fails to reach an agreement with bond holders. that's the news now. i'm scott cohen. i'm melissa francis for erin burnett. thank got it's friday. unless you are the fdic, most of us look forward to friday and not the fdic. on 20 of 28 fridays of this year, the fdic seized banks and which could be the winners. finally a few hedge funds have figured out how to make money on twitter. >> lance armstrong is within seconds of leading the tour and if he wins, so does one of the world's most corrupt governs. you can't make that stuff up. that's our show and it starts now.

>> see how stocks are shaking out. a big friday here in the summertime. trading down by about 45 points and a half percentage point and the nasdaq is broad on the session. the s&p is down by a little bit more than three points. looking at oil, not a lot of time and the nymex is trading down 72 cents. it's about 1.2%. what is the thing you need to know. let's go to bertha who is down to the new york stock exchange. what's the mood like? >> continuing and waiting for the big news next week. one that is interesting is chevron. it's a warning and not with numbers about earnings, but saying look, second quarter our refining margins were hit hard and the currency went against us and that's going to impact us.

the first quarter earnings season and wells fargo moved to the upside and got everybody boy ant with the warn for example chevron might set the tone negati negatively. >> the rifing force has been a jobless recovery that of course was renewed after the last support. it's really affected the markets and really jumps out at you. in 10-year rates, it was fairly choppy until we started to slight in and you could see the look of this chart and all this while there is a lot supply and it's interesting. remember that pattern. look at the next one. you talk about a crazy chart. a month ago it was exactly where it is right now. last week for the week it's unchanged, but what a wild ride it's been. lots of volatility and the

public doesn't like it, but the traders do. remember that pattern i told you about? how similar is this? the dynamic of jobless is not good for equities. they push rates down and we want to pay attention to that. now let's go to mike huckman at the nasdaq. >> we have a mirror effect going on here at the nasdaq am look at what happened. almost a perfect flip flop. especially we are hugging the flat line. not even a bunch o bullish analysts call on tech and on hardware in particular, they are moving and apple is the exception. credit suisse raising estimates and gadget maker and goldman sacks in a big call, raising the price on apple. goldman sacks said they did a big survey and it conclude and i'm quoting, hardware that is most depressed will be the number one area for investment when the economy and it budgets

improve as part of that thing called goldman. to a so-called conviction buy where we are pounding the table, but did it get you? sex cents. a half of a percent. back to you. >> our guest for the next segment is frank cannon. we don't have script. the auto industry and joining us to talk about the issue is codirector from the managing director of the california department of financial institutions. forgive us for the rough ride. we appreciate your help. let me start with you. how many more fridays do you think we will have? are we reaching a cre shendo

here? >> we are looking at a couple more years of significant bank closure and merger activity. this draws primarily on the fact that we expect to see dramatic stress in commercial real estate markets over the next two to three years and we also expect to see the housing markets remain under stress for the next couple of years. >> fred, do you agree and why did i care if there bank failures. the deposits are insured. what difference does it make? >> we will see a lot more failures. 8,000 banks in the u.s. and we have seen 52 failures. there over 300 on the fdic's list and as walter said, that was going up. the numbers will be in the 100s. why should you care? you don't need to worry as a depositor. one of the things they are

effective at is stabilizing the deposit base. we will have these in an order leeway. as a taxpayer, the cost of these failures is at tremendous levels. they will lose about 30 cents of every dollar. those are big numbers. >> walter, who benefits in a situation like this? the other banks in the area or an opportunity for acquisition? >> i think the significant issue is we have a strong bank regulatory process in place to create an orderly transfer of bank assets and deposits to surviving and strong institutions. as you were mentioning, this typically occurs on a friday so that customers are not interrupted and the bank reopens on saturday or monday as the case may be. as to who benefits, i think the

real issue is that the strong banks that have been back to basics and stuck to their knitting over the course of the last cycle will be the significant survivors and therefore they will be the significant benefit for them. >> fred, do you agree and can you give us names? >> we put out a report and listed 17 names across the country. companies like u.s. bank corp and the western part of the u.s. those are the kinds that got the capital or a little bit more careful back in the boom years, but the capital expertise to roll it up. individual deals won't make a difference. in other words, a lot of these banks that will fail are not household names, but if they can get 5, 10, 15, they can build a strong franchise. >> what's the lesson for the future? is there a model here that is not working and a one-time event

