it's not even lunchtime for most. am ron and radio shack all moving on extraordinary volume. >> larry, what do you think the health care stocks are saying today? >> that mr. obama did not make the sale and if they don't play small ball, they get nothing. >> nancy pelosi saying that she's confidence president obama will sign health care reform bill this year, but maybe the stock market is relieved. >> the so-called public option remains extremely unpopular among blue dog democrats. the taxes are unpopular and there are easier ways to help the uninsured. real choice in competition will do the trick and i'm not seeing it yet. >> that's it for "the call." >> tonight, we're going to show the geithner report at 7:00. i'll be anchor at 8:00 p.m.

freddie mac reports the mortgage rate this week. new census figures show income fell 3.6% in 2008. that breaks a string of three-year gains. the treasury expecting $50 billion in t.a.r.p. repayments. so you must be all warmed up and ready to go? >> nothing but caruso. >> welcome to "power lunch." sue is on assignment today. stocks are higher for the most part a fifth straight day.

proctor and gamble, chevron and cisco have been leading. the steady march to 10,000 is straight ahead. >> tim geithner getting ready to get grilled on the hill on the state of the banks. he's appearing on t.a.r.p. "power lunch" is going to carry it live in the next hour. and president obama make made his pitch to congress and the american public last night. a ten-year plan with a $900 billion price tag, but is congress closer to a deal sm we'll get two sides of that debate. and here's what else is coming up. i'm diana olick in washington. foreclosures held steady in august, but at record highs. i'm matt nesto. in washington, they're debating health care reform. here on wall street, it's health

care perform. we'll look at why the health care stocks are hot coming up. i'm julia boorstin in anaheim, california. ellen degeneres is heading to american idol. i'll have that and more from ceo bob iger at the g-23 expo. >> i think ellen is going to be a fine addition. >> i love her. the way she dances. >> i bet she'll be up on the table dancing. that will be a lot of fun to watch. let's get to the day's market action. a very busy day still ahead of us. stocks have been rebounding from earlier declines. tech among the leaders so far. the nasdaq on track for its best weekly gains since late july. scott wapner kicks it off at the new york stock exchange. >> thanks. you know, a couple of things going on today. you have the dollar index that

we're watching closely weakening just a bit. commodities strengthening, so that's helping the stock market just a bit, and so are those positive outlooks we got from a number of key companies. proctor and gamble certainly one of them. they say they expect to return to sales growth and general mills above target. texas instruments new 52-week high raising the outlook, stronger revenue in every segment and corning is ahead as well. a smaller than expected decline in third quarter glass output. airlines are mostly higher as well. a couple of things there, upgrades to united airlines and u.s. air coming from jpmorgan. the real downer today is santo. 2010 earnings below the street view as well. we are holding on to gains. it appears that we are sort of

holding in this tight range over the last couple of hours as the dow is good for about 20 points upside. technology a leader today. >> the internet, yahoo upgraded today, bank of america and merrill lynch saying they see better business. carol barts was on this morning, might want to look at that on cnbc.com. the stock up better than 4%. ebay also gaining. google is positive at the moment. the other big story, those chip companies boosting their outlook. hand set makers, a lot of them riding along with texas instruments to highs today. let's move over to sharon at the nymex. >> thanks, bertha.

opec left production levels unchanged. we got a report from the international energy agency this morning. their demand forecast is higher, but that's not really what traders have been focused on in the last hour. they've been focused on the nrng departments levels. that lifted oil prices briefly, but the report also said that gasoline supplies rose more than expected. in fact, they were expected to have declined, so that has caused a lot of selling in futures. that has brought down the rest of the petroleum. natural gas storage levels were increasing and that has sent futures on the tear. rick santelli in chicago. >> let's look at the auctions this far. we had a one-month bill auction, look at the chart for two days. that's a winner even at that high price. it managed to move higher.

three-year note auction went just shy of 149. yesterday's ten-year at 351. ten basis points there. it seems like even with the dollar weakening, sovereign debt like u.s. treasuries keeps gr growing and growing aggressively and they keep buying the paper like there isn't going to be another auction in a couple of weeks. >> let's see if it happens again at 1:00. you have president obama making his health care pitch. jobless claims falling and that auction at 1:00. what should you be doing with your money? what should investors make of this? let's gather our group. mike, how do you think this auction is going to go?

is the government going to be able to borrow money over a 30-year period without paying too much interest? >> once again, yes. rick's warning notwithstanding, looks to be in good shape. >> you agree, brian? >> if you compare it to january when you had to pay 3% to buy a 30-year, they look cheap now. all the information we've seen, the beige book looks like the economy's stabilizing, but fed president here in chicago said we're not going to raise rates. all the other stuff, if you ignore the stock market, the economy doesn't look that great. the stock market is opposed to doing the opposite. the economic indicators, the economy looks like it's slow going, no growth and no inflation and that makes people buy treasury bonds. >> that's what i don't get.

different messages out of the stock and bond markets. >> the expectation was in august as we continue to march higher, that maybe september was going to be a tough month. no barn burners, but still going up. why? >> the market tried to -- we both know, having said that, i think what's going on now is something that's very reminiscent of the 1970s. the backdrop politically and economically was really ugly. we've had other periods where that's occurred also. >> i'd be interested in brian's comments on the treasury, the third year treasury versus the tip. the tips are yielding on a cash basis, as much the treasuries are going to be at the auction. doesn't seem to make a lot of sense. >> you're saying the tips are

telling us higher inflation is coming, but brian, it's not coming, right? >> this is definitely a fact, with the global economy slowing down, just barely out of armageddon, treasury rates sometimes don't reflect what's going on sometimes in the economy. if you have dollars and you have to hide it somewhere, you buy treasuries. so the market can be disordered right now from two things. people hiding in treasuries and we still have ben bernanke still buying in treasuries with both hands. low rates due to the big gorilla in the room. >> would you buy anything in -- >> no, of course not. i think they have a big target and i wouldn't go near them. >> declared war on the insurance

companies. >> thank you. up next, the president did speak for congress last night. again this morning making his case for health care reform. did he win over any of his capitol hill critics? and still ahead, one of wall street's most inflew shl banking analysts says prices will drop another 20%. plus, the "fast money halftime report." waiting in the wings at the top of the hour, tim geithner testifying on t.a.r.p. that plus the 30-year bond auction. the dow's up 22, back in two minutes.

aig, citigroup, bank of america and fannie mae. some of the most clicked stocks today. disney's ceo was on earlier today giving us a look at the future of his business. upcoming projects. he showed a behind the scenes look at new technology. julia boorstin has more. >> i'm here at the inaugural d-23 expo.

