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helping you save money -- now, that's progressive. call or click today. live from the nasdaq marketsite, this is "fast money." rick santelli here in for melissa lee on assignment. the market losing some steam today following three important features. we had the big sell-off in the china stock market. we have a dive in oil prices. and in my own backyard, a supply hiccup in the five-year auction. and you know what? it wasn't pretty. what's the word on the street? pete. >> first of all, you are so fantastic. you medicate world that's so confusing to the rest of us, the bond world, something we can kind of halfway understand.d. fantastic to have you here. 20 years experience on the floor. this guy knows volatility index before everybody heard what the vix was. so it's great -- >> he taught you everything you

know? >> he did. absolutely. >> we all agree on one thing as traders, the market is the greatest rubik's cube and we all love and we want you to love how we try to figure it out to make you a few bucks. >> the folks at the billy goat and burrito buggy say hello -- >> billy goat? >> they can't wait for ricky to get back into chicago. getting back to the market for one second, we bounced yesterday, we hit that 968 level. we hit it again. we bounced again. late day surge, very impressive. the volatility index we talk about every single day, it's been creeping higher but the creeping higher has all been up side speculation. that's probably what's holding us here. we keep expecting the sell-off. the protection's there actually holding people away from having to sell the stocks. they have protection in place at the s&p 500. the banks. and you continue to see every single day some balance there. >> let's talk about the 968 level, why are we holding there? go back to july 23rd. look at this chart. july 23rd you had chart of the day, rick.

you actually had a breakout. you had a breakout above the june highs at 953 in the september s&p. on july 23rd you rally, rally significantly above it, you close at 969. market makes a new high and it is consolidating the gains above that 969 level. we haven't closed back below that level since july 23rd. we have digested a tremendous amount of negative news over the last three, four days. >> go back to early in the night when a lot of us were sleeping. think a lot of this started when china started to turn over for the first time, shanghai down 5% last night. there's concern the lending that's been a big part -- >> down 7.5% before coming back. china's a big story here. it knocks s&p down eight points before it started coming back and gave way during the day. china's a big story, we'll talk more about that, but it had a big impact this morning. >> it all comes down to the trade. i think the market, even if you are ambivalent about the market, i think it is going down, but i understand what joe is saying,

tim and pete are saying. look at trading opportunities. karen sat in that seat yesterday, told you she was short borg-warner. we told you to get out of bw ahead of the earnings. we had an analyst on who had upgraded the stock. we said you know, what valuations are too rich, it doesn't make sense, look at the perform of bwa today. down 10% after they reported at 1:30 this afternoon. those are opportunities in the marketplace. whether you think the market's going higher or lower. >> everybody at this table wanted to be what oil? short oil. there was a few bucks on that. >> rick, as we talk about this, it is and continues to be a trader's market. look at names that you might love. we have said you don't need to chase anything in this market. it always gives you a second chance. now you've pulled back about $5. the copper trade's starting to show a few cracks because of china, the rest of it. you start to see copper pull back, start to see the oil names pull back. when you see the commodities pulling back you start to need to re-evaluate once again because you are waiting for an opportunity, soon that opportunity's there.

probably not yet but soon. >> most of the money today was made on the short side. guy's completely right about this. listen, the oil, resource names, they rolled over today. the theme was the dollar was strong and that knocked the legs right underneath this commodity trade. oil absolutely terrible. obliterated. down four bucks today. you have cftc hearings, a rising dollar, rising inventories. all in the face of oil. but the trade going forward -- here's what you've got to think about now. the correlation between the s&p and oil, it's no longer one. it's changing. what that means is, oil doesn't necessarily have to go higher for the s&p to rally. that's a good thing. >> i urge everybody to read that opinion piece in the journal about the politics of the cftc. it is an opinion piece and somewhat enlightening. hey, i want to go to a chart here. let's put the oil chart. i love playing with this gizmo. why is this an interesting chart? because there is a couple things i used to like to do when i was a technician. right here. you see that? that's the last time we had a little bit of congestion with a spike. it kind of goes sideways here.

you notice that the 50% is above the market. the way this thing's coming back, i would say that it is below key levels. it is in a sell rally mode. but ultimately where's the support going to be? i'm going to talk to my friends. >> i think technically -- look at what oil's done. it made the move to 38. we pushed up to 72, 73. traded back down to 58. they overextended on the down side. this last push we couldn't get up to $70. i think we're headed sub-60 again. i'm not saying to go out and short it, although that's an aggressive trade and i think it works. but we said watch oil services, they'll get crushed. they have. schlumberger today down big. that probably trades back down to 49. if you're buying these stocks on dips thinking you are picking a bottom, i think you are a little early. i think they make sense. i don't think they make sense here. >> one other point on oil, rick -- sorry, didn't mean to cut you off. but keep in mind in terms of a price point in oil, obama came in, 72 bucks for oil, hasn't gotten above the level obama came in at. >> the thing with oil, i feel confident it will hold the 50-day. i do think there are trades in