or for the smaller and the regional, what do you think is the long-term lesson? >> it's stick to your knitting and know your customers and cautious underwriting. the banks that are failing got too carried away and didn't have the capital. they started lending out of the core markets. the business model is note broken. >> thanks so much for joining us. we appreciate it. >> general motors looking to turn the corner and emerging from bankruptcy 40 days after filing for core protection. there is a lot at sake. the auto reporter spoke with the top executives and joining us from detroit with more. ? >> reporter: it's a new day for general motors and a second chance now that they are out of bankruptcy and a far leaner dump. look at in terms of transforming the company. they have eliminated $40 billion in debt obligations during

bankruptcy and this will continue through the end of next year and begin the process of cutting 13 plants and eliminating $27,000 jobs. that includes phasing out 35% of u.s. executives and a lot of those people will leave their jobs over the next weeks. gm will be focusing on cars, and culture. they will look at new ways to reach the customers. after years of trying to get the balance sheet in order, they said this is the opportunity gm has been waiting for focusing on cars. >> we certainly have the capability and not only the balance sheet to win. all the time we had to spend in the last years we don't have to spend time anymore. we can spend time on customers and cars and being external. they will be a lot leaner with the organization that we announced and far fewer people. i'm excited about getting back

in the car business. >> following the announcement, chairman ed whitaker jr. along with the chair who will take on the chair of leading all communications and they left the headquarters and drove away in a gm vehicle. mr. whitaker said the performance of fritz henderson, he will know whether or not he is doing a good job based on the profitability of the company and believes people here at gm are the ones who will be able to turn the company around. >> this is a combination of great people and great technology and he may have lost his way, but all the raw materials are here and not only american success, but worldwide success. you have to be around and you can sense that. i'm sure that's the case. >> one of the veterans will be a big part of its future.

vice chairman bob lutz. candid and too candid of an executive in charge of the plans in terms of marking. a first on cnbc interview at 4:00 and you don't want to miss it. check out the blog behind the wheel. we have an explanation of why bob is the key to whether or not general motors can win back american buyers. >> when you look at the hurdles you know they are facing, they are cutting cost and making the cards that people want to buy and people having the money to buy them. that's a separate problem and the problem of credit. you buy a car and the financing has to be there. has that freed up at all? >> improved, but not as much as those in the industry would like. you talk with the dealers and it's not like it was when it was tough to write a loan for many customers. you can get most customers alone, but not all of them. they need that to improve.

the entire industry. >> thanks for joining us. appreciate it. up next on "street signs," the nasdaq is the big winner up 12%. will tech stocks continue to carry the market's water and what kind of earnings can we expect. details on the other side of the break. what does lance armstrong have in common with bor at? we will tell you how. "street signs" back after this short break. acss to favorite courses chef's meal with mmes frites perhaps a night athe theater with extra special seat additional hotel nit, our treat you world in perfect harmy: priceless

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we heard that the tech sector will be what pulls us out of the recession. the pressure is on and we are watching three things this earnings system to answer the question. i can't wait to hear the three things. in reelts, it's location, location, location. it comes down to commentary, commentary, commentary. intel will start us off and go from neutral, but what the company has to say about the current quarter and that will be key. they called the bottom to the pc industry.

does that continue doing wonders for the net book sector. the profits should be steady, but how they characterize could offer a window for the likes of hd, dell and cisco as well as anything ibm has to say about customers overseas. google should is have a window on what to expect from yahoo and even ebay. speaking of the following week, apple and yahoo come on tuesday and microsoft on thursday. so many experts saying tech will pull us out and commendary and a shift towards good news rather than not as bad news is absolutely key to the report. back to you. >> thanks so much. here now for the daily dose of "street signs," brian kelly and tim small's head of trading. thanks for joining us. me what you think of tech right

now. are you a wading this earnings season with such eager anticipation as jim is? >> i'm await together on a macrolevel in terms of what the market will do. it will be important to see if these companies can perform. i'm not that excited about the earnings coming out, but hopefully we will get good news. >> we had a technical problem on my end. let me ask you what is your best trade right now. >> the best trade is rerise on and we finished a study of the wireless market and the results were clear. it was verizon, at&t and everyone else. verizon is post poised in the space in the space and verizon is the best capabilities and highest quality network and the most profitable wireless

