delicacy in hawaii. they season it with poi. >> i haven't had it. she says, no, huge in hawaii. have you eat an lot of spam? >> i haven't. i've been fortunate in that way. >> careful.l. spam lovers are going to e-mail us and hate us. people are buying it. >> you thought i was going to go ballistic over krugman's big government call but here is the deal. >> you never fail to surprise me, larry? >> i'll tell you, the reason i was relatively calm on a seasonally-adjusted basis. i think he has the story right, not the fiscal basis. >> look how happy he is. >> it's the monetary package. there is no question that the federal reserve used big government emergency policies to pour liquidity, guarantee deposits and bonds. there's no question.. i think krugman got the story right but for the wrong reason.

>> what about the $800 billion stimulus package? >> to me, you'll never convince me that borrowing from peter to transfer the money to paul has any stimulative affects whatsoever. i still they would have been better cutting personal and business tax rates for that kind of money. i think that would add a bigger impact. just my thought. >> i like that i don't think he was talking about the monetary piece. >> i morphed it in. >> that's it for "the call." i will see you on closing bell. i'm melissa francis. thanks for watching, everyone. i'm trish reagan. >> i'm larry kudlow. now, "power lunch" is up next. this is cnbc.com news now. new york attorney general is issuing cease and desist to auto dealers for running ads on the cash for clunkers program. gm in 45 states, after a year of

cutting back on leasing. financial times says u.s. banks will make $38.5 billion in overdrafts this year. that's mostly from financially stretched consumers. cnn.com news now. welcome to spam day on -- never has so much been discussed about spam and poi. >> a whole new yorker article. >> when i was five years old i auditioned for spam commercial. >> did you really? >> i ended up trying the spam.. they wanted me to try it and make a face about it. that's what ended up not making things work out. >> you didn't give it a good face. >> they came to my school, , brought all the kids in a room, had us try it. >> that worked well. >> great info. >> joining us once again, this summer rally has taken a bit of a breather.. energy and health care the big

winners at the moment. president obama is preparing for a news conference. he's in guadalajara, mexico for the north american leaders summit. should he be getting credit for this latest rally?y? we'll be debate thanksgiving. >> i'm michelle caruso-cabrera. you sat on the fence during the rally, missed out on big gains. don't worry we'll give you the cnbc edge on the smart ways to play the s&p 500 now that it's above 1,000 or hovering there. >> i'm rebecca jarvis, are hedge funds making a comeback? cnbc exclusive with industry titans. we'll tell you what they are saying about investing in these markets. here is what else is on the menu. i'm phil lebeau live in milford, michigan where one month after general motors exited bankruptcy and promised to do business different or do business differently, is the company really changing, and is it meeting the needs of customers? we'll have that story coming up.

i'm diana olick in washington. never been cheaper to buy a new home and unemployment still rising. add those two realities together and it spells bad news for the apartment rental market. a little are offering incentives. one of the biggest rental markets is seeing activity down 60%. i'm darren ravel, saratoga springs, over the next two days $35 million of horses will likely be sold. >> exciting stuff.. we'll get to that in a second.. market action, stocks, rally up 15%, outperformed the dow and s&p 500. roberto pisani kikts it off. >> big gainers, cyclical, transportation, industrial, those are the ones showing weakness today. when you get 4, 5, 6, 7, 8% gains in a few days, you tend to get profit taking. that's what's happening today.. same with retailers.

mix same-store sales report generally on the up side last week. 2, 3, 4% decline. same with the home builders. many hit highs for the year. on friday, all of them trading down 3, 4, 5%. one exception, financials a big mover last week. by and large split. freddie mac, terrific earnings report. not a type, up. >> profit taking in a downgrade weighing, nasdaq off. i'll show you research in motion. down 4.5%. evaluation call, nonetheless an effect on the overall market.. google in negative territory, intel to the outside, apple shares down 3/10 of 1% added to the short-term buy list at umbrellas. real story i've been following is price line.. shares up 14% today hitting a new 52-week high. shares up 100% to date, earnings

better than expected on a surprising pick up in leisure travel, summer leisure travel better than expected, price line shares off to the races today, up 14%. go to sharon at imex. >> barrel up, inching higher led by fuels namely gasoline. get that retail sales data for july later this week and earnings from walmart. jcpenney, macy's, what that means for oil prices. also hearing about continued tensions between columbia and venezuela. venezuela cut off gasoline spies to columbia. that a look at natural gas. national hurricane center said we could see a cyclone off the islands in the next few days. >> thank you, sharon. i'm having a debate with fx traders. if you look at the charts, it's more specific.

dollar down against the yen. in its strengthening, off the worst levels. it's moved up against all currencies in a subtle way. there is a dynamic changing, there's no doubt about it. is it going to get late, a correction after the dollar was really hit hard the last couple months? too early to tell, a lot of dynamics not the least of which is helping interest rates with auctions. you need sponsorship and currency to buy the auctions. we start those in ernest with three-year, bill, back to you. >> we'll be talking about the what the message of the dollar is in the last trading sessions. we'll get that in a little bit. meantime president obama in guadalajara, mexico wrapping up north american leaders summit meeting with president calderon, canadian prime minister harper. they are talking trade, swine flu preparations. they will be hold ag tri-lingual news conference in 30 minutes. chief washington correspondent john harwood with details on

that. >> we know washington has health care on the brain. of course congress has vam va moosed out. the president left the steamy capital for mexico. summit meetings established under george w. bush. prime minister harper and president calderon have joined president obama. this is the fifth time this meeting has taken place. we know here are some of the topics on the agenda. one is the swine flu preparation of of course that has been a relative success story this year. everyone is bracing for many more cases this fall. you've got an ongoing discussion about how to fight drugs along the u.s. mexico border, some aid hung up because of human rights concerns in congress. you've got trade disputes that have to do with north american free trade, trucks which have been blocked. we don't expect major agreements

to come out of the session. we'll hear what they say in news conference in a half hour. >> keep everyone updated. nobel laureate telling cnbc the world needs another round of stimulus. steve liesman back from his oh, so tough assignment in grand lake stream, maine. tell us what you caught, what the outlook is for the economists and what the outlook is. >> bass, grim, debate among economists remain where they gather every year. nobel laureate what he's talking about, how strong it will be and do we need a second shot in the arm. >> a cyclical recovery, a secular trend long-term? i think not. is it a w, risk of a b is high. >> lackluster recovery. >> lackluster. >> gdp will be strong, mostly a statistical recovery, jump in

