pattern x-ray vision. plus: this amazing gadget... called the telephone. i can call td ameritrade anytime and talk trades, strategies. anything. that's where the action is. td ameritrade. built by traders for traders. announcer: trade commission free for 30 days plus get $100 cash, when you open an account. all right, folks. welcome back to "the closing bell." looks like we're not going to keep that four-day winning streak alive here. the dow actually positive, but the s&p's not going to get it done as we count it down in the final few seconds of the day. but you know what, people here are focusing on the intermediate

picture, if you will. the five-day tally for the dow, the s&p, the nasdaq the best we've seen since the trough in the marketplace, the big rally from the middle of march. we're looking at gains of just about 7% for all the big indexes on the session.n. of course, today we're seeing the financials under pressure. if you take a look at the dow, it's almost split right down the middle. what is it up, 35 points right now? the bulk of that almost 30 points is coming from ibm alone. on the flip side both ge and bank of america, the worst two performing stocks in that index. but because of that weighting, their small weighting not really having that much of a drag on the dow. but if you look at the s&p 500 the strength is in the materials. some of the cyclicals getting a bid. again, we're seeing energy stocks, again, cyclical, getting that sort of a bid. but the industrials, the utilities, the financials very squishy right now. we've seen light volume, big moves, lots of earnings coming our way next week, and it's going to be a doozy.

and it is 4:00 on wall street. do y do you know where your money is? welcome back to "the closing bell." i'm maria bartiromo on the floor of the new york stock exchange. here's what we're following at the close this friday afternoon. a push higher in the final minutes of trading for the week. investors reacting all day to a mixed bag of earnings from some of corporate america's biggest names. that offset encouraging news out of the housing sector. new home sales hitting the highest level in seven months.s. oil continuing its trek higher tonight gaining nearly 6% for the week, closing above $63 a barrel. tonight take a look at how we finished the day on wall street for the day, for the week. the dow jones industrial average up 33 points. s&p close but no zbarks down a quarter point. 940 and change on the nasdaq q

composite eked out a move to the up side to the down of 1 1/2. 1886. matt nesto on the floor of the nyse. >> what an interesting day. but really as you said this fifth day interesting but it's also important in the sense of the big picture. as we just said the best five-day gain we've seen for these indexes since the trough in march. coming off of four consecutive hard weeks. but the big picture is that we did in a day what it took us four weeks to undo in terms of this bull market in recovery since the march low. so if we take a look at the day that was, it was super loaded overnight with ibm and google. we got our first crack at trading them today. mixed trade in the technology sector a result of those. and then this morning bing, bang, boom.m. ge, bank of america, and citigroup all of which the market has to digest and seem to get through with it. then within the swirl of it all we have, of course, the housing data that came out. that helped the home builders today. but net net when you take a look at the big picture in those markets as we just showed you we

really kind of slipped into neutral for the weekend. the big picture, again, great week, nobody's taking that away. earnings story. i don't think anybody out here that i've heard yet is willing to say wow, earnings season is just phenomenal. we've seen top line weakness from a number of big companies reporting. ibm and ge just to name two from today. but again, as we go forward, next week it's going to get increasingly difficult. the bar will probably get raised as earnings reports increase in number. over 150 companies reporting their results next week. so stepping back a little bit if we look at some of the movers in this market here today you're going to see on the five-day basis names like kamt one, for example. almost 30% higher. amex and citigroup both about 20% higher in the financials. even general electric with its 5% giveback today still going to pocket about a 9% gain on the week. can't lose sight of this. if you look at technology, of course, intel really got things going. ibm very strong today.

single-handedly keeping the dow positive. and then sandisk up 20% in the past five sessions as well. so no question a very strong and interesting week. but boy, we've got some tough sledding ahead of us. maria, no question about it. >> all right, matt, thanks very much. pretty good week if you're a bull, that's for sure. matt nesto, have a nice weekend. we'll see you a bit later. general electric, meanwhile, the parent of this network reported results today. ge earned $2.6 billion for the quarter. that was 26 cents a share in the second quarter. it was 3 cents ahead of expectations. take a look at the per share numbers. revenue, however, was down 17%. the company generated $39 billion in revenue. that was about $3 billion short of estimates. cnbc's senior correspondent scott cohn is at earnings central right now at the nerve center with more. scott? >> maria, general electric chairman jeff immelt said on a conference call this morning he's feeling good about the quarter and in particular the embattled ge capital segment even though its profits fell 80% from a year ago.

