500, nearly 19 points closing above 1,000 again. and here's what's really key. there was this battle going on right around here about 1,000, finally a decisive move above it. it is held higher by 18 points, 1,026, and let's move on to the nasdaq closing above 2,000, gained a whopping 32 points today, a gain of 1.5%, but once again, back above 2,000. great news for the markets. now, let's go to cnbc with an inside look at why we had a strong rally. amanda? >> isn't it great to finish on a note like this on a friday? but it wasn't just those three indices, michelle, we also saw crude prices at year highs, as well. and if we take a look at the weekly test to see the kind of gains over the course of the week. and remember, we started off on a really weak and shaky note. a lot of what was going on over in china, over the course of the week, the dow ended up 2%, the s&p 500 up 2.2%, and the nasdaq

up 8% over the course of the week. why were we higher? well, stocks were higher out of the gate. after a now 6% gain in two sessions in china, i have to imagine that some people are starting to think maybe there's concerns are a little bit overblown about china. that helped the sentiment on stocks out of the gate. and wham, we got a really good reading coming out of the housing market with a dramatic rise in existing home sales for the month of july. so maybe people are starting to think, you know, after three years of a shaky housing market, things are starting to see stabilization here. and then just to give people another excuse to buy, we got some pretty positive comments from ben bernanke who basically said economic activity appears to be leveling out both here at home in the u.s. and abroad. now, in business news, we were, of course, in the headlines telling about what's going on with dow jones. well, the wall street journal is reporting dow jones is putting its index business up for sale. now there's no word yet on what the asking price is here. but just a little background for

you, news corps did purchase dow jones back in 2007 for more than $5.5 billion. michelle, talking money, a rare piece of good news today for the former lehman brothers ceo richard fold, i believe he has sold his apartments in park avenue for $25 million, they bought it back in 2007 for about $21 million, but they were asking for $32 million, reportedly. so they didn't quite get what they wanted, but in this market. >> a little bit of good news, a little bit of bad news. >> it ain't so bad. >> the dow jones news is so interesting because anybody who buys that index business has the right to rename the dow jones industrial average. which would mean that this icon that we talk about every single day could be called something -- we should buy it, amanda, it'll be the cnbc industrials average -- >> the amanda industrial average. >> you think big. you're good. >> well, lady in red industrial average. >> you're right. >> wearing a lime green suit from hip to toe.

>> good stuff, amanda. let's drill down into the data that amanda told you about that was so much stronger than expected. really helped drive the rally. diana olick with the details. diana, a lot of people believe that today's data shows housing may be turning, huh? >> it may be in one area of the market, michelle. the first-time tax credit coupled with bargain basement home prices really are driving today's sales. but the bulk of the activity is on the low end of the market. >> reporter: sales of homes below $100,000 surged almost 39% in july. bump up another $100,000 and we're still in the positive, up 9%. but when you cross the quarter million line, it all goes south, and the higher the price, the more sales drop off. over $1 million and sales are down 23%. over $2 million, down 32%. >> sales are very sluggish on the very high end. one interesting development is that despite the historically low mortgage rates, we are

seeing increase number of buyers bypassing the mortgages altogether, going all cash. >> now, despite the fact that so much of that is going all cash, that could be investors in the market. 16% of that all cash as compared to usual about 10% or lower of all cash. realtors and home builders are really pushing for an extension of that home buyer tax credit, they would like to see it bigger and broader. some say without it, we could see that sales turn the other direction. >> yeah, thank you, diana. what do you do with this rally? do you chase it or do you run? we've got topnotch investors to tell us how to play this market. here now is jim, senior vice president portfolio manager at macro portfolio advisers, bob frolic author of "bull for all seasons," and don strausheim. knows a lot about china. we love having him on with news on china. bob, let me start with you. we've had such a tremendous run,

