y.e. yank does the impossible and beats the unbeatable man to win the pga championship what will it do to the still-growing game of golf in asia and what about the man who taped the tiger? >> incredible day.med the tiger? >> incredible day. bob pisani at the new york stock exchange, blame japan? >> their growth there first one in five quarters but not as strong as people anticipated, china down 6%, down 15, 20% the last week and a half. look at some of the big global commodity names here, dollar stronger, of course, puts pressure on the market, as well as the general weakness in asia, 5, 6, 7% decline there no top line growth for lows. a problem, folks, wasn't the

disappointing you are jones. third quarter isn't picking up sequentially since the second quarter. home depot, be surprised if they have anything dramatically different to say. markets bifurcated in defensive outlook, big names here, modest moves to the upside, procter & gamble the upside. look at the hmos, only group moving here on the prospect of a less public component to health care reform, four or five percent moves and all the big hmos. trader talk, cnbc.com, matt, off the lows on the nasdaq but down. >> down sharply no question about it, 2.5%, 2.4%, maybe 3, 4 points better than the drop we saw. look at one of the best, big cap stocks, microsoft down only 1.4%. apple down 2.8. but look at the real disasters in here and discretionary, wynn down 5.5, foster wheeler, industrial, a construction company, down about 5%. express scripts, the loan gainer in the nasdaq 100, up about.5%

today. electronic arts also struggling with a 6% give back. timely little biosantee, the company coming out with what they call 100 protection from the swine flu that stock is up 15% on the news. dell's down 2. they are launching their own version of the handset, smart phone called the minii three in china with the china mobile. brian schactman with the china market. >> down sharply at the start, drifting ever since, down about five bucks in two trading sessions here with nynex. last week, crude that $65 level seems to get a lot of support, bounce, every time we get close to 65, bounce back up. really quick, people asking about the storms. the bottom line is that claudette has weaken and bill, hurricane bill, the first hurricane of the season, isn't trending toward any trouble spots for oil and gas. that's why i want to look at nat gas, seven in a row down days, looks like it is going to be eight. gas very sensitive to whap what

happens in the refinery region. i want to quickly point out before guy to chicago, metals are all down, all know a very tight ring since the open, back to you in chicago, mr. san tele. >> thanks, brian. let's look at the good, the bad and the interesting. the good is definitely the pound today. if you look at the pound versus the dollar for the day, you can see the pound getting hit hard. in futures terms it is down close to 180 points, but if you look at a one-month chart, really see august has not been kind to the pound from 170 down to 163 in quick fashion. now, look at the dollar, yen, this is a bit of the ugly side. you can see that the dollar is not only giving it up today but one-month chart reveals pretty much the same as the pound but in this instance, the dollar hasn't acted well, equities move off their best levels. last chart, a chart of ten-year over and it is very interesting over three months for the following reasons, three and a half is home base but has a buoyancy to go up to higher yields since early july, but of course, equities are going to

make all the difference in the flight to safety trade that is currently going on at the moment. sue, back to you. >> very good point, rick, thank you very much. the reporters detailed, markets fell off across the globe over fears whether an economic recovery is indeed sustainable. will we see global growth or double dip? senior economics reporter steve liesman joins us with all the answers, right, steve? >> all the answers. . >> i tell you one thing, the selloff around the globe does appear to be reaction, in part to the uncertainty over an economic turnaround a, its timing and strength. immediate trouble looks to be this, markets, 50% gain his some cases, priced for a near straight line recovery, guess what the data is not cooperating it has been choppy, positive on manufacturing but negative on the u.s. consumer. let's look at where the surprises have been. empire state this morning, manufacturing, market completely ignored that, that was four times the expectation, looking for three big. industrial production last friday, on friday as well, france and german gdp, i pup the

gentleman knee in the upside there 1% growth after minus 3% decline, got nude. look at the downside, u.s. retail sales, consumer sentiment, joblessness, all the stuff to do with the consumer all disappointed to the downside. over the weekend, jpmorgan economist writing, "as each week passes, we get more confident in our predick that global manufacturing is set to boom." haven't seen that word before, boom, 8% annual rate in the second half of '09. this is behind their call for a big global turnaround. predictions widespread of a return to u.s. growth in this quarter, the irony is that markets are selling off just as the global economy is showing signs of rebound. so could be simply buying on the rumor of recovery and selling on the news. it could be investors a hard time seeing real recovery propelled by manufacturer hag leaves the u.s. consumer behind. one other worry here will better growth numbersed three premature central bank tightening? all that is on the table. sorry, folks it is not a straight line it is a very choppy line.

>> all of those good questions to put to our next guest. >> good idea. >> a cnbc contributor, david, good to see you. >> nice to be with you.u. >> is this a kiss of the market simply getting ahead of the economic data and now, they are selling on the fact that some of the data is better than expected or is this really sustainable? >> sue, i'm not so sure it is sustainable, a huge rise since march. we know that now we are encountering the uncertainties that steve just summarized so well. i'm in the double dip camp but the second half of the w is after this. what we have is a huge decline in manufacturing inventories. we had falling prices which means we have inventory crunch, so to have a manufacturing rebound for the next couple of quarters, very strong and worldwide should be expected. >> what would happen after that?

what would cause the second leg of the double dip if, in fact, we get that? >> therein lies the question, bill, because of the consumer, as long as the consumer, particularly in the united states, is going to have a rising savings rate, have to recover from a financial crisis, has had a loss of wealth and decline in housing values, all the things we know, then the consumption portion of the u.s. economy will diminish and that means savings higher, consumer less and we will have a very tepid recovery once we get through this bounce of manufacturing. now, the next couple quarters, manufacturing will be very robust. >> okay. >> i think, you know, i think we are going to have surprisingly strong single-digit numbers in gdp growth rates for the third quarter. >> david, i mean, globally speak, wondering whether a double dip might be caused by a situation whereby we have had an

overstimulation, for example, take china, take australia, so much liquidity pumped in, now suddenly, the authorities have to come in real hard and take some of that liquidity away before another bubble is created. in australia, already talking about two rate hikes before christmas. >> well, mandy that is a great question, because we sit here in the u.s. and we look at our economy in a very closed way and that's mistake, with global financial integration, the central bank activity and the stimulus activity of the world are interrelated. very deeply so, and more so than we have probably had at any time in ever in history. you are absolutely right. >> steve liesman, do you think -- you posed the question, does this lead to central bank tightening here at home sooner than later?? >> my worry would be in europe which i think is a little bit, quicker on the trigger to raise rates than the u.s. is gonna be. i think they are hyper concerned

about inflation, concern bind nation, a year ago badly misplaced and i think going to look at a couple of quarters, david was right and others are white bright this gdp turnaround, by the way, you might get a pass-along from oil flies the headlines, inflation numbers the next couple of months and/or quarter, so the concern would be would europe be too quick to push the but the on raising rates prematurely? remember, you play is a manufacturing turn around but time for the consumer to get their act together, we have to be easy and accommodating for a while for the con um sear get that. >> make some recovery. >> i think more about inflation than recovery in europe and we will get some interest, by the way, jackson hole this week. >> gotta go, thanks for joining us. see you later. let's move on. it had been a quiet hurricane season, until now. three storms in the atlantic and various places respective to the united states. one of them could become a major hurricane.