but it eked out a half billion dollar profit for the quarter and the company says it has made great strides in shrinking that capital division, which is something they've been working on in earnest since the start of the financial crisis. still, there is some skepticism reflected in the drop of the stock today. as matt said, they were up going into the profit report but a 6% drop in the stock today, that's not pretty. analysts have been asking if the company is reserving enough for future writedowns in the real estate market. the company said today it is 173% reserved, adding another 175 million to those reserves in the quarter. and what about the quality of these earnings? a lot of that profit came from cost cutting, cutting costs 14% or so last quarter alone. of course that's impressive, but investors generally prefer revenue growth and, again, revenue fell 17%. here are the results by segment for ge. only energy infrastructure managed to post an increase in profits. technology infrastructure fell 11%. and as you can see, the rest -- let's go to the president now. >> thank you very much, scott. we are indeed going to take you back live to the white house.

here's president obama. >> i know that there's a good deal of that going on right now when it comes to health care. so i wanted everybody to just step back for a moment and look at the unprecedented progress that we've already made on reform that will finally lower costs, guarantee coverage, and provide more choice. is over the last several weeks we have forged a level of consensus around health insurance reform that we've never seen before in this count country. in may we were able to bring together health care providers around an agreement to do their part to decrease the annual rate of health care growth by 1.5 percentage points annually, which will save us $2 trillion or more over the next decade and lower costs for all of us. a few weeks later we got the pharmaceutical industry to agree

to $80 billion in spending reductions over the next decade. reduction that's will make prescription is drugs more affordable for seniors. that's partly why the aarp has endorsed our efforts. last week we reached an agreement with hospitals to bring down costs by another $155 billion. and just this past week both the american nurses association and the american medical association, representing millions of nurses and doctors across the nation who know our health care system best, announced their support for what we're trying to do. in these past weeks we've also built consensus around specific reforms, on which there hasn't been consensus before. let me list some of those. and i want to particularly applaud the efforts of the committees in the house and the senate who've worked hard and long to make this progress. we're now at a point where most

everyone agrees we need to invest in preventive and wellness programs that can save us money and help lead healthier lives. we have an agreement on the need to simplify the insurance forms and paperwork that patients have to fill out every time they go to a hospital or see a doctor. we have an agreement on the need to reform our health insurance system so that if you lose your job, change your job, or start a small business you can still get affordable health insurance. pef an agreement on the need to prevent insurance companies from denying coverage to americans with preexisting medical conditions. and we have agreement on the need for a health insurance exchange. a marketplace where people can compare prices and quality and choose the health care plan that best suits their needs. so this is what health insurance reform will mean for the average american. it will mean lower costs, more choices, and coverage you can count on.

it will save you and your family money. you won't have to worry about being priced out of the market.. you won't have to worry about one illness leading to your family going into financial ruin. americans will have coverage that finally has stability and security. and americans who don't have health insurance will finally have affordable quality options. these are the areas where we agree right now. and this consensus has brought us closer to the goal of health insurance reform than ever before. now we've got to get over the finish line.e. and part of this process is figuring out how to pay for it. i've said that health insurance reform cannot add to our deficit over the next decade.. and i mean it. let me repeat. health insurance reform cannot add to our deficit over the next decade, and i mean it. already congress has embraced

our proposal to cut hundreds of billions of dollars in unnecessary spending and unwarranted giveaways to insurance companies in medicare and medicaid. so we actually believe that about 2/3 of the costs of reforming health care could be achieved through these savings alone. without any new revenue. of course that still leaves one third of the costs in order for us to cover all americans that we're still going to have to find a way to pay for. and the key committees in congress are working diligently with the white house to see if we can come up with an agreement on that remaining 1/3. the bill i sign will also include my commitment and the commitment of congress to slow the growth of health care costs over the long run. this is a separate issue. and i just want to be clear. there's an issue of how do we pay for health care reform immediately in a way that's deficit neutral, but how do we

