advocating for comprehensive change. >> and pushing people out of the system. have your companies not been dropping coverage of people who they consider too high a risk? >> i'll be happy to give you an answer if you give me a moment to do so. >> neurologicunfortunately, we a moment. you have to give me a yes or no, because we're almost out of time. >> our companies have talked about massive change in the way the market works, so that nobody has to worry about getting in or losing any coverage. >> all right. we're going to have you backs to continue the conversation. >> we're not trying to be rude. we are literally completely out of time. karen, jonathan, thank you, we'll be right back. >> we'll be back.

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good morning and welcome to "the call," everyone, i'm trish regan. 90 minutes into trading. stocks lower. getting hit by financials. investors awaiting the feds' decision on interest rates. we're going to debate that. plus, whether or not the one-month-old summer rally has any legs at all. larry. >> plenty of legs, trish. i'm larry kudlow. the dollar has been rally the past week. in our "call of the wild," we'll discuss whether the green back can continue to power forward and what it means for your portfolio. >> and i'm melissa franz en, gm's electric car out next year, 230 miles to the gallon. we'll discuss whether interest cars will be the catalyst for lifting the auto industry out of the doldrums. this is "the call" on cnbc. all right.

stocks moving lower this morning right from the open, pressured by profit taking and weakness in financials. in addition, a greater than expected drop could lead to a downward revision in the second quarter gdp weighing on the stocks. but on the positive side u productivity higher. the biggest drag on the dow today is ge, down about 1%. the s&p right now down better than 1%. 996 the last trade. the nasdaq right now down 1 spain 33%. trish, what's it like on the floor? >> well, we've got that meeting, two-day meeting beginning today. feds on futures are now pricing in a chance at an uptick in interest rates later this year. so that's something to keep an eye on, certainly a bullish sign. we have also have the productivity report which you mentioned, another bullish sign for the economy, because this is what tends to happen, as you get to the end of the recession. nonetheles nonetheless, financials trading down really causing weakness in the market. we have bob pisani to tell us

more about what dick beauvais had to say, advising investors to get out. >> get out short-term. the important thing is the financials were the big movers last week, up 30% in the last month. look at zion went from 10 to 18 in a month. make some sense to take the profit. citi was 250 a month ago, and went to $4 friday. makes sense to take some profit taking. dick beauvais an analyst is fairly influential and fairly widely read. he said that bank stocks were trading on fumes and said take some short-term profits, that the recent rise we have seen in the last month is driven by a change in psychology. everybody thought that essentially banks were inn solvent and now everything is better but the earnings outlook isn't really improving that much. so the bottom line is, we have seen weakness today and that's the group that makes some sense. will the, remember, cit has been a disappointment, as well. remember last week, they're in a big restructuring effort. they may have to file for bankruptcy. if approximate they don't get this debt tender offer through,

they're going to need that debt tender offer to cover their debts here. they came out this morning, they're delaying their quarterly report because they're still trying to get the restructuring going here, a bit of of a disappointment. >> let's go back to the bank earnings. basically, they're borrowing at next to nothing because interest rates are so low. so at what point really can we -- i mean, they should be making money, third and fourth quarter. >> here's the problem, losses on things like set issues, and credit metrics will overwhelm a lot. and i think that's what beauvais is talking about. yes, they may be able to make some money, but remember, the amount of loans they're giving out greatly reduced, and the loss is still high. >> bob pisani, thank you. we head over to the nasdaq where brian us isman is holding court. >> it's a broad-based sell off, down 1.4%. some of the big names struggling, dell down 2.7%, research in motion, 1.7. cisco, 2.4%. of i want to tell people, materials down 2.4%, reports

after the bell. bob talked about financials. how about zion downgraded and the t.a.r.p. oversight panel talking about how banks may need more capitalization. pharmaceuticals priced at the low end for ipo at 17. just started trading a few minutes ago, down 2.4%. i wanted to bring up avaner pharmaceuticals, off the highs of the day, a late-stage study on an illness where you have uncontrollable laughing or crying, it seems strange, but a million people are affected by it. and you know what? it looks like this stock could be off to the races. small market cap. you want to know as an investor what to do, hgsi was trading under 50 cents in february, now at 15. 94, a new price target of $30. so these small caps can become big caps in a hurry, larry. much so you've got to keep your eye on mr. huckman and bio phrma. >> all right. thanks so much.

