welcome back. time for our final diagnosis. serve your diagnosis of where things stand right now and where we're headed. >> i think there's no question that health care reform has certainly got the attention of the american public. and i think it's rightly so. i love the fact that everybody is talking about it. i think what we should do is not try to do everything. take a look at colonic illness

and wellness prevention. bipartisan. information technology. everybody can agree to that. let's do something about defensive medicine, we can do that. we can really pass a good program that a bipartisan basis that everybody can support. >> thank you for. >> jason:ing us. this is not the last word. we'll have more. that does it for us today. join us tomorrow. "squawk on the street" is next. live from the financial capital of the world overlooked by old george there on federal hall. that's it over there with the american flag. this is "squawk on the street." we're right behind that flag. i'm mark haines. mood swinging investors back to being popular this morning. positive results, shrug ugh off a miss by exxon. >> shares of g.e., some rare

respite. up about 6% in early market action. goldman sachs upgraded ge. that could apply to a whole lot of companies out there in manufacturing that have subsidiaries contributing to an overall positive move on the market. >> i thought ge capital was what was holding the stock back. >> there is -- there is that. yes. >> all right, silly me. trying to be logical on wall street. >> yeah. >> okay. this is right now. look at that, added fair value. you're looking at maybe 100 points on the dow at the open. >> and steve liesman, check in with you on the jobless numbers. what do you see there?

the claims came in under expectations. all of the noise was a result of the data that we saw as expected. distorgs have worked themselves out since probably the first true reading of the jobs situation we've had in weeks and it shows strong improvement. claims up 45,000. the average ticking down. continuing claims coming down. but there's still a little noise in that it lags. take a look at jobless claims. you can see there, we had the peak at around 665 thoush. it came down a little bit and that decline there came as a result of all of the seasonal distortions. came back up, not as high as it has been. jobless claims lead the peak in unemployment in general. two or three months after the -- before the end of the recession.

claims tend to be. this is where we are right now on the claims the insured on the employed versus unemployment. you can see it looks like claims might proceed -- interestingly enough, a near term turnaround in the unemployment rate if this trend were to continue. it may be too soon. next week to see that improvement mark. but certainly in the next month or two, we could see if these claims numbers remain low and trending downward. we could potentially see here some improvement in the unemployment rate in the not too distant future. mr. haynes. >> unemployment is a lagging indicator, right? >> it is, right. >> we had a quote/unquote jobless claim in the early 2000s, is that right? >> we did. >> why are we obsessing about jobs? >> we want americans to be back at work regardless of whether or not the percentages of recession end or not. you want americans to be working. you don't want anyone to be unempl unemployed. >> i get that. i think the data is --

>> you want to see it peak. you want to see -- the idea is that the forecast remains high. >> not to prolong the discussion, but the peak is only here once you get past it. there's evidence of a turnaround. maybe -- or maybe it will go whoop. the peak maybe just -- whoop. >> maybe, mark. if you look at the peaks, if we can confirm a peak in claims, we're secure on confirming it. >> there's k-2 and mt. everest and they're both really high. >> thank you, steve liesman. >> pleasure, i think. >> the early market action. our reporters are standing by -- oh, yeah, of course. it's cool breeze at the big board.

>> all is right with the world again. we're up in the highs. futures have been up all night here because china is rallying. we're seeing the -- the dollar move back down. we're seeing some of the initial jobless claims back in line with expectations, commodities are up. everything is right with the world. we have to get through the seven-year auction. that's the only thing everybody down here is nervous about. how would you like to be an oil company? you hear what exxon said, royal dutch, b.p., they're saying the same thing. exxon, below expectations. don't worry about that. volumes were lower because of weak demand. the refining margins were weak. we heard that from valero. they all have the same problems. the earnings do not matter. they're 7% below last year. the ceo said we're not banking on a quick recovery. b.p. say the same thing a couple of days ago. nice little rally here on good volume. that's because barney frank thanks to comments yesterday

that the support for regulatory reform would mean that ge capital would not have to be spun off from general electric. that was the reason for the upgrade over at goldman. there's still big problems with the home builders. the losses are greater than expected. losses aren't good, the impairment charges aren't very good. trader talk.cnbc.com. how are we looking at the nasdaq? >> we could open at 1% or so. most large cap technology shops in the premarket are looking sharp this morning. recommend is higher, microsoft is higher. yahoo! in trouble getting out of the gates following the research deal at microsoft this morning. it's down 17%. three downgrades or guidance is weaker than expected. express scripts is up about 3%. they also raise guidance ahead of the prior range. symantec is down this morning.

the shares called to buy. $21 is the price target there. flextronics is down 7.5% on a downgrade from need hamm. a hold to buy on guidance towards the lower end. back at the nigh mention. >> we're looking at the prices framing up right now. $1.50 higher. weaker dollar, stronger stocks. that's the equation that traders are following. on the fundamental side, things are looking bearish. the iaea came out with a report that said demand will be off. that's one factor weighing on prices. on top of that, take a look at the turf. it's more expensive than the contract is. that's known as contango. it's a bearish signal because the folks who need oil have no real reason right now as far as

demand is concerned. they're not seen as wanting it or needing it. so folks in the market are buying it, storing it, and waiting for a time where it's more expensive. back to you. >> time for word on the street. peter kosta is here. >> smiling. >> he sailed past the mixed cafe stands out there. the lines, mark said sneaking around, everybody waiting 20 minutes for a cup of coffee. >> i don't look for anything for free. there's nothing in this world. if they give it out free like the other people have it, i'll pay. i'm trying to help the economy, erin. >> you're going to open lower because of a downgrade. >> all right, that's one thing. >> but the markets are going to be up. >> yes. it's up because the market is hopeful again today. >> bad earnings or earnings that don't seem to be hitting the mark. the reaction is not as negative as you would think. exxon being an example. exxon's earnings -- >> probably sounds -- revenues down 50%.

