the reason for optimism goes beyond just the one number. we had a steady decline in the number of jobs lost each month. the payroll number, the unemployment number, both beat expectations. revisions suggest that the trend is toward better jobs numbers. the workweek improved in earnings. top line numbers, minus 247,000, better than expectation. unemployment rate was better than expected. 9.6% was expected. take a look at the unemployment rate. we haven't seen a decline since april of '08. if you look at this number here, it's been a steady climb up. boom, it tops off. you want to see it top off again for it to come down more to confirm the trend. it's starting to feel like a peak to a lot of economists that we've spoken to. getting into the details. what you see is not a whole lot of job gain but fewer job losses. manufacturing down 52. retail down 44. you still have those losses in services. that continues to be a thorn in the side of jobs. you see probably manufacturing turn around better before the

service industry goes better. then the two gains 17,000. more reportly last hour we pointed out we did not have a whole lot of gain from government so it wasn't a government-driven number here. it's important that most of it came from the private sector. maybe some of it from stimulus money. let's look at the real unemployment rate, the collection of those unemployed, those working part time for economic reasons and discouraged workers. you can see that also topping off and heading down. i remember the first time it's headed down but it's been a long time. 16.3%. incredibly high number for this series down from 16 1/2%. so there's a long way to go to get to positive job growth, but at least this number here suggest that the payroll numbers have stopped declining at that horrific rate of 700,000. things have gotten a lot better. >> steve, i know we have some questions. one quick one. when you talk about the headline numbers with the small increase in the workweek and the increase in wages.

now, i know one number is just one number. but how much can we read into that on the wage front? are the increases that you're seeing something that actually gives people marketedly more discretionary income or does it not move the needle? >> you know, i would not predict a very robust recovery in consumer spending off of this number because i think the consumer, the average american household, has a lot of issues that are very small, higher than expected increase in earnings, is not going to be enough to offset that. but certainly it helps -- to be concerned that it will go the other way. and you're right, don't make too much of one number. all of the collection and stuff that i talked about was just proof this number is for real for the month of july. not a, you know, something from seasonal adjustment or some other noise in the data. the trend is pretty unmistakable as bob said in the last half hour. i think we can pretty confident we're going in the right

direction. there is some talk here about a possibility of positive job growth by the end of the year. but as i have also said, a lot of talk here, erin, about a double dip. what we do for tricks after government stimulus runs out. >> all right. thank you, steve liesman. >> sure. let's see how all of this is playing out premarket. bob pisani begins things off here at the big board. >> eight points is what is on the s&p. other things happened, the dollar spiked up. commodities and commodity stock also spiking up. we'll open positive here today. in the earnings, aig up 17%. yesterday had good earnings report. first profit since 2007. they used the magic word, stabilize. some of their business has stabilized. equally important, the value of some of their assets showed some improvement. that's really good because that was a key factor in some of the speculation of traders this week. it may have been a big part of that short squeeze that we saw on wednesday in aig.

david will have more on this in a few moments. cbs, it wasn't a great report. revenues down 11%. let's move, mundez is positive. some advertisers are slowly starting to return. that stock is going to open up this morning. finally, hold on to air gains this week. looks like we're adding to that right now. tradertalk.cnbc.com. mike huckman, how are we doing at the nasdaq? >> things perked up here on the back of the unemployment report. but we seem to be holding steady, up .8 of a percent. we still have earnings stories to talk about here at the nasdaq that are moving a handful of stocks in the premarket, at least. invidia up. sales in this quarter are going to be way better than analysts thought they would. ceo saying, we're seeing strength pretty much across the board. now, i don't own a pair but a lot of people do and that's the big reason why crocs says it's going to return to profitability

next year. ceo there saying, the rumors of our demise have been greatly exaggerated. that stock up 30%. h hanson's is up. leap wireless is taking a deep dive on disappointing results moving out of earnings on to data. amgen saying the colon cancer drug helped a certain population of patients live longer without the cancer progressing. it's up 1 1/2%. finally, keeping an eye on amazon shares on that announcement from target that target is basically going to go it alone eventually in terms of an online sales platform. to he me on twitter at mhuckman. i thought it was going to a slow day and that jobs number came out and everything changed. we had an meet reversal from negive to to positive. we bounced around a little bit and now in strong positive territory.

i want to share with you a couple of elements from the fundamental standpoint. think about it. we have double, more than double where we were in december in terms of oil prices. but we're still about half of where we were a year ago in july. and according to one report, front line, a major tanker company says there's 100 million barrels floating arounded a sea that's not even in storage. there's a lot of oil out there. i want to look overseas as well. tracking the same pattern with brent. it was negative. now positive. they're still dealing with the boe and the decision to expand their quantitative easing. gn natgas as well, sold off yesterday. gold right now the is muted. it will be a bit of a pause toward a run-up toward 1,000. aumz seem to be resistant at that level. the only real laggard in metals is copper. send it out, mr. santelli, interesting, we're high on oil but the dollar is a little stronger. >> it is. you know what?

lately, it seems as though the oil market almost gives you a better gauge of what to do in the dollar by looking at how the dollar was down a bit, then it rallies up almost a half a cent after the data. now it's back down about 1/5 of a cent positive. looking at commodities, i'm going to say the dollar index will slip more. let's start at the beginning. look at the chart. the knee-jerk reaction, i think it gives you great clues in the nervous position. we see that curve flattening. the early motivation. things like two-year, three-year, and five-year years popping up much more aggressively for a little while than the rest of the curve. although it's all catching up at this point. another important feature is that green back. what exactly would be positive for the green back? if it's sponsorship by foreigners or periods of anxiety, this number is kind of middle of the road. it's going to be interesting to see which side of 78 the dollar index closes.

mark, back to you. >> thank you, rick. most asian markets ending in the red overnight. japan's nikkei bucked the trend, it was up .2 of 1%. hong kong's hang seng fell 2 1/2%. shanghai composite down 2.9%. india's bombay sensex is down. guy? >> narc, the get go of the session, we were in negative territory. you follow what happened in asia. payroll has changed that all around. you are seeing the futures numbers. you can see it as we speak acro across europe. we've now got most of the main markets trading in positive territory. let me show you the spike we got in the stoxx 600. this is the story, instantaneous reaction to that number. stoxx 600 is trading at a session high here in europe. we are up by 1%. as you can see, most of the morning spent in negative territory. let me talk about some of the stories that aren't moving the market over on our side of the

pond. royal bank, very negative today. much more negative than anticipated. it missed on the metrics today with its figures. the real thing that struck the market, though, was the comments that came out of steven, the ceo. i spoke with him first thing this morning. he was much more cautious than lloyd was earlier on this week. he is talking about two years at least in terms of getting this business back on track. and that is much longer than the market was looking for. psa trading down today. the stock -- the company had been downgraded by s&p. a big reaction, down 5.1%. mark and erin, back to you. have a great weekend. >> you, too, guy. up next, the faber report. david dotting his aig's quarterly results. >> the word on the street and the buzz beyond. trading floor, find out what their take is on the better than expected jobs number. skeptics or not. and labor sec trar hilda solis

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all right. i've been sitting here for an hour trying to figure out aig earnings. managed to at least do a little bit of that for you. if i had an hour i might be able to explain them to you.