not just this week, with the 2% gain amongst all of the averages, but for weeks now. is there still time to get in? or are we going to get kicked in the knees here? >> i think there is time to get in. that doesn't mean that every week we're going to set a new all-time high. we're going to have pullbacks, which will be very healthy for the market. but why i think we're going to continue to see it move is i think it's going to be an earnings-driven rally, i think corporations really did a tremendous job cost cutting downsizing and getting rid of a lot of the fat. and i think productivity is booming and that's what's going on. we're seeing earnings are going to start driving the economy and ultimately i think it'll start turning employment around, as well. >> jim lacant, do you believe this is for real? or is this just a bear market rally? >> i think it's a bear market rally. but all three major averages rallied. and you've got to like that. our target has been 10,500 to 11,000 on the up side. i agree with many of the things that bob said but here's where i fall short and why i think it is

a bear market rally, while businesses have cut costs and are more productive, they're not going to see any increase in the top line. consumer spending is down, consumer delinquencies are up, lending is down, loan demand is down, i don't see how any of this could possibly translate to a more buoyant consumer. and you've seen the consumer confidence numbers. so i think investors have to be very careful. you've got to be in, as we say down here in texas, when the sun is shining, you have to make hay, but you've got to be careful because it's a pit bull market and it could turn on you and maul investors at any time. >> if you're comfortable with options or things like that. don, you want to break this tie here? >> michelle, i am distinctly in the bullish camp. i think the economy is clearly doing better. it's not good, but it's better. there has been an awful lot of cost-cutting that is paying real dividends. there's a great deal of cash still on the sidelines. i think we've got a lot more up

days than down days in the rest of this year. but i would caution longer term after we get a couple of quarters of very good numbers, i think we're going to have an economy that stumbles and staggers a bit in 2010 and beyond. >> is that because of the consumer or the government? why? >> it's going to be because of the consumer. >> okay. >> it's not going to be a solid consumer sector, but it's going to be better than it has been. >> now, don, i wanted to ask you when this week started out, remember the huge tumble we took on monday? and i was surprised because everybody blamed it on this huge drop that had happened in china. and my experience is, china doesn't drive us, we drive china. doesn't what happened for the rest of the week here really prove that, in fact, we're the ones in charge? china's dependent on us and our consumers, right? >> well, exactly. and the first point i would make is the chinese market, the shanghai composite, for example, is really a -- it's a closed market, essentially for the chinese.

and they are very kind of med - media-driven. it's all on one side of the bus or the other side of the bus, that's the way their market is. >> we should point out to viewers, if they wanted to buy shanghai, they couldn't. that's only for people who live in mainland china. and it's really a market that's not reflective of many other markets in the world. >> let me get back to this later. but -- >> jim, go ahead. >> we will make it back -- >> the chinese market topped before our market did. the chinese market bottomed before our market did. >> are you talking shanghai or hong kong? >> i'm talking shanghai. >> okay. >> their market topped before our market did and their market bottomed before our market did. and i think it's very much the driver. it may not be the biggest economy in the world, but right now it's driving a lot of things. chinese stimulus has driven a lot of things. it's driven a lot of the global activity, the increase in global

activities we've seen since the march lows. furthermore, if you look at the march lows here in the united states, we're up about 50%. but those markets, china, brazil, and india are up substantially more than that. so they have been the leaders in terms of investment performance. and when we start to see cracks in these markets, and i think we're going to continue to see some cracks, they're way ahead of themselves. >> okay. >> it's going to impact our market. >> don, you want to answer that? >> i think he's a little too pessimistic about this. it's going to be volatile. but it's a small market compared to ours. it's an important indicator of sentiment here. but it is not really a competitor for the kind of institutional investors that are dominant in our market or are dominant in japan or the european markets and not a good indicator for individual investors here either. >> okay. >> the way individual investors participate in china is in those chinese stocks that trade in america.