company. stock is tremendously oversold and anything down in the low 28 level and sub28. >> the hidden trade is buy taiwan. it's the i shares and taiwan index. you saw water shed event where china announced they can invest for the first time in 60 years. the taiwan index is tech-heavy. 57% in is in tech. the exposure and you get tech exposure and an e mortgaging market that is not commodity centric. >> that kind of trade is scary. >> i would agree with you. they are in the emerging marks and you have to use the tight

stops. my time frame is the next three months or so. i can see strengths in taiwan, but i would use tight stops in the market. >> i like it. me about your next trade. >> for us we would look at the xles and we have seen a sell off in the crudes that has been dramatic and recommending the clients in june. we have seen this move down to 55 and 58 in that range. that's always good support. keep in mind the crude with the trade a while back and the sell off is going to have the pressure on it. crude is not at the bottom yet. >> tim, for people who don't know, the xle is the energy etf. why would you do that?

there a million different ways to play. you can buy the enp couples and why is this the way to do it? >> a good way is always to and after the quick sell off and spread out to look at who has the best hedging and exposure in each sector, the xle will give you a quick move once the commodity turns around and picking and choosing individual companies. one of the ones we look at closely tied to the price of oil. >> brian, what is your next trade? >> the transport via the iyt-etf. it plays off of tim's idea that oil is weak. i think oil could be weaker. >> i do too. >> diesel demand is at lows we haven't seen in a year. you have seen trucks down and rail car loadings down.

this week you saw sales are dismal. retail sales with the weak number. i don't see much going on. >> yeah. thanks so much for joining us. interesting ideas there. have a great weekend. >> you too. >> just ahead on "street signs," finally a way to make money on switer and investing either. not by advertising and the money managers have found another way to make money. the negotiations on the hill are starting to get ugly. will the o bam on plan hold on to the middle class. "street signs" are back after the break.

the television ads help to defeat hillary clinton and convince middle class americans that health care reform would be bad for them. >> things are changing and not all for the better. the government may force us to pick from a few health care plans designed by bureaucrats.

>> having choice wees don't like is not a choice at all. >> if they choose. >> we lose. >> so manipulative. they sponsored last time around and are on board had time. does that mean the middle class will be on board? can they win over hary and lose this time around? here is ray's senior policy analyst and jim kessler, vice presidential policy. thanks for joining us. jim, let me start with you. that proved that you have to win over the middle class and that an ad can derail you. what is the main thing, the main message that needs to be carried this time around. is it stability or what is it? >> we believe it's stability and stable cost and coverage that can't be taken away and quality so you can choose your own doctor. you hit the nail on the head. this debate for 35 years has been about covering the

uninsured. most middle class people are insured. they think it's about somebody else and as long as they think it's about somebody else, they may support it, but that support is passive. for the president to pass this, they need the middle class to want this. >> i read jim's report and it talks about stability and that means the opposite of change. if they dot want change, are thappy with things the way they are? >> as jim pointed out, about four out of five people already have health care and the vast majority like the help they received. >> that's a problem when you are advocating chan. people talk about expng coverage and t other thing that has beennteresng is we have to hold down st. it's a very, very large bl out of congress. someere in the neighborhood of

$1 trillion and that wl be scary to the people in t middle class. they can see tax hikes coming. a tax increase on the wealthy. that's why we are looking at increases on sodas and a value added tax and middle class people have to look at the price tag and how it will affect their pocket books. >> for the president wants to get this passed, does he have to bury that and get that out of the consciousness of americans paying attention to the debate? >> costs are important, but if you are talking about cost, this is a dr. spock debate. a kindly pediatrician and you can't use mr. spock words. you have to touch them about what they care about and people are satisfied if they have coverage, but what we found in our research among the middle class, they feel there is a lot of instability in their coverage and cost and more importantly

