don't, you'll lose those people to your competitors and then you go under. the idea of not being able to pay bonus to your best employees, you just take a tremendous risk with failure. so i think that something we have to maybe get a greater degree of understanding. i can't imagine how you run a competitive business without being able to pay bonuses to the people who are performing well, otherwise we're going to lose people to the ones who aren't involved in the government or european firms or asian firms if we haven't lost some already. >> you don't want to be a senator, do you? obama is president, but it's hard in general, better to be a governor. >> not just harder, i think hard er to be a governor in the sense that you're ott on the line. >> to be president, it's better to be a governor to end up in the oval office. >> not based on the last election. we had some senators as vice president. >> i think it's just my advice is that you go for governor of new york. are you thinking about that? >> i'll take it under consideration.

under advisement. >> when would you have to make a decision? >> oh, i don't know. >> when is the election? >> a year from november. >> you're talking about pa paterson -- it might be cuomo. >> who can tell? sitting governors also have the opportunity to revive and change their fortune, so we'll have to see. >> do you miss the energy that comes from being in public office. >> i love being in public office. i have to admit that, i do. there's a certain ability to fix things and have a big impact on people's lives when you can really help them. >> let things get so messed up that you have to come? you certainly have your work cut out for you. >> that's how i got elected mayor of new york city. the first one in 25 years. i was the first one to remain a republican in 50. i think they were just desperate, they needed somebody. >> regardless of whether people agree with your positions or not. members of the city will always remember this. >> i enjoyed it tremendously r.

a lot of fun. >> we hope you come back. >> before you run. >> make you are shoe join us tomorrow. "squawk on the street" is coming up next. all right. we have some breaking news. welcome to "squawk on the street." i'm mark haines. the s&p case-shiller home price index is out. >> here's the news. do you want the good news? >> i want the good news. >> it's the fourth month in a row of improvement. we are looking at the numbers from may. which are slightly back dated. but fourth in a row of improvement. price are still dropping dramatically just not as much as they were. so in makers home prices are down 17.1%, mark. but in april, down 18.1. >> oh, so only 17%. that is good news. >> exactly. now in between april and may, so instead of the year on year. it's down 17.1% in may, but if you compare may home prices to april, they were either up or flat in 16 something happened -- >> i'm sorry, they suddenly

turned this thing in my ear on. >> 16 out of 20 markets, prices were either up or flat from april to may. so if you're looking month to month, there was some real improvement. but we're going to have one of the chiefs of case-shiller with us to break it it down. >> okay. i apologize. but all of a sudden, 800 decibels came screaming into my ear. let's check the future. down 6.20. that's not good. but fair value minus 0.82. 5.5 below fair value on the dow at the open. >> let's get straight to market reporters. case-shiller not moving storks thus far. bob miss sean know. going from a drop 68.1 to 7.1 is not to celebrate this morning. >> not particularly great. we've got to get bottom in home prices. we've just got to find some kind

of way of stopping the price decline. once interesting story that the traders are talking about. conspiracy theorists are back. they're saying they're going to issue a report that the big price swings in oil are largely due to speculators. tra traders used to laugh at these theory but they've become increasingly popular in the last yore or so. so we'll see how much traction that gets. office depot down 16% right now. going to open very weak. posted a much larger than expected loss. the overall problem is cost cuts couldn't outweigh the declines. coach down 6%. coach has had a huge run in the last two weeks. moved up about 20% in line for the earnings. top line may be a little bit light. maybe comp store sales down more than expected. but the stock has had a great run, so wouldn't be surprised to see open to the down side. viacom beat earnings by a penny but revenues fell short on weak

tv sales and box office results. trader talk.cnbc.com, mike, how are we looking at the nasdaq? >> bob, it looks like a lower open at the nasdaq. of course it's been up 13 of the last 14 trading sessions. but oven fortunately the one and only down day occur when had i was here last friday. so hopefully i'm not a bad luck charm have a big deal in tech. ibm is buying a software company called spss. that's also the company's ticker symbol. for about $50 a share approximately a 43% premium to yesterday's closing price. so that's up 40% in the premarket right now. a few earnings stories in my wheelhouse. teva pharmaceuticals. light on the top line, amgen out after the closing bell yesterday. beat on the top, on the bottom line, raised guidance for the full year.

did a deal, a partnership deal with glaxosmithkline that most analysts seem to like this morning on an promising osteoporosis drug. then finally, paccar, the company that makes peterbilt truck trucks, profits fell more than 90%. the company is saying business still looks really bad in europe in particular and the stock is down more than 4%. let's go to sharon they meantime next. >> the action is affecting the energy markets today. not happening here at the nymex trading floor it is happening in washington with the commodities futures, hearings that bob was telling you. about. now a lot of traderers here on the floor are talking about the force of speculators in this market for quite some time. right now, cfcc chairman gary gensler is giving opening remarks. you got a preview from bart chilten talking about impact speculators have played in the volatility in the oil market.

they are going to be focusing on this in this hearing today in position limits, also focusing on this in the report due out in august. he would not give an indication of what is out in that report, but said last yeshlgs that the data that came out in the december report was flaw and they're going to have much more information that incorporates what's going on over the last year. >> thank you very much. now what to expect in trading today. you are just highlighting when sharon was talking about that, for traders, we've settled for the month, it may seem like we've got a couple of days left for july but we don't. >> yesterday, was the last settlement day for traders, period. we settlemented yesterday. so you could see a slowing down the rest of the month. also, 25 of the dow stocks have report earnings so far. chevron and exxon coming out, but rnings no big surprises coming out. >> last day a of july, i know

not relevant for trading because that finished yesterday but on the last real day of july, a look at the second quarter economic shrinkage or growth, whatever you're betting. how important will that be for the market? >> that's always important to get a look at it. most people feel that it's a good thing we are starting to stabilize but still going down slightly. so even though we're stabilizi g stabilizing. we're not going down. >> you've got to have growth at some point. aluminum, what is it 11 days in a row up. >> hot. >> they're all hot. >> yep. >> and they're all acting as if there's real demand. is there? >> it seems there is real demand coming out of asia especially. a lot of money is flowing there because of. >> that the momentum, they're going to go up. >> that's it. the trend is wroor friend. we like to say. that's where a lot of money is going right now. >> any reason it's as good as -- thanks, alan. we appreciate it. out to you mr. haines. up next, mary thompson with

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welcome back to "squawk on the street." i've been listening in on the conference call ge is holding. the company is saying there's no need to raise external funds for ge capital at this moment it says in most cases ge capital is trending above the fed base case scenario and that losses through the first half are trending slightly better than the base case. however, ge says there remains a very difficult environment in commercial real estate and that part of its portfolio is actually running below the base case. the stress test that the companies is basically put on ge capital shows a losses in 2010 should be the same as 2009. still ge capital at least in this year is expected to make money. keep in mind, the company is looking for profits of $2 billion to $2.5 billion. it tries to shrink its balance

sheets, it's still a lousy market to sell assets, but positions are still the same as they were for all of 2008. also saying on the call, there's a lot of discussion in the media about meeting estimates through cost cutting. they believe this going to provide a springboard for a number of companies including ge capital wubs the recession ends. they're already seeing that actually in their u.s. consumer portfolio where they have cut costs and the portfolio has been performing better than expectation. on proposed regulation by the treasury. ge is saying they have heard support for grandfathering or not breaking up existing structures. this refers to imposing a systemic risk regulator and possibly forcing ge to spin off ge capital, something the company doesn't weren't to do. it wants to maintain the business model that it has. just lastly, the funding environment is going through this funding right now. funding for 2010 and then out through 2012, it is going to support its businesses, of course. it is a funding environment has improved over the last couple of months.

