okay. dow down only 8. nasdaq down 2. one and change. not a big deal. thanks for watching. what have you got coming up? >> we've got actually populations of people with money to spend.. we're going to tell you people in america no one realized income went up, millions of them. they have got money to spend. we'll tell you how they are. >> street signs, 2:00, be there. >> cnbc.com news now. down market after the food company raised starting outlook for the year on better than expected sales. price line.com sales are also jumping as its earnings were

also better than forecast. boeing got $1.2 billion contracts from the canadian government for 15 new chinook helicopters. cnbc news now, i'm courtney reagan. good morning and welcome to the call. 90 minutes into trading on the floor, the new york stock exchange. we're watching the market trying to move its way back to the flat line, down seven points on the dow. we're going to talk about coming up in this hour whether or not the amount of consumer debt could derail a recovery in the stock market. happy monday, larry. >> thank you. i'm larry kudlow.. paul krugman going at it again. he's arguing big government saved the economy and budget deficits are good. he's calling for a second stimulus. in our call of the wild we're going to debate whether he's right or not melissa. >> i'm melissa branch, strong earnings for price line.com. it's up 100% this year in a first on cnbc interview we're

going to talk live with the ceo jeffrey boyd and find out how his company beat the recession. this is "the call" on cnbc. stocks opening the day lower as investors take profits from the recent run-up in corporate news, mcdonald same-store sales rose 4% in july. hormel boosted 2009 profit guidelines. price line, who has seen stock rise has reported second quarter earnings. we'll talk with the ceo later in the show. take a look at the dow, it's down 5 points, 9564 last trade. nasdaq also trading the downside. it's down by a little more than one point, one-tenth of a percent below the 1,000 mark. dow below tenths of one percent. >> dollar strong. this is an interesting story.

dollar strong. >> one thing i want to point out, usually in august you don't have so much going on down here on the floor. today is a little bit different. in fact, just the noise level i'm hearing as i stand and talk is pretty significant. we're seeing some of this show up in the volume. i'll get to that momentarily. we're off six points right there. not too much. we're trying to make our way back to the flat line there.e. keep in mind, this is a market that has rallied for the last four weeks straight. so it makes sense that you might see folks take a little bit back at this point.t. but we'll see how it goes. down just five right now. on the floor with me today, as always, my good pal, bob pisani watching that, including the volumes. >> reporter: a lot of worry, the market showing signs of age. they tried knocking it down a week and a half ago and it didn't work.

still, a little sputtering. lowery, one of the most respected analytical services in the world came out with a whole survey what they thought was going on. their conclusion was they thought the rally likely continued to have potential legs here. the rally has yet to fully run its course, which is going to make a lot of people happy. >> absolutely. >> volume has notably improved in the last few weeks. you might remember it's been a little anemic in may and june and part of july. since the summer rally started in the second week of july, volume has improved. that's a major factor. >> what we're seeing is more conviction. more investors saying, okay, i believe in this rally right now and i want to get in. >> definitely. the proof is the volume increase. >> let's take a look at sectors. if you look at what's going on this week, well, monday, versus what happened last week there is a stark difference. >> some of the things, for example, transports had a great move. they are one of the weaker groups today. industrials did. they are one of the weaker

groups today as well. and the retailers had a great movup. so there's profit taking. when you get sectors that move up 6, 7, 8% in a week, you get people moving back. that's what's happening in a day like today. >> price line.com.. big increase in the number of bookings. we are going to have boyd on the program later. stay tuned. we're getting bob pisani's take. >> price line is a seller of discount hotel rooms, yet the total number of rooms they had increased. so hotel room nights were up 44%. that's a big factor. better international sales were a big factor. we don't see these kinds of numbers from hotels. so what i think is going on here is there's a move towards a value to investors in the united states. not all of a sudden, going up everywhere, they are a beneficiary of that value take.

or bitz reported and their numbers were up as well. >> finally i want to real quick ask you about mcdonald's, another really encouraging sign for mcdonald's in terms of its sales. but you have some interesting data on that. >> here is the problem. the numbers are great for mcdonald's but they have been great for two years now. kudos for the company. the street is not paying as much attention. in the last month mcdonald's has been the worst performer on the dow. mcdonald's has been selling mcdonald's in order to take advantage of the market rise. as a result mcdonald's has been moving down, the market up. >> do we have mcdonald's versus the dow. >> the bottom line, underperforming. >> right. we're seeing people move spoke other opportunities. bob pisani, great to see you asú always.ú sending back to mr. kudlow.