aig made money, profits, for the first time, well, certainly in a long time. of course, 11 months ago, it's the first time since 11 months ago it was on the brink of bankruptcy, bailed out by all of us, the u.s. taxpayer. to what is around, let's call it, $130 billion, $140 billion when you add everything in there. look at the numbers. much better than had been anticipated. we'll get to exactly why in a moment. ed liddy, the out going ceo saying the insurance company operating results remain challenged because of weak economic conditions. by overall, net realized capital losses declined. they had some changes in account that ihelped on that front. as well, improved market conditions. and they also saw the value of a lot of holdings that are out there. maiden lane assets, of course, the ceos, mortgage-backed security rose in value. assets at fp, that unit that

took this company to the brink of insolvency or add to insolvency improved. here's something else to explain to everybody. they earned 1. billion at aig but the u.s. government has a seriouser is series c preferred. we get pate first in terms of percentage wise. $1.2 billion was attributed to the series c preferred holder, which is in a trust, which is the u.s. government. aig common received $311 million. that is what it amounted to, that $2.30 number that we've been talking about because there are 134 million fully diluted shares out there. remember, of course, there was a 1 for 20 reverse split not long ago. $2.30, that's what you get. the american government gets $1.2 billion. as i said earlier, so many different things going on at aig, it's hard to keep track. at the end of june they announced that plan to put aia

and alaco to their huge farm shuns companies into specialty vehicles which the u.s. government would own a significant preferred amount of. i told you it was complicated. all of that by way of reducing outstanding under borrowings from the federal reserve bank of new york line of credit. that is still on going. that is still happening. we also have a change of management, of course. liddy is leaving. some changes on the board. and profits. so things are stabilizing at aig as it tries to basically pare itself down to an insurance company. remember joe's unit where the dwaps were written on cdos that never should have been written? most of them. that gives you a sense of to how things are improving there. they're seeing mark-ups on some of the portfolios, of course.

credit default swaps are improving a bit. it's a lot of money. and they've also reduced to number of trade positions at fp by 36%, from 35,000 to 22,500, separate trades at aigfp. this is the reason, remember, largely the reason why all of us own aig. that being said, there are common shareholders. i talked a lot yesterday about that short squeeze. perhaps it was begun by somebody who believes these numbers would be better than anticipated, wanted to get out and, of course, so many followed. and a huge squeeze, you see what that resulted in. the stock being up almost 74% over two days. we'll see how it goes today given these numbers. but keep in mind, of course, you had that incredible move up on -- no news. mark, back to you. >> thanks very much. up next, the word on the

street, the buzz beyond as traders absorb the brighter than expected jobs report and assess what it means for the near term in the stock market. and later, secretary of labor hilda solis offers her take, this is a very important moment for them. they've been very specific and careful about how they handled jobs. we're going to have that interview first here.

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jobs data. the futures are pointing higher. they're up about 11 points. we get another boost from fair value being a negative. we're looking at 60, 70, maybe even 80 points on the dow at the open. erin? >> so let's get the buzz from beyond the big board to kick it off here. joining us from chicago, matt schapiro. matt, you're reaction to the unemployment numbers and what you think it means for trade today. >> well, i think they're great, erin. the build up to this number has been all week. and 250 was really the best that we could hope for. the underlying numbers are really good, too. especially with the unemployment rate declining. now, here on the floor, the build-up with options premium and the pressure on the market was really, really high. the bears. >> reporter: expecting a sell-off and we didn't have it. i would like to see us build further on these gains for the rest of the day. >> and do you think the market can do that? i'm just looking at the futures here as we're counting down to

the open. and we have seen 25% improvement in the futures trade just in the past couple of minutes. >> yeah, absolutely. i don't know if we have enough power, erin, to really go far higher. i mean, 1,007 seems to be the top of the range right now. the market is solidifying and the bears just can't seem to press it down too much. and that means, of course, the value of the market is improving. we've got the dividends, financials that are strong. and the unemployment situation is getting a lot better. >> so how does this, if your view, matt, play to the biggest question for investors, which, is is that 50% rally from the bottom too much? does it justify it? i mean, it can go higher or does it justify it and mean, fine, we've came this far, it doesn't dive off but we don't have a whole lot more to go? >> that was the big question behind p bear scenario, which was that volatility is best against the market, erin.

really, really far higher than the underlying market was trading. they have been sitting at 1,000 for days, yet the bears have been paying quite a bit for options premium relative to that. and they're looking at that 50% rise. but as i said earlier, the market can go a lot higher with these goods dividends, recovering financials, and a much better employment picture. >> all right, matt, thank you very much. appreciate it. we're going to have the buzz on the trading floor in a couple of moments. mark is down there talking to a couple of traders. futures picked up, in terms of where futures were. we were at, you know, eight, now at almost 11. big improvement in the past couple of minutes and where we will open, will we get a big rally or not. that's the question. when this hotel added aflac

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little less, the futures if you are just joining us, the jobless number was better than expected. we lost 247,000 jobs. consensus was it would be a little north of 250,000. so not much of a pleasant surprise but it was a pleasant surprise. the jobless rate, which is based on a different survey, fell. that was also a surprise. so that gave a nice pop to the futures. they are currently -- well, they stopped trading. they stop at 9:15. futures ended 11 1/2 points above fair value. that will give us 50, 60 on the dow. >> so, just to dive into these numbers a little bit more. i think steve liesman has made it very clear, it's not just one data point, it has been part and parcel of an improvement. you know, earlier this year we had 600,000 jobs a month. in the second quarter, i believe the average was around 435,000.

very clear there is an improvement. a couple of things stuck out to me in the number, mark, to give people some contact. the labor force continues to drop. and the participation rate fell again. now, that often is interpreted as people giving up, people stepping out of the workforce. now, that number, counting people who wanted to be employed, who couldn't get jobs but gave up looking or who are underemployed is at 16.3%. people say that is the real unemployment number. that was a little bit better than the month before. but you are -- there are some caveats on the participation rate. average hourly earnings. they're up. celebrating that. but they are not up anywhere near the rate historically they rise at. so we're just starting to see improvement. >> the average hourry earnings are up, that is an indication that slack is coming out of the labor market. >> yeah. >> wages are raising, even slightly. >> yeah. >> that means getting less and less flack in the labor market.

that's just in the labor market. that is a good sign. here we go with the bells. at the big board, footwear retailer collective brand. ticker pfx. and at the nasdaq, cdc soft care, ticker cdc s. >> we are open obviously not -- the market said we were looking for grains, north of 50. right now up 32. bob pisani, take it away. >> futures had a great little pop there on the nonfarm reports. commodity stocks move up as well. come over here to aig. just opening, $5.35. $27.89. you know the story. first profit they've had for a while since 2007. the key word is the company says, some businesses have stabilized and they also talked about the value of some of their assetses improving as well. that was a key part of this speculation. earlier in the week that perhaps they would say something like that. perhaps is one of the reasons we saw that short squeeze earlier. they are continuing to hold discussions with potential buyers of parts of the business.