now we are going go to david fab who is back. david? >> thank you, mary. li listening in on this viacom conference call. look, i get a look at my hair. that's helpful. viacom earnings, revenues down, earnings down, domestic advertising down year over year, but up, some of the highlights, let's see, let's start with the bid/ask if we have one. stock looking like it might open a bit lower, but again, we'll wait and see, ultimately what happens here. what are we talking, less than 18 minutes from now. i guess we don't have that bid sksh a bid/ask for you. let's go through the numbers for you and bring you up to date on what's being said on the call. eps exitems you see it there. media network, film entertainment, the key parts of this company, video games and rock bands of some importance

but there's the key and you can see what they ended up with in templs of total revenues, and again that of course down sharply. year over year. not unexpected. most media stocks have been rallying along with the broader market over the last few weeks quite significantly in fact. as for viacom, the focus here on the part of many investors is on domestic ad ruse. what are they looking like? they're down 6% in the second quarter, versus 9% in q1. that's a bit of an improvement. some may seize on that saying hey, things are getting less worse for viacom and rest of the industry. on the call, felipe demon said things will get better as the quarter progressed. a bit of a positive there. film division, an interesting puzzle, if you will. transformers just out of the box for the quarters so not impact thing the results but they are number one at the box in revenue

and yet they lost $25 million. you say how is that possible? well, they had some movies did didn't do particularly well, the eddie murphy movie comes to mind, a significant loser. they haven't discuss ed this on the call at this point, but it is interesting to note. number one at the box office but not near that in terms of making money. the key though is the up front market. we did get information on that, on the call from felipe demoimo he said the flow evolution of the up front market has affected visibility going forward and the dollars are coming in. i'm quoting here. the continued stableation of the economy and growth of the equipment they are pleased with both volume and pricing given the up front istill playing out. of course in most year, the up front is long, long over but not case here. he went on the to say the

general market has a lot to be done and out of respect pour their advertising clients, not going to be telling us much more about the up fronts which many people wanted to get more. we'll give you more as we go along. i guess let me send it back to you guys at the nyc. >> good to see you, david. where is joe? let's look at him, mark. i told you that yesterday, he apparently had some sort of dental work done. that's what he said. >> i've been there, done that. >> you have? >> is it swollen? is it real? there was speculation you just didn't want to do earnings central. >> well, there was that, too. >> that, too, but that wasn't why. you want to save the tooth. you don't don't want to look at this. >> i actually do. but i'm morbid. >> but, mark, i don't know if this has happened to you and i don't want to make light of this, but there was this subber thing on my mouth for a long

time. for a second i thought i was waterboarded. i couldn't believe. there was water, no air. my nose-i almost panicked, but the thing i like is the needle into the roof of the mouth is the thing that -- you know. >> oh, boy. >> and now, mark, it's two weeks before they put the cement up and three appointments with the crown. >> how many appointments? you better do it before they cut our dental benefits. >> you would prefer doing earnings central, i assume. >> i'll take the root canal. take the root canal or a colonosco colonoscopy. for me, under armour isn't what i come up with for a name it sounds like underarm odor, but almost a billion company. 5 cents ahead of expectation. 3 cent profit revenue, also ahead of expect agriculture. it's being reflected in the stock today t is indicated to open a little bit higher.

i thought 27 to 27.35 on my screen. i'm still seeing that, so i don't know how old that s but it is indicated to open a little bit higher, carl, that will give it a million dollar market cap. i don't know if you own any or wearing any. >> i don't. but the double digit sales growth in the apparel business, we might own some at some point. >> underarmor, i don't have a piece of their wear yetle. >> you do workout, go to the gym almost every day. >> i do. so i know what to get you for christmas. coach in lines, revenue slightly below. same store sales down 6.1. shares called lower. july traffic up sequentially that's good news. consumer will be cautious throughout the year. they're thinking of expanding a more actively into men's.

men's accessories. you name it. >> faber is in that. man bag. >> he carries one now. >> ask mark. he carries a man bag, he's got a strap and everything. he's comfortable enough with his own person to wear one. i myself am not. office depot reporting a bigger than expected loss. the office supply store reporting a loss of 22 cents a share and the street was looking for 12. so that was worse than expected. salgs fell 22%. office depot saw particular weakness in international operations. it's dragged on earnings. that stock is going to be a big percentage loser down in the single digits. >> finally, mcgraw-hill, earns 3 cents a head. revenue in line roughly with expectation. saw weakness all across businesses, skoolgs don't have the minute they did a year ago. also challenges in the ratings business as well. >> we will back with more in an hour i guess.

i just teased myself. i'm hoping that wouldn't happen, but u.s. steel as well as valero you remember, tom hanks, right, with the ice skates. >> castaway. >> you want to save the tooth, otherwise you have this hole in your cheek. >> and your tongue becomes obsessed with the hole. >> exactly. >> those are really -- >> well, i'm leaving. >> up next, more on those s&p case-shiller numbers. vice president of index services at standard a standard & poor's >> and mark's presents from norway coming your way. >> can't wait. oof!

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s&p case-shiller numbers crossed at the top of the hour and what they showed was some encouragement. we dent want to get ahead of ourselves but the annual rate of decline for the 10 and 20 biggest cities in the country improved for the fourth month in a row. may compared to april, we had an increase in home prices for single family home, the first in three years. joining us here, maureen maitland, first increase in nearly three years when you compare may to april, how significant is that headline? is it just a headline or does it perhaps show real stability in

the housing market? >> well, it is fairly significant, because you have to put all the statistics together. we saw an increase in may over april, but we're also seeing some abatement in the rate of annual decline, numbers are still significant, down about 17%. but if you look at it, it's four months of improvement in the annual decline, there's a clear inflection point in the year over year chart which does give you some encouragement, it does show you there is the possibility of some improvement in the housing market now. >> but then you look at the overall headline which is may compared to a year ago, on that base circumstance we're seeing a drop of what is it, 17.1%, slightly better than aprils a 18.1%. >> that's right. >> but if home price are still dropping at 17.1% year over year in this country, we are have very fair away from stability a. >> well. >> yeah, that is true. basically, the housing market is is going to take some time to recover completely, most people

i've spoken to don't see a full recovery until 2010. so we've seen some good numbers in sales and starts recently, most people believe in terms of sales and start, we are in recovery, prices do lag and prices probably won't recover fully in 2005. 2010. >> i don't want to get too arcane here and describe graphs. >> it's tough. >> but is part of what we're talking about here a difficult comparison or is it? in other words, a year ago, were the numbers declining? are we declining off of declining numbers? can you give us some sense of that? because it seems to me sooner or later, you reach the point where the comparison becomes easier. >> that is true, mark, we basically started to decline, the annual rate started to drop beginning in 2006 and they went negative in 2007. and we've been in sharp decline since then. but where you can look at