inventories, a lot of government spending but not sustainable over the longer run. >> here is the consensus outlook from the group up in maine there. fed funds up three-quarters of a point, ten-year goes up i'll call it 60 basis points for today.y. just 3.5% right in gdp, modest growth a year from now. 10.1%. worth noting that the high was 15, low 8. those kinds of numbers in the forecast make krugman push for a second stimulus bill. . >> we should be doing something to give each of the major economies a jolt. we've had stimulus packages but they were all inadequate. united states, clear from day one this wasn't going to be big enough. so we really should have a second stimulus. >> krugman saying in the interview, very little chance of inflation. it's like crying fire amid noah's flood. >> this assuming the first

stimulus had impact on the economy. he says a second stimulus package is nest necessary, suggesting the first stimulus had some impact. >> yes. part of the impact -- >> this is what we talked about friday. can you quantify where the stimulus package helped in the gdp? >> no. >> general sense, increased purchasing by x from the government does increase certain jobs in the private sector. >> came out in favor of bernanke, hearing a greater and greater chorus he should stick around. ft running an op-ed as well hearing anything on that front? >> i would be careful what you listen to. the decision to be made is not necessarily a financial decision, wall street decision, a political decision made by the president who answer toss more than wall street. there's some in maine that suggest wall street's needs and desires are fairly low in the totem pole the president is interested in building.

when you ask yourself that question, don't ask yourself what wall street wants or needs, ask yourself what is good for the president here and whether or not obama and bernanke and the fed stature -- >> having said that, is it possible that the lack of a reappointment, lack of any voter confidence publicly from the president up to this point for the fed chairman could have an impact on monetary policy between now and the end of the year. >> in other words, would he not do anything because he needs to be reappointed? >> i hope not. i think not, knowing ben bernanke as i do. i don't think we'll get to that point.. i'll tell you why. the point in time where the fed would have to act is enough in advance such that the appointment will have been made by the time the fed has to get down to do the kind of serious choices you're talking about that would be affected by politics. >> one last question, any rumblings as to who that person might be that would fit the bill. >> couple of other, we'll have

some on that. larry summers, one other dark horse mentioned only got one was richard fisher, president clinton's favorite -- >> was he there? >> he wasn't. >> he could have voted for himself. >> many said he did, phil. >> thanks, steve. see you later. >> when we come back, spectacular run-up for your money, dow and s&p up 15% in the last four weeks, russell 2,000 up 40%. does the president deserve some of the credit for this summer rally? our task force waiting in the wings. >> best choice for stocks, best way to play s&p 500 health care and beyond. blowups at town hall meetings. have you seen fights? do we need a time-out on health care?? fast money, fast-food, cheap travel on their menu. stay with us. i'm racing cross country in this small sidecar,

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welcome back, mark down fractionally. dow down 30 points but a potentially volatile week ahead with the fed meeting. on top of that, some focus on it. >> thank you so much for that. we're looking at volatility in the vicks, an anticipator of volatility in the options market. it can be a contrary cater for the stock market.

witness here, this is the past -- this is this year so far. here is the vicks and here is the dow. as it was topping out in early march, the march 9 low we had, since then it's gone lower and the stock market has gone higher. over here, a little peek in early july just before this big rally we had in july. now here is what we've got going. traditionally, you will see more hedging in this market as we head toward what are perceived to be the two worst months for the stock market in september and in october, which means it will start probably moving higher. is that a good things or bad things for the stock market, michelle? >> that's the question we want to ask. thanks, bill. joining us debra danielson, founder of danielson financial group and scott hold man, wbj capital group.

good to see you. let me start with you, running into seasonally suspect time. people get nervous about september and october, historically the worst months ever in the stock market. are we going to see weakness here? >> if you look at vicks it's a measurement of option premiums or volatility based on s&p options. they also trade options on vicks itself. if you look at those options a move up going into september and october months. we saw a lot of trading in the past in september. people are apprehensive and we've seen premiums on the rise going two to three months. >> seeing premiums rise, price

in volatility in the future. historically when you see it rise, you see the markets fall. >> i think we could see a pullback in september. i've been anticipating it. markets run quickly, fast, , almost without fundamentals to shore it up. that being said, i think we could be higher by the end of the year. >> debra, a pullback or not, a lot of traders looking, getting some liquidity in the market. >> give them a chance. people on the sidelines with money, waiting to buy in. this is an opportunity to average back into the market if you haven't done so. >> scott, what motivates this market. past earnings season, heading -- the fed meeting over the next couple days. nobody expecting much at this point. economic data, showing growth, options, a lot of supply coming to market this week. for you, what motivates this market right now?

>> actually what's going to be a motivator is the non-motivation as we go into the middle and end of august we know that tends to be a bit of a quiet time. a lot of people in europe taking vacation, a lot of people take vacation going into labor day holidays. >> a thinly traded market which can become more volatile anyway. >> takes less to move it. what i wanted to point out, over the past week, a downtick in the premiums. people are actually narrowing their forecast just a little bit. >> the premiums. the fact is it's pointing to the fact of a probability of a short-term correction. >> thank you. good to see you guys. thanks. >> thanks. >> coming up s&p blast through psychologically 1,000 level last week. above that level now. how do you play that? we're going to help you cherry

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welcome back, everyone. slow day to an extent when you look at markets. down 29% on the dow. you're going to look at the biggest drag on the dow, gm, shares down 2.2%. not a lot of news out on the company.y. over the weekend they did release financials, giving people a better view beyond the original financial statement as to what's happening internally at that company. >> now, we learned during the break what's in spam. rebecca told us but we'll talk about that later. stay tuned for that. >> it's a commodity. >> yes, it is. s&p 500 surging above 1,000 as the recent market rally pushed that index to what was an important psychological barrier. the past week, there we were with that big move on thursday and how we are down three points. how do you play this milestone.

joining us executor of etf. you can play the whole market or sectors, right? >> the granddaddy of the etf is the market heavily weighted to large caps. s&p 500, rsp, which, again, when we're coming out of recessionary times, small and midcap stocks tend to do better.r. where the spider is up off that march low, the rsp is up 71%. >> you're taking more risk, though. >> well, you're taking more risk but we've seen small mid caps continue to outperform large caps. with etfs especially today you can pick your spot. nice to have balance between all asset classes. >> who is using etfs now?

we're hearing they are hitting all-time highs, lot talking about fast money using them as trading mechanisms.. are they safe, still, for the average investor? >> they are, rebecca, because they represent the underlying holding. like in the s&p, they represent those 500 stocks. but they will be some more specific, like single country or commodities that have gotten some attention. leverage has gotten attention to. etfss are doing what they are supposed to do, a tremendous amount of liquidity for a small price compared to mutual funds. >> you bring up the liquidity issue. certainly we probably want to look at etfs having a lot of trading rather than less thinly traded. what are some ideas you have. >> some of the moves off this low most recently have been industrials, materials, energy.