>> right. but the stock is -- you know, it will be hit today but not hit like you would think it would be hit. any time there's negative news, it softened by people's willingness to believe it's negative this time, but going further out, it's going to be positive. so a very, very positive tone to the market. today for a lot of reasons. >> one thing we know, okay, it would be a shock if we didn't get sharp growth numbers at the end of this year, in comparison to last year, armageddon. >> yes. yes. >> and people are going to start looking forward and say -- >> this is where it gets tricky. >> when does the market start to look beyond the little pops you're going to get in the third and fourth quarter? >> i would think me as a prognosticator, i would think that probably toward the end of the year you'll see that looking forward thing thinking maybe lit be okay. we're starting to -- >> then the government goes away. >> then the money goes away. now you know, we're going back

to the problems that we still have. still unwinding a lot of situations. even though it's taking two years, this is a major -- we had major financial crisis in the last two years. this is a long-term thing. they're going to have a long-term view. i mean, all right, for the year this year, it will be up. next year, i don't know, come on. if i knew that, i'd be in vegas. >> can you give us a real answer. peter kosta, thank you so much. mark? thank you, erin, up next. the faber report. david has the knicks and rangers on his mind. the e-team almost overloaded this morning. big oil, drug, money, on their agenda. plus, rlj's company's founder bob johnson joins us live from the national urban league conference in chicago. the take on the economy, health care, and a lot more. you have questions. who can give you the financial advice you need? where will you find the stability and resources to keep you ahead of this rapidly evolving world?

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welcome back to "squawk on the street." i'm david faber. not unexpected but noteworthy. cable vision, the large company here in the metropolitan area of new york city and the environs. that goes without saying, in the metropolitan area is going to be spinning off msg -- well, what includes a lot of different things. tax-free pro rata spin off. and you get two distinct companies. of course, they get to complete

this spinoff of madison square garden, msg, to cable vision stockholders by the end of the year. what do we talk about when we talk about msg? you know it includes the knicks, the rangers, all of the other sports teams that are in there that are more than just the knicks and the rangers. the new york liberty, the hartford wolf pack. can't forget them. you've got the concert venues, radio city. the cable network itself. msg and msg-hd. that gives you a sense of what we're talking about. and the garden itself. don't forget that. in need of significant renovations. we'll get to that in a minute. that goes to the construct of what is going on here. we didn't show you the bid-ask on cablevision. it will be up sharply. what is left of cablevision itself. you can see high as 21 up from a little less than $19 a share.

cablevision continues to be of course the cable company. 100% digitally penetrated. a lot of triple play out there. not as much cap-exof cablevision as you have in other kpacable companies which makes it a prospect for many who like the sector. rainbow media, amc, the hit, "mad men." they bought "newsday," i won't go there. and it's a clear acquisition people are still scratching their heads about. that's cablevision. a successful cable franchise. there certainly will be speculation again sparked by the saying, you know what, even though james dolan will be president and ceo of cable vision and chairman of madison square garden, nonetheless, investors are sure to say that maybe now is the time that his father, chuck doladolan, 84-yead chairman of the company looks to

sell. don't forget. it was only in '08 that the company had a $36.26 go private deal that was turned down by its own shareholders. shocking at the time. still puzzling. you split the two companies with different ebitda profiles. free cash flow of $400 million for the first half of this year. could earn $3 of free cash flow a share in 2010. put a multiple on that. then you have the garden. yes, significant renovations are needed there. that will be an expense. there are other expenses associated with the garden. but nonetheless, you get $150 million in ebitda over time and you create a good deal of value being reflected in what we've seen in the early move in the stock this morning. more, perhaps, as we go along. but again, hasn't been expected but got announced. let's send it over to kernan.

>> not going to read any of this? go to the commander -- >> they threw it quickly. >> do you want me to read it? oh. >> stay with me for one second. i want to start with travelers. i want to start with you for one second, david, about exxon, $4 billion the company made in the quarter. you remember what we talked about with exxon, right? >> $10 billion. why even bother. why even go through the motions for three months. >> i don't know why they would bother. i agree with you. it's very shocking, really. only $4 billion? >> and -- and it was only $4 billion. but we're not mad at exxon anymore. we don't care if they make $4 billion. we're mad at goldman sachs. they made $4 billion, right? >> that's true. exxon is making -- i haven't given them any money lately. >> they never paid the ticket. all the way to the supreme court, i believe, and they never had to pay a lot of it. they're incredible.

>> have you heard of any wind fall subsidies for exxon since they're having a hard time? don't you think they need a little government help? that's the problem with the wind fall -- >> have to consider a bailout of the oil companies. i mean, after all, $4 billion of profit? it's pitiful. >> check out the travelers. two dow components. exxon -- it's still the most valuable publicly traded company, obviously, or nonpublic in the country. there's travelers, which was a little bit below expectations. revenue was in line. earnings fell about 20% on lower investment income. the company upped the guidance for the year. as a result, it was indicated higher earlier. the bid split with the asset opening with somewhere and change. a fiscal year, 4.80 to $5.05. that was higher compared to what travelers said but below expectations. exxon -- it was not only $4 billion versus we've seen ten in

the past but it was well below expectations and it had everything to do with what happened in -- in crude. drug maker astrazeneca reporting this morning earnings per share, 24 cents a head of expectations. revenue beat the streets. you can see, the company raised the full-year earning forecast held by the absence of generic competition to its heart drug and the cancer treatment. eastman kodak was disappointing but we have bigger fish to fry. we're going to move elsewhere. kodak -- don't even talk about it much anymore for the former dow component considering it's a penny stock revenue fell below expectations as well. that's been a tough one to watch over the years. they fought backbought back a l at $3 under ceos. that's all from me this morning. back to you, i guess, mark. you remember kodak, right? >> oh, yeah, george fischer and the --

>> the nonprice cut rebate thing that we had that we got in trouble for? >> boy, that was a long time ago? >> it was. he said -- they want to lead the records at gm after that, mark? >> quite a career. >> one of the tales i've heard about. >> yeah. >> yes. >> all right, thank you, joe. up next, rlj's company founder bob johnson. joining us in the national urban league conference in chicago. >> going to talk about widening unemployment gaps. the need for entrepreneurship and what defines recovery? we'll be back.

we're back. the national urban league kicking off in congress today. the amount of downturn is affecting the number of people turning to it. joining us live from the conference, bob johnson, founder of rlj companies and a cnbc contributor. good morning, sir. can you give us the headlines for the studies? >> i think before i do that, i am going to give a plug in a venture i'm involved in in new york city. going to bring the best casinos to new york city, create jobs, and bring revenue to the state. the project i'm very excited about, it's involved in gaming in the caribbean in a company called caribbean cage.

