independence is the spirit that drives america's most successful investors. announcer: trade commission-free for 30 days plus get $100 cash when you open an account. bob pisani down on the floor of the new york stock exchange. this is the best they can do right now. believe it or not, we're not far from the worst day of the month. the dow jones industrial average, and i know it's a pretty young month. but the bottom line is this -- they can't drop the market very much. since the second week of july. they tried on several occasions

in the last four weeks. they were down 30 or 40, 50 points in the middle of the day, and it's always come off of the lows. sought market is not wanting to go down right now. even on a fairly quiet day, even on a day when we have big gains in financials the prior four or five days, even when we had big gains in cyclical stocks, those stocks did have modest profit-taking today but never extreme. 2%, 3%, 4%. and even with that weakness we saw here general strength in the overall markets. some of the bigger names in the financials, for example, like bank of america stayed positive all throughout the day. citigroup stayed positive for most of the day. the volumes were definitely a little bit on the lower side. so the important thing here is things have developed up very well despite a reason for them to drift lower.. it's easy to do that on a day like today. but that didn't happen. a lot of excitement down on the floor because yankee great bernie williams is here on the floor.r. with the yankees for gosh, must be 15 or 16 years, and of course one of the great all-time hitting experts for the yankees.

there's the closing bell. melissa is next. it is 4:00 p.m. on wall street. do you know where your money is? welcome to "the closing bell." i'm melissa francis in for maria bartiromo, and here's what we're following at the close. investors taking some profits after the recent month-long rally. weakness in materials leading stocks lower as we kick off the week on a little bit of a down note, not too much. one blue chip bright spot today was mcdonald's, which reported better than expected july same-store sales. and treasury prices rising for the first time in six days as the yield on the ten-year hit the highest level in two months. this as the government plans to auction off a record $75 billion of notes this week. here's a look at how we finished the day on wall street on the major indices.. take a look at the dow. down slightly on the day, about 1/3 of a percent. 31 points.

9,338 the last trade there. the nasdaq below 2,000. 1,992 the trade there, down .4%. and the s&p down just about .3%. let's get more on today's action. bob pisani is our eye on the floor of the new york stock exchange. take it away, bob. >> well, the important thing here is we had cyclicals weak as we saw profit-taking throughout the last, oh, day, whole day today. we saw the dollar rally here now for the third day in a row. we saw some weakness in financials, and still the market didn't drop too much. take a look at some of the major names. commodity stocks had a great run last week on a build-up in the belief that the global economy would be improving. all down 2%, 3%, 4% here today. same situation with the big industrial names. caterpillar and 3m. the home builders also nice run. home builders like masco. not particularly heavy volume but slow and steady through the day. retail sales last week, and again, some companies had positive earnings commentary like macy's.

today same situation. 2%, 3%, 4% declines in all the big names. financials, you know what happened last week. they were the big gainers here. but we did have some good news. freddie mac reported earnings better than expected. yes, they were helped by a change nkting rules, lower provisions for credit losses.s. they did say they did not need any fainl digsal financial aid from the u.s. government at this time. big caveat there. state street down here in the middle of the day. legal reserves related to its subprime mortgage portfolio may not be sufficient. goldman has been underperforming the market, particularly the bank stocks, for the last four or five days. a lot of commentary on that, there's citigroup up fractionally again here today. tradertalk.cnbc.com. i want to just close with priceline. the important thing is priceline had excellent earnings reports following orbitz, some of these other stocks. hertz and other big travel stocks did very well here in the past week. priceline now following next. melissa? >> all right.. bob pisani, thanks so much. taking a look at today's business headlines, mcdonald's july same-store sales rising

4.3%. that was better than expected because of a strong promotion of its new coffee drinks and a big jump in european sales. in the u.s. sales rose 2.6% as budget-conscious consumers hungered for the fast food chain's dollar menu. southwest airlines is making a firm bid for bankrupt carrier frontier. late last month southwest put in a non-binding bid for more than $113 million. the move sets up an auction tomorrow between southwest and republic airways, which had previously offered $109 million for frontier. and if you can't beat them, join them. toshiba, which lost the video format war by backing hd dvd, said it will join its rival and begin selling blu-ray products bit the end of the year. toshiba's move could trigger price wars in the already competitive blu-ray market.. the summer rally losing steam a little bit with major averages finishing in the red and despite mounting concerns that the market is overbought. my next guest says opportunities