the weather channel's nick walker in the latest. never had a hurricane named after me, nick. >> congratulations. dubious dishonor, i believe. >> indeed. >> claudette, a tropical depression, moving toward the north, a big-time rainmaker along the florida coastline. as it has been, crestview, florida, apalachicola, both received four inches of rain, still rain around the western panhandle. we get through the next couple of days, probably southern portions of billion bam, alabama and then the mississippi receive avy rainfall, watch out with he could see flash flooding with this. now, we have also got tropical depression anna, just struggling to maintain this tropical depression status, moving near puerto rico rate now, bring heavy rainfall to haiti and the dominican republic. also, we have got bill out here. and bill is probably going to continue to be the biggest one of this. hurricane, it is a strong category one right now, forecast to become a major hurricane. but look at this the path takes it well away from any land, except for bermuda.

by the time we get into the weekend that is going to be probably the closest path to land. bill? >> just hoping we don't see some damage with that obvious. thanks, nick, see you later. all right. we will get to the markets here, a selloff today is this it? is it the star of the biggest correction some analysts are calling for in the "power lunch" task force will sound off in a moment. citi facing a showdown with the government, $100 million bonus issue for a high-energy trader. . so, who is this guy? plus, the obama administration appears to be open to dumping the public option in the health care plan. kill it or keep it? and get ready for the fast money "halftime report," melissa and the gang going to go hunt for safe havens. we are back in two.

downside pressure following a global selloff. dow jones down about 162, nasdaq off 2.5%. s & p off 2%.. some of the stocks you have been clicking on at cnbc.com include citigroup, more on that in second, bank of america our parent company, general electric. something bill has been following, one of his favorite indicat indicators, right, bill? >> the fear indicator, sue, that measures volatility, the anticipation of volatility there at the chicago board options exchange, a three-month chart.

we talked about this a few weeks ago about how as that peak, that marked the bottom right there in early july for the stock market, which we will show you the correlation in a moment here. then as the market gfgs highe-- going high, the vix lower. and just about now it anticipates a decline in the fall, as often happens. we put the dow with the vix here in this three-month chart, you see the move higher, the dow is going higher, the vix lower, now starting to move higher, does that mean that we are destined for a bigger correction here? that is the question, ms. drury, isn't it? >> that is the question indeed, sir. now with that vix spike bill was telling us, stocks seeing the biggest drop in a month are we seeing the beginning of a more significant correction? that is the question.. let's gather up "power lunch" passports, joining us is the president of cio and ned reilly, ceo of reilly asset management.

gentlemen, thank you very much for your time. reading through your notes here, seems as if not only are you not concerned about this correction, you also think that, hey, about time. ned why don't you go first and tell us why. >> well, basically as pointed out by steve liesman, a lot of things have happened since last march. basically, the markets recovered from 6600 to 9400. the economic data has turned totally positive from the perspective of where we were three months ago. the problem we have is that wall street is always so impatient and they want everything to sort of confirm their recovery. >> doesn't make it a bad person. >> someday it is does, i have to say. the longer term, pointed out by dave co-tack this is a double dip, i don't think we will come close to a double dip. we have only spent 10% of the tax package that it -- and the obama stimulus package. we have housing prices starting to turn up. we have auto sales going to be 40% higher than they were two months ago, even if it was cash be for clunkers. we have had a lot of good things

turning now. >> jerry here, it is pretty clear we are in a show me phase right now the stock market anticipating a recovery now needs to see more evidence of that reconfidencery before it moves higher from here, don't you think, jerry? >> yes or no. i'm pretty much with ned, apologize if i don't disagree with anybody today r, this is t summertime. going to get a sloppy selloff do it in august and make people worried about september and october when, as ned pointed out, going to get very, very good data. for the mark tote sell off in those two months from here, boy, going to need something that surprises us. you mentioned a vix a second ago, bouncing around in the 20s, on its way to 80 a year ago. >> different period of time. >> it was, but look at the direction of all the world economies in this next three-month period. >> ned, you view this as an

opportunity long-term, you are bullish for the next couple of years where would you allocate resources right now or take money out of and put into new areas? >> i like the technology side of the economy, the q, q, q i have been sticking with the next two to three years, going to see a total rebirth of the fourth generation 4 g, things coming out that will put a secular demand twist for technology stocks. they have gone through the period well, as far as i'm concerned can, considering the stuff thrown at it the other is health care. we have stumbled through potential health care legislation the last 30 years, now obama has got his problem with the constituents trying to follow this program. i think there is another area along secular growth. >> jerry if i could just finish up here, a lot of people that missed out the last five months of rally, a lot have been saying give me a decent correction so i can get in at a decent valuation

what would you be buying right now if there is a decent fix? >> i think this is your dip and i would be in here, i like technology but add there is probably going to be big surprises in the consumer area and fourth quarter, look closely at retailers, finally, the energy stocks, you go through an industry, you know, all the manufacturing-en related industries, the industry, natural gas and oil only got to about 95% capacity utilization, the rest of the world manufacturing down 30 or 40% this is probably the leadership sector out of this whole economic swoon, look close at u.s. natural gas here, oil service and the other world oil producers. >> okay, jerry and ned, thanks very much. >> thanks, guys. up next, the citi is heading for a showdown with the government, they owe their top energy trader andrew hall $100 million bonus. now they pay him, of course, the feds will be all over him so, who is this guy and what can city do? scott cone can tell you.

as ned mentioned and also jerry mentioned, health care has been in focus. . let's take a look at some of the winners in that particular area. the news today that perhaps the public option in health care reform is dead, cigna,et nah and humana all significant percentage gains on the day. we are back in a moment the dow is down 161 points. some people buy a car based on the deal they get. others by the car of their dreams. during the lexus golden opportunity sales event, you can do both. special lease offers now available on the 2009 is 250. but i've still got room for the internet. with my new netbook from at&t. with its built-in 3g network, it's fast and small, so it goes places other laptops can't. i'm bill kurtis, and wherever i go, i've got plenty of room for the internet. and the nation's fastest 3g network. gun it, mick.

