this number was a bit exaggerated i termss of jobs initial claims. > j reynolds,s,etet's talk about that. >>an't we eny it for ten minutete can't we e enjt for ten minuteteanand say, w wgot a decent, gonnumr.r. >> i suppose. >> r repteter:t's about straight shooting, ough. > n question aboutut it. >> jim reynolds -- >> no question about t. >> youou wee waiting on tse numbers, too. right. obviously on the surfacece oiti l loo like agrgrea number. i'm with you. i i thk we needed t tha number, given that unemploymymt t nuer we got. and i'm gngngto -- i wawant t t enenjoit. i think the market neneeditit. hopefully the stock mararkewiwi joy itit. the bond m mart is pickiki up, e yields are, soso ihink we shouldld enjoy this numberr bece it's's a gat sururisise. >> jim, w wll let you rish is moment for a a whwhil >> i'mith m.m.

>> brief suspenensi o of ality. thatat c coo >> that's okay. t when youou consider allf f th ings, again, theeadlines every day, these are not headadnenes ing manufactured or de up, these aree hdldlin ininng out people really suering, really in trouble, m another concernrng g thg we saw todaday s s is idea that any rerebod in the housing stoto is gogointo be put o off by q qui long shot whenen y s sta looking atat w whas been hahappininwith the trustst running those cucutized mortgages. that theyy hee been dumpmpg g these -- a lot of these houses at much lower prices than b ban wowod. is that t a ncncerfor you when u look beyond the nextxt mthth or two? >> is that my quesesti?? >> yeah, jimim. >> that's a huge concern. en again it comes backcko o yesterday. when we talk aut the long en rates gogoindown. if we it continue to p pusththe down, totodawewe'rtaking a respite from thahat, b b if tyy continin t to push down at brgsgs wer to that part ofof the fifi. and i ththinwewe c be okay with th. remember,baba tohehe unplplment nunumbs.

perception bececom ality. we can feel good an t t rket can start to hire again, o, we talkbobout the wealth here. montnthsgogo wwere ugughi ababouititut it's a a real thin. if consumer getsts lower mortgage rate and stococks go 6%6%fououselds still own stk k -- >> reporter: b but perception/realilityii agree wih u in so mananyareas like rcrcved expected inflalati but whwhent comes to jobs, tre is no pception becomes rlity. eiererou have a jobr you don't. whdodo you think rateses meded u and then d dn n intreasuries? what is your exexplatatiofor the drdr t theast couple of weeks? > well, bebecae e pele think 's goingtoto be morere protracted recession thaha before. thlele bad becomes the keywoword herere if we canstabilizize,sure, we might be in a a recessiononfor e next year a a ahalf. as long as we'rere not spinning ouof control, people feel good. . >> why do you think k 'r're t going to b be continuing toospe? d you see the last c numberers in terms off wt the needs and what the currere deficits are o

e budgets? >> ooh, n i ihink we'rere going to spend ccometety.y. i ththin wre going to steepen out theield rve. ba t to e question about ee coconserer10% of thehe people dodon'have jobs. think it's a great thing if the other peopleho do havave jobs andavave money and havave stksks gng up, i mean, the consnserer h spent us out of reressions before. right now w wi the 7% savings rad, seems to me there's's little ntntp demand.. if that mononey comes out, thin roroll >> jim, rick, thksks wel l ta to you ain soon. jim reynolds w wilbebeith us for the rest of the showow you cann cchchim every friday ninighat 11:30 eastern tee right hereren n cn ptions actiti".". take a lookk futuresnn e e wa of those joboble claimim mbers. 565,000 is the numbebewewe g. the week wasas srtrt it's awfullyly tough in the susuertime to jgege where auto lalaffs wiwill happen. futures took i in spd. it is ththlolowe number since jaarar which is saying g memethg. alththghgh continuing claims we still added a n new recoco. . when come back we'e'lletet

engized. the ceooofof elolonill tells ababouhihis an toake over rival nrg. > teter at, a lot more ququk." yoyou ve questions. who can n gi y y the financial advicece y n nee where willll y f fin the stability and rereururce to k keeyoyou ead of this rapidly y ololvi world? these are tough questionons. ththa's y we brought this togethererwowo othe most wewerf names in the industry. introducing morgan s staeye. here to reththkk alth management. here to answswer..your . moanan snley smith barney. new wealth managementntirirm moanwith ovever 0 0 yesey. of experience.