the fed beginning its two-day policy meeting on interest rates. a training in rates is not expected. traders are looking for clues as to what's down the road. what's the feds' strategy for the rest of the year. >> let's bring in former governor bob heller, and former chief economist to hank paulson and the great steve liesman is also here. mr. bob howard, let me start with you. do you expect any significant changes from this statement of their last meeting? is anything really going to shift here? >> no. i think they will say that economic activity is now stabili stabilizing. i think that will be the watch word all over the place. >> and phil, just a quickie here. any shift on the fed's purchases of treasuries, mortgage-backed securities? some of that stuff is scheduled to expire, and i think it's september. do you think they're going to make any signals there? >> i do, larry. i would expect that they'll start to hint that those purchases will start to end. much they see the same

stabilization that we all see, and that's the first thing about getting back to a more normal monetary policy. >> steve, talk about this productivity number we got today, the rise in 4.6% makes it feel like business is a coiled spring, ready to unleash as the economy rebounds. at the same time, unit labor costs going down, the employee taking home a smaller paycheck. so you can kind of look at it either way. what do you think? >> yeah, well first i want to just tag on something to what larry just asked phil, which is that there was a headline that was out earlier that the -- the fed's treasury purchase today were cancelled. they were not. it's just that there was a technical glitch which happens from time to time. the results were delayed. we talked to the fed just a couple minutes ago, and they said it's just coming out a little later. and that headline is wrong. it was later corrected by the wire service, but some guys started going around, things get viral in today's atmosphere. on the productivity numbers, what's happening now is that economists are basically throwing out the book on how productivity behaves in a recession. we thought it would come down as

employers have been usually reluctant to fire workers and now they're not reluctant at all, so they keep the most productives on, and creates these surges in the last two sessions in productivity during the downturn, which is right remarkable and really speaks to profitability, but also as you suggest, it hurts workers in the short term. >> well, phil, can i get a clarificati clarification? do you expect the fed not to finish the treasury purchases? they've got, what, 30 to 50 billion left, the program expires in september. or are you suggesting that they're not going to expand when this program ends? because your point is, the key point, a big market impact could have an interest rate effect and maybe a stock effect. >> absolutely, larry. i do expect that they'll finish the program and then that's it. that they're going to start to look for an exit strategy, try to telemarket participants that, hey, we have a weak economy but now we have a normal weak economy. we don't have an extraordinarily weak, it's not unusual. >> i'll add to what phil is

saying. i don't think they're looking for a exit strategy from the treasuries themselves. when you hear what the chairman has said about these treasuries, one of the points they make, phil, is that they are pretty much where they were in terms of treasury holdings before the crisis hilt, because as you know, they unloaded some of those treasuries. so the treasuries may stay on the books of the fed, and the fed may act to replenish them over time as some of them expire. but among the things they'll be exiting from, i don't think treasury is one of them. >> yeah, but bob heller -- in effect, bob heller, the balance sheet has not grown in, what, seven months now? almost eight months? in other words, they put a trillion dollars of round numbers in the fourth quarter of last year. since that time, as some of the emergency programs are running off because the market demand is not there, they have bought the treasury that may end in september. it's a flat balance sheet. is it an exit strategy? that's what i'm asking.

>> no, essentially these programs are designed to self-did he say instruct. 100 about him up for sale, only 43 were auctioned off. so automatically, these programs were shut down because they're at penalty rates. >> and is they're not replacing them. in other words, the replacement rate is neutral. that's the point i'm making. there is no new money creation going on since late december, early january. >> the market realized that -- >> part of the problem is that the talf program which is slated very slow, in terms of how much the market has embraced that program. >> $30 billion? >> right. commercial papers running off, swaps running off and as robert heller said, a lot of programs designed to self destruct are self destructing but the talf program could be as big as a half or $3 trillion.

