a little breather in the trading. >> you could call it that. definitely a little breather. basically folks are preparing as well for that all-important jobs report coming out friday, the unemployment rate expected to tick higher. i don't think anyone is under the illusion that things will start improving on the job side of the equation. they're really waiting to see businesses really start rebuilding their inventories once that happen, echlgly that will trickle through jobs. ism certainly having an effect on things this morning and we'll talk some more about cash for clunkers coming up. i'm actually very interested to hear what larry has to say because i know he's been opposed to it. i thought it was a pretty good program from the start in that it's an example of something that's moved very quickly into the economy and you always like to see stimulus leak that unlike the other one we still have going on. i'm looking for bob, but apparently he has been things to do today. there you are. >> i'm actually reading the

boston beer earnings report. >> that's interesting to me because hang on, we'll come back to this that. in the mean time, becky has breaking news. >> obviously we're watching the markets very closely, but news organizes around the globe have also been watching another story breaking out today. that's the release of laura ling and euna lee from north korea. we were all watching when they arrived in california. a few things jumped out to us when she started talking about who she was thanking. she was thanking everyone from president clinton to hillary rodham clinton the secretary of state. but listen into some of the other people she thanked along the way. >> steve bing and his crew, and drew liverus and the dow company. >> she said dow chemical, someone we know very well at cnbc, so we reached out to dow to ask them what they had done to contribute. that will be a release going out

shortly, but they say they were able to provide aircraft support over the last several days. the dow plane was used in different parts of the mission in recent days. it had us wondering about a lot of questions about what dow chemical's involvement would be in in and there you have the answer. so we'll send it back over to you. this again, that's the involvement of dow. >> certainly? some happy new there is with both of those women returning hole. we appreciate the update. we want to get back to this. mark, we're off 85 points in the dow. bob, you started to get into that little beer company. we had the ceo on last week and he was telling us that a lot of people were actually buying his beer in favor of some more expensive wines, et cetera. but what you're seeing in the earnings report is something different. >> there's a big sort of overlay here and that is while the earnings are better, you see the s&p here? we were down here today and i believe that's because the reports are clearly indicating that we're not getting volume

growth in any of the big companies right across the board. this will be an issue in the third and fourth quarters here. so i'm going to show you oil stocks are really weak here today because basically they both said -- these guys are oil rig companies. rig demand is way down, so volumes are way down and the earnings are generally below expectations. let me go to boston beer. it's up today. but wait a minute. look very careful what's going on. their earnings beat expect station tapgs, but they didn't beat on volume growth. the amount actually dropped almost 3% compared to the same period last year. >> a lot of people don't want to pay that much money for their beer these days. they're trading down. >> drenking less beer is the other factor. now let's go to procter &

gamble. same situation here. basically you've got some good earnings okay being but the volume growth, organ being volumes were down 4%. here's a company that's an expert at trying to figure out cost and they're doing well. >> at some point you have to start growing that top line or you're not left with much. you can have the productivity which is the cutting all the costs you have, but at some point it has to translate into revenue. thank you so much. we are going to talk more about procter & gamble coming up in the next block, so stay tuned. in the mean time, back on over to larry kudlow. >> so if you think the economy is on the road to recovery or if you think the rally is not sustainable, i don't even understand this, what are your stock plays? what do you mean? this is a bull market. >> we're saying could you come down on either side, that there is a legitimate debate about whether the rally is sustainable or not. >> anyway, let us bring in our

distinguished guests to discuss this. for on the bulls we have ned riley. for the bear, we have drew canali. and we have somewhere in between steve liesman. so ned, you're the bill bull. y you got ism numbers. jobs light today. what do you do, do you stay launching through with your bullishness or larry, i do. got news is the psychologist is a big enigma. the point is simple. people are still looking at the down side. they're looking at a market that they want to keep their money in short time investments and they really don't believe in this

rally. it's really a mystery to many people. all i say is the recovery is here, housing is coming, the cash for clunkers is great, larry. i'm telling you, get $4 billion -- >> i caved last night. on the other side, factory on orders in june were very strong. and on on the jobs, the adp looked a little light to some people, but actually that is the smallest drop in nine months. so you could construe this being quite optimistic. how are you going to play it? >> still losing jobs and aren't we only profiting from cost cutting? we aren't seeing revenue increasing here. we're not seeing a turnaround in the jobs market. or really even the housing market. we are just seeing a throw down of the ra -- slow down much the rate of decline. we're not there yet.