but again, have to -- quantities don't always correlate as we know with the general markets. some of these areas, big boom in emerging markets have boosted stocks and underlying holdings. be aware. the key is since we're above 200 day average, for the first time in a year and a half, use that as maybe an exit strategy. if we happen to go below and you're putting in money now, that might be time to pull the plug. >> good to see you. appreciate it. >> town halls turn into town brawls. all the fights about health care. congress leaves washington with no major deal in place with all these people so angry. the time to take a break here and rethink health care reform from the very beginning. sparks are going to fly in the debate. >> yes, they will as they will at 12:30 eastern time when we get ready for the report. melissa will be cracking the whip. >> we'll go dumpster diving on

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welcome back in the headlines at this hour, goldman sachs making a call, merck on conviction and lilly on the sales list. mcdonald's posting good sales because of of the espresso drinks. >> guadalajara, mexico, the cultural center, beautiful historical art museum where the leaders conference has been under way so far today. it will be wrapping up in a moment. president obama, president calderon and prime minister harper of canada will be meeting with the press to discuss what they agreed on. not a lot comes out.

good time to convene. this time around top of the agenda was probably going to be swine flu, anticipating a breakout this fall. >> there should be a much greater alliance between canada, united states and mexico. we should go together. i love the colonial architect you're in mexico. >> exquisite. built in the 1800s. >> this is not the travel and leisure channel. pushback against president obama's health care reform. town hall meetings with house democrats. a signal for the president to take a time-out on health care or manufactured rage fueled by the option? here to debate democratic strategist and republican stat gist. you both have 20 seconds to make your case. terry, start with you. 20 seconds, took president obama take a time-out. >> time to admit my way or highway partisan approach big government approach he's trying

to impose on the american people might not play in peoria.a. it's time for him to maybe take a genuine effort at bipartisanship here when the congress comes back so he can maybe squelch make of this opposition. the american people aren't buying this approach. >> chris, 20 seconds on why maybe he shouldn't take a time out. >> shouldn't take a time out. an eight-year break during the bush administration when nothing was done, controlling health care costs tens of millions of americans adopt have health insurance. taking a break is laughable. notion the republicans talk about bipartisanship is more laughable. this is about dealing and focusing on a problem ignored for decades. >> terry, any response to that? got to do something they say. >> absolutely. we've been talking about letting people have their health insurance more portable, talking about reducing regulations so that businesses can offer health insurance to their employees with less strings.

we need to modernize medicare and medicaid, and we need to involve people in their own health care decisions. this big government approach scares people frankly and that's the opposition they are running into there in the united states of america. >> chris, what do you make of these protests? do you think they are manufactured or can you get people out there and furious unless they truly are furious. >> are they manufactured?? there are 300 million americans and there's a handful at these protests screaming and getting in fights about health care. we're talking about a crisis that is going to bleed this country's economy unless we confront it. as terry said, this is the problem. we've been talking about it for decades. it's time to end the talk and address the problem. if you look at what president obama has been doing and proposing, it is a sensible, focused solution to deal with this crisis. >> terry, when you look at that video, what do i see, a lot of elderly people, worried about the scoring system which means basically if you've got

government health care you're elderly, you're less likely to qualify because you're not going to live long. >> they put some of the money to do that in their tim lsu bill, the first bill they got passed in this last congress. so they run from the fact, but the fact of the matter is that seniors understand that their health care is in danger. >> that's just not correct. >> 13 million people in medicare are going to be moved into a less desired program. >> that is not correct. >> it's the facts. >> it is not. i encourage everyone who wants to not listen to misperception and lies fueled by certain groups out there. >> am i inaccurate about the scoring system, chris? am i inaccurate. >> go to the white house -- prosecute you're older do you not get a lower score which means you don't qualify. >> look at reality check website. >> am i wrong? this disabuses all these misconceptio misconceptions. >> no answer.

>> it's not an answer, you want to sit there and point to the reality -- >> i know what the reality is, we spend a lot of money on the elderly. the elderly know it as well, right? nobody wants to have that hard discussion about what do you do about that. is this a backhanded way to get to it? >> i hope we're not talking about the notion of death panels. that has been disabused by everyone. >> terry, has it been disabused by everyone? >> people are right to fear the government getting involved in their health care. >> that's not an answer either. >> more than 80% of the people in this country are happy with their health care. we need to focus on making health care more acceptable and accessible to people -- >> which is exactly what the president and democrats are proposing. >> you're proposing higher taxes, proposing making people who have better health benefits pay a premium on those health benefits. >> not true. >> making seniors -- >> got to wrap it up. >> talking about making sure

people don't get denied pre-existing coverage. >> that would ab great thing, if that were the only thing in the bill. >> good discussions. we'll have you back. >> whew! they never did answer your question. >> neither one. >> a pox on both houses. >> the company trying to do business in a new way. listen to this. a game changing deal with ebay now. phil lebeau tell you how they are trying to get back in gear. >> why this might be ultimate bull market for home and apartment builders. for a change the landlord just may not be holding all the cards. that story in the halftime report when "power lunch" returns. >> you're watching "power lunch" on cnbc, first in business worldwide. when my wife started forgetting things...

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welcome back. take a look at bond action with stocks near session low, the 30-year bond up a full point. a flight to safety as investors shy away from the riskier equity markets at this point in time. >> typical reaction, money out of stocks into bonds, seven point move in the yield is big. >> flattening of the yield curve. in guadalajara news conference, president obama, prime minister harper, a tri-lingual news

conference. >> which is why we're not carrying it. >> we'd have to translate all of it, the spanish, english and, of course, prime minister harper is known to answer some questions in french. but anyway, we'll let you know, keep it monitored and see if anything comes out of this. >> gm out of bankruptcy for a month of the automaker is making a big effort to be more in touch with consumers. cnbc's phil lebeau joins us from milford, michigan with more. hey, phil. >> hi, rebecca. as part of being in touch with consumers general motors bringing up 100 perspective customers showing them the gm facility. about 20 vehicles the company keeping showing these customers it's a different company. part of showing that is the announcement made between general motors and ebay where there will be a test website set up where general motors and ebay will be working hand in hand to sell new vehicles. it's only in the state of california. this test program running

through september 8th. general motors not really sure how many vehicle it sells in california. it needs to do more in that state to reach customers. this is a new way to reach customers. speaking of reaching customers in a new way and doing it on line, the ceo has been doing web chats and twitter chats with customers. we've been in sessions. he believes this is one way he and other executives can do a better job staying in touch with customers. they need to do anything they can to improve sales.. when take you a look at sales from general motors, emphasis on cash for clunkers. gm has sold more fuel efficient models sold under the program than any other automaker, 18.7%. year-to-date gm sales down 37.3% p here at the test track for general motors later this afternoon with executives. the bottom line general motors has said time and again business