>> the money market is pricing in bob heller, some teeny weany fed in the first half of 2010. that is a functioning of the economy. do you have a take on the teeny weany fed snugging? >> i think it's read. keep in mind that we will have a new fed chairman. bernanke again -- at least a reappointed one, at the very minimum. >> yeah. >> that's what you were saying, right, bob? >> that's right. either that, or a new one. >> same guy, new term, phil? do you agree with that? >> i would reappoint bernanke. he has done an excellent job, and he has shown that he's the man. >> okay. all right. we're going to leave it there, guys. thanks so much. trish. >> thanks, guys. something certainly for the bulls to celebrate. the summer rally is one month old, a little birthday going on. so can this run continue, and what does wall street want from the fed?

we're going to hear from both a bull and a bear, larry. >> also ahead, a stunner for gm, the company saying its chevy volt is expected to get a whopping 230 miles per gallon. so will this be the catalyst that jump starts the auto industry? find out what our panelists think only here on "the call."

opec cutting demand forecast. and a little more than 2%, 2.3%

on the session. we have a programming note and we'll talk live with james volcker, get his take on where he sees petroleum prices heading later on in the show. trish. >> thanks, melissa. the summer rally one month old today, look at how the gains have stacked up. we have a board we can show you right here. maybe not. there we go. down 107 today. but take a look at that one-month chart up better than 13%. some on wall street are expecting a pullback and others believe this rally still has some legs to it. well, does it? we're going to ask our bull, berry encram and doug de vrut for united wealth management. good to see you. >> thanks, trish. so ernie, you say it is not too late for investors to get into this market. how much more room does it have to go? >> trish, the big question is not can it go farther. i think it can. but clearly, you go up 60% in

five months, and we're giving some back, not a big surprise. but i think if you look out to the end of the year, where do you want to be? do you want to be in treasuries, get no return on the short end, or a modest return on the longer end? especially if interest rates might be rising, if there is any inflationary threat at all. i think there is till some benefits that the growing economy -- we're going to actually see gdp growth i think positive by fourth quarter, and we're in that turn right now, and the market is starting to react to that. >> you know, but doug, there is a lot of concern out there that we may just in fact continue on on a very level pattern, perhaps trade a little bit down. there has been talk of maybe even a double dip recession. how are you playing this? >> oh, i think we're still in the deflationary cycle, especially in real estate and i think the financial services, the banking industry, has still got some ways to go. and liquidity is the biggest issue. you know, there is a tightening of money -- cost of capital is getting more expensive, and i think that's a big issue. and until we get that liquidity

back into the market to the people that actually are -- the consumer, i think we've got some issues in front of us. so -- those are the issues -- >> i don't understand, doug. help me out on this. why is the cost of capital getting higher? corporate bonds have had one of the great rallies of all-time. not only the rates fallen, the spreads have narrowed. you've got an upward sloping yield curve. consumer and credit card rates are edging down. costs of capital are rising? >> if you look at interest rates and what people are borrowing at, it is costing more money to get money. you're actually seeing people going in and especially in the commercial markets, that is actually costing more money. you're in the 7 to 8% range there, whereas, you know, you're borrowing money at 4% two years ago. for commercial property. and i think we have big issues there, that -- and we still have a mass amount of leverage out there that we are still seeing a lot of deleverage being that's going to continue. i think that's why you're going to see people not continue to spend. and ultimately effect the consumer. >> i don't agree with what doug is saying.

maybe in commercial real estate. corporate bonds have had the most extraordinary rally. >> the rally has been fantastic. >> that's where the cost of capital has come down. you have interest rate levels and there is no inflation, but i want to go back to ernie. ernie, everyone is talking about a big correction. i don't know what the definition is. 7%, 10%, 15%. ernie, my thoughts. you tell me. don't we need to see a complete reversal of the better economic news? isn't that swhaz what's driving the market, profit and the economy's improvement, and if that happens, if we have a bone-jarring reversal, then, yeah, we have a bad correction. but if not, why do we have to have this major correction? >> larry, i think we might not have that major correction, if i'm right. but here's the deal. i actually think if we saw a major correction in the economy right now, it could set us up for that w type of experience that a couple of people were talking about this morning on earlier shows. because ultimately, the fed has to have an elegant way to