when they look at the future, they see a very, very dangerous, unstable horizon for them. the last 10 years have not been kind for them when it comes to health care across the board. they can look out ahead and the next 10 years don't look good either. >> they haven't been kine, they are happy with the health care and they want to know the stability and they will be able to keep it. >> they like the coverage, but it has gotten more expensive. three out of five american his to change coverage and almost all of them involuntarily. they experienced instability in their own situations. when they have it, they like it. more femoral and unsure.becoming they are looking for sureness. peace of mind. >> maybe the president wants to exploit that and make people feel more insecure about not having health insurance. is that the way to get it passed? you make an ad to show people

panicking and being turd away from the dto >> and the president has to make sure that pele are not scare about losing the choices they do have. i think it's a powerful mesge that the middle class does not like andhey may through a rong plic opon, people dot want to se access to th doctors they have. that's the instabilitynce you have the government competing and offering health insurance and you could have a lot of small businesses. >> write to us at "street signs"@cnbc.com. get ready to stop trading if you are still trading gm.

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the federal reserve continuing to feel heat from capitol hill of house lawmakers that has written a letter to president obama urging his administration to investigate the fed, expressing concerns about giving the sweeping new regulatory power. scott garrett is one of the men who signed the letter and joining us from capitol hill. thank you for joining us and one of the complaints said while bernanke testified he made so such threats, there is a considerable amount of testimony that calls that into question where we are talking about bank of america and merrill lynch. you are down the doubting what

he said in testimony. >> you want to have all the facts come forward and the committee looking into this was the government oversight and as you know as well, we will have his testimony and others. before we take the next step and this was the opening comment, before we take the next step that they want to do which is to give the federal reserve brought sweeping powers, shouldn't we see what they did with the powers they had. >> there have been a number of hearings and what is it you want to look into that you haven't heard already? >> that's a good point, but it's fairly narrow that they have been doing and the congressional investigation is suggesting that the administration is the 1 that is coming to congress right now with the geithner proposal as far as giving them the brand-new sweeping authority. we are suggesting that maybe the administration should take the

initiative here and we have a bipartisan letter going to the administration, suggesting they should take the initiatives to get to the bottom of all these things. deal with the point you raise as far as the he said she said situation. can we get this resolved before we go to the next step to give expansive new powers as far as the regulations and they used and not necessarily set out as far as fiscal policy. >> sounds like you think the fed is as powerful as it needs to be perhaps. >> that's true. in fact i would say they are too powerful. that's why in the gop plan i helped work on, we try to draw rings on to constrain them to where it was intended. that's monetary and let's get them out of the fiscal policy side. >> okay. there a lot of people that peel that way, but during the crisis, do you think there wasn't enough

oversight and where i'm going with that is if you don't think defense plan should be expanded for oversight and eggulatioregus there someone else? >> we have gone through the crisis shown and the need for reform. those are staying keep the status quo entirely. the republican party has thrown out our plan and pretty specific as areas of consumer protection and with regard to the fed. they were talking about right here and right now to deal with the wind down authority as well. we are not in a situation where any party, the fed or the treasury has to deal with this and have wind down authority. we have been specific in the proposals how to deal with the area and as far as reform that's necessary. >> sorry the fed too political? >> the fed has always been political from from day one. they like to deny that and say

they are hands off, but if you look over and you remember the fact that the fed's position is one that gets reappointed by a political institution. the executive every four years and it will be a few months from now in january it will be up for reappointment if this term ends. it's always political, but no accountability there. >> thank you so much for joining us. we appreciate it. >> all right, it's the time we have been waiting for. time to stop trading. jim, you look great. i love to see ow a friday. why is gm still trading? why is aig trade something if either of these companies have gone bankrupt, they have thot officially gone bankrupt, but -- >> they couldn't put it bankr t bankrupt. >> one of the things and it's

interesting because garry is ahead and i was reading his old book and healks about the notion and maybe there should be umpires and the government and the exchanges should be -- that stock will be san celled. worthless. they said the aig stocks will most likely be worthless. these are chops for people. this is just reading the gm's out of bankruptcy and thises meaningful? it's meaningless. someone has to protect the regular guy. they are mucmore worried about protecting the guy who makes millions of dollars. the stock should be cancelled. has nothing to do with gm. >> people are getting squeezed. two people on each side of every trade. >> it's difficult to short, but whoever is selling it and selling it will make a lot of money. it's not a stock. it's buy ag i lottery ticket for

