level, you want to move to the sidelines. >> do you also have a funny feeling like guy does, whatever that feeling is, a tingling in your legs perhaps? >> i don't know what it is. i agree, i'm surprised at the strength of this rally. i know there is some positive economic data coming out, but it seems to me the stocks already priced in a very sharp recovery. we may see that, we may not. but if we don't, it would seem like, wow, the bar's pretty high for these guys, for people for the third quarter. and so i'm skeptical. i, too, feel if you are a hedge fund, you feel that -- when this market is up double digits as it is now and seems to, you know, be headed just straight up, it is really hard to watch that and not feel the need to be more invested. >> and you are in that camp. you are a hedge fund manager, obviously. >> right. i do have money on the sidelines. but a day like today, there's no way i'm going to meet the performance of the index. >> the clock is ticking on the year, melissa. we're moving very quickly to the end of 2009. and this chase for performance

as you work your way close to the thanksgiving, work your way closer to the end of the year, it is going to reach a crescendo. it's going to get bigger and bigger and bigger. >> it is. but let's talk about the economic data, because today it was the existing home sales, 7.2%, it was a huge climb, and we'll get into it with rick santelli later in the show. 31% of those sales that happened in the month of july was first-time home buyers. that goes away november 30th which is, by the way, the stock market should theoretically rally. >> and also people think in is going to be the year where that year-end tax selling is bigger than ever. if everyone thinks that tax rates are going higher, there's going to be a lot of money that's forced to sell. this way they can collect on a higher. >> i got to think, though, there's a lot of losses left over from last year. >> to write off, yes. >> that still have the shelter. so i don't think -- >> i think it's a perception. the sentiment. people think the selling is coming year end, it might

fluster the late. new news. cash for clunkers which has brought in some demand for autos, autonation is saying that it's going to end the clunkers program today. and, of course, that is ahead of the expiration of the program, which is on monday. so, it is ending the program today. >> well, i mean, once you find out now is if all these automakers can actually stand on their own. you actually saw toyota motors down today, the toyota corolla was the top-selling vehicle in cash for clunkers. it was down. ford has been tepid in its performance. cash for clunkers is ending. we'll talk about it more. okay, guys, training wheels off. ride on your own. okay. we're bringing this headline to you. i'm sorry, i have the producer in my ear. >> but you're not. you're listening but you're not. go ahead. >> i'd listening and to the voice in my year. autonation is the biggest retailer of autos in the country, so this is huge. a lot of people will be looking for cars ahead of the deadline saturday and sunday, can't go to autonation, because that is over. this all speaks to these government programs which are bringing in buyers, potentially prematurely at the expense of

demand down the line. >> all those people that traded in the car for cash for clunkers now have a lease or debt instead of owning something outright. so, if you want to make the bear case, i'm a bull. if you want to make the bear case, that's one point for you. >> meredith whitney who could do no wrong six months ago or nine months ago, when she speaks, nobody listens. but she made cautious comments about the banks going forward. now today people just sort of discounting her to a certain extent and just buying stocks indiscriminately, it appears to me at least. >> are you discounting what she has to say? >> no, not at all. i happen to agree with her. but you can't get in the way of a freight train and the past two months, 1 1/2 months, it was a freight train. let's move on to oil, breaking out today to a new 2009 high, closing higher by about 6%. joe, did oil lead the market higher or vice versa? what do you think? >> oil was the biggest story of the week. you are seeing a shift.

contango is coming out of the market. we are working off inventories. and the question becomes, and pedro and i have been talking about this back and forth, the speed of the oil advance, does it choke off the recovery, or does it actually lead the entire market higher? this week i added to my position, actually established a position in btu, that's coal exposure. i added on suncorp, and weatherford, and freeport-mcmoran, why, because you need the exposure. but the question going forward will be the speed of the advance. what does it do? does it lift the entire market higher or does it choke off the recovery? >> we've got to take a break from the discussion for a sec. heading to the breaking news desk. darryl rovell has news on the cubs. >> melissa, it is finally done, the chicago cubs deal is finally done, and the winner is who we thought it would be, tom ricketts.

