guest host is roubini. let's get some final thoughts. the depression at this point, you can at least, you feel comfortable saying that we have a averted a depression. there's still a chance of a double-dip recession. >> yes. that's the good news, but i believe the recession is still there. it's going to be over around the end of the year. i believe the record is going to be very subpar, low trend, 1% at

best compared to 3%. i think it will double dip. the biggest problem is the u.s. consumer, shopped out, saving less. that's going to be the main driver for the economy. con suffsumption being 7% of gd. we had a major boost to personal income because of tax cuts, right? that's essentially had no affect on consumption. it was negative. what's going to happen now that a thaax rebate is gone and july sales look bad. the back-to-school season was awful. where is the growth of the economy coming from? that's the question we're asking. >> always good to see you. thanks for coming in for a couple of hours. make sure you join us tomorrow. "squawk on the street" is coming up next. this is cnbc.com news now. >> u.s. trade deficit came in at just over $27 billion in june. a slightly smaller trade gap than economists were expecting. retailer macy's earned 20 cents

a share for the latest quarter, excluding one-time items. five krecents above estimate. mortgage applications fell 3 1/2% last week. that was led by a drop in refinancing as average mortgage rates edged higher. that's cnbc.com news now. i'm courtney reagan. live from the financial capital of the world, this is "squawk on the street." good morning, everybody. i'm mark haines. futures trading at a very tight range. the fed this morning, trade deficit data showing a widening but not as much as expected. macy's, has has been mentioned, logging a drop in earnings but raising the guidance. not the only one to do that. toll brothers, also. >> that's right. >> it's almost as if a bull and

a bear were playing on a seesaw. we'll find out what's needed to t tip the balance. >> on the tech side of things. microsoft teaming up with the world's largest smart phone manufacture, nokia. mark, you mepgsed names. i know futures are fighting for direction, but cyrus, mining equipment company, up 2%. you remember e-house that real estate company in china? that stock trades here and is going to open up 20% higher. there are several good news stock stories today. >> all right. well, we've got futures pretty much flat. i mean, we're half a point below fair value. you know, that's really nothing. >> and we are going to see -- >> i'm done. >> so i'll go here. what are we wait for? we're waiting for the fed, frankly. let's find out what else is moving. i know we mentioned a few specific names. bob pisani is going to start off with any other highlights.

>> there's a lot of good stuff. the biggest ipo of the year in the u.s. is priced off here. starwood hotels, very well known name. they're going to be buying debt that was used to finance commercial real estate. you heard a lot of these funds coming in in the last few weeks, few days. most talked about ipo is a medical billing system company, they price their ipo at the high end of the range. somewhat a play on health care reform. ceo here is going to be ringing the opening bell. we're going to talk to him about health care reform. let's talk about stocks moving. macy's, not surprisingly, did raise their guidance for the full year and beat under the bottom line. look under the hood a little bit. 62% decline in earnings compared to last year. remember that commodity prices, being under pressure a little bit. economic slowdown. cautious outlook from the ceo. finally, toll brothers.

3% rise in the number of signed contracts during the year. that was first time in four years we saw a year-over-year increase in signed contracts. tradertalk.cnbc.com. brian, how are we looking at the nasdaq? >> slightly higher. the big story really microsoft, the reported deal with nokia with the mobile windows really getting in bed with competitor and it affects a lot of companies. it affects google with android, research in motion, oracle, and, of course, apple and mixed results there. point out in that space, pal m, basically coming out and paying by the second half of next year they should be cash flow positive. i want to point out applied materials. earnings up in premarket. strong across the board. they could return to a profit in the fourth quarter of this year. intel, joint venture with micron could boost flash memory capacity. that obviously net positive, up half a percent. there could be intellectual properties with sandisk.

yahoo! basically whatever you think of the microsoft search deal, anyway, visitors still growing up .8 of 1%. erin, replacing joy global on the conviction list. they're both out today. bucyrus has it again. let's go to bertha coombs who is with oil and commodities at the nymex. >> thanks very much, brian. we've got oil a bit higher this morning but still below $70. we'll be watching for the decision at 2:00 this afternoon. weaker inventory number coming out at 9:30. international energy agency, while it did boost its forecast, it actually trimmed its growth forecast for 2010, global oil demand saying despite the fact that china seems to be ramping up to say things recovery is fairly catch where when you look at the developed countries. we will watch for the eia numbers come out at 10:30. they were seen as a build as 1.2

billion barrels. the interesting figure saw a drawdown but those figures tend to drop quite a lot. you're going to have that ten-year option at 1:00. the fed decision at 2:00. you better have an extra cup of coffee. >> i tell you, extra couple or two of coffee. but also keep in mind, you know the new wisdom out there and probably with good cause is kevin ferry and art cashin of express, many traders, that you need to go to the website now instead of or in addition, addendum to the statement. think ant this. when ben bernanke goes to the capitol hill and somebody asks him a question and he goes, i'll get back to you in writing, usually that means there's going to be a lot of on the other hands. the more i hear of these types of observations, the more i think the exit strategy is going to be awfully muddled. and without a lot of detail. the fed funds market in my opinion and some of the pit  traders is so rich in certain  months, the notion of quantitative easing being

extended is a probability, rate are mostly lower, waiting for the ten-year option today. mark, back to you. >> thank you, rick. in asia overnight, let's look at the numbers. china shanghai composite, whoa, 4 2/3%. nikkei down 4%. hang seng index in hong kong down 3%. guy johnson, what's going on in europe? is it as bad as that? it. >> certainly is. mark, that was yesterday's news. we're pricing in today's news here in europe. and we are generally higher. not by much, but we did see a big drop yesterday. switzerland one of the few exceptions and is trading lower. the world's largest swiss company is disappointing. stoxx 600, gives you a heads up. started in negative territory on the back of what happened in asia but we moved up mid morning. we're up by .3 of 1%. today is really all about the central banks. let me start off with what's been happening in london.

this is a sterling chart. earlier on the dollar got well bid against the british pound. simple reason, the bank of england came out and turned out to be much more bullish than the market was anticipating. the head of the bank of england said the extra $50 billion that's going to be pumped in to ease is necessary because there is a real threat to inflation. you've got to remember that the uk economy is one of the few advanced economies that still has positive inflation. why is he more worried? he's much more worried than ben bernanke. some is suggesting he's deeply concerned we're going to see a fiscal shock next year and that's why he's keeping rates on hold as he is. we did get a much more hawkish start from the norwegians today. this is seen as the lead indicator for when exit strategy is going to take place, erin. we are expecting a statement for the bank, to raise rates probably before anybody else out there. back to you. >> wow.

and they'll do it before hell freezes over, hell being a town in norway, mark. literal real town. congress department releasing the latest international trade data for june got a lot of focus. steve liesman joins us now with the breakdown. good morning, steve. >> only you could get away with that one, erin. only you. this is a really interesting number. what you have here is signs of some stability in global trade after it really fell off a cliff. but here you have demand for u.s. exports abroad essentially offsetting what happened with really surging oil imports. look at the number, better than economists had estimated. better than bea estimated for second quarter gdp. june, the trade deficit down $27 billion. still a big number but way off what it was. it was $28.7 billion. it's a little bit deteriorated from the may number. look at the longer-term chart here to balance the trade. it's gotten quite a bit better from where it was, down in that