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one of the oldest indicators in the market signalled a few weeks ago. the dow theory component which has the transports and industrial averages hitting new high for the latest move at the same time that happened a few weeks ago and both are in correction mode today, the dow transports, as you can see, down 3.75%. what are you interested in today, the most widely held stocks getting the biggest clicks on cnbc.com, include cit group up a fraction, ford down 39 cents a day and fannie mae down 9 cents. sue? andrew hall, bill, you may not have heard of him but he is causing a lot of controversy right now, citi's high-energy energy trader in the middle of bonuses. scott cone joins with us a look

at the man that may force citi and the government in a very big showdown. >> interesting to see, not entirely clear that either citi or the feds are spoiling for a showdown here. there have been legitimate questions about whether contracts signed before the february 11th cutoff date are under the jurisdiction of the federal payczar, although he seems to have made it clear over the weekend that he thinks they are and citi won't comment on what position it is taking regarding andrew hall's crack. so who is this guy? at the very least, a guy who made an amazing bet on the oil markets in 2003 when oil was around $30 a barrel, then managed to get out of that long position before oil crashed from its near $150 high last year. he is also incredibly rich. he made $100 million on that oil bet last year, as you know, and reportedly could make a similar amount this year. he is 58 years old, oxford educated in chemist acres have home in connecticut and 1,000-year-old castle in germany. it is suppose lid filled with german art. the notoriously reclusive hall a

rainmaker sit itty's fibro division and reportedly wants his money a citi spokesperson would not comment on a report over the weekend that the bank wants to exempt hall's contract for review by the white house payczar, kenneth fineberg, on the grounds it was signed before the cutoff for review. fineberg said over the weekend he has not decided what to do but reportedly noted he does have the authority to claw back compensation, even on contracts signed before the cutoff date. where does that leave citi and andrew hall? citi will only say it has provided treasury with all inform it is is required to and that includes information on hall's compensation there are reports that the bank could find a way to restructure his payment into stock but what is sounds less likely among the scenarios out there, citi spins off fibro which has been a tremendously profitable business for them as well as for andrew hall. $100 million pay packsages don't look good these days.

>> scary when fineberg says he has the clawback provision he could exercise as well. thanks, scott. see you later. elsewhere, president obama and his health secretary sebelius over the weekend seem to be opening the doors dumping the government-run health insurance option. could be hart of the health care package. should they get it over with and kill the public option? spark are going to fly in our power grid debate. >> 12:45 eastern time, get ready for the "halftime report." >> warren buffett said people are greedy when fear is beautiful. the also, one area doing well today, the health care companies, what are the options markets pricing in terms of direction of those stocks? all that and more on at "halftime report" but first more "power lunch" right after this. he ran off with his secretary! she's 23 years old!

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so, various members of the obama administration dropped these not so subtle hints over the weekend about axing or abandoning the plan of health care reform after all the

protests at town hall meeting g the last week. the question, should the president kill the public option in order to keep health care reform alive? firing off in our power grid this week, democratic strat gist chris cough phone thanks nas and jason lewis irk host of the jason lewis radio show. 20 secs to make your case and we tussle after that. jason why should the public option go away? >> well, i don't know who had a worse weekend, tiger woods or the administration. but either wake the public option is dead. it was never a public option, it was the public mandate. >> what's wrong with it? >> well what's wrong with it is $1 trillion to start w if you go out past ten years, bill, according to cbo, it's 2 trillion. now, a health care reform shouldn't cost 2 trillion over 13, 15 years. reform shouldn't cost anything this is a health care takeover. >> chris, why should it stay, or should it, in your view? >> i think a pragmatic approach, if the white house can make the argument that the co-op can work, that's fine. but i think there is a lot of

argument, evidence to suggest that the public option is a good option. the problem i have, especially amongst republicans and conservatives that oppose this, this is the very logic of competition, private companies with operating margins much high than, for example, medicare it makes sense to have strong competition in the health care sector it is going to drive down costs. >> the idea was to introduce some competition in here, jason, so how if they abandon the public option, how will they try and impose competition or how would you impose competition that more than exists right now? >> we need to change the tax code so the bias isn't for employer-sponsored plans but individuals to deduct their premiums oh limb nate these mandates, 1,000 pan dates nationwide, tells companies they have to price young people out of the market and people to save for co-pace and deductibles, real reform, i'm for that. >> what about that, chris?

>> same old conservative talking points we have heard for a decade or two. >> haven't done them yet. >> what has it done for health care?? nothing. >> rather tan pointing fingers. >> how would you propose competition? >> i don't think you can have it without a public option. those that oppose the public option, hearing that a lot amongst republicans and grass roots forces, full, they have no problem, it seems work medicare no problem be with medicaid and health care it seems to be a problem be with public option, cbo standards, only 11 million people would utilize the public option. competition is not a bad thing. i thought it was the basis of capitalism but it isn't. >> what about this co-op toing? kent conrad from north dakota was on the tv over the weekend describing what they are talking about there in the senate.

health insurance plan through private consumer owned nonprofit co-op tos modeled much like what they have in electric and agricultural co-ops like they have in the dakotas now. how would that work for you, jayson? >> a step in the right direction, get rid of the third party payer system, whether it is government. government accounts for 47% of all health care spending now waves, public option and hasn't done much for competition. we need to get back to not prepaid medicine but real catastrophic health insurance. >> a good compromise in your view, yes quickly? >> without a public option i would look at it the best option is the market.. chris what, about the co-op? >> i think there has mob more explanation how the co-op is going to drive down cost that is a fundamental point here that we have real health care form. it is not a short-term political

gain, long-term political gain, the people will thank the obama administration if they have health care reform that drives down costs, next to the co-op or through a public option but that, i think, is the key point. >> government never driven down costs than anything. >> just not true. look at medicare them operate at a lower mark. >> look at medicare and medicare is busting the budget what is it driving down costs for? >> apparently, up opposed to medicare, correct? >> i'm telling you -- >> no are you opposed -- >> bankrupting the states. >> so you're opposed to medicare? >> i'm telling you, not a public option. >> thanks for joining us. as was mentioned, yang pulled off a stunning upset of tiger woods at the pga championship yesterday. what does it mean for the global business of golf and his spoon senators darren is work that story for us. minutes a away from critical data on the housing sector, all that and more when "power lunch" continues. stay with us.

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it is already being called one of the biggest upsets in sporting history. south korea's y.e. yank ranked 110th in the world before

yesterday's match against tiger woods. sports business reporter darren ravel is here with the golfing boom in asia. >> did we say going into break that tiger choked or not? >> i did not say that. it looked like -- >> i did not say that. >> tiger woods just doesn't lose in a major, we know that but yesterday prove there had is an exception to every rule, unknown ye yank hoisted the trophy as well as his tailor-made golf bag for that matter. start with asia and opportunity there japan and south korea a big, big golf-crazy country there, a chance this will help start -- jump start china which is by 2020 is projected of the second most golfers in the world behind the u.s. it should be noted, however that south koreans virtually dominate the lpga tour but this is a america, this is a men's game, a different animal. now let's talk about the sponsors, big exposure for a brand that has a presence in air this and europe but not seen much of the athletic rooster since the days of noah and then

taylor made on the golf bag and hat there we go. that was big there.e. >> good job. >> not sure yang was paying attention when he drank the gatorade on 17, the competitor. now, not many book makers had odds on yang to win it all but that doesn't mean one outfit didn't lose big. patty power's ireland's largest book maker hedged bets by paying out all those that bet on tiger before yesterday's final round. the bill came out to a little over $2 million. >> oops. >> did they really? >> the caddy also, yang's caddy. >> this is nature family and the official energy bar of the pga tour. they have a program with the caddies that if your golfer is in the final pairing, they will put a hat that says nature vally on the caddy, he goes into 17 when the cameras really focused on him and he is eating an odwalla bar, also the competitor, but give credit to

odwall a, i put that on twitter, whoever is running social media there said, yes, we really enjoyed that. >> oh. >> there we go. might have a deal now. there you go. >> "the call" when he sank the final put, y-e-s. love that call. >> a a lot of people predicted woe say that before he said that doesn't mean bad. >> good call. see you later, darren. thanks. still ahead, minutes away from key data on the housing market, diana olick has on what the holdovers think of the markets and continue to be on our markets minute by minute. >> up next, are there any safe havens you should be buying now? melissa and the gang has ideas for you can the fast money "halftime report" is on deck. we will see you back at the top of the hour. (announcer) illness doesn't care where you live...

