recovery. >> pessimistic. you have not been goldilocks or positive on the economy for the past couple of weeks. >> my animal spirits are rising and that comes off despite the down in the jobless claims last week, i want to note that start the week off on a positive note. >> yes, start it off on a good note a little bit of optimism there you are right, from the index of leading economic indicators. we can take heart in that. cit, also take some heart in that at least traders are here, look at the move in the stocks today versus where it was last week, although one of the big questions is will this really work in the long run? we are going to talk about that a little bit coming up later in the show. i want to bring in bob pisani, who is down with me on the floor, of course. >> good to see you. >> hope you had a terrific weekend. >> great weekend. beautiful weather here. >> yes, isn't it? weather, finally, after all that rain. >> spectacular. >> so we have got -- two camps that are definitely out there seems to be a tug-of-war going on between the bulls and the bears. >> right. right. obviously that happens every day, of course, but this is

particularly intense because there is real debate about the direction of earnings going on and the bulls have the upper hand now. the bulls argued successfully, trish, number one, earnings expectations, earnings numbers a built better than a lot of people expected, and to the upside rather than the downside, the basic argument is the expectations are low for earnings, inventories have been generally lower, cost-cutting, as you and i have been talk about everybody else, is very effective. here is the central argument of the bulls that the pe multiples are going to expand in the third and fourth quarter because we are going to get top-line growth and the effects, very important synergistic effects of all the cost-cutting going on. now, the bears made an argument -- >> right. and i wanted to stop you there, again, cost-cutting is great temporarily but at some point that needs to turn into some top-line growth. >> right. >> you need to start making some money and the bears are probably saying, you know what not going to have a lot of demand out there for goods. >> there is the dividing line. that is the central bear thesis, that .3 that was put up is

fundamentally wrong, that there will be and the bears are expecting a selloff in september and october because the market is going to realize that demand, that the top-line growth is not going to be there, not going to pick up. more philosophical issues about it's hard to see what the drivers of growth are going to be. you can't just do it on cost cutting, got to do it on central thesis and not really there, expansion suspect really there. one thing to look for tomorrow. >> yep. >> caterpillar, here is a great cyclical classical spot. they are going to be looking to for comments from caterpillar. some of the smaller big industrial names like open at, johnson controls they can actually bet on the top line, although there wasn't huge revenue growth there. there is going to be a stock that bulls and bears are going to seize on one way or another. >> bob pisani, thank you so much. great to see you. all right, we have got a lot also going on, talk about that coming up in the show, fed testimony coming out this week. in the meantime we want to get over to steve leaseman, who's got the latest on cit.

steve, what can you tell us? >> i can tell you, markets still waiting for the official release of cit and lenders for $3 billion financial package approved last night by the board, the deal coming from bondholders. supposed to be out this morning, a source in the talks saying it is in the hands of the lawyers and hopes to be announced today. the ci it t approved the financing package at a meeting last night it hopes the funds will stave off bankruptcy for the small business lender, at least in the short-term, little doubt about the deal visible in the company's stock chart. today, you see opened 15u79 44, then changed down, i guess as low as 127, then picked back up into that 135 area, still some confidence that is nearly a doubling of cit's battered stock. the loan company from seven of the companies bondholders car race 2 1/2-year term and some proceeds be available almost immediately and learn that cit is planning a cash tender offer for outstanding senior notes in august as part of a broader recapitalization plan. all right what remains unclear

at the moment is whether the iffing is enough for the lender to survive ultimately and what role, if any, the federal government could still play. the bond holders are providing financing, not capital, remembering. cit may need as much as $4 billion in capital that is long-term money, according to a government report that cit disputes it says it is a little bit heavy. the company hopes as a result of the financing deal the government will now look more favorably on its request to transfer assets to the u talk bank, the so-called 23 a exempti exemption. unclear what is holding up the release could come any minute a deal like this not down done until it's done. some worriness on the part of invest terse wasn't made official until the opening today. lawrence? >> 10 percentage points above libor? >> so that is in the new york times, some are worried 10 1/2 percent. you have other sources? >> journal has it bloomberg has it, a big number. let's dig in on this, steve, you are going to stay with us.

