segment. i love pop culture references that signal signs in the economy. i'm driveing into work this morning and i hear a hip hop song that maybe suggests we're now a bottom. listen -- look at the words on the screen on the bottom? ♪ >> i think i might -- i think i might go on a shopping spree. am i crazy? >> i thought the point was to see you reading the lyrics, could we have that, a little bit of presentation? >> a new song, i take it? >> this is brand-new. >> if it is, we thank mr. man

maino and swiz d. then there's the story of the international funds, 12 of them that are suing one todd alt, they thought therapeuty were ing in a software program instead he took the money and created a swinger's ranch. >> that's trading. that would be trading. >> always do your due diligence. >> masters of the universe. >> we'll see you tomorrow, "street signs" coming up in 30 seconds. the fed's latest announcement is moments away. we should be hearing from policy maker atsz 2:15 p.m. not subject to restrictions by the government pay czar, owed

$100 million bonus, existing home sales rose 3.8%, the national association of realtors say there's 2.9 blow year earlier levels. i'm erin beurnett with a change on treasury or mortgage buying, right here on "street signs." should the fed's move get your money off those sidelines, the biggest bond in stock investors weigh in here. breaking up aig may cost taxpayers, is this fair or something banks might do pro bono, given how their trading with aig caused such a crisis. our show starts now.

>> ahead of the fed decision, which as you can see we're awaiting in a couple of moments, the stock rally is on. what a day it has been, we started out with virtually no direction in the market. then a sudden pop and that's the rally that has held through much of the day. it could dramatically change one or the other as in a bigger surge or losing all of it and more depending on what the fed says on a couple of key programs. right now we're up between 1.4 and 1.6% across the board. now, the worst performer in terms of sectors, health care and the worse is still up for the day. and i believe the best stock on the dow jones industrial average in terms of percentage gain is travelers insurance. let's get straight to our market reporters and find out what they are watching, we have bob pisani

and rick santelli. bob, what can move it? >> reporter: changes in the statement on quan take tif easing, do my usual, most are not expecting a lot of changes. as far as the economy goes, most of the traders are expecting them to reiterate, the economic contraction is easing. most feel the fed will leave the purchase programs as is. if they change that in any way, that's a game changer. on inflation, most say the fed will continue to statement. inflation will remain subdued for some time and take out the time line, that also will get a little bit of play here. on the interest rates there's a lot of disagreement on that. key phrase is the foreign expended period, likely to warrant exceptionally low levels

of fund rates for an extended period. some think they will take that line out. other than that, a nice rally, 4-1 advancing to the declining stocks throughout most of the day. rick, the most interesting thing the stock guys are talking about, buying financial stocks very heavily ahead of a fed statement. that's a little bit unusual. >> reporter: it is. that's unusual. by all accounts it should have been a much worse auction considering all of the uncertainty we're going to see or hear about in next 14 minutes, but it was still pretty good. i think your comments go right in step with that. i think easing whether they don't say anything, look how the fixed markets in england moved today. their statement included reuping

quantitative easing. >> listen, the nasdaq in terms of the composite, the s&p 500 drag down the rallies probably go in sympathy with whatever happens. the thing to watch here, will the story lines held up. dell had positive news in asia about pc sales, microsoft will that story line hold up. retail, names are 9 and 15%, even financials getting some strength, when we check in at 3:00 eastern time, will the story lines still be humming or will they change. back to you. >> we'll be checking in with the markets once we get the decision. as we await the breaking headlines let's bring in jim bianco. >> jim, you're saying what to

watch the sneaky fed. what sneakiness are you going to be looking for? >> what the fed has been doing is kind of telling us what we think we want to hear and the next day or the day after they put out a second press release telling us about what they really did at the meeting. in the june meeting we were all waiting for signs therapeutthey wind down, and the next day they put out a press release. i don't think we'll be done in 14 minutes, we'll have to watch the fed website to see if they put anything else tomorrow or the next day. >> we'll get an update but not necessarily see for anything else? >> the fed has had a history with the statement of it being misunderstood, they want to avoid putting in too much