here. and as i look around, conoco today's a perfect example. when oil's down, you go after the guys who are most levered. they're the ones that are going to suffer. they reported earnings. we knew they were going to be bad. what we didn't know is just how bad those refining numbers were for these guys. they made $660 million last year, they lost $53 million. it's a tough story. the good news for them, by the way, was their investment in russia. the other thing i just want to quickly talk about is emerging markets. we talked about china. the emerging market oils are as topee as any of the names out there. watch petrobras, who's got both bad news on the political front down there and some of these oils are coming up dry. petrol china, be careful. >> the last thing on this whole oil trade, those utilities really bounced late in the day. i think people are looking at some of those names, they're looking at them saying, look, this is the one area where i can get great dividend yield. they can still get 3%, 4%, 6% dividend yields. when people are chasing dividend yields, they're used to getting bank. they're no longer get bank. people are looking at utility names, not as tied in to the oil right now.

they really reversed. the last hour of the day almost every one of those stocks moved to the up side.. >> i like that play, pete. let's go trading around the globe. hey, after that shanghai index tumbled, ultimately 5%, as we pointed out, industrial names suffered. caterpillar and alcoa trading lower. >> let's understand why it sold off very quickly. people are concerned the bank lending in china is rumored to be cut back to a third of that. it means that a lot of guys in the commodities space, a lot of buying of copper and aluminum inventories they've been stockpiling, if that's going to change, that's at risk. that affects everybody. it has also affected the dollar. that's the reason we came in here when we are talking about china, that's what you have to be careful about. with alcoa, we know their production's down, numbers are down. i think aluminum started a rally. i look to the housing market. everybody's told us in the last two weeks, including those numbers, this is stabilized. it's not going up. >> "new york times," top story, front page.

>> look at steel. we talked about u.s. steel yesterday.y. we said that the goldman upgrade here was awful, the timing. look at the stocks today, 7%. granted china has a lot to do with this. we'll talk about it again. goldman upgrade, they're late to the party. >> when you talk about china we oftentimes talk about the fxi. the fxp is an ultra short play over there. if you think there is a little bit more room to this china pullback we've seen a little bit of the armor starting to take a few shots. it is starting to pull back a little bit. last night obviously. today. we'll see what happens overnight. but the fxp. september 10 calls today. this is an ultrashort. so you're going to get double the short to the up side. september 10 calls an amazing amount of activity out there. very cheap. volatility's not very high right now. great opportunity if you think china's got a few -- >> i like that trade. buy calls to get short.

>> we talked back in march about china. their stimulus package. that's the package. fiscal policy, i know you love to follow that stuff. i'll tell you what. timmy's dead on. it's all about china. if they begin to take away the punch bowl, so to speak, that will be problematic for economic growth globally. china right now is basically the american consumer's bank. >> i'll stop everybody right here. there's all the things that they can slow this down with. my call, i don't think china's going to step in here. there is a lot of civil issues going on in china. i think maybe they'll keep this parade running a little bit longer. >> rick, how do you start to bring rates, cut rates back when you have negative cpi? there is no way they can put any more pressure on rates. i agree we hold on to this. watch pmi thursday night, friday morning.g. this number comes out late.. friday morning will tell you

whether this rally is still alive. >> you stay up, watch it for us and let us know. >> the big tech story today. microsoft finally, finally strikes a search deal with yahoo!. yahoo!. here with his tech the number one analyst according to institutional investor magazine, mark ha hainy with citigroup. he's on the fast line. >> hey, rick. >> it's unbelievable. finally it's happened. tell me what your thoughts are. >> biggest winner here appears to be microsoft. they've been trying to get scaled in internet advertising in and search, this was the only easy way or the only way for them to do it. they got the deal at a decent price. they're the obvious winner. yahoo should have gotten more out of this deal. they didn't. >> why doesn't yahoo! get an up-front payment or something to pay them for this technology that microsoft now gets to run off with and really get everything they wanted? >> that's the burning question of the day. what they did is tried to go down the middle on this. a year ago they could have outsourced everything and got up-front payment. this year they're outsourcing

part of it with the belief they're hedging themselves and could maybe come back in if they need to as a search player five to ten years down the road. we think that's risky and they should have gotten a bigger payment. >> how about the online properties? that's what carol bartz is pointing out right now. she says look, we like this deal and we think the online properties is our area of expertise where we're going to see the explosion.n. do you agree with that?? >> well, she's right in one thing, which is look, the power alley for yahoo, their deepest competitive modes are in their display advertising business. not in search. the 800-pound gorilla in search has already known. it's not yahoo, either. it's going to be google. display advertising is yahoo!'s strength. that's where they're devoting most of their assets. we just think they should have gotten more for this search deal. >> let's talk more about the stock. the stock went from 15 to 25. this quarter was lousy, missing s revenues by over $1 billion. where does the stock go? i know you're going to say valuations are fair, but that was a story from 30 down to 15. what do you think of the stock right here? >> well, you're right. i am going to say valuation is fair. it's trading at about five times

