"squawk box" has been brought to you by the letters cnbc. >> we'd like to thank elmo and our guest host today, jim chanos. >> you don't do any, but everybody says the market is sugar high, way ahead of itself, not backed up by fundamentals. >> no idea. no idea. no idea. i'm a market agnostic, always has been. >> you look at this special case. great to see you. wall street, too. better looking than shia labe f labeouf, in my view. >> thank you, joe. coming from you, that means a lot for me. >> that does it for us today.

make sure you join us tomorrow. "squawk on the street" is next. this is cnbc.com news now. >> the shares are lower this morning after restaurant chain august same-store sales were below estimates. chicago reserve president says it's too early for the fed to start reserving accommodative monetary policy but they will act aggressively if inflation starts to build. mortgage rates are down. that's cnbc.com news now. first in business worldwide. i'm bertha coombs. live from the financial capital of the universe, this is "squawk on the street." good morning, everybody. do you know what today is? >> what's today? >> it's 09-09-09. what is the significance of that? >> that happens to be the six-month anniversary of somebody's bottom.

>> somebody's. a very fit bottom. >> a beautiful bottom it is. and ironically, investors are a lot less cheeky than they had been since then, today sitting on their hands, using their bottoms to sit on their hands. where the heck are you? >> just when i was thinking mark was so self debris indicating, he called his own bottom beautiful. the facts are the facts. i'm in washington. good morning. this is still the financial capital, or the other financial capital of the world, washington, d.c. right now, down the street, the u.s. dollar. the printing presses are running like crazy. oil right now is at $71. opec's production decision is also due later today. but, mark, on this special anniversary, how are your futures? >> not too bad. up 1.20. you know, that's really kind of flat. slight positive bias. >> flat like some other things. let's find out how this morning's news is playing out.

everything is always covered. we begin with matt nesto at the big board. good morning, matt. >> erin, good news for the parent company, another day, another upgrade. a whole swirl of upgrades in the industrial sector from goldman sachs this morning. they take the entire multiindustry sacramentoer to attractive from neutral. we're not there yet. right now it's attractive. ge, the price target goes up from $18 to $15. at goldman sachs they raise the price target of technologies. we're also tracking boeing and ups here today. boeing has seen air cargo growth returning, growth, real growth, in 2010 led by the u.s. and china. also ups raised overweight from neutral at jpmorgan here today. they say the company's performance in improving economy is underappreciated. lastly, we talked about mcdonald's. the disappointing comparable stores for august coming in almost right down the line worse than expected, except for europe

which had a surprising 3 1/2% growth. a big disappointor here today. mcdonald's has already been beaten up in the dow. it's the lone loser from july 1st who really did not participate in the summer rally. let's get to scott wapner at the nasdaq. >> thank you. flat to slightly higher open is what we're looking for here. most large cap technology stocks mixed. apple is holding the big developers conference or ipod event in san francisco and jim goldman will be there. certainly this morning it's down just about 5%, palm. the downgrade came from credit suisse from neutral to out perform. cut from 12 to 16. altera says market conditions is improving. sandisk is upgraded at deutsche bank. vivus, positive results for obesity drug. cree is down 4 1/2%.

secondary offering. checkpoi checkpoint software downgraded president f5 is downgraded at deutsche bank. the oil trade in focus. opec accounts for one-third of the crude production. melissa francis is in at the cartel meeting and rebecca jarvis is standing by at the nymex where they trade the crude futures. melissa, start things off. >> mark, the number one issue at this opec meeting is all about compliance. compliance with the quota has put to 70%. was 80% last time we were here. pouring salt in the wound is russia who said back in december they could cut production. they aren't part of opec but they'd say would cut back. but they've done the opposite, amped up. this as saudi arabia trimmed 70 million barrels a day. russia is now the largest producer and seller of oil all

around the world. the other big theme here is iran's new oil minister who was just appointed last thursday. he comes from the commerce ministry. no oil experience whatsoever. of course he has a close political ally of ak moud ahmadinejad. don't forget that iran is the second largest producer. this meeting doesn't even kick off until after sun down because it is ramadan. they think it's going to stretch on until about 1:30 or 2:00 in the morning. i know a lot of people say they don't expect the quota to change. at this meeting last year there was a big middle of the night surprise and production. anything could happen. to see how oil traders are akting, let's go to rebecca jarvis live at the new york mercantile exchange. >> oil traders following opec. there's another organization they have their eyes on today as they have for the last couple of years here. it's the g-20 talking about new stimulus, continuing to flow freely. the u.n. talking about that stimulus but also talking about

the dollar. as the wrld reserve currency, that is a huge question here for traders as well as for the world really when we look at the strength of the dollar and its relative weakness in the recent year. obviously when you take a look at that dollar index that is the key to understanding a lot of what's taken place over the last year in these oil markets. and on top of that you had a lot of folks from the "wall street journal" to ubs talking about its weakness and its weakness to come. that's certainly in the past has meant strength for the oil markets as well as strength for gold, which obviously we're watching hover around that $1,000 figure. let's get over to rick santelli for more from the cme group. >> to continue the dollar conversation, many believe it's the policies of the dollar, via the government, the treasury, the fed, and the outlook for any changes as the dollar always going to be the orphan? and that strategy will last

therein also gives rise to many trades in commodities. let's remember when oil made its run-up to 150. as far as interest rates today, only 40, what, 2 million in supply? one could say it's a light day. 22 billion in one month builds the option at 11:30 eastern. 20 billion reopened ten-year notes to be optioned at 1:00 eastern. the interest rates markets are virtually unchanged and the dollar, yes, it's down about a quarter of a cent again. now let's go to the -- well, i guess it's the epi center of everything for the next 12 hours, d.c., erin burnett. >> that's right, thank you very much, rick santelli. we couldn't tell it better than you can. it's a rare september event here in washington. the supreme court going to be hearing arguments today on whether corporate money can be used to influence elections. this is the thing a lot of people care about. hampton pearson is covering it closely for us. what's at stake here and what does this matter so much. >> such an unusual case, supreme court is coming back from the

summer break three weeks early to hear reargument, if you will, about hillary, the movie. this basically was a political documentary, very anti-hillary made by a conservative group. basically they went before the federal election commission who ruled they could not distribute the film on demand because it potentially violated mccain-feingold. a lower court agreed with the all roog. however, now the issue is before the high court and you've got a split basically among liberals who feel any threat to the first amendment and unlimited free speech is, in fact, a threat, versus those who worry that unlimited corporate spending in campaigns also is a threat to overall democracy. now, this is a reargument. the supreme court heard the case last march. during that, the questions that came during that first round of arguments, at one point a government lawyer was asked hypothetically could this also make it a crime to distribute

books, advocating the election defeat of political candidates. so far as they were paid for by corporations. now, when in essence the answer was, yes, one of the more conservative justices on the court, justice samuel alito said, that's incredible. that's part of why we've got a second round of hearings on this case with, again, profound implications for how much corporate and/or advocacy money gets involved in the financing campaign. >> obviously that's one -- as we said, something a lot of people care about and could change the whole, who gets elected and who pays for it. thanks very much. mark, it's 9:09 on 09-09-09. >> who knew. up next, four hours and counting to apple's rock 'n roll event. the stock up more than 105% since the bottom. what must the company do today

to keep the momentum going? >> and the faber report and the world on the street and the buzz beyond. we've got a lot on tap today. we'll be back. 

