acquire the assets of merrill lynch this fall and he would have lewis fired if the deal did not go through. he said it was an extraordinary moment for the markets. he behaved appropriately in the matter. >> convicted swindler bernard madoff arrived at a federal prison in butner, north carolina, where he'll likely spend the rest of his life. he was escorted from a bus in leg irons. madoff was sentenced to 150 years in jail after bilking investors out of as much as $60 billion. it's been an incredibly busy week between earnings week and the fed minutes. here to help us sort out what's happened, david kelly. thanks for being with us. we're seeing a lot of companies beat earnings expectations this week. particularly in the financial services sector. jpmorgan included. a lot of them doing so by cutting costs. not necessarily by revenue growth. should we be as optimistic as the market has been this week? >> i think the market does -- first of all, the market is still very low in terms of

valuation measures. you believe the economy is ever going to recover, then the market has to go a lot higher. even if you take a broad look at earnings, we're seeing revenues beating expectations and rising quarter over quarter. if you look at the market overall. so i think companies with more exposure to the rest of the world, exposure to east asia, are seeing revenue gains. overall, i'm pleased with the earnings reports this week. >> based on what we've seen so far, where is the growth in this economy? >> i think the first shoots here are in technology. technology companies are benefiting from am the fact east asia is already rebounding. we're seeing a very strong rebound in china, in korea, even in japan. we just had a terrible recession. a rebound in growth. that's helping a lot of the technology companies. even on financial services we are seeing companies reporting good numbers. companies are benefiting from the fact the federal reserve is keeping short rates very low. that's reducing the cost of funding. so they can make good spreads on

their normal bread and butter business. we're seeing improvement there, too. >> as far as the broad economy then, where would you say we are. the federal reserve released those minutes from last week. the last meeting, and they revised the gdp projections upward but also said that unemployment will rise as well. are we in a jobless recovery? >> i don't think in the end it will be a jobless recovery. but i think it's important to realize that economists talk about recessions starting at the peak and ending at the trough. i think we're just turning that corner at the trough right now. so still feels very bad. but in the third quarter we expect to see positive gdp growth and we'll begin to see unemployment come down early next year. still a few more months of rising unemployment ahead of us. pretty good market activity. positive earnings news sent stocks sharply higher. where do you think we go from here? do i want to be putting money to work in equities? >> particularly if you are a long-term investor. if you believe the economy is going to gradually pull itself

together like it did in the 1980s and '90s. if you believe in the long expansion. the stock market is up 40% from its low but would still have to go up 65% from here just to get back to its old eye high. i think it's cape afbl doing that in an economy we see a recovering economy and higher earnings. i think there's still a lot of room to grow here in the stock market. >> what about what we saw this week as far as cit group, not to be confirmed with citi group. a major lender to small and mid cap businesses in america teetering here. could go chapter 11. it's, obviously in financial trouble. the government is not going to rescue cit. what does that mean for the economy? is that a big blow to small and mid cap businesses or are there other companies that would pick up lending? >> we can't be sure about that. here's the other side of the thing. i think if everything goes okay, we will gradually move into a long expansion. but there are plenty of things to worry about. one of the problems still is the

availability of credit to small businesses to consumers, anybody who doesn't have sort of a aaa rated credit rating, i think is going to have some problem here's. that will slow the recovery. so it's just a real battle between normal cyclical forces pushing us back into expansion and things like cit which will, you know, restrict credit somewhat. and the real question is can the rest of the financial industry move into try and fill that gap. >> if cit goes awalker that's the major lender to the apparel industry. their biggest client is the garment center. you wonder if we'll see that ripple into a number of other bankruptcies, particularly in retail. >> obviously there will be some effect. it's hard to know beforehand. obviously, this is not a lehman brothers situation like we had last fall. i think the government is right in saying there isn't thatsome attic risk to the financial system but we don't know how easy it will be for all of these borrowers to get funding elsewhere. and that is a real risk. >> do you think the stock market