>> many are nervous because stocks move up too far too fast. s&p up 50, nasdaq opens at the recess, check it out. i'm calling it the new bull market as are some of my colleagues. i believe in it fervently right now. don't know how long it's going to last.x for the moment it's looking good. money managers and economists are warning despite hopeful sign consumer debt has barely come down. that will eventually weigh down stocks. are they right? let's ask our bear, president of james investment recertainly and our bull, hugh johnson, chairman of johnson advisors. gentlemen, good morning. hugh, i'll start with you. consumer debt, is that going to weigh down? is that going to mean this is a faux bull market? >> no. just means the recovery in the economy and earnings is going to be slower. it's going to take about 12 quarters as i crunch the numbers to eliminate -- not eliminate

but reduce the debt, consumer debt on consumer household balance sheet to levels that are more manageable. that does not mean that consumers are not going to do some borrowing, some spending, it's just not going to be strong like we've seen in other post-war recovers. but recovery, yes, just not as strong. >> barry, i'm looking at the "wall street journal." this is one of the big articles, i'm wondering why we're worried about consumer debt right now. in the past i read a study that the average amount of debt revolved over time, about $10,000 per household. people aren't paying down on it. why do we care about that now? i don't think it's a good thing? >> well, when we look at it, two-thirds of the economy is consumer-based. we're going through a deleveraging phase. we have one out of nine people today on food stamps. we have bankruptcies just hit a record high. we look at consumers are starting to save. we had consumer debt numbers on

friday. we're down by $10 billion. they average increases of $13 billion a month for year after year after year. so they are definitely retrenching. the banks are not that willing to lend. anybody that's gone to get a mortgage refinanced lately knows just how difficult that whole process is. so the consumer is the future linchpin. we've not really had a consumer recession for many, many years. we're entering one. we're in it. it's going to continue to weigh on both the economy and businesses and on the stock market eventually, too. >> you know, hugh jackson on that point, the last time we had a consumer recession was really in the early 1980s. that was the '80 to '82. we jumped out of that at a seven to eight percent economic rate. i want to ask you again on the consumer point, what about profits?s? aren't profits the ultimate stimulus for consumers? >> profits are. you take a look at the profit picture, everybody is worried

about the top line and the bottom line improving but just give it two or three more quarters, larry, you're going to start to see not just the economy recover but the top line start to recover and bottom line start to recover. and in time, i understand there is a lot of companies that will be reluctant to sort of rehire workers. i've heard it story before. in time you'll see employment conditions improve as companies start to rehire workers as profits start to improve. i'm talking fourth quarter of this year, first quarter 2010 we start to see that process. it's really in the numbers. >> and credit loosening up as well for consumers. >> oh, yes. >> barry, given your outlook, what are you doing right now? >> well, we're getting more and more defensive. i wouldn't say we're in the bunker yet. we're heading toward the bunker. so we're trying to get into stocks that have higher yields right now. they are not very popular like mcdonald's as you just described it great last year. not so much this year.