they're showcasing every part of the magic kingdom for tens of thousands of fans. upkoling tv shows, future movies to new attractions. the focus here is on the long-term. he says in the near term, the market and economy seems to be improving. >> we have seen over the last three to four weeks improvement in a number of our businesses that rely on advertising. i'm not suggesting that it's bounced back in a tremendous way, but it's better than it was. >> with 150,000 employees, iger is watching the health care debate and weighed in on the issue of president obama's address last night. >> this company is a huge proponent of reform. it is necessary not just for the american people, it's necessary for american businesses. the walt disney company has been particularly focused on this because in florida, where we

have 60,000 employees, the cost of health care is particularly high. >> disney -- iger will officially open the four-day expo shortly with a presentation. the cost is $75 a day for a four-day pass. iger told me disney's hoping to attract real die hard fans to the event, that those are the company's best marketers. >> like going to disney land. >> exactly. >> by the way, what do we make of ellen degeneres, a very surprising move with "american idol" announcing her as a replacement. >> when a show has been around for this long, what do they have to do to make it similar enough so those fans will want to come

back. it's really rare to have a show remain still as much of a success for so long, but over the last few seasons, there have been some questions over whether it's beginning to falter. i think it will be interesting to see how she sits with the others. >> some have pointed out just like rosie o'donnell going to the view, is this a signal "american idol" is starting to fade? >> people have suggested there's no way it could continue, but you have to be wary of predicting its demise. how will she interact with simon cowell, how will that work. over the past couple of season, people have said there's no way

it can continue, but it has managed to hold up. >> when you have millions of viewers each night, that's hardly a show that's fading. thank you very much. >> can i tell you, i've never seen it very much. >> she said proudly. >> it's star search. how is it different from "star search"? >> it's a fun show to watch. let's find out how the hmo and health stocks are on the back of the president aes speech. >> help by obama would be -- today, the hmo group, very strong. you can see that it is at its best levels of the session. there was the little -- in the morning. 10-1 out performance, my friends, for the hmos today.

that is wall street's read on the speech last night. if you look at what is going to be remembered when all is said and done, is it the president's line about bickering or congressman wilson's outburst for lack of a more delicate term. a reiteration at best is what analysts are saying. the notes out are saying they're more confident than ever that reform will be moderate and it's going to be an uphill battle. jpmorgan saying they see no odds it will make it into final legislation. nobody does it better than mr. o himself. the facility stocks, the health care facility stocks are getting a list. health care collectively only up

about 2.10. >> who's better than you? >> nobody. we are still waiting for a couple of members of congress to give us their views on the president last night. did we learn anything new about his health reform package? we'll get to that. and state of the housing economy and what it means for the overall economy in general. we'll be right back. the dollar index is down more than 5%. [ engine revving ] [ engine powers down ] gentlemen, you booked your hotels on orbitz. well, the price went down, so you're all getting a check thanks. for the difference. except for you -- you didn't book with orbitz, so you're not getting a check. well, i think we've all learned a valuable lesson today.

good day, gentlemen. thanks a lot. thank you. introducing hotel price assurance, where if another orbitz customer books the same hotel for less, we send you a check for the difference, automatically. 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. anything before takeoff mr. kurtis? prime rib, medium rare. i'm bill kurtis, and i've got plenty of room for the internet. and the nation's fastest 3g network. (announcer) sign up today and get a netbook for $199.99 after mail-in rebate. with built-in access to the nation's fastest 3g network. only from at&t.

president obama was out selling his health care plan this morning, a day after pitching it to a joint session of congress last night. here's what he had to say. >> put simply, our health care problem is our deficit problem. nothing else even comes close. i will not sign it if it adds

one dime to the deficit now or in the future. period. the public option is only a means to that end and we should remain open to other ideas. >> my bad. that was from last night. but did he make his case? joining us now, the chief deputy whip and mike pence of indiana, the chair of the republican congress. representati representative schakowsky, what do we know that we didn't know before last night? what's new now? >> now, he's communicated those. i think he was able to put down some of the myths going around. >> like what? i'm looking for specifics so we can say we have a better idea of

how the president wants to achieve health care reform. >> i'm not sure that all americans were aware that it would be against the low for people with preexisting conditions that the fear of losing your health care when you lose your job is over now. i think that people may have fallen prey, some seniors, that medicare would be eroded or that there would be death panels. i believe he did a good job of the positives, but more importantly, he lifted it to the a new level at the end. >> representative pence, when you look at the way health care stocks are trading today and read an analysis of the speech, they're suggesting he didn't make the sale, public option unlikely and if anything gets passed, it's going to be something moderate.

can you assure wall street they are accurate? >> i really can't. i have too much respect for jan and her abilities. this was one more speech about the same bad plan. the president basically outlined a plan that has added centerpiece, a government-run insurance program that will set us on a path to government takeover. the minute a public health insurance plan is offered to employers and they're asked to pay 8% in payroll and they don't have to offer health insurance, you're going to see millions of companies in this difficult economy cancel the health insurance plans they have and send people to the federal program. this is going to send us on a pathway toward the government takeover and the idea it will add to the deficit is not

creditable. >> the so-called public option has as we know, been a lightening rod for thei critics. the president has said it's not that important in terms of being a centerpiece. how do you provide the kind of competition to the health insurers to ensure costs will come down. >> even if employers were to drop their insurance, the employees would have a choice of an array of private mplans and one public option. the president said initially, there would be a very small number of people. he made a analogy between private ewuniversities and publ universities. the insurance industry, yes, they may have to change a little bit. they can thrive and survive next to a public plan. >> representative pence, i want

you to listen to the sound bite from the president last night. i want you to get a sense of his tone. >> without competition, the price of insurance goes up and quality goes down and it makes it easier for insurance companies to treat their customers badly, by cherry picking the healthiest individuals and dropping the sickest. by overcharges small businesses with no leverage and by jacking up rates. >> seems to some there was a demonization of companies. is that constructive to the debate? >> i don't believe it is. insurance companies are a pretty big target in the political debate, but i don't think it really advances the cause. >> was there anything inaccurate? >> what he said was we need to bring competition because the reality is as the president correctly said, many states have a virtual monopoly where there's

one or two major health insurance companies that offer health insurance programs to businesses. >> how would you provide the competition to help bring costs down? >> rather than a government-managed exchange that jan's advancing and also a public option in that subsidized by taxpayers, why don't we just let the american people purchase health insurance across state lines the same way they purchase auto insurance? let's open it up to 1300 health insurance companies, association health plans, let's bring real competition and not replace one monopoly at the state level with another government one. >> would that work? >> across state lines mean that we fear that insurance companies would locate in the state that has least regulation -- >> bingo. >> and it would be a race to the bottom. we would have much cheaper choices, right?