>> okay. new topic. bob, housing data very strong today, what about the housing stocks? is that some place you're willing to go to? they've had tremendous runs, is it all priced in? >> i think most of it is priced in. we still have a way to go. it's exciting to get a good month in existing home sales. to me it's more about this month because really that's april. so now we have a four-month run in upticks in existing home sales. so it tells us maybe we've tested the bottom. but if we're going to really see the turn around in housing, that turn around has to be driven by an uptick in employment. i think we're at least a year away from that. i think there are other great opportunities in the stock market. i'm not sure that i'd be looking for it in housing right now. >> jim lacamp, do you agree with that? if you don't, where would you put your money? >> i do agree with what bob just had. a lot of these sales are foreclosures, short sales of first-time home buyers above the 250,000 that we just looked at

that. that market is dead and it's still contracting and banks aren't lending, particularly for jumbo mortgages. the housing index has improved, looks a little better, i wouldn't put my money there, however, you're going to be far better off in technology, in some of these things that pay a nice dividend like some of these pipeline mlps are good places. and you can't argue you're going to have recovery without natural resources, as well. so i still like those, investors need to be careful. >> what do you think? would you be putting money toward the housing stocks now? or do you see other areas better? >> not the housing stocks. but i like home depot and lowe's. both will be participators before the house, before the home builders participate because they're going to be in that sweet spot of all of the repair and the remodel of all of these houses that have been foreclosed, smaller ticket purchases by the consumer, that's why i would put my money. >> i like all of those ideas. stick around, these guys aren't going anywhere.

they're all coming back because we've got more market discussion throughout the show because it's been an incredible week for the markets. we're also going to talk about the last call for clunkers. government rebate ends this monday. did the program pay off? phil lebeau is going to have that story. and does negative media surrounding goldman sachs smell of anti-semitism? our own charlie gasparino have sources inside the firm that think that's a real possibility. i like to call him the great gaspy. as we go to break, we'll leave you with pictures that tell today's bullish story.  $# i'm racing cross country in this small sidecar,

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the cash for clunkers program officially ends on

monday, 8:00 p.m. eastern time. here to tell us how successful it was or wasn't is cnbc's phil lebeau. phil? >> the last weekend of cash for clunkers is expected to be a busy one at dealerships around the country. in fact, at this ford dealership, they've had a steady flow of customers all day long. as people are trying to take advantage of the government incentive before it runs out monday night at 8:00. so far the government has essentially allocated $1.9 billion in cash for clunker rebates. but only $145 million has actually been paid out to dealerships. the reason the program is ending after just a month and sooner than many people expected, the government wants to make sure that there's adequate funds set aside so that it doesn't go over $3 billion as originally projected. cash for clunkers ending monday night 8:00, the next test for the automakers, to see whether or not sales hold up once the cash for clunkers business ends next week. michelle, back to you. >> thank you, phil. mainstream media has made

goldman sachs the poster child for wall street greed. now bonus season is coming and goldman executives are in a panic, blaming a prejudice for their negative press. cnbc's charlie gasparino joins us with the full story and also to weigh in is dick bove. do i understand this right, bonus season is coming? the bonuses will be really good because they've mad a lot of money and they're scared to death that people are going to beat up on them. >> if you think it's bad now, wait until the headlines. what they're fearing is the headlines, who is probably titled if you look at past practices, probably $50 million, $60 million based on how much money they've got right now. and they are very, very -- apparently looking to hire a brand management person. i personally applied for that job today and then i told lucas

at goldman that i would have to write the annual report then i withdrew my name from consideration. but, you know, and there is a lot of, you know, it's more than just hand wringing, they are scared to death internally, they're trying to figure out how to spin this. >> and what about this anti-semitism thing, they think a lot of this is driven by -- because they're that huge firm? >> there's always been this undercurrent about goldman sachs, which traces its heritage to a german-jewish immigrant and traditionally had jewish ceos in that job, although, you know the last couple before were not. he is jewish, and there are people inside that firm that believe that there is an undercurrent, and this is why. let me point this out, i have been beating up on goldman for years. but even i, it does raise my eyebrows as to some of the stuff coming out now. now, you know, we may find out in a week from now that goldman sachs is really the evil empire