extract itself from like -- you correctly pointed out to bob heller earlier the mass amount of liquidity we had in the fourth quarter. and i think they'll be able to do that if we slowly grow out of this, and i think that's what's coming. we're going to see gdp growth approximating 3%, maybe by the end of 2010, although we'll have some fits and starts. but ultimately, if we grow slowly without inflation, there is a lot of the fed to -- let these programs disappear, slowly pull liquidity out of the system. if we have to have the fed jump up interest rates in the short term to forestall inflation that comes from overspending in the short run, that's the problem that puts us into i double dip recession. >> when you talk short-term, are you talking the next couple months or later this year into january? because when you look at fed fund futures right now, you're starting to see an uptick in the number 6 of investors come november, december or january. ernie? >> trish, that's because the economy is not as terrible of shape as it was earlier and there was no chance they would

increase interest rates. thing is a risk player rather than a forecast. i think the fed play puts off increasing interest rates in the short run until we find ourselves at least with an unemployment rate under 9%. and right now, i think we're headed to a higher unemployment rate here before the end of 2009, early 2010. >> okay. we've got to leave it there. doug, i see you shaking your head. of realquick. five seconds, tell us your thoughts. >> yeah, i just think that we're going to continue to see issues with liquidity out there, especially affecting the consumer, and that's the thing that's going to drive this market. i really do believe that the consumer is the key here. if we don't get liquidity back there, it's going to take a while for us to get back to a normalcy. >> doug and ernie, thank you so much. it was great to see both of you. of. >> melissa. >> when we come back, can you imagine driving a car that gets at least 230 miles to the gallon? gm says that's what it's expecting from the chevy volt electric hybrid. sounds like a game-changer. >> i guess, so, $40,000 a car. will this be the catalyst for an

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welcome back, everyone, to "the call. looking at the big board, up

almost 110 points, a triple digit i decline, financials weighing on the market, analyst dick beauvais coming up and suggesting investors take their short-term profits while they can. melissa. >> thanks, trish. general motors says its chevy volt rechargeable car due out later next year should get 230 miles to the gallon of gas when driving in the city. phil lebeau is in michigan with the details. phil, you know, is gm in the best position to take it away when it comes to electric cars? what about -- is this a game-changer? what about the prius? >> well, it's a game-changer, and prius is a hybrid, so that's a different cat that you're talking about there. let's explain about the volt and then we can discuss about who the other players are in the electric cars space. this morning in michigan, gceo fritz henderson announcing volt late next year, and according to estimates, 230 miles per gallon, according to gm, the volt will

cost roughly about 3 cents per mile to drive. and according to vice chairman bob lutz, this may be a conservative estimate. >> we're very confident in that 230, and to tell you the truth, we discounted it a little bit, because we hope that in the final third, i wouldn't be surprised to see it even higher than that. >> keep in mind, the chevy volt, which is powered by a huge lithium ion battery pack provides a 300 mile range. in other words, fully charged with the gas assist engine, recharging the electric motor, you can go up to 300 miles. the volt's battery, by the way, being developed by lgkem here in the detroit area. for more on why this may be a game changer, check out behind the wheel.cnbc.com. keep this in mind when looking at the volt. it's a limited production model, when it first come out price tag expected to be about 40 grand. so the impact on the bottom line at gm is going to be no impact. right off the bat. of it's going to be years before

they make money back on the investment in this vehicle. >> besides that, what was that other catch you had in there, phil, it only goes 300 miles and then you plug into the wall? how does that work? >> well, that's essentially it. the battery runs out after 300 miles. you've got a gas engine there that recharges the electric motor. >> right. >> so at some point, you will have to recharge it. but here's the thing, melissa, 65% of americans, they drive fewer than 40 miles in a day, and that's why with the first 40 miles being all electric, general motors believes that for most people, this is the right car. listen, if you're traveling salesman and driving around the midwest, this is not the car for you. and that's not the type of person who would be buying this type of vehicle. mainly for urban areas is where the appeal is going to be with this vehicle. >> all right. stay with us, phil. so will electric cars be the catalyst for an auto industry rebound in the u.s.? let's bring in rebecca lynnlynn director of the auto group for ihs global insight. thanks for joining us. what do you think? when you hear it's 230 miles to the gallon, it sounds like a