so we've got a great band of hard rock and i'm excited to be a part of it. the issue here at the urban league is jobs. we need to create more jobs in this economy. we need to particularly create jobs for many minority americans who are being displaced by the decline of the industrial sector where many minorities work. and so we've got to focus on how to take a technological revolution and make it accessible to people who are not well verse in the any economy. >> is there any reason -- have you drawn any hope from recent data that things might be improving? >> the issue i see it is businesses are going to continue to go slow in hiring or rehiring

until they get more comfort in consumer spending and available credit to invest in new plant equipment and expand territories. so it will be slow. unemployment in my opinion is going to be some of the last turns of the style to show that the economy is recovering because i think businesses are concerned about whether or not we have green shoots or green mold that is sort of going to stagnate for a while. that's the biggest concern. it's a big problem for people who have been displaced from jobs. they're at an age where they have to go in to a tough career. that's a tough assignment and many people will find it difficult to get back to the workforce. >> what's the catalyst for growth? you don't have leverage. consumers won't have that ability to purchase. government stimulus funding this chi.

that's going to be spend by the middle of next year. you can get there but then what? >> i think the catalyst for growth, for businesses is sort of creating more credit and creating the -- the thawing of the credit market, getting more liquidity available for business to borrow. small businesses -- you can see what's happening with vip and asset lender. a big impact on small businesses. the credit markets have not opened up, so businesses can invest and until you get that confidence back and then you've got the consumers who are losing out on access to credit with the changes in the credit card regulations, until those things happen, you're going to find yourself in a very difficult situation. >> all right, bob johnson, thanks so much. appreciate you taking the time. >> okay, see you, guys. >> see you. final countdown to the opening bell coming up. futures pointing to a strong open.

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the bell started ringing about 30 seconds early. >> too much coffee. >> yeah, too much coffee. mcdonald's, mcdonald's is giving out free coffee. they drank a little too much of their property. can i ring it now? can i ring it? oh, i'm going to ring it. the state troopers of the year. marking the 35th anniversary of the first ronald mcdonald house. back to barin, ticker bnrc reaching $1 billion in assets. >> assets increasing. our reporters are standing by. we're open not fully. we have 42 points, 60 points and climbing of our expected open. the question is, can it hold? bob? i think it can.

the dollar down. commodities up. expectations change. get through the seven-year auction and we'll all be rosi and happy again. looking at the crowns here in the ipo. tell you about it in a minute. and the oil companies will have a time time of it today. exxon made $12 billion last year. $4 billion to the same this year. bottom line earnings were below expectations. we heard this from other refiners like valero out there. royal dutch says the same thing, don't worry, they beat on the top line. they had earnings well below expectations. the ceo talking about the fact they're not banking on any kind of quick recovery. bp a couple of days ago said the same thing. ge, our parent company -- i

think we're opening over $13 for the first time. it's around the corner there. i opened above $13. the first time in, what, six or seven weeks that will open above that upgraded to stocks. that's not anything they said. barney franks said because of the regulatory reform, likely ge capital will be able to remain with general electric. $16 million shares at $20. a bit below expectations. the talk is $20 million shares we're talking about here. it's a real estate investment trust. they restructure them with the idea that they'll make money in that particular difference. we're waiting for that to open here. the crowd is right here and we'll go down and executives come in and ring the opening bell. we'll get more on that and ring after the first 100 shares. more on that in a few minutes

here. trader talk.cnbc.com. shy of 1%. most large cap technology stocks getting out of the gate strongly today. amazon and google over and that's up about 1.5%. microsoft up 1.5%. the only small cap technology stocks have not joined the party is yahoo!. a little bit of a downside to the yahoo!-microsoft search deal. selling off without the up front payment that some on wall street thought they might get. express scripts up 2%. they raised the guidance. symantec shares down 10.5%. exed off the conviction at goldman sachs. $21 is the price target. a downgrade over it.

guidance over the end of the range. >> thank you, scott. we are seeing oil prices higher this morning. $1.20 higher at the moment. the traders are pointing to two fundamental things behind the bullish pieces today. the dollar weaker and stocks stronger. does that sound familiar? it is familiar. and also familiar is a fundamental demand to the downside. and what we've seen as far as our inventory reports have undermined that fact with the build up much more than expected in oil supplies yesterday. a drawdown greater than expected in gasoline. so when traders look for a bullish fundamental side, they look at the gasoline and they do see the gas prices higher today. one thing we know, you see natural gas prices the one component of the complex down to the downside right now. and it's important to know some of the things that's been taking place as far as natural gas

goes. we'll get a report in an hour. the ung -- the u.s. natural gas fund announced yesterday, this is important, announced yesterday they're in the process of reducing futures projects in natural gas. the whole complex is thinking about this because it's bearish to see that happening based on federal limits. rick santelli who has more. the involvement in the marketplace has repercussions. sometimes they're not good. hey, i tell you what, the supply has been surprising. not surprising in a good way. now, if you look at a one-week chartered two-week note rates, they haven't been well behaved. these yields are starting to climb. but look at the other end of the curve, the 30-year bond, it's exactly the opposite. the rates aren't at a major low level, but it's a different look. the curve is flattening. takes tens and twos. low 250s. not that many days go that you're channeling the 270s.

everybody from banks to major trading positions impacted by the options they would go super well. by the way, 1:00 eastern, $28 billion in the seven-year notes. last chart, dollar index really fascinating because it seems to be not really affected by what's going on in the debt markets. if you look at the $2 a day indeck, we're officially one cent off that critical level we tested about 30 hours ago around 781/3. jobless claims? what side do you want to look at? initials get back on track after seasonal variations. now back to mark haines. >> thank you, rick santelli. >> happy! sad. back to happy. the sentiment on wall street changing. the investors need mood stabilizers. joining us is the president and ceo of mr buellen and company.

out there, perfect weather san diego. not sitting in front of the harbor shot at least. wealth management. >> good morning, mark. >> good morning. >> let's start with bernard. >> you're not bullish here? >> we're not. the stock market is clearly up from the lows of last year. but just as there were corrections on the way up, i think there are corrections on the way down. and this might be a false bottom. >> what? >> i believe so. march bought top, aka the haynes bottom is a false bottom? >> i believe it could be. if you look at what's driving the economy, we're basically the economy that's on government spending and cuts and expenditures on corporations.

if you look at the unemployment numbers, the housing numbers which were somewhat optimistic, i don't really truly believe. i think if the housing numbers that we first saw were on a professional athlete, i would want them test. i believe there's something more behind it. >> let's get back to you. i'm confident is not coincidence with yours. bret? >> it's completely different. to come near the haynes bottom, it would have to be a decline in market. would be a 30% decline in the market today. think we're going higher. the reports which have gotten some criticism that are not quality earnings but is not happening. the companies need to get the cost structures in place first. that's what they're doing in

this earnings report. this is consistent with the initial recovery out of recession. >> companies are cutting their costs. and my son who's in the private equity business taking the crisis to the right side. in effect, it's similar to someone who sells their furniture to make the mortgage payments. from the outside, the house looks great. inside, the quality of life has fallen and the ability to bounce back is impaired. the management of earnings is what got us in trouble in the first place. and i think that the ability to stay ready for the economic upswing, which will come -- i think you'll see the upswing in the next 18 months. but it's certainly not in the next six months. i can tell you that. >> what happens? the fundamental question appears to be, you can get through, what is it, by the end of next september, the government wants to spend most of the stimulus money in the current package.