will be done differently. this is our chance to prove to people we're a different company. this is one more public way we are showing that this, along with ebay, the deal with ebay, is all part of gm trying to be more connected with customers out there. we're doing to be talking with fritz henderson when he shows up and more of his comments later on. guys, back to you. >> thanks. any idea about other ways they might be considering getting more connected to customers, things bandied about that we might hear from fritz later today? >> the biggest thing, they have to find a way to break the old model. the old model, do newspaper, online ad, tv ad. what they are finding when we they talk with people that a lot of people, they think of general motors, they think it's toxic. the brands, however, cadillac, chevy, gmc, those have not been damaged so much. they are trying to find a way to advance the brands. that's why when you look at ebay

you'll find chevy having its on site. >> last car i bought was online, dealer went out and found it, did the due diligence, did the deal with the on site dealer. all we had to do was show up with the check, pay the car and drive away. it was it is easiest thing ever. if that's the future, sign me up. >> market strong, hedge funds making a comeback. money coming in. how will they invest it. last two kentucky derby winners brought up in saratoga. big money. we'll take you there live. taking its rightful place in a long line of amazing performance machines.

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welcome to the halftime report. retreating today after a four-week rally as investors look to lock in profits. could this be the end of the summer rally? let's geto the word on the street. let's get to the liquidator. greg, i'm going to kick it off with you on this monday morning. i've been getting e-mails from strategists saying we're overbought here. what is your interpretation of the charts. >> we're going to cover this later in the day in your segment. i'll tell you we're about 60 points above where the moving

average line is. it's a pretty tough call. if you look at the last eight months above the moving average line to a point we were, two other major points in the last seven months, always traced back to equilibrium. i would say back and fill. >> what's your interpretation? go ahead, joe. >> let's go back to where we were on friday. late friday 2:00 p.m. you had breakdown in s&p futures using september contract for that, around 1010. we tried this morning to get above that level. we could not do so. appears the market is looking ahead to the fomc meeting, looking head to treasury issuance, you're seeing profit taking as we spoke, oil coming off and s&p. >> the bond markets this week, on top of that meeting. you know what else might be concerning to skeptics of the rally so far, it has been a low quality rally here. if you take a look at which stocks, it's the stocks with the

lowest credit ratings. stocks tend to be smaller, momentum sort of stocks. is that a concern for you? is that a reason to be a skeptic of this new hire? >> i'm a little skeptical about the comment about low quality. obviously some of the more betta names are going up but so are some of the material names, high-quality tech names like ibm, intel. so you know, that's not a generalization that i think really characterizes this market. there's a certain amount of fear buying as everybody has been talking about for the past week, fear of missing the rally on the way up. yes, i think the market is overbought in thence you go steeply things pause, pull back. look, any fundamental earnings level, look at forward earnings, shouldn't price this market based on 2009 earnings anymore, you should look ahead. this is going to be an inexpensive even if it pulls back 7 or 8%. >> i mentioned low quality. you've been watching a couple of quote unquote names with

runnups, freddie mac coming out with fries profits. 80%, $1.33 at this level.. what are the options markets saying about the direction of this freddie and fannie for that matter? >> well, they are, in fact, for the last three trading sessions leading into today, there's been strong unusual activity in freddie and fannie. both of these stocks getting a lot of folks buying both stock and options and they continue to do so today at an even more furious pace. and like just i would echo what zeke said. i don't think this is a a low quality rally but these two stocks in particular are low quality but likely to be survivors. that's why people are betting on them. >> let's go deeper to financials and quote, unquote, low quality financials, particularly citigroup today. leading those, higher by another 2%, $3.93 per share is the level currently. the company has seen its shares rise 27% in the last five days.

joe, cramer said last week to buy citi. we have people coming out saying, you know what, get constructive on this name. what do you think? >> i'm not going to go against jim. >> why not? >> citi -- he's usually write, approaching a 200 day moving average. however, there is a however here.. we have lost the best balance sheet, the best in breed, goldman sachs, morgan stanley, mastercard, even asset managers we're losing them today. without participation in those names i'd be a little cautious in the financial sect or to carry the broad market higher. >> goldman sachs down 2%. zeke is this a buying opportunity. seems like bifurcation in the financials, moving into the higher momentum names, grasping for that return, last 10% of the rally. >> i don't think you need to jump on goldman after the run its had or financials.

i know on the quote, low quality, unquote, fannie, freddie, citi are definitely lo quality. if they are not going out the business and the government won't let them and that maneuver balance sheets such that they show growth, stocks under $4 in the case of city are likely to do well. i don't think you jump in with great enthusiasm. you recognize that the stocks go up as long as they don't go out of business. >> that are is the next trade. online travel agency, up by about 12% better than expected results. the profit increase and stronger booking as demand for travel was stronger in this economic recession. what are you seeing? it seems like we won't see the same with expedia. >> i think that only trends higher. i am comfortable with finding higher levels.. you are still seeing buying and

it is a summer and i understand that, but as we come out in the third and fourth quarter, that's only going to be stronger. >> one quick thing, with consumer as the fear of job loss abates, you don't have the job creation, but the fear of job loss, people spend the incomes they have based on the jobs they currently have. >> john? >> it's a great sign of how the consumer is doing emily. they are actually bidding for and this is not the business travel. this is the consumer and they are there spending money and the stock hit a 52-week high and how many stocks in the space can say that? obviously it is the winner. it's the 800 pound gorilla and the travel space for the consumer and this is justifying people's belief in the pipeline. >> on a 12% rise on the day, do you buy this and what are levels that you can get optimistic? >> i am optimistic and i think people have shown that optimism by getting into the stock in the

80 to $90 range and now over $150 briefly, it's time to more or less take a rest. the stock has more than tripled off the november low. i would say priceline is say great stock. find other areas that will move faster. let's move on to the next trade and one week highs for the euro. they made their way into the currency markets in the morning. let's bring in the ambassador and join us on the fast line. is this back at the u.s.? what it seems to be telling us is the u.s. economy will let us out of the recession that is not exactly the popular sentiment. >> the dollar will react to fundamentals and trade higher as opposed to trading down. the risk trade was on and you were safer buying higher yielding currencies and assets.

they do see a greater rebound in the u.s. economic story, but i would not jump to the sideline of the trade that said you want to unrisk your assets if the global economy led by the u.s. is getting better. i think there a lot of dollar plays and the dollar rallied higher. if you look at the dixie which is this basket of currencies. the easing is not working and they are throwing more up there. the dollar will strengthen against the british pound. europe had great data this week. you would think that if it's a relative argument, the euro should be doing or also giving ground. if they are recovering. anyway, i think this is a trade to be careful on if the commodities will be strong. >> you see here tonight on the fast money, a look at stocks that have come back and are they worth the investments or unlike support. "power lunch" takes a look at the state of hedge funds making

a come back. where are they investing? that's right after this. >> the summer rally is showing no signs of cooling down. we have a warning signal that could keep traders tossing and turns on this hot summer nights. is this the latest example or is it good for the market. plus, a pick off and put a fourth quarter come back and invests in them. a come back story john elway would be proud of on the post market show tonight.