lnchts steve jobs retake center

stage to introduce a new ipod at his highly anticipated product event today? conspiracy theory rsz running amok about what might happen. join us to discuss apple is hoppen hop en oppenheimer and company technologyist. what do you think he'll say? >> well, i think one thing he will say almost for certain is the higher-end ipod, the ipod touch will have a camera on it. that may seem like a minor upgrade. when you think about it the multimedia mp3 players are going a transformation to social networking. i think what the camera will see people using this device to send pictures to friends, to up load videos to social networking sites. >> are these incremental changes enough? i mean, obviously a camera does seem to be standard on pretty

much any device. >> i think it is. it's not just hardware. it's really changing the experience of what people do with this device. it goes from something for just consuming media to actually interacting with friends and being a part of the larger community. i think the other thing we'll see today is just the music experience will change in the ipod, from one of just consuming music to hopefully having the experience we had 20 years ago when we read liner notes. that's one thing we've been missing from the multimedia players, the ability to read extra content to see intoes and to interact more with content in and around the music itself. >> why not just add a phone to and be done with the iphone? >> that's actually a great question. i think it's a question of demographics. the ipod touch i think has really hit a bull's-eye with the tweeny crowd. kids that want everything whose iphone has to offer but won't pay the extra $20 for an iphone

plan. i think it's the demographic of different types of users. >> rumors about a possible beatles or rolling stones deal? >> that's been raised because apple -- or rirks the beatles will today be releasing a remastered versions of all their library. that coincides with the release of today's new ipod line. assumption was we will finally get to hear the beatles on itunes. we will see yesterday emi which controls the beatle library came out and said that weigh will not be getting that announcement today but we will have to wait and see on that one. >> thank you. we appreciate you taking the time. everyone, mark, will be paying close attention to that if they have the beatles deal. >> thank you. >> the remasters, by the way, is in mono. >> huh. >> how many people these days know what mono is. >> not me. >> mono phonic, not stereo phonic. back in the day, oh, boy, am i dating myself, a lot of our viewers are going to relate to this. back in the day you could buy

mono or stereo. and the stereo album was usually $1 more than a mono album. >> they had multiple audio tracks. >> to many of us, that dollar made a difference. anyway, faber is not old enough to remember that either. let's go back to hq for the brain. >> i do remember buying albums in a store. i certainly remember that. and the cds with the huge packages. remember when they first started, oversized packaging. anyhow, it's funny i'm going to talk about consumer spending related to buying things like music and everything else. almost a year ago, of course, we had that cataclysmic week during which lehman brothers went bankrupt and gm and the rest of the story. even though we are well into a year of a credit crunch, suddenly the consumer decided to back away and back away completely. and we plunged sba what has been, well, the deepest recession we've seen since the

post-war period. what is interesting is, a year later, while so many other things in the financial system, at least are undergoing repair, the consumer continues to pull back. in many ways, something that people had hoped for for quite some time. consumers are going into debt less, spending less, and saving more. take a look at the latest numbers that we got on terms of consumer credit for july, falling for the sixth straight month. the 10.4% annualized rate at which it fell, in fact, you have to go back to 1975. i mean, they've never seen, june of '75 to find that kind of annualized decline. consumer credit is down 8.8. june, look at the july numbers. at $21.6 billion, you can see revolving credit, nonrevolver, everything came down. revolving credit card debt falling 6.1 billion. nonresolving credit card debt dropping 15.4.

this is all the while you had the cash for clunkers program during the month of july. vehicle sales surging. and yet, what appears to have happened is that people were deciding to turn in their clunker and maybe finance a new automobile. well, they were just cutting back somewhere else. take a look at that drop in consumer credit. households are paying down debt. we talked so much about this, of course, the decline in housing prices have had the exact opposite effect of that incredible rise had. instead of people spending money because of the rising equity in their homes they're spending less of that ek kitty is depleted. spending slowing, households paying down debt. u.s. banks have tightened their lending standards. incredibly over the last year, over last two years. again, consumer spending overall flat in july. we're going to keep an eye on this. over the long term, this is a great thing. we're actually saving money again. but right now 70% of the economy

is based on consumer spending. you can imagine it may not be the best thing near term. mark, back to you. >> david, thank you. up next, word on the street, buzz beyond, on the sixth month anniversary of that beautiful bottom. >> yes, mark. since you're so freud of this bottom i've got some quizes to see if you really know what's on your back side. we'll be right back. when this school district added aflac to complement their employee benefits package, guess who became the new teacher's pet?

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you're watching "squawk on the street" live from the financial capital of the world. we're down on the floor right now. let's check the futures. s&p is up 1.40.

that's not worth a whole lot today. maybe five points on the dow one way or the other. alan valdes joins me on the floor. this market will not go down. >> no. you saw it yesterday. you saw the credit down $26 billion mcdonald's today, the bellwether, people not eating at maacdonald's, we get worried don here. three days in a row, it's up. no one can figure this out. we thought for sure yesterday when the credit numbers came out, it would tank over. >> could it be that we're just absurdly cheap six months ago? >> no. i think what's going on is a lot of traders have missed the 3,000 point rally and they have to get involved. not because they want, to they have to get involved. that's what you're seeing. you see the traders come back in, money managers putting money back into the market. i think that's more or less what's going on through the end of the year. we have an option coming up soon, couple of weeks.

see the volume pick up. see the money come back into the market. >> until the end of the year? >> probably until the end of the year. >> okay. let's hope so. thank you, alan valdes. back to erin in d.c. >> let's get the buzz from beyond the big board. not here in washington but on the trading floor. stanford, connecticut, is where brian kelly is here today. brian, one thing that stands out to me is we've got a whole lot of america issuing debt going on this week and a lot of it today. any concern on that? are you focused on those options? >> i am focused on the pgs opti but i'm not concerned about them because they're doing well. interesting about the options and the bond market is there an dichotomy going on. the bond market, yields are low, suggesting we're going to get a slow growth. but oil, metals, u.s. equity markets for that matter all equity markets are doing well, suggesting a v-shaped recovery. it's an interesting day even

though it's slow. >> right. we know that the bond market, especially with the tips or inflation pro tenlthive securities, people seem to be bet that we're going to have deflation, commodities stay inflation. it's safe to say there's two very divergence views? >> very divergent views. look at gold, is that inflationary? maybe. the bond market isn't saying so. it's interesting. >> what is your biggest focus today, brian? >> biggest focus is that ten-year bond option at 1:00 today. if that's a really weak you get a steep yield curve which actually could be positive for the bank. i'm going to watch the banks. after that ten-year option to see how it goes. >> watching the banks. and anything on apple? maybe even just on a consumer level for you sfl i'm waiting for the apple tablet. that's what i'm watching. >> like a book thing? >> trying to be like a book thing, exactly. i'm not sure if i want a kendle or apple or tablet. >> i don't know if i want to smell it. already, brian, good to talk to

you. brian kelly joining us. we have the final countdown to the opening bell and a couple of quick quiz questions for mark haines. does he really know the details of this bottom anniversary? that's next, along with the opening bell.