that everybody says it is. you keep reading about lately, but barring that type of evidence which we don't have right now, i don't have, maybe it's there, but i don't have it. to basically conclude that this is this sort of modelific bad firm is insane. does that equate to anti-semitism, people, there are people who feel strongly about that. a degree of it is naivety. some of this stuff gets written and gets blogged about and commented about. i read some stuff coming out of cjr, which was just asinine. and i have to tell you -- >> they don't understand the business world, you know. >> people that wrote this used to work with me at the "wall street journal." that shows you -- >> dick bove, what do you think about this? are they pulling the j-card here or is this legitimate, you

think? >> no, i think it's furious. i think basically that goldman is being attacked for being successful, and i think this is the wrong time to attack them because they're under attack, in other words, if barclay's has made a decision to add to its traders and paying what they call 007 in europe, in other words you get multiyear bonuses which are double, you know, what you made over the last 12 months. clearly morgan stanley wants to hire 400 more people according to the "wall street journal," and merrill lynch is out there paying 140% of last 12 year's commission to people who join the firm and if you stay there for five years, you're going to make 200% of your last 12 months commission. so the competition for people has increased dramatically and at a time when this competition has increased, you know who they're going after, people at goldman sachs. so it just doesn't make sense to be attacking this company at the present time when the competition for its people has heightened so dramatically.

>> yeah, and i agree with that, dick. and here's the other thing. to attack them as the worst of the worst of the worst of the lot, even seems more absurd. you know, if you think about it, citigroup, you know, are you -- are people really saying that citigroup, which was a huge firm which had many plugs into washington and to the regulatory apparatus and paid millions of dollars in fines over regulatory abuses -- this huge monomonstrosity and costing taxpayers money? >> is it anti-semitism or what? >> some in that firm believe it is because when you start putting things together, the undercurrent becomes conspiracy. >> is it? >> no, it's not, it's not. >> it's anti-jealous. >> it's jealous people are

making a lot of money. i think that's what it is. >> thank you, guys. thanks, charlie. >> dick is going to stick around and talk about the financials and whether or not we're going to see this big issue with american banks. we've had several more fail tonight, they've been dropping like flies thanks to toxic loans. financial stocks, what do you do? what are they going to do? sink or swim. you know what larry kudlow says, find a bank you hate and buy it. and -- ♪ if i were a rich man >> after a 30-year run, the reign of the super rich, according to the "new york times" is coming to an end. how will that effect the economy? we're going to debate that later in the show. "kudlow report" is coming right back. he ran off with his secretary! she's 23 years old!

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no you're not seeing things. look at the screen, there's that line. see from march 9th, 2009, until today, bank stocks have skyrocketed over 150% since the march bottom. however, the front page of today's "wall street journal" warns that we could be in for stage two of the banking crisis as lenders succumb to large amounts of toxic loans. and friday night news of another set of failed banks. ebank, and capital south bank, which brings the tally to 80 failed banks this year. what's the bank for your buck?

do you get energy? back in with our panel. still with us. guys, good to see you. quick, i want to go around the horn here real quick. financials, you uh buy, you hold, you sell, jim lacamp. >> i think you can't put them in one category. diversified banks good, regional banks and small banks, can't buy them. they've got way too many toxic assets on the books. >> bob? >> i couldn't agree more, i like the whole aspect of financials except the regional banks, they are too closely tied to what's going on with the economic downturns on a regional basis. so i like the big ones. >> don? >> i don't have that good of a filter. i am afraid of the banking sector. >> you're staying away period. >> my mind's made up. >> got it. dick bove, you're the banking expert here. we've got two guys that won't go near the regionals, what do you think? >> i think the stocks are ahead of themselves, you've got to

take some profits. i think people are buying, you know, on fumes because over the next couple of quarters all of these banks are going to lose money. and therefore to put money into companies that are losing money under the theory that over the next 12 to 18 months they're going to turn their earnings around i think is a little bit silly at this point. we've gone too far when there's nothing fundamental behind them at the moment. >> when you say there's nothing fundamental, what about the recovery we keep talking about? what about the steep yield curve? >> well, the steep yield curve doesn't mean a whole heck of a lot. i know larry likes it, but the fact is, the key is what is going to happen to their loans that aren't paying interest. and i think that we're seeing a continued increase in that we're not seeing any real recovery. i know that many people expect the recession to be over, but from the perspective of regional bank, the recession is not over. loan losses are going to continue to grow. and while long-term i'm very positive about banks in the short run, they simply have gone too far on nothing.