they made significant progress on their disposition plan. stock is, remember, with $13 at the choice on tuesday. it's up to now $27 for that. cbs had interesting comments. it wasn't a great report if you just look at the earnings report. revenues were down. moonvez said the worst is behind us and thought advertisers were slowly returning. bottom line is stocks are holding up. market gain 1% as we came into the morning here. looks like we're going to open to the positive side here throughout the morning. tradertalk.cnbc.com. mike, how is it looking over at the open before the nasdaq? i see we're opening positive. >> yes, out of the gate, up 1.1% at the moment. better than what was happening in premarket just a short time ago. we have earnings story to tell you about that could move a sector in particular. we have the graphics chip maker invidia not only beating the treat but saying sales are going to be better than expected. ceo is saying we're seeing

strength across the board. there's going to be read through to intel and in particular up more than 1%. we have the philadelphia semiconductor index up 1% at the open. juicy results out of hampton's natural. that stock is up 16%. remember, crocs, that company says it's going to return to a profit. piper jaffray upgrading to a equivalent of a buy. 750 price target on now, up from a $3 price target. leap wireless not taking a leap. down 20% on disappointing results. concern there about the rate at which customers are bailing from those services. and then finally, in biotech we've got amgen just up a fraction on positive colon cancer drug results. farmersmarket@cnbc.com or follow me on twitter at mhuckman. brian? >> thank you, huckman. i can't take my eye off the oil trade right now. it's fascinating what we have going on. you take a look even at a 24-hour chart. listen, the jobs number is

definitely being perceived as a positive. but what's maybe dragging this in oil is the dollar index. as andrea came up to to me and said, we like that number but it's keeping us back. natgas really the only consistent gainer. this is coming up a of 7.4% sell-off yesterday. i want to point out gold, that's actually picked up a tiny bit of speed. completely muted. up to the upside and stroenger. take a look at silver and popper. copper was negative for a while. that's not the story anymore. so we bounce around positive, negative, it's like lead changes in the basketball game. we've had several lead changes. bulls are in command but not by a tremendous amount. take you down to chicago where we have rick santelli. >> thanks. i don't often talk about volatile aand onyxes. but if you look at treasury implied volatility, there's only

down a little bit. the reason i bring it up is usually the hoopla going into a big number raises all the big that you pay for options. usually in front of a weekend, they reach a creshendo. the weekend, the numbers over, they smack them. they're only down a little bit. what that tells me is, in fact, a whole lot of volatility in treasuries and interest rates. remember, 75 billion next week for the august refunding. how did it all shape up today? the short maturities led the charge to higher rates. it's still the case somewhat, but it's leveled out a bit. from 2s out to 7, maturity is up a dozen basis points. tens are up about seven or eight basis points. still up for the ten-year highest level since about june 11 when they were at their worse, around $3.85. the dollar is really fighting for positive territory here. it's been up as high as close to half a cent right after the number. it's been closed on change since then. it's splitting the difference at this point.

back to you, mark. >> thank you very much, rick santelli. check on the markets. right now the dow is up 87. exactly as we expected after that good or better than expected, i should say, jobs report. down almost 1%. nasdaq back up 1 1/3%. >> as quo go to break, labor secretary will be with us on the other side. one more specific, to focus on improvement. manufacturing,lost 52,000 jobs last month. obviously that's a bad thick. however, it's a fewest number of manufacturing jobs lost in any month since july of last year. >> all right. >> so -- >> continuing signs of things getting less bad. >> we'll be right back with our labor secretary to get the administration's take on these numbers. i was in the grocery store when i had a heart attack.

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jobs report better than expected. the labor department saying employers cut 247,000 jobs, fewer than had been anticipated. the unemployment rate improving to 9.4%. let's get to washington for inside and analysis from the obama administration. joining us, secretary of labor, solis. thank you for being with us. let me put the big question to you. is the recession over? >> i wouldn't say it's over. as long as we continue to see job loss and high unemployment, it's going to be a problem. and the president and administration and i will not lose sight of that an we'll continue to make sure that we add more jobs as best we can and see this recovery money gets out there to the states and locales where it's necessary to put people back to work. >> people were very surprised by this number in the sense that it was much better than had been expected. although obviously still significant job loss. earlier this year we were losing

600,000 jobs a month. second quarter, 400,000 plus. now we're only losing about 250,000. do you believe that we are on track to actually add jobs by the end of the year? >> well, i think that we're certainly on track to at least stabilizing the the patient. the patient is still sick. the patient still has a fever. and we still have to keep in mind that the recovery money, only one-third of those dollars, have actually gone out. we're expecting that more projects will come online, where you'll see infrastructure, construction, hopefully taking place. you'll see some of that peak, but then again, there are so many others outstanding things that we're not -- we're not sure but we know that we have to continue to be vigilant. we're very excited that we were able to stop some of the bleeding, so to speak, and stabilize the patient because we know that we kept jobs, we kept people in jobs, for example, in teaching and education, law enforcement. and we also see a small uppeak in health careers. i'm very excited there because

the department of labor is also helping to stimulate that effort by putting in $220 million for health allied careers. we will continue to see a growth in jobs in that particular area. >> does the administration believe that more needs to be done, or are you willing to rest on what is in place and wait and see how it all works out? >> i think we're going to be very cautious. as i said, the patient still has a fever, high unemployment. as long as we continue to see job loss, we want to continue to move forward with our recovery plan. om one-third of those dollars has actually hit the local areas. so we knee there's two-thirds still that has yet to be released. we know that that's going to provide some support. we also know that we felt provide support for many people who are now drawing down unemployment insurance. part-time workers, people who haven't had a lot of time in the workforce, are able to get recovery money through the ui benefit program, but also cobra benefits. keep in mind a lot of people lost their health care. and with this new revision of

our insurance plan, they can -- we, the federal government, will pay about 6 65% of their health care through cobra. >> so the stimulus package is sufficient for now, i think it's fair -- that's your position. do you worry about all that, you know, the growth we are seeing, the improvement in statistics we are seeing, is largely the result of the government stimulus. and obviously that's not sustainable as an economic model. >> that's why the president has made these big investments in renewable energy. he announced $2.4 billion in lithium battery production. that's going to lead to job. the fact that we're going to put money in investment to create opportunities in health care arena and i.t. and jobs yet to be distributed. the $500 million for training in we are newable energy and green jobs and even weatherization. $2 billion for weatherization. that is going to create jobs.

that hasn't yet been fully implemented. we still have some time to go. >> secretary solis, on that greens job point. i want to ask you a question there. i know you know there's money going out and money and training has not even been spent. but we have seen study after study and spoken to many ceo nasdaq ths in who say america is not number one in alternative energy. it's a far cry from what the president has said, he wants us to be the largest exporter of alternative energy in the world. are you considering more effort and specific effort on alternative energy? >> i think that you're going to see a big change over the course of the next few years in terms of job creation and the renewable energy area. partly because the investment that has to be made. so we're coupling the big investments through commerce, the department of energy, through research and development, all those things that were neglected for the last eight years. finally, there's tax incentives

and breaks that are going to be made available for industries to come along and, of course, the federal government and local and state governments will partner with them. i'm seeing leadership in the state of michigan and ohio and other places where we're starting to retool those, for example, auto workers. they now want to get into turbo, wind, energy and solar panel installation. i'm seeing it on the ground. it's going to take a while but i have a lot of optimism that there will be a change in direction. >> secretary solis, thanks from both of us. >> thank you. all right. a little note here. the president is scheduled to deliver remarks on the economy later today, around 1:15 eastern time. the markets opened higher on a better than expected july jobs report. so how should you be positioning your part folio now? joining us now for the cnbc edge, david joy, chief market strategist, river source investment. in seattle, bill sneed, ceo/cio

of sneed capital management. new face to "squawk on the street." so let's give him the first opportunity here. are you optimistic about this market or has it come too far too fast? >> well, it's come pretty far pretty fast. and could use a correction probably. but longer term, we're very positive. >> okay. where would you be putting money in this market, what sectors, what stock? >> well, ironically, under sell on news, we think you can buy the most future success from a couple of areas that are being neglected because of the god ne good news. we like the drugs, for example. we think emerging market companies are going to buy a lot of pharmaceutical products as they get adequate health over the next five to ten years. and no one seems to want to own those stocks because they're so excited about the fact that we're coming back from the armageddon circumstances of five to six months ago. >> david, how about you? bullish, bearish, in between? >> no, we're bullish.

