okay. it's time for "last call." did you see the outfits at the obama news conference? ben bernanke, president -- look, they're wearing the same outfit.

it's like they only brought swim trunks to martha's vineyard and they're like let's run to vineyard vines, get the white shirts they've got on sale, blue blazers and do you think ben bernanke showed up with a tie and president obama didn't have one on, so he threw it off. >> they koof look kind of like big brother and little brother. >> what pants are they wearing? >> martha's vineyard attire. i just want to know, whatever he is wearing and i'll give him my tailors address and phone number, is it helicopter ben or king dollar ben? i'm here to say, folks, this is the biggest issue in the future. that's the deal. helicopter ben or king dollar ben? >> he's being serious. that's it for "the call." >> i'm mandy drury, and i'm larry kudlow. see you tonight on "the kudlow report." up next, "power lunch."

>> danny de veto and arnold schwarzenegger twins is what i thought. pretty hard to wear a tie in martha's vineyard. >> it would look a little out of context. >> the things we think about here. welcome to "power lunch," for a tuesday, i'm bill griffith. stocks have been in the green, part of it as a result of ben bernanke getting nod as chairman. and consumer confidence numbers much better than expected. but we did get mixed news on housing, that took some teams out of the rally. and also results of the $42 billion in two-year notes that will go off next hour here. that could move the market this tuesday, sue. >> indeed it could. i'm sue her era, a swine flu epidemic. half the country could become infected. we'll tell you what it might mean for american business and the economy. >> and i'm michelle cabrusso-cabrera. what do some women looking for

risky financial jobs, while others choose more stable careers? we'll have that coming up. and here is what else is on the menu. >> president obama has done his part by appointing bernanke to a second term. now it's the senate's term, but leadership aides tell me they have no idea when those potentially interesting confirmation hearings could be held, but bernanke could get as many as 80 votes in the senate. >> i'm scott cohn. everyone wants to bargain, and that should be perfect for places like costco, but there are some things that keep the ceo of that company up at night. we'll have jim senegal's look at the company, in a cnbc exclusive. >> i'm diana olick. home prices seem to be turning the corner, is it a blip on the radar or a trend? and prices and sales. we'll have all of it coming up in the next hour. >> and with diana talking about one of the key drivers of the market action today, the major averages touching a ten-month

high in the back of the consumer confidence data and also the housing data. bob pisani kicks it off. of you've got a triif he can at that of good news, right, bob? >> yes, the markets really hit their highs as we got the combination of the consumer sentiment number, and as well as of course the case-shiller home building numbers. let's take a look at some of the big movers. home building stocks had a grea morning overall. and by and large, they are holding on to their gains, even though the market came off its highs as we got those consumer confidence numbers from the conference board at 10:00 eastern time. home building stocks have held up very well here. i want to also note that the retailers -- the stocks that are doing well again are the cyclical stocks. your financials, your industrials, and your retail stocks. chicos had very good news. one of the very few companies that had an increase in sales, earnings came out. macy's generally up 2, 3, 4%.

finally, big financial outliers. yesterday, these stocks were 25% of volume at the new york stock exchanges and once again, we're on track. citigroup, for example, trading over 600 million shares. citi down fractionally. tradertalk.cnbc.com. rebecca, we are still maintaining the gains in the nasdaq, as well. >> yeah, bob, still maintaining the gains at the nasdaq. we saw a bigger pick up right after the consumer confidence data. as far as the retailers go. but the tech trade remains somewhat strong here. intel shares, the up side by 1.2%, microsoft up a 10th of a percent. also story stocks worth taking a look at. human genome sciences up almost 11% right now, abnormal options activity in the trade. there is some rumor, some chatter of a possible takeover. but right now, we're just talking about rumors, and we're just about the options activity. >> corin thee an colleges, 29%

growth in their revenues. a lot of companies would kill for that kind of growth, even in the best of times. let's get over to brian shackman are more on the oil trade. hey, brian. >> not to wax too philosophical, but oil seems like merits today. just when you think you've got to figured out t changes. we've got weak dollar, strong equities and oil down. traders think maybe it's the cbo numbers on the huge budget deficit pro projection. but if equity stays strong, we may see a turn around. the rest of the complex, nat gas we saw it couldn't get through $3 to the up side. they have pulled back. also a touch on gold, off the highs, but positive. it is a pretty straight dollar play. of dollar is a little weaker, gold stronger. silver to the up side. copper is to the down side. it's become copper, kind of a china play. not only where weak equities overnight, but miners had bad earnings overnight in china.

i'll tell you, bill it's interesting how the china story is wagging the tail of the dog lately in terms of some of these trades down here. >> indeed it has. saw here live on cnbc president obama taking time-out from his vacation on martha's vineyard to reappoint ben bernanke to a second term. john harwood wearing a neck tie, unlike the president or the fed chairman has more. john? >> bill, president obama promised reporters the other day he had no plans to make news on his vacation at martha's vineyard. forget about it! . the president today reached for a political boost by reappointing ben bernanke, saying at this particular economic moment, he has exactly the right combination of skills. . >> as an expert on the causes of the great depression, i'm sure ben never imagined that he would be par of a team responsible for preventing another. but because of his background, his temperament, his courage and his creativity, that's exactly what he has helped to achieve. and that is why i'm reappointing

him to another term as chairman of the federal reserve. >> now, ben bernanke nodded to potential critics of his performance by saying he supported the independence of the federal reserve, and he had an eye toward price stability, but those critics were too much simply for potential presidential candidates on the republican side to ignore. >> well, i don't know who else i would have chosen, but i certainly would have had reservations by reappointing him, unless he was willing to kind of rein back in his role and his involvement in some of these other issues of. i think advocating for things like the auto bailout was a really bad policy direction for the country. >> but, of course, tim pawlenty may be running for the 2012 republican nomination, but it's the 100 u.s. senators that will make this decision. and as i mentioned at the top of the show, democratic leadership source told me today that ben bernanke could get 80 votes for his reconfirmation or reappointment to a second four-year term, guys. >> john, stay there. let's talk more about this. we've got the president without

the tie saying that bernanke's bold action and outside the box thinking is what helped slowed the effects of the financial crisis. nice handshake there, guys. >> what handshake? >> pg yeah, that's the point. hmmm. >> the body language spoke a lot, didn't it? >> tom. >> the fed chief is rather reserved, don't you think? he really is. >> yeah. by nature. >> by nature, i think he is. >> that's a nice one. >> it's more the way president obama kind of stands way back. >> i know. but i just think that fed chief is kind of a reserved, kind of quiet guy. >> let's bring in amin jabbers, and steve liesman who is waist deep in a trout stream in montana, as well. amin, are we reading too much of the body language here? is. >> clearly, bernanke was a bush appointee. obama was not expected early on to reappoint him, but his performance and popularity on wall street really drove the president's decision mere. and we're getting a little bit more detail on how this all went down. i'm told by an administration