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welcome to the fast money "halftime report," the her the of the ago as it is happening. we have a selloff on our hands, wall street joins a global market pull back, you trying to protect your profits and where are your opportunities today? let's get to the word on the street now, our fast money crew today, liquid dater, joe tar nova, mike, canton fitzgerald, jerry and jeff from smb capital. dr. j, kick it off with you, seeing the vix spike by 13%, the biggest jump we have seen since april, highest levels in one month. this indicates that people are willing to pay for protection, what does this mean about the

market's moves going forward?d? >> also indicates to me we are seeing people willing to own some volatility because they see these 1 1/2, 2% moves on a daily basis. the way they take advantage of that is to own the vix. i do view it as a fear indicator, melissa, but then i also take a look at the fact that people are aggressively trading it. it is giving them great rewards for this trading, so i think that's what they are focused on. >> michael, beyond the vix which is of course, the volatility for the s & p 500 what are you seeing in terms of buying protection within the other sectors? >> i agree with john. what you are seeing when you see these things go up is just an indication that people are becoming more comfortable with the notion that they would be owning options at these levels. volatility, implied volatility, the relative price of options has been dropping pretty much all summer. now, of course, seeing the market still does move around, whether making an upside bet and protect yourself to the downside by buying calls or whether

buying protective puts, seeing increasing willingness to do. >> we have a 2% decline on the s & p 500 now you 2 1/2% decline on the nasdaq, jeff is the test of the month-long summer rally that we have with seen up until today, last friday or so is the last hour of trading, will we have buyers step into the market and buy on weakness? ask that what you are watching? >> a great point, the last trading session over last week that is what happened, the last 45 minutes, buyers stepped and pushed the markets higher. . the key is to watch the 980 level in the s & p 500, closes below that level, a little concerned, we can definitely see 968 in the spiders but the key, melissa, talking about the summer months here, i want to see volume. volume to me, closes below the 980 means institutions are selling, we have not seen that volume the last couple of months. >> joe taranova, you look at your screen, seeing the red arrows across the board and

potentially buying opportunity, which blue chap -- blue chip, i should say are you looking to get into on this pull back? >> not necessarily on this pull back. i think what's happening here is finally the market found some near-term resistance overhead s & p 1010 to 1015 area now the market going to play the summer game of she loves me and love mess not between 950 and 1010, eventually we move back higher, may come in september or october or november, down the road there is upward momentum. that will be led by energy that is the sector that is going to be the next lady that takes us higher. >> picking that petals off the daisy, joe taranova, which energy stocks are you looking at specifically? >> i think could you go into the entire sector as you move toward the fourth quarter of 2009 from the worst of the sector being the refiners to the best in breed oil service, the entire sector will perform as we navigate our way toward the end of the year.r. >> let's move on to our next trade today, financials among the biggest losers in today's

session, cap one and bank of america announcing credit card defaults rose in july. and last week, it was announced stakes as of the end of the second quarter that seems to be over, at the same time, not a surprise, dr. j, the consumer is in distress and having trouble paying their credit card bills? >> numbers respect surprisingly jumping off the balance sheet like they were in the first quarter, melissa. what i'm focused on is taking a stock like capital one, looking at the chargeoffs, seeing that, yes, they were up a couple basis points but not dramatically so. and then looking for an entry at a lower level than where the stock is right now. we would have got it if it wasn't for paulson last week. now going to work our way and rachet down to get to a level where you would lick to buy into capital one. >> you watch levels here? >> you bring up a good point. i think you bring up a point about the consumer. when the consumer is afraid of losing their jobs, afraid of, you know, losing their homes,

the first thing that will go is that credit card debt, not going to pay that credit card dealt, people need to focus on the consumer, he is especially looking forward to see if the quon km is he recovering. >> we had a disappointing earnings out home depot had a 52-week high and it reports tomorrow. what do you make of the lows and is there a buying opportunity with home building related retail space? >> i don't think there is. the $64,000 question is are consumers going to spend? if you look at what they said in terms of trimming the upper end of the forecast, it tells you that people are not highly confident that consumers are going to spend and this will be the leg that shows weakness over the next three to six months. home depot and lowe's i don't know if i would about be there. >> report that is the administration may drop the public option from the health

care reform bill. what do you see in terms of options for the managed care stocks? >> a lot of bullish activity in all of them. aetna, cigna and unitedhealth have sharply higher volumes. near date add at the money call buying. this is the way you try to play it either. if you are speculating this will be the case, you need to hedge to the downside. when we started to hear about the unitedhealth plan, unitedhealth traded below $20 sharply lower than right now. if they are poised to rebound, you want to protect yourself in case it is unfounded. >> i would say mike nailed it. three times normal volume in unitedhealth with warren buffett lightening up. you have a stock that gets this money flow with warren buffett and news that he is getting out, that's a strong sector and unitedhealth is the strongest in that group.

>> let's move on. time to go global and beginning overnight in asia with the shanghai falling 6% and index below the average and in contrast to all other major markets, let's go to the ambassador. tim, what do you make of the sell off and is there an opportunity or is it too hot to touch? >> the bloom is off this rose. that started when japan released their numbers and showed the private demand is dead. china has been concerned about policy changes and i don't think the policy changes are coming and i think there is concern about whether the bank lending can continue at the rate that clearly spruced up this market. there is insurance companies at the permissible limit of investing in the equity market and a number of options pushed into the market and reason yes the market won't go up in the short-term and i think chinese authorities while in a position to control earn a place where they may have to do something about it. this will affect domestic

policy. to be cautious, that's a great place and you can get exposure to the downside. the big companies, ach and petro china and ptr along with the commodities story, you have the state story and people would be wise to stay on this trade. >> see you tonight on the desk on the fast time. on the fast money, we head to the desk where traders give stocks on the shopping list. as million was kids head to college, "power lunch" has the scoop on comparing and competing for student loans. the fast money halftime report after the break. >> as the correction begins, the theater feels vindicated. we will ask for his next forecast. when a hedge fund manager sees blood on the streets, she looks for buying opportunities. you won't believe what made her watch list. >> plus, the dollar. say shining beacon of strength

amid the storm and we are not sailing towards the safe haven. why the dollar could be a dud on america's post market show tonight.