also bend the cost curve so that we're not seeing huge health care inflation over the long term that would not only make any health care reform package more expensive 15, 20 years out but would also make sure that people who have nothing to do with the government programs like medicare and medicaid, how do we make sure that their costs are under control as well? i realize there's going to be a lot of debate and disagreement on how best to achieve these long-term savings. our proposal would change incentives so that providers will give patients the best care, not just the most expensive care, which will mean big savings over time. this is what we mean when we say we need delivery system reform. i've proposed to congress, and i am actually confident that they may adopt these proposals, that independent -- an independent

group of doctors and medical experts will oversee long-term cost savings measures. every year there's a new report that details how much waste and inefficiency there is in medicare, how best practices are not always used, and how many billions of dollars could be saved. ununately, this report ends up sitting on a shelf.f. and what we want to do is force congress to make sure they are acting on these recommendations to bend the cost curve each and every year so that we're constantly adjusting and making changes that will reduce costs for families and for taxpayers. we need an independent group that is empowered to make these changes. and that's something that we've proposed. i'm confident that if we work with the foremost experts in the field we can find a way to eliminate waste, slow the growth of health care costs, and

provide families more security in the long term. now, i realize that the last few miles of any race are the hardest to run. but i have to say now is not the time to slow down. and now is certainly not the time to lose heart. make no mistake. if we step back from this challenge at this moment, we are consigning our children to a future of skyrocketing premiums and crushing deficits. there's no argument about that. if we don't achieve health care reform, we cannot control the costs of medicare and medicaid, and we cannot control our long-term debt and our long-term deficits. that's not in dispute. so we're going to have to get this done. if we don't get health care reform done now, then no one's health insurance is going to be secure because you're going to continue to see premiums going

up at astronomical rates, out-of-pocket costs going up at astronomical rates, and people who lose their jobs or have a pre-existing medical condition or changing their jobs, finding themselves in a situation where they cannot get health care. and that's not a future that i accept for the united states of america. and that's why those who are betting against this happening this year are badly mistaken. we are going to get this done.. we are reform health care. it will happen this year. i believe that members of congress are prepared to work as hard as it will take to make this happen. and i am grateful for the work that they've already done. i'm confident we're going to be putting in a lot more hours. there are going to be a lot more sleepless nights. but eventually, this is going to happen. thank you very much. >> mr. president, why not push back the deadline -- >> no questions.

doesn't look like the president will take questions. that was president obama talking about health care reform, talking about extraordinary steps, progress that has been taken so far. we will get a financial health check when we come right back after this short break. we'll break down today's earnings from bank of america and citigroup. what they say about the future of the banking sector. and we'll get into health care. clark winter with me. stay with us. has the fastest see in the history of professional tennis. so i've come to this court to challenge his speed. ...on the internet. i'll be using the 3g at&t laptopconnect card. he won't so i can book travel plans faster, check my account balances faster. all on the go. i'm bill kurtis and i'm faster than andy roddick. (announcer) "switch to the nations fastest 3g network" "and get the at&t laptopconnect card for free".

welcome back. after a strong week for the markets i'm joined right now to talk about investing by clark winter. he's chief investment officer at sk capital partners. clark, always great to see you. >> nice to be here. >> let me get your thoughts first on what we just heard out of the president on his health care reform. obviously something's going to happen here to really make change. >> what did we see in the last decade? an awful lot of businesses cover themselves up with simple financial engineering. now we've seen businesses like telephony, advertising and music go from dysfunctional to functional by virtue of new entree. looks like aught motives are getting around to building great cars. now we've got health care. we've gone from an dysfunctional area where we have glopg improvement in science not one hand and dysfunctional

provisioning. i think we're going to come out of it with a basic health care system for everybody and a much better service for those who can and will afford to buy more. >> what do you do from an investment standpoint? is there something i need to be focused on in this health care reform as an investor? >> i think right now it's a little early to make ation rahhal decision. even if you have a good idea.. i would be very alert and say who's going find better faster cheaper easier cleaner service across the board and that's what you have to look for i wouldn't dare pick the winner. too much ahead of us. >> too much ahead. we've got to get the senate version and figure out where this reform goes. and you know, they say they want to get this done by august recess. it sounds very aggressive. to think about that. let me ask you about the landscape for investing here. we are right now in the thick of earnings season. we have so many numbers out this week. goldman, intel, ge, bank of america, citi, google.. what are your thoughts on what we've seen so far? >> what do they all have in common, the ones coming out with great numbers? and i think it's the shift at the top from management to leadership. management was very good at