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you're watching cnbc "squawk on the street." we are live from the financial capital of the world, where both of them, in fact, where the opening bell is set to ring in, let me see here, 1:45 and you have a quiz? >> are you ready, mark? are you ready for this quiz? >> i'm ready. >> okay. since the haines bottom, these are numbers from standard & poor's, fully vetted since the march 9th low. how many stocks in the s&p 500 are trading higher? >> good question. i will guess.

>> which stocks have either doubled oregon up even more than that since the march 9th low? >> doubled? wow, oh. >> uh-huh. >> well, you've got a lot of financials that did that. >> yeah. >> 80. >> 126, which is actually -- still, pretty amazing. and you've got about 39 that have tripled in value or more in the s&p 500. >> wow. >> goes to show you, i thought that first number really said a lot, that it hasn't just been some. >> 487 out of 500. >> 97% of the vote. >> that's what we call good market strategy. >> i know you look at that. one other thing i saw today, mark, i wanted to get your reaction to. "wall street journal" deal book

blog. microsoft, cisco, apple, ge. ge has $50 billion of cash on hand. >> well, you know, they cut their dividend and they did a lot of stuff to conserve cash. whoa! >> there's the bell. before i put you on the spot on how they should spend it. >> give it to me. here at the big board, the men's company cemex. writtening the bell from the headquarters in monterey, new mexico. at the nasdaq, do something! actually, that's name of the company. it's a non-profit helping teens get involved in their community. they rang the opening bell at the nasdaq. market reporters are at their usual spots. let's start with matt nesto. >> that was pershing, do something. ge again, it's in a collective upgrade of the industrial sector by goldman sachs today. half a dozen companies with a

price targets all going higher. they think ge is headed to 18. united technologies are raised to 77. 3m, danner, granger all raised here today as they raise the sector to attractive. also we're tracking on the industrial side of things, boeing and ups. positive comments out from boeing themselves saying that they see air cargo growth returning led by the u.s. and china. next year and ups raised to overweight from neutral at jpmorgan. they think the stock is underappreciated here today. mcdonald's, sticking in the dow right now today. down about 1 1/2%, 2% here today on a global same-store sales disappointment. mcdonald's itself has been a disappointing stock all summer long. it was down 2% leading into the session today from the july 1st low in the market. take a look at the other names we're tracking here today. talbot's up strong. the company out with, well, less worse than expected results.

here's second quarter loss was 33 cents a share. wall street was looking for 52 cents. their same-store sales were down 25% in the market. it's applauding this. forecast looks to be also stronger than expected. again, stronger, i say that, quote unquote. scott, what's going on at the nasdaq? >> virtually flat open here. we've got big cap technology stocks unchanged or modest gains or loss. no big activity from the large cap apple holding the event on the west coast. jim goldman covering that for us and we'll have updates on what the developments are there. palm though is a stock to watch today. downgraded at credit suisse. they slashed the price target down from 12 bucks the fr $1. altera raised the revenue outlook. they say market conditions are improving there. sandisk is up 3%. up graded deutsche bank from buy to hold. target from 23 to 16 on improving demand. vivus pharmaceuticals is up 63%.

mike huckman coming up with more details on that. cree is down 2 3/4%. secondary offering. 11 million shares going out there. checkpoint, downgrade today come from fbr as market performed from out perform. they say a year to date out performance of shares relative. f5 networks is a nice gain today. 1 3/4%. deutsche bank, target, 46 from 39. let's go to rebecca jarvis at the nymex. >> thank you, scott. oil prices are up 30 cents right now this morning which some might think is a little less than one would expect from all of the bullish headlines we've seen as far as the energy markets, commodity markets are concerned. but there is a real conundrum shaping up for commodity traders. on one side you have the dollar destruction which has certainly gotten us to this point this year with prices near their all-time highs of the year. as far as oil is concerned. on the flip side, there is the question of demand. is the consumer really going to

come back and what is priced into energy and commodity prices in general right now? traders are asking themselves this question. and john of ms global said he's still inclined to make the upside argument that demand is getting better, particularly in china, which, by the way, out sold the u.s. as far as auto sales go for the very first time in the month of august. auto sales there up 90% on the month. on top of that, you have some geopolitical rumblings, obviously iran still a big question. lastly, rick, you have the question of all of this oil and storage. people were stocking up places like china were stocking up when prices were cheap. the question is, when that hits the market or if that hits the market, where its price is going to go from there. over to you in chicago, rick. >> rebecca, that's a big if. whether it's stockpiled oil or depleting inventories to get rebuilt, ultimately will there be demand for commodities and

re-established inventorys a quarter or two down the road. that's the whole key. if you look at what's going on today, the dollar continues to be the story. but something is going on now we need to be aware of. look at a two-day in terms of the dollar index. we have now slipped below 77. if we're down a little over a third of a cent and we haven't seen a 76 hand until trader's lingo, since september of last year. as you can see on the longer term chart. interest rates are virtually unchanged, creeping a bit higher. you want to be on alert at 11:30 eastern for supply. tonight, for all the politics that may move markets on the deficit, health care issuance side. now let's go back to mark. >> thank you, rick. up next, 1200 on the s&p by year end? that would be almost 20% higher than we are now. that's what one of our next guests is betting on. your cnbc edge straight ahead. big news out of a small drug

company. mike huckman is working on that story. >> extraordinary and unprecedented. two words being used this morning to describe the weight loss scene and two big studies of a diet pill but what about the side effects? cnbc exclusive with the ceo of this company, v ifrivus. 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 i've got plenty of room for the internet. and the nation's fastest 3g network.

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the market is opening slightly lower. as pethsed, the dollar hovering near record lows. commodities extending their rally. joining us, but is it a commodity rally or a weakness in the dollar? joining us, since all of this stuff is connected. in law school we used to call it

seamless web. onset, chief investment strategist at oppenheimer and company. in seattle, art, market strategist at ims capital management. i always let the person who got up so early on the west coast go first. art, what do you think, rising c commodities but stocks refuse to go down. >> last month was a turning point for the stock market as it broke out of a may to august trading range. in so doing it it moved the short, medium term moving average up through the longer term moving average turning the longer trend down from down to up. we used this as a significant turning point and maybe the early stages of the longer-term bull market. >> what do you make of this in is this a bull market? we had a guy on yesterday who said this is a bear market. >> we've been consistent at oppenheimer since april saying this is a bull market. target in 12 months is 1220.