game-changer. but then when you hear you have to plug it in somewhere after 300 miles, i don't know. what's your take? >> well, you actually have to -- if you're just going to use batteries, you actually have to plug it in after 40 miles. that's the range. but as phil said, most people commute less than 40 miles, 65% of americans. so there's a really good thing about the vehicle. and it's important to remember that this is our future. we have to start with alternative technology, and alternative power trains, and this is certainly one of them. >> why is this our future, as opposed to the prius? i mean, phil said that's a totally different animal, it doesn't get 230 miles to the gallon, but sounds better than a kariya drive more than 40 miles on. >> well, you can drive more than 40 miles, but you have to plug it in at night. the thing is, when i was listening to the press conference, i realized that in this is going to take a lot of education, and you're really going to be talking about a lot of different things. >> so rebecca, let me get this right. and i can be okay with this. i plug in my cell phone, and i

plug in my volt, right? >> exactly. >> and i'm okay the next morning. >> yes. >> now, i can do that, i think. >> i don't know. i'm not convinced people will really do that. >> well, that's a big question. but why was it only a couple of months ago, rebecca, the obama auto task force kind of dised the volt. they said this wasn't going to work, and gm has got problems. you remember that whole discussion? >> no, that's not what they said, larry. >> what's changed here? >> what did they say? they the said the volt wasn't viable. >> essentially what they said was -- not viable right now. and it's interesting technology that can be developed for the future. keep in mind, the auto task force is focused on gm becoming profitable immediately or as soon as possible. the volt is not going to do that. it's several years down the road. they did not say stop developing the volt. in fact, if you talk with members in the auto task force, they will tell you, the technology in the volt, interesting, fascinating, and that's the future of the industry. the future for the mass market,

many, many years down the road. >> all right. so rebecca, many, many years down the road, how does this effect the rest of gm, or for that matter, the rest of the car business? >> well, we're not looking for significant volume from full electric vehicles like the volt is. gm estimates production at about 60,000 units by 2012, 2013. and then nissan is coming out with their leaf, which they estimate volume of just 5,000 units. but similar to the prius, which sold about 158,000 units last year, it's a very small percentage of the market. but we do have to get these different technologies on the road, and there isn't one solution. auto -- >> does gm have time for this, though? are they going to be in business long enough to develop this? >> well, it's coming -- >> are they're already developing it, melissa. >> yeah, i heard it's going to be a long time before this is something that's a viable solution, before people really want to use it and it gets out there in the mass market. i'm saying, i think gm needs

something right now. >> and they do. they have a full range of vehicles, melissa. >> right. there's a lot of other vehicles out there. this just shows that a full electric vehicle can be viable, and will be viable in a very short amount of time. we're talking months before this hits the road, not years. >> okay. we've got to go. >> so for the balance sheet, they've got other things. >> thanks, guys, for joining us. >> okay. coming up next, we want to move on to the dollar, because the dollar index is aiming for a fourth consecutive day of gains. the question here is can this rally in the greenbacks really continue or is it about to fizzle? we want to answer it in today's "call of the wild" debate. >> also, shares of petroleum up more than 40% this year. what does ceo james volcker see ahead for oil and natural gas prices? he's going to join us first on cnbc, right here on "the call. "