source they actually decided a couple weeks ago to do this in late august, and that the president offered this job to ben bernanke just the president, tim geithner and bernanke in the white house together on wednesday last week at about 8:00 p.m. at night. so they have known for a little while they were going to do it. and my question is why the head fake when they told us they weren't going to make any news yesterday. >> and is that because conspiracy theorist in me says maybe that's because the deficit numbers were going to come out today, as well, and maybe that really -- this event pushes that aside and people weren't necessarily focused on the $9 trillion deficit. >> yeah, you've got to get out your spin 101 textbook. first of all, they leaked the deficit numbers late in the afternoon on friday last week. we all reported on that into its friday night of an august weekend, buried that news. and then today, they step on the official release of that, with the ben bernanke appointment, which is obviously huge news. whether they're wearing island casual garb or not, it's still a

big deal. and so you've got to look at this and say this is very savvy on the part of white house. >> steve, what's biting? >> well, first of all, i'm in idaho, not montana. where do you think i am, in the boondocks? come on. >> my apologies. my goodness. what do you make of this, the timing of this appointment? >> well, i think it was interesting, the folks at jackson hole at the kansas city conference who were wondering what the delay was. i remember jacob frankel saying to me that there's no new information of substance going to come out between now and january. why not remove the uncertainty to which former fed governor rick mitch begin added, yeah, and help the economy by removing. i think it's done now, and i don't want to get into the politics of conspiracy, because certainly michelle is around to do that. >> and she just did. >> and i know she just did. but i will point out that now there is very, very serious business that the fed is cleared

away to do now. the political issue of regulatory reform. the issue of serious talk about exit strategy. and i also want to say to what john harwood is saying, it's very interesting, i hadn't thought about this. if bernanke comes out of the senate with 80 votes, it certainly gives him the potential -- and the political support, to take some of the tough decisions coming the fed's way. so i think that number is very important now. and i applaud john for bringing it up. >> and john, if i can turn you also to the fact that, you know, a lot of people thought the president wanted to put larry summers into this position. so what happens now to larry summers, if anything at all? >> well, administration officials say he's going to stay in his job as head of the national economic council. and i think in response to the question receive just raised about the delay, the president likes to keep his options open on an appointment like this. but i think the white house thought the time was right, especially with the flack they're taking from the right about spending, big government, to reappoint george bush's fed chairman. and i think it's useful in one other way. the president talked about out

of the box creativity by ben bernanke, and clearly he is positioned not as ann inia i dt log. that's how the president would like people to see him as not an i'd owe log, but someone willing to respond to the circumstances in front of him. >> how much of this was larry summers' job to lose? how much of this is president obama seeing him more and more in action, and as my kindergarten teacher used to say, does not play well with others? >> well, that's always been the rap on larry summers, is that he is kind of grumpy and irrasable and doesn't get along with the other teammates over there. but really, this is probably ben bernanke's job to lose, if anything else. when you have a starting quarterback in the nfl and you have a great guy on the bench, that motivates the starting quarterback to perform. but it's up to the quarterback to deliver and that's what ben bernanke was doing here, the obama team decided. and to go back to the point about uncertainty, there is a

tension because of course obama would like to keep the uncert n uncertainty going, because that does give him some leverage over the fed, at least implicitly, which any politician would like to have, but wall street hates uncertainty, so needed to resolve that. >> optionali has a cost saving. i think that's the key words there. >> yeah, they had to resolve this thing and send the signal of continuity and that's been the buzz word from last night until today. >> good to see you, amin. thanks for joining us. >> thanks. >> see you later, john. and steve, we'll let you get back to whatever you're doing there in idaho. >> i'll let you know. i'll give you a full report. >> thank you. we look forward to that. so the markets up today in part on the bernanke reappointment. meanwhile, the dow has been up five days in a row now, better than a 4% gain in that time. does this rally have more room to move? we ask once again. it's task force time coming up. >> also a cnbc exclusive for you, the ceo of costco on the retail environment and the

economy. plus, $9 trillion. that's what the white house expects our national debt to get to. much is it time to dump stimulus, the rest of the stimulus, and focus instead now on fixing the deficit. >> and get ready for the "fast money" halftime report. rick santelli is in the chair with the gang. "power lunch" is back in two minutes. [ engine revving ] [ engine powers down ]

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the dow was up five days in a row, 9600 earlier on in the pile of the economic -- several pieces of economic data that were positive. ben bernanke getting reappointed. nasdaq and s&p in positive territory, as well. some of the most widely clicked stocks, citigroup, bank of america, ge, our parent company, fannie mae and freddie mac. >> so what does mr. bernanke's reappointment mean to the markets overall of. let's talk to our "power lunch" task force, joining us is president of plates financial advisors, and managing director at morgan keegan. nice to have you here, gentlemen. brian, let's start with you. it's certainly relieved a little bit of uncertainty, but a lot of people in the market did expect mr. bernanke to be reappointed. longer term, does it have an impact on how you allocate your cash? >> i don't think it has much of an impact. i think it was somewhat anticipated by market. maybe the only people that were surprised were the president and ben bernanke, because they

forgot to pack a tie. i think it was somewhat built-in expectations, and it's hard to manning who the replacement would have been. i know the dialogue earlier was talking about larry summers. and i don't know if the market was anticipating that. so i think this is good for the market. this is really a -- something that the market can build on, and it makes it a sign of stability going forward. >> kevin, just occurred to me, we were trying to guess why the timing on this, and whether or not the president was trying to crowd the deficit forecast out of the way. but what about the treasury auctions? we have the next legs, the first one coming up in about an hour here, a little less than that. does this provide a little more confidence for the markets in these auctions? >> i don't know, bill. i think that the auctions were set up and are going to go pretty well, regardless of this, just like brian was saying. i think the market expected the reappointment, you tend not to want to throw your captain overboard while navigating the roughest waters, and that's

where we are now. and i think it wouldn't have affected the auctions prior to, doesn't give a tremendous boost to it, but is something that provides some stable. >> what is he -- let's ask the opposite. how would these auctions have gone today, kevin. what if he announced larry summers today? >> yeah, i think it would have been very disruptive for the marketplace right now, because what you have is the known and you have the guy that you have seen before congress replaced by some unknown, with a whole new policy potentially. and i think it would be certainly unsettling to the bond markets. i don't know about the equity market as much. but bonds would deductible not take that well. >> brian, my notes say you think it's a bad time to be in caps or shorts. how much longer do you think this market has to run and where would you put that cash? >> i think it has a lot of room to run from here. and really, just looking at the trading in market, anybody that missed, i think, is really -- you're seeing offering support. even mild weakness throughout

the day. yesterday as an example. any time the market even goes down, dare i say this, 15 or 20 points on the dow, this really seems to be money coming in to support it. so i think there is a certain sense whether it's money managers or individual investors, they're a little bit afraid they missed it. and i can tell you, it's much more -- and the shorts, for instance, have got to be very concerned. it's much more nerve-racking being -- it's much less nerve-racking being in cash than short. >> what are you going to buy? >> it is tough to buy and that's the problem. >> what are you going to buy? >> i think right now, the industrials still look attractive. i still think there is a lot of opportunity in industrials. i still think technology and still the basic material commodity companies, still a fair amount of room to run from the global expansion theme. you can see that the staples in health care have been lag guard. many the consumer staples start to participate in the second leg. but that's not where the trade has been since the march 89th lows.