we're in a nice bear market rally, it's a bounce that you see all the the time in these types of cycles. enjoy it it's good. it's a nice little valuation bounces, but up you see that top line -- revenue growth, you really can't get that optimistic. >> but one of the reasons why a lot of people think that outlooks are wrong is because septemberment from the third quarter looks like it's going to come in better than everyone expected. sentiment a higher than it was before we got these recent numbers. fridays numbers will be huge. >> i think it's huge. and i look at the world through number fundamental glasses. they smelled a little bit better in the gdp. the markets out there didn't want to be so far out, it wants to be confirmed with numbers underneath it. so what we'd like to see is a number that comes in at or better than expectations especially better because today's for example -- >> for friday's unemployment. >> for friday's unemployment.

>> after all these olfactory discussions you're having with the smells and so fort, what is your number for friday? >> the number we're looking at is in the 350 range and i think one under 300,000 is one that confirms the proves the other guests wrong. >> ned, do you think that this rally will hold in the long run? if so, how do you trade it shall any do. i think larry knows that i've been pretty bullish for quirt a while. i'm targeting 14,000 on the dow in the next year and a half. that's been my target for the last three or four months. i think we'll achieve it. i like the tech area of the market. i open the qs, i've been recommending the qs. i still do. that is one area where the

secular growth will come back much faster. i also like the financials even though i wish some of the banks could get their act together. i don't think they really have a good handle on what people need out there. and the third thing i really like is clearly looking at the health care sector and it's one that people ignore because of legislation and everything else pending. but that's a secular gret industry. i'm getting old. i don't know about the rest of you guys, but -- >> not me. >> you look great and you've had a good year of stock market calls. and let me go back it to drew. i'm a bull. it's a num bull market and an economic recovery. and i want just to challenge you a little bit about the corporate earnings. earnings came in 785% better than expected from all corners of the economy. that's not nothing. and on sequential basis, revenues actually showed a lot more strength than the cop census is giving you credit. so are you actually going to test this rally on the down side? are you going to short stocks

here? how bearish are you in the face of all of this good recovery news? >> the ten year bond tested over 3.7 again yesterday. interest rates are up from the beginning of the year and that's where the united states government doing everything in its pourer to hold interest rates down. at some point, their capacity goes away and interest rates -- >> i would disagree with that -- >> at that point, our ability to lever into the future not going to be there, so the type of growth that y'all want to see that these stocks are starting to price in is not going to -->> tell us you how you treat it. >> first of all, 30% long. we're looking at commodities. they moved a bunch based upon what they think is what larry kudlow sees is a big recovery. there's a little surprise in some of that commodity pricing to come, but that's going to be made up for with inflation expectations that are going to start to be realized, maybe this

time next year, maybe in a year and a half. >> maybe in my lifetime. we have to get out of here. steve liesman wants to give us a wrap. >> the double dip is the wall of worry. >> which is great. >> i think there's at least an even money chance that it's wrong. >> even money. i think its eastebetter than ev money. anyway, thank you. you're looking great. everyone looks great and i'm just going to get pummeled today. >> he's out of control. >> you look pretty good, too. i like that tie. coming up, toyota expressing optimism for the u.s. automobile markets. find out why. and when phil lebeau talks live with jim lentz. a first on cnbc. >> but first, weaker than

expected revenues weighing on shares. so is the consumer guy apt worth buying now? whether you should get in on p and g only here on "the call." i drove my first car from my parent's home in the north of england to my new job at the refinery in the south. i'll never forget. it used one tank of petrol and i had to refill it twice with oil. a new car today has 95% lower emissions than in 1970.