he agrees to acquire the cubs, 95% of the cubs for $845 million. it also includes wrigley field as well as the interest, "the tribune's" interest in comcast sports net. 25% interest. this has been going on for years now, and finally we have an agreement. sam zell gets rid of the cubs to tom ricketts. of course, his father was the founder of td ameritrade. back to you. back to oil, grasso and joe, you had a pretty fiery debate the other day. >> in the end, i think we both agreed it was going to $85, before $55. and, joe, what did i say about it? oxy, the one i love, that's the one going higher. in the last couple of days up over 2%. oxy. in this market, they're a dime a dozen where you can make 2% in just a couple of days, but they were one of them. >> real quick, we're going to have a conversation about etfs going forward.

it will be interesting, because right now investors are moving away from the eft model. so, how are you going to get your exposure to those names? the oil, the copper? it will be really interesting toward the end of the year. it will probably be the moment when the inflation prices kick in and take commodities higher and no one's really got the investment. let's move on here. let's show you the chart of the day. you were talking about financials earlier. the xlf, the eft, that tracks the s&p financials, hitting a new high for the year. and this just goes to show you that this is the market leadership obviously of this mark net 2009. karen, you know, you have been a fan of bank of america, preferred as well as common. >> that's right. still remain a fan. >> do you add to your position? i mean, you, yourself, say you have cash on the sidelines you're ready to deploy. you don't want to be not in the market because it is moving higher, but you are skeptical. how do you reconcile that? >> that is the question. do you, then -- nobody -- everybody hates to feel like an idiot when you buy it on the top. when you've been watching, watching, watching, and you finally jump in, and it trades down. however, i do think that for the long term, bankamerica is the place you want to be. it's not hard to see how in the year and a half from now when things seem better and they don't need to write down so much

that they'll have a much more normalized earning stream and much more normalized multiple, so short answer is yes. i would buy more. >> will they earn their way out to pay back the t.a.r.p.? something has go to give at wells as well. it hasn't yet. the stock is pushing up against the $28, the $28.50 level. it's been resistant a few times since may. so, i would think it's a short here. but this is the deep end of the pool. it's very hard to be pouring into financials after the run we've seen. >> kudos to you, melissa. you nailed us. the financial rally has been about the trash financials rally more than it has been the best of breed. morgan stanley got above $30. it's kind of failed there. goldman sachs got up to $170. it's pulled back. it's the trash financials, citigroup names, that have pulled higher. if you look at the kre, the regional eft, it's up 5%. kce, up 5% on the month. kce capital markets exposure up only 2%. the trade going forward is at

what point does that begin to go back to the way it should be, which is buy the best in breed and sell the trash. >> at the same time just -- >> the huge short interest in lot of these names. >> that's true. >> those are the ones where you saw guys rush in and cover the shorts and get long. it was the trash. >> here's the thing, sorry to jump on you, about the regionals, though, they are the ones that could be taken over. nobody is taking over a jpmorgan, it wouldn't be a shock to see any of the regional taken over and have it be a creative deal to somebody big. so, that would make me afraid to short them even if the valuations are really stretched. >> what kind of time frame are we looking at? how much cash do some of the larger financials have in this environment? >> they can use their stock. if their stock is trading well and they can do an acquisition and cut cost they can do a creative acquisition and cut stocks.

>> and bank holding companies could be looking to increase the retail presence. steve grasso, you have a trade on citi. do you still believe citi falls into this category of trash if you do think the government has essentially given it a backstop in some way? how much longer can you actually call it trash? >> citi is a different ball game. because aig was backing them, and ambac is not out of the woods yet, so citi could be a problem for you if ambac fails. ambac reported a higher-than-expected loss, so if they go under, it trades around a dollar now, it could be problems for citi. they are not out of the woods by any stretch of the imagination. it's just a trade. >> you two buy citi for the short term? >> i bought citi. >> when did you get in and out? >> i bought it around $4.05 and i bought it today average higher. but i think the stock can move higher. >> if it goes to $5, because that's a share when it can be marginal, and if it's bought by individual investors, do you get out or are you satisfied? >> the retail guy looks in. because the institutional guys don't leverage, you know, per se, the way a retail