>> jim lacamp, here's what i didn't understand about this article. they talk about phase two of the banking crisis. phase one was they had written a lot of loans that have gone bad. we all knew that. now phase two, they say, is a lot of these banks also bought a lot of loans that are now going bad. does it really matter? haven't they had them on the books for a while? haven't they written them down quite a lot already? >> well, you know, they were lax mark to market. and bear in mind, they only did the stress test, michelle, on 19 banks. it really didn't reflect the business going on with the smaller banks and regional banks. not only did they buy a lot of the bad assets that haven't been written down yet, but you can take that even further. a lot of municipalities bought these, as well. we're going to be hearing about them for quite some time. i want to touch on the yield curve story. fed deposits from banks are at all-time high, banks are not

putting money out into the market to make money on a positively slow yield curve, you have to lend it out in the first place. and the lending is down. the lending is not getting out there in the market. >> dick bove? >> well, the reason they're not lending money out is because they're afraid of the run on the banks such as occurred in the end of -- >> they want to retain capital. it's rational at this point. >> they want to have liquidity, need to have liquidity to make sure that the hysteria or frenzy that occurred at the end of last year doesn't recur. and it doesn't make sense for them to lend money into a weak economy anyway and it doesn't make sense for people to borrow a lot of money at the present time because they have too much debt in the first place. this whole concept of lending money as being the solution to the economy's problem, makes no sense. >> guys, good to see you, dick bove, thanks very much. everybody else is sticking around for one more discussion about oil. coming up, oil hit a new high for the year. natural gas, though, at a

seven-year low. why this dichotomy? why does it mean? how should you play it? kevin kur will have all of the answer, you know why? because he's a speculator. he'll be here when the kudlow report continues. don't go away.

exxon has already evacuated natural gas rigs in nova scotia and beaches being closed along the eastern sea board. what does hurricane bill have in store for us this weekend? joining us now is the weather channel. >> this is a category two hurricane, the good news is about 36 hours ago this was a category four. it definitely has to be concerned in terms of the impact. right now, bermuda, they're getting hit the hardest, right about here, seeing sustained winds in the 30 to 40-mile-per-hour range, but also waves crashing the island. 20 or 30 feet tall. could get perhaps up to 40 feet as you head into your saturday. but also speaking of waves, this hurricane generating waves and already feeling the impact up and down the eastern sea board and will do so as we head into this weekend, as well. the good news about the east coast of the u.s., this hurricane should bypass you as

we head throughout the weekend. as you mentioned nova scotia, a near brush by this hurricane, but bermuda definitely because they're on the stronger side. the east side of the hurricane, they will feel the brunt of this hurricane. otherwise, for us, it's basically a pretty rough beach day up and down the eastern sea board and a good news for vacationers in bermuda, things look fantastic for your late august vacation there. back to you, michelle. >> paul, i'm going to tell our viewers something they probably don't know, but you were named one of the 50 most beautiful people in america the same year that carl quintanilla was. >> that was back in 2001, but -- >> well -- >> we're not even cute this year, that was back in '01. >> you're much more seasoned and handsome, thanks, paul. today oil hit the highest level for this year, natural gas sank to a seven year low. if that's oil at a high, gas at a low, why the disconnect? what can we expect this summer