so the question is will bond holder financing stave off bankruptcy for cit in the long-term or is it just a stopgap measure to buy time? let's ask politico financial consultant and also scott peltz, restructuring consultant at rsm mcglassry and steve liesman is going to be with us. scott, let me go to you. what does this mean? is it doable and is this for real? >> this is a stopgap measure to provide some liquidity and runway for the company to explore its options. it appears that cit is behind the 8 ball anticipating these occurrences and had they been forced into a precipitous bankruptcy filing, the disastrous declines in the portfolio could have occurred to bond holders. the bond holders in this care as far as i can see are clearly protecting themselves. >> certainly, but amman this question to you, the essential question on this story really is that cit has realized they

cannot fund their business wait they have in the past, not going to work and try to fund it with positives by moving stuff into the utah bankholding company, but that hasn't gone as quickly as they hoped? what is the holdup in transitioning to a more sustainable business plan long-term and is it ever gonna happen? >> well, look, i think a lot of people are struggling right now. this economy is disastrous for all kinds of firms, but for cit what they realize is that they -- they don't have accesseses to taxpayer bailout the way some of the other companies that have been deemed too big to fail have. that is sort of the bad news here. the good news is that, you know this looks like the first sort of private is sector bailout we have seen in this recession on a big scale. that means that we might be able to see an era in which the government and the taxpayers can pull back, a little bit off the hook as these companies start to wipe out. >> steve, i'm not sure that was really the answer to the question. because they were trying to fund their business by floating

bonds, commercial paper market, this and that that is not going to work so they realize they need deposits. why haven't they gotten there yet? how can they get there? or do you disagree with me? >> why the company wants to transfer assets into the bank is not entirely clear. >> they want the deposits, right? >> no, has to do with access also to government financing of those assets in the short-term. and the second part of that is give the company access ultimately to the fdic. my understanding, by the way, melissa, is the fdic didn't like that these asset goes into the bank and the fdic fund becomes liable for that they said, you know what no mass on that. >> exception or something, isn't it? >> allow the transference in there. >> a shotgun marriage to get access to the fdic guarantee of bonds. >> not just bonds but also -- >> but the -- you know that is what the big thing was, shelia

bair says no. she is striking a blow for capitalism, i have to give her credit. the question to scott peltz, scott, you look at the numbers here, cit, okay, i don't want them bailout, i don't want them too big to fail but i would like to see this resolved. 1 million businesses what, the reports are showing, a lot is retailers, 70% of all short-term u.s. financing known as factoring, okay, for 40 billion annually. that is not small potatoes in this current environment with the mid market still in trouble, as we all agree. how important is cit and how important is this deal toward maintaining those credit lines? >> i don't believe cit is critical to the financial system to the extent -- >> the mid market crowd especially retail, not that many factors left. >> larry, everybody -- everybody is critical to somebody else. >> to the extent that there is a good business model, the other people will step in and take over that business. the middle market and smaller businesses that are stressed are

stressed whether cit is lending them money or whether someone else is and i don't think a restructuring of cit or its existence fixes any of that. >> so you're doubtful, emon, what is the washington story the treasury department monitoring this? i maybe wrong about this, but i'm saying shelia bair 10, tim geithner, zero on this bailout. >> i talked to a senior white house official about this on thursday and they are watching this very closely. my take is that the white house seems to have sort of decided they can take their hands off the back of the training wheel a little bit and let the bicycle ride itself and let the private sector work it out. >> i would like to point out the government was $2.3 billion into the company does have interest in the restructuring. >> sure. >> i wouldn't say the idea of government assistance is off the table now. >> ah. >> no we have been pretty consistent, larry, in the one idea here that the government doesn't want to be the one

carrying c oil. t across the goal line but it will help it get there doesn't want to carry it all the way, just part of the watch the other thing is that if it is a small amount of money or even just this exemption, maybe the government does come in to help. >> does tech stay or peek -- what is his name? scott peck tries to build a wall street/merrill lynch model, right? investing in subprime mortgages, a lot of stuff they have no expertise. >> the journal regulated, quoted as plan a for cit asking for assistance. plan b was to ask again. looks like he got religion this weekend. >> there's been a lot of stumbles by the leadership at cit and clearly that needs to be corrected. >> i think management may go larry, i will say. >> management may go? >> we got to leave it there, i think. thanks, guys. trish? >> thanks so much. coming up next, a new survey says the majority of employers across america are against obama's health care overhaul. we have the exclusive details on this one, melissa.

plus, all you need to know ahead of this week's major earnings reports coming up right here on the call. we will be right back. undefeated professional boxer floyd "money" mayweather has the fastest hands boxing has ever seen. so i've come to this ring to see who's faster... on the internet. i'll be using the 3g at&t laptopconnect card. he won't. so i can browse the web faster, email business plans faster. all on the go. i'm bill kurtis and i'm faster than floyd mayweather. (announcer) switch to the nation's fastest 3g network and get the at&t laptopconnect card for free.

