we will break down whether rupert murdoch can make this model work. >> that's the key question. let's get to the market action. stocks are struggling but major actions remain on track. financials among the best performers. bob kicks it off at the new york stock exchange. bob? >> july sales very mixed picture. more companies missed expectations and a higher percentage missed than normal. that's the bad news. sales are not really growing. that's also bad news. look at a few companies, and this is a small handful, that raised their earning guidance. we are getting incremental earnings improvement. yes, it's on cost cutting and inventory control. but inventories are very lean here. any improvement in sales may be back to school will help with the restocking there. all of those companies reporting raised guidance here. let's talk about the restaurant business. it's not great, frankly. the problem today has been brinker, that's the chili's chain. the company issued a very bleak outlook. they talked about analyst

expectations, and their numbers will be below analyst expectations. they also talk about sales continuing to fall into the second half of the year. trader talk.cnbc.com. right now we're looking over at the nasdaq. >> where we saw we are getting weaker, much worse than the s&p 500 and dow. i want to talk about something maybe you haven't heard of. it's called an ipo, initial public offering. we don't get them very much anymore. it's a tale of two stories, really, of a company based in california and singapore. avagio. prices higher than level, $15. it is up 10%. basically mobile semiconductor, infrastructure company. but cdc, hong kong-based software company getting hit hard, down 11.3%. s cisco holding up okay. dell getting hit. retail doing just okay. epperson is down.

>> let's talk about what's getting hit in the complex, natural gas is falling after we got the report from the energy department saying the increase in storage levels was greater than more analysts expected, up about 60. that sent natural gas shares plunging. and we got the report from the government from the ana lowering its outcome for hurricanes this year, well below average. crude futures lower. we have the dollar strengthening a little bit. we're also hearing a lot of traders saying many of their clients want to take positions off the table right now. with all of this going on in washington, with the cftc and latest today from the ftc saying they're going to have the rule on the market in oil manipulation and will fine violators $1 million a day. rick santelli, back to you in chicago. >> we're getting a bit of reprieve. we're getting a rather respectable bounce in the dollar index. if you look at the two-day chart, you can see it as it unfolds. will it continue? is it just trading going on to

even up in front of big data tomorrow? we'll have to wait and find out. but there was a big driving force here and that was to some extent the bank of england. we'll get to that in a minute. look at ten-year note rates. we've come up with a new home base. seems like 375 is the key area. last but not least, the guilt. that's what i'm talking about, bank of england. its rate dropped erratically. quantitative putting weakness in the bound. will we see much more job loss on benchmark provisions january through may and even in june tomorrow? mr. biedermann thinks so. it's an interesting analysis. we'll have to wait and see. now, let's go back to rebecca jarvis. >> thank you very much, rick santelli. meantime, a judge refusing to sign off the multimillion dollar settlement between bank of america and s.e.c. and mary thompson joins us on the holdoff. mary? >> the district judge has questioned for both sides' attorneys so he will be holding a hear on monday in new york's

southern district. writing in a filing, he says the pros posed consent judgment will leave uncertain the truth of the very serious allegations made in the complaint. rakoff is asking if the $33 million fine bank of america asked to pay s.e.c. is adequate and the billions of t.a.r.p. funds they received via the government. people familiar with rakoff are not surprised he's not ready to sign off on the deal, saying he's very serious about determining whether any settlement is in the public interest. on tuesday without admitting or denying guilt, bank of america agreed to settle s.e.c. charge that's gave shareholders false and misleading information about its then pending merger with merrill lynch. the s.e.c. alleging contrary to public comments, bank of america had agreed to apay $5.8 billion in bonuses as a deal to buy the brokerage. the bank didn't share this information with shareholders before a vote on the $15 billion deal and the santa cruz said it should have because it was material information given the size of the bonuses and merrill's failing financial health. back to you. >> mary, thank you very much.

among the biggest winners s. this bout of fishing a sign we have legs? joining us, chief investment officer at stewart capital advisers and the president of rdm financial group. good to see you both. malcolm, where do you stand? so far no clear direction for august. july, obviously, a big winner for the bulls. we're finding no traction on either side here. >> it's kind of surprising to see the market having run as far as it has, as fast as it has, with really no meaningful corrections. we will not be surprised to see a correction. we're a bit concerned that the market is getting a bit ahead of itself so we're kind of in the worry camp now. >> does that mean people should protect some of the profit that's they made? if they have seen this run-up, take a little money off the table? >> i think if you have made some -- if you have made some money in this run-up, it's always a good thing to take money off the table.

set some aside and get ready for looking for options in the next leg up. >> ron, one of the things i'm hearing from folks on wall street is that people aren't allowed to be bearish in this kind of market. you haven't been paid to be bearish. is there not enough sensitivity to the downside risk here, or is it just momentum that's going to continue higher? >> you don't chase momentum forever. you're going to get burnt. i think now is the time to set your equity portfolio at about 70 beta, about 70% of the s&p from a volatility standpoint. get diversified, get all over the world. we'll going to take some kind of hit but there is some kind of recovery going on. but i take about 30% off if you're fully invested at this point. >> so that 70 is up or down from where we were a month ago in. >> we were lower going into this quarter. we took a little bit off. we actually added a little bit of a short because we liked our positions. so we took some heat off. we let down from about 80 to about 70. >> what would you buy here,

malcolm? you're a little skittish about the gains we have had but there are some things you would buy here, yes? >> right. we do believe the economy is improving. we do believe we will get recovery as we get into the end of this year. so we think you want to be participants in kind of a long-term secular expansion of the global economy. so that means things like basic materials, engineering construction, certain technology, particularly those softer firms that have clean balance sheet that's can generate their cash internally and health care that will participate in some of the cost reductions that will happen because of what's going on in washington today. >> and, ron, i see you're playing some of the classic defensive strategies -- food, energy, technology is also in there. some of the emerging markets. that doesn't speak to expectation for growth or at least an emergence from the recession, does it? >> sure it does, bill. what we are looking at is the major theme for us is the global infrastructure bill that is, as you heard me say before, the truth is 40% of the global has money to spend.

they don't have debt. it's human nature, bill. everybody wants to do better. these people are the united states' 1900, the united states 1945. >> malcolm, how important, malcolm, in your view is tomorrow's jobs report in terms of setting a new tone or a new direction for this market? >> i don't think as a data point it's necessarily that important. as abby joseph cohen said earlier today, it's difficult to look at one particular date why point because of the noise that's in there with justments and so forth. the more important piece of information is really buried in the data, and that is are we seeing expansion of hours worked? are we seeing growth in temporary employment? the jobs improvement, net improvement in jobs will come but that's not necessarily what we're looking for out of the number tomorrow. >> malcolm, ron, good to see you both. thank you for joining us today. >> nice being here. we have a possible deal for cash for clunkers in the senate. progress on health care reform package, and a cull fall for a e bank regulator. mark warner is in the middle of

all of that. will he join us in a moment. also ahead, stocks like staples, urban outfitters, big retail winners today. what does that say to the consumer on the state of retail? we will ring the register. plus, ramping up risk and raking in millions of revenue, meaning big, fat bonuses at a bank that government a government bailout. should we be outraged or should we applaud goldman sachs? and get your motors started. get ready for the "fast money" halftime report. can s&p hold 1,000 into the close? "power lunch" is back in two minutes. he ran off with his secretary! she's 23 years old! - oh, come on. - enough! you get half. and you get half. ( chirp ) team three, boathouse? ( chirp ) oh yeah. his and hers. - ( crowd gasps ) - ( chirp ) van gogh? ( chirp ) even steven. - ( chirp ) mansion? - ( chirp ) good to go. ( grunts ) timber! ( chirp ) boss? what do we do with the shih-tzu? - ( chirp ) joint custody. - dog: phew...