from the energy sector? still with us, jim lacamp, don, explain to me what's going on with natural gas and with oil. because in theory, both are driven by demand. so why is one going up and the other going down? >> yeah, we look at them separately, though, michelle, they really are. crude oil rallying off a bullish inventory report, weaker dollar yet again. these are the two big drivers for crude, they have been, back up to $75 a barrel. meanwhile natural gas plummeting once again, up kind of a bullish report. the problem with gas is we have plenty of supplies still and we're not seeing a lot of usage yet. i think that could change this fall. >> why do we have lower supplies for oil, but not for natural gas? aren't they both driven by people needing to do whatever, heat their homes, et cetera, et cetera? >> they come from different sources. crude coming out of the ground and natural gas coming out of the ground, but coming from

different sources and we have plenty of natural gas right now and not a lot of usage. gas is typically used to generate electricity and for heating in the winter months and we really won't see a lot of -- >> that's a good point. >> don straszheim about chinese demand? are they filling up reserves? is the stimulus package helping them drive demand which is making them want to buy more oil? >> it is helping, some, michelle. one of the answers to your prior question is the chinese can and have been stockpiling oil. they can't and haven't been stockpiling natural gas. and as -- >> kevin. >> you just heard, it's the electricity market that is important in natural gas. the other point about natural gas is this spells trouble for solar and wind when natural gas is $3, it's not going to be very good for some of these alternative energies that we've all been thinking about and

hoping for. >> bob, what do you think of energy stocks here? >> yeah, i think energy stocks are a great play right now, especially in the oil energy area because i think that's where you're going to continue to see a nice run. and a lot of it really is china. if you look at the two bailout packages, basically our bailout package, what we end up doing was transferring risk away from consumers and banks to the government. but in china, their bailout package was all about infrastructure, which a great commodity play and they're building roads and bridges and highways and i think that's going to increase the demand in oil and energy. so i like the oil and energy sector and like the energy stocks right here. >> jim, you told me already you like a lot of the energy plays, right? >> yeah, and there's a few other things at work here. not only is china buying and using a lot of this stuff, they're buying it around the world, using a lot of the foreign currency surplus to buy resources in africa. and they're doing business with brazil. they're buying oil around the world. and he's right, they're not buying gas. the other thing gas is used in is factories and factories are

running at 67% of capacity. so we have a tremendous amount of supply, not that much demand, but, again, you cannot argue that the global economy is starting to recover and not see oil prices go higher. and remember the rig counts are down, as well. so we have -- we don't have that much supply coming on to the market with oil, whereas with natural gas, they have all of these shales, here in texas we have the barnette shale, we have a tremendous amount of natural gas and i don't know who wrote our new clean energy policy, but it may have been monty python, we have all of this natural gas, why are we putting more into our infrastructure? is beyond me. >> do you buy oil here? sell it, buy it or sell it? >> no, i don't touch natural gas here, though i think it's going to move higher in the winter months. crude i'm a buyer of and for all of the reasons just said. we have basically shut down all of the things we talked about at $147 a barrel, there is no drilling, no nuclear being built, solar and wind are off the table while oil prices are

this low and i say this low at $75, because you're closer to $95 by the end of the year. >> thanks, kevin. everybody else is sticking around, we've got to talk more about these new deficit numbers. have you heard about them? horrendous. when we come back, exactly how people can get in on this new bull market if they should, especially with what is going on with the government. where to put your money right now when "the kudlow report" continues.

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is this a reason not to invest in the u.s. market? >> no, i don't think it really is. first of all, it's interesting that it was released on a friday afternoon. so nobody sees it. secondly, it reflects a much worse economy than most of us have been willing to admit. and third, it means that we have got to at some point become serious about holding down spending. the government is vastly overcommitted. and now we're talking about a whole new arena of spending associated with health care and the rest. this has got to end at some point or we're going to have real, real problems farther down the road. >> bob froehlich, the deficit, a reason not to invest? >> no, it's not a reason not to invest. two things to keep in mind very quickly. first of all, the federal government can't get right what's going to happen next month and we're supposed to be worried about a forecast for them from ten years from now? we're going to think that's a