i do think the markets have run an awful long way. probably needs to correct or son k consolidate. the economy is improving. we're overweighted stocks. especially stocks in the u.s. and i have a little different focus in terms of sector preferences. i like industrials. i like materials. i think one of the big growth stories is going to be construction, infrastructure rebuilding here and abroad. >> david, speaking to ceos over the past 24 hours, particularly on jobs and asking them ahead of the jobs numbers, my own info informal survey, are they going to hire and what are they going to take to hire? they are uniform, they're not going to hire. add some shifts, add overtime but they're not going to hire for maybe six months. maybe even then, they will get nervous. they don't want to get burnt by a double dip. they don't see an increase in orders rights now. is that what you're seeing but you still think the market could go higher even without orders

rising in. >> yes. i think that's going to happen is we're going to start to see earnings estimates be revised upward. this is going to be overlayed on top of a very lean expense structure in corporate america. i think earnings will surprise. i would say about ceos, going into this downturn they were very preemptive in trimming payrolls. i think they did it maybe too quickly. they've listen very, very cautious. they will be slow to hire back. i think once they do, it may surprise in terms of the speed with which they have to hire back. but at least for right now, in their public statements, they're being very cautious. >> erin? >> yes. >> you go from having all problems to having no problems in a long-term bull market. in 2000 we had peace and prosperity. and we ended up with an armageddon scenario in september through march. so we're now moving the pendulum back the other way. if you eliminate all the problems very quickly, we'll have a shorter bull market.

if it takes many, many years to solve these problems, we'll have a much longer-term bull market. >> that's an interesting point. that's actually the, we need a wall of worry. >> correct. >> -- argument. >> correct. you've got two camps out there, mark. you've got the people that think the economy might come roaring back because of the china/india growth. >> right. >> they're all long energy. and in my opinion, that's a very crowded trade because the -- aim conservative politically but i agree with the obama administration that we're in the process of making the transition from gasoline car tos to electr cars that we made from horse drawn buggies to automobiles. i don't think that was a great time to invest in horse and buggy companies. so if you got that camp. and then the other camp is the jeremy/bill gross camp that says my kids are never going to spend money anymore as adults. and i don't agree with that camp

completely either. >> all right, david joy, bill smead, appreciate your thoughts. next up, stocks on the move, including monster worldwide. >> and the ceo of nordic american tanker. pulling into port here to talk about quarterly results. stocks up 30% since the bottom. a bit of a pullback recently. oil is at $71.50. mark, is the economy really on the mend? that's next. oof! i hope he has that insurance. aflac! you really need it these days. how come? well if you're hurt and can't work it pays you cash... yeah to help with everyday bills like gas, the mortgage... ...and groceries. it's like insurance for daily living. so...what's it called? uhhhhh aflaaac!!!! oh yeah! that's it! aflac. we've got you under our wing.

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the street." i'm matt nesto. check out monster worldwide, nww. it's an industrial, believe it or not. seems like it, right, a lot of smokestacks and what not. the stock is clearly benefiting from the jobs report. up 40% in four weeks, 8% today. also worth a peak, d.r. horton, three-month high upgraded to the conviction buy list at goldman sachs. i think it's headed to 16 in 6 months. all 13 builders are higher here today. that stock is up 50% in a month.

in the dow, hewlett-packard, one of 21 rising stocks. only bank of america can't get it down here today. hewlett-packard initiated a buy. $52 price tag, gives you 25% upside from these levels. nesto's favorite, aes, higher again today. 3.of%. blowout quarter, 28 cents versus 22 cents on the estimate. revenues beating. and the full-year forecast, doing what investors like the most, pumping it up. erin, back to you. >> thank you very much. by the way, mark, it appears that president obama has time to cash for clunkers incentive. i know you were worried he might veto it. nordic america out with second quarter results this morning. basically break even. very small. but the quote from the company's statement may say the most. they did have to cut their dividend and the ceo herbjorn hansson said presently the world

economy has significant retraction of demand. nordic american shares are up 3%. trading down 1% now. let's go inside the numbers with herbjorn hansson, good to have you with us. so we get this better than expected jobs number in the u.s. everyone is focusing on the improvement. you're still talking about a world economy with significant contraction of demand. >> yes, things are in fairly good shape in the far east. and there is a lot of potential in the far east. they consume about less than two balance per person per year. in this country you consume 26 gallons per person per year. everybody would like to have a car. the far east is moving. the western world and europe is lagging behind. but i think it's important to understand that the dynamics of the world economy, they're very strong at this time.

in the past, we were sitting behind protectionistic walls. now they have injected a lot of funds into the world economy, including liquidity, improving the stock market. >> the government stimulus. >> stimulus packages, yes. and they are, indeed, improving the situation. and also, we are carrying oil from brazil to china, and we are carrying oil from ven cezuela t china. and china is all over the place. they have gotten their act together. the question is, are we turning around now? well -- >> wait a minute. hold it. the reason i'm here is to ask the questions. >> yes. so are we turning around now? >> i think we are crawling around on the bottom. and i think that if we can avoid

protectionism, we are close to a turn around, that it may take time. it may take a year or two. but for us as a company, we are in excellent position. >> well, wait a minute. you just got your dividend. >> no, we did not have the dividend. that's not a correct semantic expression. our dividend is following the stock market. >> following the stock market. >> so we keep our dividend policy and our commitment and my commitment is to pay all money coming in, we pay. >> and you have no debt. >> no. at this time, we even put a little bit of cream on top of the cake because we paid a little bit more. and now, we are strategically very well positioned. >> herbjorn. this is from president obama. this is interesting. he could have said something very different, but he said he

thinks the jobless rate will hit 10% this year. now -- >> that sounds like poor mouthing to me. >> it might be. >> down expectations so look good no matter what happens. >> could be it. it does raise the question, herbjorn, you take shipments day in and day out. your job is not to forecast. you're saying we're crawling along the bottom. are you confident that things are at least stable, that we're not going to have that double dip down? >> well, it is always the darkest before dawn. but we are crawling along the bottom. if the policymakers take the right measures, and we may argue about the nuances that i think they are on the right path, on the right track. i am concerned about our company. and if the markets become strong, we shall be making tons of money. and if the market is weak, we

shall buy a lot of ships so we have it both ways. >> a couple of quick questions. your shipping product from brazil to the far east. >> right. >> is that gasoline, oil, or -- >> crude oil. i ship crude oil only. okay. >> okay. and do you go around the horn? >> we go around the horn. >> but they're going to have the canal finished, soon, right? and then you can use the canal? >> we can do that. but this time we go around south africa. >> all right. >> our position is, i must tell you this, is like, like in the cage, you know? you always have two exits in the back. and you do have that as a company, you know. >> time for us to exit. thank you very much, herbjorn hansson. coming up, our special all-star e-con task force, in the wilderness of maine. >> where liesman is stlalaving

away. four different economic perspectives on what the jobs report really means for the recovery. 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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get the picture. live from the financial capital of any place that matters, the new york stock exchange, this is "squawk on the street." good morning. i'm mark haines. stocks higher following the jobs report. american express is leading the

dow up 3%. over on the nasdaq, hasbro, almost 18% higher. well, they're tied in with that movie "g.i. joe rides the cobra" which opens today. maybe that's going on. >> wow, mark, that was impressive. you knew the name. >> cbs, leader on the s&p, up almost 20%. big positive article in the "wall street journal" this morning on cbs seeing the light. >> let's fine out you this morning's news is playing out in the second half hour of trading. as always, all is covered. bob pisani has almost always, on the floor. >> thanks very much. the key story for the week is financial out liars. stocks that were sort of out there. had very positive things to say. and that affected financials in general. c.i.t. is one of them. remember on monday's bond offering, couldn't afford to pay the interest rates on the bond if sweetened the term and it was successful. helped counter party risk.