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i'm cnbc pharmaceutical reporter mike huckman at the breaking news desk. at an animal rights activist websi website, a group called mfah austria, standing for military forces against hunling don, referring to an animal lab testing company in the uk and here in jersey, is claiming responsibility now for the recent attacks on swiss drugmaker novartis and its ceo dr. daniel bar sellia. the website posting this photo of the presumably fire-damaged vacation home. a company spokesperson telling cnbc this appears to be his home, but they cannot be sure. the doctor, by the way, said he will sell the property so as not to trouble the town residents any further.

separately in its responsibility claim, the mfah group writes on the website -- be and this is directed at dr. vacilla -- understand this, this will continue until you server ties with huntingdon life sciences. we will attack your private life wherever possible. we will destroy your life. novartis insists that it no longer does business with huntingdon life senses and hasn't done so in quite some time. in addition, bill, as we reported yesterday, thieves allegedly stole the ashes of the remains of dr. vicilla's mother from a cemetery in switzerland as well. >> very good, mike. crazy. >> sick. on we go. health care reform, cash for clunkers, financial regulations. certainly been a busy summer for lawmakers in washington. in an op-ed piece in this morning's "financial times," advocating for a single bank regulator. to join us to discuss that and a lot more, virginia senator mark

warner. senator, great to have you back. early on, that would seem to be the buzz in washington. we're going to get a single regulator. that is what they were advocating. then they seemed to backtrack on some of the administration. maybe we need more than one administrator. you're coming back to this single regulator again. why? >> well, i think for the last 50 years, everyone across the industry, experts, former regulators, have said, you know, why do we have this kind of banking arbitrage? we set up a system in the 1930s that might have worked at that point but if we were doing major financial reregulation, we ought to have a single end to end depository regulator at the federal level. still allow state charting but single regulator at the federal level so you don't have the arbitrage, duplication, everybody from paul volcker to all of the past regulators called for this. obviously, have you to push against some of the entrenched interest. but if we're going to do financial regulation right, i think we ought to put this back on the table.

>> what about the response from people like sheila baird, who said if you have more than one regulator, have you competition amongst them to be tougher? >> i think we have seen actually the opposite, where you've got banks actually shopping for the place where they can get the least regulation. i have a high respect for slelia baird and the fdic. as a matter of fact, bob corker and i have a bipartisan bill to expand the fdic's authority -- >> i'm sorry to interrupt you, but what if you didn't give the institutions a choice to shop? what sft decision was made in the reverse, where the regulators decided who was going to regulate, rather than the regulate team deciding? >> what you have now is a separate licensing operation in a lot of these regulators where they actually go out and promote the choice to banks. clearly, if they're shopping that come here to our regulations, what they will be offering is lighter regulation. i don't know how you kind of set up a regulation or set up a system where the actual regulator would say, come to us because we're going to give you the toughest. i don't think that's a market condition. can you avoid that kind of arbitrage if we have a single

end-to-end regulator. we would still have resolution authority. i believe with the fdic. the fdic might have backup authority so you can still get in and see what's going on in the banks. there's a whole series of areas here where i think we need to lay out a comprehensive reform plan. >> on the question of confidence in the power structure that's exist out there, at a time when that confidence is being depleted day after day, do we not go back to the beginning of thousand country was founded on the idea that a balance of power brings about a more competent system? a system that people believe in? >> well, i'm not sure how having a single banking regulator would do anything to erode confidence. i actually think a single banking regulator -- >> it takes away from the idea there's a handful of different organizations with checks and balances. >> actually, i see nothing in the constitution that talked about different banking regulators, somehow creating checks and balances. if anything, i think it's

created the opposite because we have seen institutions, countrywides of the world, changing their charter to be able to shop with regulators that will give them the best deal. i think it's been a contributing factor of the financial meltdown. if we're going to do financial reregulation, we ought to get out that clean piece of paper, do it right. i have also put out an op-ed that said we ought to not give the fed the increased power, too much concentration of power, to be the system of risk regulator. i think we ought to have a council, including the fdic, including the s.e.c., fed, treasury, with an independent chair to make sure there's somebody that can look above the individual silos. my sense is this is a chance for us to try to get this right. it will take pushing some of the boxes around, but at the end of the day, we've got to make sure we never get back in the circumstance where we had both the collapse in many ways not only the rating agencies -- >> we don't want to look at that again. that's for sure. senator warner, "the washington post" has a front-page story about the senate committee working on health care reform. they say they basically have an

outline here. they're going to shave $100 billion off. they're going to tax some of the benefits of the richest plans out there. they're going to expand medicaid, crackdown on insurers and ban dan -- most importantly -- abandon the government insurance option that president obama was seeking. is that what we're going to end up with? is that a fate come plea? >> when we have bipartisan support, that makes a lot of sense. what i'm looking for is i'm looking for a alternative so we can make sure there's fair competition. i think a co-op model. i understand the senate finance committee is looking at. i think that has a lot of ability. what i'm also looking at is not only making sure this health care plan is paid for but we actually drive down the cost of health care. because what has been missing in this debate is not enough focus on the fact that the current status quo is still going to blow up the federal deficit.

the current status quo is going to double individual health care costs, even if you have got insurance. what i think we need to move to is real financial payment reform that moves the financial incentives from deeper service to a model that really does reward quality and value. what i'm curious to see with the finance plan is are they going to have the courage to step up and drive down that cost curve in a meaningful way? >> we will see. senator, always good to see you. thank you, sir. >> thank you all. >> mark warner of virginia joining us today. coming up next -- it was a disappointing july for many retailers. it seems shoppers are still searching for those bargains, but does a rough summer selling season mean a bad fall is on the way? the retail report on the other side of the break. and here's a look at how some of the retailers are trading so far today. target, the lone red arrow of the ones we're showing you here. c

social media site twit cetes back up and running after suffering from a three-hour outage after resulting from a denial of service attack after hackers flooded the system, preventing legitimate web traffic from getting through. twitter says the site is back up, but, quote, we are continuing to defend against and recover from the attack. earlier today, twitter co-founder biz stone told me that this type of attack is a malicious effort to disrupt and make unavailable services like online banks and now twitter. facebook was also very slow this morning, and although the site does seem to be working now, facebook tells me they're looking into any delays or outages. back to you. >> julia, thank you. next hour we'll be talking about this. there's actually a division of the fabled law firm of baker hostetler that advises corporate

executives on what to tweet and what not to tweet. >> you can get into a lot of trouble. >> yes. >> and lawyers should know that better than anybody else. >> anybody with nonpublic information shouldn't tweet it because it becomes instantly public information. >> have you to teyou have to te? but a disappointing july for retailers. they did up guide us. the big question on investors' minds, savings, employment. how will these impact the rest of the year in terms of the retail picture? joining us to discuss this is kimberly green burger. kimberly, did today's report surprise you like it surprised a lot of wall street? >> the numbers today were at the low end of our range of expectations. so they were slightly disappointing, yes. >> going forward, we heard talk about unemployment. obviously tomorrow's numbers are going to be important. savings rate, 6%. now have you this cash for clunkers program, which i hear is getting some traction on the floor of the nyse.