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yes. discount! are you going to buy online? yes! discount! isn't getting discounts great? yes! there's no discount for agreeing with me. yeah, i got carried away. happens to me all the time. helping you save money -- now, that's progressive. call or click today. welcome back to "the call," i'm david faber. another large hedge fund, perhaps one of the largest hedge funds out there, closing down a substantial portion of its operations. this time, it is aticus, a fund that in 2007 had as much as $20 billion under management. that's down to about $5.5 billion. this morning, informing its investors through a letter that it would be closing down two of its three funds. of the largest of which, as you

see that letter, is it's so-called global fund or the flagship fund, also closing a trading fund. and keeping open its european fund. now atticus is run by tim baricat, well-known where as sets were flowing to the asset class, involved in a number of situations a large shareholder. the the fund itself up 19% from its inception in 1996. and there you can see, very, very good performance overall. but the decision by mr. baricet, which is terming a personal decision or a personal one, coming after 15 years, he says of being singularly focused on building and managing atticus, he says it is time to reassess his future. and so roughly $4.5 billion that is in the company's global fund and its trading fund will be dispercented, if you will. $3 billion will be going back to

investors. that being returned to them by the end of the year. the remaining funds are largely those of mr. bariket himself, and he will go on to manage that roughly billion-dollar fortune. yes, hedge fund managers to make a lot 6 money. the european fund will continue to operate under the atticus banner and will continue to be run at roughly a billion and a half dollars. so far having a very good year. as for atticus, again, a fund that had as much as $20 billion under management was down 25% last year, did return some capital, but has gotten a lot smaller. nonetheless, more or less going out. and by the way, it joins obarski, jim polattta, art sandboring, the raptor fund and barski, a parade of big hedge funds that have said goodbye this year. let me send it back to you, trish. >> we have seen a lot of them, and at a time when the market is doing so well.

david faber, thank you so much. we want to get caught up on these markets. we are up triple digits on the dow, thanks in part to the financials today. you had analyst dick beauvais coming out and saying he did not anticipate they would make money in the third and fourth quarters, and that's causing some distress we should say in that sector. he is recommending investors take their profits. you can see the s&p is lower right now, as well as the nasdaq down 1.4%. we want to shift focus from stocks to action in the bond and currency markets, and none other than mr. rick santelli is there at the cme group with more on this bond market and dollar rally. hey, rick. >> trish, i think the equity markets are kind of playing the music, and in essence, the rest of the markets are dancing to the tune. if you look at intraday chart, a ten-day yield, down 7 or 8 basis points today, down 7 or 8 basis points yesterday. so those mid 380s are now high 360 lfrs in terms of yield and a delay in the auction on a

buyback really put everybody in a lather, but the market movement wasn't a lot, it's just traders don't like when they change the schedule on them. now let's look at the foreign exchange markets. a dollar index. inter day, it is fighting here, trying to be close to unchanged. it's dipped a little, but you can see on the one week chart, it's had a good rebound. what's going on? well, it's losing ground almost exclusively in the last hour against the yen. and the yen has had the equity trade. think of the carry trade and think about slower economy, maybe reflected in had equities. commodities pressured lower. maybe that's why it's coming from in the dollar. tail wagging the dog. back to you. >> thanks, rich, very much. so will the dollar continue to rally? it's a very important stock market question, as long as currencies. that's all we're going to ask today in the "call of the wild." let's bring in mark chandler at dbh, author of "making cents of the dollar." and david gilmore, foreign exchange anlytics founder and

partner. is economic growth good for the dollar? i guess that's the place to start. >> i think economic growth is good for the dollar, and that's why the dollar has gained some traction coming up. i don't think there this is a really move move to the dollar. u.s. interest rates still below. we haven't seen a convincing decoupling of this good stocks, bad for the dollar type scenario. we're waiting for that to happen to the issue of buy recommendation on the u.s. dollar. >> dave gilmore, does the fed meeting this week have anything to do with this dollar strength? >> i don't really think so. i think there is some risk that we get news from the fed on its quantitative program and asset purchases. if it does what the bank of england did, for instance, which is surprise everyone and now some kind of extension or addition to what they plan to buy in terms of $300 billion in treasuries, which is due to run out in september, that might be quite negative for the dollar. but i don't think the risk of that is quite -- is seriously high. it would take a bank of england type of surprise.