we could have choices about what kind of coverage at what level and price. >> and what about protections to make sure mammograms are covered -- >> you may more for more of what you want. >> we fear is states have gotten state's rights to protect the consumer would go out the window. >> thank you both for joining us. >> thank you. when we come back, foreclosure filings near a record, things could get worse. plus, some grim news on housing. we'll get the housing, fallout on banks as tim geithner gets ready to testify on the t.a.r.p. program. then at 12:45, the "fast money halftime report." what's on the radar? >> you saw the stocks flying. maybe that's why. we'll tell you if the trade is still on. also, one biotech company that

should perhaps be on your radar. tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move. tdd#: 1-800-345-2550 doesn't matter if a company sells computer chips tdd#: 1-800-345-2550 or, i don't know, fish and chips. tdd#: 1-800-345-2550 i'll look at all kinds of stocks before i settle on one. tdd#: 1-800-345-2550 if i think i'm onto something i'll check it out, tdd#: 1-800-345-2550 you know, see what other traders are up to. tdd#: 1-800-345-2550 when everything feels right though, tdd#: 1-800-345-2550 that's when i get serious. tdd#: 1-800-345-2550 and the minute i get into something, tdd#: 1-800-345-2550 i already know when i want to get out. tdd#: 1-800-345-2550 of course, every now and then i'll talk with somebody tdd#: 1-800-345-2550 who knows what i'm trying to do. tdd#: 1-800-345-2550 (announcer) switch to schwab today. tdd#: 1-800-345-2550 you'll get the tools, the technology tdd#: 1-800-345-2550 and the support to trade your way. tdd#: 1-800-345-2550 go to schwab.com/trader tdd#: 1-800-345-2550 or call 1-800-540-7304 tdd#: 1-800-345-2550 right now. tdd#: 1-800-345-2550 but opportunities can vanish like that...

tdd#: 1-800-345-2550 ...so most days, i'm right there tdd#: 1-800-345-2550 when the market opens.

shares of proctor and gamble

are on the move. smith and wesson shares are moving higher. and the agricultural products company says earnings will miss wall street's expectations. >> shooting higher. i like that. >> i didn't write that. a new report showing foreclosure filings hovering near record levels despite efforts to keep borrowers in their homes. diana olick has details. >> the numbers barely moved in august. analysts are pointing a finger at delays in the final bank takeover process. take a look at the numbers. just over 358,000 properties received a notice in august. it was due largely to a drop in

reos. the other categories, initial defaults, bank notices or options actually rose 3% month to month. in another report, an analyst says the timeline has doubled due to lender's self-serving motivations. she also believes quote, we do not believe investor demand will have enough to absorb the properties. now, meredith whitney this morning said these forclosures would put additional pressure on home prices because of they're brought on my job losses. >> no bank underwrote a loan with 10% unemployment. there's no doubt that home prices go down dramatically from here. it's just a question of when. >> she's estimating a 25%

further drop. some say that is aggressive. >> thank you. president obama's sounding rather optimistic on the state of the economy last night. take a listen. >> thanks to the bulls since january, i can stand here with confidence and say that we have pulled this economy back from the brink. >> let's discuss the state of housing and its impact on the economy with paul miller and david weiss.ç paul, if meredith whitney is right, what does that mean for the banks? have they already written down enough of that stuff that they can absorb that pain? >> it's going to cause more trouble. i don't think the banks have written down the problems. 17% of the houses down are down

25% negative equity. they're slowing working through the system through these foreclosures. if we get, that's a very aggressive number, i don't think i'm at that level, but if we did, it's going to cause a lot of problems. >> david, are you as worried about housing down the road? >> i don't think we're going to get 25%. i think we're going to get some down the fall, but 25% would bring prices down to levels we've never seen before relative to income. >> and all real estate's local. we just had a few real estate reporters from various cities here yesterday and miami says they're still going down, but indianapolis, things are looking good in. depends on where you're talking about, right, paul? >> it is. the thing we really worry about

is there enough demand on the sidelines to stabilize housing. we've seen a lot of money come into the stock market the last couple of months as people got more comfortable with banks not going to the nationalization stage. now that we're seeing some in housing, does that pull some to the side to absorb. >> and you're going to stick around to help us out with secretary geithner's testimony today. geithner is going to testify before congress on t.a.r.p. before he appears in a special town hall meeting today. >> we're going to head live to erin burnett along with steve liesman. we'll find out what's coming up. you can participate as well. ♪ on this endless ocean ♪ finally lovers know no shame ♪ ♪ watching in slow motion

♪ as you turn to me and say ♪ take my breath away (announcer) ge locomotives. customers love them almost as much as we love making them. ♪ my love (announcer) innovation today for america's tomorrow. right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. eight are wearing bathrobes. two... less. - 154 people are tracking shipments on a train. - ( train whistles ) 33 are im'ing on a ferry. and 1300 are secretly checking email... - on a vacation. - hmm? ( groans ) that's happening now. america's most dependable 3g network. bringing you the first and only wireless 4g network. sprint. the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com. you want a financial partner who promptly gets you... the information you need. at northern trust, our sophisticated technology... puts the most accurate information at your fingertips.

so while you may find yourself waiting now and then, it won't be for the numbers you wanted by 7am. ♪ northern trust. wealth management. asset management. asset servicing.

tim geithner is set to testify before the congressional oversight panel on t.a.r.p. that's coming up at the top of the hour. then after that, cnbc has the special town hall meeting at 7:00 tonight to be moderated by our own erin burnett and steve liesman. this will be a true town hall. you've got a studio audience and

you'll be taking questions from around the country. >> we've got facebook questions, people have been e-mailing in throughout the day and we're really going to tackle some of the questions people have. whether on taxes, t.a.r.p. really, i think a fundamental question americans have, we have put so much of our money and our children's money on the line and don't really know what we're going to get for it. the secretary's hopefully going to be giving us some answers, particularly on the t.a.r.p., so it's perfect time. >> we had the reporter from "vanity fair" yesterday saying that after reviewing documents, treasury documents, s.e.c. documents, their implementation in their view has been total chaos. >> i'm sure he will dispute that. but i think it's a very fair question. one other thing i wanted to say,

i'll be curious what he says on this. about how these things have worked. he's going to say federal programs have helped 2 million americans buy cars and we'll find out if that means we're out of the deepest part of the recession. >> looking forward to it. 7:00 p.m. eastern time. two ways to submit questions. go to our website to post a video or text question, or you can e-mail. that gets underway tonight at 7:00 p.m. eastern. meanwhile, we're getting ready for the congressional oversight panel, also, the 30-year bond auction. up next, the "fast money halftime report." just minutes away. don't move.