defining things far to the right of the decimal point in excel. leaders have to define new tasks. jamie dimon has to be applauded for taking an enterprise and re-establishing its place in the marketplace and leading them on to a new task. goldman has done a same thing. they've redefined the task.. and the losers are stale with the old garngs the old model. if there's a way to describe it in the old model there were a lot of tools that people are using for so long they began to think there were answers.s. as the world came unglued they began to realize they were tools, not answers. >> but there's a fundamental way to look at things and then there's the valuation. you've got a big move in the market this week. a lot of momentum on the up side. do i want to be committing new money to this market here? >> paulson's interview here. if he'd not done something things would have gotten a whole lot worse. i lived through the crisis in mexico in the early '80s. things got bad, then worse, then really bad and a decade was lost. likewise in france. in japan two decades were lost to the equity market. i think what we're doing is actually identifying these things a lot faster and dealing with them. creative destruction model. and now we're going to move on. and what we see this week is money will follow leaders and

would rather go back to work. so perhaps at the top of the pyramid the question is how do we get people to take advantage of really cheap money and put it to work to create jobs to take advantage of opportunity in if japan they didn't do it for two decades. i think we're going to get through this faster than most people realize. >> it sounds like you want to be buying the leadership.. you want to be buying the quality names in this market. >> in my case i'm interested in what we're doing to buy the major companies in specialty materials and chemicals that are solid enterprise that's are temporarily -- the walled city is waiting to be retaken. waiting to be made more functional again. and you can walk across all kinds of enterprises. look at the erie canal and railroad and trains. what have they done? they made the basic aspects of trade and commerce, , communication, entertainment, ever more functional and cheaper. and we're at a moment where we're shifting from financial as a way to do it to productivity gains. i think that's what's common through all these companies. >> you made a good point with regard to chemicals because there is that inflation trade out there. should i be looking at that inflation trade, copper, iron ore, steel, you know, gold, oil,

et cetera as you say, chemicals in terms of seeing new demands or the economies of the world eventually going to get back to growth and buying all this stuff, or are the valuations ahead of themselves? >> you ask the question are the economies of the world. i think the rest of the world is going to get back to growth very, very quickly. we're going to slow down here as we try to digest all the bad food we've eaten the last few years. but look what the chinese are doing. they're buying those materials. they're not selling for dollars and using the dollars to buy materials. they're trading straight. they're issuing trade payables in their local currency. they're saying they want to own the assets not a currency that will allow them to buy the assets. obviously have to get in front of it. the world is going to wake up and put money right back to work. >> and you want to put money around the world? >> absolutely. >> not just the u.s. >> the u.s. is going to have to go through some indigestion but the world is out there financing opportunity and we're still stuck in fing entitle. . who do you want to back with your money, somebody who's going to go to work or somebody who's going to stop working?

>> good talking to you. clark winter, chief investment officer sk capital partners. we'll take a break. off to earning central we'll go. we'll break down today's big pair of financial results from b of a and citi.

welcome back. a pair of financial titans

reporting results today. citigroup surprising the street with a profit of $4.3 billion. on a per share basis the bank earned 49 cents a share. analysts were expecting a loss of just over a billion dollars or 37 cents a share. keep in mind the results were lifted by a $6.7 billion after-tax gain related to the sale of smith barney to morgan stanley. when you exclude that gain, the company actually lost $2.4 billion. also bank of america reported earnings of 33 cents a share. that was a profit of $3.25 billion. a nickel ahead of analysts' expectations. cnbc's mary thompson at earnings central at nerve central with the latest. >> gains on sales of -- or excuse me. the sales of 9.1 billion on the merchant processing business and the stake in china construction bank. those sales posted -- resulted in a gain of 9.1 billion for bankamerica. now, these gains along with strong performances in trading