people are saying, well, if people are putting their budgets towards a car, maybe it will come out of the retail picture. what do you say? >> that's certainly a possibility. what we are seeing among the retailers reporting today is that the items that are most discretion ary are the ones under pressure. consumers are still spending for the needs but they're not spending for the wants yet. >> do you see any point at which that turns around? or if you think that continues, what's the best way to invest in the sector? >> we are starting to see some inflection, frankly, in some of the retailers' results today that are not at the value end of the spectrum. michelle, as you know, over the last 6 to 12 months, the retailers at the value end of the spectrum are the ones that have been really beating and doing very well. we saw quite encouraging signs today out of urban outfitters, for example. night sequential improvement in their sales number and they're not positioned at the value end. chickio chico's as well. so we are starting to see some traction away from value and we

think that is being driven by much better product execution and retailers that can stand out on the fashion. >> i see your list here like urban outfitters and american eagle, which we talked about yesterday in the context of back-to-school shopping and all. are kids really going to look like lumberjacks this fall? >> plaid. >> plaid is the big trend for fall. >> really? >> because i went through the cycle the last time around, i can't do it again personally, but -- >> you don't look that old. were you 5, what? >> but i will say plaid is the big trend and we are seeing in particular black and red the big plaid statement for fall. yes, they will look like lumberjacks. >> kimberly, thank you so much. >> we are all showing our ages and making fun of them, right? we will all be wearing it at the end of the cycle. >> matching, just like in the old days. >> kimberly greenberger, thank you so much. check this out, goldman sachs ramped up risk, raking in

$100 million on revenue on 46 different days during the second quarter. we're not talking the whole quarter, we mean 46 days, each day $100 million. >> wow. >> that means fat bones to a bank that, by the way, got a government bailout. should we be outraged or applaud their success? sparks will fly in our grid debate. are we minutes away from the "fast money" halftime report? yes, we are. i can see you doing that lumberjack thing. >> i think it should be power plaid. >> the homage to the new friend here. on the halftime report, of course, we got that retail sc e scorecard. walmart doesn't report monthly sales. we will hit the charts and tell you where that stock is headed. also, we will go dumpster diving. many stocks left for dead. aig, fannie mae, nice pops today. we will tell if you there's any value in the stocks. first, more "power lunch" right after this. has the fastest serve

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welcome back. we're almost halfway through the trading session. and the headlines this hour, first-time jobless claims fell last week by 38,000. the economist says that is a sign of hope that the economy may be on the road to recovery

at this point. "the wall street journal" is saying banks and lawyers could rake in nearly a billion dollars in fees for helping to manage and then break up aig. ha shares of aig have been very strong all week. even in a weak market, they're up against today ahead of tomorrow's earnings report. and ford is saying now it's on track to be break even or profitable by 2011. michelle? >> still, goldman sachs' money machine cranking out profits left and right. just months after a government bailout. on the front page of "the financial times," goldman's $100 million a day bonanza underlines bank's trading strength. one of the many headlines about goldman sachs. should we be outraged or should we applaud? cnbc's "power lunch" con tribltser boykin and you guys now how the rules here. 120ekdz 20 seconds to make your case. trent, let me start with you, do we applaud goldman for making $120 or be outrageed? >> absolutely. six months ago we were talking

about credit crunch, wall street bailouts and taxpayer-funded bailouts. what's happened since? goldman's paid their money back and lending and making money. that's a good thing. turns into income not only for goldman but income for the federal government. i'm sure the democrats would like to spend that on other big government programs, so it's a good thing. >> steve boykin, 20 seconds, applaud our outrageed? >> i don't think we should be applauding or outraged. i think they are doing what they are supposed to be doing, which is making money. how are they making money? they have a $10 billion government-funded taxpayer infusion last year through the t.a.r.p. program, which helped them make this money. not to mention the money they got from the aig bailout, $170 billion we gave to aig, which turned around and gave a big portion of that money to its biggest lender. >> trent? >> i'm glad we agree, keith, it's good they're making money. look, it's not how they're making money. they're making it up front. let's remember the fed, the treasury, the white house will all be watching goldman in ways they never have before.

the u.s. congress and taxpayer. to suggest another bailout will be happening is really nuts. that's not going to happen. i think the politically savvy people at goldman and elsewhere know that. for them to go belly-up, the politicians would be lining up to dance on the grave of the next financial firm that comes on bended knee to washington. >> keith, you know, we are the ultimate backstop, right? the taxpayers. what are they ramping up risk when in the end, you and me have to bail them out if they fail? >> exactly. people who invest in goldman sachs will allow goldman sachs to take risks precisely because they know the government will be there to bail them out if something happens. >> i disagree. that's not going to happen again. >> how do you know that? >> let me have my 20 seconds. the reality is gold manz sacks w goldman sachs was awarded because of the state help and now the state has the right and responsibility, the government has spinal to regulate goldman sachs, to make sure the companies are not invested in these irresponsible credit derivatives again so it's going to get the taxpayers on the hook

again. >> trent, are they too big to fail? aren't we the ultimate backstop if they do feeail because the government said they can't do anything but support goldman sachs? doesn't that mean you and i are the ultimate backstop if they get some of this trading wrong, which is clutly a possibility? >> i think it is a possibility but i think the too big to fail view in 2008 and too big to fail view now are two totally different things. i think any bank, including g d goldman sachs who gets way too far out there and thinks the government will bail them out is crazy. that will not happen. congress won't vote for it. treasury will not let it happen. the fed will not let them happen. >> that's another debate i want to have someday on this show. have we gotten to the point now we will let another bank fail? thanks for the discussion. >> they didn't need the $10 billion to begin with. >> that's what "the new york times" claims, we did not have a near-death experience. >> they deposit neidn't need th >> revisionist history. >> aig is another situation.

anyway, t-mobile, you know them, unit of deutsche telecom is pumping up its offerings, unveiling a new google phone and new blackberry, which we happen to have right here. how much of a threat are they foreveriz for verizon and at&t? jim goldman will answer that for us. and take a look at how some of the telecoms are doing. they are all on the downside. you see verizon communications up there. 1 1/2% lower. at&t almost a full percent lower. and deutsche telecom not getting the benefit necessarily from this report, 1 1/2% lower as well. 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.