remain. with me tony dwyer, equity market strategist at ftn capital marx. and lee munson chief investment officer at portfolio asset management. thanks to both of you for joining us. tony, let me start with you. a little bit of a decline today. the bears trying to take the market down but not really able to. >> melissa, i really think what people need to focus on isn't what the next 1%, 2%, even 3% pullback could be because it's likely. we're up pretty much in a straight line. i think what we need to focus on is where is its next 15% or 20%, and i think if you look at the credit markets that would certainly argue for the up side. you wouldn't even come close to equaling the returns of the credit markets in equities if they bounced all the way up to 1,250. also, you would still be in a long-term down trend if you bounced to 1,250. that's how low we really got. and gerng i'm the easiest strate strategist in the history of mankind to figure out. watch corporate credit. once spreads go back to mean after they've been stressed time

to be bullish and all the historical indicators agree with that. >> lee, what do you think of that strategy? >> i like what tony has to say and i appreciate his comments on the credit market. we've been picking up a lot of treasuries lately. we think rates are going to go down and credit spreads are still going to narrow to the lower end. i think we're going to have a recovery that includes a personal savings rate, some type positive savings rate. so instead of going after a coach or tiffany's as we get into a recovery, we're long things like an ebay or amazon, especially ebay where people are going to be buying and selling the products like coach handbags or expensive items for tiffany. >> but lee, i think what tony's saying is you're overthinking it. >> well, i might be overthinking it, but we have a rising market right now. so what i'm looking for is good setups in the charts.. i'm looking for things that are going to be ready to make a 52-week high and i think at end of the day you still have up side. today we were buying a tremendous amount and if we have any more pullback i'm going to

be pulling more capital and committing it to the market right now. including commercial real estate. >> let me get back to that in a second. but tony, it sounds like what lee is saying makes a lot of sense. is there any reason why you wouldn't buy credit markets like you're saying and pursue lee's strategy on something like amazon? the two things are not mutually exclusive. >> no, you're historically still -- you're still above normal for your credit spreads. the amount that they've come in, though. remember, high yield debts to treasury spreads were at 2200 basis points. 2200 basis points. they've come down now by more than they ever were wide before and they're still attractive. so again, there's still opportunity in the corporate credit market, which again, that ultimately is a good thing for shareholder-friendly maneuvers by the company. so that ends up in equity -- in the equity market. so again, what we're focusing on is where do you go first, information technology? because you're not going to go out and just start hiring people again. you're going to try and innovate. you're going to try and get your product up and do that through

info-tech, and again, health care is the one place where there certainly is a lot of spending. so those are our two favorite areas, with industrials and financials and consumer discretionary a little less so. >> lee, you lost me on commercial real estate. a lot of smart people think the shoe hasn't even begun to fall there and it is without question going to. where do you see the opportunities in commercial real estate? >> well, first of all, i'll say a lot of those smart people are also talking about a bank failure back in march. i think commercial real estate is not going to bring the market down. they're going to -- >> no, but -- >> i think the whole idea of why commercial real estate isn't supposed to work is that it's going to lag the recovery in the market. but i think that's priced already in. if you look at some of the action over the last couple of weeks, we've seen reits do nothing but go up. and i think a lot of institutions like goldman sachs came out this weekend and say buy puts, start shorting the real estate index funds, and i would say the just grasping at straws trying to find something to short in this rising market. but you get the rates. literally you get a higher

income yield. and i think it's the same idea of what tony's talking about, is look at some immediate yokar paper. doesn't have to be junk. look at some commercial real estate that's getting rent. i'm not convinced this is going to take us down the well capitalized a couple months ago there was a rash of secondary offerings. look at boston properties, they did a secondary a while back this summer. it's up around ten bucks right now. and i'm sure tony would agree you look at some of the preferred stocks that are thinly traded in the reit area and it's just -- i'm sure tony and i are looking at those all the time. >> melissa, let me put this in kind of layman's terms. everybody in the equity market, or the financial markets argues that the government is manipulating it, they're involved, they're forcing lending, they're doing things to create liquidity, which is supportive to the market but it's government intervention.. the government's told you that they're going to intervene. so you can fight it or you can do what's already taken place, which frankly i did for a little while. or you can know the government said they're going to intervene in markets that are not functioning properly, they're

going to add liquidity until they function properly and -- >> do you think that's commercial real estate or -- >> clearly. because that is a huge market. and if you combine commercial real estate, alt-a loans, subprime, prime loans, all adjustable rate mortgages, you collapse the banking system today. if all the redault ratdefault r >> i think we're making a different point. i'm not saying it's going to take down the whole economy. i'm saying more stores that have leases on property are going to go out of sxwiz commercial real estate has a lot of pain left in it. i don't think it's going to take down the whole economy.y. >> i was just talking to our credit strategist. if you look at the short maturity bonds my buddy brian reynolds pointed out this morn fug look at short maturity bonds for citigroup they're trading above where they were precrisis levels in '07. so the stock's down from 50 to 4. it's in it. >> guys, some good ideas.