perhaps some of the good data, you can't go from sharp negatives from positives within a month. you have to see a turnaround, first a slowdown in the decline and then some acceleration, so what we're seeing now is the potential for some acceleration which means oppose numbers on a month to month basis which will eventually translate into positive annual figures. >> where things are improving, are those markets that were gotten out of hand, got trashed or are they markets that never really got out of hand so it didn't go down that much? can you give us a feel pour that? >> there's a little bit of each. some of the markets that were not doing very well are still not doing very well. las vegas and phoenix are still not out of the woods. they both have showed two months of drops in april and may. >> they were way out on a limb, those markets. >> they were, but they still are. they have declined in excess of 2% during just this month so they're not showing any signs of recovery. other areas, dallas, denver,

that's where we're seeing some of the recovery, seeing some of the positive numbers. >> maureen, david faber here, quick final question from us. >> sure. >> foreclosures as a percent of total units sold, is that declining and is there an impact that has in the year over year comparisons? >> it does depend market to market. in some of the market we've looked at foreclosures absolutely, particularly the january, february, march, period, they were most of the sales. that's where we saw some of the steep declines. i think the most recent foreclosure numbers show some abatement also but it did depend regionally how much foreclosures played into the home prices. >> thank you very much, maureen. we appreciate you taking the time. we're taking a quick break, on the other side the opening bell and mark's presents.

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modestly lower open, maybe 40, 50 points on the dow. here we go. at the big board. ets securities celebrating recent listing of theest etfs si silver trust. >> etfs? >> we'll find out more about the volatile exchange funds with the founder of the etf securities. at the nasdaq, network equipment technologies. nwk celebrating its recent listing on the nas. >> we're going to get to market reporter, but first your gifts from norway. >> from norway. wait a minute. what are you pulling it out of here? >> this is mark's first gift, which our viewer know is right up your alley. it's reindeer jerksy. >> what's? >> reindeer jerky. i don't know if there's any whale in it or anything like that. so i wanted to make sure you got

that now. so you had the rest of the show. >> where is the camera? >> the other thing in norway, they're famous for two things, vikings and trolls. you are the epitome of a viking mixed with a troll. what percentage viking and what percentage troll? nonetheless, but this is for your refrigerator, that a stroll. >> oh, great, a stroll viking. outstanding. it looks just like you. >> oh yeah, that goes right up there on the fridge that will keep the kids away from my food. >> all right. it's good to be back with you, mark. now let's get to our market reporters, down 46, fully open. bob pisani take it away. >> i love the way you produced that beef jerk sy there. did you see the case-shiller index. up from april to may. the first in three years. i i think that's encouraging, i

got some e-mails about t year over year, dropped 17.1% but even that the rate of decline is slowing down. have we reached the bottom? no, but you can argue that there are early signs of stabilization and that's good news here. let's talk about stocks moving here. office depot is opening on the weak side here. the earnings were a bit on the disappointing side. it's very simple, folks. they add cost cuts, everybody does but it didn't outweigh the sales declines. that stock opened down 17%. coach, amazing run-up, folks, 20, 22% over the last two weeks. don't be surprised they had earnings within buy with expectation. comp store sales a little bit on the weak side, down 6%. that's opening down a couple of poi points here. finally just want to note, viacom, you heard david go through his excellent commentaries, that stock was down 9% preopen, they beat the earnings, but if you look at the individual units, tv sales were

weak, ads were weak. disappointing box office results. the rock band video game was also slower but all the companies have reported weak sales of video games, viacom just opening 1%. tradertalk.cnbc.com. how are we looking at the nasdaq? >> we are trying here for 14 days up out of the last 15 days at this point, i don't know. it's anybody's call, we're holding the flat line here. down 0.3 of a%. we have a couple of deals one in tech and one in telecom to move things along here wuchlt one is a straight out acquisition by ibm buying this software company spss. shares up 40%. $50 a sha, about a 43% premium to yesterday's closing price and qualcomm and verizon just announced a joint venture between those businesses on machine to machine wireless communication but little if any financial details in the press release, maybe we'll get them on the conference call at 11:00

eastern time. we've got earnings stories here. amgen up 2.5%. we have teva pharmaceuticals, up 2%. also beat the street, reaffirming its guidance, finally, we've got staying with pharma. vivus and celgenn in particular, being called the next biotech large cap, not doing much to move shows shares though. let's go to sharon. >> last year, oil prices were soaring above $140 a barrel. but the commodities regulator in the uk says don't blame the speculators for the oil price volatility that is from the uk financial services authority. on the other hand, in washington, the cftc is paying close attention to the role of speculators an also considering setting position limits on

energy markets. they say that they are best positioned to set these position limits and meanwhile the exchanges say no, they are already regulating themselves. the cftc's new chairman gary gensler laying out what the exchanges are already doing and what he sees as position limits that are necessary. he says commodities exchanges already use accountability levels to monitor the size of positions, but position limits are strict restrictions on the size of a position a speculator can take basically if the first place. he says exchanges don't always require participants to decrease or refrain from increasing the size of their positions. and that is the issue. but the issue for the exchanges and what the cme will bring to the table is what are the unintended koconsequence of thi regulation? where will market participants go if they feel the exchanges are too overly regulated? i'm going to turn it over now to rick santelli, he's covered this

loot as well at cnbc. >> absolutely, sharon. that story is just interesting and remember, there's a difference between some of the physical deliveries where you have to procure things like crude oil and cash settlement, more like the natural gas, so we need so many sub topics. as for today, in my favorite area, the credit markets will is a lot of supply that's going to be hitting. what a neat number. 99 billion, just a billion show of that trillion figure. especially with the shorter term instead of maturity supply this week. we'll have one month and one year bills. all of this going to be scrutinized, but look for the bi bills to be get gobld up. there's also fallout. a lot of bills maturing, even those these numbers are big. as for data, maybe confidence will be big, but many still continue to look at the momentum in equities, the fact that there's less risk taking and whether you buy into the

fundamentals pro-propelling stocks or not, the reality is it does put a hiccup in treasury. mark and erin, back to the floor. >> silver outperforming gold this year, hedge against inflation obviously and a new product out to take advantage of silver's attractive qualities. the etfs silver trust, sticker sivr. joining us to ring the opening bell first time on cnbc. graham tuckwell, thanks very much for being with us. >> good morning. >> why do we need your etf? >> well, it's the first step in building a platform for commodities. we've done that in europe, we're the largest provider of commodity platforms in the world. in fact, it was me who started the whole idea of commodities being listed on the stock exchange when we did the first one in australia. why what that then rolled out into europe. then rolled out into the u.s. which is a very successful gld

here and throughout europe, we've now built an entire platform that enables people to buy and sell a lot of different securities, many of which precious metals like the silver n washington today, there are hearings the way big institutions are able to trade commodities. as we know, they're big users of exchange traded fundses. in regulation, harder to trade in commodities, does that take away the need for things like silver? >> a lot of cftc is about futures markets, this particular product, the precious metals is completely outside the ambit of that with regard to the cftc, we have a lot of those product in europe at the moment, we would argue one of the problems is in the otc market, there are no limits and you know, there's not as much as transparency, we believe a lot of problems could be solved if all of the trading in that market is forced through an exchange, either the futures