investor is going to leverage. so, he could still buy it here. they just don't. they don't because it's their own decision on risk. but, yes, it becomes attractive around $5 for a larger, broader audience base that seems to be safe at that point. let's move on to the next trade. the gap beat estimates and got a few upgrades on the day. you watch this name closely, guy. >> the monster. we've been talking about it for a while. a ridiculous quarter. operating margin and gross margin is better, and inventory is down, and it's good. it opened at $19.50 and that's where it traded. a big move to the upside but if you bought it today, you made no money. that was sort of my point yesterday. look at j. crew, look at the valuation, look what they've done since march, a $9 in march, trading around $32. this time september last year, it was trading around $32. i think they report sometime next week. i think the trade may be, you want to own the gap, that's fine, short j. crew ahead of earnings ahead of it. >> look at disney coming out of the economic recession, disney is also one of the top performers. they have the balance sheet and diversification. what do you do, when you win the super bowl, you go to disney. when it's coming out of

recession, you go to disney. that's the play. disney going forward over the next three to six months, if we are able to maintain the equities valuations that we see right now and we have a slow recovery in the economy, disney will move towards $30. >> if we believe the consumer is, in fact, going to be spending in the back half of the year, karen, do you want to be in the retailers or in a disney where it's not, you know -- >> the retailers are sensitive. the one that we own is aeropostale, and then walmart and target. walmart is a huge disappointment today, down 35 cents in the screaming cape, that's painful. aeropostale, even today, they talked about a good back-to-school season, that is still cheap. but broadly speaking, i don't want to be. >> why is it? because everything is going higher and you want the higher beta and there's sort of a belief if the economy is getting

better and the consumer is getting better, you don't want to be in the traditional retailers? >> you want to be safe. maybe if the consumer is doing that much better, maybe they don't need to go to walmart. i personally think they will go to walmart. they've always done so. the valuation to me seems ridiculously cheap, especially versus some of the other 21s. so, you know, why is it down today? i don't really know. but i do think walmart is a good place to be. >> interesting side note, to me it seems that people are chasing. they pull out of walmart and get into everything else. that could actually be a sign in weeks to come that that was, in fact, the top with people getting out of walmart and piling into other things. again, i think the specialty retail trade, way long in the tooth. a lot of these stocks, big short interest. all the shorts got squeezed. i think you're playing, again, deep end of the pool if you buy these things here. let's move on to the next topic. the home builders we mentioned to you the july existing home sadata and certainly that lifted the entire sector. it was the fastest pace in nearly two years. anybody playing the home builders?

>> centex which is now pulte homes, they've closed the merger. the data today was obviously good, but one data point isn't enough. i think we're starting to see enough data points to say that there is a bottom in housing. i know we're going to talk with -- >> sir grande is what i like to call him. not to be confused with starbucks. >> getting home depot after the lowe's earnings. people shorted home depot on the back of lowe's and it was the wrong thing to do. and we tried to talk about it. and home depot is right back up. i think it's a stock to sell as well. let's bring in rick, he's in chicago. sir? >> well, you know, karen, one thing i noticed that i found really interesting, and this is the fourth month-over-month increase in existing home sales. i understand the second derivative. you have to slow the rate of deterioration before you can put in a floor. but one thing i did notice, and i'm not looking that in an optimistic way, this is the

first year-over-year positive number we've had in 43 months going back to november of 2005, to put objectivity and take a step back. we have a long whey to go in housing. >> absolutely, 31% of the sales were first-time home buyer credit-fueled sales. what happens comes november 30th when it all comes out of the market? are we disappointed? >> yeah, i mean, all these programs, people are talking exit strategy. every program that comes up seems to get extended. the first round for cash for clunkers. probably first-time mortgages. i think i would be shocked if they don't continue that program. many of these programs are going to get second winds, and i think there's issues regarding investing with that in mind, wouldn't you think, guy? >> hey, rick, here's the problem, though. you and i have been on the same page here and i i've watched the s&p do nothing but spike higher. at this point you have to throw in the towel, don't you think? >> no, no, i've never been bearish equities. the credit markets and the equities markets are so far apart. consider this, all my e-mails today, hey, citi, it's great. you see these preferred stocks. right now the government's up anywhere from $9 billion to $10

billion, that is terrific. but nowhere in that e-mail did it say we're guaranteeing $300 billion of their debt still. >> of course i know. but sometimes what i'm saying if you throw enough cash at it, the market can go higher. and that's what people are looking at this point. >> i think agree with guy, no matter how old it is in the tooth. we've seen what, three-quarters of a trillion come out of money markets of late. 401(k)s redirected to equities. just because it's not fundamentally sound doesn't mean it isn't happening. >> rick, it's karen. what do you think will happen in housing? do you think we'll see another leg down? do you think there's no support there? what is making you bearish? >> the halftime "fast money" show, i love it at halftime, i can't remember, one of our participants, but he brought up the connecticut connection. he talked about, i believe, 1 in every 8 houses in connecticut -- >> 1 out of every 17. >> oh, 17. >> big difference. >> i'm half as worried now, big