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t-mobile is turning up the heat in the telecom wars. the cell phone giant unveiling new products in an effort to dial into a bigger slice of that market. our silicon valley chief jim goldman looks at t-mobile and how its new offerings may signal a growing threat to at&t and verizon. jim? >> bill, good afternoon to you. t-mobile hasn't been known for its big-time momentum here in the united states but some key product releases and some splashy media events this week may be turning that tide. this is the latest device from t-mobile now, the my touch 3g operating system. it's a slim touch screen, slimmer phone and phone being met with positive reviews in the marketplace. the my touch release follows the

new blackberry curve release for t-mobile, a device featuring that cool optical touch track pad. say that ten times fast. and then there was wednesday's high-profile t-mobile spectacle in the skies above san francisco, complete with those stunt jets and 100 parachuters marking the release of the new my touch. the company out with earnings this morning, 325,000 new subscribers, gaining market share, even as sprint is declining. even up 400 basis points and a host of new 3g offerings on the way. >> by the end of the year, we will expect to have 12 different 3g devices so we are going to broaden our device range and that is very important to gain new shares and attract new customers and also to attract new users. >> still, competition remains fierce. a new android phone coming to verizon with google later this year. at&t enjoying iphone success and sprint doing what it can with the prix from palm. it still has a way to go in the

u.s. but the trends are very positive. the company says this morning. bill, back to you. >> as fate would have it, we have the new blackberry curve here. one of our staff members got it with the new touch pad thing. >> normally there's a track ball there. >> that works, huh? well, the staff member who got this likes it. but then he's a blackberry aficionado. >> cool stuff. >> very nice. >> thanks, jim. >> see you later. we'll talk earnings market regulation. all of that coming up with the "power lunch" exclusive. up next, halftime report. every shoe. ery g. every book. every cereal. well, maybe not every cereal. but every stem. every stitch. every tune. every toy. pretty much everything you buy can help your savings account grow because keep the change from bank of america rounds up every debit card purchase to the next dollar and transfers the difference from your checking to savings account. it's one of the many ways we make saving money

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welcome to the "fast money" halftime report. we're getting into the heart of the action. as it is happening, they are trying to cling to the 1000 level at the s&p. the big jobs report tomorrow. let's get to word on the street. our "fast money" crew, john and jerry of monster.com. and jerry levy of peek six investments. dr. j, i won't call you jim. >> melissa, i won't call you michelle. >> what do you make of today's action? it seems like we're just sort of waiting for that jobs report tomorrow? >> indeed, and we are also sort of pushing volatility up as you would expect ahead of an unknown event like that. we know the catalyst optical endarr. we know what the adp report

showed and the question is is whether the government hired a lot more. i think they d tid. the whisper numbers are hanging in there as are the numbers. >> hanging in here. you have to look under the lid and we are seeing weakness in technology, most notably the semiconductors. what's disconcerning to me and other folks out there is it really signaled that tech rally that sparked this whole thing going. right now the stk ock is down b 1 1/4%. what do you make of this? is this that they are losing steam especially that we didn't get the catalyst out of cisco systems that everyone expected? >> i agree with you to a certain extent. but we had a big run up, right. now we wait to see if this is a sell-off or consolidation. if you look at a lot of other stocks, besides semiconductors in the technology area, you look at the rems, you look at ibms, they are consolidating above key

levels. if they hold above key levels and resume in the up trend, we can leave over the 1,000 mark. >> we sort of got an optimistic slant here on the desk. you know who else is optimistic, abby joseph cohen on cnbc today. here's what she had to say. >> 1050 to 1100 range is where we should be towards the end of this year. keep in mind that profits are in the process of recovering. a lot of noise in those data because of write-offs and so on. but we believe that a reasonable number for next year is something like $75 per share, and so at 1050 on the s&p 500, that is just about 14 times earnings. we do think that achievable. >> and the key here is she's talking about pes, essentially a bull market that began in march. jerry, you're looking at pes but copping out with a different interpretation? >> i do. right now look at where we are. 2010 is five months away.

the average pe is right around 18 times earning. i think 75 cash a little rich. abby is great at what she does. i'm a trader. i can tell you the market say bit overbaked and we are also seeing a lot of flip buying right now in texas instruments, if we're talking tech as well. a lot of people aren't feeling so sure at these levels. i got to tell you, i'm not either. >> greg, what do you see in the charts here for the s&p or nasdaq for that matter? >> sure. melissa, s&p, i called it a couple of weeks ago that 1000 was a psychological level. our panelist talking about it backing and filling in a little bit. i have no worries with the market doing that down to around 948, 950. below that, then i'll start to change my view a little bit. but 50 points, we have some leeway to consolidate. >> let's move on here. next trade, a dash for trash. beaten-down credit crisis, casualties making huge moves this week. fannie mae up, by the way, each more than doubled. aig, though, talking about this on the desk. two words here short squeeze. dr. j, what do you make of this?

>> well, in fact that is the hot sector right now, melissa. you look at aig, you look at ig, hartford financial, ambac, they're all trading extraordinary volumes. aig, i agree with you. it went down to 134 million and they have earnings coming and they might spin off a bunch of different divisions and take cash in. that's all contributing to the big rally to the upside. i would take profits on that if i was in aig still. we are out of that. >> jeff, you are a trader who looks at levels very, very carefully. when you see a name like aig, and we do have news events, by the way. this is not just a short squeeze. there might be events on this. earnings coming out friday and a new ceo on monday. how do you trade this? >> melissa, i trade this purely on momentum. i tell you, you have to strap your seatbelt on when you trade this. i'm long when it goes up and short when it goes down and i pray to the market gods i don't get caught on the wrong side.

the volatility in the volatility in the stock is crazy and for an interday trader, there is a lot of money to be made. >> jump in here. >> you have to be careful. first of all, talk about a short squeeze. that is moving the stock higher. when you take away and restrict natural market order, that's why aig is up at 24. you have to be careful going along the stock. i don't care what they say, they have debt to pay back to the government. until that is paid off, they should not trade at $24 a share. >> a grade trade of stock. >> let's move on. the next trade out of mix at best for some of the stocks are taking off with gas, american eagle and macy's up more than 5%. do you like any of the names? retail index is up 15% so far. >> i think goldman went to the sidelines on macy's. i'm not hot on that one.

the mall i think it's been a story about rotation. the consumer continued to spend, but they rotated into which stores they like. those stores that you named are the winners and next month they could be different with the skew from going back to school and pushing more towards pacific sun and hot topic and some of those perhaps. i like the space and like i say, i think it shows us a positive going into the fall. >> the one we did not hear from, the world's biggest retailer is wall mart. what can we glean? we have costco and targ missing expectations. can we expect anything along the lines of wal-mart or are they not comparable sf. >> wal-mart is a different beat. you have to realize they have the whole line down. that's why they can do such a thing. i think wal-mart is say good play with safety. i think costco is a different ball game. i would be long. >> quickly, what are you seeing

from the carts? lower? >> i'm different. as far as fast money, there is no fast money. a two-point range for about two months. i put it out as a short. i am looking more towards the low 40s. >> let's move on to technology and before. the stocks are moving in the aftermath of the 40 to 50% profit drop. the once red hot sector given up their role? we have the pit boss. pete is on the fast line. pety, great to have you. what are you taking a look at? i'm looking at the screen and i notice semiconductors are weak and those guys are weak. >> michelle or melissa, i think you have to look where they have come from. i'm talking about since the release and the explosive move to the upside followed by ex-as instruments and research in motion. apple. we saw nothing but strong moves and you look at the xlk. the move to the upside and you

wanted that leadership. we looked for it and we got the leadership. they participated ahead and pulled back. >> i have to cut you off. i have breaking news in here. the white house is releasing a statement saying any decision on fanny and freddie mac are light years away. that is in direct opposition to a "washington post" article out today that there would be reform on the horizon. going to leave it there and see you tonight on the desk. a few break out stories and the 99 cent stories on the verge. i-max which doubled in 2008. up next, rupert murdoch said make them pay, but will the plan backfire. we are back in a minute. >> consumer feeling better? the ceo of this altered discounter on why the fast money from frugality is here to stay. this summer rally shows no signs of slowing. the economists called the crisis and said this is the mother of

all bear market rallies. wait until you find out why. once left for dead, the chief at i-max on this company's magical turn around. the pit boss takes us down a notch for a long-term play on america's post market shows. taking its rightful place

in a long line of amazing performance machines. this is the new e-coupe. this is mercedes-benz.