technical stuff. that might come tomorrow or the next day. that's what's been happening over the next several meetings. what do you think about that point? >> it's certainly possible. i would expect nem to insert the world complete, we'll complete the treasury purchases, that is what many market participants are expecting. if they go down the road in that statement today, it will at least unwind a lot of inflationary expectations they have. they think the fed program is somewhat inflationary long term, this would position them to say, yeah, we are pro active. tomorrow what they could do is say, the other thing to balance things out, we might continue to extend the talf program to commercial mortgages, they are concerned about the commercial real estate market. >> jim, i know that's something you've been concerned about,

which is due to their concern about the potential for damage, the commercial real estate market could cause the rest of the capital market, they are involved, in a major bankruptcy? >> i agree. it is going to be the big concern, how we go through the commercial real estate market. if they want to do changes, they'll announce that tomorrow and won't put that in the statement here. too big of a risk that will get misinterpreted into something they didn't intend. >> any chance they do not say the situation warrants exceptionally levels of funds raised? >> i don't think there's any chance. i think they'll keep the word extended period in there, they are not likely to change that in our view for some time. >> sounds like we're in agreement on that. >> i was going to say, i agree, that would be a minor earthquake if we drop out those words right now. i don't expect they'll do

anything radical. >> if they do it, we'll keep in mind the word minor earthquake description. >> as we are a couple of moments away from the decision, we'll take a break. the biggest managers in the country for bonds and stocks and ken heebner and will be right back. ...or if you lose your job. your health insurance shouldn't either. so let's fix health care. if everyone's covered, we can make health care as affordable as possible. and the words "pre-existing condition" become a thing of the past... we're america's health insurance companies. supporting bipartisan reform that congress can build on.

fed decision a couple of

moments away. as we get ready, we want to bring in the people you need to hear from. they are all together, susan bice, cio, bill gross, sugar cookie lover, and van guard portfolio manager, ken volper and good to have all of you with us, in no particular order. let's throw it out to you. ken, what are you -- if you could give us specific of what you think you're going to hear in the next couple of moments that might move the market, what would it be? >> i thing the fed is going to talk about how the economy is actually turning, we've hit the bottom and will have growth in the second half. there's very, very significant inventory rebuild that needs to take place in the second half in and 2010. the unemployment picture is looking better, shedding fewer

jobs than we were. and the trajectory of that is positive. there continues to be a lot of slack. close to 10% unemployed that can be put back to work. we don't have inflation pressures i think it's going to be an up beat story. >> up the growth but not the inflation. steve? >> i think ken might be overstating how far the fed is willing to go. i don't think it's going to be nice up beat -- it will be some improvement in financial markets, somewhat better numbers on the economy, i think overall the fed has a view of the world that is consistent with its policy and that is to keep its accommodative policies in place and the view of the world will reflect that. i expect we might have word inside the statement about whether or not the program of buying $200 million of bonds will expire. >> i know they had said would expire by autumn.

b bill gross, what are you lookin? for? >> that's the key.? steve hit it on the nose and bo? pisani, the quantitative easing statement will leave the markets going forward. something that hasn't been added in the past few minutes, the imf came out with a study that suggested in england the bank of england running a similar program, that their quantitative easing program has led to 40 to 100 basis points lower across the board. if you can apply that to the united states and pimco studies confirm that, ma means the treasury would be at 4.25 or 4.5. i think the fed needs to be careful here in terms of easing out of the programs or we face sudden rises in interest rates.