is higher than where it is now at the end of the year? >> i think it probably is. i think it should be substantially higher, in fact, because a lot of people are very skeptical in this idea of recovery. if you look at housing starts which came out this week, they are up 18% on single family housing starts in the second quarter relative to the first quarter. we're seeing a rebound in global manufacturing. most of the job losses we've seen have been in manufacturing and construction. if those industries begin to pull themselves together, we will see a much healthier economy in the second half of the year. i've got to believe that will be reflected somewhat in the stock market. >> great to have you on the program. we appreciate your insights. david kelly. up next on the "wall street journal report." major health care reform is in congress' sights. we'll talk about that with former vermont governor howard dean. then magical movies mean business at the box office. is the summer movie season heating up? take a look at how the stock market ended the week. (announcer) this is nine generations

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make no mistake. the status quo on health care is not an option for the united states of america. it's threatening financial stability of families, of businesses and of government. it's unsustainable, and it has to change. >> congress moved forward this week on legislation to reform the american health care system and cover some of the 50 million people who are currently uninsured. the scope of the proposed change is the most dramatic since the formation of medicare 40 years ago. it could carry a price tag of more than $1 trillion. joining me now is former democratic national chairman and physician howard dean, author of "howard dean's prescription for real health care reform." governor dean, great to have you on the program. >> thanks for having me.

>> we're expecting bills from congress that will require americans to obtain insurance, offer subsidies for those who cannot afford it and require employers to provide coverage or pay a fee. broadly speaking is this enough to actually stem the growth in health care costs, in addition to getting those people in? >> you left out the most important part. they have an option for people that choose a public plan if they want to. the option to choose the public plan is all the difference between real reform and not real reform. allowing the public to essentially get in the medicare before they are 65 means that insurance companies are now going to have to start to dial back on costs, and that is absolutely critical to this whole thing. >> that is why initially we heard some noise from the ama, the american medical association. now we just talked a moment ago that this is dramatic. they are actually endorse -- >> this is interesting. the most under reported story of the week in terms of -- and it's a big deal that the house came out with their committees came out with their bill. the senate health and education

and labor pension committee came out with their bill. it's a very conservative group, the ama, has endorsed the house version which requires the public option. that's extraordinary and it's very smart on the part of this conservative group of doctors because it -- what they got something in exchange. what they got in exchange was adequate medical reimbursement for primary care physicians. >> of course, there's also pushback as far as how to pay for this. >> right. the overhaul could cost upwards of a trillion dollars. we know that. it would have to be paid for. the president reportedly opposed the taxing of employer-provided benefits in favor of shifting that burden to the wealthiest americans in tax surcharges. >> first of all, when they say there's a lot of things i think about this bill, opinions i have about the bill. but i vowed i would focus on one thing only and that's the public option because that's all the difference between real reform or just throwing money out the window. i'm not going to be crit calf other ways of financing the bill. my own preference is a carbon tax, which i talked about in the

book. if you pay for this by increasing the gas tax ten cents, it's regressive, but the people who have -- pay the most in gas taxes also have the least likelihood of having insurance and most people would gladly pay 10 cents in gas tax if they had an insurance plan that could never be taken away and would follow them wherever they went whether they had a job or not. >> what's on the table right now is proposed taxes. 1% for couples earning $350,000 to $500,000. singles, $280,000 to $400,000. then 1.5% to couples earning $500,000 to $1 million. singles between $400,000 to $800,000. then income beyond $1 million, singles beyond $800,000, you are paying 5.4%. do you think that's going to fly? >> it might. the american people support it in the polls. and i don't -- again, i'm not going to fight with congress about how they want to fund this. there's going to be lots of