difference. but i think that the notion that there are prime houses out there that are 90 days behind or in the beginning of foreclosure, i think has huge ramifications for a large swath of the middle and upper middle-class, the prime loans, and a lot of these can deteriorate. and i think that goes into year end. yes. so, i think that's a big deal. >> all right. >> rick, it's joe. real quick. i am of the belief that right now -- >> and one other thing, gang, i'll be out there monday, tuesday, and wednesday -- and viewers, if you have any questions, i'm not saying i can answer them all, but i'll get with all the chicago sources i have. youtube, any questions you have about anything, foreign exchange, the yield curve, the dollar, you know, health care, we'll try to come up with some good, interesting ways to look at these in a different style, of course, send that link of your youtube to fastmoney@cnbc.com. and let's try to put common

sense on these big issues. >> rick, you're asking people to send you videos? >> you want to know what kind of videos we get, rick? brace yourself, buddy. >> all right, rick, have a great time while i'm on vacation. thanks for your time today. time now, yeah, rick will be here, in case you missed that, next week, while i am away. >> where are you going? >> i'm going to the beach. i'm going to the beach. time to go a round the floor and see what the traders are talking about today. the dow jones is sounding out potential buyers for the company's stock market indexing business. it opens up a name change for the dow jones which would be shocking it's probably one of the most identifiable indices in the world, so the change of the name would be something. but can you imagine if general electric, for instance, bought it and called it the cnbc/dow jones industrial average? it would be kind of hot. why are you laughing? >> it's great. go do it! >> i'm just saying. if you're listening to us. time now for the "fast money" poll -- the question is what should they call the proposed cash for appliances plan? actually, that's not the poll of the day.

look at your screen. because that's the poll of the day! after the dow jones sells its index, what should it be called? the industrial average sponsored by bank of america. the immodium industrial average, or the charlie gasparino industrial average or the chaz? he does hate it, that's why i love calling him the chaz. who will be, by the way, joining us straight ahead. that was the word on the street. listen all goldman sachs shareholders, charlie gasparino, aka the chaz has a story that will affect your trade. and we have news on the next clunker clone. here's what else is coming up on the show -- ♪ town hall turmoil. there's a trade behind that rage. and dollar diving. stimulus cash staying on the shelf. one former government official sounds the alarm on america's future. plus, karen has turned in her clunkers, and now she's ready for dollars for dishwashers.

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welcome back to "fast money." we're live at the nasdaq market

site. want to bring you breaking news, courtesy of "the wall street journal," according to "the journal" $4.4 billion of $7.7 billion managed by cerberus capital management has been redeemed. they said investors with significant assets have actually called up and said we want our money back. certainly not a vote of confidence in mr. feinberg at cerberus. >> no, he's had two very, very high-profile deals -- >> disasters. >> -- deals, i don't know what you call them, chrysler and gmac. it's not surprising. he's had a lot of big years making a lot of money for his investors. this is -- i don't know what it means for the liquidity of the position that he holds and when they get the money back. that will be interesting. and, i mean, wow, that's pretty

big news in the hedge fund realm. >> technically, karen, how do you give back $4.4 billion? i mean, how do you raise that money basically like that? >> well, last year you saw a lot of funds that couldn't, and they put gates up and investors were, not surprisingly, not very happy with not getting their liquidity back, especially worldwide everyone wanted liquidity. and we saw atticus, another very, successful, big hedge fund, giving the money back, or having the money pulled from them, i'm not sure which. wow, the whole industry is really shifting, this is pretty big news, i would think, to anything they have really liquid, they probably would sell in front of invest -- news like this. >> right. and potential for investors currently of cerberus, that still have funds in, gates could be put up as you said and they may not be able to get their funds out at this point. >> there's a herd mentality, if you hear that many of the others investors want their money back, you think, wow, what am i going to be left holding and i've got to put my redemption request in as well. moving on. goldman sachs has become the wall street poster child for greed and that has executives worried about negative