>> thank you, gentlemen. appreciate it very much. >> coming up next, investors on consumers, retail could be the key to the recovery. costco gives us a critical read on spending. scott cohn spoke exclusively to the ceo. >> yes, we'll show what costco is doing today, $1.5 to 49.59. year-to-date, still down about 5%. you're watching "power lunch" on cnbc. first in business worldwide. he ran off with his secretary! she's 23 years old!

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the dow joeps industrial average, at least that's what it's called for now, is about 8 points away from the 9600 level. nasdaq higher by 16. the s&p higher by 8. some of the most widely clicked stocks on cnbc.com. jpmorgan, wells fargo, amd, at&t, and american express. >> looking at those financials today. so when will the american consumer begin spending again? of course, that's the million-dollar question on the minds of many retailers right now. our senior correspondent scott cohn sat down with the ceo of coast co in a cnbc exclusive to talk about the retail economy. >> they're looking for values. you would think the economy is

right in costco's sweet spot as consumers glamor for bargains. but all is not copacetic in the home of costco, and we caught up with jim senegal last week. yes, the company is still flush with cash, but sales were down last month in what he calls deflation in gasoline and groceries. he says there is one key to turning things armed. >> i think this issue relative to employment has to be dealt with. there have to be jobs, people have to be working. we can't continue to lose more jobs on top of the 6.5 million that have been lost already. >> so what will that mean for sales? back to school is off to a pretty good start, he says. he's expecting a reasonable season, and what about the all-important holiday season that follows? >> i think this issue relative to employment has to be dealt with. there have to be jobs, people have to be working. we can't continue to lose more jobs on top of the 6.5 million that have been lost already. >> did you get the point about

jobs? >> i think that was my mistake there. he did say that he expects the holidays will be better than a lot of people expect, but he still sees it as kind of reasonable, not a memorable christmas. ask we also talked about health care, which effects costco as an employer and seller of product. he says the reformers could take some cues from businesses like costco that have found ways to cut costs. and by the way, the jobs situation. >> yes. it's all about jobs, apparently. >> how will they cut costs? it that's what we keep hearing about all these plans in the white house is they want to cut costs. >> right. and how they cut costs at costco? they're struggling with benefit costs in particular. they do provide health care for their employees, 140,000 some employees, but that gets to be a dfl thing. and they're trying to keep on top of it. they're trying very much to avoid layoffs in the situation like this. and they're always just very finall finely tuned to cuts costs. >> at some point, retailers can just shave the margins and shave the margins and shave the

margins to try and get people to come in. but at some point, they have to just throw up their hands and say if they're not going to come in, they're not going to come in, right? >> there's some of that. one of the things that costco does very well is private label and a lot of merchants are doing that. and that is what we were talking about for an executive leadership series coming up next month on cnbc. they have done very well on private labels, but that price point also impacts their sales results. so what they're doing well is they hung on to cash when people say you have too much cash on your balance sheet. >> yeah, everybody talking about the acquisition that they should make. and they just decided not to do that. done well for them, apparently. >> scott cohn, thank you. see you later. >> $9 trillion, the deficit in 2019. much here's the clock from 44th and 6th avenue where our national debt -- that's a little different. standing right now at -- can i even read that number? what is that number? >> very big. >> we need william shatner to read it. also, numbers from the white house over the national debt

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welcome back. we're almost halfway through the trading day, and the headlines, the dow jones industrial average pushing higher. mr. bernanke getting reappointed and consumer confidence jumping. but there was con flingting news on the housing market taking the steam out of rally early on. trying to building that steam back up. shares of burger king sizzling, stung by a weak global economy, massive discounting by fast food retailers, as well. still, profits rose more than 15%, topping expectations. and general motors plans to stop putting its gm corporate

logo on the side of its cars. the "wall street journal" says the automaker plans to put more emphasis on individual plans. >> the obama administration raising its estimate on the budget deficit to $9 trillion over the next decade. so with the fiscal gap ballooning, should the president forget the stimulus plan and instead fix the deficit? squaring off in the power grid, chris kasinis and terry holt. chris, going to start with you. what do you think should be done here? >> well, i think it would be a big mistake to roll back the stimul stimulus. the economy is obviously showing some positive signs, but at the same time, it's still struggling, particularly in the unemployment sector. you are seeing states struggle with significant deficits. so rolling back the stimulus, i think, would be a big mistake. the deficit is obviously i think a big concern and is going to become a big concern in the months and years ahead. but this is something we need to focus on is the stimulus and not roll that back. >> terry, fix the deficit or

keep stimulus spending? >> stimulus has been a huge, gigantic flop, part of why people are so angry, part of why we're seeing people up in arms at these town hall meetings. we're going to have to either raise taxes or cut spending, or, hey, i have an idea, why don't we let the economy grow? get the government out of the economy, let the economy grow, and maybe revenues will go up and we'll limit our deficit a little bit. >> i kind of thought people were up in arms at the town hall meetings about health care, terry. >> yeah, that's part of it. but over the last six or eight months, they have just had had this mountain of bad news, this increasing debt, this increasing government manipulation of the economy. and it's sort of adding up to an awful angry electorate out there. >> chris? >> well, you know, i always like being lectured by republicans about fiscal responsibility. apparently that wasn't around eight years ago. >> we don't lecture, you don't listen. >> no, i understand. but let's be serious about the reality here. almost every economist or i say

most economists both from the left and right realize you need a significant stimulus to give an adrenaline shot to a struggling economy. and the notion that you didn't need a stimulus i think is just fool hardy. this economy would have suffered. ear seeing the positives. >> this economy -- >> the positives right now in terms of job losses bottoming out, the economy starting to slowly turn around, the notion of no stimulus. >> all right. chris, let terry get in here. terry? >> a very small proportion of those stimulus dollars has actually found their way into anybody's pockets. we're bailing outstate government, and butting some money into medicaid, which is health care for the underserved. i get that. but these dollars aren't creating jobs out there. this economy is going to grow again on the strength of the private sector, and reinvestment in businesses out there. >> and chris, at some point, there is a tradeoff. i mean, when you look at public debt hitting 76.5% of gross

domestic product, by 2019, the jobs that you create now get wiped away when we end up servicing all that debt, don't they? >> listen, there is no question that rising deficits and debt are a serious concern. and i think what you're going to see from the obama administration, especially for the next fiscal budget are some tough choices having to be made in terms of spending. but these are, you know, unfortunately, even though they're connected, they really are two separate discussions. you had to have a stimulus, and you need to follow through on the stimulus to make sure the economy does not start reversing. but that does not negate the fact at some point we're also going to have to focus on deficit spending or spending as well as deficit control. >> gentlemen re, what are the implications, 76.5% as a percent of of gross domestic product, the highest since world war ii? >> it's scary for our kids and grandkids and our nation's future, our ability to grow. but what about president obama's change? how is he going to finance it?