but once that money is spent, we have to have an economy that can stand on its own two feet. nobody seems to be able to define where that's coming from. housing prices may be improving but they're still dropping 17%. >> right, look. the companies are going to be more profitable because their cost structure is lower. and from the stock valuation side, you're going to get a push as people look at comparables at 2010. you can look at what the world will look like in 2001. can't look at lagging indicators of unemployment and housing today and make rational and successful investments. we need to look beyond this year to 2010 where the money has flown into the system through the government contractors to the economy and it will be a better picture. >> i wish that were true. for the most part, stimulus money is used to pay down debt. and it's being used to balance

either budgets on the state and local side, or it's being used to shore up reserves. we haven't seen lending increase in the economy. we haven't seen an increase in employment. quite the contrary, quite the cop trar. and real estate values as i said several times continue to fall. i mean, if you look at the all time low where we were in 2007, we're off about 30% from where we were. i'm not saying we're not going to get out of this. we clearly will. we won't get out of it with the government pumping money. we need consumers. we need to bring leverage back in the economy. >> okay, wow, i'm sorry, but mr. relentlessly bearish got the last word. >> behave now. >> boy am i pumped. >> you got him to a pulp. >> and bernard, thank you sir, i

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. the squawk on the street. i'm matt nesto. we're back. the earnings are flowing, it's heavy. check out this credit couple. visa reporting overnight. but mastercard stealing the thunder with a 10% move. the company beating the $2.67 per share versus a $2.42 estimate. both mastercard and voe is a reporting an 8% increase in transactions on a global basis. visa you can see up 4% here today. they came in after a close with better than expected results. interestingly, mastercard in the s&p 500, visa in the russell n

1,000 but not the exclusive s&p 500. also worth a peek. royal dutch shell. other big avrs are active and huge and worth looking at again today will be siemens, ast astrazene astrazeneca, and sony -- stocks from different countries worth a peek. and in the s&p 500, this bad boy, expedia. no one saw it coming. but a 26% increase in global room nights and air traffic pushing expedia higher. david faber with the latest faber report. >> mat nesto, people may have seen penny mack, the ipo priced at 20. they continue to be few and far between than the initial public

offerings, not secondary offerings. the stocks that caught my attention this morning. we don't talk about it normally. small company i know. the viewers know it. they have 930 stores across the country selling children's clothes. they've been involve in a nasty fight with their founder who owned about 16.6% of the company shares. wanted to place three new directors on the board and take control again of the retailer he started. that looks like that wasn't going to happen. the vote scheduled for tomorrow. he was nowhere near any hope of victory. he settled and is leaving. the company is buying back half of his shares, 2.45 million shares will be bought back below market at $28.88. he owns 16.6% of the company right now.

soon he won't and they're getting a one-time marketed secondary offering for him to sell the rest of his shares if he wants to. yeah, just showing this to daba the door, so to speak. children's place, the stock up sharply on this news of his exit and what was expected to be a significant loss, no hope apparently for getting in the most directors on the board. all right, let's move on to motorola which we mentioned this morning. that stock up sharply after reporting numbers that were better than expected. sales of $5.5 billion. they generated some free cash flow. $150 million of positive cash flow. they did lay off a good amount of employees. a lot of this, of course, coming from cost cutting. this is a company in the midst of significant transmission being split. currently run -- two businesses run by co-ceos, greg brown and sanjay ja who runs mobile devices. not quite as strong.

sales of $1.8 billion, down 45% versus a year ago. but nonetheless, you are talking about a stock that was below $3 not that long ago. you can take a look here in terms of what expectations were and what they came in. motorola, the feature today. we're still waiting for the ultimate split of those businesses. let me end with yahoo! down yet again today after a significant loss yesterday on the announcement of that search deal with microsoft. today, a lot of the concerns center around antitrust. we talked about this yesterday. yes google controls 65% of the search market domestically. nonetheless, three going to two in any market is one that the regulators look at very closely. particularly under a new administration that does seem to have an activist posture in terms of corporate tieups. that may be pressuring the shares. one takes a year and gets turned down, that's done a lot of harm, one would imagine, to yahoo!'s

business. that stock off yet again. i'm done here for now. send it back to you. >> thank you, mr. faber. he's not done for good. back shortly. back in a moment. inside the numbers from exxon mobile. they made $4 billion. does that mean they get money, like a bailout? remember last year, the $10 billion, the wind fall tax. >> haven't heard much about the wind fall profits lately, have we? >> no. >> what does all that mean? we'll get in to it. and later, astrazeneca ceos talk with mike huffman about health care reform. don't go away.

exxon mobile is trading lower today, down about 1.67%. why? profits, though, 66%. revenues at 46%. last year, revenues were $138.1 billion. >> wow. >> last summer was the summer of the windfall profits. a look ahead to the senior

analyst research. amazing to think that the company made $138 billion in revenue. they made a mere $78.5 in terms of revenue. what does this say? surprising to you in any way? gas prices are down. it sort of makes sense. >> where does the revenue come from? must be downstream, right? >> lower oil prices, clearly. and that affects the upstream and the downstream. and the volumes compared to last year are down a little bit. so the combination of the two factors puts revenue lower. >> people aren't using as much crude. >> the demand is down. right. >> how much oil does exxon mobile produces does it own? most is owned by governments. where is exxon mobile getting its oil? >> some of it owned where it has

homes sold. in some cases it's gone and traded knowledge and capital for some of the access to the oil. >> cap-exfell. that's not good. >> no, it wasn't. but they attributed some of that to a stronger dollar. and year-over-year, exxon said they were going to grow cap-ex to 2008 to 2009, the only major that said they would do that. >> what about green, they were vocally not a believer of peak oil. 95% of the energy from oil, oil is here to stay for a long time. they changed recently. they said they're going to do more green investment. algae. it's unusual. are they spending money and investing or was that a lot of headlines? >> pond scum.