publicity. according to charlie gasparino, the executives are considering buybacks as a form of bonuses. will it solve the image problem or lead to more buybacks, let's go off the record with the man who i knows puts ketchup on everything. because last night, chaz -- all right, last night chaz and i were at the camp, which is the capanulo restaurant -- with other people, of course. >> you felt the need to add "with other people." >> i know what people are thinking. you ordered the grilled chicken and you put the ketchup on. >> my friend eddie grant was there. >> two full bottles. >> it was a very civil, you know, nice, nice dinner. i don't want anybody assuming anything here. i think melissa did eat chicken with a ketchup on. >> it's a lie. just to set the record straight. >> what's going on with goldman, chaz? >> what's interesting with goldman whether you believe the conspiracy theories or not, all conspiracy theories have

elements of truth to them, i think, i think some of the reports, i've written about this, go way over the top in terms of goldman's evilness and its ability to control everything. people at goldman are really pissed, like a weak way of describing it. they think there's an undercurrent of anti-semitism here. so, whether you believe the conspiracy theories or not, they exist. they keep getting portrayed in the press. and goldman has a massive image problem, and it's going to get even worse as bonus season comes, if you think that they might not hand around bonuses because the markets will turn around. the credit markets cease, which will probably not happen, they'll have to hand out a lot of money in bonuses. it sounds like a good thing, but if you're goldman sachs with an image problem benefiting out of the government bailing you out and bailing out aig and all the rest. >> what will they do instead, charlie? >> they are weighing a bunch of things, one of the things is they are trying to figure out not to give out bonuses and

stock buyback instead. >> charlie, why do they need to do anything? >> a lot of these guys have their own net worth tied up in the stock. i'm sorry, go ahead. >> why would they need to do anything? why not go about their business, pay the bonuses? what do the conspiracy theorists, what do they want from goldman sachs? just because they've been successful? >> i can't answer. listen, you're asking me a question i can't answer. i'm telling you whether it's real or not, they have an image problem. they know it. it's concerning the firm. you might ask, why does it matter whether they have an image problem. and, you know, they're in a different situation right now than they were a couple years ago when they were -- when this was capitalism and, you know, you sink or swim. you know, they took a government bailout. they're a commercial bank. they have the government -- they have government bureaucrats in their office. image does matter to them, and they're getting creamed.

and they got to figure out a way to sort of mollify this bonus issue, or else, you know, roy blankfein will probably be going to, you know, henry waxman or barney frank's committee to try to explain that and he does not want to do that. and the various things on the table is, let's figure out ways to make bonuses less of an issue. pay more of it in stock. okay, maybe pay higher salaries and less bonus. and maybe do the stock buyback thing which could negate the need to give big bonuses, because obviously -- theoretically the stock would go up. >> charlie -- >> or, let me make another point, or a combination of all those threes. >> goldman has figured it out, i see no other reason why they can't figure it out going into year end. >> wait a second. what have they figured out? >> how to make money. goldman is the best of the best. >> it's actually not that hard to make money in this environment. you borrow at zero and you lend at 3%. >> i challenge you with that. sit at goldman's desk and tell me what you say the next day. >> borrow at zero and lend at 3%. they can do better than everybody else. it's more difficult to figure out how to manage the image. >> that's the bottom line. got to move on. chaz, thank you very much. go to camp and enjoy your ketchup. all right, guys, so you heard chaz's report, we saw the

nice full screen where we had all the cash. do you think that perhaps with this in mind, if banks are, indeed, incented to find other ways to pay their employees and stock buybacks, is that another wind at the sails of these guys, another reason to invest? not only is cash sitting on the sidelines and it wants to move into the market, wants to move into one of the leadership areas of the market, but also we have the potential buyback coming down the pike in the fall? >> i think guy brought up a good point. all these headlines a couple months ago would have sent the stocks into a tailspin. it's not happening. i don't think it's anything major that the market can't resolve. >> i'm trying to figure out. are they buying stock back -- >> issuing more stock to the employees to pay them. >> i think he was talking about because so many partners own it, a lot of their net worth is in stock, to maybe give them liquidity that they wouldn't normally have?