and investment banking helped both banks beat the street. these profits also meant billions in loan losses and the billions set aside by both for loan loss reserves in the quarter. on the conference call both companies spoke about expectations for higher chargeoffs on non-performing loans. but ceos of both banks also offered some hope about the pace of those losses in their consumer portfolios. here's what citi ceo vikram pandit and bank of america ceo ken lewis said on their conference calls. >> based on everything we see, it seems as though the rate of growth in these consumer losses may be moderating. >> at this point i would say consumer chargeoffs may be close to peaking in dollar terms around year end, although we believe they will stay elevated post the peak. >> now, for bank of america that means it will continue to add to reserves through the end of the year. and while there are signs of improvement, lewis said that profitability is going to be tough in the second half of this year as bankruptcy filings increase and home prices continue to fall. as for repaying the tarp funds lent by the government, lewis

says the bank is in talks with the government about this. bank of america is expecting it will be allowed to pay back all of the 45 billion it owes at one time. also on the hook to the government for about 45 billion, citi won't be repaying those tarp funds anytime soon. so it did offer some upbeat comments.. pandit saying the first part of the credit cycle, meaning writedowns on troubled assets, appears to be behind it. and while it's dealing with the second phase of that cycle, that being weakness in the consumer business, the bank says it's taken steps to protect itself from the third-part write deteriorating commercial real estate market. it feels it's well prepared for that. maria, back to you.. >> thanks very much. overall a positive set of earnings from the major banks. should you be puttinger money to work in this sector? joining me now is besse graysteg managing director and large cap bank analyst with morgan stanley. nice to have you on the program. >> thank you. appreciate it. >> what do you think? are you a buyer here or no? >> we are. we're overweight large cap bank group. and we do think that people with a 12 to 18-month time horizon should be buying bank stocks here. >> why? >> basically, we're in the middle of the transition phase

of the economy, transition phase of bank earnings. as we work through this, as joblessness increases at a decelerating pace, finally peaks out and starts to come down, we're going to see losses start declining in the bank earnings. and what that's going to do, obviously,size losses go down, earnings go up, your multiple's going to expand. we think these stocks are a double. and with bac we have a $32 price target. it's our top pick. >> so a double from here even though the financials as a group are up some 80% or so from the bottom on march 9th. >> that's right. look at the valuation of these stocks. large cap banks are trading at half book. 0.5 times book. on average for the group. there are some guys who -- but the median is half. and that suggests that the current stock prices are assuminging that the banks will not earn their cost of capital. in fact, they'll earn less than their cost of capital in perpetuity. we don't believe that.. we think this is a cycle. it might be longer.. it might be tougher.

but we do think we'll get through it. and as we, do the stocks should rally. >> are you not worried about commercial real estate? some people feel that commercial real estate is an accident waiting to happen and that's going to have ripple effects throughout financial services.s. >> so let's just be clear. i worry about everything, including commercial real estate.. but i do think that commercial real estate is going to be the last asset class to really have the full force of this recession hit it. by that time you should already have the consumer improving. and when i say improving, less bad is good for this group. >> okay. and let me ask you about the non-banks, or that shadow banking sector. do you expect that we are going to see those non-banks pop up again, or has this industry changed for some time to come? >> well, when we think about the shadow banking sector, we're talking about not just non-banks but also the capital markets, the direct investor to corporate through the capital market, bond

issuanceance or stock issuance, et cetera. so that entire thing. banks actually supply to the u.s. economy only about 35% of all the capital that's used by the u.s. economy. and the key point here is that i don't think the other 65% is going to completely go away. it could shrink a little bit. we get to banks actually being -- extending roughly 40% or so into the economy. yes, possible for banks to take share. but shadow banks is not going away. >> betsy, a lot of people still feel that the smaller and mid-cap companies out there are not getting access to credit. what do you feel it's going to take to get credit moving again? >> i think we need to see confidence build up. and i would say as we're discussing this obviously all these banks are lending, as you can see in their press releases. they talk about the billions and billions, hundreds of billions of dollars that they're making in new loans. loans are going out there. but relative to peak of cycle, credit standards have tightened

up. and i think that part of the transition phase of what we're going through right now. >> we'll leave it there. betsy, nice to have you on the program. we appreciate it. betsy graseck, managing director large cap bafrnlgz, morgan stanley. president obama just finished up his speech on health care reform.. we're focusing on some taxing issues that could affect wall street and main street. the cost of health care overhaul. it could lead to extraordinary tax moves on the up side. we'll look at how that may affect the jobs market, next. >> announcer: here's a look at some of today's winners and losers. ♪ ♪