no one is looking for t don't see it happening tomorrow. interest rates the same. slight upgrade in economic assessment. slightly positive for the dollar. >> dafrd, debt, debt, debt. you look at all of the spending in washington, and the trillions of dollars it's taking to try and get this economy back on track. at what point does this come back to haunt us, at what point does it start to effect u.s. dollar? >> that's a very difficult one to time. in fact, i think it's impossible to know that. i think most people have confidence that the fed is going to be able to unwind its monetary accommodation, relatively effectively. it may not be perfect, but there's quite a bit of confidence in the market that the central banks are going to get this right. the big question is, can government get fiscal deficits in order? can we raise revenues, can we grow our way out of it? all those are very long-term questions. and the currency market is -- tends to be quite myopic, thinking a day out, two days out, two weeks out. >> all right. hang on. we've got -- are we ready for

the breaking news? not yet. all right. we have another question to mark chandler. mark, i'm sorry to break in. we're just on the verge of some breaking news on the madoff issue. mark chandler, with all of the rumors about china not buying dollars, where do you come out on this? is there any tangible evidence they're not buying dollar bonds, they're diversifying away from the dollar? what are the facts in this? there are so many rumors. we know from the u.s. treasury department as the chinese are complaining about the dollar, the need for international monetary regime change, the chinese bought a third of their treasury, they increased their holdings of treasury by 38%, the second half of this year. they continued to buy throughout the first quarter before taking a lit before of profit in may. i think a lot of this stuff about china is mostly politically aimed by the chinese, taking its mind off the idea that the chinese and repegged their currency of the dollar. they have a large growing trade share plus. they've got problems at home. this -- let's not talk about that, let's talk about whether they diversify for dollars.

bottom line no, diversification. >> just chatter. >> just chatter. >> interesting. very interesting. all right. hang on. >> we're still waiting on that breaking news. but in the -- okay, we're going head over to the breaking news desk. >> just got signals out. mary thompson has some breaking news. i'm sorry to put butt in. >> larry, we have looked over the court filings, basically terms of the bail agreement between frank dipascali, the former owner, a $2.5 million bond will be posted, signed by three people with financial -- who are financially responsible. it's secured by $400,000 in equity of mr. dipaskcali's sister's house. as part of the terms of the bail, he will surrender all travel documents, i.e., his passport, and his travel will be restricted to the southern and eastern districts of new york, as well as pennsylvania. now keep in mind, all of this

proceeds today's hearing, which begins at 3:00. it is expected that mr. dipascali, an employee of mr. madoff's for three years will enter a guilty plea. what the charges will be will be determined, it will be known when the u.s. attorney files the charging document, and that is expected when the 3:00 hearing begins today. but again, terms of the bail agreed on to both sides includes the $2.5 million bond. of course, we'll have updates throughout the day. back to you. >> all right. mary torch son, thanks so much. up next, the futures for energy prices and what it means for one of the nation's independent oil and gas companies. >> the ceo of whiting petroleum joins us first on cnbc, to discuss this live at a oil and gas conference going on in denver. keep it here. we are "the call." this is cnbc. i'm racing cross country in this small sidecar,

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okay. remember all those debates we had about windfall profit taxes for oil companies? so yesterday. the price of crude is roughly half what it was a year ago. the wild moves in crude making it tough for oil and gas companies to plan for the future. so where are the experts betting that the price of oil and

natural gas is headed next? the president and ceo of whiting petroleum, jim volcker joins us for a first on cnbc interview at the gas conference in denver. jim, thanks for joining us. let's get right to it. you swung to a loss in the last quarter, mainly because of a hedge you had out there. what happened and where do you think the price of oil is headed now? >> well, thank you, melissa. it's great to be here. in short, whiting views the market today as being about 83 barrels a day worldwide. so that's down roughly about 4 million barrels a day from peak usage last year. and in general, we see prices therefore stabilizing here around $70 a barrel. hopefully for at least the next 12 months or so. and then hopefully as the world economy comes back, and it will be a gentle rise in oil prices, because there is that roughly 4 million barrels easily available