$50 billion range on a monthly basis. that's still a large number. minus $27 billion. imports and exports, you can see here that exports beginning pretty much, what do you want to call it when the recession began picking up steam. it helped offset a decline in imports there. so what you have is a global recession. exports have been doing a little bit better than imports helping the trade balance improve. look at consumer goods. they will continue to fall off a cliff after improvement there. so what i think you would see the consumer coming back and you see this number. import of consumer goods going up instead of tended back down. continued pressure on the consumer. and now let's do trade prices, which are up 3.2%. a lot of that is going to be oil. export prices though much more modest, 1.1%. a lot of stories inside this number here, including, by the way, resumption of the growth of trade deficit we have with china, which could be a sign, perhaps of some optimism on the part of those getting ready for

the christmas season, perhaps importing a few more goods from china for the month of june. erin, back to you. >> steve liesman, thank you. and i know we'll see you through the show and i'll see you on "street signs." the fed decision, mary thompson at the breaking news desk. >> tel conference just held. u.s. government official says an initial agreement has been reached between the swiss bank as well as the u.s. government. this basically will allow the u.s. to drop its charges against the swiss bank. this concerning long-running tax evasion case. betails of the settlement were not released but ubs will be turning over the names of some clients. perhaps thousands of its clients. the u.s. government feels they've been trying to evade federal taxes through swiss accounts. again, this is an initial agreement. it has to be signed and the lawyers asking that a hearing on this matter that was scheduled for next monday be removed from the docket. but again, the u.s. government and ubs reaching an initial agreement. the u.s. government then dropping the charges, again, to

swiss banks. back to you. >> all right. up next, is a starwood ipo in the works? what? >> coming back. i remember looking at taking that thing private. >> ipo might be in the works. da brain is concentrating on that one. the word on the street, the buzz beyond and julia boorstin sitting down with redbox president. that's coming up. when this hotel added aflac

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wow. here i am. hi, everybody. hey, have you noticed? things are not that bad in the debt markets or the equity markets markets or even the ipo market. now, that may be saying bit much, of course. we haven't had that many ipos. those that we have had seem to be reflective of the times. i'll start there because this morning we do have that very large, largest of the year, ipo that we've been talking about, i'm sure. starwood property trust, 40.5 million shares will be priced at $20 a share. they're going to raise over $800 million. as i said, this is an reit. it is the biggest initial public offering of the year, begin trading today under stwd.

this is similar to some other things we've seen. penny mac. in other words, raising money to try to capture what is the belief of management that there are great opportunities. in this case, largely in the commercial real estate arena. and largely at this point in the form of commercial mortgage loans and commercial mortgage-backed securities. they'll also be looking at other commercial real estate debt instruments and a bit of rmbs, really just to fill things out p. but that's the plan. and the company is going to be run by our old friend barry sternlik. i remember when we were both young and he was running the old starwood and taking over itt and that battle with hilton. man, that was a long time ago. anyhow, he will be returning to the public markets as a ceo in this case. of course, he no longer runs starwood hotels, htot. that was a long time ago.

he thinks the next five years will be the most attractive real estate periods with investment and supply opportunitieses. shareholders better hope so. now, on this overall subject, thou though, of the primary markets opening up or primary issuance, secondary issuance has been much stronger. you forget just how much equity was issued by the nation's banks, for example, and others. we're moving ahead of ourselves, here, folks. sto sorry about that. but now, as well, of course, we talk a great deal about that debt issuance. not just u.s. debt. look at this non-u.s. dollar denominated debt. it, too, setting records year to date. 2009 versus 2008, $32.3 billion so far, according to dealogic. pfizer leading the charge there with that 10 $1/2 billion deal

that was priced back in may of this year. that gives you a sense here of how much the credit markets have opened up both here and abroad. how much the markets for secondary equity issuance have opened up and now even a bit for primary issuance. let me end on the u.s. debt market. a billion dollar deal this morning from dish networks which reported earnings last week. they are issuing a billion dollars aggregate principle amount, debt securities that will be used for general corporate purposes. there's a look at the stock. again, the ability to come to market with that happened very quickly and it continues at a torrid pace. mark, back to you. up next, the word on the street, the buzz beyond the big board. >> and later, health care billing and payment system provider emdeon, more ipo news. pricing at the top of the range. bob pisani will have the ceo first after the opening bell. first ipo of a company since may

20th, of an operating company. we need to be specific. and a secret stock. this one we'reited about. that's next.

the big board on this wednesday morning. john, always good to see you. i'm looking here at the futures trade. market doesn't know where to go. the stock news is pretty darn solid but everyone is waiting for what the fed is going to do.

what would surprise you? >> what would surprise me is the fed making a move on interest rates. i really don't think that's going to happen. mark opened the show today with a seesaw reference. i think that's what we really have to contend with today. we rallied 30%, 50%, the equity market has just about much technical strength that we can. there might be a few percentage points left. we have to look forward to what profit visibility is going to be for next year before equities can fundamentally move. the fed, it's about the balance sheet. it's not about -- it's about the fed balance sheet. it's not about the fed moving on interest rates just yet. >> do you care if the fed does not extend some of the programs that are set to expire over the next months? is that a market-moving event one way or the other? >> i do think it's a market-moving echbvent. in fact, if the fed chooses not to act on treasuries, we could see shorting of the treasury

market when you look at the massive issuance and government spending. a lot of people would be short in treasuries if it was not for the fed's commitment to purchase treasuries. i think the fed may continue to because we've had this huge rally but house prices are still declining. that's the crest of the whole issue. they could act on mortgages but maybe not so much on treasuries. >> mortgages but not treasuries. that's what we will be watch for as we read this statement. in terms of stock-specific plays, john, what are you looking at today? it's interesting, we had a diverse group of earnings from e-house in china, stocks are going to surge. mining company bucyrus, it's going to be higher. is there any name you're watching? >> i believe the run in technology and the run in materials have been legitimate. we've seen a lot of public spending that's going to fall on projects, so the materials have gone for a big run. there's an opportunity for industrials to continue to move.

they haven't moved so much yet. quite frankly, i'm concerned with a run that consumer cyclicals have been on year to date. i really question rising unemployment rate and falling home price. largest asset is deflating. i question the sustainability of the deleveraging consumer really powering the economy forward in this next recover. >> john lynch, thank you very much. >> thanks, erin. and now let's hand it down to you, mark. >> here i am, down on the floor with the one and only, empire execution fed day. >> yes. >> are we expecting anything? >> you know what? i'm not expecting anything. everybody is looking for the read between the lines. i think the fed is going to be completely blasay. they're going to keep on going that we're going in the right direction, which we already know. everything they're going to say today is already expected. i don't think there's anything unusual. we're not expecting anything. you know, and that the market is going to show. we're going to do nothing today. >> so the fed is not a factor.

>> right now. >> right now. could become later. >> right. >> does that mean we keep going up? >> i don't think so. i think we're going to be in a very, very narrow trading pattern. i think the markets pulling back a little bit or continue to pull back a little bit. not only the bottom line for us is anywhere around, you know, 980, 982 on the s&p. it's not a lot of room on the downside. i don't think it's a lot of room on the upside. a continuing pattern of very, very narrow trading. most boring pattern for us on the trading floor. until something breaks with some sort of positive or negative in any direction, you are not going to see anything. everyone should go on vacation like the french do. i'm thinking about myself. just going back to france. we're not going anywhere. >> i like that advice. >> i knew >> i'll tell my boss. let's all take off. >> it will be a wash. >> thank you, peter costa.

back up stairs to erin. we have the final countdown to the opening bell on the other side of this break on this fed wednesday. and one stock that really stuck out to us today that absolutely nobody is talking about and might matter a whole lot. that's next. when this shoe store added aflac