all right. oil had a nice week last week. right now, looking to get back a little bill byte of those gains, down . 63.23, price there is above $6 a barrel. boosted by weak dollars. >> you can't get out of this first of all what are your contacts -- you are the key opec

representative in the united states? >> i'm not allowed to answer any of these questions. i have been muzzled. i'm telling them to go lower, they don't care. they don't want to hear it. >> gasoline prices have fallen quite a bit. >> always happens after the fourth of july and everyone is surprised it peaks fourth of july, goes lower. there you go. trish? >> you know, i think it is only fair that we let larry go to saudi arabia with you. >> that is a great idea. >> he has a lot to say. >> they won't talk to me, trish. caught up -- it is a one -- it is a one-horse town. >> you wonder why they won't -- >> oh, yeah. >> i think you guys have an interesting opposite directions, one want it is higher, one want it is lower. anyw anyway, we have got to move on. we want to talk about president obama's health care overhaul under fire after the nonpartisan congressional budget office says they are going to increase the deficit by $239 billion the next decade. accord to a new survey, the majority of employers across america say obama care is not the right fix here. joining us right now weeks

inclusive results of the survey is the chief medical officer, paul berger. welcome to the show, paul. gosh, i mean, i'm not terribly surprised here. it sounds like the majority of folks out there are saying they are not in favor of this. i'm assuming it comes down to one thing and that's money, who is going to pay for it? >> i think money certainly has a lot to do with it, but i think the employers that survey on them, by the way, we sent this out to all of our employer clients, over 1100 clients responded, all types of industry, all sizes, all geography, money is a big concern, but concerns go beyond that they certainly were interested in whether employers should continue to be sponsoring these health care plans. they are interested, there is a public plan, finance a public plan and how it would be financed and we also ask them about cost and quality. so the survey covered a a lot of materials. >> do you feel at all, paul that this reminds you in any way of

president bush's social security platform that, you know, something the president clearly feels very, very strong about and yet there is a lot of political resistance and a lot of sort of just basic reality that is creeping into this situation? >> yeah the realities i are hard. i mean, we are running out of money as we all know. and i think that people are really reluctant right now to have the government spend a lot of money on health care when there is no promise of a true return. so the employers, again, they are telling us loud and clear we still want to sponsor these plans. we want to actually encourage the expansion of plans around clinical guidelines, evidence-based medicine and the like and that's over 90% feeling that way. >> let me just ask you, paul in so far as your responses go, your poll goes, if the government insurance program goes through, will your members or your survey people, will they dump their health care people, will they dump it onto the government plan? will they just say we're out of

here? >> no the survey basically says the opposite. the survey says 93% of the large employers, for that matter, middle-sized employers want to continue to sponsor these plans. they want to add benefits around prevention and wellness. they want to improve the quality of care. they want to re-enforce space medicine and clinical guidelines and feel very strongly about t. >> what is the principal source of their opposition then? if they are going to stay in the system, presumably they like the system. i mean, i don't, but that's my view. in terms of your survey, what's the biggest a gripe? >> i think clients right now are concerned about the federal government and their ability to steer the ship correctly. so when we -- you know, asked them specifically about financing it, people are very reluctant to say it should be financed and that would be an effective solution. >> but overall -- >> a real concern. >> overall, they seem to be in favor of some kind of program,

not this particular one, look at all other programs, massachusetts, governor romney was there, getting through a swarm of universal health care there that was rather a intriguing because it put the burden of the responsibility on the individual. every person in massachusetts under that theory had to have health insurance or else they were taxed as a result. they were penalized as a result. something like that do you think that would have a better response among businesses in the u.s.? >> well, in fact, that was a survey question we asked and turns out that 51%, only a slight majority, were opposed to offering a public plan to the uninsured, to small groups and pre65 retirees, and this has to do with a lot of distrust and the fact under a public plan, doctors or physicians and hospitals who get paid about 25% less. so, the playing field would no longer be level. >> okay. we are going to have to leave it there. larry, unless you have anything

else? >> no, that would close it down. thank you, trish. appreciate it. >> thanks. melissa? another huge week on the earnings front. up next what you need to know ahead of a big tech pharma and other properties. today marks the 40th anniversary of the first walk on the moon. now, a multibillion dollar industry is opening up as more commercial entities compete to send mack man back to the moon. the details are coming up right here on "the call." >> one giant leap for mankind.

bull market or bear, traders are always hungry for ideas. they find them at td ameritrade. trading's all about strategy. and strategy's... all about information. so: i start my trading day... with td ameritrade's morning perspective. that's interesting... or, look at this... i can mine their weekly webcast for ideas. this is what i need. of course, ideas are just the start. so now i can drill down. heat mapping... heat mapping shows me where the money's moving. 2,500 stocks... one quick glance. cold... cold. hot! right there. look at this: pattern matcher...