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this is the officicialarard.. of the world's largestst aliline >> keke look att crude.e. we've beenatating it go froro lolow s to 60s would he boundiding a aitittl b after six straigight sessions dú in the past f f dadays $61.1. onnhehe august ntract,

$15. ininsu nrg energy rejejecngng exelon's improved tatakeer off after it was upped by 12% last week.. jojoing usis exelon ceoeo jn roroe. it's great toto have you o on t program. good morning. glglado be here. > is nice just to watch a little backndnd forth between two companies.s. takes our md off of a the macrcro obobalssues we have. but the backck and forth has goenenat least thehe rhetoric,i guess you could ayay, heed.. where e doououhink it really stds? how mumu o of is is window dressing forust what theys on teabab want, which is a highgher price? w wel i thihinkhihiis a confnfli b beten two different viviewofofow you make value. we see eelectricity business asnn asset-orieieeded businessa coodody-oriented business, a a place where value isis hd d t get, a a we t tnk the synergies we can offer in our transactioin

make a c coue billion dollllss for the shahareldlderof each cocoanany d that's a rare thing. nrg isbebettg on arorowt strategy.. most ofththosgrowthtrtregies o ourbusiness d d't't work, bu they believe theirs wiwill so this is t only a a cflflt about pre,e, it's a conflict about viewsofof the entire induststry and it reallyust comesown to whwhathehe iestors believe. >>soso whenee says t price is irrationally low orr dramaticaly unir, although he says y y'v've been very rerect no head-faking, how do you s s it resolvlvinititse? >> well,l, i ththinththe shareholdersrsilill cide. if the sharehehdeders accept ou valueroposition and on eltt nine new n n d dirtors, then there will be a negotiationon somewhere near o ourririce. and i think in the end t thi transaction will work. the shareholders seett

differently, then itilillnot work. ththisss sharereldlder democracn action.. in the end,his won't bebout jo rre'sego or jnncrane's ego, this is aboboifferent peepeptis of value and we'e' see how it ceses ou ananwhe, we've got a a offer that getsomewhere b betenen $2 billion and $3billion for theirr ararehders and i think eiei shsheheholrs will take i i very seriously. >iven what you just saiaid about the two diffffenent ews of the busisine o othe two cocompieies, where d d you s th nergies? whwhy e e twof you coming tother? why y shldld investors care? investors shoululd rere first, because wean take a lot of stst out. the only synergies,s, jim, tha the investororrereal count on,, as you know, i is t theost side.. and we can take a lotot o costs out over a dededede somewhere between 3 and $4 bilillin presenent lulue. thererarare also synergrgieonon revenue and strategy sidide because right nonow 'r'rehehe biggest indndepdedent power

producer the country w whh o or strong footholds in illinois and xas. they'r'rveveryign n tes and small inin t n ntheast and cacalirnia. this makeses aeaeal tional gegerarati company, theirir one, actually. and it crereeses sething that ininveororcan build around. so i thinke'e'll see s syngigies on the renuend market side asell as on the cost sidid j joh you rsese your d, which is nteresting. isis i because youou s s se --- you saw s see new synergies s tr you didn't't s earlier? what went ioo that? >> well,hat's why weouou afford to do it, jijim. but, of course, , raeded the bifor t only rsoso anyone ever does. we raised the bid bececau w we d to if weweananteto win. yoknknow you do these things because you must. but weweerere able to doit bebecae e we identifiedd substantially morere co side

synergies. anwewee trying to shareethem twtweethe invesesto of the t t companies. >> you saiaid isiss your final bibid. there any chchcece y may be able to go ba,, reasssss s anraise your bidid o m me time sm? >well, we're not chasising this is our bibid. there's always chance i if somebody showsws a adadtition wy to create value, but only to close. and d itasas to beeaea vae.e. i've b bee running utilititieow fofo2525 years. i've nene it by constantly ying attention, to keininthe lights on for customeme a and adding value f for investors. m not giving thahat up wn i'm 64 just to a auiuireome other company. fofor , this i is out value. it's about valueuefst. it a aut value stst. and we'l'l stick our knitting. >> if youre were goingng t to swten your bid, nowowouou be an excelllltt time to disclose that. >> y yh,h, i sure that would mama -- add points on a tetelesisi show, but w j jus sweetened our bind we're happy wiwiour bid.