it's interesting how the co competitors are bullish. we're entering a september/october period where there's so much questioning going on and a lot of noise with respect to third sector after this big move off the low. we continue to think that stocks leave the economy and the stock market is telling us that the economic bottom is in place. now the engine has to come back in. 2010 is going to be the year of the show me period, mark, where top line growth is going to be the most important theme, especially the second half of the year. in between there, though, we believe stocks go higher, the economy recovers, and equities will be the place to be. >> all right. equities will be the place to be. you're looking for that 20% jump, brian. what about on health care? we get the big speech today. i see you really liked health care. are are you getting on a good reform bill or no reform bill? >> we've been betting on the fact that we're not going to see a broad nationalization of health care.

we believe the stocks are clearly priced for nationalization, erin, especially given where valuations were in march/april. now if you take a look at the strong intrinsic growth factors of health care, biotech, sciences, devices, and to some degree some of the hmos and drugs, they are clearly there -- keep in mind during the third quarter, erin, health care was the only sector of the ten primary sectors of the market that were showing top line growth. that's going to be a main thing going forward. therefore, we believe that sectors already priced for a broad nationalization plan. that doesn't mean they're not going to get is a smaller build done. i think they will. >> art, what about you? do you buy that health care argument or are you not trade ing there? >> health care has been an underperformer in the last few years. however, two area os strength brian mentioned was bio technology and large cap pharmaceutical stocks, stocks like pfizer, for example, and schearing plough have reversed

the longer term trends and are now getting good relative strength and out performing the market. >> art, you're even more optimistic than brian here. his target for the s&p is 11.20 over the next 12 months. you say 1200 -- what's the time line here? 1200 in what time line? >> well, you know, mark, with price targets, the market is going to shoot down as many price targets as it can. where that number came from was, if you take the current forward-looking earnings forecast for the s&p 500, about 64.59, times a multiple of 16 1/2 or 17, you get 1200. if you look at the price chart of the s&p 500, the next area now that we have an upward bias to the market of resistance is right around the 1180 to 1200 area. that's where the 1200 came from. i think it could be there by the end of the year because a lot of people are underinvested in this market. and we've been climbing the wall of worry all year long.

>> you like to play this market with etfs. i'm curious why you would buy rydex equal weighted s&p 500 etf instead of just a spider. >> okay. great question, mark. because of the nature of the market rally, smaller and mid-cap stocks have been leading the way. if you look at the year to date performance of the ciders, which are market cap weighted, you're looking at 12 1/2%, 13% year to date return. you take those same 500 stocks and equal weight them in rsp and you've got 20% more on a year to date basis. >> brian, art nune, thank you to both of you. >> thank you. >> is that what that means? no, i didn't get that. equal weights the s&p 500 stocks. so it's not going to track the s&p. >> right. >> make sure you read all the fine print. thanks, everybody. shares of a small bio

pharmaceutical company, a mack jik pill for many. unveiling how much people actually slimmed down on that experimental diet pill. mike huckman is here now back at hq with the details in an exclusive sfwer view. mike? >> good morning. speaking of bio pharma in the last segment and what a leading obesity doctor are calling unprecedented result for a diet pill. vivus said they lost an average of 37 pounds or 15% of their body weight on vivus' drug called qnexa. investors are feasting on that news out of the gate. vivus shares are up a right now 70%. joining me live from new york city and another cnbc exclusive is vivus' ceo leland wilsoned. . good morning. thank you for joining us. >> we are pleased to be here. we're very excited about the news we released this morning onyx o onon qnexa, our drug for treating

obesity. >> on top of that, you had the added benefit of lower blood sugar, lower blood pressure, higher triglyceride, it almost sounds too good to be true. >> it is true. our clinical trials were extensive. we used all the methods that the fda suggested for testing both for safety and efficacy and results are remarkable safety profile and, as you said, dramatic weight loss of nearly 15% and 37 pounds, both dramatic figures. >> but one half of your drug is made up of the better half, if you will, of the infamous phen-fen and the other half of your drug is topamax which is an old drug for epilepsy seizures and for migraine headache which has its own history of side effects as well. so what makes you think that it's going to be smooth sailing if and when you apply for fda approval because the agency has been so cautious, as you know, especially with the safety of diet drugs? >> well, we have a remarkable

safety profile, as i said. and that goes along way toward fda approval. i think even more importantly the risk/benefit aal sis is very positive for this drug. when you compare theesque cassie th efficacy that we get, reduce blood pressure, reduce blood glucose and reduce lipids and the effects that it has on -- expected effects that it has on cardiovascular risk factors in general, it makes a very positive risk benefit profile for the drug. >> did a price just go up or a potential big pharma corporate partner to join in and help you sell this drug, if and when it gets to market? >> well, we do believe the data is unsurpassed, both in safety and efficacy. so i think there's going to be competition here. we're pleased about the results of this study. thank you. >> what does this mean for your potential competition in the diet drug arena, no pun intended, but arena

pharmaceuticals and orexigen is also in the final stage of development of diet drug. have you set the bar way too high for them at this point? >> we have set the bar very high and we're proud to be able to do that. again, we're looking at, if this drug is approved, i think it has the chance of making a major change in the way obesity is treated across the world. this has an effect, i think, that can help reduce health care costs in this country which are now estimated to be $147 billion a year just due to obesity. >> so could this be another phen-fen craze and not in a negative way but in terms of it just being a blockbuster talk about product in the united states? >> well, i missed part of your question there. i'm sorry about that. but i think you were referring to phen-fen, again. again, what we use in our portion of the drug is the good phen. it has been on the market now since 1959 with over 5 million

of patient years of history with remarkable low side effect profile. >> my question was actually whether this could repeat the phen-fen craze in terms of the popularity and the blockbuster nature of qnexa. >> we do believe it is blockbuster potential. we'll have to wait for approval from the fda to make sure we meet all the requirements before it's released to the market. we have to demonstrate superior safety. the trials demonstrated that. >> they think approval could come in the latter half of next year. thanks again, leland wilson, ceo of vivus. qnexa was invented by a doctor tom najarian, no relation to the cnbc brothers who do come from family of doctors. to a medical supply company bucking the trend, pms world medical. the ceo will be with mark and i

next to talk about his plan during the recession. plus, cloely followed market strategist charles nanner will be along. he correctly called the summer rally. this next big call just minutes away. you're watching "squawk on the street." bbbbbbbbbbbbbbbbbbbbbbbb

we're back. while some health care companies have taken a big hit amid the recession, business booming for one medical supply company. joining us now, david smith, chairman and ceo of pss world medical. company supplies doctors nationwide from everything from b band-aids to flu vaccine. let's cut right to the chase. where do we stand on the flu vaccine? >> mark, normal flu vaccine might be tight this year because a lot of the drug companies have convert eed capacity away from normal influenza vaccine to the swine flu vaccine. we won't know really how many doses of swine vaccine we have

until mid october or later because of the dosage. they're not sure of the immune response yet. it's probably going to be -- >> you're in the business. you can't give me a firmance. >> that's correct. >> that makes me nervous. you were named entrepreneur of the year by ernst & young. here you are running this big company but they consider you an entrepreneur. do you consider yourself an entrepreneur? >> when they came with me about that award i wasn't really sure. i didn't understand it. i always thought a small company was entrepreneurial. but looking back at some of the things we done, we believe the only currency in this market condition is trust and the way you get trust is you innovate around your customers' biggest problems and we've created some of the best innovation to solve our customer's biggest problems. growing twice as fast as everybody in the market. and we have that trust with our customer. >> mr. smith, if the health reform bill as you currently see it. i know it's rather a blob right now, but with a public option and tax on the wealthy, perhaps