great earnings, buying back shares, good dividend there. companies like century tel, 9% yield, telecom. that's the way we're moving. we're buying sovereign bonds, tips. not so much the treasury market yet but we think bonds will start to play once we see the economy start to cool off again. i know that's not very popular. i'm such an introvert, i don't like being around crowds and the crowd is great economy and great stock market. >> i want to get your investment strategy. retailing, investment group up 60% since early march, 20% in this rally. the retailing index is outperforming overall in deckses.s. if consumers are in such bad shape and will drag us down, why are retailers up? maybe are you shorting retailers? >> no, i'm not shorting retailers. that's one of the sectors, industry group you don't want to

be short in the early stages of a bull market. when something goes from 100 down to 40 and then from 40 back up to 60, that's a big gain but you're still only at 60 on the way back to 100. so keep in mind these numbers. these numbers are not that bad. but one thing you don't want to do is short the retailers or short consumer cyclical in the early stages before market. history is clearly on my side on that one. >> all right, guys.. we're going to leave it there. thanks to both of you for joining us. trish. >> thanks so much. nobel laureate paul krugman saying there's a big reason why the u.s. appears to have averted a second great depression. his answer? big government. so is he right? larry, stay calm. coming up next. liesman versus santelli in today's call of the wild. >> he gets it right sometimes. >> cnbc interview with price line ceo jeff boyd. the company is drawing profits

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you know the price of gas is up 10 cents last week alone attachment a look at crude oil up $0.37. >> thanks, trish. the government's role in the economic crisis. a piece in the "new york times"

saying big government saved the u.s. economy and the budget deficits are, in fact, good. in an interview he's calling for a second stimulus. take a listen. >> we should be willing to give the world -- each of the major economies a jolt. we've had these packages but they were all inadequate. the united states, it was clear from day one this wasn't going to be enough. we really should have a second stimulus. >> okay. second stimulus. is he right? we want to bring in cnbc's rick liesman and rick santelli. the majority of the stimulus money, 80%, has not even reached its intended destination. so we're not seeing much of an effect from the stimulus as of yet. do you think it's appropriate, rick santelli to be taking about a second round? >> of course not. but then again, the stimulus plan, mr. krugman isn't arguing stimulus. if he was arguing stimulus maybe

i'd listen more. really he's arguing about spending. the difference between stimulus and spending is the government in the middle. that's the issue. if you had a tax holiday and the money went down to the consumer in a non-directed fashion like cash for clunkers, that's why it's a success. yet they can only spend the money in the area of automotive side. a tax holiday, of course, probably would work really well but maybe people would do something prudent like delever, and that's not going to help a consumption economy because we need more of the same hair of the dog that bit us, if that makes any sense. >> steve, you made the point actually gdp did show some stimulus in it. in fact, i think you quoted 1%? >> 1% contribution of government spending to gdp.. be a little careful we don't say stimulus prime versus government spending. there's been an increase in

outlays by the government. only 20% of the stimulus bill or package has been spent. if you look at the year over year change, there it is in federal outlets, there's a lot of federal money out right now and more through the stimulus package. that's why i think we should be cautious going to a second set. don't say just because there's no stimulus money there's no affect on the government. one more thing, rick.. a lot of the stimulus that is out there right now did come in the preferred form you just mentioned, which were tax cuts to middle class folks. so in that regard. >> temporary. >> they were out there in the form you talked about. >> not permanent tax rates. >> if we level every house that has nobody living in it or is upside down and we leveled every other building in downtown america and we had to rebuild it, would that not increase gdp? >> yeah, it would.

gdp is a flow not a level. >> that's why it's a really crappy measure. >> i don't understand what you're talking about, unfortunately. i don't see how that ends up being part of the conversation. who is talking about destroying. >> destroying is not good. it's the same with the clunker program. some benefits -- >> one uses blades to cut metal and ruins the blade in the process. there's all kinds of choices being made. in this case we're accelerating something that was going to happen anyway over a period of time and bringing it forward.d. it's part of what we do all the time is make those kinds of choices. >> tax credits, temporary tax credits, steve, no marginal rate reduction. i want to ask rick santelli do we include what the fed has done as part of big government stimulus. if we do, a, don't we have to

say it worked? and b, don't we have to include it as big government? >> i think you do have to include it in big government. i think time in many ways have worked. certain programs like commercial paper have done good things. but i also believe fannie and freddie is a brainchild of big government, the big government common denominator doesn't work in any of these instances. >> krugman focusing more on the fiscal side, i agree. i do think conservatives have to recognize that the federal reserve took emergency actions. and i think, rick, i'll ask you, right now here in august of 2009, roughly nine months after the emergency actions were taken by the fed and so forth, did it work? >> i think it helped stabilize the system.. but i also think in many ways it negated the damage of said same administration crying fire in the theater. i think much of the firing that was done was in the summer/autumn of last year, because anybody listening to our