(announcer) we understand. you need to save money.

we're getting to the heart of the action. the market's going for five in a row. financials are a drag. what's smart money doing today? let's get to our crew. dr. j., you made the trip all the way into the big city. let's start with you. we had claims coming in better than expected and yet we're not

moving at all. what's going on here? the week after labor day, a slow volume period? >> we were waiting for the apple news yesterday, then the president's speech. neither really appear to be much to move the markets here. even though they both made headlines, i don't think a lot of folks were so jazzed up or against what the president said last night and it's more or less relief that we're seeing in the market today. >> we weren't going to talk about health care necessarily, but it's interesting to watch the trade today. we have hmo moving sharply higher. maybe that is because, patty edwards, because the president's speech was con toush. and so nothing massive will be done. >> i think we're also seeing a bit of a beta play.

i think people are actually looking to take on more risk and if you're looking for risk, you can go into those names and get some upside as long as the gridlock remains. once it's gone, i think you're looking to the downside. >> let's talk about the group weighing on this market. that is financials. moody's saying they anticipate losses for a large number of banks. with all do respect, they got it wrong a number of times. meredith whitney is still concerned about the banks, but still in favor of goldman stox. they're trading higher today. brian kelly, is there opportunity for people still looking around goldman, but seeing it higher by 1.7% today? >> one, you've got to be very nimble at this point in time. we've had good run off the

bottom, but you can be bullish on financials as long as you have this curve. but if that goes away, then you can have some real problems in the financial sector and particularly if unemployment doesn't start to tick down here. >> non-headline financials, big banks, citibank, there are opportunities in insurance names, casualty. there are these sort of beaten down left for dead names that are not high profile that you think outperform. the sector overall we think goes higher. >> dr. j., let's say you were lucky enough say six months ago, what does it look like for goldman sachs? is it too pricey, buy on the index instead? >> i think it's always a good

idea to have protection in a stock like goldman sachs. the volatilities are down substantially from where they were and don't even have to go back six months. just six days. i think goldman continues to show that there isn't that big worry going into september. clearly it's played out that way. and i think there are better plays like carter's saying, i think you can get more pop from some of the other financials. and to what brian said, i think they have other avenues. goldman is all about trading. that's where the money is and that's why you get on goldman and jpmorgan. >> we've got to talk about those chips helping to move nasdaq today. tech came out yesterday, expecting revenue growth for the first time in about a year or so, raising its third quarter

guidance. can we connect these dots and say the recovery's on the way? >> yeah, right, and what you're seeing in the tech sector is the emerging markets growth story. they cited china and you look a mack crow level of the market we were just talking about the financials, but you have this dichotomy of the tech sector coming and doing well. if the emerging market grow story can help pull us together, that could push the market in general higher. >> what do you see in the charts for something like the stocks? >> if you look at the sector overall, semis in particular but the whole sector, up 40%, versus the s&p up 14%. a little overdone. 19% of the s&p as a whole, we think there's profit taking opportunities. let's just say it that way. >> patty, let's talk about the story we were closing. that is apple.

it rolled over yesterday. not doing too much. we're also seeing palm a little weeker. are there plays here based on what we're being told about a recovery in the tech seth sector? >> i think you have to go with something like an apple or a rim, one of the two that's actually got apps. it's all about the apps at this point for those phones. and the fact that apple didn't come out with everything that everyone expected at the meeting yesterday just means that there's more in the pipeline that they're going to be able to surprise us with going forward. i'm still a believer that you're going to see apple hit about 200 bucks a share. i think that's pretty much almost a done deal in my mind. palm, not so much. i think they are really stumbling and fumbling around with some of their marketing, but i really like the rim and apple trades. >> 200 bucks per share on apple, a done deal says patty edwards, today, september 10th. >> mark it. >> let's talk about yahoo! up about 4% today. getting an upgrade to a buy

rating at bank of america. price target now at 19 bucks a share. dr. j, are you a fan of yahoo! or did they sort of blow it by not taking the microsoft bid? >> yes and yes. i am a fan of yahoo! and, yes, they did blow it. carol bartz said that on your air this morning and said she would have taken the money. most investors when they have a problem that somebody like me looks at and says here is what you need to fix, is they don't know how to sell. and if carol was the head of yahoo!, i think she would have said sold, you're going to own it microsoft plus-30 and i think that would have been the trade. i still like the company. i think carol is focused on the right things and you will see good things out of this company over the next several years. >> brian kelly, quickly, if i like what yahoo! is doing with microsoft, why wouldn't i just buy microsoft? >> i don't know. why wouldn't you? i mean, why not buy microsoft? you've got this big conversion cycle coming up with the new window's product. i think i like microsoft a

little better than the yahoo! play at this point in time. >> let's talk about the ag stocks. monsanto coming out and lowering expectations. dennis, big pullback in mon. do you buy here? >> i think you have to be careful about buying it. it's had quite a run. it's been an amazing stock and it basically is a bet on how much agricultural is going to be planted next year. with prices down and looking to be heading even lower, you have to bet next year we will plant a good deal less acreage of corn and soybeans. that means probably less usage of monsanto's chemicals. >> does that make you a buyer of those commodities? >> not right now. this is a huge crop that's coming. it's an amazing crop. it's getting bigger by the day actually. the only thing that will keep it from getting any larger is an early frost. we'll know tomorrow how big the crop is going to be because we have a usda crop report out at

8:30 in the morning. we planted less acreage this year than last year and we're going to get a bigger crop. american farmers are unbelievably productive. >> dennis, always great to talk to you. dennis gartman joining us on the fast line. on tonight's "fast money," we have a first on cnbc interview with the ceo of national semi-conductor following the company's earnings release after the close. up next, "power lunch" is treasury secretary tim geithner's live testimony on capitol hill, and, of course, do not forget to catch cnbc's special town hall event, secretary geithner tonight at 7:00 p.m. eastern time. taking your questions, america. "halftime report" continues after this. as obama's big speech generates even more debate. >> the time for bickering is over. >> the fast desk generates some winning health care trades. and rick santelli is feeling sick over the lower dollar. we'll tell you why. plus, forget the nfl kickoff, watch these two former linebackers collide over a

trade. on america's post market show tonight.ve 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. gun it, mick. (announcer) sign up today and get a netbook for $199.99 after mail-in rebate. with built-in access to the nation's fastest 3g network. only from at&t.

most people try to get rid of algae, and we're trying to grow it. the algae are very beautiful. they come in blue or red, golden, green. algae could be converted into biofuels... that we could someday run our cars on. in using algae to form biofuels, we're not competing with the food supply. and they absorb co2, so they help solve the greenhouse problem, as well. we're making a big commitment to finding out... just how much algae can help to meet... the fuel demands of the world.