tax on insurers, went through, would it matter to your bottom line? >> okay. as a ceo of pss world medical, taking patients out of the hospital emergency room, which is more expensive than moving them into the alternate side, would drive my business. strategically i think health care reform is a smart way to go. as citizen, as americans, i feel like i'm looking at the abyss of fundamental debt building in the country. we think that in our industry, this isn't a $1 1/2 trillion event. it mub $3 1/2 trillion dollar event. from moving patients outside of the expensive area of the hospital, in the emergency room and moving them into my customer, the physician, home care and nursing homes, we think that's the way they're going about it is too expensive. >> how would you do it differently? if we keep going on the track we're on we all know that medicare will become insolvent in eight years. the current track is

unsustainable. if you had to say to people in a nut shell i would do this for the reform right now, what is the this? >> i'm probably not going to be very popular. about 20% or 30% of all costs in health care is from over-testing and over-diagnosis to avoid litigation. so the fact that every test done is duplicated or mimicked in other ways to make sure that you are in no way subject to litigation is driving a lot of costs in our industry. i would also tell you that ob e obesi obesity, costing $150 billion today, attacking the way food is manufactured and produced in the united states would be positive for health care. i know that's not the pop plar subject right now but those are the two things that i think would take the biggest chunks out of health care costs in america. >> so you -- you're kind of angling in toward tort reform, malpractice reform. >> whatever you call it. >> okay. the other one is great, great, the problem is --

>> the last 20 years on the show. >> right. >> if your grandmother wouldn't have -- >> they sell a lot of twinkies. >> a lot of twinkies. >> and not a lot of granola. >> that's the problem. >> all right. david smith, thank you very much, sir. congratulations on the award. up next, you know, they keep make meg want to take credit for the bottom. i didn't predict the bottom. i called the bottom but didn't predict it. i had no idea it was going to happen until the day it happened. charles nenner predicted the subsequent rally. we'll get his next big call in minutes didn't he sound bearish over the something? perfect way to celebrate the sixth month anniversary of the haines bottom. and talk about what the president is going to say tonight. it is top story. how many specifics will he give, what will it mean for stocks tomorrow?

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insured by united healthcare insurance company. call now for your free information kit... and medicare guide and find out... how you could start saving. saudi arabia's oil ministry is happy with the $70 a barrel oil price. they get set to meet in vienna. chairman and ceo donald

lateen will step down at year's end. they hope to name a successor by that time. investors getting set for the fed's book today. the economy is due out at 2:00 p.m. ooen. that's cnbc.com news now, first in the nation worldwide. i'm bertha coombs. live from the financial capital of the world, that would be new york and washington, at least for now. welcome to the second hour of "squawk on the street." i'm erin burnett here with mark haines. first trading session of the six-month anniversary of the haines bottom. won't be the only treading session, but who is specific? boeing right now is leaving the dow up two stocks at one-year high. and textron on the move. txe up 3%. aerospace company and says 2009

is on track to hit expectations. mr. haines? >> let's find out how this morning's news is playing out second hour of tradesing. second half hour of trading. got it all covered. kick things off with el nesto grande at the big board? >> waiting for american to open up, gold mining company opening up a secondary offering. it is going to open down from the previous close but up from where the shares were priced at. we're also tracking the market going higher now, albeit a slight gain for the fourth consecutive day.@ú the industrial sector, the real power, if you will, in terms of percentage gains, up .8 of a percent, being led higher once again by the general, our parent company, gerk and half a dozen other names being raised. ge price target goes from $18 from $15. also seeing illinois tool works sharply higher. added to the conviction buy list

at gold man as well. 3m is on that list. all signals price target going higher today. in industrials, driving it higher here today. ubs is up 1 1/2% thanks to an upgrade at jpmorgan. they think is stock is underappreciated. don't we all want to be appreciates? boeing in the industrial area as well. it's up about 1% here today as the company confidently saying they see return to growth in cargo led by the u.s. and china next year. down we go to dupont. was down about 3 1/2%. it was downgraded to neutral from buy at goldman sachs. price target $32. it has firmed up a bit. only down 1 1/2% right now. mcdonald's, the worst performer in the dow, down about 2% and down 11% year to date. their august same-store sales were a disappointment. let's get to scottie wapner at the nasdaq. >> modest gains for technology. right now the nasdaq is up 8

points. modest is the word. apple holding that event in california. google is up 1 mrs. intel and mike microsoft are barely in positive territory. palm is $12 from 18. altera upped the revenue guidance. down 2 1/2%. sandisk getting a decent gain. up 3 1/2% on the wall. upgraded at deutsche bank. target was bumped up to 23 from 1 on improving demand. vivus pharmaceuticals are getting a little more momentum. wove been talking about it. hope you saw mike huckman's interview. they saw a positive result from their obesity drug in a study. stock is up 78%. cree is down 2%. checkpoint software is down on a downgrade over at fbr. ffiv ticker there, f5 s downgraded, as well.

as opec meetsz in vienna to talk about output cuts, the saudi oil minister says he's happy with oil at 70 bucks a barrel. lucky for him we've been stuck between $68 and 75 bucks a barrel for weeks now. they say we're not looking like we're going to break out any time necessarily soon. on top of that, the oil markets aren aren't burger king and you can't have it your way. that's what we've learned in the last couple of years here. in fact, the dollar plays a major role in all of thiss a does overall sentiment in the world market. those are the two key questions playing out among oil traders' minds right now. on the one hand you have a potential deplace their environment when it comes to the consumer and their wants and needs. on the other hand, when it comes to the dollar, the fed's wants and needs and the politicians wants and needs you have a potential inflationary environment at hand. let's get over to rick santelli with more in chicago. >> i like your burger king

analo analogy. burger king doesn't own a third of all the cattle in the world. so maybe the cartel principle is a little different here. as far as the markets, once again, can you handle the handle changes? we talked about the dollar index getting under 77. now look at an intraday chart of the dollar/yen. last time we spoke it was trading around 92.25. it's also slipping a handle as it's now trading around 91.75. yesterday they releel those are the we lowe's dollar levels against the yen going back to february. we need to monitor. as a matter of fact, as i look on the boards i see that outside of slight gains on the pe, so, e dollar is down in a rather substantial way. i'm talking several basis points on the ten-year note at a critical point, though, of 350 on the yield. mark, back to you.

>> thank you, rick santelli. our next guest has called some of the recent market tops and bottoms. he joins us from london with his latest positions. charles nenner, professor of turo college. good morning. thanks for being with us. >> good morning. >> first quarter of this year, on this show you said a price target of 1,000 on the s&p. you repeated that in june. and here we are. we're at 10.29 right now. so where to next? >> i brought some very important charts that i'd like to explain. can you show them? >> i believe we've got chart number one on the way, do we not? let me see. we're looking at a chart. comparing the -- now, this is -- this is the one reference to number two. this is a 1937 overlay on the recession.