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welcome back. president obama says he's convinced a major health care plan will pass this year. this after two house committees voted in favor of the plan earlier today. but buried in the legislation is the millionaire tax, a way to fund health care by taxing as

much as 5 1/2% of income for the nation's wealthiest household. critics worry about the plan's hidden toll. how hidden taxes could pressure business growth. joining me now to discuss all these issues is greg valliere, chief policy strategist with soleil securities. and tony fratto, former white house deputy secretary under president george w. bush. both cnbc contributors. gentlemen, great to see you as always. >> hi, maria. >> hello. greg, let me kick it off with you. you heard the president speaking a few moments ago and something struck you. you said that's newsworthy, this is very important. tell us what you heard. >> to put it in context, maria, they're in trouble. despite what the president said, they're in trouble because they can't figure out how to pay for it. so i think he's changed his spin. the spin now is we only have to take one third in taxes, the other two thirds is going to be spending cuts. i think that's an indication that he sees the polls, that people are worried that it would be 50-50 or more in higher taxes. >> well, the taxes is significant. i mean, whether you make $250,000 for your household or

$1 million, you're still being taxed between 1, 2, 3, or 5 1/2%.%. >> absolutely. and in an economy that's still pretty fragile last time i checked, do you want to have a big tax hike? and these folks at the white house, rahm emanuel and others, as tony knows, at the white house, they read the polls, and i think the polls are showing that a big tax hike is radioactive. >> tony, what do you think? >> yeah, i don't think there's any question about that. i think they're seeing the reaction from the small business community. the proposal that's are out there on capitol hill right now are, you know, really slamming small businesses. about half of all small businesses who would be -- or half of the taxpayers who would be hit by this tax are small businesses who file as subchapter s corporations. so you know, they're going to hear from small businesses, and that's nothing that members of congress want to hear when they go home, that these guys who were out there trying to create jobs aren't going to be able to do that. >> so you say, tony, it's a sham.

explain why. >> well, look, they're not going to get the revenues that they're hoping for. we're talking about what dul elmendorf said yesterday first of all just about the cost of this, doug elmendorf at the cbo didn't say we're not going to see as big a savings as the administration says. he said the exact opposite.. he said we're going to see increased costs. and now they're out trying to make predictions on the kind of revenue they're going to get. and we know it's about people in very high income brackets that if you do raise the rate on them they're in a position to do tax avoidance schemes, including not earning as much money. so we know they can do this. the projections on revenue just aren't real. >> yeah, i've got to figure tony is probably salivating.. someone should check your necktie, tony, to see if you're drooling. all the republicans are so ecstatic. what a gift from god to have such a radioactive plan that's not going to make the savings -- >> well, it's not such a gift because at some point taxes are

going to go up, regardless. money's got to come from somewhere. >> but not the rangel plan. >> it only has to come from somewhere in a big way if the democrats are insistent on this idea of a public option. and i think the public option is a non-starter for republicans. i don't think they're going to be able to get that through the senate. and that is where the -- that's a very big ticket item here that they're going to have to come up with revenue to pay for. >> in the worst case scenario for the democrats -- i like obama. and as you could tell he's worried about this. is that only the house bill passes before the august recess and it just sits out there for a whole month attracting fire. the more moderate senate bill probably won't make it before the break. >> i think that's right. >> yesterday said buck up, we are getting this done, we want it done by the august recess. >> yeah, saying it isn't enough to do it. you really have to get in there in the nitty-gritty on the legislative language. and it really just isn't getting anywhere. and really i cannot emphasize

just how important, you know, elmendorf's testimony was yesterday and his judgment as the unofficial -- sorry, the official non-partisan arbiter of the cost of this program really sent shockwaves to, you know, both -- through both ends of pennsylvania avenue. and i think you saw that on the president this afternoon. it was a very defensive thing to have to come out on a friday afternoon and make that statement.t. >> actually, it looked like president obama was a little ticked off there during that press conference, to be honest. >> i bet there are a lot of guys ticked off, yeah. >> i think they still get something in late november, but they're going to have to redefine success downward. >> they said they're going to go back to the drawing board. i think that's frup and i think when they go into the room where that drawing board is they should invite some republicans in and see me can't do this in a bipartisan way, and i think maybe they might be able to come one something that has sound reform. >> and maybe invite some business people too. >> absolutely. >> let's talk about the ripple effects of this, guys.