thanks -- go ahead, lee, give us your last thought. >> i would just say that people want to get involved in commercial real estate i'd use something like vnq or iyr, use an index. there are some great names out there, but remember, outside of simon and branatto these are small cap names, they're somewhat illiquid. you need to be careful out there. >> guys, thanks for joining us.. we appreciate it. >> thanks, melissa. here are some other stories we're following on the "closing bell" ticker.. best buy downgraded to neutral from buy because of increasing competition from online retailers and consumer clubs. the consumer retailer is also facing lower prices for big ticket items like televisions. best buy shares on the day trading to the down side by more than 5%. ubs cutting research in motion to neutral from buy on valuation. the stock is up 28% over the past six months. the analyst there also says some investors are concerned the blackberry maker's partner verizon wireless could eventually start offering apple iphones. research in motion shares

trading down on the day by almost 5%. and dish network reporting an 81% plunge in second quarter profit to $63 million. that was much worse than wall street was expecting. but the nation's second largest satellite tv provider added 26,000 net subscribers.s. its first quarterly rise no more than a year.. dish network shares up on the day by almost 5%. a twist in the bank of america merrill lynch saga. now developments in the courtroom and why the bank's settlement with the s.e.c. over bonus money may be more than meets the eye. and later, is it a bad case of double dipping? banks who took taxpayer money are making billions more from overdraft fees. are they gouging consumers at the worst possible time or just making money? the debate just ahead.

hearing in federal court at this hour. the issue, a settlement regarding bank of america's handling of executive bonuses at merrill lynch. cnbc's mary thompson has more on some of the new twists in this ongoing story. mary? >> well, u.s. district court judge jed rakoff has a couple of questions he'd like answered by attorneys from the s.e.c. and bank of america today.

first of all, is the $33 million fine the bank agreed to pay to the government an adequate sum given the serious nature of the allegations made by the s.e.c.? second, how did the two sides come to agree on that amount? and then lastly, will any of the $45 billion in tarp funds bank of america received from the government go to paying that fine? last week without admitting or denying guilt bank of america agreed to pay the fine to settle the s.e.c. charges it made materially false and misleading comments to shareholders. this ahead of their voting on its $50 billion merger with brokerage merrill lynch last december. the s.e.c. claims contrary to public comments b of a had promised 5.6 billion in bonuses to merrill employees but didn't disclose this to shareholders in the proxy. the s.e.c. says the bank should have made this public given the size of the bonus and given merrill's failing financial health at the time of the vote on the merger. now, lawyers say it is unlikely that the judge is going to make any kind of decision today on the settlement. instead, they say look for a

written opinion from judge rakoff later as to whether or not he agrees or disagrees with the settlement or whether he'd like to hear from some witnesses or wants more information before making his decision. back to you. >> all right, mary thompson. thanks so much. will the s.e.c. fine have any material impact on bank of america? dick bove is a financial strategist at rockdale securities. he says it won't and that ken lewis should say. bill pattison is executive director of ctw investment group. he disagrees. thanks so much for joining us. dick, let me start which. when i heard they were going to be paying $33 million for all these billions and bonuses and they didn't have to admit any wrongdoing and everything was fine, i didn't really think it was going to be that easy and it looks like it's not going to be. >> according to this judge it looks like it's not going to be. but the fact is it should be because the real issue for shareholders in bank of america is did they benefit from the acquisition of merrill lynch or someone and it's clear from

looking at earnings of bank of america in the first and second quarter that they clearly benefited. merrill lynch was accretive to the earnings of bank of america, as by the way was countrywide. the other point is after the longer term is bank of america stronger or a weaker company as a result of having merrill lynch? it's clearly a much stronger company. it has 16,000 salespeople. it has operations overseas. it's stronger in the equity markets. its trading is better. so in every way bank of america shareholders benefited by this deal. why should the company be fined for doing something which benefits shareholders? >> will, i mean, what's your answer to that? it does seem at the time ken lewis paid too much, it didn't seem like a great deal, now it's hard to deny it worked out. >> bank of america is far weaker than it should be at this moment of the recovery, and this is laid directly at the feet of ken lewis. ken lewis made these decisions and committed the sin of failure