announced they were able to borrow more money. one week, stock is up. now look, $1.68 here. take a look at aig. david and i have talked about it all morning. $13 a week ago, now $25. bottom line, yes, there was a short squeeze. positive comments this morning. talked about businesses, generally showing signs of stabilization. and the value of some of their assets, also showing improvement here. so two outlyers affecting the rest of the market. the big bank names, citi group supposed on the week. key corp., this is one week here. i tell you it's because of some of the worse case scenarios being sort of put aside here as a result of what we're hearing about some of the other banks out there. tradertalk.cnbc.com. mike huckman, how are we looking at the nasdaq? >> we are still higher here at the nasdaq. although we have already pulled back off of the intramorning high if you will, up .7 of a percent.

i know that mark just said that hasbro is the leading gainer at the nasdaq. we also have a few positive earning stories to tell here at the nasdaq today. graphics chip maker envida up. they say that sales in the current quarter is going to be much better than the street is expected. seeing strength across the board. it does not look like there's much of a read through to the rest of chip sector. the giant intel down half a percent. semi conductor index down .7 of a percent. hanson is down. corcs up 30%. not much reaction in amazon shares this morning to target saying that it's eventually going to abandon amazon in terms of its online sales plat form. let's go over to big sir rick santelli in chicago. >> thank you. you know, it's really fascinating to look at the action today with all the hoopla, and deservedly so. i was totally wrong.

the number was better on every level than i would have expected. let's look at week to week. enlightening. the dollar is still holding on to the gain. still up a little less than half a cent. that's not bad after a decent little hold yesterday. but for the week, the dollar index was at the close right here is virtually unchanged. in you look at a ten-year note yield, this is very enlightening. last week was the end of the month as well. we closed the yield at $3.48. it's currently $3.83. you're up close to 35 basis points. that's something equity traders are definitely talking about by the s&p pit. mark, back to you. >> oh, i beg your pardon. this was not on. >> i thought you were -- i thought you were doing a mark, a big pause and then -- no. moments ago the white house saying that we could still see 10% unemployment and lit be quite some time before u.s.

sustains job growth. begging the question, are we out of the woods yet? let's get to our jobs task force for some insight on where we go from here. alan sinai is chief global economists with the decision economics. david speaka, vice president and investment strategist at wht fund. our own senior economic reporter steve liesman joined by martin barns, economist and managing editor at pca research. we have a full cast of characters here. let's start with mr. speaka, what's going on in this economy? are we turning the corner, is this recession over? >> well, i think this data today, mark, clearly shows that the economy isn't improving. we had other data leading up to this that is supportive of an improvement in the economy. it's all very good da a. >> wait a minute. i mean, not to be a wet blanket. but isn't what's really going on is the economy continues to worsen, but at a slower pace?

>> oh, i think we're seeing improvement, mark. i mean, obviously job losses at 247,000 is not good news, but it is much better than 400,000 or 500,000. the trend sim proving. that's what we need to see. this has been an extremely difficult recession. >> again, not to be a wet blanket. but the reality is that we're still losing jobs, just at a slower pace. >> i agree with you there. ultimately we need to see job gain to drive economic growth, to drive earnings growth to continue the market rally. i agree with you there, but it's clear that the economy is in a recovery and we're out of the woods in terms of that great depression ii scenario that everybody was fearing a few months ago. >> alan sinai, what do you think? >> we're still in recession. the jobs number tells us from a market point of view, i think recovery is baked in the cake because the market looks ahead 6, the 12, 18 months.

and six months from now we're in recovery. are we in recovery now? no, we're not, not with minus 247,000. the 2.4% unemployment rate understates this because it came about because we had over 400,000 drop in the labor force. so it's a less bad jobs market, but it's still, mark, your point, bad. >> and, steve, i know that you're stand ing there with martin barnes. two things for you to react to. one, what the president just said, is that he expects the unemployment rate to pick up 10%. he could be setting the barlow so he politically benefits when it's better than that. that's one thing. or the other thing is he might be completely right and means what he's saying. that's the first question. and the second is, when is a recession over? >> good -- two good questions. the economy may or may not be out of woods. we have decided here in maine to remain in the woods. stupid puns aside. to the first question, what the

president is probably talking about is as the job market improves it will draw in people into the workforce. drawing them into the workforce would tend attorney crease the unemployment rate. there's a long way to go for jobs recovery. if you look at people looking for part time for economic reasons as well as discourage workers, that percentage came down for a long time in a long time. again, a very, very long road back for the jobs market. what i'd like about this number, it was internally consistent on the upside. revisions, all the other stuff, we'll be out of recession technically when the national bureau of economic research says we're out of recession. you can look for improving jobs, improving production, improving inventories. those are the sorts of things you can look at. four key indicators they can look at, five or six really, dig determination yourself. as allen says, recovery is baked in the cake here. >> although allen did say we're still in recession. what do you say? i know itsy m's is mantisemanti.

it could have real economic impact, potentially. >> the first point to make is that employment actually kept falling for a few months after the last two recessions officially ended. employment on its own is not good enough statistic to call the end of a recession. markets bottomed in march. looking at commodity prices, corporate bond spreads, stock market, the leading indicator index bottomed in march. these have a lead of their own six months. they are all consistent with the recession ending august, september, october. you don't want to put a particular month on it. i think this is becoming not a still debate but it's time to move on to talk about what the nature of the recovery is. i think we are seeing some kind of recover roy here in the next couple of months. >> allen sinai, are you accepting the market indication of what the timing will be, that

the recovery -- >> you know, absolutely, absolutely. we're bullish. in fact, we've been bullish on stock. you've got to be that way because we're looking ahead to recovery and expansion, there's a lot of fiscal stimulus that will still help. the main thing is earnings. the earnings looks like next year like a "v." the joblessness looks like an "l" and the economy on gdp basis looks like an "l" with up tilt. >> we're running out of time with you, allen, we're going to lose you. one more question. you sound confident that the economy will shift from the current reliance on government stimulus to an uptick in private demand. >> well, i didn't say that. i'm not confident about that at all. the government side is mo motivating this. >> private demand? >> no, it doesn't. it can -- but to have a really healthy recovery you've got to have a healthy private sector. to martin's point, the next

question to really get to, what kind of recovery, who will b benef benefit, who won't. will it all be government driven, will the private sector drive earnings from that side. and that's a question that has to be determined. >> all right. allen, why wouldn't it, allen? that's what i don't understand. why wouldn't the private sector revive? >> it's how much revives and what drives profit in the future. it's a very different kind of recovery that we're going into, i think, steve. and it prs profile is very different than we've had before. we've never had one where the consumer fundamentals is so negative. that's 70% of the real economy. the average rate of growth of consumption in real terms in the last three years is .8 of a percentage point per year. historical trend was 3 1/2% per year. >> allen, we've got to leave it there. thank you very much. we must say good-bye now to

allen sinai and martin. i guess the fish is starting to bite. that's why martin has to leave. steve liesman, david is going to stick around. up next, more with our all-star jobs econ task force. plus, jane wells, firing and rehiring on small businesses. and former electronic chairman and ceo and harvard o professor with seven ways to create sustainable jobs. and, of course, friday trade. a ton of economic data out this week. how to get ready going into the weekend. announcer: some people buy a car based on the deal they get. others buy the car of their dreams. during the lexus golden opportunity sales event, you can do both. it's an opportunity today. it's a lexus forever.