leaders tell us how horrible and scary it is. >> it was horrible and scary, rick santelli -- >> in the end, we're never doing to get to the end of this argument. >> leave it to overnight repos of good quality. bear stearns went under, washington mutual, countrywide went under. i don't know what other evidence -- >> where were all these leaders when they recognized this was going on in '06. >> there are ashes and there are smoke. there is very, very obvious evidence of a fire, not to mention the flames we all saw in the market.t. and more importantly, though, i want to get to the latter point. >> how we cured it. >> the fed stepped in and provided liquidity. >> credit crisis fixed -- >> rick, what would you have done? would you have just allowed bank

after bank go out a la lehman brothers? where would we be then? >> i think more institutions should have failed. we do need spending when we break down. >> this is exactly what jpmorgan did in 1987. he stepped in in that case and did what absence of a central bank is supposed to do. >> we're out of time. steve liesman, do we need a second stimulus. answer the question. >> i would like to wait, see the fed program, see how they are designed to run offer. we have more stimulus from the stimulus package in addition to the deficit spending already in place. i don't want it overdone. if they got this right, don't bet on getting it right again. >> will the public let them? has everybody read the papers lately? people are not happy. >> rick, if you take the $800 billion. >> some people are not happy. >> rick, if you had taken $800 billion and lowered marginal tax

rates, personal rates and business rates, would you have signed ontd that stimulus package? >> yes. a lot more than i would have in this current -- yes, i would have. >> just asking. i just wanted to ask that question. i wanted to put that on the table. there were options here.. that's all i'm saying. there were options. >> we've got santelli on record. thanks, guys. when we come back, cnbc exclusive on the state of the housing market. >> by the way, personal tax rates and business tax rates, so would i. getting onto the business, are we seeing more signs of stabilization? we have results of a new survey and ceos will unveil them straight ahead only on "the call."

welcome back to "the call." looking at the big board, 20 points after that four-week rally. people taking profits.s. let me qualify that by saying we're only off 20 and the day is young, melissa. >> thank you very much. national real estate brokers announcing many major housing markets, even california, are seeing signs of stabilization.n. president and ceo is here to

explain in a cnbc exclusive. thank you for joining us today. >> thanks for having me. >> i'm looking at your report now. you say the number of homes listing nationally has gone to a low since '97. is that because they are taking them off the markets or buying house? >> a combination of both. we're seeing good buyer demand driven partially by the $8,000 credit first time home buyers are able to get as well as strong interest rates and strong demand for consumers who continue to have jobs.. presses have fallen so much, people that previously were rent thanksgiving wanted to get into a home are doing it. combine that with the fact that sellers whose homes have lowered, the prices have come down, they have decided not to put their houses on the market. that combination is lowering inventory plus strong demand. >> people say that's a shadow inventory on the sidelines, as soon as we bounce off the bottom we'll see a flood of houses on

the market. do you think that's going to happen. >> there is a shadow inventory that exists out there. i think that's an accurate portrayal. the concept a flood of homes on the market doesn't make sense to me. the reason it's a shadow people are waiting to a price point they feel comfortable selling their homes. that's over a period of time. that's not a switch that gets flipped and everyone decides to put their homes on the market.. there will be additional inventory coming on once housing prices stabilize but it's not going to be a flood that puts us into a downturn in the housing market. >> patrick, i want to get to the issue of sales, nationwide housing sales have improved. you see all the time state by state california, nevada, arizona, hard hit ones, are sales rising? i see reports all the time. nobody wants to pay any mind. are they rising? >> they are rising. we've seen a reduction in the downturn slope we've h we are seeing sales go up. activity has been good. we're seeing that there are lots of people willing to buy homes.