pattern matcher spots technical patterns, automatically. wow, look at that. look at that head and shoulders right there. it's like pattern radar. 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.

welcome back. up 40 point opts big board, an optimistic outlook for earnings combined with news of that cit bailout, along with news of the leading economic indicators data. all of this really adding some fuel here to the market, up 39 and about half. melissa? >> thanks, trish. a big week for earnings, especially in the tech sector. texas instruments after the bell, apple, yahoo! tomorrow, microsoft on thursday. joining me are the squawkers, becky quick and carl can can teen ya from san jose and jim goldman with us from san jose as well. five times last week, i could

never say it i should forget t dow component week. >> huge week for dow components, but 40% of the dow components reporting this week which is -- >> 12. >> 12. do the math quickly. >> did that just now. >> if you look through the names, this is tuesday, dig big dow components including merck, coca-cola, ucx andcality pillar and caterpillar would be interesting to watch. second quarter could be a bottom for construction. keep an eye on caterpillar. on wednesday, more dow components, pfizer out with its earnings, also -- yeah, pfizer coming out and also boeing with its earnings. interesting thing is boeing is expected to be stronger than a year ago, expectation for 121 versus the 116 that it earned just a year ago. if you look on thursday, you have got mcdonald's coming out,

at&t, microsoft, american express and 3 m. >> that is is a a lot of consumer. i see that all over the board and that is important not because of how they did in the last quarter, that was bleak. any kind of a bottom or turn. >> microsoft interesting on thursday, looking potentially for the first annual sales dip in the history of the company as a public entity, which is a pretty big deal. we had good results from ibm and intel last week, talking about the strength of the pc market potentially, talking about mast maybe positive growth in the fourth quarter. overall, people will be looking for positive comments about windows 7. can we rerace the bad memories of vista and then bing, bing, six weeks out. >> google what it is going to do as it starts giving away its very same software. >> look for jim goldman to comment on these says he is the king of everything that is tech. jim, i mean, let's start with

microsoft that first dip. are they just managing expectations really well or sandbagging or -- >> i think it is realistic. you are going to see the overover year decline. i think that will be real. but what is the deal? a jinx. but, no, i mean, but you are looking in the rearview mirror, look at guidance what windows 7 is going to do look at what this company has to say as far as the enterprise is concerned. microsoft, talk about them being a software company, lots of revenue streams far more interesting as far as it is concerned when you're talk about microsoft against google that is just microsoft. tomorrow, you have yahoo! and apple, a lot of optimism going into apple's report tomorrow. >> too much optimism? is it possible we are too optimistic? everyone is in love with apple. >> apple has every quarter for the past eight quarters beaten by a minimum of 8%. the record is real. >> expect it to be more than,

you know what ever the estimate is? if you consistently beat by that much, doesn't that change what the expectation is? >> apple has historically always sandbagged. they played this game, quarter in and quarter out. >> everyone buys it. >> everybody buys into it but then the other part of this, when it does come time to put pedal to the metal, apple does perform, far exceed expectations and see that likely again tomorrow because if you look at the momentum -- >> i was -- >> you -- >> goldman has got this right. you guys -- so cynical. i can't believe the cynicism. in terms of animal spirits in the stock market, it is not about microsoft t is going to be about apple. microsoft is a beep beep beep from the past. apple is the future. that is the key. apple is gonna be huge. >> sounds like somebody just bought a 3 gs. >> do you have an iphone, larry? >> all about apple and cisco, too.

>> want to build on what larry has to say, and where apple is hitting in the marketplace in wireless and deck top and mobile and online, the ap store and itunes going gang busters this is the company for a new generation. >> the bears microsoft would say -- microsoft is trading for 13 times earnings, apple 22, 24 a lot of people say sam overval nude comparison. >> okay. yes. >> you have got to look at the growth and look at the potential, overvalued in the hand of the beholder there but look at where apple is gone. >> new applications? >> how many ipods do you have? >> unipod. >> i have two. goldman, how many do you have? ipods? >> three or four. >> three or four? yeah. yeah. i don't know. interesting. i don't have to ask larry. i'm betting he has none. >> i am not gonna divulge my ipod count publicly. not ready to do that i want to tell you, jim goldman is right. you cynics are wrong. apple is the key to this whole story coming up. and technology is on a tear and

this market is bullish, i love it. >> larry is going to keep his record to himself. >> smacked down. i like it. >> a shot of that. >> we gotta go. they are having a heart attack. trish, over to you? >> melissa, at least we know what to get larry for christmas. >> aim not divulging my position, just very bullish this morning. >> we are going to get knew this century. we will get that ipod for you. coming up, stocks climb 7% last week, so, will the summer rally continue and if so, where are you going to make your money right now? that is next. ben bernanke testifies before congress on his outlook for the economy and fed policy. that should be a big factor. is it time for the fed chief to implement an exit strategy? that is coming up in today's "call of the wild" debate.