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breaking news. questions circulating. what did the president know last night about this morning's jobs report. >> oh, geez. >> well, i think it's fun speculation. >> it is fun. >> i'm not, you know, i'm not going black helicopter conspiracy thing here. but i think it's fun speculation because he did seem a little upbeat. some people are saying maybe he knew. will you please give me a chance? john harwood has some insight on all of this. john? >> it's a complete nonissue. he's been using that line in his speeches for several days now. in fact, the white house aide sent me a precise transcript of a week ago where he used exactly

the same line based on the earlier decline in job losses from 700,000 a month last wenter to what we've seen the last couple of months. and more importantly, white house aides tell me that he did not have the number when he spoke to that fund-raiser last night. even though the administration and the white house did have the number, the president did not have the number. and so, it is -- that line did not reflect the knowledge of that report. >> all right, john, thank you very much. now, the jobs number, one thing we all know is that it was not as bad as prior months or as bad as anybody thought. try telling this drop of 247,000 jobs, though, as good news to small businesses that have been taking drastic measures in order to survive. the vast majority of people in this country of what they think matters. jane wells has more for us. jane? >> erin, you know if you can survive in this economy, you can

survive anything. here at this iembroidery shop, they can. they make them for movies and the show bs you they saw business disappearing in january, a lot because of the economy. now, owner nuri morales is going without a salary as revenue has fallen 0%. she's been forced to layoff half her workforce this year. but here's a change. with everyone in the same boat these days, she's getting by with a little help from her creditor. >> bank of california has been really great with helping us to rework the loans so that our monthly payment will be less. our landlord has been working with us. so we've really been reaching out to everyone in our circle to help us through this right now. >> reporter: the national federation of independent business says the biggest complaint in the latest survey of small businesses is weak sales followed by taxes and insurance. financing is way down on the

list. and while optimism hit nearly an all-time low in march, it is coming back up. and job cuts, as we learned today, are slowing. >> in the july survey, we only reduced employment .8 employees per firm compared to 1.25 in june. so it's getting better. >> reporter: now, in an hour, an incredible story of hope and confidence of budding entrepreneurs coming back from raub iraq and africa. and, guys, why they think now is the perfect time to start a small business. back to you. >> all right, thank you, jane. let's get back to our jobs task force. sticking around for more, david and senior economics correspondent steve liesman. who is back with john molden, president of millennium wave investment. and the fish got off the hook, so martin burns is back as well. let's start with david.

when -- first, no, i want to go back all of the way to square one. what do you expect in terms of job growth in the coming recovery? >> well, mark, i think job growth is going to be fairly weak. we've seen in the past two recessions that job growth has lagged the recovery. i think we're likely going to see that here because recovery has been so deep. you need to see corporate profits improve. what we saw in the second quarter was better corporate profits but as a result of reducing costs. the cost of reducing was labor cost. outside of the technology sector, what you're going to need to see is improved profitability in corporate america before you see job growth. i don't see that happening any time soon. security selection is going to be very important. >> the jobs market, in your opinion, will look much like it did in the last recovery, which was in the fall, everyone was complain no jobs growth. >> i believe so, yes.

>> how do you see this unfolding? >> well, i think what we're going to see is the statistically recovery. the numbers are going to look better because we're looking at such terrible comparisons from a year ago. but it's not going to feel like a recovery. let's think about the next five years. just because of demographic growth, population growth, we're going to need to create 6 million to 8 million jobs because of that. we've lost 8 million jobs between now and we see the bottom. we're going to have to find 16 million jobs in the next five years. now, i think over time we can do that. it's going to be a long, slow slog. it's not going to feel like recovery. unemployment is going to linger and probably grow. that's going to put pressure on wages. it's just not going to be this "v" shaped thing to have priced in right now. >> where do 15 million to 16 million jobs come from? in all honesty.

the administration are clear they want alternative nench. we know there's a whole lot of speculation about whether that will happen or not. but where do that many jobs come from? >> well, first of all, it will come from 150 million people, you know, and families trying to figure out how to make their life better, creating new businesses. i was just with a gentleman that's created a new liquor business out in the middle of north carolina. there will be, i think we're going to see a complete reworking of the tel communications industry. the energy industry. we will go electric cars. let's go back to the '70s. in the 1970s, we were worried about japan taking our jobs. everything was terrible. but the correct answer to the question where will the jobs come from was, i don't know, but they will. that's what happens in a free market. so even though i'm telling you it's going to be a tough recovery and it's going to be "l" shaped, we will recover and we will find new jobsz and new industries. >> steve liesman, conspiracy

theory about whether the president knew anything. john harwood has debunked that. but some people are still going to be skeptical. it actually seeps to me that the comment about the 10% unemployment that we could get there by the end of the year, data, right, the drop in the unemployment rate we saw appears to be attributable to something mark and i were talking about at the opening bell, which is a decline in participation rates. people dropped out of the workfor workforce. >> yeah. just a quick aside, erin, on the thing about the president. we reported this and i reported this over the years that the white house gets that number sometime around 4:00 on thursday. and i think the reason i reported it several years ago is because either president bush or maybe ben bernanke or somebody said something about jobs and we wondered do they know something. my opinion is that we guys, since we know they get the information a day before, they should shut up. they shouldn't talk about jobs. after we know they have the numbers. >> are they being, i guess, dishonest then? they're saying he didn't get it at all.

>> they said the president didn't get it but the administration key government officials get the number. >> oh, right! >> that means that the president didn't get it i find unusual. >> right! >> i thould we a number like the jobs number, the president would get. i'm confused as to why he didn't get it. that being the case, i have no information that they're lying about that. >> one of the president's aides gets a peak at the labor report, which shows the better than expected number, and doesn't tell the boss. right. >> i see your skepticism is well placed. >> martin, you know, one thing that strikes me, i don't know if this is a side bar or what. but the unemployment rate decline, it really doesn't strike me as good news. a, it's a decline in the workforce. and, b, it would be counter intuitive to expect at this point in the recession or recovery, if we have begun one, the unemployment rate shouldn't be declining at this point. >> that's absolutely right.

the unemployment rate is definitely a lagging indicator because as the economy improves, more people do start looking for work. without which the supply of people looking for a job. and it takes a while to absorb those. you would expect the unemployment rate to keep moving higher for a while. but, you know, like all economic data, it's noisy. you get up months and down months and you need several months in one direction to talk about a change of friends. it would be unusual if we seen a peak in unquloiemployment at th point. just my point on this president, i think he's right to manage expectations. i think it will be bad for him to talk a great story and then have the economy come in and disappoint. it's better to have people surprised on the pleasant side than be surprised on the downside. >> david spika, give me a ballpark estimate on when we should expect to see job growth resume. >> i would say sometime in the

middle of next year probably, mark. i mean, if you're going to continue to see, as we talked about, pressure on the job market, you're going to continue to see job losses and you're going have to see profitability resume in corporate america, top line growth, revenue growth. and you're not going to see that here in the near term. you've got to be careful about where you're putting your money and make sure your investing managers know how to pick stock. >> gentlemen, sorry. they're yelling at me. we've got to wrap this up. thank you very much. martin barnes and steve liesman. thank you all. coming up, james faber back inside those numbers from fannie mae. hey, it was about a year ago that some say the crisis truly began. a lot of people say it was not lehman. it was the way the government dealt with fannie and freddie. 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...