it is increasing. however, contrary to where we were three years ago, still not that level. compared to a year ago, we are seeing sales rising. >> is it true in your judgment a rise in sales offers a low price bottom but that will eventually spur price increases.. do sales lead prices? >> not in the near term driven primarily because of the shadow we were talking about a few minutes ago. that is not going to lead to high price increases. what it will lead to is continued demand and stopping of price declines we've seen. one of the things dramatic in market we've seen like california and nevada in particular, houses are down 30 to 40%. wee need a stabilization to get them to turn and flatten some. this demand will help that. >> is the worst over? i guess i just need the generic question, is the worst over in your judgment? >> yes, it is. yes, it is. we've gotten supply better under control. new home builders aren't putting

as many homes on. demand in a good place, interest rates in a good position. >> how about foreclosures? >> we've got one more wave to go through. we're seeing stabilization. there are a second wave of a.r.m. resets coming through taking place in the next three to five months. it won't be nearly as pronounced as the first wave was. it's inventory adopted by the demand currently. >> is it concentrated the same as before, the area of new areas of foreclosures? >> tends to be fairly concentrated as the same areas as before. florida will be difficult in this area. california will not be as pronounced as the previous one. they will be pretty much the same areas you'll continued to have it. you won't have it in the central parts of the country. midwest won't be nearly as affected as the coast will be. >> patrick, interesting report. thanks for coming on and sharing it with us, we appreciate it. >> thanks for having me. shares of online travel

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crossed into positive territory. meanwhile the s&p, you can see off a quarter of a percent there, 1,007. latest level. ho hormel, mcdonald's, nasdaq off 5 points, 1994 the latest trade. a strong quarter for price line.com. they say its quarterly profit in revenue rose on strong bookings. stock up 100%. right now stock trading up almost 13 points, 16.9 -- almost 17 points. $8 a share. price line.com president and ceo jeff boyd joins us right now for a first on cnbc interview. great to see you. congratulations on your quarter. >> thank you very much. >> jeff, what's really this all about here? we're in the midst of what has been the worst recession since the great depression. how is it that an online travel site can actually be seeing such

an increase in bookings at a time like this? >> for some time things helping online travel in our business going forward have tended to overshadow some of the negatives of the recession. in particular we're benefiting from favorable trends around the world, people moving travel purchasing behavior from off line channels like the main street travel agent to the internet. that trend is very powerful internationally as well as here in the united states. we really benefited from it. >> is this a case of you taking more market share from competitors, or is this really beam going out there and saying i want to book a trip right now? >> i think it's a little bit of both. we certainly have seen stronger demand for summer travel for leisure travelers. one of the thing spurring demand is the availability of low prices. a lot of discounting, online

companies like price line helped to market those discounts and bring customers to our suppliers. >> jeff, at the lower price points, can you say, would you say consumer spending for vacation is actually rising? >> i wouldn't go so far as to say it's rising but it is certainly very strong demand, especially compared to what people expected at the beginning of this year, as to whether the leisure traveler would travel in numbers in the summer. >> you operate in the discount market. what kind of hotels are we talking about? what kind of trips are we talking about? fill us in on the blanks. >> at price line, we have name your own price product, that laos us to offer discounts of 50% or more. we're able to deliver those across a very wide variety of hotels around the country and around the world. really, very good compelling discounts. what we're also seeing is that published rates are down around the world as well.

so we reported our average daily hotel cost was down in the 10% neighborhood. so there's a lot of discounting going on for weekend travel and for vacation week travel and that's happening around the world. >> jeff, where do you see the economy right now? are we coming out of the recession? will we see growth in the third and fourth quarters of this year? >> i think for some period of time we now have seen a slow ending to a lot of the very bad news particularly around the financial sector. and in travel, some of the reports from the airlines and hotels as well as the online travel companies are starting to show at least in the near term a stabilization perhaps in pricing and yields. so there is absolutely some evidence that the economy has stopped the fall. i think some of the most recent employment numbers were better than expected. so i think there is some reason for a little bit of guarded optimism here. you can't predict what's doing to happen over the next couple quarters but at least the bad news seems to have slowed down