cash flow. that puts it at the lower end of the traditional media companies that can trade at five to eight times cash flow. there is no near-term catalysts. obviously there are people in this looking for a good deal. yahoo! had a chance, they disappointed there. it is hard to see this stock moving near-term.. it should bounce along around $15. >> mark mahaney, thank you. we want you to come back soon. >> rick, tomorrow financial analyst meeting for microsoft. keep your eye on that. also, that $1 billion in revenue. they were light last week. they just made it back up by not having to give it to yahoo. >> i tell you what. morgan stanley cut to neutral from a buy. that's a big story. there's another big story out here. you know, goldman sachs needs to be in almost every headline. goldman sachs itself was down. also jpmorgan. >> you cut morgan stanley, goldman sachs, you're kind of cutting yourself. certainly a lot of people, as joe terranova coins morgan stanley goldman light, you're taking down the same business model which we think is going to be a heavy trading model. some he can poeshz in morgan stanley's case i think more to asset management than goldman sachs. aside from the risk they didn't take in the first half with the

government's money the stock's better positioned to actually perform in business that's are more longer-term annuities. >> you've got to like morgan stanley's business model but understand what morgan stanley versus goldman sachs, morgan stanley's coming from a different place. back in '07 mortgage security derivatives, they got completely obliterated. goldman sachs dodged that bullet. morgan stanley had to hunker in, change the model, take less risk. yes, morgan stanley goldman sachs light but right now they're goldman sachs very light. >> nobody trades like goldman sachs. you can only compare them insomuch as both firms trade but goldman is clearly head and shoulders above everyone else. but jefferies. go back to that stock. traded up to $22. they raised estimates. we said get out. stock trade is down to $17.50. we told you it would trade down to the high teens. now back to 23. stock's going to have trouble here. no reason to chase it. this is the real story, jef, to watch. you don't want to own it here. gets down to $18.50, $19, jump in. >> you look at bank of america stock, this has been going up,

up, up while the rest of the big names are starting to pull back. you see goldman sachs, morgan stanley. interesting thing about bank of america they'll write off about $40 billion. right now they presently -- normally they trade around 11 times earnings. they're trading about five times next year's earnings if this analyst is right. by the way, this analyst, just like meredith whitney, a year ago went cautionary on the financials. she said they went to an attractive back in map you've got to like what's going on right now for bank of america. write-offs are huge but going forward -- >> i'm with you. i'll tell you why i'm with you. all my buddies are texting me today, they were talking about that offering, ten-year offering, 6.75 coupe okay. if you kind of like the stock, it's also maybe let's look at the debt side. speaking of the debt side, let's go outside stocks. weak demand in the five-year auction. it was the d. it was the d for dog. as we say put a tail on that auction and call it lassie. >> you know what? it is all about indirect bidders right now.w. we need the central banks to step forward.

we talked before the show about this. august 7th you'll get unemployment. what follows that? august 11th, august 12th, august 13th. threes, tens, and 30s. a lot of supply coming in. from august 7th to august 14th it is a tough week of sledding. >> what's interesting, we speak of goldman when we speak of the treasury market, they said u.s. treasury funding will be much less than expected because the financial recovery is under way. in fact, they said it's going to be 28% less at $2.9 trillion. that's very good news. it's one of the reasons why people are starting to think that between paying back tarp, the dollar actually has some more room to run. >> that's a good point. fact that the dollar rallies is interesting. i don't want to give it away. dennis gartman will be here. we'll talk to him about it. but that's an interesting phenomenon right now. >> plus the curve's flattening. these auctions are going sour. twos and five supposed to be the lay-ups. the five-year's become the new fulcrum of the yield curve. all the investors like to be in the five. it's not like being on the end

of the teeter totter when the bottom falls out and rates go up on the long end. should supply become an issue. when the good ones, easy ones aren't good. doesn't make me a bit nervous. time for bull market or b.s. pimco's mohammed el-erian talking about it. >> -- on things like corporate profitability can continue to be driven just by cost cutting. that's not true. you need revenue growth. investment guides, look at the rally in equity especially what happened in july. you get a feeling that the equity market is now on a sugar high. >> where's the almonds? >> i tell you what, i don't know that we agree with the sugar or not but i think we all kind of do. hey, jon from monster.com, the monster himself. he's on my spot. you know what? i like your lollipop. >> i think you need a bigger one. >> did you say you liked his lollipop? >> yeah, that sounds wrong. >> all right, that's it. get the hook out now. anyway.