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of the world's largest airline. >> welcome back to the "power lunch" trade to go. we seem to not break this range we have been in in the past week in 70 or 73 or so a barrel.

>> normally i have been accused of being the biggest bull around. what lines up here is back on june 30th, you made the highs of 7332 and lat week 7284. against that level where we are trading right now, 70 1/2 and the play here is to be short oil against those levels. >> short oil. heard it from you. time to call the close. do you buy or sell? kick it off. >> per i'm surprised how hard they have been. >> obviously you if have free cash, taking a dip is not a bad idea. be careful. >> hi, i would sell into the close. i got run over friday doing that, but i'm selling. >> jp? >> we tried to make up the ground. we lost late friday and didn't do so. i think you you have to sell. >> that are does it for us. we have your trades ahead of the

almighty fed meeting. up next, "power lunch" goes inside the rental market and discovers what will keep them happy in the ongoing housing slump. >> a lot coming up and markets are rallying and hedge funds are making a come back. where are the industries putting their money to work? financial 3 struck consumers are getting hit with billions in overdraft fees with the banks that taxpayers bailed out. at 1:20 eastern time, the big business of investing in horses. you won't want to miss that segment. all that and more at "power lunch" that starts in 30 seconds. >> a judge has given approval for a movie deal with michael jackson's final rehearsals. jackson's mother had until today to review the contract and raise objections. in a down market raising 10% on better than expected earnings and mcdonald's is bucking the

market trend, rising on sales numbers above estimates. that's the news now and we are first in business worldwide. i'm courtney reagan. >> welcome back. i'm bill griffith. let me turn my microphone on. i turned it off for the halftime report. don't blame the audio guy. he's a terrific guy. stocks hovering around the lows. mcdonald's and merck and 3 m and boeing are among the big losers today. what kind of economy with car companies owned by the same government. we will look at what jane wells called the bizarro economy. >> there is a crisis and there is opportunity. why this is a great time to rent. >> let's do that.

hedge funds have been posting the 5th straight month of gains and earlier today on "squauk box," they hosted the hedge fund summit of sorts with the industry's heavy weights and among the power players, lee cooperman talked about the state of the american consumer right now. >> the consumer is wound and i think most of the people i speak to had a transformational experience in 2008. i don't care what strategy we are at, by and large people lost 30 to 40% of net worth and they are squared. >> we spoke with another legend, michael stein hart about whether this bullishness in the market will continue. >> almost with no exception, no one i know is long-term bullish. no one i know. >> does that make michael

bullish? he is a great contrarian. >> he has a great voice. >> cash starts flowing back in for the 5th straight month in a row. with the average fund gaining 12.17%, is the 1.4 trillion dollar hedge fund industry finally on the mund. here to talk about that among our guests, john with morning star and there is the financial times. you can hear us? >> i can. >> chris wolf is the manager of the global strategy fund. good day to all of you and thank you for joining us. >> my pleasure. >> we have been itemizing the industry that is witnessing the thaw. they are benefiting from the thaw. why not hedge funds too? >> hedge funds are a fan and they had the best quarter in 10 years recently. you can still say they are a long way from the peak of their

performance. it's a really mixed message from hedge funds these days. >> when i see hedge funds for the last several months, they were okay, but down when everybody else was down. i see nothing that tells me boy, you should have been with that smart money. it doesn't seem like they are doing anything for anybody.y. >> that are is a great point. you need to pay people two and 20. they were so far down last year and in the face of the great alley skws equities and bonds. they still aren't anywhere near their peak. >> what extent is the performance on the positive side the reality that a lot of players got shaken out and we are seeing the ones that managed to hang on. >> the hedge fund industries benefitted from the shake out in the stronger. after all, the weeklings aren't around anymore.

that helps the performance and explains the cash flow result t because the people who wanted to get out have gotten out and those funs have folded as well. >> what are can you tell us about the active strategies we have seen with the surviving hedge funds? anything that gives us a sense of which are doing what? >> i think they tend to be contrarian. you really want to go to where the puck is going to be. to anticipate what the movements are going to be. when we look at where we see a lot of investment tunes, a lot is timeouted about emerging markets and think the valuations are high right now. we are standing on the sidelines and we would in fact be buyers in a continued basis on deep dips and by that i mean the specific countries and the stocks down 10 to 30%. we see a lot of tune there is and we see incredible

opportunities in the credit space. if you look at a period between the years 2000 and 2002, huh something similar to what we are going through, just smaller where you had extinction of the number of players. during the years after that, you saw returns of 25 to 45% for the nexty three years. we are going through the same cycle and we think that's an exciting area as well. >> in the asset management business, in hedge funds that investors tend to bet the jockey as much as the horse. they go with the names in the industry. we had cooperman and stein hart. those are a couple of legendary names in the industry. is that where we will see strength down the road do you think if in fact this come back continues? >> it's so hard to predict.t. i think a lot of hedge funds you just ride the rallies and you are fine.

there is a lot less leverage and it's a lot less crowded. >> you get the stevie cohens and you know all the names. the guys ready to take the risks and going against the crowd and look for investment that nobody else is looking at. is that what will dictate success or do we have to come out of this thaw and everybody rides the wave? >> i think it gets harder from here on in. the people who made money made money in the recovery trade early. at some point that stops working. >> the people who made money assume the most risk. they owned emerging markets and exposure and the smaller funds outperformed. >> that happens anyway.