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a look at the big board. we're seeing a little bit of improvement. folks rather never us after that

ism number. and all ahead of friday's big job report. the expectation the unemployment rate to of course tech higher. so a little bit of a breather basically investors taking today after impressive rallies. proctor and gamble reporting its fourth quarter profit fell as households kept tight on spending during the recession that we have seen. taking a look at where the stock is trading right now, 53 bucks. 70 cents a share down more than 3%. mary thompson is at earnings central. bob and i were talking earlier, you look at all these companies, and it seems to be a real repeat of this theme that n. noone of are growing their top line. >> it's an issue, but also to be sxegtsed in this environment. the important thing is that they're cutting costs. that will make them lean to benefit when sales increase. sales at p and g declined in all six of the consumer giant

segments in the last quarter turnt by currency translations and what the company calls one of the most difficult macroeconomic environments in decades. the company cfo telling cnbc they will continue to dog p and g in the kurpcurrent quarter. >> we tip to see market contraction in some of the more discretionary categories we compete in like fine fragrance and salon hair care. >> earnings declined 14% while revenue in the quarter fell 11%. the 172-year-old company whose products range from detergent to shavers expect quarter over quarter improvements in its businesses as the year goes on. as consumers are keeping a tighter grip on their wallet, it plans to cut prices on products where it's actually losing out to store brands.

for the current quarter, the company is forecasting earnings of 95 to a dollar a share. organic sales forecast to be flat on down with currency impacting net sales by about 7% to 10%. for the full year, earnings seen at $3.65 to $3.80 a share. to drive that organic growth, the company plans to be selling more beauty products and increase its online presence. it also says moderation should help its bottom line in the current fiscal year. >> so we have a question for everyone. how can you make money right now based on what you saw with p and g earnings? we want to bring in the manager director of karas and company. you look at these numbers.

p and gc is a consumer staple. you would expect that the one thing that would hold up is the consumers need for the basic products. that really doesn't go away. and yet this company really was challenged in terms of being able to grow its earnings and wasn't able to grow that top line. so how do you play this as an investor? >> well, procter & gamble is not one of my picks in terms of a buy rated stock. i actually prefer polgate and they did produce 6% in the second quarter up like bloproct& gamble. >> she just pointed out colgate was successful. what is it that colgate was a able to do that procter & gamble shall how missed? >> i think there's two key reasons for the differences in

the performances of the two companies. the first one is that procter & gamble's portfolio is a little bit more discretionary oriented with batteries and prestige fragrances and small electrical appliances. those were businesses they acquired with gillette and wella. toothpaste is really not that discretionary compared to some of proctor's businesses. number two, i think that procter & gamble right now is really gaining no market share globally and losing in many areas whereas colgate is gaining market share in many reasons of the world. >> i was going to go there. i heard the ceo whining about the dlollar or foreign chexchan. ow he's trying to cover up the problem. is the problem he's not doing

the business he's doing overseas and i'm interested in asia because they're engaging in a recovery. is p and g not getting it done there? >> well, it was interesting that they said that in developing an emerging market, the organic top line growth was actually about the seam as domestic. so we're talking down 1% organic even in developing an emerging market. so they're not doing much better in those markets than in developed markets. >> so is that where they're losing ground to colgate and other competitors? >> yes, i think so. >> linda, what does this tell you about the sector as a whole? if i'm going out there and i'm picking a stock in the consumer stap hes environment, what do i need to know so basically i'm not buying the company that's thought growing? >> well, first of all, if you at that time bear market stance, then the sector overall should do better than the overall market in a bear market and that would even include procter & gamble. however, i think you can get really a the lot better performance by picking the right

stock. and, again, i do prefer colgate, but valuations are actually not that difference. and yet colgate is gaining market share, posting top line growth and procter & gamble is not. >> it's worth noting on the way out of here the consumer staple sector of the s&p, that sector, is the worst performing sector going back to last march and in the summer rally. >> because i think people have been looking ahead and weigh what was safe, what was good before, suddenly once you started that massive rally in the s&p since march, things have changed. >> they've been playing banks and cyclicals. >> they're wrapping us. great to see you. thanks for coming on. >> thank you. >>. when we come back being retailers have been big winners on wall street. the sector up more than 25% year to date. >> so which chain stores are most likely to make the grade this back to school shopping season? many we'll have to give them cash for clunkers. two analysts will unveil their