you've got a tax like this certainly impacting the highest earners, but a lot of people feel that it will also impact jobs, job creation and really impact workers on wall street. so what other ripple effects that perhaps we're not looking at at face value?e? >> i don't think there's any question about it. look, anytime you make, you know, the cost of hiring someone more expensive, you're going to hire less of them. i mean, this isn't, you know -- >> not rocket science. >> yeah, it's not rocket science. you don't need calculus for this. it's pretty simple. if you make people more expensive to hire, businesses will hire fewer of them and they'll find other ways to be more productive. or they will do less business activity. and that's pretty clear. >> and the one thing we know for sure, maria, on taxes and that the top rate of 35 is going to 39.6 at the end of next year. that's pretty certain. so do you want to add a lot more on top of that? to me that's the biggest head wind out there for economic growth. >> and when you talk about state and the other taxes, you're

talking about the highest earners giving 60% of their income to the government. >> absolutely. >> major reason why anybody talking about a v-shaped recovery, some really dramatic bounce in the recovery, that's a tough case to make with this tax story. >> you mentioned states. and states like new york, that income tax is sky-high. >> absolutely. gentlemen, thank you. we appreciate it. great conversation. thanks for spelling it all out and making it accessible for us. up next, we'll break down today's positive numbers on the housing market. we'll also talk about comments from larry summers. i'm jim goldman in the silicon valley. this is "tech check." >> it's one small step for man -- >> and one giant leap for wireless communications. the immortal words spoken by neil armstrong spoken into a headset made by plantronnics in santa cruz, california, now one of the key leaders in wireless

and bluetooth headsets. monday's the 40th anniversary of man's mission to the moon. brain fitness goes mobile. posit science now take its mind-sharpening software and applying it to drivers. aaa giving its seal of approval. a kind of video game that helps older drivers improve reaction times. and bill gates takes on hurricanes? he's filed five patent applications that propose slowing down hurricanes by pumping cold deep ocean water in their paths from barges. gates and hurricanes? we'll save the jokes for another time. that's your "tech check." i'm jim goldman in the silicon valley. could someone toss me

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welcome back. we have a special surprise coming up. reggie jackson is with us. we'll tell you why in a minute. taking a look first, though, at some of the day's business headlines. new housing starts rising to the highest level in seven months. construction of new homes jumping by 3.6% to 582,000 in the month of june. better than the 530,000 economists were looking for. and it marks the second straight monthly gain. the number of building permits also moving higher than expected in june. rising almost 9%. building permits are seen as a good indicator of future construction activity. meanwhile the news to the housing sector sent the price of crude oil higher.r. oil today tack on 2 1/2% to

finish the trading session at 63.56 a barrel. crude oil now up almost 6% for the week on the back of today's gains. and national economic council director larry summers saying g that the u.s. economy has come "a substantial distance back from the abyss."" in a speech on friday summers did say, though, that the economy needs to become more focused on exports and less dependent on consumer spending. warning that the u.s. will continue to feel the effects of the crisis. >> for quite some time the united states will be living with the consequences of an overleveraged economy.y. the common desire of households, businesses, and financial institutions to reduce their borrowing and improve their balance sheets will act as a drag on spending and growth. >> coming up, is the sports auction market feeling the effects of the slowing economy? we will talk about that with steiner sports marketing ceo brandon steiner. and new york yankee great reggie jackson. stay with us.

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♪ welcome back. as the house that ruth built,

new york's yankee stadium, continues to be picked apart in demolition, the yankees are helpingapart in demolition. the yankees are helping fans preserve the memories. in partnership with sports marketing everything from seats like the ones we're sitting on to sod and signs are being auctioned to the public. joining me now is the man selling those memories and the man who made some of them and certainly raised the value of them. and the new york yankees great, reggie jackson. great to have you on the program. >> you have a hanky for me? >> are you going to be tearing up? >> they're tearing the place down. it's sad. there's a wrecking ball outside now. >> it's coming to a point where you go to a game in about two weeks and you'll see a portion of the stadium gone. >> and you've been collecting -- i mean, how many seats did you buy, reggie? >> i bought 30 sets unless i can talk brandon out of some more because every time i talk to somebody they want some and if i