he's going to be broke in the first year of this administration, and all of his big plans are going to have to go by the boards, because he's not going to have the money to pay for it. >> with all due respect, let's talk about reality. president obama inherited -- >> i thought would was reality. we're broke. >> a series of economic crises that he had to deal with. it wasn't like he just woke up on january 20th and said let's go into a trillion-dollar debt. that was something that he was given. >> he did wake up and say let's spend more money, though. >> thoois thanks, guys, terry, chris. we'll talk more about the government trying to raise money later today. they read to raise $40 billion today? >> $42 billion, in fact. key retailers are putting a whole group in the spotlight. matt nephewo drills down on the numbers and the back to school spending. >> and market-moving bond option, $42 billion in notes. we will be all over that for you with some analysis. of "power lunch" is back in a flash. the dow is up 93 points. when this hotel added aflac

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i'm mary thompson at the breaking news desk. a manhattan u.s. attorney charging a democratic political donor accused of engaging in a fraudulent scheme to induce city bank to lend up to $74 million to namazi based on false representations. this according to the charge by the u.s. attorney's office that namazi owed millions of dollars in collateral. namazi back in 2004 was a major supporter of then presidential candidate, john kerry, was also finance chair for the chain, and currently finance chairman of the democratic senatorial campaign committee. during his tenure there, he has been there since 2006. he has raised about $115 million additionally during his presidency. of president clinton nominated mamazi to fill the position. but once again, accused of a scheme to try to defraud citigroup or citibank, i should say, of $74 million. back to you. >> mary, thank you very much.

now to matt nesto, for the cnbc real-time flash. retailers, it's perfect time of year for that. >> i guess, if you're the right retailer, sue, you know? everybody is out there right now. and, of course, today's big focus on the weak side, because the retailers are doing very, very well, going to be on staples. can't say discipline on a first-share basis, met at 16 cents a share, but one of only two retailers that are trading down today in the morgan stanley retail index. 16 cents a share met expectations, but the recession and high unemployment is certainly hurting some of their furniture and office supply type of sales. the fact of school business has been pep i had, not great, but not a huge disappointment. you can see office maxim, the smallest of the three, and office depot doing very well. look how retailer have outperformed the s&p. almost a two to one margin. if you take a look at the big if i can at your today, guys, it's retailers and retailers by a mile. these chico's big lots and

dillards all up nicely. >> so far, so good. thank you, matthew. so this story caught our eye here. according to -- this research, higher testosterone levels may explain why some women look for risky financial trading jobs while other women stick with more stable business careers. new research by both northwestern university and university of chicago found that female mba students with higher levels of the male hormone were far more likely to choose risky careers such as investment banking. the thing that caught my eye, they measured the students' hands. >> and fingers. >> because they found that finger lengthening is affected by how much testosterone a person was exposed to in the women's womb. the more testosterone, the longer the fingers. >> anyone? anyone? >> here's what struck me about this. at the university of chicago, they were forced to give saliva.

i find that a total disruption of civil liberties. why were you forced to give saliva? i don't like that. >> this as we were discussing the president wearing ties. of. >> still ahead, the $42 million bond auction. market reaction, coming up. >> halftime report is after this. see you then.

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welcome to the "fast money" halftime report. much getting to the heart of the

action as it's happening, real-time. i'm rick santelli in for melissa lee. hey, you saw the housing data. much better than expected housing sending stocks higher. but the real question, especially lately, come on, are we going to have a little correction in the afternoon? let's get the word on the street and see what the gang says. pete, what do you think? >> well, i think, rick, what you're seeing right now is just same reaction we've had. now, what you asked is going to be a difficult question. i think when we get some of these bond numbers, we're going to know a little bit more about our afternoon and what to expect. but certainly, what we have seen is financials leading the way, goldman sachs once again looks like they're the front runner. but look at bank of america showing a little bit of strength, as well. you've got to love the institutional commitment to a lot of these financials. they're chasing performance right now. bank of america is only up 26% year-to-date. it's chasing after the jpmorgans, and, of course, those investment banks have been absolutely on fire all year. >> danny, what do you think is more important? the housing number or consumer confidence? are we going to put our stock in

5,000 respond ants or do you think case-shiller is the driving force? >> you have to look at the consumer confidence, because like pete was saying, there's been a the love chasing by investment managers trying to chase returns. everybody is spending a ton of money on the sidelines. i think the same thing applies to consumers, because everybody stayed out of the stores, and believe me, i know. we stayed out of tstores at the malls and everywhere. so i think a lot of panic buying as well in some of the retailers. but seeing it more on the specialty side, which i think is interesting. because that kind of tends to -- we think of that, that might be at the tail end of this market in terms of the consumer confidence. so i think we're going to see a pull back, too, maybe in september. >> interesting. chris? if it wasn't for this data today, do you think the market would have been higher or is it a key catalyst? would it hold up? >> i think the market probably would have been higher anyway.

great action, broken out of key levels. the really is, it's still a lot of cash on the sidelines, but it's chasing stocks here and chasing performance, as pete said. >> brian, you don't look convinced. >> when you look at the consumer confidence numbers, they were good. the expectations were better. but what concerned me is, if you look at what people thought they were going to be earning over the next six months or a year, it din really increase that much of. so while i might expect to make more money, if i don't make -- while i expect things to be great, if i don't make anymore money, i can't spend anymore money, so i'm a little concerned about that. >> i'm with you, big guy. of course, the next trade, options action, my favorite. pete, we're talking -- you're seeing big movement in in areas that have to do with housing. what a surprise. your favorite etf. what are we seeing on the options side? >> well, the xhb, and, you know, the tirg thing, rick, when you look at the xhb and the top ten holdings, only a couple of the names are housing. it's just a few, and then the rest of them, bed bath and beyond, mohawk, a lot of folks

that are the secondary thought when you're looking at housing. but it's been a very impressive run, already touching on multimonth highs, and yet people are coming after not just september options, but moving out into october, very, very active. >> they're paying for premiums? they're paying for premiums! >> well, people are willing to pay for premium. and back to that other point. when you're talking about sentiment, you can measure sentiment and volatility index. and the volatility index right now is telling us that people are far less scared, and not only are they not scared, but they're now starting to develop some sort of a confidence level when you are looking at the volatility index. >> pete, they don't need to trail any puts, they're just rolling sell stops. what do you think? >> well, i think what they're really doing with something like the xhb is, they want one more piece, and they're going to do it. they don't want to have the full explosion of actually committing to the stock or to the etf. they're actually going for these upside calls. yes, there is a lot of premium there, but they know their risks going in and know how much they