for now. >> what does this mean for your company? >> once things start to shift in the economy will consumers continue looking for bargains or will they go back to their old ways. >> i think consumers will always look for bargains on the internet. that's really what got the internet started, a place for shopping. we like to think customers coming looking for a deal, our international site looking for a deal, finding one when the economy was in tough shape would still come back when things s improve because this is nothing like a bargain. >> jeff, have you raised profit guidance with this good report? what are you guiding for the future? >> we did raise our guidance to a range that averaged out to about 16% growth in pro norma income net in the fourth quarter, which is in excess of what the street had been expecting for us. we were able to raise the outlook. >> what about guidance for sales? if your price points are so low

and some people are going to ask that. you keep slashing, that can you keep the revenues up? >> it's a good question. there's no doubt our gross bookings growth has been impacted by low prices. we reported a 44% year over year increase in hotel room nights for the second quarter and forecast growth at roughly similar levels for the third quarter, so our transaction growth is very high and that's allowing us to report gross bookings growth even though prices are down. >> we want to point out to viewers your stock hit a new 52-week high today. thank you very much. >> thank you. >> wall street style, stocks that plummeted in the last year in some cases doubled or tripled from lows. >> cash for clunkers, we're talking about that straight ahead on "the call," the new bull market thank you. [ engine revving ]

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welcome back. take a look at mcdonald's. fast-food giant, global, same-store sales up 3% in july beating analyst estimates, u.s. sales up 2.6% aided by its new espresso-based coffee drinks.s.

now the stock is trading at a little over $56, up a buck, almost a 2% rise. melissa, does not seem to be hurt by the improvement in the dollar. they are the hottest of the hot stocks, stared down the profession, buck up and bounce off the bottom. joining us with a look at the rehabilitation of some of wall streets worst clunkers this cash for trash these are hotter than a kudlow neck tie. clearly if you take a look at what's going on, two bull markets here. one-month bull market, the short-term one the longer one in march.h. up 12 or 50% respectively. if you take a look at short-term, dominating the move, financial materials discretion

and industrials. within that financials up over 100% since the other three big movers up about 60, 65%. those not participating in our clunker brigade are going to be health care, telecom, staples and utility, hlt, shutdown trade, energy and tech really on the fence. short-term, a stock can't move ahead or behind. both very good economic indicators for the market. let's take a look at some of these hot stocks. mentioned neck wear specials.. taking aig, cit off the board. we know those are huge media stocks up, gannett, louisiana pacific, masco, building products company, very strong. macerich, the financial sector 72% in the last four weeks.

real titans of the trough, aig, of course, has an unbelievable run.n. look at trw, over 1,000 percent. genworth 1010, office depot, ford, another $1.50 to $8move. take a look at aig, we keep holding that up as the darling of the clunkers because of its short-term and surprising move to many. if you look at super composite financial index which is small, mid and large cap financials, there are 20 stocks that not only beat aig but buried aig from the trough, i showed you gen worth, bank of america, hartford, capital one all beating aig off the bottom. >> matt, what's our takeaway here? those were some incredible numbers. is it luck?

is it the rising tide, they were off. look at office depot. look at the mall read. malls aren't doing well. >> you're lucky if you bought them, had the confidence to really buy into the sounds of cannons as they say. clearly moved, the financials -- >> look at office depot, that's ridiculous. >> it is what it is, it's a recovery signal, health of the financial system signal.. i've got a turkey. what about freddie mac, aren't they zipping along today? >> the reason i didn't include it, it flies under the radar, not meaningful index, up a buck a share. >> government owned. better earnings from freddie mac, i don't know if we believe the numbers because they manipulated them in the past. let's look at the numbers. good for housing, housing story, cash flow better, part of the