although, i mean, they would have to account for that compensation as well, i think, so maybe they've -- i don't know. i don't think it's an issue. i mean, if they make money, they deserve it. >> exactly. what i don't understand is basically in the fall of 2008, everyone went underwater, and goldman sachs was able to hold their breath the longest. does that mean because others, then, failed that goldman sachs should fail as well? they take risk as -- every day as each of us on this desk do, you take risks. when you lose money, you incurred the loss yourself. it's not like goldman sachs asked anyone to incur their loss. they're taking risk and they're making money. and you know what, for their shareholders, they're making money. >> let me add one more point. if you're a really talented person on the street now, where would you want to go? where they can pay you. >> right, of course. >> i mean, it seems fair. so, they can live with a little more bad pr, make more money. >> right. time for the prop desk where we give you the best ideas heading into tomorrow.

obama's health care plan sparking resentment from the public. a lot of it, baby boomers. what's the trade? >> let's think beyond health care and think deeper. what do we all think we're going to need? maybe a hip. maybe a knee, stryker, zimmer, those are the deeper spots versus unh. >> because of the demographic play? >> yeah. the aging baby boomers who will need these type of things going forward. they're living longer and living more active lifestyles. it feeds right into the whole play. >> zimmer might be the better. stryker is higher on the valuation front. i think zimmer's quarter they reported a couple weeks ago was better than stryker. i would probably go zmh, although both charts are exactly the same since november. >> karen's picked stryker already. >> the reason i did because zimmer has a little bit more of an issue with -- it's a little tainted. there was a scandal of medical device reps paying off doctors to use their product. zimmer seems to be embroiled a

little more deeply than stryker. but at the end of the day, i think they trade together. i like the space a lot. the valuation is really cheap. they have been really hit hard by fears of an obama big restructuring which doesn't seem to be about to happen. >> cash rates, balance sheets. cash rich.h. up next, are we about to lose our lead of the wealthiest nation in the world? former commerce secretary carlos gutierrez says perhaps. your wallet cannot afford to miss this move. big news from insurers this week. how to trade the hot tamales after this.in new chevy equinox. with an epa estimated 32 miles per gallon. and up to 600 miles between fill ups. it's the most fuel efficient crossover on the highway. better than honda cr-v, toyota rav4 and even the ford escape hybrid. the all new chevy equinox.

on tonight's "trader radar," we look at stocks lighting up the screen on wall street today. founded in 1948 as a bait and tackle shop in binghamton, new york, it has since grown to be the largest athletic chain in the u.s. continuing to expand its reach. the u.s. seems to be taking its cue from other nations recently from following china to watching your stocks prosper with more effective stimulus package. is the u.s. losing its grip as the world's market leader? former commerce secretary, carlos gutierrez, is with us. but, first, we'll listen to the

setup piece and hear what he has to say. time and again history has witnessed the shattering rise and shattering falls of great civilizations. 476 a.d., the fall of the roman empire. 1945, the demise of british colonialism. 2009, the end of american world dominance? once the leader in global commerce and controller of the globe's currency of choice, the u.s. may be sliding into second place. in its scramble to avoid a deep depression, the federal government ran up quite a tab. hundreds of billions for bailouts and stimulus. adding up to $1.8 trillion in debt. a whopping 13% of gdp. all that borrowing has sent the dollar down, 10% in the last six months. meanwhile, countries that didn't break a bank on bailouts are already seeing a robust recovery. throughout history when the chips were down, the red, white and blue always rose to the top, but perhaps this is the crisis that changes the normal course of history. with us now is former commerce secretary, carlos gutierrez. mr. gutierrez, always a pleasure to speak with you. >> how are you? >> in terms of the stimulus plans, we make the point and you

make the point that smaller stimulus plans have been more effective in other parts of the world. at this point with only 30% of the u.s.' package deployed, how can we structure the rest of it so it can be more effective here? >> well, you know, my concern, michelle, we've already seen the best part of it, because we've seen the part, you know, that sends the cash into consumers' hands and it's tangible and it happens very quickly. what's coming now is a lot of small projects that are being dribbled out throughout the country. about 10% is construction. that will do okay. but it's only 10% of the whole thing. so, you know, my concern is, it's a lot of money being piled on to the deficit. we've got the second highest deficit in the world. and we're not really talking about it. we're not focused on it. it's almost as if though it