all right, jon, what do you think? let's talk about this. mohammed el-erian right? what's your thought? >> well, restriction because i'm standing in your spot, i've got to use props. that's why i have this sucker. but i've also got what i prefer, the energy drink. monster of course is my brand of choice. but here's what's going on here. el-erian's right that the market is on a sugar high, though a lot of doctors will tell you that sugar highs aren't even real, that you don't really get a sugar high, it doesn't even happen. but since i've got two kids, i can tell you, it does happen. they go running around in circles. then all of a sudden it's nothing but tears. we're hoping that doesn't happen with the stock market here.. and i'm thinking that there are so many of us, rick, that are looking for the correction that guy was talking about. and i do believe the fed -- >> it's also all about timing. as every trader knows, you could be logical, nail it. but what if the next five months the market holds up, we get the inventory blowouts, and all of a sudden the consumers aren't there to buy it? thoughts on inventory, thoughts

on sugar, thoughts on stock prices. >> i've got a question for jon. jon, you're out there in chicago. you see what's going on in the vix. the concern i have is every july the smart traders go out there, you know what they do in they look at the october vix, they're going out thar, they're buying 0 strike -- sorry. >> you're eating.g. >> can i get some of that licorice over here, rick? >> johnny, you see any type of buying in the october expiration? specifically 30 strike vix calls. >> sure. we're seeing that exactly and that is still relatively cheap. it's a third of where it was last october, as you know, joe. and i think people are just positioning themselves in case we do get a pop-up here in volatility. that would occur if we broke down through 970 for the downside. i don't know if we'll break seriously below that. i'm looking for more modest t correction beneath that. but that could all change with these earnings that are coming our way. look at stocks like goodyear. we had unusual activity in this one today.

goodyear is a stock that's just gone like this. cooper tire, like this. there is a lot of those companies out there that are actually performing extremely well and were sold off so severely that even though i'm with el-erian that i think there is a sugar high going on, there could be so many of us looking for the correction that it just doesn't happen. >> nobody's smarter than el-erian on this stuff. he's had a great call. how about the sugar low we had on the way down? this correction back up here, look at this. the s&p is not expensive here. we talked about this last night. it is actually back to a place where it's supposed to be. i look at even a ford. you talk about goodyear. ford is actually going to beef up production because of what we went through and the heart attack that led to the second quarter essentially drying down or the fourth quarter in inventories. fourth quarter production for industrials is going to be very strong. i don't know where we get this was all a big mirage because it is a big piece of licorice. >> you've got to be very careful, by the way, when you're trading the options in the vix, because of the expiration cycle and how it all goes, you do not want to trade it if most people don't understand it.

look at the quad qs. there's a lot of different ways to play it and still be involved in the volatility in the marketplace but not put yourself in those vix options. >> jon, keep my spot warm. >> i'm keeping it warm. >> guess what? there's a lot more "fast money" coming up. you have to tune in. how to save your money in this very confusing time in the equity market. >> will another pixar hit and terranova tourists keep the magic in disney's earn sngz and don't send your bling in the mail just yet. gold is getting pounded this week. the commodities keying on your next move. plus, when two giants enter the ring, only one comes out standing. it's the economist versus the bondsman. when america's post-market show continues.en t beat the $100 cream. flabbergasted when we creamed the $700 cream! for under $30 regenerist micro-sculpting cream hydrates better than 32 of the world's most expensive creams. fantastic. phenomenal.

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welcome back to "fast money." of course we're live at the nasdaq marketsite. hey, the dollar's rebounding. from a very, very critical level, gold getting hit hard. maybe it is just the antidollar trade. with us now, commodities guru dennis gartman. hey, dennis, what's the trade on gold? >> well, i thought the trade was to be long of it until they

started hitting every stop known to man. until crude oil started selling off rather dramatically.y. until the grain markets all made new lows and suddenly as if there was no bids anywhere they just took gold down, what, $20 yesterday. they continue to take it down today. hard for gold to do anything other than go down when crude oil's falling $4.50 a barrel. >> that's right. and you know what, dennis, as much as gold is the anti-dollar trade, i think it's almost ramped up exponentially when the dollar bounces from these levels, it can't get through, whether it's december of last year, june of this year, the day before yesterday, and boom, it's up. >> 78.30 on the dix, you can't get through there. but the question is do you think gold when we go back to the e fundamental story at least where we equate gold with inflation, what's there for you on this and what's there for you on production which is down globally and there really could be a supply issue if central banks are buying? >> well, we'll see what ends up happening. it will be interesting to see if the gold con tatangos begin to

