all right. two quick things, we are watching talking about this dialogue with china, i thought this story was interesting in the uk "telegraph" newspaper. bank of china, which is the third biggest bank in the world is now entering the british market and offering mortgages to british consumers. now they have a housing crisis, perhaps even worse than ours and doing it at lower rates than british banks. >> very interesting. >> this global economic supremacy or global economic ruin? it caught my attention. >> uk paper, talking to business people when you're overseas on vacation. i like the housing numbers, a month's supply, liquid as excited as they could be. 8.8-month supply a good number. europe, go to europe, here in the u.s., you go to the call. >> all right. bye. this is cnbc.com news now. >> new home sales rose 11% in june. that's well above economist's forecasts and biggest monthly surge in nearly nine years. vick cram pandit tells "the wall

street journal" they will not retreat from the asian businesses even as it is trying to strengthen balance sheets. and abbott labs will be paid $400 million to settle a patent dispute over heart stent technology. that is cnbc.com news now. i'm courtney reagan. good morning. happy monday. welcome to the call. i'm trish regan live here on the floor of the new york stock exchange. we are 90 minutes into trading. watching the market off 44 points on the dow, but still this is a market that actually grew 4%, a whopping 4% last week. so, what does this mean for the summer rally going forward? do you get in now? do you is sell? we have a bull/bear debate coming up. melissa? >> i'm melissa francis. the state of the real estate industry is changing both residential and come mersing, cnbc exclusive, we will talk live with new york real estate big wig bill rudin and get his take. larry? >> i'm larry kudlow. in an unprecedented move, fed chief ben bernanke holding a

town hall meeting to bring his expertise to directly to the american people. in "the call" of the wild, is he being more transparent or just trying to save his job? can't do anything right anymore. we are "the call." this is cnbc. hello, everybody. stocks getting a brief boost from strong new home sales which soared 11% in june, heck of a number, largestnthly increase in nearly nine years. but the rally is short-lived. stocks are off some. instinct today, gold is rattling around, oil is rattling up and the treasury bond rate is up to 375 or thereabouts. that is a sign of economic strength. let's just take the s & p is down 4, call it 5 points, about a half percent. dow off 38 points. the nasdaq dropping about 13 points why know. i've seen worse. to me, it looks pretty good. diane olick is in washington and she will give us the details of this incredibly strong home

sales number, new home sales roaring. hello, diana. is this the bottom, most bullish thing you have ever seen? >> a very strong report, larry, we are seeing signs of a sales -- bottom in sales volume at the very least. it really beat expectations among the streets, by a lot. look at the numbers, full. sales rose 11% month-to-month, 384,000 units. keep in mind that volume is very low, down from a peak of 1.2 million. so i want to caution that there is is a wide margin of error on this number. at such low volumes work we need a trend to be sure. median prices down 12% from a year ago. that is driving those strong sales. teed that the first-time home buyer tax credit, extra $8,000 but some stabilization there in prices as well. the most important number is the inventory, down to an 8.8 month supply and not just the increased sales base driving that supply but real actual inventory units down, always a good sign. does this mean the builders as a sector are out of the woods yet?

they themselves say definitely not. the builders, even ones who kept current on their lopes, they are finding that the banks are -- and the lenders are increasing the requirements on them and even taking performing loans to turn them into nonperforming loans. this has been a concern that this pressure is coming from the lenders to hurt the builders. >> builders are also concerned with appraisals, which are actually matching up with distressed properties as opposed to real properties and so builders' prices are being put down by that watching foreclosures closely to see where the numbers go the next few months. foreclosures compete with new construction, many foreclosures are new construction. the question down the road the next couple of months will this turnaround be sustainable given the expiration of the tax credit and mortgage rates inching up ever so slightly. again, very good signs. let's go down to trish at the new york stock exchange. trish? >> okay. thanks so much, diana. we want to talk a little bit