to disclose. shareholders have to know the terms of these transactions. they didn't know the degree of losses, nor did they know the enormity of the executive bonuses at merrill lynch. the biggest pay for performance failure in recent memory was committed at merrill. bank of america should be in far better shape right now, but it can't shake the stigma of -- >> but phil, i understand you don't like ken lewis, but do you honestly think the company is worse off because it has merrill lynch? >> i think that it's hard to know because shareholders weren't given the facts on the bonuses, on the bonuses and the shape of the company. >> dick, what do you think about ken lewis? >> first off i think what was just said is simply silly. it is easy to know whether the bank is better off or worse off than merrill lynch simply by taking a look at the numbers. the numbers are extraordinarily clear. the numbers show that this company is significantly

stronger as a result of having merrill lynch than if it didn't have it. as far as what i think of ken lewis, he's certainly one of the best managers of banks in the united states. remember, about 20 years ago there were a whole bunch of small regional banks that were vying to become national banks in the united states. only one made it to the top, and that was bank of america, and it made it to the top because of the wise judgments that hugh mccall made in making acquisitions, and even more importantly, the execution that ken lewis demonstrated in making those acquisitions profitable. this is a highly disciplined company. it has 12% of the nation's deposits. in other bank in the history of this country has even come close to that. it's significantly stronger in the capital markets arena because of the acquisition of merrill. it actually is stronger because it acquired countrywide. >> i don't know. i mean, i agree with a lot of things you that say, dick. the only problem is that ken lewis has consistently over time

paid top dollar for his acquisitions, and that's one thing that's a little bit troublesome. i mean, what about the issue, bill, real quick of them paying back this fine with tarp money? they continue to be under the perspective of tarp money. it's kind of a ridiculous comment because money is fungible, but until you shake that stigma it's there. >> that's our point. that's why there flooeds needs to to be new leadership at bank of america. bank of america's the only bank that suffered the enormous losses that still has its leadership in place. the board is changing. ken lewis's days are numbered at bank of america, and the sooner they -- >> i don't know about that. we should all have a bet on this and meet back here at a later date. thanks for joining us. noted economist paul krugman says the u.s. economy may have bottomed out, but is that wishful thing or are fundamentals really supporting that view? we'll look at the scenarios when "the closing bell" returns. access to favorite courses

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the good news is it does not look like the second great depression. after -- for a few months there it did. we had a terrifying plunge. but that seems to be leveling off. so you look at all the various indicators out there, it looks like kind of we've stopped plunging. >> that was the always positive paul krugman speaking with cnbc's martin sung at the world capital markets symposium in malaysia.

and while krugman says the plunge is over, thank goodness, does that mean economic growth is poised for a long-term rebound? we're going to debate that topic. brian levitt is with us, economist at oppenheimer funds. also daniel penrod, senior economic analyst for the california and nevada credit league. thanks to both of you for joining us. credit union league. pardon me. brian, plett start with you. you're still concerned about structural problems in the economy, like a lot of people, through 2010. >> yeah, that's absolutely the case. i mean, i think the near term sort of becomes a cinch at this point when you just look at coming off of very low compareables, whether it's an inventory restocking, auto production, federal stimulus, but when you start to get out into 2010 and beyond, clearly there are some impediments to growths. now, this doesn't mean we crack y. quarter over quarter. it does mean a slower pace of growth, whether it's the excessive debt that continues to remain on the consumer balance sheet and also being taken on by the federal government, but also the deleveraging process where simply the shadow finance system becomes a shell of its former self.. and you don't see the available

credit out there to spur economic growth. >> daniel, that's -- brian's depressing me. do you agree with him? >> well, i take a little different view on that. that may be the wall street perspective. the main street perspective is that there are still people out there looking for funds and there are institutions that are lending, we've seen a lot of community bank and credit union activity helping their members and their customers get those loans, we've seen these requests continue, membership growth continues. we've seen a number of green shoots on the ground level. and those are the things that are really going to push the consumer back up to where they should be. and as we know, consumer is about 70% of the gdp. so that's a big number.. >> daniel, of course i have to say that your league represents 359 credit unions with more than 9 million customers out there right now. so i can see why you might think some of the things you just