narrow, which normally they won't. keep in mind what's happening there. you're right. production in china is down. production in south africa is down. production here in the united states is down. even in canada it is down a little bit. we could get gold to go down to $915, $920 without too much difficulty. it's a big consolidation, a big -- for the chartists out there, a huge triangle that's. formed over the course of the past year and a half.. it would seem to me there's probably going to be support in the low 900s. selling it at 1,000. >> dennis, it's joe. quick question for you. pull back in commodities. i agree with you. on the pullback give me the option here. you've got gold. you've got copper.. you've got oil. which one do i want to buy in. >> i think i'd rather buy copper than gold. i think i'd rather buy copper than crude oil. i think crude oil has a ways to go down on the down side. >> i kind of agree. >> dennis, on that same topic -- i like the call there as well on the cop consider and i'd give him applause as well. at what level do we like copper? most people won't trade copper they'll trade the freeport. at what point do you like freeport-mcmoran?

it just made today's pullback off of those highs. where is the level where you'd like to re-enter? >> i tell you, what if they take it down another $2 tomorrow, pete, i'm going to be a buyer for my fund. i'm going to be a buyer for myself. give me another $2 on the downside and i'll buy freeport. i find myself using freeport more often than i use the copper futures. or copper etf or anything like that. i'd rather own freeport. i like the dividends, that sort of thing. take freeport down another $2. you have me very interested. >> dennis, it's guy. you got a view on the s&p here? >> i'm a little bit short, guy. not dramatically so but i think we've gotten a little top-heavy. i think there's enough for sale. i think there's very little insider buying. enough new supply coming at us. i went home a little bit short and the operative words here are a little bit." >> dennis, it is a pleasure to talk to you. you are the commodity man. now it is time to take your position on disney. the mouse house reporting tomorrow after the bell. traders looking at the margin of the theme parks. profits at their cable division.

and this little itty-bitty film called "up," which just happened to gross over $300 million worldwide. i'll tell you what. i have two high school daughters. you know, they're really cool. they're not going to go see the animated cartoons, are they? are you kidding? listen, i used to go to the drive-in.. not only that, i go in 50-year-old cars. i had all the teenagers in there seeing the movie for the second time. what a great flick. >> i'm with you! >> what do you think, pete? >> i'm curious what you think really more than myself. because i tell you what, disney's been on an absolute catapult to the up side and i'm just wondering has it already been -- >> david bank managing director of capital markets, rbc capital markets, and he will tell us the story. >> first i didn't get any of the sugar so i'm going to have a little bit lower energy than you. >> you're a little more sedated than rick. >> but in short, i guess the answer is we have relatively good visibility into the cable business. espn's a very large part of this business that people don't realize. we have pretty decent visibility into the broadcasting business.

much more difficult visibility into the parks business, where they've cut costs, traffic has been up. but it's really hard to know exactly how much money people have been spending.. so the way we look at the stock is -- and we're at 52 cents. we're actually a penny above consensus. you know, putting our money where our mouth is. but the reality disney of all the diversified media conglomerates is the one with the absolute least amount of what we call toxic assets. from a secular perspective, the reason the stock has been so strong-s that the pressures on disney have been cyclical as opposed to every other diversified media conglomerate where you have like newspapers, radio, local television. those are business that's have secular pressure. this company is all cyclical. that's why the stock's been so strong, to be honest, regardless of what happens exactly on earnings. >> the disney channel has been bigs for them but i was under the impression the ad spend at espn this quarter wasn't going so well. do you factor that in? >> we do. >> i can understand the

valuation at disney but it's also had a pretty big run. what do you think of the stock? >> i think if you look for leverage to a cyclical recovery in diversified media this has to be your best play. it's definitely run but since 1982, the company has not traded below 12 times earnings, with the exception of the middle of the crisis. right? so right now on a calendar year '10 basis on our estimates, this stock is going do something like $1.90, low 1.90s. you talk about 13, 14 times earnings. historical, trough earnings, trough multiple. it is still pretty attractive. >> but more importantly, where does that trend end? because again, we know they've recovered well. we know their business is fairly insulated. espn's doing a great job but again, we go back to the stock price. i see it around $26 here, all-time high at the peak of the market was $33. so i mean the stock again if you're looking at it in earnings perspective it -- i'm just wondering what you think the forward-looking guidance is. >> well, the company doesn't guide. that's one huge challenge. we're going to be looking to

tone. we expect to hear from them the same tone we've heard from everybody else which is stability, modest sequential improvements. >> joe, what do you think? >> the story on this, rick, is right now valuation on disney is right on target looking forward to 2010. to timmy's point and to guy's point, it's how do you get it now north of 30 bucks? besides me continually taking my kids there, which we're booked again going again. i love disney. i've been long disney stock. but up here at $25, $26 you got to step to the side and say how does it get north of 30? bob iger has a plan. the plan looks like it is going to be online content. he understands the model of how to put your business on the web. he's trying to move to that model. and if he does successfully, yes, it goes above 30. >> last question. target price. what do you have for a target price? we all know it's trading around 26 going into this number. what's the target price? >> based on the fundamentals today, our published price target is actually $27. but that said, i think that we roll the price target forward when we get the next -- get closer to 2010.