time now for the "power lunch" trade to go. today that stock is up by 9%. >> like i said, melissa. the particular hardford is one of the stocks that has been on fire this week. a lot have. they take profits and they roll up to the next strike. they take profits and roll up.

this is one of the hot sectors and the hottest stock. >> you would recommend doing that? >> i did that about an hour ago a and -- >> do you buy or sell? >> i am going to lead towards the short side and for options traders, it's august 100. i'm a seller here. >> sell the broad market. >> dr. j? >> i might be the buyer. >> i'm cautious before the numbers tomorrow. >> kicking the right stocks after the sales data. do they have theed my as couch? first on "power lunch," a cnbc exclusive with the earnings and

government regulation. what are you working on? >> a lot coming up. we will talk about investing with our special guest and investment strategist at her own firm. she is on set and be careful what you tweet. they are saying cut back on twitter. news corp rceo said make em pay. he plans to charge for all of the online contents. bull strategy, but is it going to work? all that and more on "power lunch." >> twitter said services are back for most services after attacks earlier. facebook also experienced problem this is morning. both chief engineer said the companiville a new test flight for a few weeks for the 787 stream liner aircraft. frank greenberg settled improper accounting charges for $15 million and said he is pleased that the results are in conclusion that he shouldn't be

charged with fraud. that's cnbc news now and we are first in business worldwide. i'm courtney reagan. "power lunch" continues for a thursday. stocks struggleth and s&p below 1,000. tonight panic. financials have been helping to offset the declines. financials have been strong, michelle. >> i'm michelle caruso-cabrera. the ceo of fm global is here and we will talk about the earnings and futures of the financial markets. >> i'm rebecca jar sis. twitter back online after being down for hours as law firms advise ceos to be extra careful about what they say over twitter. look at the fallout. >> i love that. we are joined by a friend, allison from dean's wealth

management. we had a bang up july in the stock markets and so so, so far for august. what do you think about the market? >> i think right now the markets are going to retrace as people grasp what's going on economically, but the market is headed up at least 10%. >> do you believe the economy is turn something. >> it's turning and i think corporate profits will be better than people expect. the companies retrenched more dramatically and looks as if the revenue trend will result from positive earnings. >> if there risks, what are they and what are the unknowns that could go the other way? >> the biggest risk is that may be consumers wind up slowing down and consumers seem to be stabilizing or unemployment wants a dramatic effect. i don't think unemployment will improve. since consumers are always a big part of profits, that's the one variable that you will pay attention to.

>> i'm getting ahead of the game, i know, but the fed has to start raising rates. >> the futures are pressing in a 100% chance by january. is that possible? >> what that will do to the stock market? >> if the fed does tightening, it will be positive for the market. they will go from worries about a depression or recession to inflation. some action to correction has been inflationary with interest rates and perceived positively. they did something too dramatic and that could hurt the market. >> we go through the half hour analysis and mf global is out with earnings, excluding charges they posted on a gain of $5 cents beating estimates. the stock is down about 4 and 3/4%. the ceo. thanks for joining us. how would you characterize that quarter. coming out of the great freeze

at that point. >> we had a great quarter. revenue up which is one of the first companies to demonstrate that. the expenses continue to go down and three of the four product lines were sequentially up on the quarter. we continued to diversify away from the listed sort of futures business which is the historical track record. our push into fixed income and high yield corporate debt are starting to gain momentum. our share of u.s. segregated funds measured by the cftc are up. we are gaining market share. people are embracing the model that is focused on risk management. >> there is a lot of noise and it's difficult to tell what you earn and what the run rate is. could you clarify what that is? >> sure. i have been with the company for a year and we have been

rebuilding and addressing legacy issues to try to identify the run rates. the way we report is with some of these exceptions that have existed since the ipo. a real run rate to focus on is the nickel. the market is expecting four cents and relative to the industry where zero interest rates and a key driver for us and a low volume over the last year and a half. we feel good we are at a nickel. >> the first quarter revenue was down 28%. a sharp decline in trading volume which i don't understand. i hear about high frequency trading and the volume going on all over the place. why aren't you in there? >> you are talking year on year. what happened in the futures industry which is the biggest driver is open interest is down 50% year on year. c and e volume is down year on year 30 to 40% and we track with the major markets. if we look sequentially, this is the important point. open interest in the industry is

building. up for the third quarter in a row. we had 11% increase in revenue and volume for the quarter. we are starting to see signs of stabilization on a sequential basis. if everybody is focused year on year, we are in the same boat as a lot of financial institutions. we are focused on the recent track record and that's what i'm excited about. >> does the regulation coming down the pipe limit commodities and trading and the futures markets? does that concern and you would that constrain if it comes to fruition? would that restrain your ability to make money in the future. >> they are vur positive for us. the transition for otc to a cleared model creates an opportunity for intermeadiary to serve those clients. that will be more transaction revenue for us. the second thing coming down is on the adjusted net capital. most competitors with large trading positions, the capital base will go up. ours will stay the same because

we trade for clients. the third thing in the domain is on the limit discussion for energy. a couple of points to make. it's a mistake to try to control pricing or volatility with limits and number two, we trade for largely commercial hedgers and we will be in the market anywhere in the world due to the 14 countries. >> they don't feel they may be better off. the interests may. >> this would be positive for you. we freight in 14 different countries that they will restrict the trading and i will observe them in other parts of the world. i am not bound to only one environment. those buyers and sellers and speculators will find each other. >> they had an issue with a road trader and you had to impose a

lot of risk management. are you done with that and satisfied with what you have been able to do? >> we today announced the final internal realignment of the company. i came in to focus on introducing an enterprise culture and the organization embraced it and we are getting validated that it's working because of clients and new employees and our growth and revenue. it is working. >> that could not happen again? >> we mitigated the risk and have a risk appetite statement and what is goal is to operate within the parameters. we mitigated the risk and clearly have operational risks every day. >> you mentioned that i noticed in your press release you make income off the hearings and have trading. can you talk about that in the contest of being low risk? >> we do it all in the back of facilitating client orders. we are not a directional trader.