said. is there available credit for all these people?? because the story in the "wall street journal" today, of course, was about how, you know, people are so overleveraged and they're not going to be able to go out there and get credit because their revolving debt is so incredibly high and they can't use their houses as aw piggie bank to go and pay off those bills, at the same time banks aren't giving them credit and the consumer's never going to go out and spend again. you disagree with that narrative, right? >> i do. that's incredibly bleak.k. because while there are unfortunately a number of individuals who were caught up in the housing boom and bought at the wrong time and are upside down, there are a number who didn't fall into the trap, that didn't go that route, that went the more secure.. and so while it may be a little more difficult to find the individuals out there, there are still a number of them out there. we've seen mortgage growth every quarter, even through this, quote unquote, recession that we're going through as the credit union members continue to

ask for mortgage loans. and that's in california and nevada, two of the four states that were hit the hardest. >> brian, there are two o'threads to this very depressing scenario. one is that the consumer has overspent itself and will never get out from the debt.. the other is the government is picking up where it left off and leveraging itself out into the future that it can never pay for, right? >> well, that's correct. and first i should say i don't mean to depress everyone. i've -- >> you've got to be honest. you have to tell us what you really think. we don't want just people on with sunny outlooks. >> i don't think a couple percent gdp growth year over year is necessarily depressing. but i would say the consumer does need to work off some of these excesses. when you think of how the government's taking on debt, though, that was a positive. that's what needed to happen at this point in the economic cycle where public demand replaces private demand and that was appropriate. of course over time you do have to pay for that and it remains to be seen whether we pay for it in 2010, 2011. those are going to be policy makers' decisions. but over time it does create

less than pro growth options whether it's raising taxes or scaling back services. where you have to hope for and where the optimism is in all of this is you innovate our way out of this, you create the industries that create the jobs that provide revenues to the government. >> daniel, given that whole scenario, do you think as paul krugman thinks that we should have a second stimulus?s? >> well, anything to get more spending going is a good thing at this point -- >> oh, come on. even -- >> you know what? >> you want to us just leverage our future, our children's future, higher taxes forever? you just heard brian say we're going to take the top off the next growth cycle by, you know, raising taxes and spending all this money. you just want -- >> taking a little off the top may not hurt if it boosts people now.w. the consumer kept spending when the recession started. they got spooked by a few government actions and a few of the big companies that went under, and suddenly they halted. so getting them back in the game is the key.

so if the government can spend some of the money and purchase some things and create some jobs and get programs going, that's going to get people going. so while we don't -- we definitely don't want to see it going really big, we need something right now, and until people see the true change they're not going to believe it. >> i say we wait to see whether this -- let's get this stimulus plan ramped up. i mean, we've seen a lot of the money go to keep municipalities above water. a lot of it through health care and income protection. why don't we start ramping up some of the infrastructure build and let's wait and see if that works? >> i don't know why people and the government overspending is the answer. but anyway, that is a debate for another time. thanks to both of you for joining us.. that was fun. banks are poised to reap $38 billion in overdraft fees this year. should companies getting taxpayer bailouts be jacking up rates and biting the hand that feeds them? come on. we're going to look at the pros and cons coming up next. >> announcer: here's a look at some of today winners and losers. i'm racing cross country in this small sidecar,

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all the government's bailout and stimulus intervention have created all kinds of conflicting interests that are leaving a fog around american capitalism to be sure. cnbc's jane wells is in los angeles with a closer look at the bizarro economy. jane? >> you don't want to look too close, melissa. it's a little ugly. everywhere you turn right now the taxpayer's footing the bill. that's not new. what is new is how often we're suing ourselves or subsidizing ourselves. the best example may be the story mary thompson's reporting on today, mank of america paying a fine to the s.e.c.c. >> i don't know if i'll get to do another acquisition during my career. this is too important not to get right. >> i bet he hates seeing that tape. that was almost a year ago. and in this circle of death -- debt. death, debt. b of a got 45 billion in bailout money. then it bought merrill lynch, which got 10 billion. then b of a spent nearly 6 billion on bonuses to merrill execs without telling shareholders, mostly the taxpayer, and then agreed to settle the charge by paying 33