and there's probably up side in that price target. >> can you see $33? >> i think it is going to be tough to get above there. >> i like disney, i like their movies. let's turn to under the radar earnings trades. hey, chemicals set. the dow set to report tomorrow morning. pete? what's your trade -- >> the chemical stocks have had an unbelievable run. we talked about at the halftime report today. dow is going to report tomorrow. dow's one of those that's gone up threefold. you just wonder is there anything left in the tank? my thought is their numbers will probably produce something pretty strong but i think this is a name where you can actually wait for the earnings to come out, wait for that pullback, maybe a little bit of relief from the folks that they actually produced, get a little bit of a pullback, and that's your opportunity. i don't think you have to chase. >> look at quarter in eastman chemical reported july 23rd. 86 cents. the street was looking for 71 cents. these guys are going to make $2.75 this year, $3.62 next year. that's 31% eps growth. they trade at 13 times forward earnings. this company's cheap on valuation. stock's had a big run.

you don't chase it but it's one you want to own. >> as pete said it's been a pretty good run for these guys. stabilizing demand i think the market's priced it. watch basf tomorrow germany. they're really the granddaddy. they'll tell you what's going on with demand going forward. guess what? more "fast money" coming up next. >> next on "fast money" -- why this casino stock rolled snake eyes. how this soda bottler got a pop. and why traders were checking into this hotel chain. they're the biggest moves of the day that you missed. your pops and drops are coming up. andy roddick has the fastest serve in the history of professional tennis. so i've come to this court to challenge his speed. ...on the internet. i'll be using the 3g at&t laptopconnect card. he won't so i can book travel plans faster, check my account balances faster. all on the go. i'm bill kurtis and i'm faster than andy roddick. (announcer) "switch to the nations fastest 3g network" "and get the at&t laptopconnect card for free".

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welcome back to "fast money." live at the nasdaq marketsite. i am having too much fun. let's get to some of the after-hours action. i like these thin markets. hartford financial out with earnings, stocks up 3% in the post-market. i even heard 4%. they beat earnings forecasts big-time. break-even profits for the year. pete? >> hold on, before you go to pete, i'll break down ahartford. got a half-hour left. the tea party thing, that's been unbelievable what went on there. i know you've got people, i'm sending you tea, you're sending

u.t. what is this thing like? where's it going to go? tell us. come on. >> all i know is i have cartons, cases, tea all over the office. the weird thing is, i take my parents out on sundays when i can. i go in my flip-flops, my cut-off shorts. >> yeah, whatever. whatever, rick. >> now people are buying me tea? the mexican mostacciolis, even though it should be breakfast time. >> how about you put together a little tea party right around here. what do you think? >> whatever you want. >> the tea parties are neat. i tell you why. because it's just people trying to have their say in what's going on in the world today. it's involvement. that's a good thing. let's get back to hartford. >> projected forward they might break even or may even make a profit. i think that's what shocked the street a little bit. this stock has run into this earnings number. we talked about it the other day. a lot of activity out there. stocks up 26% in the month. most of that in the last four or five trading days. you understand why the stock is not going up even faster today after that report. you still got to like what they said.

>> if you believe them, they said you'll make over $4 next year which puts their forward "p" around 3.5. this stock is ridiculously cheap. especially if you think the financial disaster is behind us. >> also, 40% of their holdings in their portfolio, corporate bonds. and corporate bonds have done very, very well. their balance sheet's a lot better. >> their balance sheet's phenomenal. >> they shorted up. >> hold on. we got a fast message from george. >> george bush? >> he calls you the great santelli but he thinks your new moniker should be the enumerator. >> i think it's better than e-denominator. thanks, george, i like that. time for today's "pops and drops." the diamonds and dogs of the day. massey energy. 7%. it's a pop. pete? >> they got a nice upgrade today from ftr and they not only hit those numbers, they crushed those numbers today. all of that gives them a pop.

they pulled back, big pop. take a little off, you got it. >> arcelor mittal dropped 7%. tim? >> this is the biggest steel company in the world. they totally missed expectations but the bottom line is demand is recovering and they're starting to restart plants across europe. >> coca-cola enterprise pops. it really pops. 3%. joe? >> they retain their u.s. pricing power. lower input cost. but you know what the tell is here? we had the ceo john brock on our show. and i'm telling you something, these ceos keep coming on our show and you know what happens? the stock price goes up. >> then we should invite all of our buy recommendations back for encore performances. all right. let's go. lazard pops. 13%. guys? >> monster second quarter. this is a name we talked about. assets under management up. management fees up. this stock's at the highest level we've seen since october. better valuations in green hill. but still great plays. >> daimler. what do we think about daimler? >> improvement in operating profit. they put in much better numbers than expected.