more about the numbers and what the effect has been on the market. here, we have a market off 40 points despite this very, very bullish report. for more analysis, turning to my good pal, bob pisani. i hope odd great weekend? >> i haven't talked to you on over a week, congratulations to on your news. >> thank you. >> she is expecting. and yes, it was a topic of conversation for several weeks so thank you for announcing. >> some people were starting to wonder, you can't see me on this a whole lot. >> you are going to be a fabulous mother. >> thank you. >> talking about home sales. heard all the facts from diane a couple pieces of good news, not only beat expectations here but the inventory levels, 8.2 months, good heavens, great news, everybody has been waiting for some signs of that moving down. the bad news, trish, is inventories are really down. i think largely because the home price were continuing to decline, a 12% decline year over year. i certainly and everybody would like to see an ability in home

prices to get some kind of definitive bottom here. and diana, concerned about foreclosures as well she should be. >> a lot of this being attributed to the fact people are getting a tax deduction, first time home buyers, first time tax deduction ducks and california tax deduction. >> biggest jump in sales were in the western part of the country that certainly make a lot of sense. >> okay, so the home builders doing well today. market, you know, not doing so well. down 39. >> now, here is something interesting, the first name a while it sold into good news. remember, the buys, the upside, any good news, the stock market gets it, moves up, bad news doesn't want to move down, sold right into good news here today and a lot of people debating what, if anything, this means. i would note the dollars spiked up 10:00 eastern time and usually stocks tend to get a little iffy when the dollar starts moving up that well have been a factor, look at the big names that moved recently, you know what you're moving, tech a big leader, retailers a big

leader here a, tech stocks weak here, amazon had trouble when they announced earnings a while ago but yahoo! and google led - tech led the move down at 10:00 eastern time and big resource had the huge moves, trish. i mean, lowe's up $3 the other day and goldman sacks finally cut it from a buy list because it hit the price target here. you see lowe's. >> a certain expect that is expected. market gaining 4% and peoplecy i'm going to take profit off the table, not going to sit on the sidelines this week. >> this makes an imminent amount of sense, but when you have good news, a change of sentiment in the last six, eight week he is. nobody has any idea what this does for stock demand. i don't think 25 years we have seep -- >> the 90 billion and 100 billion. >> 90 billion is short-term, a

year or less. then another 110 billion in 35 and 7-year notes. >> bob pisani. >> thanks. thanks so much. more than that 11% rise in home seams that turned around the markets, we have a special cnbc interview to sort through the housing and discuss whether the recovery is here. joining us is new york state mogul is bill rudin, president of rudin management and cnbc's diana olick back with us as well. bill, let me start with you, incredible number, 11%, saw a little graphic in that story, it is wrong. prices down 12% year over year, maybe haven't seen a bottom in prices, do you feel like there has about a change even in sentiment the past 30 to 60 days or not? >> definitely a change in sentiment, probably since the beginning of april. in our business, mostly focused in new york city, we have seen the phones ringing, people looking at space. deals are being -- >> real deals? you have seen contracts, like

concrete evidence of change? >> we have 10 million feet of office space in new york city and we have seen the increase in activity probably up 20, 30%. our apartments we have done over about 110 leases in the last four months. and in general, its marketplace, just last week in new york city, there was about 5, 600,000 feet of lease assigned. eli lily signed 100,000-foot lease on the east side, a biotech center, a new expanding school in downtown took 200,000 feet and the school construction took 200,000 feet. you are definitely seeing activity. people are looking and making commitments. prices are down probably 30 or 40% but a good sign people are stepping into the market and making long-term commitments. >> why do you think we are seeing that change because there is a change in prices or people are more optimistic? what is behind the activity? >> i think a combination of people realize the end of the world did not happen in the

beginning of the year and that they're -- the economy all the things the president and chairman bernanke and the treasury have put into place are starting to kick in and i think people are taking advantage of the price, you know, you see in the housing and commercial real estate, too. but the big problem going forward is going to be the dealt market he is there is still -- you had a gentleman on a few minutes ago talking about the commercial mortgage-backed securities market. you know, you've got billions and billions of dollars of debt coming due this year and next year, over the next four or five years, up to ten years. and that is a big, big problem. we have to expand talf. talf is just starting to kick n. >> how does talf help you walk us through that the auctions overall, asset-backed, asset-backed lending facilities, you're part of that as a consumer but it's also commercial real estate. how much assistance does talf