welcome back to the "fast money" halftime report. time for the "power lunch" trade to go. dr. j we turn to you for this one. you're looking at a biotech name that has heavy call activity. how heavy? >> it normally trades under 100 contracts a day. we're talking about a sleepy little stock, bmrm, full disclosure, i own this one. what put us into this one today was quite frankly huge, unusual buying at the september 17 1/2 call strike. they're gobbling up these calls. have traded nearly 10,000 total calls across all the strikes. keep in mind that's against entire august volume of 1800 contracts. they've got a couple big conferences, morgan stanley next week, watch this one. >> dr. j, connect the dots for me. that would imply to me that people are expecting news, so

out of the conference some news potentially a deal. how are you interpresenting this activity? >> exactly. could be a deal and they're partners with genzyme in some developing drugs. it could be that, and like i say, conference today and a conference with morgan stanley health care next week. that's why they're so focused on the near term calls. >> okay. great. dr. j, i will see you as well as your brother on the desk tonight. a double dose. doubling the pleasure, double the fun. also on tonight's show, do not miss area outlook for the casino names. will investors double down or crap out? up next, "power lunch" is up with reaction to the $12 billion 30-year auction. >> that's just a minute or two away. that's going to be exciting. more breaking news at the top of the hour. tim geithner, treasury secretary, going to testify been congress on the t.a.r.p. program. we will have the headlines as soon as they cross, carry that hearing live. see you on the other side. >> this is cnbc.com news now. cnbc has learned that

sutby's international realty will list bernie madoff's new york city's apartment for sale. the price tag $9.9 million. max baucus says the effort to craft a bipartisan health care bill got a boost from the president's speech last night. general motors will sell a 50% stake in its opel unit and hopes to close the deal bithe end of november. welcome to the second hour of "power lunch." i'm bill griffeth. breaking news right now. treasury secretary tim geithner getting set to testify before the congressional oversight panel on t.a.r.p. the embargo on his testimony has just lifted, so let's go straight to hampson pearson on capitol hill with his details. hampton? >> hi, bill. the treasury secretary plans to tell the t.a.r.p. oversight committee the emerging confidence in september 2009 is a far cry from the crippling fear and panic of september

2008. the consensus among private forecasters is that our economy is growing, the financial system is showing signs of repair, and the cost of credit has fallen dramatically. looking ahead at the economic recovery and the overall t.a.r.p. program, geithner goes on to say treasury is now entering a new face and it's time to begin winding down some of the extraordinary support we've put in place for the financial system, including guarantees for money market mutual funds and fdic senior debt. treasury's most current scorecard for assistance to banks, $239 billion in outstanding commitments. a year ago. down to about $170 billion. bank will be repaying $50 billion over the next 12 to 18 months. topic "a," the bailout of the auto industry. geithner will tell the panel government support for a new chrysler and new general motors moving through expedited bankruptcy proceedings prevented substantial job losses, led to

an early restructuring, and also stabilized economic and financial markets. the government, geithner says, is a reluctant and careful shareholder keeping its distance from day-to-day operations. i don't know, bill, sound like pretty good warm-up for the treasury secretary for our town hall meeting tonight. >> absolutely. a lot of fodder for questioning tonight. hampton, thank you very much. >> the council of economic advisers has just put out a report simultaneously. they say the stimulus plan added 2.3% to the u.s. gdp. gdp was negative 1%. >> also, said it saved or created 1 million jobs in that time as well. >> and we are waiting for the other breaking news at this hour is rick santelli standing by in the pitts with the results of the 30-year bond auction. rick, what's the grade? >> oh, my god. this is an "a" plus.

4238. the "w" i was trading, 3, 4 basis points higher before the auction. lower yield, higher price, indeed, that is the case. you have 46 percentage in indirect bids. you had a 290-plus bid to cover. that's without a doubt the highest bid to cover on a 30-year since they brought it back after its hiatus from october of 2001. i'm not going to try to explain the i will logic of how more and more supply and debt bring more and more aggressive buyers in, but it is what it is and it's an "a" plus. >> the good news is that the government was able to borrow moneycheaply for a veong time. is the bad news that people are worried about the state of the economy? >> if i had to give you a very simple quick explanation for why yields remain low, i would say kun nun drum one, two, and

three. treasuries still represent the biggest hedge to everything from toxic derivatives to slowing stocks. i think that's partially what's going on in all sovereign paper around the globe. >> thank you very much. we're waiting, not a huge move. the dow near the major averages have been homdilding steady. the dow is up 35 points, which is just a few points above where it was when the auction results came out. now trading at 9582. the nasdaq is up 10 points and the s&p up about 4. so still tepid gains at this hour. >> we should point out if ever we got to the point where we were worried about whether or not the government could fund its deficit if the overseas buyers weren't coming like they did gangbusters today, that would in theory rattle the stock market. >> while we wait for the testimony there on capitol hill before the congressional oversight panel, we're rejoined by paul miller of fbr capital

markets and david weiss of standard & poor's. what's your answer as to why these auctions have been so successful and what it says about the economy? >> i think it just goes to show there's a lot of liquidity in the system right now. it's kind of odd to see it both coming into fixed income and the equity markets, but i think it's one of the things that we're trying to understand is how much quantitative easing is in the system and how much is finding its way in the stock market and fixed income market. a lot of money coming off the sidelines. >> david, he is arguing that you got to put money some place and there's so much money out there it's going everywhere at this point. but at the same time it's really weird to see yields coming down, that tells you the economy will get weaker, but stocks going up. are they at odds? >> remember, the value of a stock is the present discounted

value of the stream of assets it generates. when interest rates go down, stocks go up. >> do you buy the notion going back to the cea report michelle was mentioning, david, that in the second quarter the stimulus plan may have added 2.3% to the gdp in the second quarter? >> do you believe that? >> no. i just can't see how they could possibly get that big an impact on gdp. >> what do you think, paul? >> i think it sounds very high. adding 2.3% in any quarter is a lot of stimulus money, and we're just seeing most -- >> what is a more realistic number then? what could stimulus have realistically added in the second quarter do you believe? >> probably given the stage we are, probably a half to percentage point but not more than that i think. >> and it said here that the stimulus plan may have saved or created as many as 1 million jobs in the u.s., david. is that a high number as well do

you think? >> that strikes me -- >> i don't know how you quantify that. >> don't they make the argument that a lot of this money went to, say, saving teachers jobs, that would have been the state money that preserved firefighters, police officers -- >> the highway transportation jobs. >> but it's a question of how much of that would have been spent anyway. i think a lot of this just transferred the state deficits to the federal level. >> right. that's always such a good thing, right? because that means an entire country can pay for a state's mistakes. >> what do you want to hear from secretary geithner today? i assume he's going to crow about the fact that the fdic doesn't have to issue that fdic-backed debt for the major banks. that's a huge milestone, isn't it? >> and i don't believe it. i don't think that the fdic is ready to back out of that yet. >> really? they said it today. you think they're still going to keep doing it? >> we have to wait and see. most of the banks we're talked to, maybe there's one or two out there that can issue debt, someone like a goldman sachs. these guys can issue debt.