>> you said 4.5. we were at 3.7 today? >> that's what the they have studied in terms of the bank of england. i think it's a similar situation here in the united states. 900 billion, there's more to come. >> susan, do you think they have that sentiment, even if things seem to be looking up, you wouldn't want to pull back too quickly on these programs? >> i think that's the direction they are heading in. while we have seen things start to level off, i think we've got a long way to go before we see an improvement in real growth in the financial sector. remember, this was a financial crisis. as a prior person mentioned, commercial real estate is just beginning to start its cycle. we have a lot of mortgages to rehab and work through. the housing is going to be very

slow for a couple of years going forward. i think they want to be cautious. they don't really see inflation as a worry, not a worry in europe. i think they have the ability to be cautious about putting up a wall that prevents them to use any tools they can right now. >> ken, what about the housing market? i know we keep talking about the survey that says half of american mortgages could be under water by 2011. that was a shocking number and if that or anything close to that is true t. would seem rates aren't going to go anywhere for a long period of time? >> it feels like the housing market is starting to do better. sales are starting to pick up a little bit. if the jobs number, the key is going to be what happens with jobs. we'll start having positive growth in jobs in two or three months out, which should bode well for the housing market. if people expect that we're close to the bottom of prices we'll see more demand. i think a lot of homeowners are

on the sidelines, potential homeowners on the sidelines waiting for prices to level out. >> why wouldn't they take the word extended out? why not take out extended? why is that such a bomb? >> that's an absolute, bob. >> no change in the fed funds rate. the committee will maintain the target range for the federal funds rate at 0 to a quarter% and continues to anticipate that economic conditions are likely to warrant exceptionally low levels for an xebdsed period. information received since the committee met in june suggests that economic activity is leveling out. conditions in financial markets improved further, household spending showed signs of stabilizing but remains con trained because of sluggish

income growth and businesses are cutting back on fixed investment and staffing but are making progress in bringing inventory stocks into better alignment with sales, although economic activity will remain weak for a time, the committee continues to anticipate that policy actions to stabilize financial markets and fiscal and monetary stimulus and market forces will contribute to a gradual resumption of sustainable economic growth. the prices of energy and other commodities have risen of late. however substantial resource slack is likely to dampen cost pressures enthe committee expect inflation will remain subdued for some time. the federal reserve will employ all available tools to promote economic rory and preserve price stability. to provide support to mortgage lending and overall conditions in private credit markets the

federal reserve will purchase 1.2 $5 electrical of agency backed security and agency debt by the end of year. in addition the federal reserve is in the process of buying 300 billion in treasury securities to promote a smooth transition in markets as the purchases are completed. the committee has decided to gradually slow the pace of these transactions and anticipates the full amount will be purchased by the end of october. the in the will continue to evaluate the timing and purchases of securities in light of the economic outlook and positions in financial markets they are monitoring the size and composition of the balance sheet and will make add justs as warranted. the vote was unanimous. this is hampton pearson reporting live. >> we know there was no change in rates. no one expected any such thing.

in terms of the fed balance sheet, we got an update and steve will correct me if i'm wrong, in line with con sen surks no change in anything, the treasuries will slow as they get near the end which is the end of october. some had hoped there would be an extension of that. we'll get more reaction in a couple of moments. on inflation, appears to be unchanged, talking about substantial resource slack and added sluggish income growth to household spending and no change in the business summary. if there's a word there, steve will tell me. the only change i saw steve, but they replaced some words like stabilization with leveling out. it appears to be virtually unchanged. >> i agree with you, the leveling out is what we said

would happen. this very, very slight upgrade in the economy. not signifying much in the way of policy. i will disagree a little bit on the significance here. it looks like what they are saying about the fed's balance sheet. what they are talking about here is trying to have it both ways. it sounds to me like the fed is not yet ready to decide to end this program, perhaps the reasons phil gross just gave us of what they perceive to be the impact on treasuries, trying to have it both ways. ten-year not necessarily having it both ways, they'll even out -- yesterday erin, the purchases were smaller than the normal ones, it began almost yesterday with a 2.7 or 2.9, some had been in the billion range. it wasn't really conclusive, they'll try to extend this out and give themselves a little more time before they give a formal end to the program and let's give the market a little