providing? >> just starting for commercial real estate, can tdr just did 5 or 600 million. "wall street journal" reported last week that vernad to o and several other companies are in the process of issuing talf debt. it provides liquidity, five-year paper at probably about 5 or 5.5% interest rate f they had to go out and get conventional financing it would be 7 or 7.5%, and if you could get t and it is re -- will help create liquidity in the marketplace. >> diana olick wants to ask a question real quick. >> when you look at the residential market in manhattan, specifically condo buildings, commercial and residential as well, we are told by a lot of realtors in new york that learned does not want to get in and lend to borrowers in condo buildings, new construction, that is new real estate where it is not completely or at least some percentage full they want 50, 60, 70% of the building to be occupied before they are going to lend to borrowers to buy into those buildings.

how is that going to affect the recovery doing down the road in those buildings and also in your commercial apartment buildings as well? >> that is a big problem and that is something that the real estate board in new york and the real estate roundtable is talking to regulators about to try to get that rule loosened up, because that will definite lynn hib bit people to buy into buildings that are just coming online. so, that is a big problem.> >> you know, rent per square foot, commercial represent per square foot today versus a year ago? >> down probably 30, in some cases maybe 50%. >> 50%? >> that's why you're seeing people come in and make deals. >> what are some of the recent rents running at right now? >> probably for a class a space, probably in the 70 or $80 a foot range where it was north of $100 a if the last year. class b, probably 40 to $45, maybe as low as 30. >> how does it compare to the 1990s? similar things 1990s, which was predominantly a commercial real

estate crunch with a million savings and loans going down. relative to where you might have been, say, 1992, the first year of recovery back then, 2010 is the first year of recovery, how do you assess it? how does it feel to you? >> it feels better than it does in the early '90s. early '90s, lower manhattan, 30 million feet of vacant space, today it is probably 10 to 12 million feet of vacant space. >> very different -- >> what about the valuations? when some of these loans that are healthy loans and commercial real estates come due and the valuation of the building is so much lower than it was, say, five years ago, how are they going to refi those lopes given the valuations? >> that's why knee we need to extend alf, foreign investors to bring in more equity, a limitation in terms of taxes, there is a restriction, they have pay double taxes for foreign investors, so that has to be dealt with and then the remick rules in terms of the servicers has to be linesed up

so that the servicers can start negotiating with the borrowers before they go into default to work through the issues. ó >> different point in the two ó cycles, two markets, residential and come merring?ó i have had very smart people stó me recent lit commercial real ó estate market is going to be a ó disaster, we have only seen the tip of the iceberg and that most people are prepared for that most companies prepared for ó that, it may not take the economy with us but we haven't even seen the start of that residential may be on the other side, do you agree with that or see that differently? >> as i said before, receipt finance, you are talking about the debt issue and there is a huge problem out there. there is literally hundreds of billions of dollars of debt coming due that is why i said before, talf needs to be extended, deal with foreign invest hors to get more equity in. there will be more adjustments and the banks will have to start dealing with those issues in terms of -- >> do your banks return your calls? i want to hone in on the banks, not talf. do your banks return your calls? are the banks at all interested in commercial real estate? >> the banks -- >> with the stuff on their books

but they are making a lot of earns, which is going to help them? >> they return my call bus there is definitely an issue out there in terms of, you know, making  new lopes but that's why we have to help the economy get better. >> will they roll over? >> we think that talf will to some degree. >> we gotta go. thanks for joining us. we want to keep you here all day. >> bill rudin, great stuff. i knew his dad and he was a great american, too. thank you so much. when we come back, u.s. and china strategic economic are under way in washington. we are going to check in with hampton pearson live at the white house. the sign of the stock markets posting dramatic gapes this year. how can you make money right now in chinese equities? we have a five-star fund manager going to join us with strategic investing ideas. only on "the call." we are back in two minutes.