>> this is riding a recovery and it gets a lot trickier from here. >> when it comes to the high frequency trading and the markets on top of that and regulation that could come down, when you look at emerging markets on your fund, what do you think about that regulation and do you think that is going to play into how they do investments going forward? >> no, we don't look at it in our fund. again, we tend to take a longer profile in terms of where we think. china as we said earlier is not going away. they are using real money. they are not going to continue to be thorrer. >> we have breaking news. >> what do you have, phil? >> i am standing by live with bob, the president of general motors who was just helicoptered in, piloted in to a day of cars, customers and culture for general motors. we are heading in, but give me

perspective in terms of as we look at where cash for clunkers is, has demand slowed down at all as they extended this. are you seeing as much demand? >> i think we are probably seeing a slower restart, but it seems to be catching o. the numbers are above prior levels. >> you expect this to continue? it's not as red hot as it was. >> no, i think everybody who wanted to trade probably traded it and or was in the process, although one of the people who worked for me at home traded in an elderly mercedes on a brand-new four-cylinder malibu. there is one i know. the difficulty is that we have some pretty firmly established rules of the mileage improvement

that must be a pain. so there probably a lot of people out there with the vehicles that they would like to trade on something new. they are not going to meet the fuel economy. >> a month after bankruptcy, we are doing business more. we are more in tune with the customer. the public looks at this and said how can we be sure they are changing. how do you assure this. >> they are going to have to judge us by our actions. we haven't really in the past had a coordinated communication approach between advertising on the one hand and the communications on the other. we can decide on the message. we are always going to be in a very short time thinking a very strong push in conventional advertising and spiral

advertising. that's in print television and the whole nine yards and getting our story out there. we bring normal customers in and tell them what gm is all about and let them drive and experience the cars personally. that's kind of the pinpoint of the efforts that we are generating. anybody who knows anything about vehicles will say that general motors is about the best product line of any car company in the world. >> you have to sell them. >> i know we do. you can argue that we were deficient in the past. we didn't get the story out and talked too much about gm and not enough about the brands. all that is going to change. in two months, we will see what we can say. >> you will be announcing the epa mileage and i know you don't want to say it now, but how much of a head turner will it be? will it be way above anything

anybody expect? >> it will be above what anybody is expecting. >> he said you are not going to get me to tell you what the number is. heading into a meeting. >> this is the president. i'm only the vice chairman. >> we will get the title correct next time. >> who paid for the helicopter ride. >> i guarantee it was him. >> he paid for it personally? >> it's his bird. you want me to find out who paid the fuel bill? >> the government. they were bankrupt. riding around in helicopters? >> i understand, but he has his own personal fleet. >> good for bob. see you later. >> wind screen next time too. >> john and chris, thank you. thank you. meantime shares of aig are up and more than doubled in the last four segs and it's just one of many come back stories that

had a lot of investors scratching their heads and itching to jump in. matt? >> my skateboard here, rebecca. thanks very much. i say that in all due respect. we like to drive in jets and helicopters, but randy travis saying a song said a better class of losers suits me fine. it's all about the losers. go back in time and one month up 14% and peel it back and you are about 50% in the green. not too shabby. take a look at what you calling a loser? 190 s&p 500 members are up since the trough. there is just one stock in the s&p that is down from the 52-week low. this is interesting too. of the big stocks, the exxons, only 12 of 50 or 25% are up 100%

or more. look at the guys. 34 of the 50 are up more than 100% since the worst case panicked lows. if you take a look at the worst becoming first, it's a theme that i love. as an investor and somebody who always goes to the numbers. aig up 316%. if you look at the financials from the trough, bank of america and any number of reads, all outperforming aig. back to you. >> thank you very much. >> we are going to come back and gather up the all-stars and get you the realtime pulse of the markets. we have seen the stock market move higher and trended lower. bonds moving higher. >> the yields lower and the turn around for the dollar. the dollar moving higher again.. got battered for weeks when we had good economic news, but the whole trend reversed itself on friday after the jobless numbers. is this a key trading change e that you need to know about?

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let's get to the market support. bob dasani is down at the market exchange. the headlines are crossing about state street and some folks may be talking about it as well. >> we had weakness in the last

hour and partly this is due to a weakness and put upstate street. they had a 10-q out this morning. there was a headline just a minute ago and i haven't been able to read it, but there is a line that said the $625 million reserve they established for exposure to subprimes may not be sufficient. i take a look at that carefully. other financial stocks will be weak. goldman sacks is a good example. it started to underperform a week ago. this was similar on friday. the stocks moving to the downside. i want to note the brought gains last week, the retailers are going through and reversing. we have bond yields down and also weak here.

does that mean there is a new normal? we will have to wait and see f. you look at the longest end of the curve. all maturities are down about seven basis points.. you can see rates are down, but a one-month chart reveals we are down from a higher level and down from a higher level in stocks in terms of the flight to safety and all that gives way to the real story. you can see the dollar index doing better and below 80 where it spend most of june and half of july. we need to get back above the 80 mark to truly walk away more bullish on the dollar. let's go to sharon at the nymex. >> the dollar is what traders here are focused on and the fact that it's slightly higher is the reason why we are seeing weakness in oil prices and it has been a choppy trade within the tight range of 70 to 72 a barrel. with gold down about $11, you

will note that last week he had about 16 european banks talking about the fact that they will cut down the gold sales. that could have an impact on prices. >> we're will call it out here. if we can see state street again and the dow extra day. they have been higher on the leaders. the gains that we saw for aig among the others. >> the regionals are seeing expansion in the price. >> what strikes me is subprime exposure. does is it make us wonder if there is more to come. >> this may be a vulnerable

moment given the rally we had lately. the next major move could be the downside. this could be an excuse for selling. you are quite right. there is a correlation between the selling and the move down in straight street after that news got out. how about this dollar holding ground against the euro and the other currencies? as rick pointed out, are we seeing a new normal for the currency? joining us to talk about that is the senior strategist adam bointon. >> we were talking about this a lot and the rally continued today. is the dollar's motivation different and more in lock with the stock market? >> we are seeing a regime shift and the shift i'm seeing is we are moving away from moving with the stock market and we are following more closely. that's the key lesson to take

from friday. the reason why was the yields were so much higher. the question going forward is the yields fall into the meeting on wednesday and reiterates. for me, i would be trading this in the dollar. >> you think there has been a shift? for so long when we saw strong data, the dollar fell because people were into most risky currencies. it seemed to go again today. they call it a regime change. really i put this down to foreign exchange markets and starting to normalize as well. it's very unusual for currencies in the equity markets. to move as tightly as they have. what we are seeing in currency is a move back to normal and a move back to where relative differentials matter. the market is going to be increasingly focused as we move into wednesday and the question

of whether or not the dollar rallied too far may change. i think it has. >> for it does and has changed, what's the next catalyst beyond that point to really say this is how things are going to move into the end of the year. >> really the next catalyst is the data flow. if we get a weaker data in the u.s., there is nothing to stop the europo from heading to 150. off target before the end of the year. we will see if fed expectations are changing and the ecomy is recovering and recovering slowly. no fed hikes for at least a year. >> we're should point out that it's at 1.41 right now. >> thanks, adam. >> here's an interesting thing. in saratoga this week, you might win the kentucky derby in two years. with the high rollers for shopping for champions right now. darren? >> that's right, rebecca. it's all about hands in the

pockets for me tonight. i'm not bidding at all, but this guy might. his name is skbain he's the chairman of public storage. he will be back with us on "power lunch," coming up. i'm racing cross country in this small sidecar, but i've still got room for the internet. with my new netbook from at&t. with its built-in 3g network, it's fast and small, so it goes places other laptops can't. i'm bill kurtis, and wherever i go, i've got plenty of room for the internet. and the nation's fastest 3g network. gun it, mick. (announcer) sign up today and get a netbook for $199.99 after mail-in rebate. with built-in access to the nation's fastest 3g network. only from at&t. every head. every bite. every gallon. every shoe. every book. every cereal. well, maybe not every cereal. but every stem. every stitch. every tune. every toy. pretty much everything you buy can help your savings account grow

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welcome back. we are watching for word out of state street's 10-q report that the money they put up in reserves to guard against subprime exposures may not be sufficient. here we go again with the subprime situation and the stock has moved lower and as that sell off and stock moves lower, the sell off intensified in the stock market. the dow down 61 points at 9308.