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you are watching cnbc's "squawk on the street." we are live from the financial capital of the world. the opening bell is going to ring in about a minute and a half. and we are going absolutely nowhere at the open. futures are right at fair value. we're not getting any push one way or the other. >> wait for that fed statement. in the meantime, stock. a chilean company here with the stock exchange, fertilizer company, sqm, you say, why are they so important? they are important because they are the world's biggest producer of lithium, hidroxide and

lithium overall. they are maker of the bolt and the america's energy independent company. >> i thought you said they are an -- >> they must have mining operations. >> biproduct or something? or when you dig up one of them, lithium comes off. >> it may be true. what's interesting is they are chilean but 50% of the lithium comes from bolivia. what's obviously right now the leader of morales, close copatriot of hugo chavez. trade on the battery, there's a trade there. secondly, there's lithium ion batteries that we say are energy independent. you've got to go to bolivia. and if you want to get cobalt in batteries, you have to go to the democratic republic of the

congo. maybe your alliance is shifting from the middle east, but to other places. the only place in the u.s. you can get lithium is nevada. >> here at the big board, western asset management company celebrating a recent ipo of investment grade defined opportunities trusts. ibi is the ticker. at the nasdaq, checkpoint software, ticker chkp. >> mark, we should note that the company making the battery, the lithium ion is lg, south korean company. >> sure. >> big consumer of electronics. >> they have a michigan subsidiary now. market reporters are standing by. let's start with bob pisani here with us. >> biggest iipo of the year, starwood hotels. here's the crowd. waiting for it to open. usually opens after a few minutes. should open somewhere around $20. good pricing.

$20, $50.5 million shares. they raised that. that is going to be used to finance commercial real estate. there's a number of other companies seeking to do similar things here. get a read on this right now. nothing really. $20 here. companies reporting macy's came out. good news here is they're raising the full year guidance. look underneath the hood. show you how much things are done on the downside recently. 9 1/2% drop in same-store sales. bear that in mind. same thing with blp. they beat but had a decline. commodity prices were weaker until very recently. the economic slowdown hurt them as well. toll brothers. come on over here. this was good news. 3% rise in the number of signed contracts during the quarter. that's the first time in four years that the homebuilders saw a year-over-year net increase,

increase in the net contract. toll brothers is just opening up 11%. here is the little bit of early good news for the homebuilders. you know that good news is very choppy recently. we are waiting for george to come by, ceo of emdeon, very successful ipo. come on over here. he is still over there on the podium. come on over here one minute. here's the post here. one of the charming things about the new york stock exchange is when the ceo shows up for the opening, for the ipo, traditionally get to do the first trade. and the ceo will come over here, put 100 share order in for the crowd here and talk a little bit about what's going on. let's say hi to him. george lazenby is here. lazenby, do this quickly. congratulations. >> thank you. >> priced right. this is the talk on the street. a lot of over-subscribing going on. and a lot of interest in this. but let's be honest about this. most people i talk to who are traders say that you are a play

on health care reform. is that a fair characterization? >> we are a play on health care reform. our central position in the market is going to allow us to really reduce the cost of health care. that's something we're keenly focused on. >> let's tell the viewers exactly what you do so there's no misunderstanding here. subscribe it in 15 or 20 second what's your company is doing. >> what emdeon does is facilitates communication between payers and providers to reduce the cost of the administrative side. we're focused on the $360 billion in savings that can be created by reducing administrative costs. >> the obama administration has made advances in medical payment systems a real cornerstone of health care reform. >> yeah. >> you're smack in the middle of that space. >> precisely. we believe we can change how t. way health care is done in the u.s. >> let me talk to you about that. do you think -- what do you want to see from the health care reform plan? what issues do you think are important to advance here? were we better off doing nothing, for example? where do you come down? >> obviously we need to do

something. the costs are out of control. we'd like to see the industry focus on the things that you can do. there's $30 billion in savings that can be created on an annual basis just by implementing slukss like we offer in the marketplace. do what we can do today and let that fund the longer term reform. >> be more specific. specifically, you can save $11 billion a year. just by facilitating electronic payment. most of the payment in health care today, from insurance companies to providers, go pay, print and mail. they print checks. let's do that electronically. >> how do you deal with the security issues? i would like to see this done, i think that it would help facilitate certainly understanding with patients and physicia physicians. how do you know it will be secure enough and not leak out to people who are not authorized to see it? >> emdeon has been the leader in security and health care information for 25 years. our system is very robust in that regard and closed to the market. >> any expansion of health care

people on the insurance rolls would also be of benefit. >> absolutely. the more people are covered, the more benefit to our company. >> finally, what would you say to the critics of reform out there who say we ought to have nothing to do with a public form of health care? where do you come back on the public versus private health care issue? >> i think that honestly the taking six months to try to solve a decades' old problem with a complex system is probably not the way to go. but using the things that we can do today to drive efficiency is where we need to be focused. >> george lazenby, ceo, thanks very much. congratulations. go over there and make the first trade. let's go over to brian shactman standing by at the nasdaq. >> i want him to come up with something that means i don't have to fill everything out in triple to go to the doctor. it might be quiet all of the way through that fed rate decision but that doesn't mean we don't have good stories here. microsoft reported deal with kia. with all the talk of research in motion and apple, the iphone,

this is the global leader in handset. global windows and expanding relationship with a strong competitor could be huge news. okay. google up .4 of a percent. it's going to have an impact on research in motion, oracle, apple, you name it. i'll touch on this, up 2.3%. listen, they were strong earnings. they didn't make money. they lost more than expected. q-4, they reiterated sale rating. yrcw, nicholas tell and garmin on a sell list on goldman sachs. let's go down to bertha coombs at the nymex. >> we're seeing a little touch of weakening in the dollar index. that's giving us a little bit of strength as far as crude at this hour. we have reports out. the iea with its monthly forecast boosting the forecast for demand, saying things are still fairly sttenuous in a lotf regions. demand for gasoline is still

low. api last night out with industry results on inventories. they say that crude stock fell. but the forecast for money here is that we're going to see a build actually when we see that forecast or the reports from the eia at 10:30 this morning. cameron hanover meantime says this market should look at three different things. crude, they say, is like one of the three bears, right now it's too cold. heating oil is just right. and gasoline, they say, remain toos hot given the fact that demand is so low. let's go on over to rick santelli. >> thank you very much, bertha. there are so many ways to look at today. let's start with the deals virtually unchanged but 15 to 16 basis points lower than they were worst case early in the morning on monday when we were in the 380s on the ten-year. dollar index is holding on to the bulk of the true rally. but really very lateral the last

several sessions, including today, of course. now, if the ten-year option $23 billion at 1:00 eastern goes really well today, is that a statement that the players in the option process are so intertwine with the government that maybe they have an idea about quantitative easing, potentially being extended if it doesn't go well does that mean it's not? or does oil then, of course, have no impact and we have to wait until 2:15 eastern? these are the issues. think about it. if you wanted to buy into the ten-year option, considering those potential headwinds or tail winds that could help you or hurt you in the statement, would you just wait for the secondary market and trade it then? so there's going to be some fun at 1:00 eastern today, rest assured. erin, back to you. >> thank you very much, rick. in the meantime, lots of headlines. microsoft and noyokota, top of e list. iphone, blackberry and another favorite in the palm family, add that on, too. jim goldman has more.