doesn't really matter. we're just talking about how to spend money. >> mr. gutierrez, bring it home to the average person's who's watching you right now? why should they care? how will they feel it? >> here's the thing, our deficit as a percentage of our economy, gdp, is 14%. that's the second highest in the world. just to give you an idea, michelle, that's ten times higher than argentina. just to put it in perspective. three times higher than mexico. it's huge. and we're going to have to go out to borrow money, to be able to cover that, to be able to cover our debt and interest payments. so, that means we'll be begging the world to lend us money. the interest rating will have to increase. we may see additional inflation. we're probably going to see that impact our dollar. so, the question is, why should we be positive about the future? what is the catalyst? what's going to make us grow? >> sir, you are a businessman. you had an illustrious career at kellogg's, so i know you know where you speak. what can they do right now, given the situation this administration? i know you were a representative of a prior administration. >> yeah. >> but this administration, what

can they do, given the hand that they were dealt, what can they do to get towards the kind of more balanced spending than what -- they had to do something, right?? i mean, it was really the -- we were on a precipice there. they had to do something. bernanke talks about bringing in the excess liquidity. what would you do differently now than what they are doing? >> you talk about business people. what business people have to do now, karen, look at cash flow like hawks. take care of capital spending. make sure you've got working capital and control. make sure you cut costs down to the bare bones. and hope that you find a way of growing the top line. but -- but, you know, it's basically a defensive posture. and you can't blame them, because there's a tremendous amount of uncertainty. taxes are going to go up. we're just not seeing any regulatory relief for businesses. so, businesses are in a defensive posture. waiting for the government to make the next move. and, frankly, the next move doesn't look very optimistic. so, it's all about, right now, just holding on and making sure you get through this, which is not a great scenario for growing.

>> mr. gutierrez, thanks for coming on. it's guy. >> yeah. >> i want to be tactful and respectful here, but when you were part of the previous administration, you painted a bit of a rosier picture than you're painting now. have things changed that severely, or it was a just a political thing then and now you're back in the real world, you're playing with a different game? >> things have changed. our deficit has been increased by $800 billion. we're talking about raising taxes. we're not focused on trade. our trade is way down. we are -- it seems like we've declared a war on business. so, yes! i mean, things have changed. our environment has changed. the deficit, you know, towards the end of the administration was perhaps 6% of gdp. and that was the last year when it ramped up because of the stimulus, because of the lack of growth. >> right. >> again, let's just focus on.

we're talking about 14% of gdp, and the brain power in the country is going into how do we spend the next trillion dollars? is it a public option or is it a co-op? we're not focused on the right problems and putting out the right fires. >> mr. gutierrez, thank you for being here. how do we trade this? do we short the u.s. dollar? do we short treasuries? what's the best way? >> joe's been on the dollar trade. everybody except me has been on the dollar trade. i think the problem with the dollar trade is everybody's talking about it. that's what scares me. and i just saw one of the elliott wave guys on the other day saying we could see a new bull market for the dollar in the coming months. so, shorting the dollar here terrifies me, but it's been the right play. >> again, i go back to this week, the story that people will talk about, the equity market, no. it's about commodity prices. there's been a dramatic shift. this the initial stage of the thrust that we've all feared in food and energy costs. it's coming, folks. it started this week. they're going higher. >> karen, what's the best way to play? treasuries -- >> i would short the long end of the treasury curve, and it worked for a little while, not worked recently. but i'm staying short that trade for a while.

>> grasso? >> i agree with joey. it's the commodities play. if the dollar gets beaten up more, the commodities will spike. up next, we know the exact level where this rally will end. hmm, do we? apparently the options market is perhaps telling us.ng stay tuned for what it says. back in a minute.er with my new netbook from at&t. with its built-in 3g network, it's fast and small, so it goes places other laptops can't. i'm bill kurtis, and wherever i go, i've got plenty of room for the internet. and the nation's fastest 3g network. gun it, mick. (announcer) sign up today and get a netbook for $199.99 after mail-in rebate. with built-in access to the nation's fastest 3g network. only from at&t. ♪ yes, you're lovely... ♪ what do you think? hey, why don't we use our points from chase sapphire and take a break? we can't. sure, we can. the points don't expire...