changes over the years to this. the critical thing is can we make the jump to real reform where we put the american consumer in the driver's seat for the first time or will we have more of the same. you make the initial reform jump, then you can start controlling costs and arguing about how to pay for it. >> in your book you contain a gas and carbon tax can raise substantial revenue to pay for that. what kind of reception are you getting? >> i'm not pushing it. i think with the hassle over cap and trade it may not fly. on the other hand, those argue that -- i'm not necessarily one of them -- that a carbon tax is much superior to cap and trade. i think you could do better with both cap and trade and a carbon tax. but we are so under taxed in the area of fuel and carbon compared to europe. and, yet, this is a tax that's easy to collect. it has a great environmental consequences unlike the oil industry. it claims it's not a job killer. in europe their economy is a little stronger than ours and

they have much higher carbon taxes, and you can pay for health care reform without raising income taxes or any other kind of taxes if you use it. again, i'm throwing this out because in the best of all possible worlds, it's not the focus of the book. the focus of the book is what can you do to fix our broken health care system, which the private sector has failed to run right. >> of course, for months, the white house has been pushing for true bipartisan support for health care legislation. we're still at that moment, though, in time where we're wondering if -- >> it's not going to happen. it's not going to happen. the republicans have no interest in passing this bill. they think it's bad for president obama if he doesn't get health care done and that's their mantra. they are more interested in what they single good for the republican party than they are what's good for the country right now. >> we know that preventive care is the best way to cut the curve in terms of rising health care costs. give us your sense of what can be done realistically to get the cost of health care down. >> you can regulate the insurance industry like they regulate a utility, which is not

going to happen and is not on the table. or have a private sector -- i mean a public sector which is fully integrated so whatever money you save flows through to the bottom line. that doesn't happen in the private sector. there's no integration. whatever you invest in prevention, there's no savings for the people who make the investment. >> what about policies on the table that actually help people make the right choices so that we can prevent some of these diseases that we are put -- spending so much money on. obesity, diabetes, you know, these are the types of things that are preventable but we need policies in place so that people can make better healthy choices. >> nothing works in life without financial incentives to make them work. in a more closed, real integrated system, which you have with the public option, you can begin to get people to change their behavior early by giving them financial incentives. simple things. if you smoke you have to pay more for health insurance. if you -- if we put a monitoring system on people with chronic medical conditions which costs us enormous amounts of money, we

can find out way before they need to go to the hospital if they are getting out of balance. there's no incentive. because the people that have to pay for prevention don't realize the savings on the other end. fully integrated insurance system like medicare could benefit. a fully integrated system like kaiser could benefit from that. the system we have now doesn't benefit from that. >> very smart. howard dean, thanks for your insights. we so appreciate it. governor howard dean joining us here in the studio. we'll see you soon. up next, did a boy wizard make movie studio magic on a big opening day. what it means for this summer's box office receipts. >> she's interested in you because she thinks you're the chosen one. the world'suncer) leading companies thrive on collaboration

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a boy wizard, an austrian supermodel and alien robots are battling over consumer dollars at movie theaters. "harry potter and the half-blood prince" earned $80 million in two days. my next guest is paul dergarabedian. great to have you on the program. >> great to be here. >> the sixth harry potter film opened wednesday. warner brothers delayed the planned release from last november to this summer to try and boost revenue. how did that pay off? >> i think it totally paid off. they had midnight screenings wednesday, 12:01 that earned $22.2 million. just in midnights.

that's a record. that beat the "dark knight's" midnight screenings. interestingly enough, this is the same week that warners opened "the dark knight" last year to such great success. this is a magic, no pun intended, a maj date for warner brothers and harry potter. 2001 these films started out. j.k. rowling, the books. i personally wasn't a huge fan of the earlier movies. look at this. $4.5 billion worldwide in box office, not even included "harry potter 6." >> like you said a minute ago, she doesn't have to do anything for the rest of her life. j.k. rowling will maybe do more. >> i think warners would love it if she did because what they've done, there's one more book but two more movies. they wisely split it into two. now they get more bang for their buck. by the time this franchise is finished, all eight movies, they could be looking at over $7