leash to see how it does on their own. >> they are going to pace the money so the fed remains involved and doesn't withdraw entirely so. trying to have it both ways. >> bill, is that what you heard? would you agree with our take leveling out is maybe a mild upgrade in the economic outlook but that's all we could find? >> i think they had to. everyone knows we've got an inventory pot coming in the second half and the gdp will be positive. in terms of the treasury buy back program, they are trying to have it both ways, it looks like by the end of october they'll end that particular program and continue with mortgage and agency purchases until the end of year. then they'll have to see the total in terms of the yield. 40 to 50 to 75 basis points in england, perhaps the same in the

united states. the fed will be monitoring that and perhaps other programs will follow. >> ken, you were looking for an encouraging statement, more so than some on the economy, are you disappointed with what you got? >> no. i thought pretty much they said the things that i anticipated, that we're leveling out, it was slowing and now they are basically saying we're bottoming out here and they are expecting growth going forward, especially eninventory accumulation, we had a huge -- even though the treasury rates are up 2% points, corporate yields are now about 5.4%, down 2%. high yield bonds have declined 8 percentage points in yield. credit is much more available. you look at the tech spread in terms of liquidity in the banking system is huge, the improvement has been dramatic, look at the liquidity in the

corporate market, this has been a huge really unprecedented rally that really now is making it much more feasible for the market to grow going forward. it's going to feed on itself as it grows and very encouraging, i think. >> let me get you in on the one thing on the consumer side. statement was unchanged except for the addition of the word sluggish income growth, perhaps that's in reference to the numbers we had on the economy earlier this week. is that something to note that they've added, acknowledgement of lack of income growth? >> it is important. unemployment is still a serious problem and growing. more and more people to lose jobs even though it's slower. we've got to be creating about 130,000 jobs a month just to keep the labor report growth. too many people reacted too positively to the drop in the unemployment rate when it was people getting discouraged and

dropping out of the labor force. as long as people are continuing to lose jobs, there won't be an income foundation to support consumer spending. the other point i would like to make, i agree with the other folks, comments on the bond side of the market, realize that yesterday in the sale, the amount of the auction was half of what the fed was willing to lend, even though it had already decided to drop the amount therapeutthey were going to extend credit to banks, because the pricing of the fed are continuing to find the bond markets more readily available to them at these better spreads. i think the fed is trying to manage between bank funding and the debt market. >> let's quet get a quick check on the market. we've seen for the whole year, when you look at corporate just an example, where we stand now. bob and rick, i know you're both

with us. bob, we fell 20 points, now where we were. this looks exactly in line with expectations? >> reporter: the one thing being stated down here, most people agree that the comment on economy is a slight upgrade. leveling out is better than the pace of economic distraction is slowing. that line is in there, interest rates low for an extended period, that line is in there. quantitative easing, more finality, purchase by the end of october. people got what they want. >> rick? >> reporter: i think it's fascinating. the dollar recouped a good chunk, two-thirds of its losses but still down. in the 30-year bond, the only unauctioned piece of the week still left from the treasury had all of the action, went up to close to 4.60. and three things, mr. gross has

a lot more confidence than the imf research than the people on my floor. they don't believe the numbers. if it is true, oh, my god a recovery will be so much worse on interest rates if they are 60 basis points lower. the other point is the program not on agencies but on the buy-backs of treasuries was almost exclusively stated to be six months now put a date october. they are buying more slowly. they are buying time and trying to have it both ways. he nailed that one. >> phil gross, how do you conduct yourself from here now that the program looks to be ending in october, later than expected? is it your expectation that the 0 basis point improvement you believe came from the fed involvement now goes away and rates rise that 40 basis points or more from here? >> i think you have to be cautious. the treasury still has a trillion and a half to two trillion to issue on a fiscal year basis. somebody has to buy the bonds,