but did you know you also get hotel price assurance? it's a one-two punch of savings -- pow! pow! lower hotel booking fees mean you get a lower total price. plus, if another orbitz customer then books the same hotel for less, we send you a check for the difference, automatically.

welcome back, everyone. looking at the big board. up 52 points. steadily gaining here, inch by inch, optimism about earnings, optimism about the cit news, bailout news and leading economic indicators and this morning very positive, all leading to a bit of a rally. dow, s & p and nasdaq up 7% last week. we want to know whether or not the summer rally is really going to continue here and if so, how are you going to make machine on it now? we have a bull and bear to discuss it. for the bulls, jeffrey fox, chief investor strategist of raymond james and for the bears, mike rubino of rubino financial

management. great to see both of you guys. >> thank you. >> jeffrey what is the number one thing you think will send this market higher right now? >> i think the earnings momentum is going to drive prices higher. i was surprised by the second quarter earnings, i didn't think they would be favorable comparison as they have been. the third and fourth quarter coming up against easy comparisons of 2008 is going to make the earnings picture look good. >> mike, a lot of the earnings we are seeing is part of cost cutting, said it over and over again, c save your way to prosperity what point will it turn into demand and if it doesn't, what does that mean for investing now? >> i don't think it is going to turn into demand. it is just going to be cost cutting the summer rally is all we have left and it will be a dark, dismal one. >> i'm surprised how good the earnings are, 70% reported better than expected, a heck of

a good number, i thank you is fuelling this. but you get this morning on the cyclical call by goldman sachs, saying buy cyclical stocks, financials, commodities, energy and technology. raising their year end by 15% on the s & p. the leading indicators are are up today, despite down if jobless claims last week, second major spike down. even the new housing starts, jeff, coming out better than we thought, what four straight months. i know the levels are low, but nonetheless, the malt concern is this now clearly an economic recovery scenario will which will boost revenues in the coming quarters? >> i thank you is spot on this is unique in the productivity rose during this recession. he is right, that is bus of the cost cutting that is taking place, but if and when final demand takes up it will swell pretty much straight to the bottom line of these companies. i do think they have made a turn in the economy, numbers will look pretty good between now and year end, somewhat concerned we

were borough sales from 2010 into the current year. >> mike, let me ask you about just in terms of this week. we have got fed chairman bernanke is speaking both tomorrow and on wednesday. how might that influence the market in the here and now? people are looking for an exit strategy from the fed. what is your take? >> i think everything that the fed, the government is doing is a head fake to make it look like things are improving but the bottom line is the same. unemployment is rising, the housing market is two years away from a recovery. banks aren't lending, they are tightening their standards. the baby boomers have left the spending party. they are not coming back, they are afraid of losing their jobs, they are afraid for retirement and last but not least, you have got congress and the president who seems to have taken their economic classes at the kremlin. i don't see how anybody can see that long-term. >> i like that very much, mike

rubino. that is well put n terms of the economics coming out of the kremlin, how do you invest in kreml kremlinomics? >> the last bounce, the green shoots are quite possibly weeds and long-term tough but right now, large cap growth, small cap growth, emerging markets, i think for this summer rally, but boy, place your behind right next to that exit door because you don't want to be the last one out. >> you're putting stops on it, that's what you're saying? >> that is correct. >> but jeff, suppose the kremlin-like economics don't go through and the cyclical recovery does? i mean, i think the politics of health care look like that thing is not going to get done this summer but that's just my view. what if kremlinomics doesn't pass and cyclical recovery does? >> i think markets will trade higher. again i'm somewhat worried about 2010 but between now and year end, i'm pretty constructive. >> how constructive?

give us some numbers. i know trish will ask this, what specifically should you be investing in? >> i like specifics. >> you're right. i totally agree with you. let's get down to it. >> the two groups the least overbought, at least by our word, is energy and telecommunications. >> okay. and the other side there? >> i think emerging markets definitely the strongest. >> guys, we are going to leave it there i think we have coined a new term there for larry, kremlinomics, one we will hear a lot b. >> that is a beauty that is worth the price of admission from brother rube bean know. did you hear that? >> i like it a lot. >> do you? may have to talk more about that. >> up next ahead of fed chief ben bernanke's congressional testimony, is it time for the fed to implement an exit strategy, today's "call of the wild." >> the old kremlin central bank was the goss bank. nasa says it will cost $35 billion to send man back to the moon but commercial competition is heating up.