recovery in demand. these guys are getting a huge benefit from cash for clunkers which started. >> that was a pop 3%. by the way, mooney's drops 8%. >> really? i think it should drop a lot more than 8%. >> i think there is a lot of agreement on that one. where were they when the hurricanes were coming down? royal caribbean cruises, it's a drop. 15%. guys? >> second quarter loss of 16 cents. street was looking for a loss of 6 cents. should be no surprise here, this stock got popular around $17 a couple times. double top there. i think it goes a lot lower here, probably $11. >> dad, if you're watching, i'm telling you what, just pretend none of this is coming out of my mouth, but it is chicago. apart from the white sox you have to like the chicago teams. but i come from a long line of cubs fans. pitcher mark buehrhle, wrote just last week completed a perfect game. would have been a lot more perfect eight miles north. another record yesterday. 45 consecutive batters. that's unbelievable. i think the old record was 41.

absolutely extraordinary. >> that is a very difficult record. one of the best in sports. >> go sox! i gotta love those sox. >> come on, guys. >> lots more "fast money" coming up. it's trader versus economist, options pit versus ivory tower. yes, it's santelli versus liesman. >> get out of the pit. there's information outside the pits. >> i'm not in the pits. i think you're in the pits. >> who will be left standing after this nasdaq smackdown?

welcome back to "fast money." my old pal steve liesman. we're no stranger to a good old-fashioned street fight. take a listen. >> you're going to come up with excuses to break rules? break the law? you sound like richard nixon. >> ooh. >> if you want to blow a gasket on that, rick, just blow it on someone else, not me. >> then don't open your mouth and say dumb things. >> not now. >> rick, do you understand how the banking system works? rick, get out of the pits, rick. get out of the pits. there's information out of the pits. >> i'm not in the pits. i think you're in the pits. and i'm not talking about the trading pits.

>> rick-i argue with the reality or i can argue with your illusion about what the reality should be. but right now i'm arguing with your illusion. >> he's back now to go head-to-head, toe-to-toe with me on the fed's so-called exit strategy. hey, it might say "exit" over the door, but there's no handle. you know, out of record low interest rates, steve, seriously, welcome to "fast money." let's get on it. what do you think, steve? is there really a chance they'll thread the needle, buddy? >> rick, i have to tell you that when i look at the numbers they've gotten it right. when i take a look at the fed's balance sheet, they were up as high as 2.3, 2.4 trillion, and now it's come off. i don't know who made that chart. that's not the chart we requested because that's through 11/6/08. that's whatnot we asked for. there -- that's not even the one i asked for. that's the second one. did you rig this for me, rick? so i would get it all wrong? >> all i can tell you is at the bottom of the sea there is a a lot of sunken ships and there's chart rooms and they're filled with charts. >> the charts will tell you

we've had half a trillion-dollar move with commercial paper and the central bank swaps have run off, actually, just like the fed said they would. but they have increased to half a trillion when it comes to mortgage-backed securities. >> i think -- they're going to ramp up the sheets a little bit. what are you hearing? >> would you repeat that? on your show you shouldn't interrupt me because you're the host today. >> host with the most. steve, you think their balance sheet -- i know it's been flatlining, it moved up, it's coming off a bit. do you think they'll ramp it up some more? >> yeah, we heard today there was actually news today from bill dudley, the fed president, who said it's going to go to 2.5. which is why i want to get to the second chart. you see that very low line there, that's the talf, that's where they're going to finance legacy cmbf. that's the bottom one. $30 billion right now. that one could ramp up to another half a trillion -- >> there is legacy assets which are really toxic. and there's legacy politicians. we won't even go there. okay, let's talk. >> legacy bond traders.