>> iftt doesn't go through, erere es that leave exelon?? > elolowill still be the most valuable utitiliinin the count. exelonill stillee takingarar oftstscustomers. exelon will l stl l rununni the biggggt t nuear fleet in the cocotry. an exelon will a addvavalu ass s and electricity pricices recove. and we're alalso best sitioned acarbon conrarain age. we are t theararst cararbo ututily in the united ststat.. we are t the o one withhe only plan to neutrtrizizeur carbon ototprt. we're ininhehe bt position to alal a greenerera, and w wrere gogointotoeep doioing hahat. >> is that whyhy y c ce ouin pport of waxmananmarking? you could afford too it?t? >> well, that's one reason.n. another reason iss that ththe country wawas s to deal with th problem. it's aeaeaworldwide prprobm. the issusuishat's the

chchpepestay to deal withit? waxman rkrk is auch c cheer way to dedeal with t tss proble an would beigighe renewable portfoliliststanrds or other mo c cplicated provisions. a capndnd trade is c cplicated buinin t end i willetet l lerer priciced carbonolutions than wi pure federal mandates. and this is v ver impoportt.t. but let's be candid, because of our low c carnn position,, w we acacally make a lititee more moyyn a cbobon-nstrained age. we srtrted off on ththis to sol a problem and realizededt t wa also an opportrtunyy for us wit our nuclear fleet. >> it's s gogg to be intntertitg to s how that wholol s sto wiwindupup john, apleasure to t tk k toou. appreciatete yr r me today. >> a alws s a pleasure. thanks foraving me. jijim,ooooto talktoto ou, too. >> thanks, jiji toxic opoprtrtunies.

the t treurur announced pipp, lblbuross is in on the actioio d0 "i'm rethihiiningevery. tdtdd#1-1-0-345-2550 includining o o i ust to look after r m mon." tdd#: 1-800-0-5-5-25 tdd#d#: 8080345-2550 "the dust t mitt be settling... tdd#: 1-800-345-252550 th, bubut m m no" tdtdd#1-800-345-2550 tdd#: 1-800-345-5-5050 "i guess i'm just done w wit doing nothing, you k kno"" tdtdd#1-800-345-2550 tdd#: 1-800-345-255050 h, i'm not thinking ababoumoving my money. tdd#: 1-800-345-2550 i i amoving it."

the long awaited pp prram unveiled by thehe

treasury. onone t t chohose ptitipants, e capital anand chrman and ceo o w.l. rossndnd company.y. lbur, good mornrnin this plan h been a l lon time in the kiking i gugus s thquestion is, n now wh?? what are you g gngng tbe buying and what are y you looking to d first?t? t tplan a a this stage embracacesotot kinds of mortrtga-b-bked sesecutities namely the residential mortgage babacknd the commercial mortgage bas.s. so thoseilill bebe the t two universes thatat we'll be focusg on >> how ickly can we expect to see things reaeallup and running now that thennouncementas been ma?? >> well, as soon as t the banks become willing t to se, we w wld be prepared toidid because, ass you kkno i'veommitted $5 mimilln for my funds a invesco recentlyaised a $200 million rereitrorom e pupubl. andd therefore, we already have fuining place to getgoioing. >> i guess t thass e qqueion,

wi t t banks billing to sese. it's brought up p agn n inany articlcl t tha are o outhehe todaytalking about how t t banks aree trying to ldld even as some of ththerusts thatrere running these supreme couecurit pools. erere things stand rightt now and how fafarofof are y from what you're willllintotoay and what theananksare wlili to llll for? well, i believeve atat the vevera inherent in thehe ip ogogm will let us pay somewhere between 5% a a 10 percentatageoiois higher than e bid we could have made without the leverageinlvlved sosohahathould helplp a l lot td clining e gap. butt i also thinin that there ae some categegieies of bankshaha arare chch more lely to be sellllerthth others. r r exple, there are se 77 banks that have bebe seized by the fdic, somome off which also hahavearge bundles these