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you're watching cnbc's "squawk on the street." >> welcome back. aig may have found some firl footing, perhaps a stabilization, and perhaps a capital structure that will not require the u.s. government to put any more money into that ailing insurer. not the case, however, for another ward of the state. that being fannie mae which will soon approach its first birthday as a state-owned company, if you will, given that we own 79.9% of the mortgage giant. what were the numbers this they were terrible. a loss of $2.67. net lost much or almost all of the loss driven by $18.8 billion of credit-related expenses reflecting the on going impact of what they call adverse conditions in the housing market. as well, of course, of the recession, rising unemployment. people continue to not pay back their mortgages in what are still growing numbers.

there's a look at fannie's earnings. now, to the part about us. they want another $10.7 billion. net worth deficit was $10.6 billion. they can't operate with that deficit. hence, they have requested from the treasury another $10.7 billion by the end of september. that will bring the total that fannie mae will have thus far received from the u.s. government to support its operations to $46 billion. take a look at a one-week stock chart. i talked about aig, of course, in the short squeeze there. fannie mae was also acting oddly this week, too, in terms of perhaps again a short squeeze. obviously it's a penny stock. but you can see it is down sharply today on these pretty atrocious numbers. when we get fannie's numbers, we also get supplements that do give us interesting insight into the overall housing picture.

fannie mae and freddie mac, the largest agency market. take a look at the default rates. look at 2006. that will go down as worst single year for the underwriting of mortgages in this country, one would have to believe. i mean, man, that's overall. that's fannie's portfolio. original overall originations. things are still rising for '06, '07, and '05, all three years, the first half of '07 being the worst. even from fannie, which, by the way, was still a lot better than wall street. but you can see earlier when they weren't getting into all day and subprime, it was better. here it gives you a sense of fannie versus the street. fannie's in blue, the street is in yellow. you wonder where all those losses came from? that's part of it. look at that default rate. i want to end that on this subject with a great chart from my friends at amhers securities. in terms of loss se varieties.

this is all day where fannie played big and wall street played bigger. we don't talk about subtime anymore. it will end up being a worse asset class. look at what they're taking. 60%, 50% of the mortgage amount, gone. gone. we'll see what happens here from fannie mae. but, yeah, $46 billion will have gone to that company thus far. doesn't appear an end in sight at this point, erin. back to you. >> thank you, david. next? seven straightforward ways to release america from a jobless recovery increase, sustainable jobs. perfect time for bill dortch to on since we just heard them saying we had 15 million jobs created in the next five years. bill dortch, board member of exxon and goldman sachs with his seven ideas, is next.rk right nw 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.

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this morning's better than expected jobs numbers giving a positive nudge to the market. we are now at triple digit. the market was waiting an thinking. now at least, so far in the morning they've decided to embrace it. up 102. some say the jobs crisis could get worse before it gets better. the president one of them, who says the employment will go north of 10%. how do we save jobs, create temporary jobs, and fundamentally long term, sustainable jobs. bill george author of "seven lessons for leading in crisis"

has ideas and professor at harvard business school and on the board at several companies like exxon and goldman. good to have you with us. appreciate you taking the time. >> thank you very much. you know, i think this -- go ahead. >> no, go ahead. >> i was going to say, i think this jobs report is good news for wall street. but it's still not good news for main street. we've got 15 million people out of work and lost 7 million jobs. still losing jobs. and i'm really concerned that it's going to be a long toll until we get the jobs back. the ceos i'm talking to are not -- no one is talking about hiring other than maybe half their replacement workers and companies are hiring like ibm are hiring largely overseas. and india and other locations. i'm still very concerned about whether we're going to be able to add long-term sustainable jobs. >> and how do we do that? okay, i don't know if you heard on economists on saying that this accounting for population growth and rehiring all the people who lost their jobs. we have to create 15 million

jobs in this country in the next 5 years. the president has pretty directly said he wants a lot of that to come from the next big industry, which they've defined as alternative energy. can we get that many jobs there? is that smart policy? >> well, i'm glad you used the word create jobs because jobs create sd very different from a job saved. this idea of saving jobs is very y . we have to focus on new companies, entrepreneurship, innovation. how do we do that? we get to an economy that is not just focused on driving consumer spending to attack. we've got the put the incentive for investment. you've got boeing laying off 10,000 people. emerson, 5,000. these are the companies that you want to look to add jobs to be great global, dominant companies that can be shipping their products in the united states all over the world. i think we do that through

incentives, capital investments, through making r&d tax credit permanent, give incentives there, underpinning it. i think the government should invest in science and technology and energy, like the national institute of health, the national institute of energy. i'd like to free up some of the constrain constraints. a lot of people think that free trade hurts us. i think it's a great boom to jobs. >> first of all, i agree with your first two points of the seven-point plan are tax based. you know, capital gains tax needs to be fiddled with, investment tax credits need to be fiddled with. research by r&d tax credit, et cetera. there's a lot that can be done through tax policy. and then you talk about free trade agreements. but then when you start talking about federal investment, you get into really tricky ground. i mean, for example, you know, i can remember back in the '60s and '70s a lot of people

complained, there's so much poverty in america why are we wasting time on the space program. but, in fact, the space program generated enormous leaps in technology which benefited everybody. that's a tough sell. >> el, with you're right, mark, it's a tough sell but we've got to do it. look at the biologic industry, amgen and biogen. that's all underpinned by the national institute of health doing the basic research. today the stock market doesn't allow companies to invest in that long-term research it takes 20 years to apay off. so i do think the government should be doing that. and we cut back on msf grants for math and science. i had one of those when i was a young man going to college. that's a long-term proposition. it's not instant gratification like cash for clunkers. i think we have to make those investments in building a long-term economy. i have some reservations about who the government should be saying let's just do it in alternate energy.

i'm for alternative energy sources but i don't think we should just specify that. there's lots of areas. i.t. is a fabulous area for it. i think underpinning the technology there is good, freeing up the trade so the great companies like google can continue to advance their business around the world, i think is going to create many more jobs here at home. >> all right. i guess we're out of time. thank you, professor bill george. >> thank you, mark. coming up later, your jobs friday trade on a now triple digit move in the dow. yeah, up 123. let's get ready for next week's meeting. f1c meeting. >> pricing in by the beginning of the year that we will get a quarter% increase in interest rate. >> over six months? >> by end. >> reasonable except the market doesn't want to see a hike in rates. >> no. >> the fear will be is that it will slow down the recovery. >> funny how quickly conversation turns from celebrates and improving, but

the markets right near at the high of recession. kent conrad, financial regulation and taxes. that is what john harwood is focusing on this morning. all that coming your way. the doctor diagnosed arthritis in my right knee.

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kent conrad talking financial regulation and taxes with none other than job harwood. and that is the subject of this friday's "harwood files." >> erin, we know chuck schumer is a major force in financial regulation. and we noticed lately that treasury secretary geithner is a little hacked off at some of his regulators who are defending their turf. chuck schumer says he's with the administration on making the fed systemic risk regulator, and second of all, he says the turf complaints for regulators is play acting. take a listen.