>> right. what i showed a long time ago to my clients is you see the low, the big low from the dow jones just after the yellow, the line stopped. i did a overlay to the qqq and the dow jones and it followed exactly, and it dit exactly that low at the end of the first quarter of 2-09 and moved up. and it showed the exactly the june, july, august rally that we're finishing right now. and the question is how does it continue from here? can you show the next chart? >> we will do what we can. >> okay. i trust you. >> there we go. we're looking at dow jones february '35 to february '45. >> right. so here you see this april low that we're talking about. >> right. >> december 1938 high. big correction. so for right now, day by day, week by week we're following the exact scenario of 1937, 1938.

>> when has history ever repeated itself, charles? >> for now it does. my system say it repeat itself until proven differently. let's just take this into consideration that this is a top end in december this year and my system shows a top a little bit earlier if you can show the other two chart on the s&p and the dow jones. >> there we go. s&p cycle versus the nenner psyche. >> this is my cycle. this one shows the top in october. so my cycle on the s&p and i also brought one on dow jones shows the top in october. and if you will continue to follow the 1937-'3 sent n8 scen would end in december. >> what would end in december? >> this -- this rally from april, march '09. >> so your call is rally continues until the end of the

year? >> no. the call is that in two or three weeks you really have to be very defensive. and you could then finally see correction everybody is talking about. >> okay. so right now you're saying be very defensive? >> you still have three weeks. >> you're saying be very defensive starting three weeks from now? i'm trying to get a straight answer here, charles. okay. >> yeah. >> be very defensive. >> beginning of october. >> running out of time. let's talk about gold. what's your forecast there? we are at 1,000 on gold, coincidentally. >> yes. i brought one chart on gold, long-term chart of the cycle. i don't know if you can show it. >> we'll do our best. >> we have been gold all year but now it's getting close to starting to just yet. >> this is still next october we're looking at. what's your call on dpoegold un

>> my call on gold, we're not going to do much in the week, two weeks. middle of february next year. and then it's all over. >> okay. so it sounds like both gold and stocks wouldn't call in sick the next couple of weeks, not miss anything. >> correct. >> charles, thank you very much. charles nenner, joining us from london. up next, the kahuna is going to ask the brain if he wants fries with that shake. plus, is the key to getting health care reform passed as simple as having president obama's economic advisers shut up? >> oh. wow, mark. upping the rhetoric. then, is the drive for short-term gains killing corporate america's long-term prospects? and later, the excess and the extravagance of bernie madoff's life before prison. we have new video inside his manhattan and west palm beach homes. that's coming up right here on "squawk on the street." it's 11 past the hour.

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yeah, there's barnum and bailey and simeon & schuster an or son and wells and we have the kahuna and the brain. >> captain and ten nell. >> captain and tennille, "muscrat love." >> i'm afraid to ask, barnum and bailey are no more? >> barnum is still around. >> bailey. >> bailey died, yeah. >> great names. he's, you know, covering for him, you know. trying to -- i know i heard you. i heard you. you need to tell me. >> what? >> i saw vivendi is buying something in brazil, radio it? >> they are. that's worth mentioning. vivendi, you know, continues to be quite active on the acquisition front.

they had looked at a property for some time in south africa. that sort of failed. but $3 billion brazilian deal, if they get more than 50% of the company to tender, which it looks likely because they already reached an agreement with the -- i think it's a a 20% or 30% shareholder. their core business. >> i'm bored with that. what is this? >> emerging markets, wireless providers. >> what is it going to do for me, al franken? >> well, you work for nbc universal. >> this is where i'm trying to get you to do. what does this have to do with the scuttlebutt about what happened? >> every time vivendi spends a billion here, $3 billion there on a property that is core, people come back to the fact that shawn bernard levi, ceo, says 20% stake in nbc y brkb un.

so speculation begins yet again. especially because every november or so they have to write under the agreement with ge to put that 20% stake to ge, force an initial public offering, or they could find a third party to buy the stake from vivendi. that's speculation is rt staying yet again. in part, because i think in this deal it puts a spotlight on vivendi and their desire to continue to expand in wireless around the world and their need potentially for more cash in order to do that. will it happen this time around? who knows. it seems as though it may be more likely than not that this time something does happen come november perhaps we hear something. but then it's a long process before that stake conceivably would either change hands, disappear because ge would buy it although ge somewhat cash

constrained right now, or have somebody else. >> i have seen some crazy things in rupert murdoch-owned publications. i think it was "the post" that our friend bobby cook, i might have to kiss up. i buy so many video games from his company, they have to like me. activision, what wasn't that in the "post"? >> yes. no, that's not going to happen. more likely, and this is all spec. would a comcast have an interest in buy that 20% stake? it's a total non-control stake. will see it perhaps a past in tom say to control or a lever to pry nbc universal out of ge. pure spec, ge has said nothing to indicate that at all. in fact, very contrary in the last report. >> yes. >> w. would time warner be interested? you know, who knows. we'll see. the logic of it from an economic standpoint is sort of strange

because it's a non-controlled position. you're not getting anything. you're just investing. but companies that are interested in furthering their ownership of content will see it. >> comcast, i mean, obviously. what were they offering back then? >> they have no comment on that. came in way low on that disney, on that hostile. but comcast did succeed in the biggest acquisition ever, prying at&t broadband out of at&t, which would have seemed to be a mond menu mental task. >> what date? >> mid november? >> mid november. it's unclear. what do you think? >> i think i come down to be with you but i really don't offer anything. >> you're offering plenty. you're hear for me to sound board things off of. >> i have a question. that didn't happen, for somebody else. >> yes. >> that would have been a lot more money. >> even bigger $3 billion. but again -- by the way, $3 billion, larger point here, m

and a, we've seen a lot of volume suddenly in the m and a market pointing to what would be the fourth quarter. >> this vivendi guy is a capitalist. >> yes. unlike the guys holding up oracle sun. i mean, what? >> look at the intel. look at the intel thing. we're headed. they're here. >> i don't know about that. we let oracle/sun go by pretty ease plip we'll see. >> the three handsome guys right there. >> remember mario monte, mark? >> oh, yeah. yeah, the -- the lack of competition director. >> still happens. they want companies to exist, not customers. >> that's right. we've got to go. thank you very much. still to come, inside the scam of the century. see the excess of the extravagance of bernie madoff's life. new video of his park avenue pad. oh, kribs shs kri cribs coming

first, it's the bottom of the ninth for president obama and his push for health care reform. what must the president do to retake control of the debate? our next guest is going to say something that flies in the face of consensus today on that. we'll be right back. natural gas is a cleaner burning fuel,