wind up with too many i'll just build a grandstand in my back yard. >> what are you going to do with these seats? >> i'll pretend i'm at the ballpark, you know? >> and so you're giving them to friends, selling them to friends? what are you doing?g? >> i have a bunch of friends that want some seats but i won't sell them in the open market or anything. i want them myself. >> of course. >> i want the letters on top of the stadium.m. i don't know why. >> yankee stadium? >> yes. the great big blue yankee stadium. i have a friend who has a son named jackson. he wanted me to get them and he told me they weren't important until you hit the three homers so i swallowed that. right? >> that's fantastic. >> i talked to brandon and now i own them. i get a little sad. >> in the economic environment like the one we are in are you still seeing that kind of demand for items, memorabilia like this, like yankee stadium?

>> mainly because you know it's the greatest stadium of all time. so 15, 20 years, you invest in a stock, you want it in the long run to go up. i don't think there's any doubt when you talk about these items they're priceless. >> you're still seeing people want to put money to work in these collectibles. i mean, the yankees. >> we've sold 50,000 units of dirt. >> i'm going to an auction in a week or ten days and bob gibson is selling some stuff. i want to buy something from bob gibson. i don't care if it's worth more than what i paid for it. i want to buy something. i have an autographed ball from willy mays. i have one from jackie robinson. >> how about one from you? >> you go get one from me. but there are some things i want and if i can afford it i want it because the memories are what i want. i want to look out there and

star in my own movie. >> will you show us what we've got here? >> brandon can do that. >> well, we lifted these right up off the last game. it's freeze dried.. we came up with this new process for your desk. another size is essential. if you want a bigger size. this is one of about -- >> how much does this go for? >> about $80. it's a nice little gift. we have 20 or 30 different dirt -- we wanted something for everyone. it's nice to have the seats. they're $1500 per pair. >> you could have collected the sand here. >> a lot of players -- this is the actual dirt from the last game of the yankee stadium on the pitcher's mound. then we have these, buy them signed or unsigned and there are probably 18 versions of this seat back from the stadium. hang it on your wall or whatever. >> i would actually want to do what reggie did and have a

couple seats in my home. that's the memory. >> forget the couch and the furniture. >> exactly.y. i want my seat from the yankee stadium. >> it's a lot of fun. the auction is a week from sunday. we're doing two auctions. there's all the lockers, the foul poles, you know, the last lineup card. >> my locker was used by lou gehrig. it's an undersized locker and has not been used. one of the guys that does a lot of our advanced scouting and puts all of our data together with the film and stuff, he used it for about ten or 12 years. now i heard it was going to be sold and i said, hey. i want that. i said all right. i'll buy it. >> so you bought your locker. you bought the yankee stadium letters. >> the letters. >> and you bought 30 sets of seats. >> 30 sets of seats. >> if you want to bid on like a-rod's locker or mariano's locker we're doing that in a couple weeks. it's funny because immediately

when you announce the sale, you say, brandon, no one is using this locker. >> that's what i said. >> it's my locker. >> but, you know, if i could afford it i'll buy mariano's locker. i'll buy derek's locker. >> i can understand. >> derek we'll have a conversation with. derek has to be derek. we have to make sure that -- i think derek may be taking his locker. >> this is point of all of this. you've spent such an important time in your career, reggie, at yankee stadium. here we are. tell us how you're feeling. this has to be incredibly emotional as demolition we hear is going to begin in a couple of weeks. >> you know, for things like that i'll plan on not being here. because i don't really want to see that happen.. but i know the last day i went out in center field and i sat out there, hung out with val kilmer who i'm a big fan of, doc holliday and all that. i sat out in center field and

got teary-eyed. i didn't stop it. i just let the tears come down and i took pictures. i went back in november and took pictures of the center field. i sat in the upper deck. i sat in the lower deck. i sat with the fans. i ate popcorn. >> i don't know if you notice, but the first pitch at yankee stadium in the beginning of the season, last june, you know, change-up, right down the line. thank you very much. reggie jackson, brandon steiner, glad to have you on the program. we'll take a break and be right back. you have questions. who can give you the financial advice you need? where will you find the stability and resources to keep you ahead of this rapidly evolving world? these are tough questions. that's why we brought together two of the most powerful names in the industry. introducing morgan stanley smith barney. here to rethink wealth management. here to answer... your questions. morgan stanley smith barney.

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