cucuriized momogagage enen you have athther category of banks thahat r recve t.a.r.p money overerhe laststyear thaha ar i i such b shape they can't even bay t thererefeed stock dividendnd, ee .. so t the clearlyreregoing to have to startt to dohat thee government ants. anand then third, you have sosof the larger banks that are in a.a.p., they're trying too tt their balance sheetsn n orr to eiththeraiai privatete capital fi some other wayay t t get ouo of t.r.p. i i tnk those wld be the three m mai categories thahatwol be cooperative. the fifill onehaha m come i io play would beegional banks atatad n hereto it ifor r needed t.a.r.p. b butilill thth mortgage market deteteriatat. >> wilbubur,nene omy views s s been that, givenhehe change i i the p protatabity o many of the monies in the banksks, ee more likely sellers w wldld bthe other option iss at you aid,

the rioiol banks, thehe smler banks, the ic, seize institutions.. if you were to j jus sort of gure what mimix, what peenenges you are lely to sesee omomach group, wldld you say then that theononie in the banks would be much lolowe in terms of your priority ofbebeg ab to get assets a others would be significantly higher? >> ll, i think ttt that's a a fairir assessmement but when y think a autut as a buyer r of t the paper, the sou don't make too much difference toto us. 's's jt a question, can we reach h agememt on price and wiwi i it produce acocompsatory returnrn t us >> wiwiur, everybody hahad varis exexctations going into ththis anuncement and one of the things that ss turned someme heads is pimcmco' dececisn n no bebe aart ofi t theact that goldman is not on thelist. did that makee youlook twice? >>wewell i fnknk was a littlee puzzled by t the pimco

announcement. they said thatarly in j je they hadad withdrarawn from the presesse a a my memory m may be fuzzy, b but i hadad tugughthat right t ououndhat same time there was a big interview ttt llll gss gave t to e "new yorork times" e expssssina good d dll f thusiasm about the project. so i don't quite uererstd the pimco dececisn.n. >> yeah. >> but i a evt, that's their decision. 'r're ite e exced ouout the prograram. we think it'ss the right thingng for the economy.y. and we t thi it's righthihing for r rrinvestors. >>o o wh t thealk about the reasasonii mean, their motivation, , eyey ce uncertainties ababouththededesi anand ilementation about thee program.m. you don't share ththos concerns? >> i don't share t concerns because att t thi point w now ow a lot about it. we now h howucuchononeyhe government has put. we worked out v ver detailed contractuaual aananments between the treasury departmtmenanan the

variousmanagers. so at this stage,i i ink it's beming quite ear what's happening. >> wiurur, one lastt q queion from m me, and thatt is, whata yoxpect to seeehehe mi the miof your investotors tbe and what kind of returnsnsre you indidicangng to them? >> well, i'm afraid can't't talk ababt the retutuss because, if i did, t theththethther people wh will bebidding would be able to ininrpret that to what sort of ununveraged yield we'll bebe ddddin so i'll tllyou the rurns afterwarard. >> okay. >> the facac that i'm committing privatequityapital is an inindition that i think w will beberespectable returns. > wililbu t tnk you foroioini us. we apececte it. t tha you. it good to talk withouou agagai >> see you so.. whenen w we me back, parting shotfrfrom our gst host jim reynolds, some positive comments from tget, as wee ta stock of

l l those retail sales. today ththe'e's way to save more f foretetement,

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>> r guest host jim rnolds of l lee capitital mamaetets hat us company soarar this morning. we've had a gd time,e, aot

do. as we await, big bank earninin starting to next week. dodoou think it's going toto affirm people'e's hopes s atat things havave enenkay, at least in bankinin >> i thinkwhwh you get bacack t our cocore business in lee pipitaand the core binins in ee i iestment bbanng, investment bankingng nerally, it b bac solid again. whenen y l lk at thehe l low po which i say wass t bear stearns/lelehm b bthers time and that fourthh qrter with the maive layoffs, th was gut wrwrenining. the businessssececamfofosed.d. i i thk k nothe business h h gotten back to basics. investmementananksreocused on ieies ain. they're doing clilienusiness agaiain. it's profitable e buneness >> jim, weweee loved h havggyou here. good to be here. ank you very much. >> that does it for us today.y. right now w it t timfor "squawk onon t street." see e yolalar. first claims fell to 550000 much lower thanan titipated. it w washehe lt