can lose. >> chris, in ten seconds, do you agree with pete? >> i agree with pete. and i think people want to play it without having exposure. and when the ball is very low, it's a cheap way to get the upside. >> okay, danielle, your moment. you have talked about retailers and today they're a hot commodity. do you think this consumer confidence and the action in retailers -- you know, are we getting the extra innings as you implied before? give me some guidance. >> yeah, i think we are getting into extra innings. charlotte ruse taking private. we have seen things on the wall, a lot of big-box retailers being closed, malls looking empty. things are getting more local. that means more local retailers are coming into play. i think we're seeing a bigger picture from a macro perspective. a lot of changes. paradigm shifts a lot of changes and paradigm shift from the retailers to the smaller, local guys. we will see a pull back significantly, but we are seeing a lot of people who haven't been in the stores go in because they

need stuff for back to school. >> i am hearing more about everybody being nervous about how far they go and me and the world series. it's a lot of talk, but the market keeps going up. today was a big day with ben bernanke. he gets reaffirm and have $42 billion and two-year notes and i know of course that brian, you have thoughts here and you like to watch the spread as do i. let's tell the audience what you are thinking. >> the two-year maturity is the frontlines in the battle right now. not just for interest rates, but the dollar. people rushed for safety last fall and that spread is between germany and the u.s. is 300 basis points. there was an incentive to sell dollars, buy euro and reinvest. we have a two-year option and if

we get a weak option, you are talking about a razor thin option. let's buy dollars and sell euros and everything can turn. >> the average viewer understands what we are talking about, it's around a 105 yield. what are you seeing in a two-year note? >> somewhere around that. exactly. >> higher yield should draw the close. that's the logic. >> for has because you have seen the euro rise with the dollar. it's a very small difference at this point in time. >> with the fed sitting on their hands, you nail the short maturities. the margins might remain razor for a long time. goldman sachs trading higher despite reports of all the stories in the journal about regulators and companies sharing trading tips and on the fast line. your old employer, give us the skinny here.

>> rick, are you ready because i'm about to break news here. listen up. you know what else i learned about goldman sacks is they are recycling their aluminum wrong too. leave them alone. people hate the yankees for the same reason. lay off and focus on things that are important. >> what do you think we should focus on? if i think about goldman sack, i should throw away the paper and what should be the key issue. >> now the key issue is can they repeat the quarter they just had. that was ridiculous. they crushed. are they able to do it again? i don't know. that's what it comes down to. personally i don't think can chase goldman. but there bigger issues other than a couple of guys in the weekly meeting. >> there bigger bonds to fry. >> i think goldman has gone from too big to fail to too big to succeed. i think if we have done enough

government intervention and let them do what they have got to do. >> do you agree, chris? >> i agree and think the stock is way ahead of itself. i would not be a buyer. i would wait for the great company and a great price. >> what are a great panel. lots more halftime fast money after a quick break. here's what we have for the big show at 5:00 and i will be there. >> he took his licks, but he has the last laugh. will traders? rick santelli gives the bond trade on the new term. howard dean on the public option. don't knock it before you try it. another street fight and it's time to batten down the hatches. joe plays al roker for your exclusive hurricane forecast on america's post market show tonight. 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.

fast money fast time report. it's time for the "power lunch" trade to go. it's like take out trade style. what's the trade? >> when you are looking at the market, everyone seems to be talking about technology. i will follow the same group. i love technology for a lot of reasons. to look at the balance sheet. intel kicked it off in the earnings and catapulted the entire market place and when you look at them and the potential growth they have, they are trading at a cheap level. $11 billion in cash and $1 billion and net books and the mobile device area. i like the directions and i think they are a great beneficiary. >> it's an interesting trade. is there any optionality i should be aware of? can i play this? >> that would be the cheaper way and the options are cheap and the volatilities are lower and

that's what i'm using rather than the stock. the stock made a big move and the options present a little bit better risk reward type of a scenario. we may see pull backs and the s&p start to break. we never see it happen. if we do, intel would have to follow along. i think the options are best. >> it's time to call the close. let's go around the horn. buying or selling? >> i think you have to take profits. this is an incredible run. >> buying or selling? >> selling too. can you maimonides hans? i'm a trader? >> i can tell the time talk to my kids from thousands of milesa, way. >> traders can ride it longer. investors should be selling. we are in the 8th think of a-inning game. >> i will be a buyer. >> a brave soul. that's it for the halftime report. don't miss tonight's show.

guess what. i will go head to head with howard dean and have fun talking about obama care. what are you doing? >> another edition of must see tv. breaking news that could move the markets. we bring you the results of the two-year note option. a white house report saying swine flu could infect half the population. the panelists weigh in on how businesses should prepare. sitting right next to me and will tell you the best ways to play the asian markets. back in a minute. >> citigroup sales assistants and wrongfully took more than $850,000 in customers and did not admin wrong-doing. the paperwork headline has been extended to 8:00 eastern time tonight and added a wireless version of the new reading devices aimed at competing with

amazon.com's kindle. the version will be available in december. that's the news now. i'm courtney reagan. >> the tension is palpable. welcome to the second hour of "power lunch." the stocks continue to rally and we are moments away from the results of the $42 billion two-year note action. rick santelli has the great in a moment. >> adding to the mood on wall street, showing home prices rising for a second consecutive month. is the housing market stabilizing? we will have a realty check. >> since apple's ceo returned in june for his leave of absence, shares have risen about 20%. he is said to be ramping up involvement. we will fill you in. >> excite being that. >> we are joined by a full hour

and the managing principal and the global advisors. when we first met, you were chief economist at merrill lynch. >> a long time ago. >> what do you make the give-and-take between the u.s. marks and the company you know so well, china on the declines. >> well, i think the china market still is fine. to put it in perspective, we had a run from 1,000 in 2005 in the shanghai exchange and 6150 in 2007 and crashed down to 1500 and back up to 3400 about weeks ago and do now we are down 20% to 2900. >> should that have an impact? >> it has had, but i don't think it should have. >> we have breaking news with the results of the auction. >> 42 billion. let's call it a shade under 112.

they were trading around 110. higher yield, lower price. to bid the cover, 268. it isn't bad, but indirect bidding and foreign central basics and large institutions. there may be some gains going on here. i think i will have to give this a b minus primarily from the pricing structure and indirects, i'm not sure how to deal with that. we are going b minus on the 42 billion. tomorrow we have five years to look forward to. >> sorry this what you expected? this was supposed to be the easy part. >> it is supposed to be the ease one and a couple of basis points is not the end of the world. i think we should learn something from the last two-year auction on a day where we had year bills and one-month bills and the governor brian talking about how the yield in the u.s. is being benchmark and

handicapped. maybe the darling for this set and the five-year goes to the better. >> what are role should the chinese play? >> we rely on them a lot and will continue. they will be there. >> they have been diversifying. >> they have and that's a good thing and not aed about thing. overtime they will be holding less dollars relative to a variety of others. >> good thing for us or them or both? >> for both. china needs to be integrated more and more and it will. that means the more diversification and it will happen. >> this indirect bidding today, are the chinese going to buy? do we ring our hands too much? >> of course we do. they were there today. they are going to continue to be there as long as we keep going into wal-mart and peck it up and it says made in china, they will be there.