the question is can they do it in an economic manner to keep interest rates low. that's going to be difficult to do. i don't think in any form that the fdic can back out of the system yet. what we've heard is the fdic is already talking about extending that well into 2010. i don't know they're really to back out at all. >> david, are you as skeptical about that? >> i don't think they would be announcing it if they didn't intend to do it. it's too much of a negative if it fails to happen at this point. so i think you will see them coming out of it. i think they will be able to. >> as far as the written testimony, the sense we get from secretary geithner is that he feels that the economy has stabilized enough now that we can back away from the rescue strategy and now start preparing for future growth. how do you do that, paul? and do you think it is an appropriate strategy right now? are we stable enough? >> they have to find a way out of all these support mechanisms, but the issue that we have with all the bank out there and what would the banks and earnings and

interest rates look like as the government starts to back itself out. now, you know, rates will probably go up, but do we really want rates going up with a housing market that has to deal with another million foreclosures over the next 12 months? there's a lot of destabilizing issues out there. i don't think the government is really -- i think if they try to pull out and if anything happens, you will see them come right back in again. >> what do you think, david? >> i think there's going to be a gradual exit and mortgages are probably the last thing they will exit from because of the political issues that paul points out. but i think you can get out of these. the federal reserve is already starting to. their balance sheet is already down 10% from where it was in ç april. >> all right, guys, don't move.ç we'll try to squeeze in a commercial break because congress is running late. >> imagine that. >> don't move. we'll waiting for treasury secretary geithner to testify. >> we'll be back in just a moment. moment. stay with us. do you think? hey, why don't we use our points from chase sapphire and take a break?

we can't. sure, we can. the points don't expire... ♪ there is nothing for me... ♪ there's no travel restrictions... we could leave tomorrow. we can't use them for a vacation. you can use the points for just about anything. i know... ♪ the way you look tonight ♪ chase what matters. get your new chase sapphire card at chase.com/sapphire. an eleven sixteenths wrench over here? here you go. eleven sixteenths... (announcer) from designing some of the world's cleanest and most fuel-efficient jet engines... to building more wind turbines than anyone in the country... the people of ge are working together... creating innovation today for america's tomorrow. thanks! no problem!

bbbbbbbbbbbbbbbbbbbbbbbbbbbbbbb. a conference call with gm officials just wrapping up detailing the sale of the european opel unit. we're still awaiting treasury secretary tim geithner's testimony. when it comes to t.a.r.p. gm officials wrapping up a conference call detailing the sale of the european opel unit. magna international will get a 55% stake. employees will hold a 10% stake. gm keeps 35%. opel will not be allowed to sell in the u.s. or south korean markets. canadian sales will be allowed

but that will be in 2012. china sales barred until 2015. >> wow. >> binding agreements will go signed within two to three weeks. gm is targeting profitability for the unit in 2011. that's too bad about the china sales. that's where all the growth is. >> barring a huge market for that period of time. i got to say, doesn't look like anybody is hurrying to start this testimony from secretary geithner in the meeting hall. a lot of milling about and i don't see any of the panel members sitting up there. we're waiting for elizabeth warren, the harvard law professor who chairs this panel that was positioned by congress last year when they created the t.a.r.p. program, and this panel we'll just remind you is made up of members of congress and others to gather periodically and hear testimony on how the t.a.r.p. is being distributed and they will hear from secretary geithner when that gets under way. they were supposed to start about ten minutes ago. let's get to the markets and see how we're trading. modest gains. we start with scott wapner at the new york stock exchange.

>> the trend really continues. weaker dollar, higher commodities, higher stock market. that's what we're dealing with right now. the dow is good for about 45 points. also a slew of better than expected or pretty decent outlook from a number of important companies. let's talk about proctor & gamble. p and g said they expect to return to sales growth in the second quarter. general mills and texas instruments are to the downside. texas instruments new 52-week high raised the outlook. corning saw a smaller than expected decline. you have some health care stocks rising, cigna, health net, humana are to the plus side perhaps from some of the bickering on capitol hill as to whether a health care deal is actually going to get done. the hmos are moving higher today. financials, a bit of a weak spot. moody's reiterating its negative outlook for banks. let's go to bertha at the nasdaq. >> we're seeing modest gains come in the internet and chip

stocks. we have yahoo! and ebay both getting upgraded. google entered the electronic medical records. now dell is joining google and microsoft launching a product that's having a pretty good day. up 3%. the weird thing is despite the fact you have texas instruments upping its guidance, it's to the downside. three of the biggest components in the stocks are kind of dragging the sector despite the fact you hear from some of the other who boosted their outlook and say they see things turning, they see more demand. you do have a few communication chips today, also lamb research and others hitting new highs. nvidia hitting new highs. we look on the hot board. along with them in the other area in the tech sectors is the

gamers. we have a downgrade of electronic arts to a neutral. one last sector to look at coming back out to the wall, we've got the airlines today moving higher on an upgrade of united over at jpmorgan. it's up 18% off its highs of the day but overall airlines are soaring. sharon epperson is standing by over at the nymex. >> what's soaring here is natural gas. some of the same-day options that were traded today, part of the reason we are seeing natural gas futures back above that $3 mark. we also got the report from the energy department showing that natural gas storage levels increased but less than expected. there's been a big concern about how much more storage can really be fit into the tanks and a lot of concern that natural gas prices could dip. some traders say even below $1. now we're seeing that rally after the oversold condition and a lot of concern we're going to see a very big, much bigger than expected increase in storage. that didn't happen.

the rally ensued. the weaker dollar has had an impact on crude prices turning around. that helped crude oil turn around. the inventory impact is another factor, the fact that crude inventory declined by nearly 6 million barrels, but then gasoline inventories increased as distal late inventories. that's why we're seeing the sell-off there. we'll continue to monitor what happens with this energy subcommittee that the senate finance committee has put together. they're talking about proposed tax hikes. that could be interesting coming out of washington as well. bill, back to you. >> holy cow, 8% gain on natural gas prices today. that's big. >> you don't see it that often. >> you do not.ç >> we're joined by paul miller and david weiss. paul, let me start with you, when treasury secretary geithner testifies today, i'm wondering if he will be asked whether or not we've finally gotten to the point where enough measures have been put into place that a big

bank could fail. what was the problem we knew after lehman brothers? all this counter party risk, we didn't know who had it, to what degree, to what size. now all of that stuff will be traded on a platform where we can see it. have we gotten to the point where we can get some of these big guys fail if they need to? >> i think we tried the big bank failure issue and i don't think the market likes it one bit. >> even if conditions have changed? >> even if conditions have changed. i think what you got now, especially these s-cap banks, the top 19 banks that have been blessed by the government. even if conditions get better, i still don't think they will fail any of these institutions. they're not going to walk down that path they took with bear and lehman brothers. too many people ran from the market. cash became king and it caused a lot of disruption. it will be years before we allow another bank to fail of any material size. >> it could be argued conditions have changed because of the expectations banks won't be allowed to fail.