market itself or the stock exchange as we've got here for these etf type products. >> these commodity etfs have been hugely prop lar. gold immensely popular. natural gas was so popular, there were issues around a short while ago. there have been accusations these kinds of buying, commodities, which are still relatively thin markets help drive prices up in a manner that wouldn't happen if they weren't there. do you think that happens? >> we haven't seen any evidence of that in any of our products. we offer both the short and long, we've never seen any evidence of trading in our products that has caused the underlying market to have the price move anything other than according to general supply and demand, which is often much greater. >> just to follow up, platinum and played yum are really thin markets here. i know those traders are very nervous about seeing any kind of etf where you can pile in very easily with the very, very thin market. did that cause any concerns on

your part. >> we once again, we've analyzed the platinum and played yum market, we're filing at the moment, but certainly there's a lot of demand that's fallen off because of the duction in demand for the cars, catalytic converters all that stuff, so we don't see the same sort of problems that might be in evidence a few years ago. >> when i buy your etf, what am i actually buying. are you buying boy onbullion buying bullion>> it's bars of silver in a vault that have a number on them. so you can be sure it's there. >> a lot of people speculate that nobody owns anything it's all hocus-pocus. >> i go to the vault every year and it's all there. >> are there other people who actually buy the bar and providing a serial number? >> i don't about others, but for

us, we believe it's absolutely critical the number is on every bar. we can't have everybody visit the vault, but it's certainly there. we've got two of these products ashdz the world an this is our third on silver. >> thanks very much. >> graham tuckwell, thank you very much. up next, how to play replenishing inventories and gdp in our cnbc edge. and the ceo of verizon wireless is going to be here with us to talk about growth, not an improve innocent in the rate of decline. is there growth? if anywhere it will be in cellular, we'll be back. welcome to the now network. population: 49 million. right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. eight are wearing bathrobes. two... less.

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bank of america shooting down a report that it's planning to cut its bank branch network by 10%. the spokesperson said the bank, quote, does not expect the

network to slink as customer demands evolve, but the total number will only be modestly redusd, what does that mean, over a 3 to 5-year period. sounds like they're cutting them, but they dent want to admit it's 10%. maybe it is, maybe it isn't, but they say they haven't been pressured by regulattoregulators perhaps the most important part. >> case-shiller numbers not having much of an impact. nasdaq, kind of flat. and the first of our next guest says it's time to take the profits in tech. what? joining us now is ted parrish, director of investments. and peter costa, cnbc market ab analyst. ted, you want to take profits in tech? >> i don't want to sell out of the all of the technology stock, mark, but that sector has held up throughout the downturn and there is still good growth available there. but if you want to take profits

to allocate to a sector like consu consumer discretionaries or other sectors that haven't done as well,s that a good area to take some profits in. >> what areas haven't done as well that you would like at? >> consumer discretionaries and industrials. i think it's clear that i think economies are about to turn and that's an early cyclical and consumers should start doing better. the estimates in consumer discretionaries have been pulled down way too far and we're going see that probably in the third and fourth quarter but definitely in the first and second quarter of 2010, that means the growth is going to be good for consumer discretionary stuff. >> michael, your comment to our producer that cit underscore how fragile -- >> actually it's peter costa. >> never mind. let me put this question to you because this is something michael would have said. while a lot of people focused on

the fact that cit failure hasn't caused a massive crisis, his view is that it underscores the weakness of the economy. which is the right way to at it? >> on the economy or cit? >> what cit says about the economy. >> you gut to look cit's commentary is that it's coming from a company that's in fairly bad shape, they're going anything they can to boost their business, their solidity and i got to worry about what they say. i'm not going to take what they say to the bank. what i would do is i would look at the economy and say that, consu consumer numbers are starting to get better. competence is getting better, obviously with case-shiller looks better. there are certain steps that we're taking. we do have those crocuses out of the ground and the begonias blooming. we are still looking at the economy starting to recover. i'm looking at it also, the market has shown that. >> is it starting to recover though? i mean- >> well, i think so.

i think that we do need obviously confidence, number one. if you have a couple of consecutive months of house price improvements then you know what, right now, people are starting to get more comfortable with their station in life and moving on. yes, unemployment is very high and that's something we to deal with, but on the whole, the economy is getting better and it is going to take time. but we will get out of the this. so i think this is a sign of the market has shown that. i think we're going to continue on this trend, very, very slowly but we will do it. >> ted, what's your feeling about the big picture market? >> well, i think that the economy is definitely about to turn. you know, most estimates from even some of the biggest bears in the market have come up. they expect 3% gdp growth in the fourth quarter. we're seeing more and more estimates that are positive for

gdp growth. we're also seeing more and more estimates for the s&p 500's earnings come up and that's really good. we got to get some confidence built back into the situation and i think that you know, we're beginning to see the numbers come back up. you know, i just think some of the companies need to follow through with their earnings estimates, you know, we get a few more companies report this week especially in the consumer discretionaries area that point to positive revisions for the third and fourth quarter and that's to be really positive for the market. >> you like lowe's to that end? >> that's a company we own in the henssler equity fund. we are seeing a turnaround in housing, existing home sales up three months in a row is a good indicator of possible sales for lowe's, even if you're buying more existing homes, you're going to have to repair those homes. even new home sales are up and that might help lowe's, too, but the company is down a long way from its high. it's the type of company that has room to grow versus its

competitors. it's growing faster than competitor and and has a great balance sheet with little debt all right, gentlemen, thank you very much. ted parris and peter costa. >> that turkey tastes good. we have tasted it, it was good. >> it's good. >> it was very, very good. up next, david faber is along. >> he's got more on big blue's big deal to buy spss. you're watching "squawk on the street."

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welcome back to "squawk on the street." i'm david faber. as all of you know, of course, this has been a record year for m&a. record year for no m&a. and that more or less seems to be the case as the summer progresses. we did have one deal to tell you about this morning which may provide some insight into why we're not seeing more deals in some ways, i'll get to that. ibm is going to be acquiring a company called spss inc. to provide its clients what they call predictive analytics capabilities, all of that adding up to a 42% premium and a $1.2

billion deal. yes, i am talking about a $1.2 billion deal at $50 a share for, again, the aforementioned spss. let's take a look though at the stock as well because you'll see that it's quite a premium and that is resulting in as you might expect quite a move up for spss. there's ibm doing much about nothing. of course it's not using cash in this deal. there's a look at that nice, right? nice to wake up see a 40% move in your stock prices. add to that the cash deals we'll seen, the few and far deals have been done at fairly high premiums. that is one reason why we may not be seeing more deals because when i speak to bankers, they continue to talk about this dislocation between buyers and sellers as you might expect. buyers don't have enough confidence yet that the economy is truly going to turn. and therefore are not willing to

pay what are the expectation of sellers for very large freedpre who say look at that ibm pay 40% premium tharngs deal or a couple of other smaller high-premium deals through the year. 40, 50, 60% premium, many of them taking place in technology but that has given sellers in all sorts of industries perhaps some thought they can sell out for the same kind of a premium. that is not something that most buyers are willing to pay. hence, we sit here with very little to tell you about in terms of m&a. one would expect that that would be a necessary ingredient to a long lasting bull market here. some sent from corporations that they truly see a lot of value out there. as for ibm, which does so much its m&a work inside, huge team there. you may remember one of the biggest deals is one that they began but ultimately didn't finish and that was the acquisition of sun micro, which

ultimately went to oracle when ibm stepped out, but they continue to be quite active and again we see $a 1.2 billion deal, not much, i know, i don't owe know if we have the charts, they did set records as i said, marx but not kind that most bankers want to see. back to you, mark. a double barrel dose of breaking economic data, consumer confidence and richmond fed survey for july. >> plus the e team still crunching numbers in earnings strachlt fresh analysis from valero and u.s. steel from the root canal man.