>> the stock market held here. the dow around a gain of 75 points. when the results were coming out were up 78 points. we are taking it in stride so far. shall we move on and get the business of a story that is unbelievable. a new report of the advisors and technology. listen to this. they are guesstimating that half of the population of the united states could be sick with the swine flu and as many as 90,000 people may die. are these predictions realistic and if they are, how does the medical community and the business community prepare? joining us to discuss, this is the senior vice president and chief medical officer here in new jersey. he is an infectious disease specialist and the chairman and chief investment officer who has written extensively on the swine flu and the impact on the economy.

doctor, half the population? is that possible? >> it's possible. i don't think it's going to happen. the reports that came out from the cvc and the president's counsel are way overblown. the last two pandemics we had in the united states, 1957, 70,000 deaths. 1968, 34,000 deaths. calling 90,000 deaths is ridiculous. >> what do you think is more realistic of the impact swine flu will have this season in the u.s.? >> i wish the media gave influenza the attention it's getting this year. it's a serious disease. there 35,000 deaths that occur almost every year from influenza. if an invading army came in the united states and killed 35,000 people, we would be shocked.

>> we in the media have time constraints sometimes. what do you think will be the impact? >> typically what happens is at least 20% of the population gets infected. i would say anywhere from maybe 20 to 30% might get infected. the elderly are going to be pretty much protected because they will be immune. it will affect the very young and those about 20 to 40. >> you have been very concerned about this, david. i'm sure this report from the president's counsel put you in the fetal position this morning. >> i don't know that it put me in the fetal position, but it is a cause forra larm. i think the issue is and i'm not an epidemiologist so dr. gross would have more expertise, but the concern is more if there is

a mutation in a virus that makes it more lethal like the avian flu virus which is a very lethal, but not easily transmissible human to human. this virus is easily transmissible human to human, but so far has not shown the characteristics to be lethal. what i believe the report is saying is if it's more lethal. we are looking at deaths not from ordinary flu, but deaths from this particular virus. then we could have serious dislocations. that's an if. doesn't say we are going to have it f. we do, we could have trouble. >> what is that trouble. speaking as an economist and if we get that pervasiveness, what would it mean for the economy to suffer? >> we change social behavior. people don't go to markets and don't shop and stay at home. they act with fear.

they alter the social interaction and all the economic things that come from social interaction whether it's retail sales or automobile sales or working in an office or a factory. whatever it happens to be. it changes for the worst. my old friend is with you and visits more than i do. >> he saw it firsthand. >> i was in and out of china several times with the sars epidemic. when it became important is when people changed behavior and hotel occupancy in hong kong went to 10% within about three weeks. we just quite frankly don't know. that is the potential. i don't think this was time to be alarmed. >> in talking to sources, one of the things they're worried about is also the fact that you have not only the swine flu, but the seasonal flu hitting at the same

time. one of the issues they are concerned about is the lack of medical infrastructure. whether you are talking about doctor's offices or communities where hospital his to downside and you had reports close. is the infrastructure ready for the confluence of those two viruses? >> the infrastructure is not ready to handle the severe predictions of the present. there is no way they could lnl it, but there is slack in the infrastructure and a lot of hospitals that are running at 50% that could easily pick up and handle those patients. the other thing is that the hospitals could admit patients to hall ways and they often do that in crisis.

they could easily handle the typical seasonal flu we get. although they are pressed even at that. >> what are should company employers do to get ready for this season? >> i think the -- if the social distancing that was mentioned before has been something that's been used since 1918, it would have to be done again. you saw this summer when there were camps that had seasonal flu. they either closed the camp or for the season or a couple of days, people should stay at home and schools may close. >> there is no such thing as over reacting? >> there is no such thing if it happened. the question is, will it happen? i don't want to minimize what the president's council said in the sense it pays to be

prepared, but to scare people to think they will be 90,000 deaths and all those people are infected, i think it's scaring people too much. >> good work. thank you. >> thank you for joining us today. on our web cam, david is looking good. >> the deflationary effect you talk about, i flew to hong kong after sars, two of us. $1,000 each for round trip, six nights and food included. you could roll a bowling ball through the hotel. the traction, there were so few people willing to travel, it was deflationary in a way that was frightening. >> for the 90,000 number occurs, that is still less. the 70,000 in 1957 is equivalent to 140,000 now with a larger population. this is still under the most dire predictions must be less severe than in 1957. >> fingers crossed. the dow up about 78 points as it

was before the results. we will round up the all-stars and take the realtime pulse of the markets. >> new data showing month to month increases and is the house being market stabilizing. the best way to play the asian markets and apple jobs is micromanaging. the details that was. we will fill you in in a minute. tdd#: 1-800-345-2550

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the nikkei apparently a newspaper in japan's wednesday edition is out already. they are saying toyota will slash global production by 10% or one million vehicles as early as this fiscal year to raise utilization at underused plants. they will slash by 10% or one million vehicles. shares are higher by 1.5%. >> let's go to the market reporters and that's up on the day once again women start out with bob dasani at the stock exchange. >> mr. bernanke may be the headline number, but home builders are doing well and many are sitting at the highs for the year. big names have essentially doubled in the last month. there is a lot of dispute about how much we should put into the numbers. in fact with housing numbers in general, a lot of people noted the distortions going with on

disclosures and first time buyers. that will expire soon. a lot of people debating about what the numbers mean. take a look at the other names. up 60 to 70% and the average home builder is up 60 to 70% since the july rally began. let's move on for the first time in several days. the energy stocks on the weak side and oil is finally cracked a little bit and looks like $75 doesn't happen in a while. energy stocks have been lagered for the recent rallies. i want to know, the financial outliars could dominate the volume. look at the financial stocks. the out liers continued to dominate as fannie and freddie and citigroup with 25% of the volume. fannie mae was 90 cents four or five trader sessions ago.

how are we looking at the nasdaq. >> hanging in there and technology names are stronger fractionally speaking. a lot to the upside and one name in focus is yahoo acquiring and getting into the arab online community business and yahoo  talking about the fact that we heard this from the company. talking about it again today. the fact that they upgrade their search, im and e-mail. they want to compete with google and this is the way they think they can do it. they are accelerating the store expansion into 2010. what's interesting is we heard about commercial real estate making the next shoe to drop. it's taking advantage of the commercial real estate left out on the market and taking advantage of those opportunities as they expand and grow. one last stock of growth, corinthian college is looking good not only on the bottom line, but top line growth.