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frnchts president roosevelt to johnson, knic johnson, nixon, and obama, they have tackled health care and failed. when president obama addresses congress tonight, who should he be talking to? motivate his base? joining us now with his insights, jim, professor of political science at brown university and coauthor of the new book "the heart of power, health and politics in the oval office." >> good to be here. >> one of the things i was saying coming into the commercial break, i said you have a view that may fly in the

face of consensus. consensus, it appears, is the president needs to bring the country together tonight, show he's reaching across the aisle, be a bipartisan leader. you think perhaps that's the wrong move? >> that's right. it is wrong move. what this is about now is is speaking to the base. the great debacle for the democrats after the last effort, the clinton effort, was the 1994 election. what people have forgotten about that election is the turnout was 37%. that's a base turnout. the democrats are all trying to get the wishy washy people who are sitting on the fence. what they have to remember is that the party that's going the win the next mid-term is the party that's got its base all excited. and the losers, it's the base that's discouraged and dis-spirited. >> so you're saying if his choice is force it through just with democratic vote, that's the right choice? >> i think that's abs looutly right. you know, everybody's talking

about how high the stakes are for obama. they're right. stakes are sky high. but you know the stakes are also high for the republicans. imagine this. if the democrats come up with a plan, medium size if, and if it's a very successful program that people love, big if, the republicans now will find themselves having vehemently oppose something that is popular. they'll be eating crow for years. in the past, passage of social security in 1935 or passage of medicare in '65, republicans voted against it. only one vote for social security in the house of republicans. after that they covered themselves by voting for it. they voted for it after they voted against it. this time they left themselves no wiggle room. this is for all the stakes on the table. that's true for both parties. each party has to fire up its base. that's what's really going on today. >> so you're giving him some advice. he may not be getting from others. >> that's right. everybody is talking about, oh,

get the middle. the middle the for presidential elections. >> compromise, right? >> right. >> everyone wants to hear compromise. >> what's really important right now is not only speaking to the country, but this is the part of the debate where it's arm twisting, horse trading, getting your congressional guys lined up so a really successful speech will not only quiet some of the criticism but you'll also hear very little about the back room trading. what we're going to find out about president barack obama in the next three weeks, in the next month, is the extent to which he knows how to deal with congress because this ball game has gone from out of doors, the whole country, to behind the legislative closed doors. this is now all about tough negotiating. >> i know you have noted that lyndon johnson obviously famous or perhaps infamous for his successful back room dealing. the best is you do it, no one knows you do it. and only history will know what we really have.

one final question for you, professor, is this. why is it that health care has inflamed american passions so much? why in this country, more than any other? >> it is true, every time it comes up, this is a huge issue. and i think it goes to the heart of what each party is about. for democrats, they just -- it's a moral issue. for the real democratic base, we are the only country without health insurance. for republicans, it's a point of pride. we're the only country without health insurance. it gets to the heart of both parties. >> thank you very much. >> thank you. >> well said. certainly brought a lot of passion to that discussion. up next, if corporations lost their way? it's a drive for short-term gains killing our long-term success? we're going to dive into that. by the way, on this issue of whether the president should be reaching across the aisle or going straight to the democrats? on "street signs" we will have an interview with barney frank

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welcome back. i'm diana olick live on capitol hill. the treasury has just released the latest progress report on the home affordable modification program. that is the administration's housing bailout. take a look at the results. through august, 47 services signed on to the program have offered 572,354 modifications.

op of those offered, 365,000 were actually started. that's a cumulative number since the start of the program in march. to put that in perspective, in july alone, they filed on over 360,000 properties. the report shows with banks and services are doing what this is particularly interesting. the lender with the largest number of eligible delinquent loans, lank of america which took over countrywide, of the estimated 835,000 eligible delinquent loans, it only started modifications on 7% of those. citi mortgage started modifications on 23% of its eligible loans. and jpmorgan on 25% of the loans. sa saxton mortgage on 39% of eligible loans. as we speak, hearing of the subcommittee on this housing bailout program is getting under way if we will hear from the top guys at the fha and at the treasury in charge of the home affordable modification program.

we will also hear from banks and lenders and an excerpt testimony we received from bank of america. the executives will say two of the most signature can't hurdles are customers not providing financial information and lack of borrower response to our outreach. we recognize we have the opportunity to improve our efforts. obviously 7 % started is not a great number for bank of america. we will have more on this hearing coming up on "power lunch." let's look at the markets and the internals. we have clawed our way to the plus side. dow is up a quarter of 1%. nasdaq is doing better, up a half. s&p in the middle of about a third. big board winners out number losers, not quite 2-1. and on the nasdaq advance/decline ratio is roughly the same. erin? the institute along with 27 well-known leaders in the business world is calling for the government to focus on

overcoming short-termism. that's a new word. with more on this today, we're joined by samuelson, the director of the business and society program. good to have you with us, judith. we appreciate it. you know, short termism, obviously something we've seen on the margin, a push to get rid of it. retailers not offering same-store sales every month. some companies are saying, hey, we're not going to give you a forecast of where our earnings are going, now it's compensation. let's link it to longer term things. have all those things together, have we made progress, or no? >> well, we're working to make progress. i don't think we've gotten as far as we need to get so far. >> and what specifically do you recommend we do from here? >> let's step back and figure out why we're even talking about this. it's an obvious statement today that businesses are an incredible force for all levels of society. we need business to be able to

think and act long term and help create a long-term vision for us going forward. the business side is the long-term thinking and need the industries to support that. what we're doing is we have a group of investors, investors, businesspeople, laborers, academics, in this case they have agreed to come together and put ideas in front of congress to help move the ball. importantly, think about what are the market incentives that investors need to stay long and, second of all, to really think about how do we sort out, how do we understand what the motivations of investors are. and become clearer about that so companies can respond effectively. >> judith, not to be cynical here, but i've heard this argument for 20 years. nothing ever happens. >> well -- wait a minute. one of the reasons nothing happens is the market wants to know what's going on all the time. you know, some people have said, you know, we're not going to give guidance. we're not going to give

same-store sales. we're not going to give short-term guidance or quarter to quarter. the fact is the market wants a data. demands that data. if you don't give them that data, they're not going to buy your stock. >> one thing to step back and say, are all investors are same? the market is made up of all kinds of different investors. ma and pa are investing on college saving and retirement. >> they are a tiny minority. most stocks are held by institutions, pension funds, mutual funds, et cetera. >> who are pension funds investing for? >> pension funds are investing in one of the big key take aways from this is to step back and say, in fact, are the intermediaries, investors, institutions, are they, in fact, aligned and compensated appropriately to say focused for the long-term needs of their investor. this is what they're designed to do, to create and illuminate the disconnect between the ma and pa investors.

we need to save long term. second of all, to illuminate the cost of the short-term churning and noise in the system that you have so adequately described. >> mr. david faber here. on this idea of mom and pop investors on investing in the long term. the s&p is down over the last more than ten kraeryears, i wonf the focus on the short term makes it difficult to invest in the long term. and so really it's a self fulfilling prophecy. >> what we're trying to do is make it possible for companies to stay the course. we're trying to make it possible for them to both be looking for those kinds of risks that are appropriate long, appropriate short, and to respond effectively amid all of this noise of short-term versus long-term. >> i think it's a great goal. i've been doing this now for 23 years. i remember following a hedge fund manager 15 years ago, check on their performance every month. then it became every week. then it became every day. now it's minute by minute.