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tumble yesterday. we're skekd seconds away from the release of the conference board's release of the consumer confidence index. and s&p has reported its first increase in nearly three years. i'm courtney reagan. >> welcome back to "squawk on the street." rick santelli here. not chicago headquarters. breaking news, july final on consumer confidence, 46.6. now this is down a bit from an unrevised june look at 49.3. hey, maybe it's just the general feeling, joblessness has been a big issue during the survey period, we're going to continue to monitor that. richmond fed is going to be popping out at any minute, another -- plus 14? so this is definitely an improvement at least from the standpoint of that region ease manufacturing, but any bright news considering things like replacing cars is going to be a big positive. seasonally adjusted units down the road, but consumer confidence did take a ding, now back to mark and erin.

>> thank you, rick santelli. let's find out how this is playing nut second our of trading. >> it's been a crazy first half of trading at the nasdaq. right now, down slightly. qualcomm doing a joint venture with verizon but investors don't know what to do with that since no financials were disclosed. we have financials coming out of a deal between spss and ibm. ibm buying that company for $50 a share, those shares up 40% right now. on the earnings front, shares of paccar are putting on the jack brakes this morning. makes peterbilt trucks. sales were cut more than in half. company says business in europe still looks bad. those shares down 6%, but in the up side, biopharma in particular. amgen raised guidance up 2% this morning. teva, beat the street. up almost 3% this morning. and finally, one of teva's

competitors in the generic drug business, mylan putting out that press release this morning saying that the allegations, the accusations that there were quality control overrides at a drug manufacturing plant according to the fda, mylan said were baseless and unfounded. those shares rear bounding nicely after about a 13% hit yesterday. let's go back over to bob downtown at the nyse. >> move down just a little bit as the consumer numbers came in a a little bit bow lee expectation. dow down 53 points right at the open, struggled and got into positive territory. there's resiliency, down a little bit since the numbers come out at 10:00 eastern time. the building home industry in general, numbers case-shiller this morning this weren't great. but we got a sequential improve innocent prices, not seen in three years. masco, big building supplier, had a loss but talked more

positively about the rest of the year. more narrowed loss. that's important. standard pacific, these stocks have had huge moves, you want to know how tough it is to be an oil refiner? look at valero, they had a nice profit last year, but a loss this quarter and no surprise here. what's happened is the amount of money that they can make off trucks, airplane, selling fuel to them has dropped dramatically bought demand for airplanes, tractors and trucks has been dropped dramatically, so the ability of these dpens buy a barrel of oil and convert that into diesel or jet fuel, the ability to make a profit on that, the margin, dropped dramatically and that hurt them a lot. tradertalk.cn tradertalk.cnbc.com. sharon, are you still talking be this is a cftc, this report that the cft is going to blame the

price swing on speculation. >> that's all they're talking, not even just "the wall street journal" because on cnbc on "squawk box" we had the commission bart chilton on talking about the oil price volatility, he won't give us the conclusions, and part of the hearing today and tomorrow and on august 5th are about with the cft krch cftc are to look at some of these issue and also to look at the issue of position limits. the cftc came to a settlement with ice about natural gas contracts saying they are going to limit those positions, but as chairman gensler pointed out, that's different than position limits, which is limiting what position can be taken in the first place. when they talk about speculative investments, i want to go through the nuns they may be paying attention to, that is the amount of money in commodity index as well. $300 billion when oil prices

were near $147 a barrel. $80 billion in february at $33, then back up to $125 last month when oil price were over at $70 a barrel. there is a lot of money at work and that's having an influence. what the cftc has to figure out is how much influence and what they can do about it. >> in the case of the case-shiller home price index, diana olick has been culling through those numbers. you said, yes, there maybe positives but there were a couple of key questions that you had. >> absolutely, erin. continuing this trend in positive housing news this month. home price are down still but down less than in previous months. take a look, if you will, at s&p case-shiller home price index report and the top 20 markets in the nation. prices were down 17.1% year over year but that's an improvement over the 18 boyne 1% decline in april. now after 16 consecutive months

of record annual declines that began in october of 2007, we have now seen four consecutive months of volatile decline, improvement in annual returns but still plaguing the prices are foreclosures. >> in some of the markets we've looked at, forecloe, absolutely, particularly the january, february, march, period, they were most of the sales. so that's where we saw some of the steep declines. i thinks most recent foreclosure numbers showed some abatement also, but it did depend regionally how much foreclosures played into the home prices. >> now, month to month, 13 out of the top 20 markets did show improvements, but again, as i always say, you've got to see those year over year returns to to be sure of real recovery and it's always market to market depending on where the steepest drops were and biggest home price increases so place like las vegas and phoenix are still dropping. worry seeing improve innocents in areas in the midwest like massachusetts and boston as

well. but again, you want to see those year over years before you start saying that everything is completely stabilized. for more, go to the blog. realtycheck.cnbc.com. tonight, a programming note, all things housing realty check as we go region to region, asking whether it is time to hold'em or i don't know, accumulate them. >> it is time once again to check in with the earnings central command center. techs and mechs, what are you watching? >> you heard bob talking about valero reporting this morning. the loss was apparently two cents narrower than expectation, even though revenues were above. but it was a quarterly loss. and then the company attributed this loss to what bob was talking about, profit margins. in both diesel and jet fuel.

and you figure that you get $150 boil, you figure energy company, they must do really, really well, but it all depends on the crack spread. >> i knew you were going there. >> it's what a barrel of oil costs and what you can sell the refined product for. it just depends, you can't just assume with oil prices high that other refiners are going to do really well. >> seal, a bit of a different story. shares of x. second quarter loss. expects all sectors to report a loss in 3q due to continued low operating rates. i would carrying costs. there's spn stein signs that destocking is coming to andy, but they say the overall demand outlook remains uncertain. that's after they cut the dividend and raised $1.5 billion in capital. >> i saw the revenue number for the quarter, a couple of

billion, something like that. it was amazing that u.s. steel, what is that $8 billion a year, market cap, single digit in the billions, it's just not, it's something like a google or a rimm. >> or apple. >> just a tiny slice. >> finally, a lower than expected quarterly profit on supervalu. mr. noodle is no longer there or it's nodle. >> that's right. >> look at supervalu. versus u.s. steel. it's depressing. anyway, revenue just shy of expectations. supervalu continues to face pressure as the consumer struggles in this environment t is really big, they bought a grocery chain. >> albertsons. and they're going to be opening

a bunch of new -- >> yeah, that says albertson's right there. you dog. >> i knew that anyway. >> you did? >> they're to be opening a limited assortment stores. >> i think our act got old last summer. >> it was ever new? >> no, but they're shortening us and we're sending it back now, i think. >> they start to hit a cattle prod on you, when you go off the reserve air, we're used to it. >> they do it to us a lot. up next, part two of our five-part social climbing series. jul jul julia looks at social climbing. >> and talking about growth and wireless in your pocket. plus highlights from steve sedgwick's bp ceo tony hayward. that's a big one, we'll have it all. welcome to the now network. population: 49 million.

right now 1.2 million people are on sprint mobile broadband. 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.

facebook is no longer just for college student, it's used by every demographic for customers to reach consumers. how much is that worth? part two of our social climbing series. julia boorstin joins us from los angeles. good morning. >> good morning, facebook is at a tipping point. it's no longer the underdog with 250 million users, it's nows most popular social network. now the company is trying to get its profits to live up to its popularity. facebook is growing up and not just because it's attracting older users.