>> i'm talking more about the practical issues. what was the problem after lehman? we didn't know who had exposure where because you had derivatives spread out like a spider everywhere. they're going to be traded on a platform. now we can see them like we can see the options market. in theory doesn't that get us a long way to where -- so all these ripple effects, david, would not necessarily happen if another bank failed? >> i don't think it solves the problem because, number one, it tells you at best what the banks have, not what everybody else has, like the big insurance companies, like aig, nor does it tell you what's spread out internationally. it helps but it doesn't solve the problem. >> i'm looking at the testimony right now that we'll be hearing from secretary geithner, paul, and he says here the e merging confidence and stability that we enjoy right now is a far cry from the crippling fear and panic of a year ago right now. are we able to say or can you say with some confidence that we're coming out of this recession quicker than we would

have without the stimulus package? >> oh, i think yes, without the stimulus package we'd still probably be, you know, losing jobs at a half a million -- 500,000, 600,000 again. the stimulus package helped tremendously. i wish it was more hardline stimulus rather than some of the other social issues that was thrown in. but, yes, it's helped us tremendously. without it we would be in much worse shape. >> gentlemen, we're going to take a break.ç still waiting for the testimony to get under way before the congressional oversight panel on t.a.r.p. we'll continue. we have paul miller and david weiss with us here on "power lunch." and we'll be back. don't forget about the town hall meeting tonight. secretary geithner after he finishes his testimony heading to our studios in washington for our town hall meeting tonight with steve liesman and erin brunettbre burnett. you'll be able to participate as well. you can e-mail your questions to townhall@cnbc.com or very cool, go to our website and you can

submit a video question. >> all the kids are doing that these days. >> well, we'll see how they do tonight. 7:00 p.m. eastern right here on cnbc. back with more "power lunch" though in just a moment. stay with us.

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. we've got express options, fast ground and freight service-- you can save money and keep the heat on. great idea. that is a great idea. well, if nordic tuesday wasn't so much fun. (announcer) we understand. you need to save money. fedex shopping online can help save. doing it with bank of america can help save a lot more. up to 20% cash back from over 300 online retailers with our add it up program. just sign up and use your bank of america debit

or credit card when you shop online. it's one of the many ways we make saving money in tough times a whole lot easier. among the stocks hitting 52-week highs today, oracle and emc out with good guidance. there's bmc software, i thought it was emc. baidu up 6%. goldman sachs up to $173 and international game technology, a lot of gamers have been doing well recently, up 70 cents at $22.71. and apparently secretary geithner has arrived in the hearing room where he'll be

providing testimony before the congressional oversight panel. >> look at that shot t must be so disconcerting. they're within three feet of his face. >> look normal as think sit and take yir picture right in front of your face there. >> oh, my gosh, weird. he's got good things to say today. the fdic announcing today they are -- there's elizabeth warren, the head of the panel. should we listen in or what are we going to do here? >> i want to welcome paul atk s atkins, who is the newest member of the congressional oversight panel, and we are glad to have you with us here today. thank you. i also want to say as we get started here the panel has agreed to keep their -- >> liz warren, professor at harvard, frequent guest here at cnbc to discuss her findings about the t.a.r.p. oversight over the last year or so. >> scott cohn is here with some new developments.

>> the transcript has been floating around for several months. it was part of the massachusetts secretary of state's lawsuit or complaint gens fairfield greenwich group which was the big madoff feeder fund. now we have the actual tape now that case has been settled with fairfield greenwich not admitting any guilt. one of the most i guess kind of ironic and fun parts really has nothing to do with any sort of cover-up. this was in december of 2005. bernie madoff is in his office talking about how they should spin things when the s.e.c. comes calling. he keeps getting calls from charities and it's just annoying to him. listen. >> i'm sorry. any more solicitations for charity, i'm going to kill myself. >> he didn't kill himself, he just stole billions of dollars from a number of charities. this was fairfield greenwich, the biggest madoff feeder fund, preparing to answer questions from the s.e.c. in 2005 about

the relationship with madoff. the s.e.c. was getting a little suspicious finally, and madoff said don't worry about it, i have these s.e.c. guys figured out. we deal with them all the time. >> it's a fishing expedition. >> right. >> that's what they do. okay. so, you know, they typically, you know, we run through this all the time. the guys come in to do books and records examination and they -- they whatchamacallit, you know, they ask a zillion different guess and we look at them sometimes and we laugh and we say are you guys writing a book. >> it was three years to the day from that phone call that madoff admitted to the scheme. the inspector general of the s.e.c. is going to be on capitol hill this afternoon. mary thompson covering that. talking about what the s.e.c. did wrong and answering some questions about reforms. also on that witness list,

robert ka za mi, the director of enforcement who came in in the big house cleaning in the wake of madoff. it really puts an actual voice on some of what was going on behind the scenes. >> you get a better sense of the man if you can hear him speaking off the cuff. >> we have the whole tape it's about an hour and ten minutes o@ cbs.com if you want to listen. >> very good. >> is it worth it to listen to the whole thing? >> yeah. there are a lot of things that seem a little he is co-teesoter. but he really controls the whole conversation and the fairfield greenwich guys are taking his advice, but it's mostly bernie. it's very interesting. >> thank you, scott. >> thank you very much. and we're getting closer. we're getting closer to the time when secretary geithner will begin his testimony. that is, as michelle mentioned, elizabeth warren, who chairs this panel. when the testimony gets under way in ernest, we'll go there live. a story out of michigan, one of the hardest hit, if not the

hardest hit state by this decline. one of the highest unemployment rates in the country. governor jennifer granholm is desperate to create jobs. she has a new initiative with ford motor she will tell us about when we come back [ engine revving ]

[ engine powers down ] gentlemen, you booked your hotels on orbitz. well, the price went down, so you're all getting a check thanks. for the difference. except for you -- you didn't book with orbitz, so you're not getting a check. well, i think we've all learned a valuable lesson today. good day, gentlemen. thanks a lot. thank you. introducing hotel price assurance, where if another orbitz customer books the same hotel for less, we send you a check for the difference, automatically.