joke in itself. but secondly, i think the issue is the government spends too much money, but it's not just the federal government, it's the state government, it's local government, i think we have to put a cap on spending. that means we could lower taxes, that means we could give money back to people, goodness sakes, they could even buy stocks with the money instead of sending it to the federal government. >> jim lacamp? >> we need to cap and trade our government. >> at some point, stay away from treasury? >> we're going to have to cap and trade our government spending is what we need to do. we're issuing so much debt in this country. and around the world, by the way, that someone needs to buy that paper. and there's going to be this big competition for capital. we're looking at $10 trillion in global debt issuance next year and this is how we have to pay for the deficits is by issuing more and more debt. that takes money out of the private sector and puts bake in the public sector, bad for the dollar and bad for the economy. this is not good news, it's going to push up interest rates. and michelle, if you look at what has happened with mortgage, refinancing, and new home deals,

they get killed every time that mortgage rates go back above 4%. and it's going to happen because we have to issue the debt, we have to find buyers. the global savings rate is only $900 billion a year. yet we're issuing globally $10 trillion in debt. where is all of the money going to come from? >> jim, you say no treasuries. bob, would you buy it here? >> no, i probably wouldn't. i'd rather be in the soft market, rather be investing outside of the united states in some of the asian markets. >> okay, john straszheim, would you buy the ten year here? >> no, i would not. i'd rather buy equities and there are a lot of places around the world i would rather invest in than america. chinese oil companies i sure would buy before i'd buy american oil companies just as an example of this global focus. >> all right, thanks for the

advice, guys. good to see you. jim lacamp, john straszheim. a reign of the super rich coming to an end. what does it mean for the economy? don't we need the rich? a debate right after the break. but first, let's check in with sco scott. stocks at the best level of the year, so does the rally continue when you wake up on monday morning? and how did your stocks do today? all that and much more when we see you at the top of the hour on cnbc reports. and stay with "the kudlow reports." we've got the great debate about the super rich after this.

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get your kleenex because after a 30-year run, the reign of the rich may be coming to an end. take a look at this front page "new york times" story. it shows just how much the super rich have been super-soaked. last year the number of americans with a net worth of at least $30 million plummeted nearly 25%. monthly income from stock dividends for the wealthy has declined more than 20% since last summer. that is the biggest decline since the government began keeping records in 1959. so let's debate. what does this mean for the economy? don't we need the rich? let's bring in david min with the center for american progress and cnbc contributor jimmy

pathicucus. i know nobody has any sympathy for the rich, but in the end, aren't they the biggest spenders, job providers, the biggest entrepreneurs? >> it's not so much we need rich people, we need risk-takers and people need to be rewarded for taking risks and the one reason the rich suffered so much because the stock market went down and gee, who else does that hurt? everybody with a 401(k), including me, bad news for them, bad news for us. >> pension funds, by the way? >> that's right. >> david, what do you think? don't we need the rich? >> i don't know if we need them. they're obviously part of our society. listen, this is a case of a lagging indicator. it's, obviously in this global economic downturn, everyone's getting affected. the fact the rich are getting affected, the middle class is getting affected, so is the poor. i'm sad that guy lost $100 million and went down to $4 million. >> there was a guy in the article who is selling everything because he's only got $4 million, which to the average

american is plenty, by the way, but when you plan on living on $100 million, it's different. >> but you don't have the story of the guy from $100,000 down to $4,000, that's not news. >> they've not written about that at all, not written about the average person losing their 401(k). that's been completely absent. >> it's not front page, that's for sure. and as far as the stock market, yeah, we all have exposure to the stock market, but the problem with this and the reason that the rich are getting hit right now is that the asset bubbles are deflating and they had relatively higher percentage of their wealth stored up in actual, you know, markets, whether that's stocks, bonds, et cetera. obviously someone like me has a much lower percentage of our income, 401(k)s, et cetera. we're not looking at billions of dollars to invest in the stock market. >> i forget what member of the federal reserve it is. but i remember reading this great story where he wrote about his father who had a shirt shop down near wall street. and it was either 29 -- it was