to perhaps 7 million barrels as new production comes on, primarily out of saudi arabia. >> okay. i've got a lot of questions about that. first of all, what was the hedge you had on last quarter? were you betting it was going to go higher, or what happened? >> our hedges are essentially collars with $60 floors and $80 ceilings, and so we really don't lose any cash as a result of that. that's merely a mark to market noncrash transaction. so you can sort of think of it as the midpoint of the trade changes. we mark that to market. but because we don't pay anything, unless the price rises above $80 a barrel and the counter parties don't pay us unless the price falls below $60 a barrel, there's really no net cash effect on whiting. >> okay. you think it's going to go to -- it's going to be about 70. why don't you think when, you know, demand returns and the economy takes off that we're going to sprint back up to

driv triple digits, because it seems like fundamentally almost nothing has changed. you say there is a 4 million barrel cushion, but a lot of people think it was speculators that helped drive the price as well. so what makes you think we're not going to explode again once demands comes back? >> i hope we have tread that pag once already. like a lot of people here, we hope that the rise in commodity prices doesn't surf to cool the recovery. and in general, because of that 4 million barrel cushion, as you appropriately call it, i believe the rise will be more gentle than it was the last time. keep in mind that the last time the demand was up about 87 million barrels a day. and thus, any -- let's call it speculation in the market, just proved to exacerbate that problem. here we do have it, in my opinion, anyway, between that 4

million barrel a day and perhaps a 7 million barrel a day cushion. so at whiting, we're planning -- basical basically, we're making our plans with a $400 million, $440 million drilling budget for 2009. and it's essentially based upon $70 crude. >> okay. i'm not sure what has changed, but we don't have more time, tim. thanks for joining us. i appreciate it. larry. >> thanks very much. "power lunch" at the top of the hour, and here is bill griffith to tell us what's in store. hello, bill. >> hello, larry. coming up, with the fed meeting today and tomorrow, we'll ask the same questions they are asking right now. is the recession over, we headed for a double dip? it's town hall meeting today and you have seen arlen specter's town hall meeting in pennsylvania. the president holds his own in fort smith, new hampshire. could be fireworks, as well. we'll keep an eye on that for

you, and count em, three books hit the bookstores today on bernie madoff. we'll have two of the authors, and try to ask all of the questions we still have about the bernie madoff scandle. >> it's the the town over from where i grew up, fort smith, new hampshire. coming up, the stocks you need to know about for the rest of the trading day, larry. and scott wapner with the call to action. >> jetblue shares flying high, and yum brand not so yummy. and have you seen shares of tnba, eeesh. stocks to watch when we come back.

take a look at target, ahead, 4.4% from 7.8%, came after ackman lost trying to get on the board. trading higher on the day, trish. >> tar-get. i like that. call to action, news of stocks you need to be watching for the rest of today's trading day. we have scott wapner on hand. >> going to go through some stocks to watch here now, cit group down 22%. what a difference a week makes for cit. we thought their restructuring efforts were going fairly well but now delayed their 10q filing saying they can't complete the debt tender, it may have to file for bankruptcy. cit said last month it expected a second quarter loss of $1.5 billion. take a look as well at mbia,

jpmorgan downgrading the stock to underweight from neutral. potentials saying, this is a quote, ultimately cdo and mortgage-backed security related losses will overwhelm capital, and so overwhelming the stock today is what it's doing. there are down 5%. kwonds lick, target to 65 from 49. that comes a day after the bottom line earnings beat expectations. they did reaffirm their full-year guidance toward the high end of the range. nonetheless, fluor is trading lower. as is bank of america. citi, though, raised the price target to 20 bucks from 18, perhaps it's dick beauvais's note, the influential analyst saying the stocks are trading on fumes right now, so perhaps -- and they have run out of gas, i guess. fossil down 12%, big week or retailers, melissa noting what was happening with shares of tar-get.

profits falling for fossil, 30% lower revenues, and amgen is down 2/3 of a percent, initiated at rbc capital. the price target, 72 bucks. the firm says the company turned the ship around. not helping the stock today, though. jetblue, meantime, airlines were down big yesterday as oil prices were higher. and transports really were down in general. but jetblue is up today about 4%. upgraded to buy from neutral over at ftm equity, the target is 10 bucks. melissa, over to you. >> all right, scott wapner, giving us the stocks to watch right now, helping you make money right now, the rest of today. we're going to be right back with last call. this is "the call" on cnbc. 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.

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