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"power lunch" trade to go. jt, you are watching the strengthening dollar and the name of the minors. >> the currency market itself, we talked at the top of the show with the importance of the vicks and providing insight to the market. you have to look at what goes on with the dollar. the dollar is rising and not a story. the dollar short position is an overcrowded trade and the dollar rising is weighing on all term energy andal equities. the tale going forward is the dollar to roll back over and get the equities to resume the uptrend. >> you happy you put on the trade, huh? >> it worked out well and i tell

you what, regis knows his stuff. we have puts and worked out good. >> time to call the close. do you buy or sell? kick it off. >> i'm an options and not a day trader and i tend to be ag gnostic. we are waiting to see if the pull back would be prolonged. >> you are more of a day trader. >> we are selling into the close. >> dr. j? >> we have a bunch of earnings.. home depot hit the 52-week high and target tomorrow. i'm selling into the close. >> jt? >> it's a big branch with a lot of the little leaves on it to play. she loves me, she loves me not. right here you will have a lot of confusion in the market place. whatever seems logical, that's actually the trade you don't want to put on. you are probably not going to navigate your way through.

>> not the surge that we have typically seen? >> conventional wisdom said we will see it. therefore that's the reason why. same trade with the dollar. should be going lower and that's why it's not. >> that's it for the halftime report. peter bear makes his case for why the corruption will continue. up next, breaking news on the mood of the home builders with the sentiment and see what else you guys are watching. >> the markets and on "power lunch," the u.s. widens many of u.s.'s wealthy clients as tough and costly choices are made. we will talk to attorney who is represent the clients. the sell off on wall street and take the pulse of the markets for you and advice on getting money for college and how to win the financial game. back in a bit. >> stocks are selling off with the major averages off the lows of the session. several big issuers reported

drops in delinquency rates for july including american express. seeking comment on price restrictions that may be easier to implement than previous proposals. reader's digest said they are likely to seek bankruptcy protection. cnbc.com news now, i'm courtney reagan. welcome back. let me make sure my microphone is on. we had issues last week. i'm bill griffith and mandy drury is spending a few days with us. we have breaking news right now on the housing market. let's get to diana in washington for details. what's the sentiment right now? >> the nation's home builders continue to gain confidence, but carefully and gradually. the national association of home builders survey rose point in august to 18, building on a two-point game in july.

the healthy confidence. that said, they covered three areas. buyer traffic and sales expectations over the next six months. current sales went unchanged and rose three points and sales expectations took the biggest jump up four points. the first time home buyer's half credit and the chairman questions what happened after that. will there be enough momentum in light of significant head winds like the credit crunch for production loans and inappropriate appraisal practices that are scuttling a quarter of all new home sales. tomorrow we get housing start that are expected to rise along with permits and signs of recovery in housing. you know where to go. realty tech.cnbc.com. >> it's interesting to see the

reaction in the stocks. much started before we started to see the numbers and the housing numbers started to gain traction. >> we have seen a big bump up in the stocks based on the good earnings. >> not standings, but in the last two months, they have been up overall. the home building index up 32% and we have seen a big surge. the time to get into it might have been two months ago. they may be at the peak now given what's going on and given that there head winds in housing. >> the argueument should be the same that we heard last hour when david said he sees a double dip recession coming because it's on the individual right now to deliver. if we don't have the tax credits, will they be willing to buy homes beyond that? >> you look at the tax credit and if you are getting in on a new home or signing a contract for a home that hasn't been

built and you want to take advantage, you are doing it now. you are not waiting until november 30th. the bulk of the home buying going on because you closed when the house is finished.. you have to get it in now. if you are going to close and get in. >> for comes down to jobs then, i guess. if they feel better about their jobs, they will be more willing to buy. >> from the analyst that you are speaking to, the best time to get in was two months ago. none the less, what is the best way to play it? you do it with the building stocks or the development stocks or building materials? >> they haven't given any. we are looking at the home builders and rises and starts in confidence in the sector and more building going forward. that said, you look at the home productions and the lows in the home depots and lower expectations. we are not seeing things as well as we expected. it will be on specific builders. you have to look at ones that

might be more healthy. there good healthy home builders and overall, maybe not the best time, but there good ones specifically. >> thank you very much. see you later. >> new developments are emerging in the tax probe involving the u.s. government and ubs with thousands of the swiss bank's american clients in the mix. cnbc has been following the story and we go live to washington with more. >> essentially what happened is this. the governments reached agreement where by we are told 500 holders of swiss bank accounts and the names will be disclosed and selling details of the agreement could be announced any day. certainly before the end of this week. all part of what's emerging as a global crack down on tax evaders. meanwhile as the irs is offered amnesty of sorts in the form of

reduced penalties and less likelihood of prosecution if they come out between now and september 23rd. remember the government initially wanted 50,000 accounts from ubs and looks like they will get at least 5,000. on friday, u.s. prosecutors reached an agreement with ubs california. he admitted holding at least $1 million through ubs swiss bank account held in the name of a hong kong entity and avoided paying taxes. that case grew out of an earlier agreement in which the world's second largest wealth manager turned over 250 names and paid $780 million in a fine and helped american clients evade nearly $20 billion in taxes and offshore accounts. it has been informed that a new agreement in principal has in fact been reached. now, all this in terchls of an

anti-tax climate that is going global and growing on the aftermath of the recession. the government simply needs the money and it's not just the u.s., germany and france that stepped up to the plate. we are seeing perhaps the end of decades of legendary with banking secrecy. >> sounds like it. let's bring in a couple of attorneys that represent ubs client who is are facing choices on the issue. asher rubenstein and scott michael is partner at kaplan and driesdale. thank you for joining us. is this the end of the secret swiss bank accounts some. >> it's the end of swiss bankingy is creaty with the irs and tax authorities. i don't think anybody with have an expectation that they can hide money from their tax regime. >> what about the choices, scott, that some of these people have to make.

it's certainly either way a big risk to these people that are facing huge fines or roll the dice and hope that they are not part of the first lot of names to be released. what are you counseling your clients? >> they had a voluntary disclosure in place for decades. the deal on the table is a special version of that deal. it may not be the best you would hope for, but the best anybody will get from the internal revenue in the middle of this issue. we are counseling our clients that if they get to the irs before the irs gets to them and their accounts hold legal funds, funds that are not dekrif rifed from criminal activity, they are candidates for disclosure and they go through the intake process they get a voluntary disclosure letter or determination from the irs and then they can negotiate over civil penalties and take one of the options the irs has on the

table. >> are you advising your clients to come clean and fess up before they face criminal charges? >> absolutely. for me it's i'm advising my clients that it's a no brainer. given the back penalty and taxes and interest when you are in the program versus if you are not in the program and the irs finds you independently, couple that with the fact that if you don't come forward and make yourself compliant, you run the risk of a criminal allegation and that leads to all kinds of possible consequences as well. it's a no brainer if you have noncompliant accounts, that was the time to come forward. >> is there any reason to have an offshore account? >> people have accounts for all kinds of reasons. they like international diversity and investing and they have family or other connections overseas. there is nothing illegal in having a foreign account. >> tax havens are not the reason

anymore. >> that is eroding. in my opinion, it's eroding and the protection available for people from government inquiry whether the united states or other countries. >> how does this square with swiss law? it's a great ambiguity right now because switzerland agreed to a tax information exchange about a month or two ago and under that agreement, the swiss agreed to abide by article 26 of the oecd model convention on tax information sharing. what that would require is internal swiss law be changed. up until now, tax fraud was a criminal violation and the mere non-reporting of income was not. >> the swiss blinked in this whole thing? >> i think they did blink and the irs also kind of walked away from the table. the facts were so against ubs, they came to the u.s. and hid behind swiss law. that's a lawsing argument.