million to the s.e.c., which is also the taxpayer. all four of those items are filled with taxpayer cash. you also have the s.e.c. suing regents bank, another bank bailed out by taxpayers. so once again we are suing ourselves. then there is the 70 billion spent in the auto bailout by taxpayers followed by a taxpayer subsidized incentive to get taxpayers to buy cars from taxpayer owned banks -- excuse me, taxpayer owned automakers. except congressman brad sherman says all the money here is not going in a circle.e. >> half the money is going to cars engineered, designed, mostly made abroad. >> all right. finally, take aig. please. it got 170 billion in taxpayers' money but ate lot of that money went straight out the door to creditors like goldman sachs, who now along with taxpayer bailed out banks may charge us a billion dollars in fees for advising us how to break up aig, the company we own. melissa, i think i need a drink. >> hey. this is why we should just lower

taxes. because it's like writing a check to ourselves as opposed to sending the money around and around and around in a circle would everybody teaking a little bit along the way. but whatever, that's my editorial. jane wells, thank you so much.. the "financial times" is reporting that u.s. banks stand to gain a record $38.5 billion in overdraft fees. many of the banks in fact have received tarp funds. like jane was saying. so is this fair, all this money going around in a circle? again, especially to the most financially strapped consumers. joining me now to discuss this, daniel alpert, managing director at westwood capital. we also have john ultheimer, president of consumer education at credit.com. thanks to both of you for joining us. daniel, the issue of the day, the raising fees, this is the question i always get whenever i go outside the world of cnbc. they're saying my bank is raising my fees on my credit cards, raising my overdraft fees.. at same time they have my money because they took tarp funds. is this fair? what do you think?

>> it does seem a little bit confusing. but the fact is that one of the things that the government told the banks to do was go out and make a whole lot of money. in fact, if you look at the bank stress tests for the 19 largest banks, it said we expect you to incur $600 billion worth of losses in the next two years, and you're going to need to make at least 350 billion in order to make that up above and beyond your existing reserves.. and these banks are going at it with a vengeance. that's their business. they're supposed to do it. this is a double-edged sword. the fact is obviously people who overdraw their accounts or don't pay on time or whatever, they're trying to provide a disincentive to do that. but they also don't want to lose customers. and so on the other end banks are somewhat -- banks are working with people when it turns out they may miss by a day or two or ten days, they're trying to be reasonably cooperative. >> john, i mean, isn't the bottom line credit is scarce, it's hard to come by right now. whether we're talking about

overdrafts, talking about having a revolving debt on your credit card. so banks should charge a lot for. it's hard to come by. >> credit is definitely scarce. unless you have put yourself in the position to earn better credit and earn more credit from some of these issuers who are making it more difficult for the common man to actually get credit. look, melissa, there are two types of fees that we generally feel. there are punitive fees, when the bank is punishing you for doing something that they don't want you to do, for example, going into an overdraft position. or nuisance knees or service fees like when you go take money out of an atm and they hit you up for three bucks. we can avoid most of these fees. the problem is that these overdraft fees, these are tending to be subsidized by the people who can least afford it, the folks who live paycheck to paycheck and don't have enough money after all their bills have been written essentially to convert bills that come in the next time they get paid. people who make a good amount of money are not feeling this $39 sting every single time they go into an overdraft position. >> so what's the solution? >> i don't know if that's true,

by the way, because at my bank, bank of the united states of america, also known as b of a, which we own a good chunk of, right? that bank started charging crazy fees. i have several accounts with that bank. and i was formerly a customer at u.s. trust, which they acquired last year. and amazingly enough, if one account goes under they won't fill out the balance from another account anymore. i found that out to my great surprise. and of course they start doing that. but the fact is they've been basically removing the tarp, so to speak, and letting all the other fees percolate down. >> but the bottom line is they're trying to -- they're supposed to be out there making money and they are. i mean, we're telling them get your bank healthy so you can pay back the tarp money, but when they go out and earn money we're angry again. isn't the bottom line the government shouldn't get involved in the first place because we're -- >> i totally, totally agree with you. there is way too much government involved in banking right now.