good morning, jim. >> very good point, erin. microsoft and nokia now confirming their alliance will be formally announced in a media teleconference at 11:00 eastern this morning. neither has ever embarked on an alliance of this scope and nature with microsoft and noeki. microsoft bringing office mobile and other business communication software to nokia's handsets. to microsoft, this is a big deal. apple grabbed the lion's share but nokia is the world's biggest player in the space, sell 2:00 million devices so far. what could be the beginning stages of the market share leaps enjoyed by iphone, blackberry. >> you mentioned apple, and there's clearly a cool factor and so forth, but indeed, an organization like nokia has demonstrated with, i think, just out last night, 45% market share in that space. that's something that catches our attention. you take nokia and their strength there and clearly our

very strong footprint around microsoft office, put those two together and it's a great combination. >> for nokia, the deal sets aside a bitter rivalry with microsoft. nokia choosing the operating system on the handsets over windows mobile. the deal today is only for office and related products, but this could expand. >> i want to make clear that we are fully committed and this is a key part of our strategy, a long, long time to come. i think that's the first point. the second thing is that, of course, in a successful corporation that we and two companies, i think there's a possibility that it expands to other areas, brings new possibilities. >> nokia still enjoys that 45% market share in the smart phone sector. but you have to think a deal like this makes the folks sweat just a little. most execs appreciate the stories behind rim and apple but may market share numbers is what counts.

when i asked about the new palm and pre, for example, they both laughed. google begins to roll out android, microsoft's deal with nokia becomes all the more important. this would have been a bigger deal, sure, had microsoft scored windows mobile but you take what you can get. this is a big step for both company, none the less. mark, back to you. >> all right, thank you. markets kind of teetering in the positive territory this morning. looks like the open could go either way. could the summer rally be slowly starting to come back the life? joining us is jeff are live capital management and kristen, chairman and cio. jeff, i'll start with you. is the rally still in gear? >> i definitely think it is. i mean, when we look at the market or we look at stock, we look through three lenses, we look at fundamental, valuation and technicals. i think in each of those categories, fundamentally, employment is improving,

earnings are pretty solid. look at housing inventories, that's pretty good. valuation, stocks compete with cash and bonds. on that front, i think stocks are pretty good stead. technically, we like the price trend. we like what we see in terms of breadth. you should expect some correction after you have a 38% retracement that everyone is talking about. that's normal. a ton of cash on the sidelines. if everyone was in, we would be nervous. but everyone's not in. so we feel pretty good about a cyclical recovery here in the market. >> chris, your view? >> i agree. i think that we're going to continue to see a little bit of a lift. we think that we're going to go back and probably test those highs we saw just a couple of days ago. the key is if we do not break the new highs and the shorts don't get squeezed even more, then if we pull back below yesterday's lows, i think we're going to start that correction and it could be pretty nasty from there. but short-term, momentum is on the upside. >> christopher, your point though is that we could go down as much as 10%, 12% early this

fall, right? >> that's correct. i think people have to be protected. they have to put in stops or some kind of derivative to protect themselves, whether it be selling calls against their positions or risk reversals where you sell a call and use that premium to buy a foot to make sure you sleep a little better at night. >> the area where you see opportunity, chris, are select area of financials. i want to highlight one area you mentioned. jim cramer and i were talking about this yesterday. insurance companies. now, is that health insurance companies, is this a tradeoff what's happening in washington, or is that anything but health insurance companies? >> i think there is a trade in the health insurance companies. you have to be selective there. we believe the health care reform is going to be more mild than people expected. therefore when you get the final news and people can price that into valuations you're going to get a lift in the stock because it's not going to be as bad as people were afraid of. >> jeff, do you have any specific areas? >> we had the bar bell that

everyone was talking about now on for two years. beginning in the spring we really started moving to thoughtfully and incrementally, not heroically, put some beta in the portfolio. you heard a lot of people talk about tac and industrials and energy and materials, bewill be there. but we like consumer discretionaries as well. but the idea is to add some beta and cyclicality into the portfolio. >> briefly, what do you expect from the fed today? >> you know, not a whole lot. i think that they'll continue to say, hey, we're going to be supportive in terms of the treasury program. you know, i don't expect them to necessarily extend it but i think that they'ller on t err o side of conservatism. >> i think if you come out with anything where they do not support the treasury market, we will sell off dramatically in that news, treasuries and stock.

bottom line, they don't want to rock the boat right now. >> thank you both very much. >> thank y'all. up next, the next generation of movie renting or the bane of film studios existence? >> julia boorstin sits down with the president of redbox, first on cnbc.

redbox, the red kiosks that recent movies around the country in retailers and grocery stores. julia boorstin is going to tell you. she has more on a first on cnbc interview. julia? >> well, erin, movie studios are split, undervaluing movies and eating into home video revenues. others are embracing the business and striking deals with the company. mitch lowe, president of redbox, oined by coinstar, joins us in this debate. thank you for being here.

>> good morning, julia. >> universal is opposing redbox, delaying them on dvd before supplying them to redbox. they sued them to keep the supply of movies coming. you're now leading a ruling. how big a problem is there opposition for the studios? >> good morning, julia. redbox has developed a very efficient movie distribution model. it results in significant savings. we passed some of that on to the studios, but the majority of that to our customers. and our customers are king. and we continue to provide them the hit new releases that they require and we've built an amazing ability to acquire their product despite these challenges that they've put in our way. >> and do you see opposition from major studios like fox and universal being a problem in your business going forward?

>> it results in more challenges, but we have figured out ways to get around it. >> such as what? >> well, you know, we buy their product. you know, years ago the studios tried to stop video stores from even starting their business. and congress passed the first sale amendment which allows video stores to set their own pricing and acquire their product. and what it does is it opens options for the customer. and question continue to rely on that law. >> well, on the other end of the spectrum, sony pictures entertainment and lion scape have five-year deals with redbox. redbox is agreeing to not send previously viewed products to the market. how did you take them to get on board? >> our huge and growing customer base is a real win for the studios. several studios, in fact, the majority of the studios realize that redbox can offer greater

opportunity to expose their product, which results in more sales. for the customer, it provides more copies of the hit new releases. so the majority of the studios understand that our business model is good for them and for the customer. >> well, so dvd sales are down across the board, but rentals continue to rise. why is redbox, as you mentioned, good for the movie industry? >> well, it's an incredible value. as a result, especially in these tough economic times, it provides the value that gets customers to rent more movies. our customers rent about 20% more films than they would have in a higher-priced model. and they turn that savings into purchasing. in fact, our customers will buy about 77 million disks this year over $1 billion worth of new dvds. so it's good for everybody because they turn that savings

into purchases, and also for health hou household expenses. >> coinstar reported earnings and revenues more than doubled from a year ago to $189 million. how can you keep up with that kind of growth? >> you know, for the last six years we've doubled in revenue, projected to be over $750 million this year. the reason is all about the value we deliver our customers. >> great. >> and it's a word of mouth growth. we do very little in the form of advertising. >> great. mitch lowe, thank you for joining us. we look forward to seeing how the company continues to grow and how the lawsuits turn out. thank you very much. erin, back over to you. >> thank you, julia. and next, industrial metals gaining nearly doubling, mark. >> really? >> yeah. since that infamous day when you sat down. the sector is an indicator of manufacturing output, which is the key to whether we're going to get a "v," a "u," an "l," an