>> we have several reporters working the story to see the impact it might have on the rest of the market. it's an alternative investment. the big money heading to one of the biggest horse sales in the country. who else but darren ra vel is there in new york with a special guest. darren? >> that's right. it's caused the basic tip in year sales. 235 horses and one of the guys we have is chairman in storage. he has about 100 mayors there. what would you say is the state of the economy and how have we seen it manifest itself in the horse business? >> i'm not smart enough to answer that question. it's difficult so i'm

counteringing that and leaving that aside. americans are americans and we will come out of it one way or another. i'm a positive thinker and think things will get better in the future. >> the horse business we have seen with sales down between 25 and 30% as recent as last month. this is an indicator. obviously there is a lot of positive energy. >> it will be difficult to judge. we got a better quality. this is the best that i have ever seen in sales. that will be a reflection that will be hard to sit through. i look for positive sales. >> he hasn't been at one of these sales for at least a decade.. what do you do to evaluate.

this is a living being, but also a business. a hard business. how do youy evaluate and you will bid for a couple of horses tonight and sell a couple. how do you evaluate what's really and what's right. >> the principal thing you look at is pedigrees and find out what the family has done. i might have my farm manager here and the racing manager and they're looking at confirmation to see if the horse is correct and big and strong and those are the items and i evaluate the prices and whether we are going to buy them or not. >> if you have a budget, you won't buy any horses. >> this is again a very interesting business. me how much is luck and how you

did it right. i don't know what the percentages are. i would rather have luck than good judgment. >> there you have it. he will be bidding and selling. >> if you go to the auction, don't wave. >> look at the hands. >> good thinking. we are down in guadalajaray. president obama and the presidents answers questions and news out of this. >> two things. president obama saying that canada's government-run health care system may works for canada, but will not work in the united states. a lot of people have complained what he is trying to do is a canadian system. saying that immigration reform will have to wait until next year because of a full plate of issues. >> that has been a sticking point between the u.s. and mexico. >> for years and years.

>> you guys were looking further into the state street's 10-q. >> the story, what we are hearing is they set up this reserve. $625 million. >> we have to run back to michigan and we have another special guest. >> i will let you know after today. we shifted gears. completely shifted gears and went around the productions and nice to be in the offense again. >> i think our sales last month were certainly encouraging. the industry was actually. >> the new general motors was open for business and we want people. >> how many people respond.

>> the technologies of issues and product issues and dealer issues. a host of things that relate to what happened. bankruptcy and maybe half and 2/3. what's going to happen? that's the question of the products and how we will be successful. it's nice to have. you should have been doing this 10 years ago. why weren't they doing this 10 years ago? >> from your perspective, when you look at cash for clunkers, how much has it slowed down and you have to slow down and how much will it continue? >> it started out okay. it slowed down and call it the pace at the end of july. is it in or is it out? we expected to have a healthy impact on a positive impact.

the customers are still coming to the show rooms and appreciative to support. i have to go. >> fritz henderson talking to us before he had thes in and we had about 100 customers. cash for clunkers slows down and they are seeing the demand. >> thank you very much. let me get back and this is an important distinction to be made on exactly what state street is saying on reserve set up and guarding against subprime. >> it's to pay for lawsuits by people who sued them. >> this is a remnant of the past crisis. they are merely saying what they set up to guard against the lawsuits. >> the sec investigated and they said there was going to be claims and penalties in response to the fixed income. this is what it encompasses. >> an important distinction.

stocks down 3.4%. >> we will head to the floor and get steve's take on the big action and see the impact of state street news on the market. >> diana will tell you why this may be a great time to rent. "power lunch" is back after this. tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move. tdd#: 1-800-345-2550 doesn't matter if a company sells computer chips tdd#: 1-800-345-2550 or, i don't know, fish and chips. tdd#: 1-800-345-2550 i'll look at all kinds of stocks before i settle on one.

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>> welcome back to "power lunch." the conference board said it is july trends index unchange friday june. year over year that is down 20%. barnes and noble is buying the college book sellers. the move they say could lose share earnings by about a third. shares of cisco, the food service company teleed with an s is holding steady after lower fourth quarter profits. today's market moves down to the floor where steve and stewart is here.. we got the headlines about state street and it looks like they are subprime exposure and may be the issue with the reserves. words enough to cover the subprime exposure and a closer read of the quarterly documents.

what's the reaction on the floor?r? >> i got hit with a bunch of ims. that 10-q came out at about 6:10. about 100 pages long. it takes a while for people to read through t. i think that's what you saw. the fact that it's not the exposu exposure, but the lawsuit. once we got that under control, you still have the markets sell off and you have the markets rally. >> we point out to the people that state street is coming off the loans. >> everyone read it as subprime exposure and not the lawsuit exposure. that's what you are seeing right now. >> the fed meetings? >> my clients are more focused on the retail earnings coming out this week.

seeing if it's going to catch up. >> you know what i did this weekend? i read by faith alone. it's a great book. >> you did come through. we are even. >> downloaded now by space alone. a brilliant offer. the ongoing cluf caused many landlords to make a deal with tenants. diana? >> that's right, bill. with job losses mounting and real estate prices falling through the floor, the rental market is taking a big hit. ages 20 to 24. 70% who don't live with their parent are renters and hardest

hit. there goes the supply. i spoke with john burns who told me the big rental properties are being crushed by demographics and by bargain basement foreclosures. nationwide it will cost only $70 more to own than to rentment compare that to the normal gap. in fort lauderdale it costs you $171 less to own than to rent. in riverside, california, $2 fine a month less and in d.c. $135 a month less to own than to rent.. in manhattan rental activity is up, but down 58% from a year ago as rental prices fall down 6% from the fishing and listing inventory fell 3% from the first quarter, but way up from a year ago, up 29%. here's your real concern. we have talked about the bargain basement foreclosures and the investments buying them up.