a lottery that is last night's. you know it's a loser, but it's okay. the ticket should be cancelled. there is no stock that represents that gm. the government and the sec should just say listen, we are spending this. that's what they do in britain. we are suspending it. just suspend for heaven's sake. come on! >> i bought it this morning and made money. >> i don't kir f. i bet last night i made money. it's not legal. it shouldn't be legal. it should be suspended. every other country on earth suspend this is stuff. not us. a lot of fees are made. we will do anything for fees in this country. that's great. >> aig is not the same situation. >> the reverse split and that

confusions everybody. i am not in the government. who protects the little people? i would love that power. he said i will do a new thing. they will be like every other civilizedcompanies and suspend stock where is they are worthless. we think it's all caveat into here. this is the used car and the american secures market. protect us. >> very much wlik i'm out there and i have the same sensation. >> he's a gentlemen and a scholar. >> goldman tech upgrade. >> everyone is so negative, it doesn't married what happens. novella supports and it's up cents. nobody cares. any time i come out with something positive, i feel like a dope. goldman sacks is up and they come out and recommend hardware

and they recommend dell, the worst company on earth. it's a statement and everyone is ignoring t. atlanta houses going down. because the government is in session. if washington were to take a break this week, we would be up 500 points. there is a great pizza place. >> i have to ask you about the oil margin thing. >> i'm sitting there and they areaying listen, if they raise margins, that will hurt it. how about $147 a barrel? was that not harmful? that wouldn't have happened. the reason why we have margin requirements is so that we don't create leverage. th are saying we never raid rates. look what happened. it'skay to limit leverage. not everyone has a rig to borrow 10-1. >> what would you like to see be there? >> we don't find a level where

it would discourage traders to corner the market with others or get driven out by shorting. it's reasonable to put up 25 cents or 50 cents or 25 cents on the dollar. let's find a level so that they are there. there is nothing that said they have a right to be able to trash. it's not in there. >> i was sure it was. >> it's not there. >> i think i wrote it on the end of mine. what will be the biggest surprise some. >> it would not sho me to see apple have a number that blows your socks off. >> really? >> would that be surprising? we love apple. >> how about the job on the conference call? wouldn't that be something? >> cancel gm already! >> thank you so much. all right. more of jim on "mad money" tonight at 8:00 and midnight eastern right here on cnbc. he is just like -- >> no!

>> different political views. >> true, but you are both energetic and passionate. the guys have figured out a way to make money from twitter. i n't believe it. take look at lance armstrong. have that video. the logo on his jersey.re it's a logo borat would love if he were real. first in business worldwide. mr. evan ts is janice from star. i have reived automatic signal you've been in a front-end crash. do y need help? i'll contact ergency services and stay wi you.

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effect. we are keeping an eye on twitter and turning tweets into trader smarts. we are joined by eric prisoness, ceo of boston based hedge fund. let me start with you. your company is a platform as i understand it. hedge funds came to you and asked you to develop this product? >> yeah. >> you basically tap into any news source and coming through. twitter is an extension of that. you can go into the platform and look for patterns like what are people saying about the new

apple 3 gs launch and you can get information on what people are thinking. >> this is a product that you used? >> we used the product and our primary focus is of a systematic trading firm to monitor direct market data feeds. we don't currently have strategies deployed on the adaptor and we use a wide away of adaptors and implemented our own adaptors. we have been approached by the stream base on the twitter adaptor and dow jones news wire and the other news feed providers and we are certainly open to the potential of looking at the types of feed although currently we are not focused on those. >> could the chatter on twitter be significant enough to move the stock. how many people would have to be

talking about a stock and how would you know that it's real as opposed to people just trying to get out there and trick people like you out there looking for chatter? >> sure. really our approach to trading is we are informationy this rhettic traders and i think for years people accepted that information is what moves markets and markets move because different people have different opinions about prices and different people have different reactions to news. what we do at face capital is we deploy processing and other techniques that have been common to try to separate what's information and what's noise. the type of chatter that will emanate from twitter and at this point i think it's too early to know. >> people are interested enough that they are willing to pay for it? >> it's an extension, but there is a lot of monways to tap in