>> they committed $600 million so far and if things go well, lit be more. that was a real commitment. >> it's real investing. not like bp at one point did a lot of marketing and not investing? >> $300 million up front and $300 million goes to the partner. >> they're investing in it. >> i have to ask this question for david faber. earnings for the interest lated punitive damage? >> yes. >> that's a -- they're paying interest on their awards? >> paying interest on what they had to pay out. >> they got to defer it. >> yeah, thank you very much. >> i think it is 92% of the oil reserve controlled by governments and a mere eight are controlled by big oil. >> that's my -- a little bit -- >> a little bit less. >> little bit less?

>> less than 92. a little less than that number. >> 85 to it 0 so -- >> coming up, steve, our senior economics report. as a curtain raiser tomorrow morning, highly important to these numbers. what is expected? what should be expected? what it could mean? all of that stuff. n plus continuing the economic theme. we're shining the sector spotlight on consumer staples. mark, they have risen 26%. since that day in march when you sat down. >> all righty. >> we'll be back.

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live from the financial capital of the world in lower manhattan, here we go again. second hour of "squawk on the street." good morning, everybody. is this the return of the summer rally? general electric leading dow up more than 6%. ge, on a barney frank comment on a goldman upgrade. goldman priced at 20 a share.

>> let's find out how stocks are trading. 134 points the upside. you were saying you thought it could hold for today. what do you see now that you're looking internal. >> terrific because all of the -- all of the stocks and second for all of the stocks th were down. they're rallying this morning. i want to go back to pennimac which mark mentioned here. seeing weak demand. growth syndicate. $20 and opened at $19 here. it's been coming off of that but a little bit of a disappointment. what is this? an indication that the ipo market was weak or this particular product? i think the indications was this product was an esoteric product. former mortgage reit. they're buying distressed home mortgages and restructuring

them. well, that's perfectly understandable. but it's a fairly esoteric product right now, fairly new. that might be the issue. i don't think this is an indictment of the ipo market in general. i think interest is pretty high and we'll see how it goes when we get a little bit more product out in september and october. let's move on and talk about what else is going on? the big energy names. exxon, royal dutch, talking about it all morning. exxon made $12 billion a year ago. this time, they make $4 billion. same situation with royal dutch, 70% below. simple, volumes, lower, weak demand, refining margins a lot weaker. royal dutch and bp saying they're not expecting any kind of robust recovery any time soon. the good news is, when china f moves, folks, commodities move. china market up 1.7%. china making commentaries they're going to keep monetary policy relatively loose, whatever that means. dow chemical. we had earnings from dow

chemical on the upside. how are we looking at the nasdaq, scott? strong. we're up 1 2/3%. we added some of the names along the big cap technology landscape. ubs added amazon and google. started them at buys. look at the stocks up 2% for amazon. better than 2.5%, 2.75% for shares of google. research in motion, 1. %. app apple, 2.5%. microsoft up 1.66%. look at yahoo! the day after the big announcement, yahoo! shares slid yesterday big and they're down another 4.5% this morning. speaking of being down, weak guidance is the story there. they raised their guidance. symantec is down 10% removed from the conviction violet. over at goldman sachs shares are called a buy. flextronics are down. but as you guys were mentioning

earlier, the resorts a standout on better than expected earnings. look at the stock, up 13.5% to lead the nasdaq. as i said, nasdaq up 1 2/3%. rick santelli who has his eye on the bond actions again today, rick. >> we're going to save the best for last. you know, you can have your own opinion about whether the imf's opinions are going to matter to the likes of the ecb. what's the talk about the trading desk and the table that steve liesman and the economists gather at. is it time to talk exit strategy? but the most recent headlines of the imf aim toward the ecb are exactly the opposite. they're saying better keep prices low. ceo do not agree. they may have to alter their

positions. always about jobs, jobs. the automatic data processing reporting and they had a comment about what they think it will look like at the end of the year. their range, 10.2% to 10.5%. $28 billion seven years, i'm excited about it. 1:00 p.m. eastern. we know what grade it will get today. back to you. >> thank you, rick santelli. >> a busy morning at earnings central. no fewer than 50 companies reporting earnings today. >> wow. >> wow. >> i saw that. >> thank you for nothing. >> now going to wade through 50 stocks. hi, guys. >> hello. good to see you. >> start with the first. you have to do one before you can do 50. dow chemical reported an unexpected profit excluding costs that were the result of that roman purchase. but we were surprised when they first came out, right? we did not think they were going to be this good. five cents a share. analysts looking for eight cents.

the outlook for the rest of the year appears to be stabilizing with strong growth in asia pacific and in china. the stock getting a nice 7 1/3% bounce. >> made some comments about the american economy. the american economy looks like it's bottoming out. people waiting to hear about that. masterca eer mastercard beat expectations. they beat the top and bottom line. 25 cents ahead of expectations. that stock has been on a tear every since. the credit card company looking at higher process tran action. unit spending declines. get this. the assumptions on the economy, carl, are unchanged. they say they still stink. they don't look for the economy to improve until sometime next year. the spending forecast is stable for the second half of this year. >> interesting. a couple of consumer staples.

colgat erke palmolive grew toda. goldman says the growth came in below forecasts and investor anxiety about the company's pullback on ad spending as a percentage of sales over last year. from q-1, they spent more on ads this quarter than q-1. they did so in toothpaste, hand soap, and dish liquid. consumer trading is down, it's a lot on paper products which affects like p&g but not so much colgate which is not in the space. >> they gained a lot of market share. >> the rates have come down, they can afford to spend a little more. >> kellogg out with numbers that beat the street as well. the company talked about earnings per share, nine cents ahead of expectations. revenue came in line with expectations. this is a similar story to

colgate. kellogg benefitting from cost-cutting measures. surging prices for grain. stock you can see is up by 17 cents. it was facing the stronger dollar, which hurt in terms of the company sales. >> how many did we get through? >> four. >> we'll get the other 46 together as soon as we can. >> i look forward to seeing that in my e-mail, thank you. big expectations for tomorrow's gross domestic product data. steve liesman, one of the reasons we have steve is because he's getting ready right now. for a number that doesn't come out until tomorrow. >> i don't know if i can correctly convey my excitement over these numbers. >> i don't know that you want to. >> i'm not the only one. they're gearing up for the gdp report. there's high hopes that the last

negative quarter of this particularly wrenching downturn. the estimate, minus 1.5% is a big improvement. the fourth negative quarter in a row. the first time it happened in the postwar period. by any measure, it will mark the worst recession in the past 60 years but this report will contain important provisions to pass gdp data. savings could show a higher u.s. savings rate suggesting that house holds could be further along in adjusting the finances as economists have estimated. the fourth quarter decline is going to eclipse the $7375 downturn and all of the other recesses in the postwar period. it's the extremely mild downturns you can see on the right-hand part of your screen. the consensus, though, is that the downturn is running out of steam. a look at what led to the fourth quarter decline in the first quarter.