>> i'm wearing a tie. >> just five years ago, zucker berg started facebook in his harvard dorm room for fellow college kids. in 2006, opening the service to anyone, allowing everyone to create applications. >> we are building a tool to be as effective as possible for people to stay connect and share information. >> growing revenues at 70% a year, it's on track to be cash flow positive in 2010. board member mark andreesen expecteds half a billion in revenue this year. >> just got a huge share. i think in the long run, advertising dollars are going to follow time spen spent because it makes sense. user interact with each other. comment on things. they like things. they share information, so that's what advertisers do. >> anyone were buy a target facebook ad, that business tripling in the last year.

big brands like starbucks and adidas, sharing ads. >> you can control the information you want to share with the community and have interactions and engage really in an authentic way. >> it reaches beyond the site itself using facebook connect to bring networks throughout the web. >> this is basically facebook attempting to colinize other sites on the internet and that's like hi to have a beneficial effect on their ability to generate revenue. >> ads aren't facebook's own revenue, it makes money from virtual gifts and work on microcredit force games and other apps. >> i this is going to be the way of e-commerce in the future. >> microsoft invested $240 million in facebook giving it a $15 billion valuation. russian firm digital sky technologies values facebook on $10 billion based on its investment in may. but facebook's success hasn't been without challenges. it settled a lawsuit from two of zucker berg's former classmates an is pushing to stay relevant

and personal despite its size. the question now, what's next in facebook's dramatic trajectory. >> it's big enough there could be a lot of different products going on an testing different things. in a lot of ways, it's an extremely exciting time for the company. >> facebook's dorm room to boardroom explosion has captured the imagination of the entertainment industry inspiring a novel called accidental millionaires and also a movie in the works. the company tells me it has no plans for an ipo any tinear fute but its cfo currently from genentech starting in september certainly shows all the pieces are coming into place. coming tomorrow, i'll bring you inside the big business of corporate networking, how companies are using networking to help them financially. david faber, over to you. >> all right, thank you, julia. now, from social networking to

some of the latest trends in wireless communication, joining us first on cnbc, lowell mcadam, the president of ceo and verizon wireless. of course, a division, the most important division. lowell is in san jose, california, for the verizon developer community conference. let's start there. what is this community conference and how many developers do you have there and what are they doing? >> good morning, david. this our third open development conference that we've had since 2007, the first two focused on devices bringing mostly machine to machine device s s to our network. today, focuses on bringing applications to our devices, meaning the ones that we sell in our stores. so what we're doing today is talking about the partnership that we are going to develop to really take advantage of all the applications that can run on 3g net work as well as the upcoming 4g networks what would some of

those applications be? >> well, if you look on the internet today there's about 65,000 applications that you can download to various handsets. everything i see coming forward of mobile commerce, of security, of health care, it's a very wide gam gamut. it's i was at the job one conference a couple of months ago, i said to the senior executives, it's amazing to me what you think can run on a cell phone. i never thought a cell phone can do that. he said the beauty of the 6.5 million developers is they don't know it can't. that's the exciting part. we don't know what's going to be on the cell phone a year from now. >> at some point, shouldn't we stop calling them phones entirely? and something else. because clearly having a conversation on them is going to be the least of the things people are doing now and certainly in the future. >> yeah. well, you're absolutely right.

i mean the processing power of these cell phones is startling. and if you look at how networks have progressed over the last ten years, we went from 56 kill low bits of throughput, today it's about a mega bit. the 4g network will have between 8 and 12 megabits of throughput. so just for your listener, a high definition, full action movie takes about 10 megabits. so we're well above that think of all the applications that can reside on a mobile device. >> can we have that day not too far where we have full motion video available in real time available to to your users? >> we're trialing our network in seattle and boston this year. we'll be commercial next year, a be a year from now. we expect to have about 30 markets in the u.s. by the end of 2010. well ahead of any other carrier and we expect to be fully deployed in 2013. so the sky's the limit. that's really what we're telling the 600 develop evers that will

be here at this conference today. that's what we're all about. >> in the last minute we have, unfortunately, couple of other questions, verizon, of course, reporting earnings yesterday some investors wondering if you can tell us anything about our expectation for second half margins for verizon wireless. >> well, we've given out very steady guidance over the last several years here, david. we have always been a growth company with strong margins. and as you know, we reported just over 46% marches and 1.1 million subscribers. we've got a strong portfolio of devices for the rest of the year. certainly the economy doesn't help us, but we think we're in a strong position to continue to be a bolt kind of company. >> to the extent market share become becomes more important in this blt between verizon with the largest single subscriber base and at&t, i'ming here your latest blackberry that you're offer, but what about the

iphone? people wonder whether -- >> i have one here. >> can this compete with the iphone that at&t provides? and will you sign up your own deal with apple in the note too tao distant future to provide an iphone to your subscribers? >> just to mention the tour. it is clearly the best blackberry and we like to say the best blackberry running on the best network is the best option for customers, but to get to your question around apple, we have a great relationship with them, there's a lot of discussion in the media about how we don't get along. that's not true. we, i think you look for opportunities where your business interests align. and going forward, we hope that will happen and something will roll out something together, but there's nothing to announce here in the short run. >> not in the short run, but it did sound like at some point, you could see verizon offering an apple product? >> well, we talk to every oem and every software developer. as i say, business interests tend to align especially when

you provide the kind of network advantage that we do. on 3g and we think we'll extend that lead with 4g. >> final question here, today aesz "the new york times" reports that texting is causing an enormous amount of accidents. in fact, a wide margin in terms of versus any other devices. 23 times more likely to crash if you're texting. is there anything that you can do as a company to perhaps prevent people from texting on devices while they're driving? >> well, david, that's something that i think we've been at the forefront of from the very beginning. if you go all the way back to when wireless devices were voice only, we had multiple campaigns about safe driving initiatives. verizon wires will and ctia have been at the forefront working with the states to craft legislation. we're very supportive of what the states think they need to do to encourage safe driving and we educate our customers on our

website and point of sale. number one is to be safe while you drive. >> we'll leave it there, mr. mcadam. thank you very much. good luck at your conference. >> thank you, david. >> mark, back to you. >> thank you, david. coming up, cnbc's europe. steve sedgwick sitting down with bp ceo tony hayward following the company's quarterly results this morning. we will get the highlights. >> as oil is down about $1.60. were will he talk then about stagflation in the cross harass of our adviser network. we'll be right back. trying to grow it. the algae are very beautiful. they come in blue or red, golden, green. algae could be converted into biofuels... that we could someday run our cars on. in using algae to form biofuels, we're not competing with the food supply. and they absorb co2, so they help solve the greenhouse problem, as well. we're making a big commitment to finding out... just how much algae can help to meet... the fuel demands of the world.