we take risk and could be a minute or an hour or occasionally overnight. our balance sheet has no level three assets except for the exchange memberships and focus on risk management. >> when it comes to serving the client orders, we headlined on the jobless rate in the country. the white house is projecting it will go above 10%. what are clients telling you on the state of the economy? where do they suspect prices will be? >> i'm not going to make a judgment on prices. i will focus on our clients saying we want access to unconflicted, unbiassed intermediaries. >> you make money whether it goes to 100 or $55. >> our clients are encouraging us and we responded by upgrading and building the fixed income capabilities. of all the unprecedented debt, we are right in the middle. >> what is the fastest growth in

demand for your services. institutional or outside the u.s.? >> we are focused in the retail sector as well as expanding the equity models in hong kong and japan. >> good to see you. thank you very much. we are seeing the market down. the s&p is up and the dow is up 42%. what's driving the action. we will take the pulse of the markets. >> he wants to be charged for the online contents? can he make that happen? "power lunch" is back in two minutes. welcome to the now network. right now

five co-workers are working from the road using a mifi, a mobile hotspot that provides up to five shared wifi connections. two are downloading the final final revised final presentation. - one just got an e-mail. - what?! - huh? - it's being revised again. the co-pilot is on mapquest. - ( rock music playing ) - and tom is streaming meeting psych-up music from meltedmetal.com. that's happening now with the new mifi from sprint, the mobile hotspot that fits in your pocket. sprint. the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com.

the market down fractionally. let's get a look at the numbers. we are standing by and begin with bob dasani at the new york stock exchange. >> we are sort of on a flat day and moving in different direction. one stock in the financial group

and restaurants are having trouble today. aig, let's bring up a two-day chart. titanic move to the upside yesterday and big volume today. struggling. two theories about why the volume was spiky today and yesterday. some believe they will announce a blowout quarter on earnings and theories about debt for equities that could help the interest payments. that's one theory. another one makes more sense in a way. the volume strike would do to stock lending making it more difficult to borrow. why would they do that. yesterday's announcement would make it short selling and make lending more conservative for whatever reason. that may be the most likely reason. let's move on. we have a problem with the restaurant here. the problem for the bulls in general. the steals trends are supposed to be getting better. we are not really seeing that here. here are the retailers. take a look at the restaurants. drinker came out and lowered

2010 guidance. rather notably and that's a problem. we are supposed to have comps a lot better. they are easy comparisons compared to last year and that's not happening here. that's a big issue. trader thoughts. how are we looking at the nasdaq? >> i will take it from here,  bob. it's interesting to see at this point that the fixeding in markets are hunkering down and getting ready for an important job state in the market. if you look at the chart, it's bouncing a bit and evening up with the bank of england and what the currency has done. they will have more quantitative and surprise the markets to some extent and hovering around 3 and 3/4. whether or not we will see benchmark revisions from january through may on the job site, more job loss. the range anywhere from 500,000

to a million according to trim  tabs. will it happen tomorrow morning? it should? does it have to be announced? not necessarily. let's go to the shack at the nasdaq. >> down 7/10 of 1%. that looks like a foregone thing. the chips if you watched fast money halftime report, they are weaker and the semiconductor down. weakness from rim also giving back yesterday's gains and dell as well. i want to point out staples as well is up on a buy list at goldman sachs. i want to touch on this issue with news corp and with coin star. this will be the last thing i talk b. i am having technical difficulties. everyone talks about how news corp wants to charge for everything online. one element of what happened

with the earnings report, they are delaying the release to red box at $1 movie rental establishments. it's all over. pick up another couple thousand outfits at kroeger. there is a fight to get more money out of the rentals and obviously being undercut by it and delay by 30 days. we might get tension in that market place. back to you. >> we have the shack now. our own rap group. >> like shaquille o'neal. they are similar. >> we are getting word, a report on nasdaq, you will like this. >> very interesting. >> nasdaq announcing they will cease offering flash order types effective september 1st. >> do we have the graphic to explain what flash orders are. high frequency trading and orders are flash and there is a subset of investors and player

who is can see the orders ever everybody else. it's an extremely controversial thing because a lot of people think if you can see that, you can front run. >> that are they have been looking into this and talking about looking at the equitable nature and trying to make it more equitable if they could. they are talking about ceasing offering flash order types. where do you stand? is this good for the marks? >> i'm not sure it will make that much of a difference. it's never good if people can enhance the ability to make trading over others. it may make people feel more comfortable and there is an imbalance and not fairness. i don't see it as generating. >> if it's not possible that they can come up with another ren dig of something that's

unfair. isn't everybody looking for an opportunity to gain in the market and get as much information as possible? >> absolutely. there is always a possibility. that's capitalism and we have regulators. >> the white house does not expect stimulus that. is crossing on the wires. a discussion about whether or not there will be any second stimulus for the cash for clunkers which will be voted on tonight. one final question, when you look at flash trading or dark pools, you end up with the same issue which is some people can see orders before other people. mary shapiro puts them both in the same sentence. that's a lot of money on the line for the goldmans of the world and people providing the dark pools of liquidity. could we look at the profit base in the way that people didn't expect. >> you could hit the profit base, but if they are gained because you have an unfair advantage, they should be sustainable. >> isn't this a liquid enough

market that they don't need the incentives and the split second first glance at trade before they are executed. do you need that? >> we like to think people are making money in the industry because they are good investors or helping restructuring. >> so quaint. >> i want to ask you to get your ideas before we let this conversation die. what percent of the liquidity do you think is coming from the dark pools from high frequency trading right now. the argument has been made that they do provide the liquidity. they are the majority of it. >> no idea. >> well put. bob has this week's cnbc 101. >> the estimates that up to 60% of the total volume is due to high frequency trading in general. let's talk about the weekly guide to investing. there 600 out there and i'm asked which are best and not best. i'm not going to do that, but the two things that are

important is thin volume and a thin asset base. that's a no-no. there is a simple reason for that. when you get the thin base, you have wider pricing spread. when you get the large spreads, it's harder to get the right price and on top of that, the light volume that can cause a delay in executing the transactions and unloading the shares could be difficult. there is no hard and fast rule, but in general, here's a good rule. try to look for minimum signs of liquidity. it's a reasonable number and 100,000 shares trade and execution is reasonable and there might be cases you don't want to do that. you would be amazed how many don't meet the requirements. we don't drag in many to talk about. i try to stay in the top 30 or 40 out of 600 out there. doesn't mean they are not good to look at. you have to be careful. that's the 101 for the week. >> that are is great information. thank you, bob. we are on twitter patrol again.

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. no, the world did not end this morning, but it felt like

it after twitter shut down on a denial of service attack. julia boorsten got the word from biz stone who called the attack malicious. here's part of the statement we are show you. given the latest security breech, a reminder from what corporate executives should be careful about what they tweet about. more now from george with the law firm where he has corporations on social media practices. good to see you, sir. >> hi. >> what should an executive know when it comes to tweeting. the anchors are told they better not be tweeting on the job. what should executives know as well. >> the companies who are essentially always on even when they are on personal time and a high enough executive of the company are always representing the company and there is a line between business and social

networking. it tends to blur. >> isn't that a bit duh. >> why would a corporate executive want to tweet? >> as the technology involves and more people are turning to that versus others, they want to reach out and connect and they want to monitor the market and deal with the customers and the customer image and perceptions of the company. >> isn't that what e-mail is for? >> that's one thing. those of us who are new to tweeting, we are once new to e-mailing and resisted it as well. i think you have to be open mind and they have to be careful. they have fiduciary obligations and fiduciary duties and they have federal regulations. >> the problem i have and i get your tweak of the way i asked the question, i don't tweet, but when i sent the e-mail, i know who i'm sending it to. i have no idea who will read that thing.