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revenue fell. the fashion company says it expects full year revenue to fall at a high single digit rate. as we said the stock is trading high oeer on the day. consumers are looking for bargains and discount chains are hoping that that will translate into bigger sale, but will the retailers stocks follow suit in rebecca jarvis here with a closer look at the discounters. >> valuations are no longer cheap, analysts agree that they could continue to be bullish bets. ubs says it anticipates walmart and target will continue to grow this back to school season. less dollars are available, but more are coming their way as a result. 22.3% of shoppers in the consumer survey respond that had they will buy most of their back to school clothes at the world's largest retailer, 10.5% said they's buy it at target and it

is a trend that is also expected to be seen. >> we expect discounters to continue taking share. it really depends on which. there's the walmart and target competition for commodities and school supplies and every other category in the general merchandise. >> he also says that the off price retailer, the likes of tj max, said they will also continue with a winning share. the question is can they also private profit growth. jp mar go jpmorgan's brian tunick says they will. >> they're at or near all-time highs. they're a good place for investors to hide. they're been hiding there for the last couple quarters now. i think the good news is we wil see more upyard earni yarward h issues. >> the retail index is up 50%. he says there is still cost

cutting that can be done. inventories are the major themes. they're running down about 10% to 20% versus last year. and when i talked to him about where the other cost cutting should come, one of the interesting points a lot of people have made is they can do it on the negotiation of represent side before he said even with a 10% to 15% drop in rental price, that's not enough to move the needle. so it has to be the inventory and sales growth side. >> thanks so much. let's talk more about investing in the retail sector. what are the investment plays? erica is our guest and also jaron. thanks to both of for you joining us. let me start with erica because you say you expect this back to school season to not be good. i can't jam my son back into the clothes that he wore last winter, so unless i send him to school naked, i have to go buy something. isn't that the kind of situation a lot of people are in? you have to go buy something no matter what about p.

>> do you, but you don't have to buy as much as you have in past years. the national retail federation did a survey and found that families to expect to spend 8% less that year. >> so do you agree with that? does that mean that they like rebecca suggested just shift to the low her he said? >> that is correct. the index consisted of 0 retailers and expected to be negative 5% for the month of july. that is the second weakest consecutive month in 2009. which means that back to school season already started very weak. and consumers are definitely trading down and buying at the lower costs of retailers like walmart while parents are shopping for basic necessities such as food and grocery, they're also eyeing the back to school merchandise and shopping at a much cheaper price. >> if you look at the market and rlx, it's up 57% since the march

low. people are buying the retail stocks. what's the disconnect? >> i think people are really looking forward at 2010 and expectations have been low for a while now. meeting expectations is making the stocks go up. >> so are any of them priced appropriately? how would you play the sector? >> they obviously had a great run. we still like urban outfitters looking at the back half of the rear. we think investors do shift around. it will be one of the few retailer out there that have substantial top and bottom line drivers. they are positioned well for the back to school season for the teen and young adults with really a differentiated merchandise assortment. they know they can't compete on the value end on the lowest priced products, so they're augmenting their really next must haves about. >> and you like nordstrom, as

well. what is worth while out there right now? >> definitely the buckle and tj max. a ept ropostale has done a great job stealing market share. on the other hand, abercrombie & fitch is on track of negative sales. so what we're seeing is that consumers are trading down. they're trading down from the abercrombies to the tj max. >> thanks for joining us. we appreciate it. coming up, we've got first on cnbc doubleheader for you. we'll talk cash for clunkers for the chairman of the national auto dealers association. >> but first phil lebeau's live interview with jim lentz on the future for the world's number one automaker takes tries to

gain u.s. market share only here on "the call." mr. evans? this is janice from onstar. i have received an automatic signal you've been in a front-end crash. do you need help? yeah. i'll contact emergency services and stay with you. you okay? yeah. onstar. standard for one year on 14 chevy models.