maybe that will bring down the cost. that is coming up right here on "the call." please stay with cnbc. access to favorite courses chef's meal with pommes frites perhaps a night at the theater with extra special seats additional hotel night, our treat you world in perfect harmony: priceless look for world on your mastercard

to get rewards and offers that matter to you. i hope he has that insurance. aflac! you really need it these days. how come? well if you're hurt and can't work it pays you cash... yeah to help with everyday bills like gas, the mortgage... ...and groceries. it's like insurance for daily living. so...what's it called? uhhhhh aflaaac!!!! oh yeah! that's it! aflac. we've got you under our wing. a-a-a-aflaaac! 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. a new wealth management firm with over 130 years of experience.

take a look at hasbro, up

4%. announcing a better-than-expected second quarter profit of 26 cents a share and helped by cost cuts and demand boosted by summer block busters like "transformers." stock is $26 and change. let's not forget one of the great all-time pro american toys, g.i. joe. >> hopefully megan fox has options in that stock. she deserve it is. fed chief ben bernanke will be on capitol hill tomorrow morning testifying before the house financial services committee. the big debate surrounding the fed and today's "call of the wild," should they begin their exit strategy in lending out money to companies? let's bring in dan greenhouse and rick san telly. dan, you heard the question. what is your opinion? >> i don't think that they should be implementing any exit strategies right now this is a brand new economic recovery, a baby, if you will. and i think the idea that the fed, in light of the cessation of economic decline, the fed should be withdrawing liquidity from the system in an imminent fashion.

i don't see any basis for that argument. >> rick? >> i think they should at least in certain ways have token exit strategies outlined in a very precise fashion. just consider let's look at the program to purchase asset, 1.75 billion, a combination of mortgage backed agencies and treasuries. years before they can sell the securities but mean these can't snug it up or lower the bar on some of the liquidity programs early? no it doesn't mean they can. >> but they have. they have. >> okay. they have in certain ways. >> to look clearly at -- i don't think we have the charts this morning, but this is an important thing. they have stopped creating new dollars, going back now -- it's just about seven months, the initial surge of $1 trillion went in september, october, november, half of december. they have finished. and the demand for the fed liquidity has gone down and they haven't bought more treasuries to offset that. >> concretely put a finite date

on any of these things? >> no see is that the weird thing. dan go to you on. this the fed looks like it is changing its money supply poll circumstance its dollar policy, yet they don't talk about it. what are your thoughts on this? this is a strange store troy, some extent. >> you have mentioned this in the past on the air. if you look in the last couple of weeks, mostly, the monetary base, the money supply, commercial bank cash assets, excess reserves, declining the last couple of weeks, while the fed hasn't specifically come out and said, yes, draining liquidity, here is house, some degree they have been doing that. >> rick, if you agree with that not sure you do, is that enough? >> if you put that chart back up, certainly it is stabilized, not say whether it is decreased but the notion that the securities are going to be on their balance sheet potentially, let's assume that gdp goes positively, we have a joblessle recovery. the jobless part is going to keep the fed from wanting to do things like raise rates. the end of the day the next of a better economy in some form and

large ownership in securities makes the timing of their sales potentially the worst time for interest rates to go up. they can't wait to -- >> a great point. >> you see how you can actually raise the target rate right now that is just my take. i want to come back to dan. dan, the second part of this odd fed story which i think bernanke should explain to the public, the trillion dollars they put in the fourth quarter of last year in the crisis period basically not been used by the banks it has been put on deposit at the fed, excess reserves, meaning they are keeping much more money in the fed deposits than they need to now that is not being employed, not creating loans it there is a hoarding going on. what do you make of that? isn't that part of the bernanke mysterious policy? no working no money multiplier? >> i think the issue is respect to the banks and what type of economic recovery they are seeing. i know the guests on the segment before was talking how credit

standards are tightening and banks, banks effectively aren't following make that many new loans. >> i don't know about that ask the ceos in last he shallings said the demand suspect there. that is their story and they are sticking to it why do you not buy that? >> the supply and demand issue, i don't disagree with that but to larry's point, seeing this in the excess reserve data, where excess reserves right now are around $800 billion to or so 750 billion, off the highs but considerably higher than it was before this whole crisis. >> what is the conspiracy theory, larry, what do you think that is? what does that tell you? >> almost all the new money the fed injected is still on deposit at the fed, banks hoarding the money and keeping them as excess reserves, rick cancelly. this has a certain 1930s feel to that and we need to talk about that i want to know what you think if bernanke goes too far with an exit strategy, he might disrupt the market, already