that's the world we live in. we've got all these performance based managers out there measure that performance on a second-by-second basis. i simply think it's almost impossible to imagine that we could get back to long termism. the average mu chund fund holds the stock for less than nine months and that's a mutual fund. >> ten years ago these same funds were hold for 26 months. so we know what's possible and what's noise. what we need to be doing, actually, is to be providing more information and one of the things that's recommended is better disclosure. so companies can actually sort out are all their investors the same or what are the various investors looking for and what are the motivations behind those. >> judith, thanks so much from all three of us. appreciate you taking the time. we're going to talk art short termism with barney frank. we'll have an extended conversation with him today on that issue, on his plans for mortgages in america, and, of course, his view on health care bipartisan or not.

mark, that's coming up just after 2:00 eastern on "street signs." coming up, before bernie madoff took up residence in the big house, he was living large in a park avenue penthouse. we have a look inside his former home. plus, for the first time ever, this is a neat story, a u.s. financial services firm will be owned by a native american tribe. with that comes favorable tax treatment. we're going to meet the chairman and the ceo. $1.2 billion under management. we're going to get the story. fithe same tools the pros use, so you can be a disciplined trader. by selecting from eight advanced triggers, your order gets executed, even when you're busy. and with trailing stops to help you lock in profits and minimize risk, you can be confident in your strategy, no matter which way the market moves. find out why more and more active traders

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we're back. bernie madoff went from the penthouse to the big house.

now we're getting a first look at how the swindler lived in the penthouse. mary thompson outside his former park avenue residence. mary? >> mark if you look at the videotape released by the u.s. marshals you can understand why madoff's victims were so upset he wasn't thrown directly in jail after admitting to the $65 billion ponzi scheme. he was confined to his apartment for a couple of months. but you know, what it's a very guilded cage. now the government is putting the penthouse on the block. the asking price for the one-bedroom apartment with his and her studies and 4 1/2 baths expected to be between $8 million and $10 million. as with madoff other properties, two-story apartment has fantastic views, wrap around terrace giving you a bird's-eye view of manhattan and inside the alleged investing prowess, there are lots of bulls. custom made closets said he was really more of a clotheshorse.

>> he had a fondness of shoes and suits. he had over 50 or 60 suits lined up here, dark suits with however many number of shoes here. >> madoff kept over 40 pairs of custom made shoes in his palm beach house, also on the block. like the manhattan penthouse, 8700 square foot, five-bedroom home is long on bathrooms with seven, long on bullish decorative touches and long on views with the back of the house overlooking the intracoastal waterways. he was also an avid boater so it features an 80-foot dock. >> you have room for probably a 75-foot yacht, possibly larger. you also have another slip that could accommodate a 30-plus foot yacht or boat. >> now, the government is hoping that the sale of these two properties along with the madoff's home in long island will fetch a total of at least $21 million.

then there's going to be a sale of all the shoes, artwork and furniture. that's going to be separate. again, the proceeds from that sale as well as sales of these three properties, all of this money will be going to madoff's victims. erin, back to you. >> mary thompson, thank you very much. mark, pretty incredible. the bull art collection. >> i want to know what size bernie's shoesing are. i heard he had small feet. >> you know what, there's -- let's just move to the tease here. "because you clicked," the stock up 33%, pot ash. mark, consultant is going to tell us if it's time to stock up on the fertilizer maker. but first, oh, becky. >> hello, mark. i heard small fingers, too. anyway, coming up at the top of the hour, we will be live from the opec meeting in vienna where melissa francis is standing by. we're going to talk opec strategy and where oil prices are headed.

president obama is going to deliver a major address on health care tonight. we'll debate whether he can get some meaningful legislation pass. and apple and what apple may have up its sleeve. got lots ahead coming up on "the call" at the top of the hour. -da

pot ash stock is up more than 30% since my bottom. it's also one of the most clicked stocks on cnbc.com. can potash hang on to the gains? we take a look at pot ash and whether you should be hanging on to the fertilizer, because you clicked. michael, good morning. thanks for being with us. you don't think people should be buying potash? >> i don't. specifically potash, we have concerns about. looks like very fully valued. really nice run here. at the end of the second quarter they had very high inventory levels because their sales levels were very low in the first and second quarters.

we think in the third quarter that the volume is also very, very weak. and you know, although we are constructive in terms of our earnings estimates for next year for a big pick-up in demand, potentially in the spring, we are not optimistic about the third and fourth quarters in terms of the pick-up in forth q pick-up in volume. the key reason, the corn crop was planted late and so it's not going to -- it's maturing and will be harvested late, so harvesting will take place in october and that leaves a very narrow window for planting or actually starting to plant -- putting down fertilizer. >> let me ask you this. okay. you know, from a layman standpoint, the standpoint of someone who doesn't look at this in depth. i hear the following argument. chinese are going to buy a lot

of food. to grow food, you're goipg to need fertilizer. it's part of the china play. why doesn't that keep the stocks afloat? is there so much capacity they can still go boom and bust? >> that is true for next year. most of these chemical stocks trade on what's happening this quarter and next quarter. >> so you can't just buy these things and sit back. >> they're highly seasonal and commodity prices have a lot to do with it. if oil prices were to go down sharply from here, most of the commodity related stocks could go down in tandem. that would create the buying opportunity they were looking for. >> are there any fertilizer stocks you do like? >> we do like another stock

called mosaic. the issue there is that the e l evaluation is more attractive. >> it's genetic engineering? >> they're also a fertilizer company. we're simply saying take some profit from potash and if you want to come back when there's a correction, we still like it longer term, but short term are concerned it's overvalued. if you have to have exposure to large cap fertilizer, mosaic is more attractive to be in. >> thank you very much. michael judd. up next, for the first time ever, a u.s. financial services firm will be owned by a native american trim. >> the firm apparently not subject to normal tax law. we're going to find out what that means for its opportunity. chairman and ceo with us after this. be right back. when this shoe store added aflac

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new york city -- first time a tribe has ever owned a firm. joining us now, michael jandreau, chairman of the brule sioux tribe. michael, what exactly is happening here for your trip. >> a new opportunity. an opportunity that hopefully will generate the kind of activity with access to capital and those issues that can generate funds back to the tribe that can help us with the many social problems that we have at the reservation level to be able to deal with. >> and don, are you mostly going to be servicing, providing bank

services, to native americans and also, what about the casino business? >> well, we're looking to continue our business as is. grow the institutional business that we can now access the public pension funds, the retirement plans, the syndicate from the vul ch racket firms and we're also starting a new division to service the native american indian tribes. they will give them ideas to do things like we did and we'll also help raise capital on reservations for tribes looking to build hospitals or help with schools. >> will the tax exception be an advantage in this business?

>> it will be an advantage to us. after working with us for many years, a fellow named dennis who came to the reservation, created a corporation for the ideal of going out and seeking businesses that would find themselves as a good fit as capital generators and as opportunities for the tribe to utilize the resources that its had. one of the fence that we found about two and a half years ago was an opportunity with west tribe and so we looked at, we did do diligence. we