bp is section biggest oil company in the world, publicly trade. profits came out this morning. they are lower, but crude prices were lower dpird a year ago. our steve sedgwick sat down with bp's ceo earlier this morning. louisa bojesen has some of the highlights wncht did he speak to the ceo earlier, it seems the

market right now is pushing bp loe, not just on the back of the actual figure, the profits drop but also on the back of the confidence figures on your side of the pond, of course. bp lower by 30% or so. they have made good progress on cost. they're still not cash flow neutral. that's one of the issues. $6.7 billion operating cash flow is being offset by $5.2 of kpex and a dif dent payment. but if the price of oil that could come up for discussion. as you were saying though, steve sedgwick, my colleague, sat done with tony hayward, the ceo of bp earlier and talked to him about the change of administration and how that changes bp's perspective what do they want out of the obama administration was the question he led off with. let's take a listen. >> there has been a change in the way in which the u.s. administration is looking at

energy, energy security and climate change. there's no doubt about that seven new players, bringing a different perspective. >> of course, they're not just reacting to the price of oil, they're also reacting to the pullback being seen in spending that is the issue at the forefront t wasn't just about being pro-active with the obama administration but also the u.s. market being so very important to bp as mentioned bp being the section largest oil producer globally. how is the u.s. energy market shaping and what do they see coming out of the u.s. energy markets? >> continued encouragement to develop the resource in an open and free market. that's the biggest provider of energy security. a free and open energy market. >> now, i was looking at some of the recent comments hitting the wires from tony hay ward this afternoon as well because he's been continually asked about the

outlook for the market in gener general. it's a pretty downbeat assessment he's given to the oil market. saying there's little evidence going forward of any growth in demand and they expect the recovery to be long and drawn out scenario, also thinks when you look at the oil price range of $70 to $80 per barrel. we're going to be in the lower end of that range. this is it an oil market but having reacted to oil being in the region of $137 a barrel last year and now $70 a barrel that has a huge impact on the company. oil and gas production for the group was up by almost 5%. 4% to be exact. they're also continuing to slash refining costs in the near term, too. so erin, we're seeing money coming off the table with bp, not a big surprise when you look at the run-up over the past two weeks or so. back to you. >> thank you so much, louisa, perfect timing for breaking news. let's get straight to our

headqurs. >> an important development in the case of tan ford financial. cnbc has obtained a report from the s.e.c.'s inspector general that has been widely anticipated and widely looked for by the alleged victim of the ponzi scheme, but they will be disappointed by this report because the inspector general said the s.e.c. did not reach its automobile gigs to vigorously pursue allegations of wrong doing in the stanford case. it does say it picked up speed after bernie madoff confessed in december of last year and things got a little dicier for the s.e.c. and the s.e.c. was looking bad. this is consistent with what we've reported in the past. the report also says that the s.e.c. was hampered by lack of cooperation by stanford and there are allegations of course of fraud and obstruction on the part of antigan regulatoregulat

an important report that will get a lot of discussion. an important report. we'll bring you more. >> thank you, scott. we'll hear from him when we get more. what louisa said about the bp, some say it's not inflation that will be the problem, it's a more ominous thing, stagflation, how would you trade that sort of scenario? let's go to our network. the president of db road and company. one of the top financial advisers over the fast five years. i know you're worried about that situation of stagflation, right? >> we've heard so much about monetary policy causing inflation because we're going to get demand but were we look at inflation, deflation, stagflation, the kpoens components are prices going up and demand.

but when you have prices going up and don't have growth, you have stagflation. >> inflation, prices are going up but there's one place you usually go in inflation, you can go to stock, right? because hopefully they get a piece of rising prices. stagflation, obviously would not be necessarily where you would go. so where are you investing right now? >> right. it's a completely different animal. in this circumstance, what we're looking at is the value of the dollar and the tremendous decline that we have been experiencing which is driving commodity prices up. so for investors, they really need to look beyond the scope of u.s. stocks because what you find are many opportunities that exist in the commodities market, in the emerging markets, even in treasury inflation protected securities. >> so you would go in. >> yes. >> how much are you going -- when you look at an average portfolio, i know it's different for every person, but how much are you putting into stocks in this scenario.

>> going into stocks it really becomes an issue of being selective, when we're looking at tips what we're looking at is inflation coming back into the picture, surprisingly possibly by the end of the year. so we're looking for an allocation in tips, somewhere again, you know, it's different for every person but even a 20% allocation because you're going to find going forward is that these types of bonds will offer very good opportunity and price appreciation. >> terry, thank you. >> i was just going to mention that looking at the emerging markets also because with the value of the dollar declining, you have natural resource-rich countries that benefit from that. >> carrie, thank you very much. appreciate it. we've had a record issuance especially on the fixed income side from those emerging market countries. betting those countries won't fail. market holding its own.

down 34 despite the slack in consumer confidence, which is the most recently headline. better than expected numbers from case-shiller. still prices falling 17% from a year ago. we'll try to find out whether resiliency is still the trade. then, viacom, the ceo and the closing bell today. philippe d. a uman will be there for an exclusive. and my lifestyle. i'm joe james, and being outside of the box is my simple win. (announcer) now available in five vibrant colors.

we are back. let's take a look at the markets

and their internals. the dow right now is down 41. the nasdaq is down 8 and change. the s&p down 7 and change. do we have the internals? there they are. no, there are the markets. >> there are the internals. >> internals about 2:1 negative on the big board. nasdaq, not too bad. can't round down those odd numbers. anyway -- >> come on. >> joining us here on the floor is the managing director of rosenblatt securities, midtown craig tekkam. last time we talked, the market was up 7%. >> that's last time we talked. the fact of the matter is i said be cautious, heading into

earnings season. everybody was pleasantly surprised about what we saw. >> now is the time to be cautious then? >> so we're going to talk about the haines bottom. let's get down to -- >> i haven't talked about that since you came back from vacation. >> you rode hoeng's coattails on that let's call it the way it is, mark. >> craig, how do you see the market right to you? >> i frankly see the path of least resistance here continues to be higher. the few reasons i think that number one, obviously it's the wow factor in earnings season is behind us here. upside surprise have been commonplace, the tenor of earnings season will continue to be positive. number two, there's still a lot of cash building up on the sidelines here. $3.6 trillion in money market funds. third, if you look at the valuation of the s&p on 2010, 12 or 13 times earnings rate, leaves an upside based on an

historical measure. >> gordon, over the last two weeks, market are up 34%. germany, 15, france, 13. in two weeks. i understand momentum, but what justifies that? >> you know, look, you have an overflow condition, you start to get some confidence back in the markets, all over the place. once you get the negativity out of the room and there's all this cash object sideline, people are going to get involved and there's a lot of opportunities in areas across the country. i don't think these other countries felt it as bad as we felt it overall in the first place. so once america are stabilized and we get the swagger back in this thing, the rest of the countries will as well. >> it's like college where everyone lost so much money last year, off the haines bottom and now everybody wants to get all back, right. that's psychology. how much is what we've seen is that? >> i think psychology is

incredibly important here. if you think about one of the reasons we've had this incredible move that's taken the market up. 9 of the last 11 days going into today. part of the fact is that psychology was starting to get incrementally negative into the earnings season. that's the kind of base you need to drive a market higher. that wall of worry is what set expectation too low into earnings season. now we've got a world where people are feeling underinvested like they need to chase the market higher. >> oh, so, gordon was just another brick in the wall of worry. >> your words, mark, not mine. >> completely unnecessary. totally unprofessional. >> all right. >> okay. >> done with that page. moving on, the president-elect-elect of the american medical association has a warning about the possible consequences of inaction on health care reform. plus we'll get his response to online physician communities sermos. >> a guy on yesterday criticized

the health care reform and criticized the ama. and dairy farms in crisis. a special report. >> profits, probably the worst performing commodity out there in an industry that is hard to slash supply when demand falls. a situation so dire in the number one dairy state it has turned tragic. that story when we come back. in these markets, i'm glad i turned to fidelity for an annuity with guaranteed income for life.