"l" with an upward slope. why he thinks now is the time to be bullish, and what it's saying about our economy. c

our next guest says investors who want to capitalize on the coming economic rebound should put their money on metals. demand rising out of china, look at prices are up about 90% so that's nearly doubling, mark, since the haines bottom. here to tell us which metals has the upside potential and which one to avoid, good to have you with us, michael. i'm hoping you can hear me because i see you're trying to hold your ear piece in. the bottom line is they have already stirred so much on the expectation of economic recovery. do you still see upside in prices? >> i would say that the industrials have been used as a reflation trade basically

through the first half of the year. i believe there was another positioning ahead of the global economic recovery. you have to say that you have seen some amazing prices. starting just for the moment i would probably be a little bit cautious. we may see a little bit of a breather coming through. but then especially as you move into 2010, by all means, our forecast of the global economy is reacceleration. i think that should boost demand for all of the industrial metals. but at the same time, i think that is a critical issue is the supply for many of the industrial metals hasn't really increased a lot. so, yeah, no, i think industrial metals remain a good story for next year. >> one thing a lot of people are betting on is the cash for clunkers program in the u.s., which even at its peak would be, what, let's just say 750,000 cars and they're saying that would be a big push for metals. but i'm not quite understanding that fully because you've done cash for clunkers in germany with a couple million cars, which is way bigger than ours,

and that didn't appear to move demand for these metals. so, is there really a cash for clunkers trade here? >> i think -- i think that very same play into that. the first thing that i would say is that all of those kinds of programs play particularly towards sales. but matters in demand is actual car production. so what we need to see to get a boost for demand is that those things lead to higher production. what we have seen at least during the past few months is that car has been drawn down. that has to some extent limited to impact of that stimulus. but we do see at the same time now that those car inventors are relatively lower. increasing in the third quarter and the fourth quarter, you could actually see the higher sales that are coming through right now should provide an incentive for the car producers to increase production. ultimately, should provide a boost for demand. but at the same time, though,

clearly, that sales they are doing now are sales you won't do in 2010 or 2011. so it's demand that is lacking there. so a little bit of a short in terms of support, but medium term, i think relatively neutral to bearish. >> you bumped the target for congress you're -- copper up dramatically with housing and autos flat on their back. why would you be so bullish on copper? >> sorry, i didn't catch that, but i guess -- >> i say you raised your target on copper dramatically, with housing and autos doing so poorly, why would you like copper? >> yes, i did. we like copper for two reasons. the first reason is, again, the supply side. basically, copper has seen a tight supply for several years now. producers now have delayed projects. they have cut production. so you're moving out of

recession into an environment that demand is going up. and i think producers will struggle even more to satisfy rising demand. at the same time, what normally happens in a recession is that the report eed inventories are replenished and this happen only to a very limited extent for copper right now. and that means that the safety parts that you have for higher demand is really, really low. and that is bullish now for copper. >> michael, thank you very much. on industrial metals, he likes them. >> he likes them, except for aluminum. coming up, fresh housing data, the national association of realtors minutes away from releasing its second quarter metro home price report. this on the heels of toll brothers saying it sees a turn around. >> that's right. diana olick is going to rush us

those numbers just as soon as she gets them. she'll get them first. by the way, mark, look at that market. >> yeah. how about that. >> 100 points. it was doing absolutely nothing waiting for the fed decision. but the news we had was positive. we're up 102. we'll see if the housing market will move it.

live, oh, yeah, doesn't get any more live than this. you can't get a more live show. >> than this one. >> than this one. the original "squawk on the street," the second hour thereof begins now. and we are having, all of a sudden, a really nice day on the market. kind of caught by surprised, but we're not complaining. electronics, stock up 5%. piper jefferies and china both 52-week highs. lots of stuff going on. we'll bring it to you. >> and let's get -- talk to bob pisani first. bob, literally we were treading water. then we went up 100 points. what is the reason? >> well, you can look at certain sectors that are doing better like builders and also financial

stocks that were under pressure really turned around. also did fairly well on the ipos here today with the money that came into the market here. two big ipos. look at emdeon, we had the ceo on earlier on, his play on the health care system. 23.7 million shares. it opened at $17.50. it's still trade ag above that. that was pretty good here. they do, of course, a play on health care reform, really. medical billing system. starwood capital, 50.5 million at $20. that price and talk with increased rather notably in thep last couple of days.p it opened at $19.50. it's $19.84, a little above the talk -- the price at $20, still pretty good considering the increase of the size of that offer. these guys, of course, really, they're going out and buying debt that was used to finance commercial real estate. for the rest of the market, homebuilders under stress for the last few days. toll brothers come out, 3% rise in signed contract.

first year over year rise in four years. and that's why the builders have helped turn around. that's good news. the banks have been under pressure for the last few days. they have stabilized all the major players. in fact, all of the major players are trading to the upside. tradertalk.cnbc.com and the nasdaq is helping out a little bit here, brian. >> we reversed all of yesterday's losses and then some. staring down the barrel of 2000 once again here the the nasdaq. keep an eye on that. see what happens leading into, of course, the fed decision. i want to talk about the chips quickly. definitely out performing the semiconductor index at 1.8%. a lot of positive news. aman a applied materials said they would return to profitability at q-4. intel, the reports are that joint venture with micron is going to boost flash memory capacity, this innovation going on. and kree had very strong earnings. microsoft reported deal with nokia being digested positively. coinstar story is fascinated

with redbox because dvd maybe saving technologiwise, but lower end of the market, it's still growth. redbox is something we're going to be talking about. due cyrsiqe ducyrus, up today.qe let's go to mr. santelli in qe chicago. >> thank you. i tell you what, it's so interesting today to watch how the one issue, ten years that haven't been opsed, how they're behaving on a yield basis, versus the rest of the curve. of course, they ebb and flow together. they were 390 when we were 38 0s, now the wio yields, lowest in the cycle. high 360. very similar to the ten-year, the old guy. think about it, at 2:15, we get a statement. at 1:00 eastern investors, dealers, central banks, all have to decide if they want to buy the option. the results are the strategy

going in are going to be largely impacted by the statement and whether we keep buying treasuries. so stay tuned. as far as going in, hey, rates are going up, stocks going up, dollar going down. seems like old times. back to you, erin. >> thank you very much, rick santelli. still up 7. let's get the numbers from the national association of realtors. report on second quarter him prices. diana olick has it all for us. >> that's right, erin. home sales are climbing back but all thanks to still falling prices. the price report shows sales rose 3.8% in q-2 from q-1 to seasonally adjusted annual rate. still nearly 3% below a year ago. 39 states showing quarter-to-quarter increases and right here in d.c. as well. double-digit gains in some states like maryland, new york, new jersey, indiana and washington state to name a few. like i said, it's all thanks to falling prices. in the second quarter, 129 out of the 155 metropolitan

statistically areas reported lower median existing single family home price from a year ago. 26 with price gains. distressed sales, foreclosures and sort sales, 36% of the transactions. again, pulling prices down. disstressed properties typically sell at a 15% to 20% discounted to their comp. national median price is down to 174,000. that's below q-2, 2008. a couple of key facts in this report do not bode well for the second half of this year. number one, first-time home buyers accounted for one-third of all transactions. taking advantage of that tax credit which, unfortunately expires in november. secondly, mortgage rates fell to a rofrd low 5.03% in q-2, hoping to push sales. but the mortgage bankers reported that the 30-year fix last week was at 5.38% and application volume was down. go to the blog

realtycheck.cnbc.com. bern thie madoff, ten charg. frank dipascali told a court yesterday he knew what he was doing, knew it was criminal but he did it anyway. who was this guy? mary thompson in the courtroom had the answers for us. mary? >> during the two-hour hearing the 52-year-old dipascali described how under the direction of his mentor and boss bernie madoff he created false statements for investors and false documents to cover up the $65 million ponzi scheme he called a catastrophe. madoff's former cfo is pleading guilty to all ten counts. in a dark striped suit and pink tie, he was emotional in describing his role in the fraud and while the prosecution and defense pointed out he had been cooperating with the government since january. judge richard sullivan denied request for bail, sending him straight to jail. dipascali facing 125 years,

sullivan sadie pascally had ample reason to flee. he had little comfort to victims. >> well, there is that nano second of perverse pleasure you get because you've been suffering for so long, but it then, of course, you realize it doesn't really mean anything because you are left with a hard life that i've been left with. >> dipascali said the fraud began in the late '80s and early '90s. he knew what he did was fraud but he believed madoff had assets elsewhere to pay them back. they joined right out of high school and was madoff's go-to guy for the scam and supervisor and lure for the scam. a strategy dipascali said he, madoff and others knew was never deployed. mark and erin? >> mary, do we know what they did with all the money?