29 and his father said serves those rich bleeps right, and six months later he was out of business. he figured out when the rich suffer, so does everyone else. >> my father put it more sus singtly than that, you know what? i never got a job from a poor man. someone has to create jobs, it's going to be the wealthy people david probably doesn't like that he uses as an unnecessary evil. they're lepers, oh, i suppose they're going to be there, i try not to think about it too often. they're a driving source of this economy for innovation, for entrepreneurialism. you know what? we need them, sorry. >> david, do you think -- we are an aspirational country. >> that's right. >> we look and think that could be me. >> i want to make a distinction, though. there's a difference between people who want to be rich which is that motivating factor and people who already are rich. there's also a difference between the rich and as we're talking about here the

super-rich, they're a part of society. eng the only issue here is, first of all, i don't see that the wealth gap is shrinking, and the second -- >> good. that's good. >> alan greenspan on the left, in 2005 said that we couldn't keep sustaining this level of inequality in the united states. >> i'm really glad the wealth gap isn't shrinking because one of the reasons we had this growth income in equality is one technology, and two a global market. unless you want to get rid of globalization, sorry china, and get rid of technology, there is going to be a growing income gap and the solution to that is education and making people more technologically adept. that's the solution. >> this is not a straw man here, i'm not arguing for 90% tax. >> how east 70? >> no. how about we change the topic back to what we're talking about, which is globalization. >> straw man. >> i don't think globalization -- >> let david speak. >> it's not about globalization, it's about policies we've

enacted under the bush administration et cetera that have really stacked the deck in favor of the super-rich. we create a philosophy -- >> i forever to give reagan personally. >> at first -- >> it's not bush -- it's those macro trends. technology, and globalization. that is by far the overwhelming reason. >> the fact that -- >> let david in here. >> yes, sir. >> the fact that warren buffett pays less taxes than his secretary is -- >> that is so facetious because he takes it in dividends. if he wants to pay more taxes, he's welcome to it. >> capital gains tax rates are built on that emphasis, that's the problem. >> because he's an entrepreneur. >> what's that? >> they're 20% too high or 15% too high. >> david min, good to talk to you. >> thanks for having me. coming up more of "the kudlow report," larry will be back on monday. welcome to the now network. population: 49 million.

right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. eight are wearing bathrobes. two... less. - 154 people are tracking shipments on a train. - ( train whistles ) 33 are im'ing on a ferry. and 1300 are secretly checking email... - on a vacation. - hmm? ( groans ) that's happening now. america's most dependable 3g network. bringing you the first and only wireless 4g network. sprint. the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com. it was so much fun going the kudlow report while larry is off, but don't worry, he's back on monday. thanks so much, cnbc reports starts right now.

tonight on cnbc reports, go away? forget it. it's up up and away for the markets as the dow approaches 10,000. a few more solid trading days and we could be there before august is in the books. the dow is getting close to 10,000, the s&p and nasdaq also outperforming just about everyone's expectations. plus, big news on many of the biggest most widely held stocks. we have the list. also tonight, what this man means for the markets. >> right now we're seeing growth in the second half of the year. >> will ben bernanke stay or go? we're covering markets on a big day for america. this is a special edition of "cnbc reports" recovery watch. now here's scott wapner. >> and good friday evening to you, i'm scott wapner, no other way to say it. what a day. the dow up big time. take a look at this chart.

up 155 points, that's more than 1.5% for the week, the dow was up almost 2% as we broke the 9,500 mark. look at the s&p, up more than 2% today, but in the last six weeks, it's up 16%. the nasdaq picking up 1.6% today, as well, in the last six weeks, it's up 15%. of course you want to know where your stock's headed today on this big market day and that's why i want to take you around the horn here and show you some of the most widely held stocks today. and let's start with citigroup. take a look at this chart. you know what bank stocks have done, up better than 150%. citi alone at the highest levels now since way back in january, up 60% over the past month alone, the prospect for better profitability certainly improving for citi as it and other financial stocks rid themselves of those bad assets. and how about