okay. welcome back. real quick check on the market, dow off 30, nasdaq also trading down about 10 in part because we got a down grade there. amazon was cut to sell. we will get to that later. first we want to jump to the meeting between the dialogue between the u.s. and china taking place at the white house this morning. the dialogue will set the stage for future economic cooperation between the two super powers. hampton pearson is at the white house with more on this meeting. hampton? >> good morning, trish. president obama says the u.s. and china must take the lead, whether it is the global

economy, climate change or dealing with nuclear threats in places like north korea or iran. clearly, the global economy tops the agenda as this u.s./china strategic economic dialogue gets under way. u.s. officials say china must understand a slow u.s. recovery and debt-weary american consumers means its chinese cannot expect exported goods to the u.s. will be a major path for chinese recovery. >> as americans save more and chinese are able to spend more, we can put growth on a more sustainable foundation, just as china has benefited from substantial investment and profitable exports, china can also be an enormous market for american goods. >> treasury secretary geithner and secretary of state hillary clinton will lead talks with vice premiere wong and state counselor dye, a top diplomatic and security expert. china is america's top creditor, holding $768 billion in treasury

securitie securities. going forward, they say the goal should be a balanced economy. >> china's success in shifting the success of the economy toward domestic-led demand growth including greater spending by consumers will be a huge contribution to our global challenge in bringing about more rapid but more balance and more sustainable global recovery. >> the u.s. also wants china's cooperation in leading globe aal financial reform as well as climate. the two countries also recognizing their differences. president obama highlighting human rights. a top chinese official saying china will never be the u.s. the u.s. will never be china. trish? >> you there go hampton pearson, thank you so much. live at the white house. from strategic economic kai log -- dialogue, check out the shanghai composite. also the hang seng, up 40%. quite a bit of upside.

how can you make money right now in china stock in joining us we have five-star fund manager andrew foster of matthews funds. great to see you. thanks for being on the program. >> great. thanks. >> okay, so you lack at china right now and so many people have said this is an economy that's clearly going to suffer based on this -- the fact that the rest of the world is not going to be gobbling up their goods. and yet, one thing a bit of a surprise and one thing you highlight is the fact that china has emerged with a rather stable domestic economy of its own. how does that play into the investment picture now? >> i think that has been the key surprise year-to-date when -- in terms of investing in china. some folks really thought that when the export side turned down globally, that china would be hit hard. it certainly suffered on its export sectors but domestic economy is really quite large and i think the comes from

president obama, secretary geithner at the top of this section are one as well i don't worry about too much because i think the domestic economy there, the consumer spending is really beginning to take off. it is admittedly being prompted and spurred by a tremendous amount of stimulus inside of china's own economy. they are spending well over half a trillion in that economy as well. >> is getting to the economy quickly enough to really aid and to help? i mean, you point to out that, in fact, the domestic economy earthquake the domestic nonexport side of china's economy accounts for 65% of gdp, which i think would surprise some people who assume that china really is mostly an export-led based economy. >> the domestic is sector is really quite large and i think some of the sectors -- it's tough to make a very strong case for investing in chinese equity test at this moment because valuations have run up steeply. people looking the short horizons it will be tough to make money. if you are investing in the

long-term, domestic sectors like medical equipment, health care, also some of the renewable energy sector there is also the focus of today's talks that i think are poised for long-term growth and look very attractive. >> what about commodities? the one thing i hear when we talk about china, everyone says it comes took commodities, an economy what is growing, they are going to need these natural resources, need all of this to bulk up and build. you do it think there is some upside potential there or has it already run its course? >> i think commodities has run pretty hard already. the difficult itty this is a very volatile sector, investing in chinese commodities to boot, you are adding volatility on top of volatility. some segments, soft commodities, agra business, agra culture, those areas will perform well if inflation starts to pick up in the asian region and i think that is where i would focus my energies if i was a commodity investor. >> andrew, what about this meeting today because the -- what you hear and read is that china with its 2 trillion of

total foreign exchange reserves, 800 billion of american reserves, dollar reserves, not going to invest in our bonds to the extent they used to. they will buy commodities it is called diversification, is the commodity play to you talking to trish about really the most direct way to play the china story? >> well, i think that the way i look at it is fairly indirect. it is difficult to tell when the chinese authorities are going to invest in the commodities sector and how they are going to do it. i think this are a number of high quality stocks listed in hong kong and the share markets in shen zen and shanghai more of an attractive and direct way to access the chinese growth story. admittedly, high-qualcomm modity companies that trade on counters around the world. if you feel you can time the cycle, which i know i can't do, they may be a attractive way to invest. >> okay. we got to leave it there. out of time. andrew foster, thank you so much. we appreciate it, from matthews funds.