>> well, in the hearing yesterday, dipascali said the money was put into a bank account managed by madoff. and in the s.e.c.'s complaint against dipascali, they say it was a jpmorgan account. and dipascali said every day he put together a record of this account for mr. madoff, so he knew exactly how much money was in there. the redemptions were issued from that account for the investors and also dipascali took money out for himself, buying a poet boat from the funds with that account, as did mr. mad i don't have allegedly using it for personal expenses as well. >> mary, so when are we going to -- and others, and they say he's been cooperating. do they already know who the others are and they aren't ready to come forward with charges? do we not know who they are? when are we going to find out? >> of course, prosecution declined comment on that. we are expecting that indictments will follow. the others were unnamed. mr. dipascali never, again, gave names during his hearing in none of this. no names have been released in

any of the complaints that have been filed by the government. but it is expected, of course, that other indictments will follow. and even if he's jailed, he's in the manhattan or metropolitan correctional facility, it's expected that mr. dipascali will continue to cooperate with the government. sentencing date of may 2010 has been set. his sentencing date depends on how much cooperation he has provided to the government since then. >> thank you, mary tofr son. up next, our task force takes on the doom and gloom upon from "squawk box." is it really all that bad? and our "young and successful" series continues with fortune 500 companies. plus, will sovereign wealth save our bacon? what an interesting choice of food. it's back and bigger and its managers -- we'll will b. right back. these days, when you have to spend,

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in the 20th month of the recession, the worst we have seen certain over the last 60 years. so the "v" is going to be over by december. exactly 24 months.

>> oh, man, dr. doom. roubini if you watched "squawk box" this morning and are still watching, we have a little antidote for the doom and gloom that they were peddling. faber, doom, doom, gloom, kaboom report, down play the out of the woods talk about recent economic data and the lightning up to the fed. joining us at the nyse hooper, chief economist of deutsche bank securities fund, joining us from midtown, managing director with zypher. and, of course, steve liesman. peter, are things as bad as roubini thinks? >> mark, we're in for a relatively sluggish recovery, but we follow up, it's going to be a significant bounce from here.

even if we don't get any consumer spending, business spending is dormant. the drop in inventories we've had over the last couple of quarters, we do back to zero inventory accumulation is zero to growth. the fiscal stimulus already in the pipeline as another percentage point. so baseline, 2 percentage points over the next four quarters, at least, has got to be some bounceback in consumer durables. we're seeing the autos pick up. helped by the cash for clunkers. more fundamentally, demand there. and you're going to begin to see business coming back from a very low level spending. and finally, home building, we're starting to see some signs, but that's a very low level. we're going to start at a tremendously low base, bounce. looks good, 2% at least. that's sluggish by historical standards. >> you're not a gloomy guy. >> i think peter is right on in the analysis.

the way the numbers work, you're going to have a couple good quarters here. the stimulus is going to keep going all through next year. where you have to start to have concern is nothing to act on now, is in '11 the government has to become contractionary and raise taxes and cut spending to address the deficit. how much will the private sector have taken up at that point. we have to see how consumers, whether they continue in a long-term deleveraging mode, when businesses are willing to start spending. right now you go with the flow. you're going tv the bounce, productivity is high. you're going to have a very attractive corporate profit picture. if you look at what can go wrong out there, the stimulus expires. >> steve, i know this is a tough number to get at. we've seen a drop in capital spending by companies. it's still dropping, 9%. but not as much as it was. if you take inventories back to -- i don't want to say where they were.

that's obvious will the whole point. they my may not get there. how much is that rebuild just in and of itself? >> well, i don't know what the detraction of business investment was last quarter for gdp. i can look it up when you ask the next question. whang peter was talking about. you have to go to neutral. you have to take away the subtractions and that, then, adds to growth. you know, i think that what you just heard jim and peter say is very interesting. that this rebound is baked in the cake. and now the discussion is the next six months but the six months after that. i think that's very much what the fed is thinking about. i think one of the things you can look at over the next six months is does the restructuring process continue, the toxic assets are still there. there is a breather space here. and the hope is and the requirement is that we continue to work through these problems and don't stop. if this opportunity is used to keep the status go in place, then there's a reason for pessimism on the other side of

six months. in instead we dig down and keep going with reform and regulatory system and restructuring of the deleveraging process, then there's the other side of this six-month statistically recovery, which the what many economists call it. >> we keep coming back to this at this point, every time we have this conversation, the issue of housing. that, you know, we are -- housing prices are still dropping and some people say you can nearly have half of mortgages under water, where the mortgage is worth more than the home by 2011. if that's the case, what happens to your nice four quarters of inventory rebuilding in government spending? do we go back to negative growth or just sit there? >> erin, the risk in housing is really for the financial sector, the banking sector. the fact that home prices are m falling and we have a lot of foreclosures coming, which can put further downward in prices and hurt financial assets. the home building is already at levels that are way below demographic trends. at levels that will start to

work off the excess in rapid pace ahead. i expect to see home building come off this 500,000 or less in terms of starting in the 6, 700. if it does, that's a tremendous increase in percentage terms. >> you get the last word. by the way, want to say, i did for a little bit with peter on that point. seems to me it remains in the dumps. people just don't feel the wealth affect is the problem. you get the last word. cheer us up, pal. >> well, there are plenty of opportunities to make money even in a so-so environment. as peter said, there's tremendous opportunity in stress. tremendous opportunity in the credit markets. there's tremendous opportunity in the emerging markets, which really have terrific growth. in the large cap u.s. companies that service the emerging mafrkmafrk markets. those four areas should work. it's always a chance to make money. >> there you go.

thank you both very much for adding to the debate. coming up, another edition of the faber report. david's going long over short interests. but first, stocks on the move on the list, allstate and s sara lee. i'm racing cross country in this small sidecar,

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tracking the markets and the stocks moving here. check out sara lee, oh, boy. the fourth quarter loss did narrow but it looks like four cents a share is not necessarily comparable to estimates to some charges in there. their full year x items look light on the revenue and sale -- eps basis. that stock worst single performer in the s&p 500. the solar stocks under pressure, j.a. solar down 14%. second quarter loss at $28

million, twice as wide as wall street had expected. a 51% decline in revenue. allstate higher here today to buy from neutral this morning. they see $1.8 billion in positive portfolio adjustments going forward. premiums are drifting higher. claims at historical lows. bucyrus replaces joy global. milwaukee cross-town rival on the conviction buy list at goldman sachs. they're both still buys. as is david faber, who is along with the faber report. >> thanks, matt nesto. you know, it's funny looking around these days you might pick your head up and say, geez, feels a lot like the good old days, where, oh, guys will run lbo funds can send out stock for a secondary offering even though the stock, of course, of the actual entity has performed poorly, or old names in the real estate industry can come out and raise $800 million. what am i talking about there?