but we tend to focus on the 10 or 15 largest banks in this country. and daniel, you are a customer of one of them. i tend to bank with one of the smaller banks, or a non-bank, a credit union. and guess what, i don't see these types of things, even when i go into an overdraft position. why? because they're not depending on so much of my tarp money to make their ends meet. that's the position that you want to be in. look, if you're not happy with your lender or if you're doing banking business with, then let your money do the voting for you, take it somewhere else. >> the argument i always hear to that is i don't have a that luxury, i can't get a credit card somewhere else because the banks aren't giving out credit cards. how do you respond to that? is that not true? can you go to a credit union and open a bank account and get a credit card easily? >> absolutely. there are thousands and thousands of credit card issuers in this country, and we tend to focus on the top 12 or 15. there is money flowing in regional banks and credit unions, melissa. if you're having trouble getting a credit card from one of these large issuers, the ones that we keep hearing about doing these

adverse things to consumers that forced the card act to come upon us, take your money to a local bank, a regional bank, or credit union. >> daniel, does it bother you what mary thompson said a little bit earlier about bank of america potentially paying off this fine with their tarp money? that's not exactly what's happening, but obviously money's fungible so if they have tarp money and they have to go ahead and pay a $33 million fine it's conceivable to say that's tarp money. >> had we to do it all over again we probably could have come up with a few measure that's would have prevented some of these unintended consequences. clearly there are a number of these things that have happened. when we were talking about the subject we just mentioned, you're talking about three banks, bank of america, citibank, and wells, they control an enormous share of retail banking in this country. and those are the banks that feel the biggest burden because they're also sitting on the hugest number -- hugest amount, rather, of debt that is potentially going abad. all of this is about protecting their balance sheets. banks need to earn as much money

as quickly as they can because the losses keep coming. >> guys, thanks so much for joining us. we appreciate it. >> sure. aig is now on its fourth ceo in the past 14 months, and the ceo position at many companies seems to have become a bit of a revolving door job. so does ceo really matter anymore when it comes to a growing company in we've got some answers when we come back. mr. evans? this is janice from onstar. i have received an automatic signal you've been in a front-end crash. do you need help? yeah. i'll contact emergency services and stay with you. you okay? yeah. onstar. standard for one year on 14 chevy models. i hope he has that insurance. aflac! you really need it these days. how come? well if you're hurt and can't work it pays you cash... yeah to help with everyday bills like gas, the mortgage...

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today aig welcomes robert benmosche as its new ceo. it is the fourth chief executive there in just 14 months. what kind of signal does that send about the importance of the position? we get thoughts from jeffrey sonnenfeld, professor at the yale school of management and cnbc contributor.. we also have libby kitslar, a partner at the corporate practice division of jones day law firm.m. thanks to both of you for joining us. boy, jeff, it is tough to be a ceo these days. i mean, unless you're jamie dimon, who's been practically made a deity in the press, besides him it is very tough out there right now. >> well, you know, it's a longer list than jamie. although -- >> give me some other names. >> a.g. laughly, who's now just stepping down after a very successful reign turning around procter & gamble. we think of it as such a glistening global icon we forget it was flat on its back just before a.g. stepped in there.

ann mulcahy who's stepping in there, actually very young after a successful tour of duty, saving xerox. if it weren't for ann mulcahy.y. ivan seidenberg took a lot of heat from misguided shareholder activists till they realized this man is the savior, building the future of verizon. jim mcnorthwesterny at boeing. on and on and on of people whose leadership style is extraordinary and does have a big impact in the way they lead and the way their businesses thrive and survive. there are cynics out there, but you know, you go to any town square, any village anywhere in the world, melissa, and what do you find? you find a monument not to a committee or a task force but to a bold-thinking individual. >> libby, is it -- are we tougher on these people these days? do they matter less? what's your take on the corner suite? >> i think they matter just as much as they ever have. i think in certain economies and certain industries the role of the ceo has to be defined. for companies in crisis it requires a somewhat different skill set. and the search requires someone

with tremendous vision and great leadership. and frankly people are drawn to these positions who have those kinds of skills. >> yeah. you know, jeff, when i -- it seems like there's more scrutiny than ever before. i mean, maybe there's more media attention. it seems like it's cleared than ever before. i look at robert benmosche, i think it was in the "wall street journal" today, there was a pretty glowing article about his management style and i thought to myself this honeymoon's going to last for about 30 seconds. >> he's a pretty remarkable guy. and you take a look at his predecessor who was revered, ed libby, and you think he certainly is someone who would feel running aig for a dollar a year that no good deed goes unpunished, that he was not a part of the problem and he certainly had to absorb a lot of the heat. but yes, even going into situations of great distress, if you communicate really clearly, it makes a big difference. jamie dimon's communications versus -- vikram pandit is a beautiful example of a very intelligent, brilliant man, and yet -- or ken lewis at bank of

america, vikram pandit of course at citigroup, is that their communications were so opaque and initially quite defensive. jamie tells it like it is. and that sort of ability to discuss these things is fantastic. the verbal side matters. i think much to libby's good news coming from the jones day law firm is the ceo of home depot today and the ceo of pfizer are former attorneys.. and that even that is not a hindrance. >> do you think -- i mean, is there any less incentive to do these jobs today in libby, you look at ed liddy, you know, here's someone who as we look at the last earnings of the quarter, i understand that they didn't pay interest on a huge portion of their debt and that's part of what made the earnings look so good, but there is no doubt that he had a lot of good for this company. he didn't get compensated for it at all. and in fact, he was completely vilified. he made it seem like it is just less desirable to be a ceo these days. or is that not the case? >> the scrutiny is tremendous.