billion in worldwide revenue. >> the half blood prince had a budget of $250 million and cost another $155 million to market. what about other releases this summer? "bruno" took in a lot its first weekend. not all the buzz about the movie is so positive. >> that's the thing. "bruno," i thought it was really funny but such an acquired taste. "r" rated. it did $30 million opening weekend. and it dropped to about $8.8 million on saturday. so people were saying, did the word of mouth or the twitter effect affect that movie. also "transformers" out there which revived the box office. the summer box office was running even with last year until "transformers." that boosted us to 5% ahead of last summer. >> are the big money movies, the big event movies, the best bet for movie studios in this economic environment or is it a better bet to make $5 million, $10 million, $20 million movies on the low side. >> your best bet is to make a movie like "the hangover" which cost $35 million to make.

let's say it even cost another 15 to market that film. it's up to well over $200 million. that's what you want. but a film like "harry potter" you've got to spend big bucks to make the big bucks and it will probably earn close ta to a billion dollars worldwide. that is definitely worth the investment. but otherwise, it's a very tricky business. it's very expensive. you can really lose your shirt on a movie if it doesn't do well at the box office. >> you have "harry potter and the half-blood prince." you think it has oscar potential. >> on my blog i wrote about that. >> the number of best picture nominees being increased to ten next year. >> yeah. >> what's important about an oscar win? >> well, it's vital to a film's legacy. first of all. beyond that, in terms of dollars, a film can get a big box office boost from getting an oscar nom, assuming it's still in the marketplace. it's going to boost the ratings for the telecast because with ten best picture nominees, a lot more films out there that are going to have the fans that are

going to have a vested interest in watching the televast. >> so you get that much more business after an oscar? >> that's right. >> paul, great to have you on the program. we appreciate it. paul dergarabedian joining us. up next, we'll take a look at the news this week that will have an impact on your money, move the markets. then the long, strange trip to wall street. a talking sponge celebrates his birthday in style.

for more on our show and our guests go to wsjr.cnbc.com. you'll also find a link to my new blog. maria bartiromo's investor agenda. now a look at stories coming up in the coming week. 12 dow components will report their second quarter earnings. among them, caterpillar, coca-cola, pfizer, microsoft and mcdonald's. also reporting, apple computer, starbucks, morgan stanley and ford motor. this week, of course is the height of an important earnings season. on tuesday, federal reserve chairman ben bernanke will testify on monetary policy before the house financial services committee. and then on thursday, existing home sales for the month of june will be released by the national association of realtors. finally today if nautical nonsense be something you wish, the trading floor of the new york stock exchange was the place to be this week. spongebob squarepants celebrated his 10th birthday by ringing the closing bell. the optimistic yellow kitchen

sponge has generated parent company viacom some $8 billion in revenue since debuting on nickelodeon in the summer of 1999. still has a lot of years of earnings power left you know. under water sponges can live to be 500. that's the show for today. thanks so much for being with us. harvard professor elizabeth warren, chair of the congressional panel overseeing the panel is our guest next week. each week keep it right here where wall street meets main street. have a great week, everybody. i'll see you again next weekend.

hello. i'm maria bartiromo. thanks so much for joining us for this special broadcast. dealing with record oil and gas prices has been a turbulent ride for the american people. and for the global economy. just about every aspect of life has been affected. and with world oil consumption expected to increase 50% by 2030, the fact that new oil reserves are harder to locate and increasingly expensive to bring online isn't helping. tonight, we'll look at this from the other side of the pump as you'll hear from the men who run the most profitable companies in the history of the united states as they go to the ends of the earth on the quest for oil. you'll also hear from politicians and activists who

take issue with the way the american oil giants do business. we begin this journey here in alaska. up on the pristine north slope as we take you on the hunt for black gold. >> are the oil companies responsible for the high price of oil? >> we don't set the price of oil. >> drill, drill, drill. >> is this a viable option? >> we can switch our cars to natural gas. >> this is the generational challenge. they want their share of the petroleum. >> what we do in the world needs energy. >> we have the moral responsibility to do something about it. it's one of the most remote areas on the planet, and it's one of the most valuable places in america.

alaska