that's expected to continue. the bump we got in consumption, that's going to go ahead in the first quarter and net trade is going to help again. government is going to turn around and be positive in the second quarter. the expectations from here is that the current quarter, the third, we'll see a gain between 1% and 2.5%. and the u.s. economy gradually ramps up to the potential of 2.5%. the real debate -- not the second quarter, but whether we have a stronger rebound as is typical for the kind of recession we've been through and ultimately the government support wanes, we have to worry about a double dip back in to recession after a brief turnaround. i correctly convey my excitement there? >> yes. >> did any of it rub off at all? >> no. >> well, i don't. getting you excited. you know what i mean. >> tomorrow is a big day. >> huge day. >> i know you're ready. >> very excited. >> okay. up next, you heard about

colgate palmolive's quarter. we're turning the spotlight on consumer staples which are up more than 25% since the you-know-what. >> all a twitter in part four of her series. the ceo of astrazeneca sitting down with mike for a dose of outlook and real answers on health care reform. we'll be right back. nn

check this out, the s&p is closing out on 1,000, 995, roughly. and stocks with highs of the year. dow jones industrials up 150 points. well into 9,000 territory now. look who's back! el nesto grande. missed you -- >> i came in in the thick of it. no question about it. they say there's no such thing as a sure thing. but how about an unsure or insure thing? three insurance companies all out with results after the close. lincoln missed by a couple of pennies but hartford with a big blowout quarter and that's in this group. lincoln coming in at 1 crepts a street. 84. aflac beating comfortably. hartford at $1.90. the full-year forecast with flat for 20 cents a share versus a

29-cent loss estimate right now. that group is moving very, very strongly. ticker x-ray. one of the best performers in the s&p 500. the numbers are confusing. charges in there, tax charges. but $1.80, $1.90 in the full year gets investors confidence here as we move into the names. also, paid him at your own risk. who would want to buy an autoparts company? a pool maker, a building products. i didn't hear people say, you know, the building products group looks good here. boat makers look good here. all these companies reporting autoparts look great here. load the boat, right? no one said that. look at these guys. they're all flying here today. and we heard a lot of people saying, i like the defensive global growth stocks. and you can see colgate here today down 4%. the company did beat by two cents on the bottom line. $1.07 versus $1.05.

investors are concerned about the organic sales growth. up 6%. but some of that was due to currency or excluding currency. but they have to look at pricing and some of the other issues. colgate taking a hit here today. mark, back to you. >> thank you, matt nesto. stay with us, matt. continuing to discussion on consumer staples. the sector overall racking up gains. the s&p 500 consumer staples index showing an increase of over 25% since the march low. which we call something else here. joining us on the inside on if there's room to grow as well as the favorite stocks in the group, dick mody of personal care and tobacco products. thank you for being with us. >> thanks for having me. >> are you bullish on this sector right now? >> yeah, still bullish.

they're still outperforming from when we had the lehman crisis. we see upside in the second half of the year. you have issues subsiding and occurring in the fourth quarter. you can see some easy comparisons in the results. >> even with consumer confidence falling again. >> consumer discretionaries and staples. cohgate talking about toothpaste and soap. something people can pare back on in times of economic development. they're growing their dividends and earnings. >> going to squeeze that tube one more time, i'll tell you that. >> when do we get to the point where we're not celebrating comparisons so easy to a year ago? >> that's interesting nick pointed that out from the lehman crisis. you look at the intermediate term, you guys pointed out the

staples are up 27% but that would put them in really the bottom bunch. only two or three sectors that have performed as bad or as -- or in the same area as the staples. they're definitely lagging the marketplace. when you start to pull it back, they're down 8% in the year versus the bigger gains for some of the broader indexes. so, you know, if you're bearish out there and you think this spin volume summer rally is maybe people making hay while the sun is shining, maybe staples are worth a look, especially in the globals in this business and organic growth was a disappointment for colgate, 6%. >> related to this industry, although a little bit different was they're having generic organic foods. you had to have a high brand name with a high price. you're starting to have more store brands.

what about on the staples side? we do continue to see pressure, would the quote/unquote brand companies be the one to outperform? private labels or store brands are a big concern. there has been trading down. colgate, no brand or private toothpaste. it's 1% globally. when you have personal care businesses that you physically interact with, skin care, toothpaste. you tepid to see low penetration of private labels. >> chatham does that. only brand brands. >> chatham, which i don't cover, do a lot of over-the-counter type medicines. there's a higher proportion of those labels in some of the categories. >> you like the tobacco stocks. two of them, right? >> that's correct. >> why? >> we've been bullish on tobacco since the beginning of the year.

the company is yielding 5% and 8% on the dividend side. tobacco is one of the only sectors that has not cut the dividen dividends. getting the yield, the earnings growth, because the sector has pricing power. there's a lot of concern coming in to the year on rising taxes and the companies are reporting better numbers than a lot of people were expecting. >> all right. >> thanks. >> thank you very much. >> thanks for having me. >> matt nesto. >> we'll track foreclosures. get straight to the real estate reporter diana oleg. diana? >> the usual suspects in california in the midwest continue to dominate the foreclosure rates but we're seeing some cities that are showing declines. before you get too upset, just the opposite is happening in cities that previously weren't in any kind of trouble. foreclosure leaders like stockton, california and ft. myers, florida posted declines in the fist half of the year, portland, oregon, minneapolis, st. paul, and boise, idaho

posted big gains. why? job losses. these nationwide gains are providing more opportunity for the bargain hunter. >> buying a foreclosed home seems like a good deal. we don't want to pass up an opportunity for a good deal. >> some are investors, others are looking for their first home. buy many times, 10%, 20%, 30% below market. maybe more. >> price is everything. take a look at this data we requested exclusively from the national association of realtors. home sales of the lowest price point posted huge gains in june. as we start to talk about the housing recovery, it's so important to understand where the recovery is happening and where it's not.

go to nbc.com. >> it's happening at the low end of the market. under $375,000. up next, the week long social climbing series making more than 125 characters or lesds. >> looking at the tie. you wore your bull today. >> the tie you gave me. the bull is at the top. worth 123 points. got the summer rally. risk, reward. the network trades coming right back. he ran off with his secretary! she's 23 years old!