toyota says it will build and affordable sports car that will be available in the nest couple of years. the company also saying the u.s. market will recover and it will come back stronger. right now take a look where it's trading, down more than 3%. last trade 83.72. phil lebeau joins us live from

michigan for the special guest in another first on cnbc interview. >> it's been a big day here at the center for automotive research conference in traverse city, michigan. in his first public comments here in the united states since taking over as chairman appresident of toyota, we heard about the future of the company. here with more perspective on where toyota goes is jim lentz, the president of toyota usa. we heard talk this morning about toyota can rebound and the u.s. market can rebound. how quickly do you sthee happen something. >> i think we'll see steady recovery this year depending on what happens with cars. i think we'll start to see a rebound next year. but it may be a couple years before we get back to that $15 million, $16 million, but it is coming. >> and that cars program is cash if clunkers. we'll talk more about that. but saying this morning we're fast tracking an affordable sports car. given this this market and given the economy and the limited demand for sports cars, is that

the right new vehicle for toyota to be bringing in to the markets? >> well, i go it's an important halo vehicle and i think what's more important is we look at the next generation, the next big generation of car buyers, we need to make sure the generation understands that we have passionate styling and passionate driving dynamics. and i think a sports car will do that. >> let's talk about cash for clunkers. there's this on and off debate. it appears the senate will extend the funding. have you ever seen a rush this week because people were fearful that funding would end and are things going to slow down or plateau a bit here once the funding is extended? >> i think last week thursday and friday we saw a big rush. weekend, fairly substantial rush. so a lot of that were buyers that knew a program was coming and wanted to get into the marketplace to get in on the deal. i think it will plateau and level itself out as we go forward.

>> you brought up an interesting stat. tell me again, how many vehicles has toyota sold because of cash for clunkers and in terms of fuel savings and benefit to the economy? >> we estimate that we have sold about 40,000 in the month of july. if you look at the mileage from the vehicle they traded in for, the new toyota, and the mileage on the old vehicle, it will save in one year's time 8 million gallons of gasoline and about $20 million in had fuel prices in one year. >> and that's just toyota. so we don't know what the whole industry impact is. but the question becomes are we pulling forward demand or is there in-kre men that will demand in the market. are we seeing more people coming in because they have more consumer confidence? >> i think there are three variables right now. we are definitely pulling some ahead, but evening that's the minority of the piece. i think we're pulling buyer there is to the market that never would have been in the market before. these were either going to be used quarter buyers or they were just going drive their vehicle up it dies.

but as well, i think there was a little bit of pept up demand. consumers have seen this going on in europe, they nooknew it w coming in the u.s. and we definitely saw a rush from that. >> rest of this year, what kind of sales pace are you looking at? 10 million, 10.5 million? >> our plan all along was the entire year about 10 plus or thigh fuss about half. i think the minus piece is gone. i think it will be between 10 million and 10.5 million. >> there you have it, they're looking at the overall industry sales. one last thing, ron bloom is getting a briefing and essentially he's saying that their roll with gm and chrysler and we know the government owns stakes in both company, their role is to monitor, not to micro manage those companies. we'll have more from knows comments as well as what's

happening here at toyota a little later on today. back to you. >> we'll look forward to that. we have more on the auto industry. u.s. senators poised to vote on extending the cash for clunkers program. >> and my guess is approval will make our guest guest very happy. the chairman of the national auto dealers association joins us live only here on "the call." welcome to the now network. population: 49 million.

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three more companies are out with earnings. dean foods posting higher quarterly profit due to lower costs for raw milk. garmin also out with better than expected earnings helped by higher sales of its personal navigation device. however, oilfield service company baker hughes reporting a 77% plunge in its earnings head by lower oil as gasoline prices. right now, two of the three are trading down. garmin is trading up slightly. so there you have it. over to you, trish. >> the way is almost clear if a is that the vote to extend the cash for clunkers auto incentive program with another $2 billion worth of funding. the senate jord leader said the vote could be delayed until saturday if lawmakers cannot agree on the measure. here to discuss the program,

chairman of the national automobile dealers association. >> good to be with you. >> so, first of all, jim lentz was just on the program with phil lebeau, head of toyota usa. he was saying he anticipates a recovery in the auto sector in the near future. my question to you is how does that fit in with the cash for clunkers program. >> because, yes, in the here and now, it's good, but what happens two years down the road, three years down the road? suddenly you don't need to buy a new carn anymore because you traded yours in. >> i think that the auto industry was starting to solidified over the last several week and this program has given is a kick start. there's been a tremendous apen-up demand. and inwe are bringing a lot of