barry sternlicht who used to run starwood hotels but, of course, got his start in real estate and has stayed in real estate is or has actually successfully raised $800 million in the public markets for an reit that will invest primarily in commercial mortgage-backed securities, commercial loans backing commercial real estate. all sorts of different what he believes are distressed assets related to commercial real estate, which, of course, is an area that he knows quite well. for that privilege, you're going to pay 1 1/2% management fee every year. raised that money, so you'll pay it on that roughly $800 million right now. that could go up. you see the stock has actually broken syndicate bid, trading below the $20 level at which the shares were issued. i'm still tryinging to figure out the incentive fee. mabrey next week i'll have that one sorted out. it's a little complicated. maybe it's not but it reads very

complicated. the point though being, of course, they'll get rich even if you might not. speaking of that, anybody take a look at apollo investment group. shareholders there certainly have, unless they got in in the last few months, in which case the stock has moved up sharply. but apollo investment group and all the friends over there at apollo able to sell 15 million new shares into the market to raise money. pay down debt. apollo you may recall launched the closed-in fund to invest in all sorts of different insubordinated debt and seen your secured loans and preferred equity, lots of portfolio companies. there's a looking a chumly as of the last quarter. 26% in senior secured loans. 68% subordinated debt. preferred equity, common warrants. look at the long-term stock price but also look at this. this sh the key, again. they'll get rich even if you

might not. net operating expenses. 25 million a quarter right now being paid out in fees. so even now they're running at one had been million a year in fees. very nice, isn't it? let's go back to that two year before we wrap, which kind of makes the point, doesn't it? yeah. it hasn't been pretty. it has not been pretty. although, again, way, way off the lows. erin, back to you. >> thank you very much, mr. faber. and breaking news on inventory data from the energy information agency. let's get to sharon epperson for the numbers. crude is up more than a dollar. what are you seeing? >> coming off from the highs right now. we're looking at -- it looks like an increase of -- sorry. it looks like they're up 2 1/2 million barrels. crude supplies are up 2 1/2 million barrels. gasoline supplies down 1 million barrels. and distillate fuel supplies the down. it's greater than expectation.

the decline in gasoline supplies was expected but they're expected to be a decrease in distillate fuel, not an increase there. as a result, you said that crude prices were up a dollar, yes they were before this number came out. right now we're up only 85 cents or so, just above $70 a barrel. i'm joined by ray carbone, veteran trader on the floor. it was a surprise. >> it was a surprise. now we're going back to a fundamental picture for the moment. we were follow equity, following the dollar, losing value and now we're back to where refiners cut back. decrease in gasoline stock. increase in crude. it fits into a fund mment tally weak picture. >> down 83.5% capacity. as we look at the fundamental, sometimes they only last though for a moment, ray. are we going to go back to following the currency later in the session? >> my guess is the stocks rally and the fed comes out with a decision not supportive of the dollar, we are going to go back

up. but right now back to the emergency agency report yesterday, lower for demand in 2010. we know what the fundamental picture is. will the equities tramp snut. >> it has been bearish on the demand outlook for quite some time. and now they're saying that that demand for 2010 may be down by 100,000 barrels. is the reality of what you've seen and the reports you've seen? does it look like demand will continue to weak snn. >> this whole rally has been without demand. we don't see any demand now. this is all projected demand based on equities, based on a lower dollar valuation. so i think it fits right in. but we'll see how long it lasts. >> we will see. we're looking at crude prices now, again, just above $70 a barrel. up about 94 cents after that eia report. thank you, sharon. coming up, rebecca jarvis on the may sicy's conference call. we'll be right back. and our market rally continues.

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major market averages highs after the session search for direction. honing in on the positive and getting ready for the fed's decision, where we really do expect some sort of news one way or the other beyond their buying up treasuries today. perhaps the outlook on the economy and inflation, ahead of

the market highs of the session. let us look at the advancers/decliners, mark, and see what we find. >> looking pretty good. >> looks pretty darn good. >> 3 1/2. >> 3 1/2-1. and over on the nasdaq, we'll show you the similar statistic. not quite as good. 2 1/2? >> 3-1. >> 3-1, yeah. up 3-1. macy's, we've been telling you, better than expected profit. and shares as you can see are up about 1.6%. rebecca jarvis is on the conference call. >> they've got this strategy of cost cutting like most of the companies out there are doing right now. macy's is trying to cut costs where it can. revenues are still a little weak at the company, down 9.7% for the quarter. and also on the same-store sales basis, now 9 1/2%. what they're talking about on the conference call right now is the success of the my macy's concept that's taking place right now.

they have it now at this point in time across the company and what it is is a very local approach to what they put out in terms of merchandise. now, they said on the call that the my macy's district out performed other stores 2-6%. that's important to note. at this point in time the company is now rolling out that approach throughout the country as opposed to in a few of the areas that are out there on a very macro approach. the companys a come out and said on the call that while they wish all the economy was stronger, they are feeling good about things. couple of notes about what's performing best, what's weakest. they say the weakest divisions are the furniture, mattresses and handbag division. regionally, the midwest is out performing the rest of the country in terms of sales. california and the southeast are the weakest. they also said houston, louisiana, were some of their best districts as far as sales go. erin, i'll be continuing to listen in on this call, to take away anything we can from what

terry, the chairman and ceo, has to say. i'll be bringing that to everybody live on cnbc coming up in the next hour. >> r.j., thank you very much. coming up, he started his first business at the age of 9. now 24, a veteran, he's a consultant to fortune 500 companies. >> meet the next entrepreneur in our young and successful series. you're watching "squawk on the street." market rally, fed day. there's nowhere else to be other than right here with the infamous haines derriere. fidel, traders learn from the pros. say you want to backtest an entire portfolio of stocks. market experts show you how through fidelity's extensive trading knowledge center. and fidelity gives you free research from 15 independent firms, with accuracy scores... to help you decide which analysts to trust. find out why more and more active traders are turning to fidelity

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we are shining the spotlight on another self made millionaire entrepreneur as our week long look at "young and successful

people" p joining us onset is 24-year-old, consultant to fortune 500 companies as well as an author. started 12 online businesses before the age of 21. considered one of the most successful young entrepreneurs in the world. cameron also featured in the richest kids in america. how they earned it, how they spend it, how you can, too. cameron, thank you for being with us. you make an interesting point. the internet is a key part of your success because -- because -- not that you were hiding, but your age was not in the obvious to people you were dealing with on the internet. >> exactly. the internet puts everybody on an eyaul playing field. it doesn't matter your age, race, background, or location. it gives you access to a global economy, access to customers around the world. if it weren't for the internet i wouldn't have been able to start any business past a lemonade

stand. >> how did this happen? were you hard wired this way? as a kid, i wouldn't even sell a christmas card in the neighborhood. there's a knack to it. >> mark is a -- >> christmas card, not that i believe in christmas. that's part of the personality. >> i appreciate that, thank you. i started selling at a really early age. anything from tomatoes door to door. a funny story when i was 8 years old i saw "home alone 2, lost in new york." donald trump had a cameo appearance in the film. i was 8 years old. i had never been. my parents made a deal with me, straight as, we'll go to new york next summer. after i got straight as i found out we were going to be staying at the plaza hotel which mr. trump owned. i wrote mr. trump a letter without telling my parents. i never heard back. when we got to the hotel he arranged for my family to stay in the same suite where they filmed "home alone 2" and all these other things. the lesson i took away from

that, is i want to be like donald trudon donald trump and start my own business. >> how many business snes. >> 12 businesses. >> anything from beanie babies, you name it. >> what are you doing now, from the ripe,grizzled old age of 24? >> i spend most of tie mri time traveling, speaking. i had books of my own own, "you call the shots." i still do work in japan. one thing that really energizes me though and i'm passionate about is the education system in america and the dropout rate. i'm on the board of a non-profit to help at-risk high school kids stay in school and graduate high school and go to college. >> you went to virginia tech? >> i left after one semester and raised 10 million venture capital and ended up turning down the offer and selling the company instead. >> what do you want to do when you -- >> grow up? >> -- grow up. >> i hope to continue to do exactly what i'm doing. i feel like i found my passion at an early age. that's what you need to be successful, you find your passion.