larry, back to you. all right, coming up, fed chief ben bernanke has a message and he is taking it to the public broadcasting. discuss what motivated, another bernanke television interview. you know, melissa, no good deed goes unpunished. >> a great job. fantastic. the earning central round up and how to ring up profit in the tell come sector. two top analysts with their tope stocks are straight ahead, right here on "the call." 31 are streaming a sales conference from the road. eight are wearing bathrobes. two... less. - 154 people are tracking shipments on a train. - ( train whistles ) 33 are im'ing on a ferry. and 1300 are secretly checking email... - on a vacation. - hmm? ( groans ) that's happening now. america's most dependable 3g network. bringing you the first and only wireless 4g network. sprint. the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com.

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all right. the big earnings report of the day was verizon which bucked the trend by reporting stronger revenues on strong subscriber growth. mary thompson joins us now with the details a lot for them has come down to cable and television and battle. >> that's right. >> think to have as tell phones. >> but that is an increasingly important part of its business. it was still subscriber growth in its wireless segment was the highlight for verizon. total revenue increased 11% to 26.86 billion, a little bit ahead of expectations for the quarter. look at this earnings, 63 cents a share, a penny ahead of

expectations, 4 cents lighter than last year, corporate spending declined for the company's customers. revenue, though, verizon wireless, a highlight, joint venture with vodafone, revenue rising 28% helped by a 27.7 increase in clients thanks to the acquisition of alltel, the impact from the iphone, which has an exclusive deal with its rival at&t. its fi yo unit, offers cable, phone and internet services to retail clients added 300,000 new customers in the quarter some, that was strong, too. again it is corporate and wholesale businesses, revenue decline there had because the recession is affecting both small and large businesses to so, as their spending decreases, that, of course, impacts their part of the business. the second half of the year, company accelerating cost-cutting, trimming 8,000 jobs from its payroll, 3.4% of the workforce. the company says it expects pressure on enterprise clients to continue in the second half of the year so it is cost cut

mcadvance or cutting those jobs in vans of that trend. >> interesting, a lot of exposure it has that enterprise ex-poesh be sure which is a day cult piece with businesses having a hard time. fi yo is something everybody is interested n they said that the iphone was limited impact at this point, right? i mean, that has been interesting because of course, the iphone has that exclusive contract with at&t and everybody watching to see how much impact it will have for how long on verizon. >> the household, as you say more people have wireless, how much more growth can you expect out of that unit? then there was an analyst on earlier this morning making an interesting comment about fi yo. with fewer people entering new households, more kids are  staying home with their parents. >> putting back in with their parents. yeah, that is pretty funny, fewer households, new families respect being formed faster. kids going, i can't afford it. >> i'm back. >> mary thompson, thanks so much. send it over to larry. let's see some more work on the tell com sector, should investors get in now or hang up on a sector that may have seen its glory days?

well, ask christopher king, stifel nicolaus senior analyst for telecom and david dixon, fdr management. chris, start with you, is this a recovery telecom sleepy play now about corporations and wireless and cable tv. is it a recovery play? >> good morning. you know, generally, i think in terms of verizon and at&t, large cap names viewed as a late cyclical or defensive industry given the strong dividend yield the dividends have. those two names in particular will work better and choppy to soft economy. >> you mean ver rise and who? >> and at&t. >> verizon and at&t? david dixon, give then the choice between verizon and at&t what do you choose? >> the fascinating point for the industry. i think right now, results out of ver rise reason highlighting

that the ecosystem advantages with at&t in the new term there, i don't think you can get away without having the network advantage and superiority of verizon's network i think is going to play out. i'm really impressed by the management team at verizon, focus on the longer term strategic positioning of the company and i think that we have to be very careful. again, not to extrapolate these devisive trends. i do like at&t and verizon, both rated outperformed. >> let me throw one more into the mix, we haven't mentioned sprint. chris king, you first, on sprint? >> sprint continues to struggle, certainly from a retail subscriber standpoint. we expect them, they report on wednesday morning, we expect another loss of roughly 1 million subscribers or so on the retail post pay side of the business. very little strengthening signs coming out of the company. they are, by far, the worst performing, from an operational a standpoint in the u.s. wireless sector. >> you hate it. david dixon, do you agree with