this year of all years we spent a lot of time with our clients helping them prepare their ceos for their shareholder meetings because of all the very tough questions. shareholders are in a tremendous state of pain right now, and they've seen, as everyone knows, their 401(k) balances go down, their investment returns go into the deep negative zones, and they're trying to hold someone accountable. and that is the ceo. >> jeff, what's your best piece of advice? >> there is another twist on this, melissa.. >> go ahead. >> just another twist on it. this speaks to something which you spent so much of your own day covering is some of the immediate pressures on the ceos. the short-termism that's so rampant in america is what hank paulson before we got into this crisis, he pulled together a commission on the competitiveness of our global markets from the u.s., and the problem that he was going to address before he got diverted was looking at the short-termism to try to build a company for the future. whether or not it's in pharmaceuticals or telecom, you have to invest a lot of money

here now, and it doesn't always pay off right now. that puts an added pressure on the ceos. >> libby, what would your best piece of advice be for a ceo? >> well, i think that ceos need to really focus on what the long-term strategy is and to jeff's point really communicate that clearly to shareholders, get the full support of their board and surround themselves with directors and advisers who are really focused on w we specific challenges are of their company. >> okay, guys. thanks so much for joining us. we appreciate it. >> thank you. >> thank you. >> one of the country's largest advertisers on a new aggressive push.. find out who it is and what it means for the economy when we come back. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 i want everything right where i can find it. tdd#: 1-800-345-2550 anything that makes trading easier. tdd#: 1-800-345-2550 i want to be right in the middle of the action-- tdd#: 1-800-345-2550 you know-- i have to see what's going on. tdd#: 1-800-345-2550 and when i pull the trigger... tdd#: 1-800-345-2550 ...i've got to get the best price out there. tdd#: 1-800-345-2550 (announcer) try the new schwab.com tdd#: 1-800-345-2550 for yourself. tdd#: 1-800-345-2550 call 1-888-4schwab tdd#: 1-800-345-2550 or visit schwab.com/trader today.

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anheuser-busch trying to counter a big sales decline, its most popular brand, bud light, by launching a very aggressive ad campaign. what does it mean to the ad market and the economy? >> while overall tv ad spending has fallen off a cliff during

the recession now anheuser-busch is planning to spend more. the brand sales dropped 3% in the first half of the year. that kind of accelerating sales down 7% in the key july 4th period. president of anheuser-busch said in a memo the company is, quote, reinvesting tens of millions of dollars anheuser-busch telling cnbc that the 15 new ads will debut a week from today and the company is currently selling new retail displays. this comes on the heels of media conglomerate ceos saying the ad market is beginning to stabilize and they expect it to improve over the rest of the year. advertisements like budweiser looking to grow market territory and take advantage of the fact that prime tv ad spots are more available now and ad rates are lower. >> the networks had a really rather disastrous up front period and they held back an

awful lot of the inventory thinking that things are going to get better in the third and fourth quarter, so bud can come in right now and pick up at probably the lowest prices.. >> anheuser-busch stock traded up about 2.5% today. the stock is up about 70% year to date. the merge of anheuser-busch and nbev completed last november and this gives an opportunity for the new company to put its brand on the marketing message. when a major force like bud light starts to spend more money and invest in new ads to reach consumers that means some of its rivals might be paying attention to look to spend more so they can compete as well. back to you. >> we are all in favor of more ad dollars spending for whatever reason. thanks, julia. now let's head over to the nasdaq market site where melissa lee is standing by with more of what's coming up. >> the two big events of the week, the fed meeting as well as the $75 billion worth of supply hitting the bond market. we'll give you the trade and

kick off our series this week. the pit boss has a story. all that and more coming up at the top of the hour. >> looking forward to it. the fed holding the latest meeting on interest rates tomorrow. find out what else can move the markets when we come back.