when you're passion it in about something, it's not work, you're enjoying it. >> consultant, what do they consult you about? i assume it's not just youth issues. >> sometimes it's reaching the gen-y market because there's a big disconnect with approaching them, advertising in many different ways. sometimes it's social media. others times it's just a matter of trying to get their product in front of the right people, because with the way the internet is today, we can spend very little money and we the k. still have a hot product. we see that all the time. >> how -- how can i phrase this question. >> carefully. >> would you rate -- what do you think of twitter? >> i'm on twitter. so twitter.com/cameronjohnson is my twitter id. the question is why am i on twitter? you know, to be honest, i'm not sure. i think the benefit for a company, however, is to be able to use twitter search feature and to go on and instantly see what your customers are saying about you.

for instance, if you've got a new movie coming out on friday you can see what people think about that movie. if you've got a company or a new product, you know, take a car company, you can instantly see what people are saying about that product. i think that's powerful. >> would you want to know what people are say snk. >> i don't want to know what people are saying about it. steve swine sitting in his internet-free box, the whole point being, pig stays completely away from the internet and he's perfectly happy. the reason i ask you about twitter is i have seen people say that youth, young people, don't use it. that, oddly enough, even it's the latest and greatest, it's really used more by older people. >> i've seen both sides of that. when you talk about teenagers, they're not using twitter. they don't see the value in it. if they do use it they're only using it to follow and see what john mayor is doing. although on a corporate standpoint i think it's very important that company bs in touch with their customer. if you don't join in the

conversation then they're just going to be talking about you. and that's never a good thing. >> cameron, thank you very much. best of luck as you continue toward retirement. >> thank you. >> cameron johnson, our young and successful series rolls on tomorrow, does it not. >> there is someone older than you. >> there you go. >> 27-year-old ephren taylor, youngest african-american ceo of an american company. he will be here tomorrow at 10:40 eastern. we want to tell folks about the parkt, at the high of the session, 117. it was sudden. absolutely nothing was happening and then we got that surge. what is causing the surge? david kotox is joining us from cumberland advisers. david, good to see you. i know that any given instant, it's hard to say what's causing this. but on a fed day, it is unusual to get this sort of a gain off the bat. >> well, i'll tell you just this, erin, i love the interviews with people who are

younger than my children. that was terrific. great series. to the fed and the fed day, we are seeing the markets accept no interest rate change, no less a positive statement, essentially the market repeats with no change. and no change is the most desired thing because it means continuing very low short-term interest rates and that is a boost to financial assets and asset pricing everywhere. >> and, david, what would you say about the key issue today? let me phrase the question this way. is there anything the fed could do today or say that would cause this rally to evaporate? >> oh, yeah, they could derail this in a minute. they could indicate they're going to tighten soon. i don't believe they'll do that. they could indicate that they don't see the economy in some stabilizing and moderately recovering way. that would create a puzzle because there's an awful lot of folks who see it that way and they would have to explain that

view. there are a lot of things they could do which could derail the rally. my expectation is they won't do that and the market's expectation is they don't do it, which is why we're getting the strength that we see today. >> david kotok, thank you. next, sovereign wells fund. you know a lot of people thought they were angry maybe about losing their money or maybe didn't have any money. a lot of funds help in parts of the world were $70 a barrel. a lot of money. >> okay. but first, oh, trish. >> hey, good morning, mark. good morning, erin. coming up on "the call" we're going to talk about this fed and the conclusion of its two-day meeting. we have on hand with us former vice chairman of the fed allen blinder and we're going to discuss whether or not the fed should be talking about an exit strategy right now. plus, earnings this morning. we are listening to their conference call. we're going to bring you all the details of that. and with retail spending suffering so much, and with cash for clunkers out there, we

started thinking, hey, why not maybe a little bit of money for clothes for everyone? if you've got it for should there be a bailout for the nation's retailers? we will debate it. all coming up on "the call" and news from the new york stock exchange. but first, "squawk on the et street" is after this. ( chirp ) team three, boathouse? ( chirp ) oh yeah-- his and hers. - ( crowd gasping ) - ( chirp ) van gogh? ( chirp ) even steven. - ( chirp ) mansion. - ( chirp ) good to go. ( grunts ) timber! ( chirp ) boss? what do we do with the shih-tzu? - ( crowd gasps ) - ( chirp ) joint custody. - phew! - announcer: get work done now. communicate in less than a second with nextel direct connect. only on the now network. , hard of hearing and an people with speech dischities accessac.sprintrelay.com.

common wealth funds are back, maybe never went away. while america tries to address the deficits around the world, especially in the far and middle east, are sitting on cash, and looking for where to put it. and there's one fund that's grabbing the world's attention. joining us now, their expertise, young randolph, ihs global director and ken griffin, president of bgr. good to have both of you with us. obviously, well -- which is the one that you would say is getting most of the attention right now, jahn, the one that we are hearing doing deals with forces, china investment corps.

>> yeah, i think china investment corporation is the one to watch. i think it's being greemd by the chinese sovereign authorities for bigger and bolder things, not just the last few months it's been active buying canadian miners, ramping up investment in u.s. hedge fund industry, also asia. asian hedge funds industry. it's being groomed for bigger things, i think. it's definitely one to watch. >> ken, what about in the middle east? there were two issues there. one, at first oil prices plunged and that obviously affected how much money they had. oil prices came back a while ago, so they have been getting a lot of cash, but maybe they're a little angry and frustrated with some of the places where they were putting it last time around. >> it's been a difficult season of reckoning for private equity funds and hedge funds that have done well previously in generating new wealth or funds in the middle east. so this time around, we are seeing the professionals in the

middle east put more specific projects, doing careful due diligence, getting away from some of the trophy asset investing they have done in the past, and migrating more towards investments that have a direct benefit on the local economies. >> jan, essentially sovereign wealth funds are the products of imbalances, right? liquidity imbalances? >> absolutely. and so some were funds -- foreign exchange and global imbalances. >> right. so it's hard to see in the near future any end to imbalances that favor asia and therefore were going to be -- i mean, these asian countries are going to have to put their money somewhere. >> yeah, i think any analysis of sovereign wealth funds needs to start with global imbalanceses, these deficits generated around the world. but possibimportantly, how the has changed since the great global recession and credit crunch. the u.s. one -- u.s. deficit is

down by half. at its peak was minus $100 billion, minus $400 billion. the mirror to that was the falling surfaces for most of the oil producers, not all of them. some were super exporters like norway and libya. but generally in the middle east, you know, the generational sovereign wealth is in low single digits. and on top of that, the government of russia and oil producers have been using sovereign oil funds to say look, you are useful agents to support our own banking system, fund our own deficits, so very much working -- dealing with the problems at home, rather than venturing abroad, and very useful. but the exception has been china and other emerging asian countries. we all know exports are down 20, 25%, but so are imports. and on top of that, getting return in trade benefit, the unit value of import commodities is down from a year ago.

so they're still creaming off the surfaces on the trade and capital accounts. >> all right, well, thank you very much. appreciate both of you taking the time. interesting, singapore might take external funds, because they had weakness. so not a completely all-good-news story. we'll be back with a final check on the market. d i was in the grocery store when i had a heart attack. my daughter was with me. i took a bayer aspirin out of my purse and chewed it. my doctor said the bayer aspirin saved my life. please talk to your doctor about aspirin and your heart. i'm going to be grandma for a long time. the gold delta skymiles credit card... from american express... it's the official card... of the world's largest airline.