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we're back. dairy farmers facing a crisis over plunging milk prices. jane down on the farm wells has more. janie? >> hey, mark, you know, low prices for milk are great for consumers, although there some disconnect between what farmers pay. but they undercut the other

prices. and it's particularly tough for dairy farmers currently losing money. they are been for a while, particularly in the california, the number one dairy state. >> i want ton the next happy cow. >> she was born to be a star. >> the slogan here is happy cows come from california. but no one is happy with milk prices down by nearly half over 18 months. underperforming just about every commodity. if you look at the chart, there's two reason, global demand has dried up and fewer americans are splurging on things like pietz sampl the lowest milk prices for farmers are forecast for 30 years. it's gotten so bad that many dairy farmers are killing cows early which is driving down the prices for beef and leather as the market is flooded with cattle. and even more so in southern california, two farmers have committed suicide. fourth generation dairy man brad scott says he's losing as much as $4 per cow pore day. >> there's always been highs an

lows but this one was gone for so long there has not been a high in milk prices for the long periods of lows. so everybody's equity has been dwindled to nothing. so it's very, very disturbing to see the fact that the dairyman today cannot make money on today's milk prices. they're actually losing money. an operation my size today an an average is losing close to $100,000 every month. you have cow, they need to be fed, maintained, taken care of and milked on a daily basis. we're not a widget company, other companies when they don't have the market, they can turn the key af, lay the help off, put their machines to rest. my machines don't rest. >> all right, now the agriculture department is of course providing loan s s to fa but farmers are lobbying pour a new way to set prices. prices are dependent on prices like milk and cheese at the merc. they take into account feed and

fuel, that's never been done before. they should have the price reflect the input costs. back to you. >> interesting concept. i wonder if they could do that on an exchange, if there's way to it adjusted. >> but you got to feel for the farmers because the way he explained it. there's nothing he can do. he can't reduce -- the only he can do is slaughter part of his herd, that's all he can do to control his output, otherwise those cows are going to keep making milk. up next, the head of the american medical association warns us about the consequence of inaction on health care reform. but first, melissa francis, what's coming up. >> at the top of the hours, the cftc on a reversal from the bush administration now blaming oil traders for the spike in oil prices last yore and a our call of the wild will debate whether speculation is really to blame.

and teva pharmaceuticals ceo on where his company is headed. all that plus the latest market news and reaction, only on the call at the top of the hour, but first "squawk on the street" is back right after this break. 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.

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the battle on the hill over health care reform is all but paralyzed as both the house and

the senate are hashing out the details of what some say will end up being the most sweeping reform in health care in decades. the american medical association is the largest doctors' lobbying group in the nation. it backs health care reform, saying the consequences of inaction would be far greater. but does it back this reform? joining us now, doctor cecil wilson, president elect of the american medical association. doctor wilson, good to have you with us again. i know you and i had a chance to speak a few weeks ago. and i just wanted to get an update from you on where you stand. do you support the legislation as it currently stands? >> i think what i would like to start with is to say the ama is sort of in the midst of controversy and politics. and wants to remind the nation and policy makers in general the consequences of not doing anything. and for that reason, we are publishing ads in major media outlets across the country to point out what's at stake if we do nothing. if we do nothing, 47 million americans will continue to be uninsured, and at risk of being

sicker and dying younger and more added to the ranks daily. patients and physicians will be faced with fighting insurance companies to get approval of the treatment and then fighting for fair payment. and physicians will be driven from their profession by the burden of bureaucracy of high liability premiums, and payments that don't cover the cost of providing care. so we are committed to health system reform. to your point, it's a process. it will take time. and we are still in the early phases. >> doctor wilson, obviously you said a lot of fair points there, but with you thing you want is something that seems to me to be so politicizpoliticized, and 47 uninsured americans, and the numbers broken down don't show that to be the problem. many people are covered by medicare or medicaid, and we could argue whether it's really 9 million or 20 million uninsured, but it doesn't appear

fair to frame the entire problem of health care in this country around an uninsurance problem. it appears to be a cost problem, and doctors are a big part of that. is that fair? >> the reality is that the problem of health care in this country is a multifactorial problem. and you mentioned a number of those. let me comment on the number of uninsured. and i would agree, that's not the whole problem. however, unless we fix that problem, we're not going to be able to have a good reform in this country. the other thing is that i think the value of breaking those numbers down is that it helps us decide how to treat each segment of that population. i would also suggest that that really understates the severity of the problem, because if you ask citizens not are you without insurance now, but have you been without insurance any time in the last year, actually, 85 million will say yes to that question. so it's a significant problem. i think we do ourselves a

disservice by breaking it down and deciding, based on that, that the problem went away. >> well, let's get back to this issue of cost, sir. of now, suppose the health care legislation eventually includes tort reform for malpractice. would you still support it? >> well, i assume that that's somewhat in jest. you did say if it does include. clearly, we believe that's important. that's an important factor related to cost. estimates by the congressional budge he office have said that the costs of defensive medicine. that is, physicians ordering tests because of fear being sued is some $120 billion a year. so unless we address that, we still are -- we're going to have problems related to costs. >> yesterday on this program, we interviewed the head of an on line physicians community. he says the ama is partially responsible for skyrocketing costs because of cpt codes that your organization licenses for

profit. so i would like to give you a chance to respond to that. >> well, i think the beauty of the american system is that we encourage a diversity of opinions, and ideas. we celebrate that. the ama celebrates that. the reality is that the ama is the voice that gives voice for every state's medical society in thiscountry. and every specialty society in this country. >> excuse me, sir, but i don't hear you addressing the issue of the cpt codes and what role they play in skyrocketing costs. >> the answer is they do not play a role in skyrocketing costs. they are a mechanism to define how physicians provide care and to assure that the payment of that care is representative of what is being done. they have nothing to do with the cost of medical care. >> don't you get paid every time they're licensed, though? i mean, doctors are paid to give more tests and procedures, your codes define what those tests and procedures are. so if we have more tests and

more procedures, you make more money, right? >> the question is whether one is providing good care. and let me suggest that whether one is fee for service or whether one is -- the test is, are you going to provide good care, efficient care, and that's what physicians get up every morning to do, and that is to do good, to provide care for their patients in the most accurate way and most efficiently. >> doctor wilson, thank you very much for your time. and we want everyone to know, mark, on "power lunch" they're going to debate another issue that is considering going into the health care legislation and that would be a 10% tax -- i guess it depends who pays it, whether it's the doctor or the patient. but it would end up being the paint or the insurer on cosmetic surgery that was not deemed critical for services. what do you think? "power lunch" will debate it at

12:30. >> up next, the final check. what? holy cow, this show is over already? >> holy reindeer!