people into the market that are not traditional new car buyers. they typically bought used. that i think's good for the industry and good for the consumers. they're buying more fuel efficient cars and their cost of operation will be considerably less going forward. >> i've come around on this program and i want to ask you about this. for some reason this cash for clunkers seem to have cost the public imagination. it's almost become the national pastime here in summer, its heaping lift consumer spirits. a story in the "wall street journal," and this is where i want to ask you, that even used car sales are rising. so many people are coming in to the showroom, if they can't get the clunkers, they're buying used cars where prices are rising. is that true? is the traffic really that great or are you all just really good at hyping this story? >> no, it really has been astoundingly strong. evening people feel better, they get caught up in the psychology, they read on the front page of

the newspaper and other news programs that the people are buying cars in droves. they get caught up in in that and a lot of people don't realize that they're note eligibility, they come into inquire about it and they're there and they find out that there are good values in used cars, they find out that there are strong manufacturers incentives on new. and a good percentage of those people do end up buying. if we can just get them in the dealership, we can -- >> larry, i'll have it to play the other side here since you've suddenly come around and evening this program has a lot of merits, too, but this keeping with the spirit of devil's advocate here, this is costing the american taxpayer plenty. how is this translating into any real growth or job for the which i? >> first of all, inventories are very close by all manufacturers, particularly the detroit three. so you'll see big increases in production for the rest of the year. hopefully going into next year. getting people back to work at

the manufacturer, at the suppliers. ford announced they're cranking up production even higher than anticipated. so that is a very good thing and that's something we badly need with unemployment running at a 10% rate. and the other thing -- >> i'm willing to give a shot. i don't like this kind of shot, but i just think it's captured the imagination. >> it certainly captured yours. >> i just think reading all this stuff, even's talking about it. it's so funny. the people painting in her gallery are talking about this. just fascinating. but let me ask you another one. tom coburn of oklahoma was on the show last evening. he asked a tough question. besides detroit, your big he is severals are toyotas and hondas and i want to go to toyota. prius, camry and corolla. are any of those being made in the usa? people are asking that. the vote in the senate may be close and that's one of the issues. prius, camry and corollcorolla,y of them made, part, any assembly going on in the usa? >> vinchly all the corollas and

camrys is built here in the united states. the prius is built in january ja pan. the other thing to remember is domestic sale, gm, creaseler and ford represented 47% of the sales on this program and they've only been in recent months about 45% of the industry. so overall, the domestics have actually gained a little bit of share relative to the imports on this program. >> we have to leave it there. thanks so much for joining us. larry being i like that change of heart. >> to me, you get bang for your buck. but mostly it's the consumer imagination part that i like. it's been such a lousy year. let just roll with it. >> power luchbnch oig is coming. what's in store? >> i always love following this. >> yeah, me, too. >> coming up, rebecca jarvis has the latest on the retail sector.

we'll-we'll focus on the teen retailers. also the president is in elkhart, independeiana. we'll have a steamy debate on whether obamanomics is working. and get this, one of the hottest back to skochool items is the amazon kindel. some universities are giving them to their students. we'll get to that at the top of the hour. >> i just bought one a few minutesing a go. yeah. funny you should say it. long before the show started. just minutes from now, president obama is due to begin speaking on his administration's efforts to rescue the economy. we'll take you live to indiana for his remarks. >> but first, jane wells with a story of a subprime survivor. hello, jane. >> this bank is successfully modifying mortgages, redefault rate is lower than the national average. the problem is it's losing money and the clock is ticking. a rare look inside a subprime bank when we come back.

the treasury department complains some banks are move toog slowly. one that specializes in mortgages have been way ahead of rivals. they say the problem is the bank may not survive. >> it may be the last bank specializes in subprime loan which is has not gone under, but a year ago, i reported on this show that this bank was on the list of who might be next.