the chinese are pulling back and holders of reserves are pulling back. if the fed itself ends a program that was $300 billion, you'll have less demand going forward. i think caution is going forward in terms of yield and relative to tomorrow. >> as we wrap it up here in a word. what would you be buying or selling today, kent? >> continued to like investment grade credit and continue to think has more to go. with money market funds at zero%.? it's a lot of money out into ? credit. that's still a good trade. >> and bill?? >> erin, in addition to sugar cookie as the trade of the day, 50 prosecution appreciation of the stock market since march, ? similar effects on high yield and corporate bonds as well as we've mentioned, compressing ? yields lower and squeezing a lot of value out.? i'm ambivalent when it comes to bond market these days, but

there's one particular security? if i had to choose, it would be? short-term securities of aig an? their subsidiaries and 10 to ? 15%. there's about 40 billion of t.a.r.p. money backing them up for the next few years and that's good value in my opinion. >> there we go. thank you very much to all of you. appreciate it. >> just ahead on the show, the stock side of the story, we know the fed stays the course, what about investors? bob and ken heebner and cramer coming up. 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

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how you could start saving. the fed left rates unchanged. what must be done to get investors off the sideline. ken heebner and bob doel, good to have both of you with us. you got to hear the statement and at least the analysis of the folks that we had on. let's go to you first, ken. does this in and of itself, what they are doing, modestly upgrading the economic forecast saying rate cuts are off the table, does this make you more or less excited about stocks? >> they are starting to see the signs of the turning economy.

the new order index for the month of july was 55, a very strong sign for manufacturing. we're now producing far below the level of which we consume. it is very evident in the automobile industry, scrapping cars at the rate of 13 million and only sell teg rate of 10 million. taking the sales level back to the level of which cars are being scrapped would be a big increase in sales, you're seeing this with inventories coming down to low levels, the cash for clunkers is a stimulant, but i think you'll see a pretty sharp rise in business activity sooner rather than later. that's going to bring increased jobs and increased spending. there's a bigger turn in the economy coming than people are looking at. >> does that mean it specifically ken, another big surge in stocks which stir up 50% from the low, only up 12% from the year, do we have a whole lot more upside left? >> well, i think the rise in the

market off the 680 low reflects an expectation of improvement in the economy. i wouldn't say this is going to make a big rally in the market overall. individual stocks there will be positive surprise there's. i think basically the company isn't saying much, and i think that there's going to be dramatic news on the positive side out of ford motor company next month or two. >> ford would be your name to play. >> bob, do you agree with his overall view? >> largely i do. the fed has to be feeling pretty good, erin, we have growth expectations for the second half moving up, lead indicators moving higher, productivity has been incredibly strong for a recession, inflation remains quiet. the fed couldn't write a script better than that. it's early days but i think things are improving and the fed will stay the course. >> do you have any specific name? >> yes, i would put out high quality u.s. growth companies,

verizon communications, phillip morris international will do well here. >> one of scenarios we talked about with the bond gurus, that the fed does start to pull back from the purchases, you heard bill gross say that interest rates could be, well, frankly, nearly a percent higher if we didn't have the programs in place. if they start to take the programs off the table, rates go a lot higher.ñ÷ does that change your view of stocks? >> i think that rates are likely to continue to move higher, eventually across the whole curve as we continue to normalize rates as fear sub sides and confidence comes back and economy eventually does better. in that environment rates will move up. i don't think they'll move up ton, but enough we have to keep our eye on it. equity investors need to be prepared for that. hopefully at that point in time

when earnings are doing better also. >> i think there's an important factor that hasn't been discussed. countries like japan, south korea, taiwan, em rats and saudi have more treasury secretaries than the chinese and these countries are dependant on the united states for their security. their purchase of longer term securities could be an offset. i can't believe that our government isn't on the phone to these countries saying we like you to consider our securities at the auctions that are coming. that's a positive factor. we talk about the chinese, these country that's i named collectively and more importantly the chinese. >> a way of looking at it that we frankly never hear about. thanks very much to both of you. we appreciate your taking the time. our viewers have gotten specifics there and overall view. jim is going mobile reacting to the fed. but he's got titanic gains he is