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markets are higher. we're off of the highs of the session. a few days like this sprinkled in. 126 points for the dow. 153 is where we're coming in to commercial. nasdaq higher. companies like cit are gaining. earnings win. hartford financial, expedia, all those names are among the biggest gainers of the day.

twitter's popularity has taken over or taken off for the night. not making money yet. julia borsten has taken the time to investigate. she joins us now. julia? twitter may not have a penny of revenue but a proven maker for fortune 500 companies allowing them to tap in to chatter for free. twitter itself has big business potential. >> in 140 characters or less, twitter has changed the way people communicate, allowing anyone with a cell phone to communicate messages. >> twittering is all the rage. >> and the potential audience, 2 1/2 times that of the internet. >> 4 billion mobile folks in the world. they're twitter-ready devices because they have sms. it works over sms as a fancy web connection. >> ashton kutcher and oprah to

cnn and "the new york times" post updates. the u.n. state department asks twitter to delay service outages. >> there's news happening right now. people are twittering about it while it's happening. >> twitter allows millions people to search while millions of people are exitering. a gold mine for thousands of businesses that talk chatter about their brand. monitors buzz after long delays. southwest communicates with travelers after mechanical difficulties. whole foods treats bankruptcies. banks twitter service reps company support. >> any company that's not already talking to its customers on twitter is missing a huge opportunity. >> dell told twitter co-founders and made $1 million thanks to the site. >> big brands like starbucks and comcast are using it for marketing and customer service. that's happening and we think we can make it more efficient and powerful. >> possibly packaging and selling analytics about brands.

>> i don't think it will be a big problem for a company to pay to have a whole lot of followers on twitter. >> another obvious source of revenue. ads around twitter search a realtime alternative to google ads. it's not rushing to bring profits. >> we're trying to build value and bring product to people. we have time to figure out the business. >> encouraging the company to hold back on charging users or considering an ipo. >> if you can get through hundreds of millions of people and get to a franchise, they're selling it -- almost any point along the way would be selling too early. >> twitter says it should generate revenue this quarter. a billion users and a ball and a half dollars in revenue by 2013. now millions are watching and tweeting about how they'll get there. this week, twitter launch add new site called twitter 101 to

teach best practices on how to profit from the site. the first step towards charging companies towards premium services. we'll look at the feature of social technology, companies like google are going to make everything you do on the web social. back over to you. >> thank you, julia. and as we got the market up 151 in the mid midst of a big rally, there's risk of a rally but also ensure you don't lose too much money. what is this? a structured note. our next guest is here to explain how it works. financial planning at star borrow capital management. the advisor management network of the day. it's a way to get the gape and not take the risk of a loss? >> absolutely. it combines a zero coupon with options for an underlying asset. as the zero coupon bond matures at face value, those options will allow you to participate, for example, 80% to the upside. but you have no downside

protection. if the zero coupon bond is on the balance sheet of a bank, well, then, in addition to having the security of that instrument, you have fdic insurance. so it's a little bit of protecting the portfolio but also participating in market appreciation. >> so, when you look at the rally like the one we're seeing today, the clients call you and say what do i do? what do you a? >> well, in a rally like this, it's move sod far up. you don't want to miss more of the upside particularly since we saw so much of the downside last year. i can protect the portfolio in the event there's no jobless recovery in my opinion. let's say this is a false rally. they'll still get their money back. but not just the s&p 500. say you want to make a play on bonds. you're worried about interest rates going up. but this can take the place of the bonds and anchor the portfolio if the underlying asset is the market, the market goes up, you get that return also. a lot of different ways to play it.

it's not a homogenous product. there are a lot of different ways to structure these notes and you want to make sure that somebody is involved who's familiar with how to put this in to your portfolio? >> thank you, ivory. good to see you. >> thank you. >> the market is up 148 points. we have breaking news out of the energy world, though. we have the numbers, rebecca. thank you, erin. we're seeing a 71 bcf injection to natural gas supplies. that's being reported right now by the eia basically right in line with expectations. the sort of range had been a 70 to 76 bcf injection. that's what expectations were right smack dab in the middle of that. however, we are seeing prices slightly higher. what's interesting to note is if you compare this injection this season to previous seasons, there is a much greater amount of supply being injected in to storage right now. and basically you have a very bearish picture overall for the

market by comparison to previous -- previous years and previous times. aside from the warmer weather that we're seeing in the west, traders say there's very little to be bullish about in the natural gas world. contrast that for a second, if you will, however, with the overall oil markets. you can see oil right now to the upside by more than $2. so traders here are following a bit of a different thing in natural gas. they're looking at the fundamentals of that market. on the oil side of things it's more about a dollar story. more about a stock story. erin, back over to you. >> thank you, rebecca. coming up next, the ceo of astrazeneca, the first on cnbc might speak to them about results and health care reform. and prescription drugs. we'll be right back. this is "squawk on the street." market up 153 points. you can see every index higher across the board.

here's where we stand right now, looking good. dow up 160. nasdaq, 1.85. look at the s&p, up better than 2%, closing in on 1,000. on the big board -- we are 6 to 1, add vans over decliners. on the nasdaq -- >> number one advancer on the

dow is our company general electric right now. >> what's it been about ten years? >> i didn't say it. i didn't say it. shares of drug maker astrazeneca are the biggest dollar gainer and the big pharma sector so far this morning. speaking of gainers, the company handily topping street targets and boosting the forecast for this half of the year. as promised, ceo, now, mike? astrazeneca saw the cholesterol drug for the drug, cholestor. it has significant supply issues for the h1n1 or swine flu. joining me to talk about that and, of course, health care reform, cnbc and as tra zhises can's ceo. because of satellite delays, i'm going to jump right in. you posted a whopping sales

increase. sales topped $1 billion for the one quarter for the first time. how is it when pfizer and the lip tore sales are going down and the company says it's facing intense competition from zocor that your crestor is gaining market share and you're boosting sales bigtime. >> a more effective drug. it's been shown a number of different ways. it showed that it saved more lives, it had a better mortality benefit than any of the other stattens obvious on the market. for people who have complications, diabetic, post m.i., doctors want to use a more effective drug. >> m.i. is myocardial infarction or another term for heart attack. >> heart attack, thanks.