partially exiting. maybe he should explain that instead of going further. >> first of all, all a that money sitting there right in excess reserves, one thing, not going to be taken back and a matter of time before it does move into the system. the real question is when that occurrence becomes reality is that going be the same time for the fed to tighten things up a very confusing dynamic? >> yes. yes. we see the velocity or turn over money, see it multiply throughout the system, see the excess reserves reduced, that's when they should and will tighten, dan. last word to you. >> i would just -- listen, i agree, rick has legitimate concerns and people in the market have legitimate concerns. i would just remind everybody it is not as if our fed chairman is in the back room playing pinball right now. he is aware of these issues, he has got his attention to them and i think it is probably an incorrect argument to say he is not going to step in when and if necessary. >> we got to leave it there, gentlemen, thank you so much for joining us. we have a programming note as well, cnbc will cover the

bernanke testimony on the economy live tomorrow beginning at 10 a.m. eastern time. >> all right. "power lunch" is coming up at the top of the hour. sue had herrera what do you got? >> a terrific show coming up tomorrow at noon, larry, when we take a look at etfs, technologies specifically. if you want to play tech but don't want just one individual stock, look at an etf. we have the best i can picks for you. in addition that what about playing the options market ahead of some of these earnings? the options action you need to know about. the president is going to speak out on the health care plan. that is on our watch as well. trish, back to you. >> okay, sue, looking forward to t thank you so much. going to take a quick break and then business competitions, out of this world. jane wells has the story on this one. hi, jane. >> hey, trish. we used to have these things called slide rules. where were you 40 years ago i was in front of my tv with my 80 family, jawsed. 50 and now, trying to get back to the moon without nasa, when we come back.

tdd#: 1-800-345-2550 "the dust might be settling... tdd#: 1-800-345-2550 that's great, but i'm not." tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 "i guess i'm just done with doing nothing, you know?" tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 "oh, i'm not thinking about moving my money. tdd#: 1-800-345-2550 i am moving it." so, what's the problem? these are hot. we're shipping 'em everywhere. but we can't predict our shipping costs. dallas. detroit. different rates. well with us, it's the same flat rate. same flat rate. boston. boise? same flat rate. alabama. alaska? with priority mail flat rate boxes from the postal service. if it fits, it ships anywhere in the country for a low flat rate. dude's good. dude's real good. dudes. priority mail flat rate boxes only from the postal service. a simpler way to ship.

i'm hampton pearson live in washington. we have a statement from neil barofsky, the special inspector general for the t.a.r.p. program, who is scheduled to testify on capitol hill tomorrow. among the things he is prepared to tell lawmakers, the total potential for federal government support for t.a.r.p. could reach

$23.7 trillion. t.a.r.p., he says, evolved into a program of unprecedented scope and scale. ongoing criminal and civil investigations related to t.a.r.p. are, in fact, possible. and the t.a.r.p. report shows the administration is falling short on account billity. toes are the words of the special inspector general for the t.a.r.p. program, set to testify before a house oversight committee tomorrow. back to you. >> okay, hampton pearson, thank you so much. well, july 20, 1969, 40 years ago today, americans watched the first landing on the moon. while space travel has grown by leaps and bounds since, no one has walked on the moon since 1972. that is expected to change as commercial competition for lunar exploration is heating up. nasa says it will take $35 billion to get back to the moon. cnbc's jane wells has that side of the story for us. jane? >> hi, trish. you know, there is the drama of returning to the moon and then there are the market opportunities.

>> the eagle has landed. >> roger, tranquility. we copy own the ground. you got a bunch of guys about to turn blue, we are breathing again. thanks a lot. >> the apollo missions cost billions but out of it came gps, kidney dialysis machines, cordless tools, et cetera, we need billions to go back but the private sector is hoping to do it faster and cheaper. >> join the revolution. and this time, we are planning to stay. >> the google lunar site promises 30 million in prizes, 20 million to the first to get a lunar rover to the moon, move it 500 meters and send back images and data before the end of 2012. other prizes are for finding ice, remains of the "apollo." looks like wall-e. google on the moon could be used to produce power and a study by an aerospace company says the