rather than pursuing 52,000, the irs is settling for between 5,000 and 10,000. >> do you think it will end there? don't you think the irs probably and this part of the program will go back for another 5,000 or 10,000? why would they stop even though they agreed no the to pursue? >> i think the 5,000 to 10,000 names they will get will be way more fruitful than the 50,000. in the 50,000 there were a lot joint checking accounts and students and people living overseas not trying to find mobby. the irs will fashion criteria to obtain discussion of a narrower or more meaningful groups of accounts. the swiss government was party to this agreement. there is now nothing to stop the irs from formulating a similar request on other swiss banks. >> that will raise that. today ubs has the screws put on

it, but is there another out there that might be next? >> plenty of others. credit suisse and a big footprint in switzerland and we read the names in the press before and i wouldn't be surprised if we saw them coming in the press. the fact that the irs gave up and is now using the treaty process to obtain this information means they can get information even from banks that don't have a footprint in the united states. >> big, big stuff. great stuff. thank you both for joining us. >> thank you. >> the markets are off the lows that we had and a good old fashioned summer sell off. we will round up the all-stars in a moment. >> also ahead, is intense reaction to health care reform turning president obama into a more pragmatic leader? we will talk about that and lowe's earnings disappoint the street. we will hear different stories when home depot reports. analysts on whether you should buy or sell.

>> how could you get financial aid for college in this environment? coming up next on "power lunch."

we are up 168 points and the nasdaq is down 50 points and the

s&p down 22. it's probably no surprise that the key components in the sectors are down as well. lower on the trading session. let's get some reaction now from the market reporters beginning with bob dasani at the stock exchange following on the global sell off. at least we haven't retested the lows of the session at this point. how does it look going into the latter part of the afternoon? >> it will be tough to get a move up in the last hour or so. we opened down 200 points and tough for the troiders to open the market. you don't make a lot of money. that's a rise you get in the last hour that might be muted. i want to point out several groups that are weak. oppenheimer downgraded the industry this morning. here's the pressure that the analysts are feeling after noting the big run uf in the last couple of months. now they are noting the fundamentals are not improving and the pressure is on analysts

to sort of change their more optimistic members.s. they now downgraded with the health care stocks. they are all to the downside. here's the good news. banks are reporting that for yell that is the delinquency rates and they are not bad. they are better than people expected. it is strengthening the dollar and kprn about what's going on in asia. matt nesto, we are -- nasdaq is trailing. >> we have garnered a full two-point bounce off with 1934. 1932 is the inter-day low. you can see for all intents and purposes it's down and over. notably microsoft is down 1.7 in a market place that is holding

up better than the markets. apple is down over three and google is down over three. foster wheeler or joy globals in the nasdaq both down four or five%. wynn resorts is down 6%. weak in the discretionary names and electronic art 7% lower. what's interesting is that the nasdaq on track and the broader index is on track for the worst day since until 2nd. the materials index for the worst in two months. the loan gainer in the nasdaq is express. let's go down to rick. >> thanks, nesto. we are seeing kurves flattening and twos and 3s are not the best purr formances. it starts at the five-year and that is the winner of the day. look at the chart and when you expand it out. the lows yield from the last few

days of july. we will call it the lowest yield for the month of august. if you want to look at another interesting area of marketing with each, look at the lqds, the corporate investment grade etf and indeed over year, you see it hasn't come down much. it only came down a bit. there is opportunity here if you are an equity short in the market place.e. the dollar index and it's just like the other contracts and today is roughly at a one-month high in terms of price. let's go to the nymex. >> we settled into a range between about 5550 and $56. he touched on this and they will determine the close and said that where the s&p is will determine that. if it stays near the low, they will not cover and we will see what happens. we might get a pop near the

close. we are down about dollar 5 and 7% in terms of oil. i want to touch on the seven-day losing streak. the storms, we don't wish ill will on anybody and missing the market and tough on the bulls here. when it comes to metals, copper and chile one of the largest producers in the world. 47% decline in terms of exports, year over year from january to july. you talk about a slow down in demand, there is a perfect outliar for you here. >> i can't do that. you are still brian to me. >> i am older than shaquille o'neal so i'm shack. >> there you go. you were shack first. >> you want a dream vacation or a second home? how about getting out of debt? we highlight an unusual sign of the times with unemployment close to 10%. game shows are seeing a huge

increase in contestants who are older, college-educate and unemployed and looking to make quick cash until you find a new job. they quoted meredith vieira with the syndicated version. she said when she asked people what are they going to do with the money if they win? it used to be to go on a dream vaation and now it's i just want to pay the bills. >> the lottery is beginning a lot. people are betting on the jackpot because some of them don't have a choice. >> i guess one of the other good things is there so many more options now a days to win money. look at the huge boom in reality tv. there is not a day that doesn't go by without new reality tv coming up. >> you can do it with our friends there in jeopardy ordeal or no deal. you are right. >> there a lot. survivor or -- >> no, thank you.

it's okay. i would borrow from family and friends before i ate bugs. >> far down the road on jeopardy, but go to unemployment week. >> i want to know at what price would you go on reality and eat bugs? >> bugs? maybe i could do 10 grand a day? >> everybody has a price. >> up next, should we call it after weeks of fights and push back on the health care plan, we would see a less liberal and more pragmatic president obama and what does it mean for the market? >> we will talk about that and you won't believe what the american chemical society said is all over the money that is in your pocket. 97% of it. what's on it? you will not believe. >> wash your hands. >> as we head out, one managed care company among a few gainers