and you can look at the one perk to your original question. that's not just tapping into one person. or like ceos, i'm on twitter, richard branson, the ceo of virgin atlantic, is on twitter. i was watching him last week, and he twittered about going to lunch with jimmy fallon one minute, and then he was talking about buying up $2 billion worth of planes. there's a whole range of information. so yeah, it's a good extension of the platform that just taps into a -- >> everyone's doing it right now, and they were doing facebook before that, myspace before that. how long are they going to be doing twitter? real quick. >> that's a great question. >> six months? >> no. a lot of people think it's a fad. but it's very prolific. there's a million tweets an hour going on in this thing. it's hard to imagine it going away. >> all right, guys, thanks so much for joining us. very interesting. we appreciate it. >> thank you. >> lance armstrong, borat, and darren rovell. need i say more? darren. >> lance might be from austin, texas, but if he wins the tour de france, he'll be the pride of kazakhstan. we'll explain, coming up. i promise you like. come back to "street signs."

so, katy kicked off trying to download the docs.wf which turned out to be the old-w docs. ther than the new-new docs. then bob dled in from home and his... g starts barking. so jen jumped in with her "two cents"... which katy missebecause she was buying shoes online. and then i hit mute. to talk timelis with my team. getting lo of dirty looks througe phone in the process - overal.. - a great call. - great call. yeah. inoducing a better way. lemore at cisco.com/newys [ dog barks ]

lance armstrong's team dominating the tour de france. through seven stages armstrong and his teammates are in second, third, and fourth place. all of this -- through all of this the nation of kazakhstan is very happy. our darren rovell is here to tell us why. this is a very confusing story. >> it's weird and strange. >> that's why we like it. >> anyone who looks at lance armstrong's jersey, you'll see that the united states postal service and the discovery logos you'reamiliar with, they're now go. thnew sponsor is backed by i sumruk kazakhna. that the holding compa for kazakhstan's assets and development fu. they've ponied up cash to hope that the 37-year-d armstrong, who's currently in thirdplace, wins his eigh tour de francrs now, if u take a look at these jerseys,ou'll see kazakh ms

corporation, which is e governmentwn mals and mining company. arastana the government owned airline is on the sleeves. and on the side of the jerseys that stands for the eurasian natural resources corporation. they also own kazmunaygas kazakhstan's gas coany, the railway,nd kazpos which is the national mail serve.a >> i have lot of questions. >> it's hard toigure out exactly howazakhstan is going ch in if armstrong finish with the yellow jery in a couple weeks. >> that was one of them. >> astana doesn't fly from fans ought capital city and if armstrong winds i'm pretty sure they'll be playing the a.m. anthem of the united states. at least it will be good for some publicity. you remember kazakhstan backed off their threat to sue sacha baron cohen for his portrayal of the country in "borat." it certainly made the nation a

household name. >> i've got a lot of questions. first of all, what do they hope to gain from this? >> i don't know. i'm not sure. >> and then my next question was lance armstrong is one of the most bankable athletes out there. >> why wasn't there someone else to step up? >> are they just paying him so obscenely much money that he chose this? or what is the deal? >> no, they're funding kind of went down for a bit. no. i don't know. it's weird. i can't even tell you. >> you have no answer? >> i have no answer. >> we're going to work on that. we'lbe right back after this. >> i'll work on it. >> okay. d luxury sedan. this is a history ofver 50,000 crash-tested cars... is is the world record f longevity and endurance. and one of theost technologically advanc automobiles on the plat. thiss the 9th generation e-css. this is mercedes-benz.

okay. before we go i wanted to show you this chart of crude oil because it has settled below 60 for the first time since mid may. $59 and change. the eia saying today demand is continuing to contract. also equities lower on the day, and you can see the dow there is down about 68 points. that really didn't help out crude oil as well, but interesting there, crude oil closing below 60 bucks today. thank you so much for watching "street signs." i'm melissa francis in today for erin burnett. "the closing bell" is coming up next with maria bartiromo. have a great weekend. >> announcer: this is cnbc.com news now. the university of california may furlough tens of thousands of workers in an attempt to save $184 million. uc president mark udoff is proposing the cuts to offset an expected 20% reduction in state funding. newscorp is denying allegations made in the uk's "guardian" newspaper about le