competing teams here on earth could exploit a $1.5 billion market the next decade selling technologies and services from their efforts. >> oh, i get stuck all the time. learning to drive this is not easy. >> this is a leading team member. we caught up with him last year, developing a prototype rover from the midwest controlling it from san jose, i tried it too. john lawson at the national air and space museum says it is unlikely, in his opinion, these teams will succeed it costs too much to get a rocket ride. don't tell that to the teams here. some talk of sponsorship deals, finally look at this marketing opportunity. >> you can create images on the moon. >> on this 40th anniversary, news from moon publicity.com, put your logo on the moon using the company's robots to move lunar dust around, for a captive audience it says of 12 billion

eyeballs that is actually 6 billion pair, trish. minimum bids, 46 grand. of course, got to get the robots up there some. how. >> my goodness. neat stuff. thanks so much, jane wells. melissa? >> all right. how are they going to get those rovers to the moon? any way, we will be right back for last call. you are watching cnbc, first in business worldwide. that is the challenge, right? are on a conference call. 750,000 wish they weren't. - ( phones chirping ) - construction workers are making 244,000 nextel direct connect calls. 1 million people are responding to an email. - 151 accidentally hit "reply all." - ( foghorn blows ) that's happening now. america's most dependable 3g network bringing you the first wireless 4g network. - sprint. the now network. - ( whoosh sound ) deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com. come on in. you're invited to the chevy open house. where getting a new vehicle is easy. because the price on the tag is the price you pay on remaining '08 and '09 models.

you'll find low, straightforward pricing. it's simple. now get an '09 malibu 1lt with an epa estimated 33 mpg highway. get it now for around 21 thousand after all offers. go to chevy.com/openhouse for more details.

but did you know you also get hotel price assurance? it's a one-two punch of savings -- pow! pow! lower hotel booking fees mean you get a lower total price. plus, if another orbitz customer then books the same hotel for less, we send you a check for the difference, automatically.

okay. welcome back. i have a little bit of news on a personal note that i wanted to share with everyone. my husband, james, and i are expecting this december. and it's twins. >> god bless. congratulations. >> really excited. >> i heard you are going to name them nyse and nasdaq. >> i don't know about that larry,ky count on to you for babysitting here and there? >> the night shift. >> trish, i volunteer to babysit and so thrilled to hear this news and say god bless to you

and your husband and your child. >> we are so excited. >> children. twins? >> twins. yeah. i'm going to have my hands full. >> i totally want tobiby sit because i want to teach them at an early age supply side. >> i will say who else could teach them better about an inverted yield purpose than larry kudlow? >> all right that is it for "the call." on that note, i'm melissa francis. >> i'm trish regan. >> i'm larry kudlow. see you tonight on the culledly report at 7 p.m. eastern. and "power lunch" is up. >> illinois see you on street signs. this is cnbc.com news now. >> stocks are adding to last week's gains. the dow growing positive for 2009 and the nasdaq trying for the first nine-day winning streak in 11 years. t.a.r.p. inspector general neil barofsky says investors could be on the hook for $27 trillion, testifying before the house oversight committee tomorrow. shareholders of drug maker wythe approved the acquisition by rival pfizer.

that is cnbc.com news now. i'm julia boorsen. happy monday, everybody, welcome to power lunch, i'm sue herera. to our partner, bill griffeth is off this week. stock market pushing higher, not on its best levels, however, caterpillar is among the stocks pushing the dow into positive territory for the year, as a matter of fact. fresh clues whether it is coming to answered. >> i'm michelle caruso-cabrera, many are looking to technology to lead us out of recession. we will show you how you can get in on the game with the top tech etfs right now. >> i'm steve liesman. new developments for cit's fight for survival, small business lender set to get a lifeline and it is not from the government. here is what sells on the menu. john harwood in washington, critical point in the drive by the obama administration for health care reform. public bely, the president turning up the heat, including with remarks an hour from now. private lakers a lot of negotiations over,pay for

extended coverage and how to control costs. i'll jim goldman in the silicon valley bureau. another huge week for tech earnings, tech instruments after the dow, am and yahoo! tomorrow, ebay and microsoft wednesday thursday to name a few. all the details coming up. i'm cnbc pharmaceuticals reporter mike huckman and biopharma is starting the week on a very high note. two positive late-stage drug study results for two big areas of up met medical need have the shares of two companies jumping today. what it means for patients and, of course, for investors, coming up later. >> let's get to the market action right now. the dow jones industrial average up for the sixth straight day. the nasdaq and the s & p 500 on track for a sixth consecutive monthly gain. bob pisani at the new york stock exchange. earnings season this coming week help us with another gain? it is, not just six straight days, michelle but breaking key levels, 945, s & p for the