rising tide. >> it is. >> part of the new bull market. >> clunkers go up in a bull market that's what happens. >> definitely disproportionately weighted super performance with discretionary names and financials. >> these are real stocks. talking about penny stocks moved 100%, they have gone up, gannett, office depot, these are real stocks. >> big time. that's why i mentioned just the financials alone, some of the big companies bank of america, hartford, capital one, real companies with big business doing business again. >> i wonder if you take profits and run. >> rising tide. >> thanks so much. >> you had to throw that out there at the end. power lines coming up at the top of the hour. bill griffethity, what's in store besides taking those profits and running? >> trisha, they are talking

about tide rising and taking it with them, hedge funds as well. evidence hedge funds in the midst of a comeback. we'll itemize that for you. a couple of ways to play the market with s&p hovering around 1,000 mark. is it much too soon or more to go?? we'll talk about that with experts in that area and darren ravel at a horse auction. this auction has produced the last two winners of the kentucky derby. is the next winner out there. check in on that. >> sounds good, bill. coming up next, circle of debt involving the government, companies receiving bailouts. what do you know, you, the taxpayer. >> jane wells in los angeles. hello, jane. >> hey, larry, it's been quite a year, hasn't it? while your money has been used to fix the economy, you're suing yourselves, paying yourself, buying yourselves and it ain't over yet. a few examples after the break. h

dahl it a sign of the economic times, hormel, making of spam, strong performance in its refrigeratored food segment, spam. right now the stock is trading higher on the day of 236, up . 6.5%. i'm not sure i've had spam. >> do you eat more or less spam and a half more. >> i'm happy to say i haven't tried it either.

i'm sure it's delicious. i don't want to disparage them in any way. >> do you free it way. >> there's no way larry has had it. >> i don't think i've had it. >> all right. i propose we have it for lunch later this week. >> the new bull market recovery. thought i'd put that in. >> 4:00 p.m. hearing scheduled to discuss the judge's rejection of bank of america's $33 million settlement with s.e.c., another example of a government agency caught in the middle between you, the taxpayer and you, the shareholder. jane wells has more on the conflicting issues, leaving a fog, shall we say, around american capitalism? >> hey, trish, this story is a little bit like spam. you don't want to know what's in it. where were you september 15th, 2008, the economy tanked and you've been paying for it every since. >> i don't know if get to --

>> that was a long time ago. since then a lot of money has been thrown around corporate america, mostly yours.s. in a strange circle of borrowing and spending. take bank of america, which got $45 billion in a taxpayer bailout. define merrill lynch, $10 billion. then came $6 billion in bonuses paid to merrill execs which regulators say weren't disclosed to shareholders. that includes you the tack pairs. >> when you talk about shareholders, we are, by far, shareholders. >> b of a, aka, you the taxpayer agreed to pay $33 million back to you, the taxpayer. here is another example. >> could i ask the three executives here to raise their hands if they flew here commercially. >> taxpayer bailouts of the car business total $70 billion. now with cash for clunkers we have a taxpayer subsidy to convince buying.

that circle of debt is like a tire with a leak. >> half the money goes for cars engineered, designed, mostly made abroad. >> reporter: finally take aig, please, taxpayers poured in $170 billion there. much went to banks who will give you advice on how to break up aig. at this point they give you advice for free. as if, one more example, civilian contractors in iraq have to buy insurance usually from aig owned by you. their insurance premiums have been factored into their contracts with the government meaning ultimately the premiums are also paid by you. so guys, ultimately in the end, it's all about you. >> all about us. so what does that mean for us? are we going to get stuck with this in the end? >> we are stuck with it. we're stuck every which way you

look. that's the whole point. >> all righty. thanks so much.0 jane wells in los angeles. melissa. >> that's why you get to keep the money, jane. you get to keep your own money. that's why. >> you're paying the premium tower receive. >> i don't feel like i have any money. >> not necessarily in a circle. >> it's not always in a circle in the case of cash for clunkers, some of that money leaks out and goes to toyota and honda. there are definitely americans with toyotas. >> jane, thank you for the spam update. this is government spam. >> go to hawaii, they love spam. >> all right. jane wells, thank you so much. i'm so depressed now. we'll be back for last call. >> on the economy and government, paul krugman is right but i think for the wrong reason. i'll try to explain up next. you're the colon lady!

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