that? >> i think that there's been a big shift between even just 12 months ago, they had very poor relations with their handset device manufacturers, their network is continuing to improve. and again, i think as we move in this fascinating pivot point in the industry, focus increasingly on data, networks going forward. i don't think there is going to be many carriers left standing, the deployment very high. i think sprint is as well ahead of the curve on the 4 g rollout and momentum in the second half will be key, outside of the iphone effect. i think you should expect to see improving postpaid trends, i think the prepaid is on fire. i agree with chris that the weakness in the postpaid business is a concern but i think you should expect to see them announce some very significant price cutting and subsidy costs. >> gentlemen, i got leave it there. thank you very much. i think the whole sector is pretty -- trish, over to you. is oil risoning and the dollar weakening? can u.s. stocks it continue to march higher?

talk about this summer rally and how you can make money coming off of last week's 4% rise, larry. plus, ben bernanke on public broadcasting what is really behind the fed offensive? no good deed goes unpunished. that's coming up, only here on "the call."

okay. welcome back, everyone. so dow popping up a whopping 4% last week. can this summer rally really

continue or will the weak dollar, high oil price and the threat of inflation bring to a standstill? we have a bull and a bear on hand to discuss. i want to bring in here the president of heritage capital for the bulls and jim mccap thes, portfolio manager and adviser. welcome, gentlemen, terrific to see you both. >> thanks. >> i do want to give a little credit where credit is due here, mr. schaadts. it was back on march 11, right here on this program on the call that you said this market is going to rally. in fact, you were absolutely right. so i'm going to put you to the test again. what do you say? do you think this is a rally that is going to continue? >> on balance, i do. i think my first target was 9,000 which we hit just last week. and i think on balance, we are probably going to summer in the 10,000 area in the next two to three, four months, certainly this year before any kind of trouble hits ya. >> what is going to get us there, paul? >> listen, my song the same, i'm not that smart, so i will keep

it simple. liquidities drove this market from the march loads, liquidity continues to drive this market. until the fed really pulls the punch bowl, which i think they are going to do you know, three to six months down the road but until that point comes, money is still going to flow into equity test and commodities and everything else. >> but there is a lot of money still on the sidelines is that going to be, do you think, coming in and helping thins? we look at the treasury market there is some concern there we got 200 billion coming to mark threat week. what's all that money that's out there right now going to do, paul? >> the only argument that somewhat bothers me, so much money in the sidelines, therefore, some has to come in, you look over history there is always trillions of dollars in money markets and i think it is kind of silly to believe that money has to come in. a lot of that money is never coming into equity test. there is a certain amount, sure, but the vast majority is not. the key is money is cheap and it is easy and that's why money

will flow into stocks, not because there is so much on the sidelines. >> a-ha. larry, you want to get in there? i will give you dibs on our bear? >> i want to come to my great pal, jim mccants, who i love dearly but missed this summer rally. big story in the "wall street journal" today, corporate bonds really roaring ahead. and now with corporate bond prices up and rates down, the difference against treasury has narrowed by 50%, pointing to prelpr prelehman levels. why shouldn't the stock market get to prelehman, which was 1200? >> the reason it won't get to the prelehman level, consumers won't be spending the money they were back there businesses wonting spending the amount of money they were back then and credit has far this, it hasn't expanded -- >> corporate bonds are telling

you that credit quality is improving for business and that -- and that the outlook for profits, which is the prime determinant of credit quality, just like stocks that is doing better too. so i just want to know, suspect there a link between the rally in corporate bonds and the stock market and doesn't it say we are going higher? >> absolutely and i think we are going higher. think this market could go to 10, maybe 11,000 but i still believe it is a bear market rally or pit bull market rally and it could turn and bite you and maul you at any minute. the reason -- >> i'm sorry, jim i got interrupt you right there. we have got some breaking news, some really interesting comments from you, we will get back to you later. go to rick santelli. >> we just had 63 million usual three and six month bills but what is always interesting, the yield on the three month was 19 basis points, the cover of 3.40, good demand. six month, 27.5 basis points, the yield 3.87 bid to cover we ton see strong demand and they