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welcome back, dow holding onto the triple digit rally. it is a little lower, maybe people trying to debate what it means and treasury purchases. >> what a strange -- kind of a color like -- a baby a diaper. >> that's any. really on fire. this is something that had held them back. there have been a lot of people talking about it. now you're getting upgrades it's one of swing divisions people hadn't thought about. >> nasdaq, and i know we'll talk a lot about mobile which tends to be nasdaq focused. it is nasdaq traded, they have a lot of tech in their business.

>> international game technology has been moving. >> making all of the slot machines. >> have been desperate to have new machines come in because they literally have to make it more exciting. wynn has the best balance sheet and saying that if mccal were to become public today, that's a great one. and i don't want to play the poor man's win. >> there's a ferry you take from hong kong and even in the height of the crisis going there to talk to the casino owners, packed. >> unbelievable, right. >> yeah. >> wynn has the great balance sheet even when all of the bonds were getting hurt in casinos wynn never did. balance sheets rule these days, a lot of casino companies are marginal. >> i think that's -- wynn is a

great stock. i've been using $70 price target. >> all things mobile, wireless and smart phones, not going away. >> there's rumors right now as we talk that chu placed an order for 5 million iphones. that literally is about what they sold last quarter, so obviously there's a lot of people in china, you don't need me to tell you that. clearly part of the 40 billion inf infrastructure program. >> not a high penetration rate, but some growth. >> this is, again, got to remember why do the touch screen work so well on the blackber blackberry -- >> do you use a blackberry with a touch screen? >> i have a problem with my elbow which means i can't use my right hand to do it, i'm kind of

like -- pathetic. >> i literally destroyed my wrist, my elbow by doing too much texting, i'm out of the tweet game, no, i tweet. >> you tweet? >> everybody tweets. >> not everybody tweets. >> cree, when it's lit up, that's cree. what i've been saying is forget about what the fed is doing, this trend is bigger than the fed. >> that's also a trend, it doesn't matter if you don't feel like making a bet on blackberry versus iphone, you got to have a light. >> that's a solution. that's cree. >> t.j. said something interesting, we own the technology in the country for cell phones, nokia has too come to microsoft to make the phones smart. most i would describe as being not smart.

this is a very big move. we've only had -- apple has only 3% of the phone market, but it has, nearing 40% of the smart phone market. >> who is going to get that -- this is the holy grail product, you can deal with -- and there are big mobile companies talking about merging right now -- none of them are american. in africa and india, you can provide somewhat smart phones to people because all they use is cell phones and now it's too expensive, if someone can gets the product -- >> there's a great debate going on with the smart phone companies do we cut price down to $99 and explode the sale and hurt the margins, or do we let the verizon and at&t. interesting data come out, on a smart phone, maybe we keep that model and have at&t continue to

sub siddize the sale. >> in business school we would be spending -- >> jim has a lot of other trades, he'll have more tonight. he's very excited. 6:00 and 11:00 eastern with jim, who got a hair cut today and i'm sure the viewers noticed. if you wonder why wall street has an image problem? here's one reason. we're familiar to the tune of about $173 billion. jim, tens of billions of that went to aig's trading partners and some have gotten a billion dollars in fees fixing -- >> remember, european banks did better. >> on the fees? >> no, in terms of the payoff. >> in terms of payoff. famous 13.5 billion. >> of which 5.6 billion was directed to pay goldman on. the government could have stiffed goldman and chose not to -- >> very important.