29% growth and a lot of people going to the for profit educators as they are unemployey and looking for new ways to boost their appeal in the job market. full of appeal at the oil market. >> you talk about appeal, a lot of people want to stay away from the oil trade. it's a head scratcher for a lot of people and look at the dollar index. it's weak although i will point out that the dollar euro is stronger against the euro. you take a look at oil, usually with weak dollars, we have been up in the oil market and continuing the pace of the sell off and could be a few reasons. i will give you a couple right away. we have 7496 and got slapped in the face to the downside. the deficit projections, maybe that means long-term recovery is difficult. also china weakness overnight is another thing. michelle, i have other things i

want to talk about. the american petroleum institute comes out at 4:30 p.m. eastern time. this number can leak out a little bit more than they used to and maybe people are selling at what might be surprise. >> conspiracy theory is right up michelle's alley. >> there would never be a leak. never! >> better than expected news on the home front we have been telling you about. posting the smallest declines since april of 2008. is the market stabilizing and are we turning the corner? >> we have been tracking the home builders and they are all in the green. posting advances. back in a moment. @@@@ carol, when you replaced casual friday with nordic tuesday, was it really for fun, or to save money on heat? why? don't you think nordic tuesday is fun? oh no, it's fun... you know, if you are trying to cut costs, fedex can help.

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in the housing market, the case schiller index showing the prices rose for a second consecutive month. in washington with more details. >> that's right, michelle. the bigger number was the quarter to quarter jump in the case schiller index. the national index that mirrors the top 10 and top 20 markets went positive quarter to quarter for the first time in three years. the index is still down year over year and down 30% from the peak in q2, 2006, but it's a solid turn. why is the inventor still bearish?

>> we really don't know the future. that's why we need markets to predict. we have a securities market that is still not predicting. they traded on the new york stock exchange and not predicting any major increases going out five years. they are predicting in five years home prices would be 6% than they are now. that's that is not a huge recovery. >> one state that is being a big recovery, california sales up 12% from a year ago. prices are still down, but that's the smallest annual decline in 19 months. inventories are way down under a four-month supply. why? the first time home buyer tax credit is juicing that market. you want to talk about the action on the lower end. prices under $500,000 are making up 74% of the action in the housing market during the

housing boom may made up 43%. go to the blog at realty check.cnbc.com. >> we're will bring in david, president of reconadvisors and managing principal at the global advisors. let me start with you and a lot of people are looking at this number and a lot of the housing data we have gotten and saying that housing has turned a corner. do you agree? >> i'm not sure. we had a number of favorable reports on the housing sector over several weeks. that's good news and certainly the case schiller members were good because the pace of decline is slowing but we have a lot of foreclosures and mortgage delinquencies were up. that told us that more foreclosures will be in the pipeline. i would suggest we proceed with caution even though we are getting good news. >> how much more if it is not a turn or not a bottom, how much

further to the downside percentage wise do you think we have to go? >> i would divide the housing markets into two areas. home sales and home prices. on the sales side, we turned the corner and seeing sales come up. the existing home sales numbers were very, very favorable the other day. however on the home price side, home values should continue to decline, although the pace of decline is slowing and that's good news. we have to go into 2010 to city recovering in home prices. home sales we have seen the recovery. >> all things, diana is showing levels down sharply. you are seeing a lot of inventory where you live. >> there tens of thousands of excess units in palm springs. you can find the same in naples, florida and las vegas and hilton head, scottsdale.

>> it's better than it used to be? >> the number of unsold units is not better. it's must jot growing like it was before. stabilizing, yes, but rerising, no. >> is it enough so that it stops affecting gdp and we see positive input into gdp? >> absolutely. that's an important turn. you will see the housing numbers and construction put in place will be dramatically better than it has been any time for the last 10 or 11 quarters. >> that are sequential quarterly number was the eyeopener and even confronted bob schiller. >> it was an eyeopener and it left out three unsensored factors and the first time home buyer tax credit. you can't say enough about it. $8,000 more in buying power that expires at the end of november. the foreclosure morer toia we

saw. banks were holding on to properties in that 90-day delinquent bid because they wanted to see how the program worked. there were several state foreclosures and on top of that, i don't know if you can hear me. so you didn't have the foreclosures on that. if you don't see those tax credits expanded or extended. you are going to lose that. >> what happens when the credit goes away? >> i think i agree with diana. it hurs because it did stimulate a great deal of demand for home buying, particularly in california. that goes away and we are stuck with what's the true demand for house. low mortgage rates are helping, but we have a sluggish economy. >> are people getting loans? >> people are getting loans, but it's still difficult to get a loan and hard to get a jumbo loan.

the third factor is that case schiller doesn't seasonally adjust the numbers and they don't account for the seasonal changes and we all know that in spring, prices historically go up. they are adjusted in the government numbers and we saw them go down. >> good to see you. we will let you get back and every time i hear a siren in washington, it's a diplomat going to lunch. >> see the effect of tax credit. on the line here, the bulls are not backing off so far. we will head to the floor for the latest market action in a moment. >> we have a double dose of technology on tap. we have breaking news you won't want to miss and jim goldman

with the latest on steve jobs and apple's computer and is he back to micromanaging again. to stay on top of my game after 50, i switched to a complete multivitamin with more. only one a day men's 50+ advantage... has gingko for memory and concentration. plus support for heart health. that's a great call. one a day men's.

welcome back to "power

lunch." here are the stories we are following. the recession is winding down and rebounding to a reading of 54.1 from 46. the expectation was to go to 47. much higher than anticipated. earnings fell down 38% despite an increase in revenue. profits admit they tumbled because of charges related to spents. core earnings and revenue did beat expecting as and med tronics will be on "the closing bell" to talk about the picture later today. >> the industrial average on the plus side. let's go down to the new york stock exchange. a cnbc market analyst joins us to weigh in on the markets as well. >> good to see you. >> off of the highs, but given

the fact that we have a lot of paper to go this week, not too bad. >> looking at the numbers, i was thinking the would have done better. i will put a wet blanket on it. >> the confidence is what you like and that number skyrocketed. >> they got bernanke as well. >> i will reserve that one. the global community, they are not saying yes or no, but i don't think it's that much of a surprise. number two, i don't think it's upsetting anybody. if you look at it that way, that's a positive. >> you see the dita coming out and people reacted dramatically and we lost a lot of that. do you get nervous even though we have good numbers? >> not really.