>> steve, joe, i'm coming at this strictly as a trader. the concern i have, we're about to move into august. what is going to happen with ben bernanke? he's up in january. what gives here? >> all i can tell you is what the pool was on the plane with tim geithner among the reporters. what i heard was 3-1 in favor of reappointment. and i've heard nobody else -- i think it's going to be tough for obama to put somebody else in there for the particular reason that i think you might be worried about, which is that anybody else is seen as more political than bernanke is. >> hey, steve, it's guy. what indicator is the most important for them to think about starting to raise rates? understanding that's probably a year away. but what do you think's on their radar screen? >> you know, i ask them that all the time, and they always tell me it's not a single indicator. i think if you see a cpi come up, the one thing i would look at, i remember hearing one central bank guy tell me if i saw like a point rise, a full percentage point rise in the five-year inflation expectation i would raise interest rates tomorrow. expectations are an absolute key for the fed, and anything that

tells them down the curve that things are going to get much hotter when it comes to inflation, that's going to force their hand whenever that is. i think you have to make a bet on the politics of this. i think everybody wants to raise it gradually or take the accommodation away gradually. but if they're forced to move you have to make a bet as to whether or not they will. >> that's the question. pulling liquidity out of the market, are you comfortable that there's a mechanism in place that they can deploy efficiently if they had to do it right now? >> first of all, there's an automatic mechanism in some of the programs. okay? it's the good and bad times pu bad and good times. the idea that some of these rates are set to run off naturally because they're no longer attractive when the market comes back. that's why the commercial paper part of the balance sheet has run off. that's why the central bank swap exchanges have run off. because it didn't pay for people to come to the central bank anymore. that's a piece of it. the question becomes the other stuff that's not automatic. i would like to see them step forward and start raising some of these rates to put the market on notice that all is not free

forever. and i think maybe we can end there, because rick and i are probably in agreement on that. >> we are in agreement. you know, what steve -- >> that's boring. >> -- i'm in a pretty good mood tonight but i'll be a little surly in the morning because i'm staying in new york another day. you better get ready. our thanks to the man, steve liesman. liesman. more "fast money" on the way. time to change my tires. knt when it comes to shaving i know when to change my blade. (announcer) gillette fusion's indicator strip fades to white when it may be time to change. fresh blade. better shave. it's the chevy open house. and now, with the cash for clunkers program, a great deal gets even better. let us recycle your older vehicle, and you could qualify for an additional $3500 or $4500 cash back... on top of all other offers.. on a new, more fuel efficient chevy. your chevy dealer has more eligible models to choose from - more than ford, toyota, or honda. so save gas... and money... now during the chevy open house.

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welcome back to fast "fast money." welcome to the obama trade. announcing deal on health care. i would say it was around, what, just before 1:00 eastern. let's take a look at the united health chart here and what i find interesting is i always like to see what happened in the market. now there is your move but it is always economies a scale. because what you need to notice is that chart, like all computers generated, they want to exaggerate it. it wasn't a huge move. this market, i would think, would have a bigger move with some substance to this story. are we seeing the legislation of the market's perception that there's a big program on the way? >> i think a lot of debate still going on and the problem that people haven't made up their

minds yet. long term, we had an analyst the other night and he gave us a great blueprint, somewhere he gave us a great bid. that's why i think that we're starting to see of that move up on the upside. some of that pullback. but that's not why it is as volatile. people are gravitate to the idea that something is good for the sector. >> was on june 11th and we talked about it on it show, capitulation grade. cate down with the aetna guidance which was awful. traded down to 23.30 on 30 million shares. we said now, you get in. i mean, the obama administration, a wild card. but unh, you know still at these levels is cheap. >> cheap. >> again, hard to chase but i like unh. >> these guys don't have the votes. they need push the bill, as expected, which means only good things for unh at this point, so again that's reaction in todays stock. >> hey, this conversation isn't over. why? don't miss a special on health care. we're going to have a health care sum out "squawk box" tomorrow. that's starting at 8:00 a.m.

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hey welcome back to the "fast money." tonight on my larry kudlow's report show, 7:00 a.m. eastern he will have gary gensler. this will be interesting, i told you about that editorial, tonight at 7:00, don't miss it. time for the -- "final trade."

go around the horn. >> before we go to the final trade" you've been here two nights. it's not easy to be in that seat. you've done an unbelievable job. thanks for coming on. >> a guy who could give us some trading strategies. >> i love it. >> i'm a good waltzer but not good at the tango. >> a good chicago man. >> listen. >> all right, "final trade." short-term emerging markets look questionable. >> you know what they said was pretty impressive. they will make money this year and next money next, aig. >> take a look at sneakers, nike, you buy it here. >> you know these insurers have been red hot, somebody like metlife. they had an unbelievable amount of activity today going into their earnings. 35 strikes. stock his a hard time getting through 35. if it does bad bing. >> listen i'm rick santelli. more "fast money" at 5:00 and midnight. i'm so sad, erin burnett is going to be hosting, along with a special guest, former new york

governor eliot spitzer. have a great night. tomorrow, oil's well. a global dynamic duo. aluminum. two ceos with their fingers on the pulse on the world economy.e ? yep, even the rental. what if i'm stuck at the office? if you can't come to us, we'll come to you in one of our immediate response vehicles! what if mother won't let me drive? then you probably wouldn't have had an accident in the first place. and we're walkin'! and we're walkin'... making it all a bit easier -- now that's progressive! call or click today.