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a simpler way to ship. call or go online now to get started. welcome back to "power lunch." down is the theme of the day and the dow is down by 1.8%. 2.5% for the s&p 500. and the widely held stocks with citigroup, bank of america and general electric which are all firmly in the reign. 4.3%. >> after a bruising battle on health care, beltway watchers are saying president obama has become decidedly less liberal and more pragmatic than he has

been in the past. thoughts now from gene cummings. it defines pragmatism if they are willing to give up the public option right now. >> yes. it is a sign of that. barack obama has always had this streak in him, maybe there were times liberals didn't want to see it, but he wants to get some things passed and as much as he can get passed. he is not the sort that is going to let the whole thing collapse over one provision. >> not so much the case of pragmatism, but more resignation? >> it depends on your perspective. if you look at all the other pieces of the health care bill, there is a lot of stuff he could claim victory on. if they go with the co-op plan with maybe a trigger for a public plan, it puts the ball in

the insurance company's court that they have to show. they can have to do what they say they can do. >> is that the most like leeway and can he claim victory? >> he could claim victory on the fact that more people will get coverage because there will be a mandate for everyone to get coverage. the real victory would come later if we see costs go down. i think he could claim victory if he gets that kind of piece of legislation through. >> george bush if he had an achilles heel it was dealings with the far right in the republican party. barack obama while he deals with the liberals and the democratic wing, he sticks to his guns in 19 cases on issues like this. >> he does. it's been interesting to watch him from the beginning. he doesn't want anybody to think they own him. if you look carefully at his happy with the congressional

black caucus, one might expect him to have them over to the white house or he would go over to the hills to meet with them. they have no more attention than any other group. if you look at the women's groups, he is not playing up to them. labor, he is not playing up to them. any time somebody acts like they got a piece of barack obama, it triggers a negative response. he is very much trying to cuts had own path and be his own man. >> thank you. good to see you. >> we are showing pictures of the president who is in phoenix speaking to the national convention of the veterans of foreign wars and announced new competition within the va to suggest ways to improve service. he is speaking to 5700 members of the vfw at this hour. >> coming up on the half hour with the market down 163 points,

we will head back down and steve will join us with his take on what's going on in the market. >> the ultimate show. the question is, are people buy something everything you need to know about the pebble beach. >> shares of ro seta stone tanking and that stock is down 22%. how do you say ouch in all the languages they teach you? we are back after this. i'm racing cross country in this small sidecar, but i've still got room for the internet.

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welcome back to "power lunch." here are the stories we are following. the new york fed's manufacturing index improved for the first time in more than a year. it is now at the highest levels since november of 2007. on the other hand capital one said the 30-day delinquencies rose nearly 5%. credit card borrowers are a month behind. the hedge fund performance with funds posting the best year to date results in 11 years.

>> it's a downside day with a sell off in the asian and the rest of the global markets. let's talk about the market here and go down to the floor of the new york stock exchange. steve, is this kind of a one-day event or do you think this summer sell off has more room to go? >> let's look at the summer sell off that has more room to go if you look at the fact that there plenty of people off in august. they have been pushing for a while and the last couple of weeks they have been run over. if they smell blood again t could be a couple more days. >> would you use that to enter into the market. they said they missed this huge move in the dow and looking to get in. they have enough confidence? >> this is still a by the dips market place. mutual funds do that and i would suggest that that was probably the premises to work off of. >> i have a softball question for you.

why are health care stocks up? >> wow! it's unbelievable.. the administration takes the lead when it comes to energy, health care and the market place. the safe health care other than the plan. >> you are welcome. >> if this is a buy on the strategy skills, what are you buying? you have to go with the strongest performers. >> energy, there is no real alternative. you have to go with the stand by. more data coming out later. >> coming out thursday. it's all about that. we have housing data and those three things together will give real direction to the market place. there is still buyers and don't

take your from a sleepy monday in august. >> cash for clunkers seems to dominate the conversation when talking about the order, but over the weekend, it was all about cash for classics instead. we pick up a classic and he is live from san jose with the details. >> not on these wages, but maybe next year i'm holding out hope. we will talk about that another time. the only thing green about these cars might be the color they are painted and the sticker prices they feature. muscle cars featured at the auction for one are getting attention. they are the stature on the world's stage with gm and chrysler scratching towards recovery. camaros and fores are that much more collectible. the main event was the gooding

auction. $50 million worth of classics sold including this stunning 1958 ferrari 250 gt california spider going for almost $3 million. this 1938 and special coupe commanded $1.375 million. the aft on martin set a new world record. the recession of the convertible and a 1938 buick limited set a world record for a prewar buick at a half million and a 1953 xk 120 set a record at $192,000. they turn out to be the great buys. if you invest in the best, buy the best and stretch for the best. it's usually the car that will appreciate the most. >> gooding said many of the cars

on the auction did sell for less than their catalog estimates. in this economy the firm is exceptionally pleased with the bids of this auction. that begs the question, normally when you buy a new car, the minute you drive it out of the show room, it depreciates. what about the cars in terms of investment overtime. what percentage return would you expect on an annual basis. >> it all depends on what kind of car you are investing and what condition it's in and what money you are willing to put into it. jay leno featured his comments and he brought up the best point. you have to buy what is hot. do your research and don't buy what your gut says. do research and check out the car clubs and figure out where the momentum is going. this is a momentum-oriented market. we are seeing classic car prices

increase as investors look for tangible alternatives for the investment dollar away from what's happening on wall street. >> hitting huge rulings. >> absolutely. so beautiful. i would take the aft on martin in a minute. thanks a lot for that. let's go out to bill. >> mandy, let's take a look at the most widely followed stories on cnbc.com. talking about what's clicking. >> we have this out here and this headline. twitter is 40% pointless babble. they went out and did a survey with information you can pass along. most is pointless. >> is it a surprise that it is that high? it's only 40%? >> that's why i was surprised.

anyway. a little bit more serious and a hotter story for us, a market strategist on friday afternoon and he said something rather startling. the markets will drop 25 to 50% in the coming months. a lot of people are dive in and wrap up the comments and people are eating it. >> why do they say that? >> it works for everyone and for us. the hot thing is we did a partnership with the magazine and we have a list of fastest-growing companies up on the website. there is going to be a big special on it wednesday and people should just eat it all up. >> at the value on our website at cnbc.com. >> thanks, bill. taking profits for 19% on weak demand of the stock getting hammered. home depot tomorrow and with housing stocks starting to stabilize, would you buy or sell this? we will ask an analyst.@ú >> on wall street, here's a look

at how the stocks are doing. lowe's is down 9 and 23%. home depot down almost 4%. back in a moment. some people buy a car based on the deal they get. others by the car of their dreams. during the lexus golden opportunity sales event, you can do both. special lease offers now available on the 2009 es 350.

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sell off across the board d and the sell off was down about 200 points. down 177 and the nasdaq and the hardest hit down 2%. the s&p down 23 and 2.3% at this hour. the home builders had the numbers out from the national association about an hour ago and still a pretty pessimistic

lot, holding their breath, waiting to see what happens after the tax credits expire later this year. will home buyers be out in force and that's the question so the home builders are down across the board. >> that's a question for the home improvement as well. lowe's shares are down sharply after the second quarter profit fell more than expected.. right now the stock is down almost 10% at $20.62. what does this tell us about heem depot's numbers. should you buy or sell? joining us are the retail analyst and chris is the retail hard lines analyst at jpmorgan. welcome, gem. chris i will start with you. you have an over weight on both of those stocks. what do you say to the people who say that there is going to be less home improvement because there will be more new home purchases?