announced 30 billion one-month bills to be added to tomorrow's auctions, the grand total for the week, including bills and coupon supply, 235 billion. took melissa and larry. >> who is buying this stuff, rick? rickster who is buying this stuff? >> anybody who is a little clearly rbi of credit quality will be hunkered down, to be fair, a lot of failout, 111 billion worth of bills maturing this week and doesn't include the longer term cash management bills, 30, 35 billion falling off, like the 280 bills. some fall off, we replenish no matter how you slice it, larry, people like my parents still like bills. >> you are, the spert rick santelli, we appreciate it. thanks. up next, the bernanke offensive on the fed chief's

welcome back, everyone, check out shares of ryne air, irish budget airline, cutting

the full-year profit guidance because of falling yields and despite better-than-expected is second quarter earnings. by the way, a little tidbit for you here, the company is considering coin-operated toilets. yes, coin-operated toilets on its flights. right now, stock trading down almost 7%. i didn't think it would ever come to this. it is cutting full-year profit guidance, that has something to do with it. larry exmelissa, i think it is giving new meaning to the term budget airline. >> no frills. >> unprecedented move, chairman ben bernanke sitting down for a town meeting with jim lehrer over the weekend. the fed chief taking his case directly to the american public. in today's cull of the wild is this a bid for transparency or a bid to save his job? i don't like that bring in steve liesman, cnbc senior economics reporter and mark cal will be a write ya, cato director. let's see, cato director of financial regulation studies.

mark, you say that this is strictly a charm offensive. why are you so jaded about this? i mean, he went on "60 minutes" the market bottomed right after that totally repaired his image? why are you so jaded?? yonch have a problem being a ? contrarian, i try to lack at what the facts are in terms of decisionmaking he has made in the past. ? i have yet to hear anybody at the fed say, hey, maybe that contributed to the housing bubble. >> in truth, a good point, green spam's co-pilot, bubbling up the money supply and house and commodities. steve leaseman, i want to go back to this very interesting jim lehrer interview and the published stuff. i personally, although i agree

with some of mark's stuff, i got to give bernanke enormous credit for talking to the public. i think the fed should have done this 25 years ago, and i like to see him do even more, like whole news conferences after the fomc meetings. >> larry, look, the nation is still standing, the fed is still there, great fear inside the fed for a long time what about the risk of this? it turned out to be nothing, you get up there talk to people, defend your policy there is a lot at stake for a lot of people in america right now, especially right now with what the fed does and it is incumbent pop the fed's responsibility right now to go forward and explain it to the american people. this is just one of the -- let's just say this, a series of things the fed has done, websites now, all kinds of things out there where the fed is trying to explain itself because of a particular position it is in, as david wesle said in his neat book, the fourth branch of government. >> i mean no doubt this was great but there is a fine line somewhere along the way. i mean, part of their power is

the mystery, the only missionsing, tmissions i -- the omniscience, the omnipotence. >> i think he believed deep down and from a lot of academic studies that transparency leads to better outcomes. >> mark c, this is what i want ask you you can the federal veer of has been putting the pedal to the metal, okay, he did not mention, however, stabilizing the dollar in your pocketbook or purse. what do you make of this, what is he signaling us to, pedal to the medal? >> i think he is signalling tha? monetary policy will be loose and expansionary as far as the

eye can see and this concerns ? me, a refed of what we had, ? 2003, 2004, i don't want to say -- i am in favor of greater transparency, i would like to see a dialogue. i don't think we saw it in his hawkins testimony, and i don't think we saw it in terms of his news hour. >> he has to yet to face a reporter or pan that will knows anything about monetary policy, something he ducked. this debate that mike brings up here is a good one. the fed's history, all that needs to be on the table and debated, that is a more true defense. >> you know what's going to happen, keeps doing this public stuff, people are going to show up who know about it and engaging him in a dialogue. i mean, i would like to see him, honestly, the europeans do this. why can't the americans, mark, after the federal open market committee policy meeting where rates and money suppliers, why not hold a news conference and take questions from the financial press?