>> are you also critical of those regulators for those public turf battles? >> first, i think, for instance, financial regulation, we have a far greater consensus than, say, on health care when we started. and it will be easier to do. the general consensus, we need a large systemic risk regulator, we need some consolidation among the banking regulators, we need some more consumer protection at large. >> filling in the details. >> we haven't gotten up to that, but it will happen. i have been on the banking committee since 1981. the regulators always defend their turf. but make no mistake about it, when you talk to them privately, they say, well, i have to. thousands of employees doing these things and they don't want to say it's worthless. you need a systemic risk regulator who is a smart and knowledgeable as the people they're regulating. and so i would have to be shown who would be better than the fed for that. >> so you're inclined to accept the administration -- >> inclined to believe the fed

with some real oversight would do better. a counsel, if it's the counsel has power, then the buck stops no where. we learned that is a problem. new regulator will be a good idea but how long will it take them to learn this stuff and the people they are lregulating wont run wrings around them. >> geithner and summers on the sunday show refusing to rule out middle class tax increases. robert gibbs saying the president wasn't going to go there. kent conrad said, in fact, there's a third way. take a listen. >> we need more revenue, but that does not mean you have to have a tax increase, at least a tax rate increase. let me explain why. under the current tax system, we're only collecting about 76% of what's owed. if we just collected what's owed under the current rates and the current tax structure, we would not have a structural budget gap. the problem is, we've got a tax

system that is woefully inefficient in hemorrhaging revenue. we're losing $100 billion a year to offshore tax savings. we're losing $50 billion a year to abusive tax shelters. we've got the spectacle now, john, of companies buying sewer systems in europe. not because they're in the sewer business but because they want to depreciate them on the books for u.s. tax purposes and lease the sewer systems back to the european city who built them in the first place. that's the kind of nonsense that's going on under the current tax code. >> we know that fundamental tax reform an awfully heavy lift. and both of these senators are consumed right now with an even heavier lift. they're both heading home to the town meetings, trying to figure out if there's going to be a bipartisan plan on the health care plan. >> when you look at the polls, americans by a large majority, do not want a health care plan that is passed only by the

democratic party. >> yeah. >> i can see why. up next -- >> guess what is a top story today, mark. >> i'm guessing jobs. >> jobs, it would be. markets embracing it right now. up 125. like i said, they waited and then they committed. next week, we have a fed meeting. there is a lot of talk about that interest rate hike. and that's why you need the meat and ice cream trade. >> but first, oh, melissa. >> good morning to you guys. happy friday. coming up at the top of the hour we're going to talk about that that better than expected jobs report, what it means for an economic recovery and for stocks. abbey calling and confirming yesterday what larry kudlow said, we are in a new bull market. we're going to talk about that. we'll talk live with the ceo of blue nile, the online jeweler. their stock has downed this year. sales are actually doing well. interesting story. also ahead including the latest

on aig.ahead, including the latt on aig. first, "squawk box" on the back after this break. announcer: some people buy a car based on the deal they get. others buy the car of their dreams. during the lexus golden opportunity sales event, you can do both. it's an opportunity today. it's a lexus forever. special lease offers now available on the 2009 is 250.

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time now for the fan favorite. yes, indeedy. the friday trade. for some reason we call it peanut butter and jelly time. i don't know why. >> i'm naming it meat and ice cream time in honor of our host. >> vice president hilliard lyons back at hq chris, managing director of capital management. allen, give us an idea. >> verizon, especially verizon wireless. apple and the iphone got a lot of publicity, and at&t got a lot of publicity, but verizon wireless, biggest in the country. 87 million customers. that's the biggest in the country. strong revenue second quarter. right in line what they were

thinking. and solid growth. theyed aed 1.1 million customers second quarter. verizon wireless, we like that. price target $36. trading about $30 right now with a price target of $36. >> great marketing. they've got a campaign out there, sign up for such and such a plan, and the price will never go up. and you read the fine print, and it turns out what they mean is never is only two years long for verizon. you want to live an eternity? >> is it really doing that? that's bogus advertising. >> of course it is. that's verizon, and he's recommending it. >> okay. now that we're getting over our outrage here on that, what is your best trade for this friday? >> using the wireless idea as a jumping off point, we like interdigital communications. it's a company that has a portfolio of wireless packing that they license to mobile device manufacturers.

the catalyst for the stock to move higher in the short term is that there is a suit that's in a digital file, nokia, that is due to be -- well, an administrative law judge is going to rule on it sometime next week. and so we think that there's going to be a settlement, perhaps an event of the ruling between the two companies in which nokia will pay interdigital a per handset license fee. >> translation on that? >> it is also a stock that we like? in a long term, supply/demand fundamentals for oil. and transocean has a strong position in the ultradeep water drilling area. >> question to you. here we are up 127. jobs are the reason. more than 50% from the low. do you have any fear we're too far too fast? or do you think this is

justified and you should get in if you're not already? >> i think you should get in, and i'll tell you why. this month washington is basically closed. they're on vacation. earnings come to go a close. i think this sets the tone for the rest of the summer. we have a good summer going. we're going to see a good rally. back to school sales end of september. get in now, you'll have a good two months ahead of you. >> allen valdez, chris trompeter, thank you very much. final check of the markets coming up. don't go away.

we're back. dow jones industrial average up 145 points. 30 dow stocks are up. by the way, been trying to sneak this in. >> what? >> canadian employment reports very bad. much worse than expected. >> that one is interesting. they haven't had the huge downturn in housing. watch what's happening in canada. intel stock only down a penny. might turn around. time now for the call. stocks are rallying on better than expected july jobs report with the dow and s&p 500 on pace for their highest closes of the year. merck shareholders have given their approval to the planned merger with schering-plough. and drug maker sanofi has

applied for fast track approval from the fda for its h1n1 flu vaccine. cnbc, first in business worldwide. i'm courtney reagan. welcome to "the call." i'm melissa francis. trish regan is off today. a surprising and better than expected jobs number coming up stocks. the recovery is on. it's the new bull market, larry. >> indeed it is, melissa. i'm larry kudlow. we're going to talk live with the ceo of blue nile. the stock has more than doubled in the past year. we'll talk about where she sees the economy headed. this is "the call." we are cnbc. it is all about the jobs report on wall street this morning. it was the 19th consecutive month of job losses, we know that. with 247,000 positions eliminated, it was the best showing since august, fueling hope that an economic recovery is beginning. take a look at the dow right now. it's back above 9400 right now. this is the first time since

november we've seen this level, up almost 150 points on the day. that's about 1.6%. the s&p right now solidly above 1000, 1013, to be exact, that's about 1.66%. and we're up 1.5% on the nasdaq, above 2000. let's check in with bob on the floor of the stock exchange. nice way to end the day, huh, bob? >> yes, it is. i'll tell you the key story. financial outlying stocks, stocks out of people's radar really ramped up this week, and that helped improve the outlook for all of the financials. look at the leading sectors this week. financials blew everything away. even the big leaders like industrials, materials, and consumer discretionary, they were up nicely but not nearly as much as financials. everything else was way below that. the reason that's happened is the two outliers. first, let me show you cit. remember what happened on monday? cit came out and sweet indiana the terms of its bond offering. it was a bond buyback offering. the important thing was it worked. what happenes