they have to rent them and they have to get their price so they can hold even on their mortgages. that will be a problem in the big markets in nevada and california where they are buying up the foreclosures. bill? >> before you go, what does it do to trusts that invest in apartments? >> good question. i asked that and sam told me the reach for apartments are faring better. they can offer you the incentives in the bigger markets. they are offering lower prices and extra added amenities in the big buildings. they are all invested and they're faring better and still not great. >> thank you very much. >> americans are buying thousands of cars for the cash for clunkers programs. government money to help and taxpayers own. does that sound complicated? jane wells will explain. >> as only jane wells can.

check out the action in the regional banks and they are trading today. there is the dow down 50 points. here come the regional banks. zion, huntington and regions financial in a mixed session today. we are back after this. [ engine revving ] [ engine powers down ] gentlemen, you booked your hotels on orbitz. well, the price went down, so you're all getting a check

thanks. for the difference. except for you -- you didn't book with orbitz, so you're not getting a check. well, i think we've all learned a valuable lesson today. good day, gentlemen. thanks a lot. thank you. introducing hotel price assurance, where if another orbitz customer books the same hotel for less, we send you a check for the difference, automatically. you know, the beer you choose says a lot about you. you want friendly, but not pretentious... classic, never trendy. you want a real american beauty. are you talking about the budweiser? or... me? yes. ♪

>> spar spar stay with us on this one. what economy is subsidizing from

car companies owned by the very same government. jane wells is looking at the circle of death in this bizarro economy, jane. >> to quote from you a few minutes ago, desperate times call for desperate measures. when the government made up of taxpayers and the company bailed out, does that help? all that help started a year ago next month. >> i will get to do another acquisition. this is too important not to get right. >> i remember that day. here's what happened since september 15, 2008. bank of america received $45 billion and some to cover losses and merrill lynch got $10 billion. they paid executives nearly billion in bonuses and didn't tell the shareholders and is now being charged by the government for the violation and agreeing to pay $33 million in fines absent the taxpayer and fining

them without telling the taxpayer. or there is this. >> i am going to ask the three executives here to raise their hand if they flew here commercial. >> remember that. taxpayers report and get taxpayers to buy the car companies that created a cash for clunkers subsidy funded by taxpayers and they are being spent on foreign cars. oops. 170 billion so far going into the company and a lot of them are going to creditors. some of them are being joined by banks which we bailed out. the fees help them break up the company we own. it's the sort of thing that drives brad sherman nuts. >> the money went into aig. they were in the hands of goldman sachs. we are going to pay the firms to give us more advice on what to do.

>> i call the circle of debt and some fear it doesn't come back where it started. the executives are giving bonuses and presumably they will pay taxes on the bonuses. >> you are preaching to the choir. you know how i feel about government intervention. >> brad sherman is a democrat. this is from a democrat here too. >> he is also a numbers guy. he blames greedy call street for the problems and not the government. >> we have a bone to pick with mr. sherman too, jane. >> let's play the sound bite that you hinted at. the famous sound byte. >> we will ask the three executives to raise their hand if they flew here commercial. let the record show no hands went up. second, going to ask to you raise your hand if you are planning to sell your jet in place now and fly back commercial.

let the record show no hands went up. >> jane, representative sherman is one of the members that voted to double the number of passengers with jets and bowings were going to use more than the department of defense. >> we asked him if he supported that notion and the answer was he had to vote for the entire budget defense appropriation. >> what do you think, jane? hypocrisy or no? >> it doesn't matter. it is amazing. what politicians say and did and you also, the writers that go into these, they don't even have half of those. >> why do they get attached to the bills? because they can. >> thank you, jane. >> thank you very much. >> coming up next here on "power lunch," we have a lot more, including a rough year for the economy and the

financially-strapped consumer getting hit this overdraft fees by the banks that taxpayers bailed out. we will tell you what's going on. >> you will not believe how much money they got charged whochlt charges the highest fees. they will ask here. citigroup, b of a and jpmorgan chase and wells fargo is down 40 cents. we are back with more after this. )%)%)%)%)%)%)%)%)%)%)%)%)%

>> welcome back. banks in hopes of boosting profits and mitigating risks and raising fees and according to the times, banks are set to make a record 38 billion in overdraft fees. here to tell us about it, this is an interesting article. one of the most telling facts to me was that 90% of these gains, these $38 billion are from 10% of the population. >> that's just 10% of roughly 130 million checking accounts in the u.s. if you run the math, that works out on average to about 10% working out at roughly $2600 in fees a year.

a lot of customers are paying a lot less than that. on average $2600 in fees a year. >> shame on the banks for raising fees. people bouncing checks in this bad economy. >> that's true. there is a high correlation of heavy use of overdraft and low fico scores. that's it is something that you might expect. the low fico scores. you get hit with the charges. at the same time the banks put up fees and for the first time in a recession in 40 years. >> by how much?? >> that's shocking. >> the median is up a dollar. >> at both the small banks and the big banks. it's not so appropriate to do that in a recession. >> this has been that kind of a

recession and these guys that and they needed to do something to raise fees where they know they will be able to make money because people will be struggling to keep the checks from balancing. >> that's one argument and at the same time overdraft has been a high margin business and continues to be a high margin business. there other places to make that money rather than jacking up fees for low income consumers. >> give us context. 38 billion from the average bank, give us an example. how much does it matter to the bottom line? >> i don't have it for individual banks, but i did run the data. he found that almost half, around 45% of banks would not have made any money in 2008 had it not been for overdraft fees. >> fascinating stuff. >> your hair has gotten long. >> we're love the hair. >> thank you so much. >> thank you. >> things are getting tougher ça and tougher fert big business of

porn of all things. our inhouse expert melissa lee is coming over here to tell you why things are getting tougher. we have empty calories for you in two minutes. [ engine revving ]

[ engine powers down ] gentlemen, you booked your hotels on orbitz. well, the price went down, so you're all getting a check thanks. for the difference. except for you -- you didn't book with orbitz, so you're not getting a check.

well, i think we've all learned a valuable lesson today. good day, gentlemen. thanks a lot. thank you. introducing hotel price assurance, where if another orbitz customer books the same hotel for less, we send you a check for the difference, automatically.

this piece in the l.a. times this morning about the porn industry. l.a. is the porn capital. >> it is. san fernando valley is where most production takes place. >> my hometown. how nice. >> we talked about it and how times are tough and there specific examples of how it hit the industry. melissa slooe here to talk about it. >> wherever i hear porn, i come ark live. the recession is hitting all industries and the same for the porn industry. the industry has a whole, the actors are not garnering as much in the way of