>> so political, beneath him. >> the reason, larry, the fed statement speaks for all 19 members, the concern would be that the fed chairman answering questions would not be speaking for all -- >> europeans can do it -- >> too tawdry. >> hearing terrible defenses, too todd rib, not mystifying enough, speaks for all the people. he is the fed head, mark. after that meeting, he can go and face its financial press where experts cross-examine him. >> larry, i agree with you but on the other hand, i don't think we should ex-age rate, the vast majority to of the financial press, except for cnbc are going to be softball questions. >> all going to go melissa is going to go steve's gonna go. >> all shouting at the same

time. it will be ugly. we are going to leave it there. >> glad we solved that. >> trish? >> i'm going to go to, and i think actually i'm going to start a petition, we will get that going for us. okay. "power lunch" coming up at the top of the hour, bill griffeth, would you sign the petition and what you got in store? >> put me down. i do get cookies for that as well somehow? >> sure why not. >> coming up, back to school well under way this summer. find out hot winning retailers are as a result of all of that. good news also by the way, "newsweek" magazine has declared officially the recession is over. now we just have to survive the recovery what ever form that takes. we will talk about that coming up. and the cash for clunkers program is under way now, bring in your clunker, $4500 back you, is it working or will it work? we will talk to big car dealers in various parts of the country. the gang and i will see you at the top of the hour, melissa. >> a a lot of comments on that program, no time for them now. >> oh, a shape. >> change is brewing at nbc

universal. julie boorstin has the details. >> ben silverman is out and nbc universal's cable chief is going to be taking over the entire tv business. i will tell you what it means for our parent company as well as its rivals, coming up only on the call. it made a big splash with the employees yeaaaahhhh! find out more at aflac!... ...forbusiness.com (laughter)

welcome back. nbc universal announcing key leadership changes this morning, among the headlines, co-chairman ben silverman leading to form a new company.

julie boorstin is live in los angeles with details on this one. morning, julia. >> good morning. that is right. ben silverman is leaving nbc to form a content creation venture with barry diller's iec interactive corps and the runner of the cable group will become the nbc top executive, chairman of nbc universal enter tapement overseeing all the programming, spanish language and english. he has managed the cable nets including usa and bravo for digital and wireless distribution, syndication and telemundo the past two and a half years. expanding his responsibility speaks to the growing importance of cable stealing revenues and viewers from network tv and providing a stable stream this merger of units allowing nbc to better sell ads and leverage content across all of its platforms. >> some of this has been driven by cost cutting. some of this has been driven by the realization that you know, the cable and the networks are increasingly converging in the

nature of the program that it produced and the demands of advertisers. >> reporter: silverman's production company will take advantage of his relationship with talent and advertisers, bringing together content creators and producers, advertisers and distributors to create different types of programming, included branded content for a broad range of platforms. silverman brought advertise nears the nbc process and this new venture is expected to bring markets and big grants even big near the content creation process. erin, i'm sorry, melissa, silverman will stay at nbc for a few weeks to launch the fall tv season. some of this year's big changes were his idea, including putting jay leno in prime time five nights a week. coming up, going to join us for a live interview on "power lunch," get to hear about the expanded role of jeff gas pin. >> thanks, julia. tonight a cnbc special you can't miss. maria bartiromo hosts meeting of the minds on u.s. health care. here is a peek.

>> the one part of medicine not regulated by the government or insurer and it is called cosmetic surgery. cosmetic surge very a direct transaction between the patient and the doctor, the fees are set, the negotiation occurs, it is not paid for. if you look at lasik surgery, technology has again up, the price has gone down. what this highlights is that we don't have a free market in health care. everybody says let the free market work there is no free market, regulated pricing that removes the negotiation between the patient and the doctor over the service. >> catch meeting of the minds health care on cnbc at 9 p.m. larvae going to be watching. >> we are going to be right become for the last call, you're watching cnbc and we are first in business worldwide.

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