we have gone so far since march. the bears say it's over. they have been wrong every single time and i that are wrong again. there plenty rooms for this market to run. >> the stocks and yields and oil is going down. anything going up? >> tech stocks and with steve jobs coming out with this, i always have to keep an eye on it. they will be in positive territory and continue to be in positive territory for the rest of the year. >> breaking news involving you tube. julia? >> that's right, michelle. you tube announced they will

make videos that they are most famous for. google's site is ex-panning that puts ads on videos from popular contonight include people who upload just one hit. they track viewer numbers and look at the acceleration of use and contacting uploaders to determine whether they own the rights and ask if they want them to insert ads. they will share with the uploader. the company is saying they expect the vast majority of user-generated content to qualify. it sets the ground to be monitized and deliver revenue. >> and revenue for you tube rolling like the battle of cougar. nearly 28 million times and the videos like the wedding dance

don't fal by and make money as they own rights to the song. they dismiss concerns that advertisers won't embrace the content, saying hundreds of thens of advertisers comes in the content, eager to reach people watching viral hits. you tube puts ads on the professional conat the present time and now it's all about user content. >> do they give a break down on how much they can generate? >> they wouldn't give specific numbers and they are choosing to say. it seems like a lot of traffic is driven by this. look at the way you and i watch them. 45 million views. if they can catch the hits early enough and predict what will be successful, you give the users the ability to upload. you tube is spending a lot of money on the band width to

support the videos more than they can make profitable, the better. >> absolutely. thanks so much. bill. >> the dancing wedding. tough to do.8ñ i digress. it's time for the daily look at the most widely followed stories. this is the managing editor to tell us what's clicking today. >> it's a tone today of divorcees. you know the hoo ha about swiss bank accounts. listen to the irs man for people. >> that's interesting, right? >> we have a report. they are bouncing on the secret accounts and the phones are ringing, saying hey, i think my -- people are interested in that one. in a similar vain, we have a report that the lady writing a note about how she was a mistress of bernie madoff and did an interview saying that

bernie was terrified that his wife would find out because the divorce lawyer kicks in and checks out accounts and guess what they will find. we have that and yesterday madoff attracts viewers all the time. this is the new numbers. people are diving into this likñ you wouldn't believe. seems to be real concern and the economy is with the double dip. heating that up. >> watching this more than the dancing wedding party. >> indeed. maybe they will watch it up a little. >> thank you, alan. all on today's cnbc.com. >> perfect place to go. we will focus on the asian markets which were lower. shanghai, hong kong and tokyo. we will get you ready to trade those market fist you care to. good advice on how to play it. >> as we go to break, here are the retailers on the roll today. check it out.

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index science nutrisystem d works. satisfaction guaranteed or your money back! new! nutrisystem d. lose weight. live better. call or click today. the world's worst performer this month suffered another set back. the economy faced many unsrpts. the shanghai ended down and the biggest loss since september 19th.

the global creeks and if you want to play it, what's the best way to play it? long-term, you are extremely bullish on china's economy. this is a set back after a rise. >> it is a set back. we shouldn't be surprised about that. one thing that worries me is a lot of loans that were made in the first half of this year went into cross holdings. companies get loans and then we will speculate on buying other company stock. it's like wal-mart took out a loan and bought a bunch of intel or whatever. if the economy does well, they

are underexposed to china and all emerging markets. >> what's the best way to do that? if i want exposure to the growth rate you have in china, i will put something away. >> two ways. etf and the two etfs that i think stand out are fxi, 25 enterprises and well-known and you get good exposure. another is hao which is a basket of small cap stocks that are leading the way in china. >> do they give you exposure to state-owned companies? >> exactly. >> i cannot buy a stock in shanghai. >> they are traded in hong kong. you can buy them on the exchange

and this is and my favorite stock is ceo. china national offshore oil corp. the driller. it service china and the exxons and everything serves everything but china. china grows faster and the rest grows slower. >> what are worries you about china? >> since this economic collapse or melt down we have seen, china is much less interested in listening to our washington solutions and much more inclined

to go its own way and inclined to be a central planned economy rather than leans trtds a market solution. >> that could have an impact. >> it could, but the truth is over the last 20 years, they have gone a great job of managing their own economy from the top down. that's the infrastructure and spending and that so helped. >> they have like 2000 then ministries and now they have 100. they made a concerted effort to make government smaller and smaller every day, right? >> there is more. less that meets the eye in terms of consolidation.

>> the model that they have going, doesn't that put a cap on their growth? they have done better lifting the economy than we have. there is articles in the paper about the way they are pushing alternative energy and far more than we have. china will be the fastest growing economy in the world with less debt. >> we have the debt issue. >> i want to be exposed to that most rapid growth. >> always good to see you. don't make it so long. enjoyed having you with us. >> straight ahead, he's back!

steve jobs is back and supposedly micromanaging every details about the tablet computer. what's going on there? >> you must be feeling better. glad to hear about that. micromanaging must mean they are feeling better. stock up to $169.68. a gain of 98% year to date. we are back after this. @

. after his liver transplant, steve jobs has been back on the job since june and is micromanaging with apple's newest products includinging the new tablet device which is the main focus. jim goldman joining us and said he must be feeling better. >> steve jobs micromanaging? this is the breaking news animation and the music that

comes on. substitute has gone through that is the gist. the ruffled feathers with the attention to every detail is creating. the company tries to get a new tablet mac out the door. they didn't say who they were talking to, but in case jobs is not paying attention, the journal got an e-mail from him saying much of the information is incorrect. and they are developing a version of the notebook and could be an oversized i phone or ipod touch with a big screen. net books had seen sales explode. piper jaffray thinks a mac tablet could add additional revenue by next year. steve jobs is back in charge and

that's apparently everything at apple. back to you. >> what's the response if any from the apple employee. these are people who worked here for sometime and they changed in the culture while steve jobs was gone. they didn't care about what they were doing and it was a different atmosphere. the deep bench at the company is beginning to fade off into the sunset as we realize steve jobs is back.

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>> well off of the best levels of the day soon after the opening bell this morning. we had economic data better than expected. >> you know when that came out. look at the site. >> up towards the auctions and the results came out that time. >> we have a lot more paper to go. one thinks the five-year will be the winner. a c minus or c plus. >> the government's ability to raise debt. >> empty calories. >> let's get that segment. are you looking for a place to relax? many are headed to the new high line park. >> we are fagging this? >> they are getting quite the view. there is this hotel there. >> not a family attraction. let me put that out there. >> this was the standard.

they have floor to ceiling windows and have been encouraging guests on their facebook page to be exhibitionists. the new york post yesterday took a lot of photos of people standing at the windows naked. what happens today is hundreds of people are showing up to look and watch. >> the hotel is back tracking and apparently on the facebook, they encouraged their customers to do this, but now saying that's not the case. >> they were doing other various things in front of the window. >> that are you wouldn't see in the theater or not the kind thaw and i go to. there is a hot place called the monkey bar that people can see. maria ate there. >> what they had. don't bring the kids. that's all i have to say. >> the crypt that