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welcome back to "fast money." we are live at the nasdaq market site in times square. time now for some "options action." the s&p 500 blowing through the 1000 level this week and now resting up against a key technical level at 1025. those that follow the options market knows that the 1000 strike on the spf was a virtual obsession for the traders. what could be the next stop on this rally? scott nation is the president of nation share as well as an "option action" contributor. where are we going? >> we're going to 1100. we saw a huge volume. a month ago we talked about buying index calls for stock replacement and we see people rolling their long calls in september up to about 1100. you know, you left some money on the table during this rally if that's what you did. but on monday, when the stock

market was down so much, you looked like a genius and that's what we see. guys wanting to steal second base without taking their foot off first. it would be really tough if we got through there with all the open interest. >> what do you make of the elliott wave guys who said we're ready for the fifth wave lower in this thing? are they just early, or are they just missing the boat here? >> i think they're missing the boat. i -- you know, it was so easy to wait for some sort of pullback. i think it's almost time to throw in the towel on that. the news has just been too good. it's been relentlessly good, so i think they're just wrong. >> scott, it's joe, do you see any call on the vix for the october expiration?? that would be a great tell for me. >> we've been seeing put buying for the vix more so than call buying. call buying has tailed off a little bit. there's not nearly as much risk. that's an apocalyptic trade and we haven't seen that much of it. people, on the other hand, are thinking the vix will break below $20, so we've been seeing more put buying than call buying. >> interesting. >> scott, thank you very much. i'll see you later tonight. do not miss scott as well as

myself -- >> what time? >> 8:30 p.m., "options action." don't not miss that. rick santelli was kind enough to fill in for me when i'm away next week. he will be the guest host. if you have any question for rick on the hot-button issues from taxes to debt to health care reform, send us a link to your youtube video question. don't forget to wear clothes and use proper language. perhaps we can put it on air. also you can send us an e-mail. coming up next, we grill the traders on some trades gone cold. tell you what the next moves should be on that stock. back after this. ♪ (announcer) this is nine generations of the world's most revered luxury sedan. this is a history of over 50,000 crash-tested cars... this is the world record for longevity and endurance. and one of the most technologically advanced automobiles on the planet.

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as the volatile chinese stock market kept some investors on the edge of their seats, our traders tried to keep their eye on the balls and be quicker than the ticker. >> anadarko, they're still cash rich. they can continue the offshore drilling, and they still have a lot of onshore production in nat gas. >> the governor drilling deep for a winning trade after announcing that they had found a new deep-water oil discovery in the gulf of mexico, the stock

shot up 8%. >> children's place, they put an end to the proxy fight. the stock goes up three bucks. time to say good-bye. the chairwoman checking out this specialty retailer. after reporting a 4% drop in same-store sales, children's place tumbled 6%. >> target has reduced prices 4.5% year-on-year. walmart has not reduced prices as much. that's why target lines up better. >> the liquidator hitting the bull's-eye on target. after reporting better-than-expected results, the retailer rang up an 8% profit. name like western digital is a story going forward in terms of this whole digital era. these guys are doing everything right. >> and the negotiator, hung up on a hard drive maker after being upgraded to a strong buy. western digital jumped 8%. >> leaving with us two words -- "fast money." all right, time for "fast

fire," where we hold our traders accountable. we kick it off with the liquidator believing a bottom had been put in on this commodity. >> natural gas, the way to play the energy exposure, look at natural gas. i think it bottomed today, we're coming to the time when you will talk about hurricanes. completely did not bottom, natural gas. it's below three bucks, and it looks like it wants to go below $2. if you think it's going higher, buy coal. i bought btu. >> the negotiator believing this commodity was poised for a dramatic selloff. >> let me talk about u.s. steel really quick. traded down on july 8th. by july 11th, the stock was trading $43.15. it's had a monster move. i know the analyst at goldman. he's great. i think he's late. i think this stock corrects to $35. >> what do you think? >> got to $37 the next day. my bad. my entry level was wrong. i'm sorry, folks. it's rallied ever since. my bad. all right, more "fast money" all right, more "fast money" en this hotel added aflac to compliment their benefits package

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do the "final trade." joe? >> the reits, i'm shorting them. >> steve? >> abt. >> karen? >> syk, stryker. >> grasso? >> citi for a trade.

be quick on it. >> i'm melissa lee, thanks so much for watching. catch an instant replay at 11:00 p.m., and tune in for "options action" 8:30 p.m. eastern time. have a great weekend. i'm racing cross country in this small sidecar, but i've still got room for the internet. with my new netbook from at&t. with its built-in 3g network, it's fast and small, so it goes places other laptops can't. i'm bill kurtis, and wherever i go, i've got plenty of room for the internet. and the nation's fastest 3g network. gun it, mick. (announcer) sign up today and get a netbook for $199.99 after mail-in rebate. with built-in access to the nation's fastest 3g network. only from at&t.

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