a ratio of about 40% he says is, quote, in the daker zone. >> one of the banks in the danger zone, the stock collapsed from $25 to five cents. >> all of our clients were panicking because they thought everyone was going to turn into indymac. >> reporter: but one year later, they're doing everything to keep first federal bank of california afloat. how does this bank even survive is this first, it stopped making risky loans before everyone else did. second, it began modifying mortgages in december '07 before everyone else did. it's modified a third of its portfolio. thinks it can somehow finish the rest of this month. plus, it's 0% redefault rate is

lower than the national average. is it enough? >> i think it's a pretty good chance that we'll get through it. we don't -- how do i want to say this to you? i've been talking to the fdic obviously because we've been having them look at our modification program. everybody wants their loans modified. the government wants everyone to modify loans. we're doing exactly what the government wants. and they've been looking at our program saying why does your program work. and the other thing that i've been saying to them is, you know, guys, if you want the lowest cost solution for our bank, it's to let us raise capital. it's to let us finish and raise capital because then you won't lose a dime. >> on loan which is are 90 days late have fallen in half, however the bank is still losing money. later on the "closing bell," the clock is sticking. how much longer does first federal have to turn it away and we'll have a whole lot more on the website.

they have cut business expenses so much employees cannot even buy post-it notes. >> jane, thanks so much. we want it to go right to elkhart where they are introducing president barack obama and we want to listen in to the chepts that he is saying there. >> thank you so much. thank you. please, everybody have a seat. thank you so much. well, it is wonderful to be in wakarusa. thanks for the great sbr duaeat introduction. it is great to be back in indiana. this is as close as i've gotten to home in a while. and i flew out here with somebody who i think the people in indiana have known for a long

time, have trusted for a long time because he's fighting for working families in indiana each and every day and that is our great senator, evan evan a gre applace. it's nice to get out of washington. and spend some time with people who actually sent me to washington. too often there are those in washington who focus on the ups and downs of politics. but my concern is the ups and downs in the lives of the american people. the families feeling the pain of this recession, the folks i've met across this country who have lost jobs and savings and health insurance, but haven't lost hope. the men and women who still

believe in the and of thbility nation to meet the challenges of our times. these are challenges you know all too well here as you have been hit with a perfect storm of economic troubles. over the last few decades, you've worn the brunt of the steady weakening of american manufacturing in the faes of global competition, you felt the impact of the struggles of the american auto industry and the rerow kugss that have hid the midwest especially hard and you're living every day with the consequences of this recession. and the financial meltdown. and you felt it in the form of lost jobs and lost savings. so as a result, the elkhart area has experienced the second great increase in the rate of unemployment in the country, up ten points in a year. astonishing statistic. and there have been times where

nearly one in five people in in area ha this area have been looking for work. you've seen factories close and your sons a daughters move away in search of jobs and opportunities. so this is more in an an economic crisis. this goes to the hear and sot a of a community, it tests the strength of families and the spirit of good people, hard working folks who have given their all to a company and now don't know where to turn. there are some who see what's taken place here and suggest that it's all somehow inevitable and that the only way for america to get ahead is for places like elkhart to be left behind. you hear that argument sometimes in washington. but i know and you know that the truth is exactly the opposite. i'm here because i believe our ability to recover and to prosper as a nation depends on what happens in communities just like this one.

bill griffeth here at cnbc about. if you're just joining us, we're watching live coverage of president obama in elkhart, indiana, trying to create jobs for that hard hit manufacturing part of the country. let's listen in. >> -- across the country that have been the backbone of america. it will be won by making places like elkhart what they once were and can be again are and that's centers of innovation and entrepreneurship and in-agage b in-begin newity and opportunity. for as the world grows more competitive, we can't afford to run the race at half strength or half speed. we hope to leave this century like we did the last september includry, we have to crave the conditions and opportunities for places like elkhart to succeed. we have to harness the potential, the innovative and

creative spirit that's waiting to be a weakwakened to be all a america. that's how we'll be strong enough to compete in the xloeb al economy, strong enough to avoid the cycles of boom and bust that have reeked so much havoc on our economy, strong enough to support jobs throughout 21st century and strong enough to unleach prosperity for everybody, not just some. that's why we passed a recovery act less than one month after i took office and we did so without any of the earmarks or pork barrel spending that's so common in washington, d.c. and let me just talk about the so-called stimulus package or the recovery act, because there's been a lot of misinformation out there about the recovery act. let let me tell you what it is and what