>> there is a protocol on twitter where you can protect your tweets and you go to the settings and you can control your settings so it only goes to your friends or followers. most people don't do that. most people sign on and bypass the terms and tweet away. >> how binding is tweeting? >> it's your word. it will cost you your reputation whether it's binding or not and can be as binding as an e-mail if you give your word. the reputational damage and the risk could be serious. >> could it be evidence in court? you said this on twitter and therefore it is so? or used against you? >> it could be the basis of a civil lawsuit or criminal prosecution. if someone is tweeting out insider information or a tipster tweeting out that my company is merging and i'm about to retire and stock holdings are going to

double, intending it or not, that could be the focus for litigation. >> most company when is they make any type of announcements, they usually have to hedge or protect people from saying something. with tweets, they can make a comment without it being filtered. it seems to me it doesn't make sense to communicate without a type of filter. >> i agree, but there filters that you can apply. you can put a dis-plamer like i'm an anchor at cnbc and the views are mine and not the views of my company. >> just like it comes with the company e-mails that get sent out. >> that's correct. another thing that companies are doing is changing their code of conduct. they are telling. yes, we recognize we have a company-run twitter account and you guys will have personal beings that we are not familiar with or we are.

we want you to be mindful of the information that can be shared and the code of conduct applies proprietary information that should not be shared. copyright information cannot be share and all the things that can expose you. >> brings me back to the original, duh. >> i know you don't tweet, but we appreciate you joining us. come back and see us. coming up on the half hour mark, we will head to the floor on all of today's market action. >> sorry john mac starting to head in and charlie gasparino is working that story.

welcome back to "power lunch". here are stories we have been following 789 good news and bad news. the same store sales fell in july and plenty of companies are beating expectations and raising guidance. former aig chief frank greenberg is expected to settle allegations brought by the sec. ahead of tomorrow's very big unemployment number, new claims fell by 38,000 last week. that could be another sign the

economy is recovering here. >> let's talk more about that. let's go back down to the floor of the new york stock exchange. standing by, i know i used that. good to see you. what are we seeing here? is this ahead of the jobs report? >> those numbers have been ratcheted a different way. if you look at the beginning of the week, analysts were looking at maybe 200,000, 225,000 they are give together a wider berth and saying south of 350 and south of 970 on the unemployment rate to see that the rally is still intact. >> you drive a truck through that. >> look at it normally. 190 to 375 i believe is the range.

>> that's one of the reasons the financials have been going higher and some are uncovering and they are low to lend under the circumstances. >> there a couple of good cobs from the competitors as opposed to an outlook that the financials are recovering enough to get back into the stocks s. this more of a technical rally than just something fundamental that things are getting better? >> i think it's all based on technical. we have to look at what the companies are telling us. they said that things are getting better. the market is definitely leading us to the path of the end of the year beginning of next year. that's what the markets are focused on. >> what is the saying about the new york fed story and paying $1

billion to firms in order to break up aig? >> to tell you the truth, i haven't heard a word about it. my clients are focused on jpmorgan, goldman sacks and morgan stanley continued to rally up. they think they are getting squishy. >> the last time you were on, you predicted 1100 was the next stop. are you standing by that or anything that makes you nervous. >> we will see a correction. the 2% to 3% correction is always a possibility. we are headed towards 1050 or 1100. >> is that blinking that i see there? >> always got to be -- we did go from 1100 to 1,000 in two days. i didn't think we were going from 1,000 to 1100. >> don't bring that up. >> i think it's a little odd that the white house came out and said they are projecting

that unemployment tops 10%. i don't know why they would say that the day before the numbers. >> that's a hint. >> time for the daily look at the most widely followed stories at our website. we go with what's clicking. alan? >> we have an amazing story up on the humor blog right now. give me a job or i'll sue. apparently a young lady at college graduated with fay 2.7 gpa and couldn't find a job and she is turning around and suing her college that she did the education and no one wants to hire her. >> take responsibility! >> there you go. the second hottest thing we have going, on the air last night, predicted that the dow would hit 14,000 in 18 months. people are diving in and finally the hottest thing, america's greenest university. this is from the princeton review. they look at academic offerings and what the colleges do.

rank them up there and you have yale and university of washington at the top. check it out on the website. >> thanks, alan. did he really say that? 14,000? 18 months? >> charlie gasparino is a great singer at john mac's future. what that means. he joins us now. >> this is what i'm getting from people senior in the company. this is a likelihood. he had that story and john was going to see power over the brokerage chief. i think that story was accurate. before the end of the year, we will get an announcement that james gorman, the copresident of morgan stanley runs the department that he will be named ceo and step down as ceo and be

chairman and this will be effective by the beginning of the year. that's what i hear from eastern people as being the likely scenario that this transition will be made and anything is possible. it's possible that they go for an outside candidate. the way it looks right now, at the end of this year, he turns 65 in november. i guess that's retirement age. he basically gives the ceo jobs to gorman and he becomes the ceo and remains chairman for however they do in the transition. it could change, but i'm hearing this from senior people. he was right with that report. how that work on the transition is another story. i think morgan stanley came out with a statement that said that there is nothing imminent and believe that. from what i understand from the senior people that the likely scenario, unless something happens is that the ceo to

gorman gets announced at the end of the year. we only have six months. that becomes next year. this becomes interesting. why make him the ceo and why is he an important player? just to be a jerk i may call him jimbo. mac is now done a 180. when he took over as the ceo he basically adopted and got rid of the agency model where you make money as a brokerage and transaction stock trades and being an advisor on deals and stuff, that was the main business model. the trading model and that risk model is doing the 180. for a part of that, jim gorman is the head of the brokerage

department. that is a part of being a broker. he got mixed reviews in the transition. i will say that with the loss recently. that did not help. >> good stuff, charlie. thank you. coming up next, murdoch said he wants to charge for all of news corp's online contents. is that a good idea? can he make it happen? can others follow suit? >> par performing and the stock roller coaster ride up 1.7% to $12.42. back after this. undefeated professional boxer floyd "money" mayweather has the fastest hands boxing has ever seen. so i've come to this ring to see who's faster... on the internet. i'll be using the 3g at&t laptopconnect card. he won't. so i can browse the web faster, email business plans faster. all on the go. i'm bill kurtis and i'm faster than floyd mayweather. (announcer) switch to the nation's fastest 3g network and get the at&t laptopconnect card for free.