>> i say that with the home improvement names, 90% are on the existing side. that's where you see the strong correlation to the loan comps. with a credit constraint consumer, i don't think they will run out and buy new houses and they'll do work on the existing homes. >> do you agree? >> absolutely agree. it's like cash for clunkers. there is a big business and people driving their cars longer.. that's the bulk of the market. business under small -- under $500 did better than business. business was up if you look near 50. the home improvement business is fine. >> what did you make of the lowe's numbers down 19% on the bottom line. are we just facing difficult comps until we get past this period? >> today is a buying opportunity for lows.

the compares in terms of same store sales came to the back half of the year. three-year comp comparisons starting in the and july was tough because of the rebate checks, but the back half business fell off and more than just housing. the consumer mentality. >> i know it's a did you oply in terms of lowe's and home depot. the other 50%, are there names that you like? >> it's a fragmented market. there is the local hardware dealers and the lumber and building material. not a way to play it unless you look into the product guides and the vendors. >> david? >> i agree with that. you can look at the other guys out there that operate small stores and not equity plays. again, the small ticket home improvement is hardware that is doing better. they don't have the big ticket

stuff in the mix. the two big players have the breath of the exposure and business is fine except for big ticket. big ticket compares to the of '06 with the business rolled over very, very hard. we are finally lacking that. >> this is one sector that wal-mart hasn't big footed. >> it is interesting and i think wal-mart likes businesses that have traffic every day where you have one or two or or 10 items that drive the business. they want to get the categories and get it right? no. the second is pricing and if you put paint on the super sales, do you paint more rooms.

it's not as much of a roll back business and not as much of a high single light of the business. it's a good business with competitors, but a tough time in a good business. >> thank you for joining us. good point. breaking news at this hour. >> we have a massive data breech being alleged by the u.s. attorney in new jersey that involved as many as 130 million stolen credit card numbers. the only individual names is 28-year-old albert gonzales of miami, florida who conspired with two other individuals, both russians, to hack into credit card systems with hartland. one of the data breeches, there supposed 3 five data breeches in

this case. one would be the largest ever. 130 million stolen debit and credit card numbers where they went into the retail locations of the companies and scoped it out and were able to find out how they can hack credit card numbers and did just that. we are following this one. >> i believe it's easy. >> have you really? >> i know other people are as well. >> an act of faith when you lose that card. >> cash is king. millions of kids head off to college and more expensive than ever. with endowment slammed by the pillar, how can you get some? we will ask. >> as we head out, a look at how school stocks are faring as it happens. owl to the downside today. back to more "power lunch" after this. not looking for a bailout, just a good paying job. that's why i like this clean energy idea. now that works for our whole family.

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we have a broad-based sell off in the nasdaq and the s&p and commodity markets with oil and gold down and taking a number of stocks to the minus side today. where can you play defense? in some of these stocks with pfizer on the upside by 14

cents, merck is just a fraction lower. p&g, a fraction lower as well. they were higher before we came into this segment. . >> it was last week. coca-cola on all cylinders. millions of kids head off to college and in the lows of the worst economic crisis in decades, families are straining more than ever to find ways to pay. how do you tap into financial aid and how do you get the aid? one place to start is the news week guide on news stands this week. it's filled with all sores of tips. david is news week's senior writer. it's not just about this issue and the best colleges, but how to navigate the financial aid situation. that's more complex and certainly a lot more strapped right now. >> for sure. finding the right school is a big part of it, but paying is a challenge and as you know,

everybody got hurt. the colleges got hurt and families got hurt. endowments are down and parents lost jobs and family savings accounts are down. it's been brutal. >> professors have to be laid off and everybody is cutting back. >> the colleges took an average of about 23% hit in endowments as of november 2008. thing guess bad in early 2009. everybody is cutting back. what they are trying to do, they halted construction and stanford got $1.1 billion on hold and they are cutting back on budgets and trying to preserve the money available to help students pay tuition and room and board. they need to compete to get students. that's the thing they are trying to keep going. >> one thing students are aware of is getting the aid is one thing, and you have to carry the debt and repay it. >> what are the strategies that

you can tell us about so the students can get that without burdening themselves? >> borrow carefully. the obama administration federal student aid has been doubling since 1985 and it's about $88 billion available in loans and grants in '07 and continues to grow. there was $32 billion in the stimulus package in pell grants and for now are temporary tax credits that obama wants to make permanent. you need to be careful about how much you borrow. federal money tens to be cheaper than private loans. that's a good way to go. and scholarships. here's an interesting thing. there a lot of small scholarships and you need to go to your high school's counsellor's office and in our town, the police department has a scholarship and on senior

awards night, it's amazing how many $500,000 scholarships are picked up. you can cut into your overhead. >> for left handed accordion players. >> it's there. >> how much lower are interest rates on the loans in free crisis? >> that's something that you have to research as you go forward. these things tend to fluctuate. the plus loans which are the federally-backed parent loans at 8.5 on the higher end of the federally-backed loans. >> thanks, david. we all need to think about that. some sooner than others. >> i know. the news week issue and finding the right college is on newsstands as we mentioned. >> are you nervous? they will both be in college. >> that's paid for. send them off. >> restaurants are one of the. >>s that are hurting more than others and some are offering to

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others by the car of their dreams. during the lexus golden opportunity sales event, you can do both. special lease offers now available on the 2009 es 350.

several restaurant chains including i hop are hoping that will attract families with free deals. i hop kids eat free every day for the next month. kids eat free tuesdays and weekends and el to rita free for kids on saturday until 3:00 p.m. >> sorry this a great country or what? >> it is. it's quite clever because i believe a lot of these deals don't include drinks and they are the high margin products. you bring kids along and they eat and it doesn't cost that much and they wash it down with gallons of coke and that's where they make their money.

everyone wins. >> there you go. >> i have here one, two, three, four, five dollar bills. you might be carrying around cocaine and not know it. ? a study, scientists found that up to 90% of u.s. paper currency is contaminated with cocaine, especially in large urban areas like baltimore, boston, detroit and washington, d.c. they tested the bank notes from other countries, but the thinking was it has been rolled up and used for cocaine and put back into the currency. unbelievable. we had the highest and canada was second and the lowest was china and japan. think about that. "street signs" is next. welcome to street signs. the dow is holding near session

lows and falling 2.5% and volatility is up about 13%. the dow off 155 and a low of 198. you see an eager face leaning in. we have breaking news and whether they are leasing. steve? >> was i leaving you? this goes along with a lot of other stuff and situations remaining abnormal. things are getting better.r. for example, somebody said they continue to tighten, but the percentage is declining on prime residential and 20%. they are still tight, but that's down from 75% a year ago. loan demand is weak across all major categories and the lending decline is from this falling demand and declining credit quality. in a special question, they asked about how long they remained in place. banks expected to remain in place until at least the second

half of 2010 and into 2011 for other types of loans. banks are tightening standards and that falls from 20% to 30%. they have an increase in demand and the place they saw demand is about 60% increase in loan rate spreads down from 80% in april. a little change in the way they make loans as in they are not very willing. 35% are tightening on consumer loans for just 60% in april. 45% of banks report tighter in commercial real estate. down from 55% in april and decreasing credit lines for all types of consumers. being the business consumers or regular and banks are drawing in. we still have a credit crunch in the economy and in some cases improving. >> herth