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they made money off of aig's bailout and collected money from the t.a.r.p. and now they are profiting from fees for fixing aig, breaking it up, what are you want to call it, today the "new york times" wrote enough is enough, the bank should clean up their reputations, to return the favor and offer services for free. $1 billion in fees have been paid by aig to banks, including goldman sachs and the fees are continuing of the robert miller, and charlie gasparino, charlie,

what do you say? >> it took you a while to russel up a goldman apology. >> i had to go to the bottom the barrel, charlie. what do you say? should they be doing this pro bono? >> are you asking me or the professor? >> i'm asking you first. >> it does rub me the wrong way that wall street gets bailed out on one end and makes money on the other end. here's the bottom line. these banks, for better or worse have been declared by the bush administration and now the obama administration as too big to fail. they are a business. if they are going to perform a service for you, for you know, busting up a company, doing whatever they are doing, they deserve to be paid a fee. if you want them in business and you know, it is the policy of the obama administration that they want the firms in business and making money. the question is, and this is

what i don't understand from either liberal academics which the professor might be or might not be some of my liberal colleagues in the media, is why there is not more condemnation of the current administration for allowing these firms to rake in fees or exorbitant fees -- the obama administration is an 80% shareholder in aig, correct? >> so you're saying they obviously -- >> why aren't they squeezed -- why is goldman allowed to take risk on the government's dime? which is what they're doing. this is the administration that's allowing them to do this. >> dr. miller, there is a point i think charlie was getting at there, too, which is, well, i mean, we all know goldman got that, what was it, $13.5 billion payout related to aig contracts. maybe they just should have realized goldman shouldn't have been involved just for optics here. >> well, i hope that aig, looking at -- are employing the best people they can for the job. after all, we're taxpayers that have an interest in this.

now, if they're not doing that, then that would be an argument that they shouldn't be -- that as taxpayers we shouldn't be involved at all. i couldn't agree with the point more, that deutschebank and goldman are simply not going to do this for free if they have alternative ways of making money because, after all, they are most interested in their own stakeholders. >> they are. although charlie, couldn't some -- i mean, there could be a way to make them do it for pro bono. >> maybe not pro bono. but listen, i covered the municipal bond market for my early part of my career, and one thing we know these are wall street firnlgsz greedy wall street firms underwriting municipal bond deals from cash-strapped municipalities like new york state, new york city. they make money doing it while they do it. but one thing that i noticed, the heads -- you know, the heads of new york state government, when i was covering it was mario cuomo, the governor back then. it was david dinkins and rudy giuliani, is what they used to do is squeeze them on fees. why aren't they -- i don't

understand the fee structure here. that's how much they made. are those normal, rational? are those low fees or high fees? i guess what i'm saying. and since there isn't a lot of business out there, you would think that aig, which is 80% owned by the federal government, would be playing all these firms off each other to bid them down on fees. and we don't know if they did it. my guess is they didn't do it because the administration right now -- they want to attack wall street on one end but they're giving wall street a license to steal on the other. >> all right. well, gentlemen, thank you very much. i think a lot of very provocative questions raised by both of you. we're going to keep following this one, and this is a good pairing. thanks to both. and we are anticipating some breaking headlines from the food and drug administration, the fda, in a moment. soon as we get them, we'll come out of commercial and give them to you. these days every penny counts with everything you buy. every head. every bite. every gallon. every shoe. every book. every cereal. well, maybe not every cereal. but every stem. every stitch. every tune. every toy.

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markets at the high of the session on the back of the fed as you saw there, 166. we keep watching that. we do that. developments out of the fda. we want to get straight to mike huckman with the details on

that. mike? >> erin, on a just ended fda conference call officials unveiled some good news not just for patients but also for the biopharmaceutical industry, saying that with the agency's permission provided the companies meet certain definite criteria they may be able to charge patients for use of unapproved drugs. so drugs that aren't yet on the market, that are still in the testing process. this would be for patients who are seriously ill or, as how one official put it, with very bad diseases. so this opens up a pathway, erin, for these companies to recoup their costs at a time when so many of these small companies are dying on the vine and running out of money. back to you. >> thanks very much to you, mike huckman. i know very relevant for many of our viewers. we'll take a brief break. market at the highs. some of the biggest movers -- 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,