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>> rupert murdoch is vowing to charge for his empire. is this the web model of the future or is the media out of touch? that and the fate of xm sirius radio and the subject of today's media and money segments. julia boorsten in los angeles and nice tie. he is joining us as well. julia, we know the "wall street journal's" online content has been a leader in being able to charge for that. early on, i believe he said he was going to make everything free. now he wants to charge. is that a good idea? >> the thing we have to remember is that the "wall street journal" is so different for most other newspapers that. is a differentiated and very specific type of content that that an affluent audience is willing to pay for. if you look at local newspapers

and if there two newspapers and the times of london and one of them charges, won't everyone go to the other paper? i think you can rarnlg for some online newspapers, but the same model is not going to work for those. >> is there a problem with testing the model? can you not regain the viewers? >> it seems to be that the future i have been predicting wrongly that the future of the web would be partly pay per view and partly free. right now there is a new letter that they charge $15,000 a year. for a broad publication, there is too much other free stuff out there. >> doesn't it become a lack of supplies that will drive price? we are killing newspapers. they are firing reporters left and right and the quality

journalism will diminish in size to the point that you will be willing to pay for it. i don't know if it's at the breaking point yet. >> people don't want to read so when you charge them, you are putting another barrier of entry there. >> they will pay for quality. >> who will pay for an extra channel. my father said he wouldn't pay for cable. >> i agree that people will pay for quality and the question is whether or not there is competing information. you probably drop your "wall street journal" subscriptions and they have been successful. one thing i think they will have to be careful about is how to get people to pay for content that they are not paying for now. once you get something for free, it's really hard to start paying. >> except for heroin.

let me move on to xm sirius. a wider loss. >> i feel so bad. i think one of the best executives in media. he did a great salesman. they overpaid for howard stern and have too much debt. i wonder if john malone bailed them out hoping they can go belly up. what do you say? >> i think a contractor is a problem, but only one problem. this was a business model that counted on americans buying cars and paying for this service. once they got it already, the melt down in the industry has been a huge problem. now they are trying to figure out another model. they have this application to download to the i phone, tons of people very quickly download this application and once you download, you have to start paying. we don't know how many people have paid for the service.

>> there is a parallel between the story and the charges for the web story. sirius is trying to sell radio programming where it comes to us free of charge. >> that's available in that domain as well. >> it is the same thing. >> 8:00 tonight, cnbc reports. we will look at why gridlock is good. >> in government? >> yes. >> doesn't even wait for us to ask about it. >> all right. >> i need viewers. >> amazon's kindle. is the big gun among evil breeders, but barnes and noble is not rolling over. they have their own version and plenty of books to back it up. david togue. >> amazon is down and barnes and noble up to $22.99. i'm rebecca jarvis.

it may be one of the most popular sports in the world. here at herbal life, table tennis is number one. the number one fan is michael johnson, the chairman and ceo of the nutritional supplement company. >> i'm addicted to table tennis. >> ping pong is such a hit shlths they hold quarterly tournaments. according to the boss, it's not all fun and games. >> the people in there 2:00 or 3:00 in the afternoon playing ping pong. business will take place so it's social, business, and community. it's all-around sports. >> yes, a sport. they can send a ball flying over 70 miles per hour. while johnson participates in many sports, his ping pong game needs work. she ranked in the top 10. >> you do not need to pass the third round, but i'm going to. d

>> are today in your digital life, tech columnist introduce the arrival from barnes and

noble. it's not this week. i'm on vacation. it's august. all year long i deserve a break and i deserve a little downtime. today it's just me rough together. off the grid. just me and the beach and the waves and curl up in the electronic book. it used to be if you wanted to curl up with a good book, one of the bestsellers you had to buy from amazon. read it on the ipod touch. not anymore. last week it was the largest e book in the world. 7050,000 instead of 250 thousand then. just like amazon only better. you can read barnes and noble on

the blackberry or the mac or windows computer. that's something you can't do. that's it, right? game over? not quite. 750,000 may sound like a lot of books, but 500,000 are free from the library of old out of copyright books. they got typos and stuff. on one hand there is no way to search for them when you want something free, but they seem to clutter the searches when you look for a real book. the bottom line, among real books you want to read, amazon has lots of books that barnes and noble doesn't. they are cheaper too. it's $10 on amazon and $12 on barnes and noble. trig nomices. 10 versus 16 and so on. it's great to read your e books on a mac or pc. you can choose one page or

two-page spreads and make a notations so you don't have to turn the pages. the i phone ap is nice. you can flip through the books like cover flow and change the font. can't do that on amazon. there is also glitches and confusing aspects to the reading software. not only that, but barnes and noble won't have equivalents until sometime next year when it partners with plastic logic and there lots and lots of book that are not available from any company. the authors and the publisher haven't agreed to it. even if barnes and noble's 1.0 e book story is flawed, it's a good enough start and competition is always good. now earsly if you don't mind, i have a novel to read. a real page turner.

>> so creative. >> i love it. >> coming up next, a few empty calories at the end of "power lunch." >> brnd new economic index. you will not believe this one. a feast for the eyes when we come back. 7éééxmñ[ñgg

the huge monthly indicator. the new york magazine has their own set of indicators.>r the overeducated cabbie index and the job market is bad. the speed at which contractors return phone call index. >> good one. >> the latest? the hot waitress index. >> how does this work? >> well, waitresses when they all turn out to be good-looking, they are not getting jobs in

real estate and helping to sell pharmaceuticals. >> at the convention when is they have all the demonstrateors. if the businesses are not hiring them, they become waiters. >> they have done great on the ground reporting to show there more hot waitresses. >> and paying well. they are squawk being this. that breaks it down. >> radioshack becomes the shack. a new branding campaign hoping to give themselves a fresh new face to consumers zeechl the commercial has well. >> where is shaquille o'neal? >> either here or brian shackman. the shack. i think that works. >> radio is so quaint now. this idea. have you do that at the same time. she came early now. started off way early. born the second of august. when was she due some she was due on the 14th.

just a tad early. >> she looks six months old. a summer surprise. >> we are glad she is on board now and mom and baby are doing well. dad is back again. >> adorable. >> in the control room. working like crazy. charming. >> that is "power lunch". thanks for joining us. see you tomorrow. "street signs" with erin burnett gets under way in 30 seconds. the white house said the administration is not planning on stimulus measures in the near term and said president obama still believes the unemployment rate will rise above 10%. the nasdaq will voluntarily stop offering flash order types of the service that lets firms get addan vanced look at trading orders and the strategist told cnbc that 1050 to 1100 is a reasonable target for the end of the year. we are first in business

worldwide. >> here's what wall street is talking about this hour. nearly half of americans with mortgages are going to be under water in a couple of years that. could mean the housing problem is bigger than the market is banking on. the u.s. postal service is continuing to believe billions in red ink. they lost money almost every quarter for the last three years. demand was saying how bad things are. you can be our guest and talk about whether we need a postal system at all. president obama wants to be number one in alternative energy. they need $30 billion to make that dream come true. this is street signs and it starts now. we begin with a check with the dow. you heard what courtney just said.

adding to the course to make the full-fledged bull market. energy and health care stocks are leading lower today. a few out liars were a few of the most troubled financials. the good news is stocks are out on retailers and doing well. july numbers were slightly better than expected. cramer has a trade on the gap. staples and macy's and limited on the list. down about 2% so far this week. oil moving lower. energy numbers are lower and not much of a move. bob dasani and is with us. let's start. >> look for sales trends. troubling commentary out of the restaurant. brinker is a good example. they own chili's and a couple of other chains. they came out and sales trends are supposed to be proving. they gave guidance f