health care reform is front and center in the united states. the big line in the city, happy to have a seat at the table and you support health care reform. what do you think about what you've seen and heard so far. in the end, do you think this could help your sales because more people are going to get coverage and take your drugs. >> i'm chairing our state association pharma this year. i've represented the board of directors. to answer your last question first, i believe there's an opportunity to get something done. there's a tremendous amount of industry behind it relative to what we as an industry believe. we think the free market is very efficient ebt in lowering price improving qualify.

quality. it will allow us to compete in the market that we normally complete in. access to products is important. quality is highly important. there are things that need to be built in to it as an industry. we've said that we would take $80 billion out for the next tenures for health care reform. we're behind it. people will come in to the market. not sure what the impact will be. >> the $80 billion you're talking about is industrywide. the company you bought a couple of years ago or so, metamunne, makes the nasal spray flu vaccine. you can make 100 million doses of flu mist for the h1n1 or swine flu but you can only make 40 million of them by march of next year. one, isn't that going to be way after the fact? two, why don't you have plans

going full tilt 24/7 to make the nasal sprayers so you can fill the orders for the other 160 million? >> those are excellent questions and we are working 24/7 first of all to be able to make the 200 million doses. we didn't have any orders for sprayers a couple of months ago. our supplier has geared up to go from zero to 121 million in a short period of time. we have ear hoping they will increase that. we're working with the agency to see if we can come up with an alternative device. the agency met with us several times in the last few weeks. we have a device we proposed. we need to demonstrate that it can deliver the drug in the way we want. if we can get 200 million of the sprayers that we normally put our seasonal flu vaccine in that we will be putting some of the h1n1 in, we will be filling 200 million doses. we can't get the sprayers yet. >> thank you for the astrazeneca

ceo for joining us first on cnbc. an exclusive with the ceo of a generic drug maker. mike huffman, coming up, what's in a name? as the growing exodus from leveraged etfs is a good thing? or overreaction to an otherwise valuable tool? simply because of the l-word in the name? and the summer rally returning with the vengeance. the highest off 172 now. more insight on to why? why this much? why today? we'll find out.

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>> just like it went to 120. >> right. potentially. now, suppose that thing dropped

10%. the next day. as it turns out, the money you will make on a two-day basis will be different than if the bank index goes up 10% and then down 10% in two days. a lot of numbers, and you'll see that it will track slightly differently, because they reset the numbers. if it's also 100 to 120 -- >> why? >> well, what are they doing? is. >> yeah. >> because the idea is, every day they're meant to be exactly correlated to that index. and then the new day starts, so they correlate again. >> right. >> you get the tracking error because of the leverage. and that's a bit of of a problem. >> all right. as of june, 2009, we should salibraged and inverse etfs, you mentioned different by linked. $30 billion in assets. among the more popular types. although they found it confusing. >> i don't understand why they would do that. anyway, i don't have a tease, and i don't think you do either. >> i do not. >> we'll be back with more on the summer rally in just a

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we're up 168, so holding in that 155 to 175 range for about

the past hour. obviously a big rally. a couple of headlines, u.s. good year up 15% on earnings. >> ge up 8%. >> ge up 8%. one-day wonder or the beginning of a new era, mark? >> who knows? let's turn to our guests. art hogan -- no, art hogan, we don't have the signal yet. we do have the signal from art hogan. there's art hogan. and also joining us, gore dan rosenblat who joined us just in time for a rally. where do we go from here mr. cautiously cautious? >> i was going to bite on that, but i'm too big for that, and anybody following this show would know that i was talking about earnings and since they have just clobbered earnings all up and down the street, we still have up side -- talking about bringing out the dow 10,000.

>> me thinks thou protest too much. >> mr. hogan, do you believe that the twin behinds will hold? >> this is the first time i think the market in about 10 months has tried to price forward. we have been spending a lot of time pricing where we are. i think this is the first time we have seen an earnings beat like this since the early '90s. regardless of how that is happening. and this is the first time we have seen increases in estimates for the out year in about 12 months, as well. so clearly what the market is trying to do is forward price. and if you go out to 2010 iraq which, you know, starts in six months, and look at how much estimates have gone up on the s&p 500 and put a fair market multiple on that, the market still goes higher from here. so i think clearly what we're doing now is for the first time in a long period of time is looking ahead as opposed to looking exactly where we are. >> miss faber? >> well, everybody is getting on board, erin, that's for sure. even the nonbelievers. and, of course, you have enough nonbelievers, that helps the

market overall. but if you're running a hedge fund now and have been short or neutral, you've been feeling the pressure. you have been for weeks now, and that just continues. earnings season, no doubt, has been better than many people anticipated. certainly the anecdotal evidence that i have been getting from ceos and the like was the things were not getting better. but nonetheless, the numbers themselves, while not showing revenue growth and being down 22% in terms of the s&p earnings year over year were better than anticipated. cost cutting has helped a great deal there. the abilities to do that quickly. my question is one that art was just talking about. in six months, will we ultimately see the revenue growth that this market seems now perhaps to be starting to bryce in. who knows? >> you know, that leads me to an interesting question, too. mr. charlop, when you look at the upticks in demand, an awful lot is being driven by government spending. this country, china, europe, as well. you know, we're kind of betting

that private demand is going to well up, as the government demand wipds wipds down. how good a bet is that? >> it doesn't seem to matter whether tearnings growth is coming top line or cost cutting. everybody is buying in right now. so straight across the board. the fed up 170 doesn't even indicate how strong we are right now. 10-1 advance over decline. and you are just seeing people buying into this thing that we're going up. >> but to david faber's point that we're still down on top of 22% from a year ago. i understand -- maybe you think people expected worse, that's why we get the rally. that makes sense, but art, at some point, we are going to need to focus on the other point david raises, which is lack of revenue growth. and maybe that isn't even until the beginning of next year. and to haynes point, what replaces government spending. when does that question start to hit the market? >> erin, to david's point, you bring up a very good point. the earnings season so far, down

22% on a year over year basis. we thought we were going to be down 37%. that's important. we're getting good guidance which is good over bad on a going forward basis. i think the ultimate answer is going to come in when we get the gdp number out this week and see if there is an up side to that number. and when we see estimates for gdp growth rates, we thought that would be in the first half of 2010. we're hearing the fed talk about positive territory in the fourth quarter of this year. so it may just be the decrease and magnitude of negative news is accelerating, and this is something we're going to see in revenue growth in 2010. >> thanks so much to all of you. and mark, i hear him, but minus 37% expectation was sort of a -- they had no idea what to do, and they -- >> you turned your back -- >> you walked out of the shot! first you're fighting with him, now he's your biggest defender? >> gordon is going off to be cautious.

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