a rare good economic news story for detroit to tell you about today. ford chairman bill ford, jr. and governor jennifer granholm set to announce plans to convert a plant that was closed back in 2007 into what is billed as the nation's largest renewable energy park that could create as many as 2,800 jobs in michigan. first on cnbc we welcome governor granholm back to power lunch. good to see you again. welcome back. >> thanks so much. >> you provide tax credits, what incentives did you need to provide to ford to get this thing done? >> we have a whole slew of incentives because we wanted to make this a signature project. i'm standing here in the former ford plant that used to make ford vehicles, and now it's going to be making both batteries as well as solar panels. in fact, the numbers are that it will create about 4,000 jobs to start, which is more than a two-shift plant would create. it's a great example of the

phoenix rising from the ashes, and it's all part of our strategic plan to diversify michigan's economy. >> governor, i'm sure you are familiar with the recent "wall street journal" editorial where they took straight aim at tax credits like this one and pointed out that your state has done this many times and actually not created as many jobs. you had the broadband development authority which was supposed to along with another program create half a million jobs. instead you ended up with a lot of loans that went bad. you have this hollywood program where you're trying to get filmmakers in there. instead, you've paid $4 million to wereduction companies and only gotten $70,07000$700,000 w spending and you raised taxes on businesses. wouldn't it be better to cut taxes in your state? >>ened a we are doing that as well. let me tell you what this has done. like every other state, michigan is going very aggressively after sectors that we know we can compete in. we want to diversify in ways that are important to us.

so, for example, we've had the largest number of battery companies coming to michigan as a result both of our tax incentives and the department of energy grant. so we are creating a whole new industrial sector. the anticipation is that it will create up to 20,000 jobs by the year 2020. we know batteries will be important in the renewable energy field. same thing with film credits. we have the most aggressive film credits in the nation. we have four studios that have announced they're opening up in michigan. we don't want to just pay hollywood producers to come here, make a film, and leave. we want to create an infrastructure and jobs for those who are seeking them in michigan. we have been very specific about diversifying our economy both in the creative sector but also in ways that are inherent to our manufacturing base. >> i guess the spirit of michelle's question, i don't want to put words in your mouth. >> go for it. >> nor from "the wall street journal," are you giving away too much to get as much as you are getting right now in terms of long-term economic growth?

are you in the short term giving away too much. >> like every other state that's doing this, the money is not paid unless jobs are created. so this is foregoing revenue, but it's only for if the jobs, in fact, are created. every state in the country that i'm aware of is doing this. we compete all the time. michigan was the third best in the nation last year in terms of diversifying our economy and attracting new job providers, and you better believe we are going to be aggressive, and we may try a lot of things and some may not pan out, but we are not doing to stop trying, not going to stop going after trying to be innovative in a way that attracts job providers and anybody who is watching who is a job provider and if you're trying to decide where to locate, come on over have we got a deal for you. >> i don't know who i worry about the most, you or arnold schwarzenegger in california in terms of the problems you face economically. how do you feel you're doing? do you see any light at the end of the tunnel yet economically in your state? >> yeah, in fact, we really do

because we are creating these new jobs in new sectors. the problem is that the percentage of manufacturing jobs we've had historically, we have seven times more automotive jobs than all the other states. when that industry is hit, as it has been, we get disproportionately affected. this is why it's so important for us to be aggressive about diversifying. so i do see -- i talk with our economic development folks all the time and they are very positive and optimistic. it's always a chamber of commerce day from their perspective but especially lately because smart businesses are investing when the cycle is down. general electric announced they would put a major center here. ibm announcing a major partnership with michigan state university. last week bae systems, another sector we've targeted, announced a major expansion in michigan. we have had huge numbers of new

businesses being opened up as a rul. we expect this energy park will create a lot of spinoff jobs as well. we're excited about this sector. we know we have a workforce and university system that's second to none. infrastructure that's great, a tax structure that's great. come on over. this is a great place to invest. >> she's got the commercial going there. let me take you off topic to health care for just a moment. obviously, that's job one in washington right now. we heard the president's speech last night. when all is said and done, what do you expect a health care reform package will mean for a state like yours? >> well, i think it's an important economic issue. you know, our auto industry has been slammed by those legacy costs and health care costs. we know that $1,500 for every vehicle was baked into a vehicle because of health care. we also know that more cars were built in ontario last year than in michigan, and they weren't going to ontario because of the tax structure or the regulatory structure. >> but are you hearing anything out of washington right now that

would solve that problem per se? >> yeah, i absolutely am. i think if there can be a partnership on the resolution of the cost of health care, if business doesn't have to bear the entire burden, then you've got now a more economically competitive structure to allow the united states to compete. >> so if business doesn't bear the burden, who does? >> i think it's a shared responsibility. i think the individual may pay a piece. i think the government pays a piece. >> unions should have to pay more for their health care? >> no, i think that there's going to be a shared responsibility in it. i think that there's going to have to be as the president announced last night these health care exchanges that allow the private sector to administer it, but there may be a skinny down benefit for those who already don't have health care. the unions and others who have insurance are currently paying for the insurance of those who are not covered, so let's bring down the cost of everyone. wisely ma lly manage these costt

around these perverse incentive that is pay for more every procedure you have. you can get waste out of the system and you can cover more people and i think you can do that at a price that's affordable. >> okay. always good to see you. thank you for joining us. >> great to see you. >> hope you sleep at night still. >> appreciate it. >> we're trying. >> see you later. >> it's just frustrating because when you look -- programming note, ford's chairman bill ford will be on the closing bell tonight at 3:00 p.m. eastern time. when you look at health insurance, particularly the unions, you had such high utilization rates compared to the rest of the country because they had such low co-pays. they had no monthly fees along with it. they overutilized in a way. that's what drove up costs not we bearing the costs of people who don't have health insurance. >> equitable distribution. >> yes, i think so. >> when last we left the testimony, they were hearing statements from the various members of the congressional oversight panel. that continues now.

then we'll get to the testimony of secretary geithner and then the g aq&a. that's all still to come. stay with us. the algae are very beautiful. they come in blue or red, golden, green. algae could be converted into biofuels... that we could someday run our cars on. in using algae to form biofuels, we're not competing with the food supply. and they absorb co2, so they help solve the greenhouse problem, as well. we're making a big commitment to finding out... just how much algae can help to meet... the fuel demands of the world.

you know why i sell tools? tools are uncomplicated? nothing complicated about a pair of 10 inch hose clamp pliers. you know what's complicated? shipping. shipping's complicated. not really. with priority mail flat rate boxes from the postal service shipping is easy. if it fits, it ships anywhere in the country for a low flat rate. that's not complicated. come on. how about...a handshake. alright. priority mail flat rate boxes only from the postal service. a simpler way to ship.

not to state the obvious, but the testimony has just now begun by treasury secretary tim geithner before the congressional oversight panel. let's listen in. >> i think they have made our programs more effective than they would have been. so i welcome that role and compliment you for the thoughtfulness and seriousness of your approach. also want to thank you, for what you said about herb alison.

i have the privilege of working with dedicated people at the treasury. it's a good thing about our country that people are willing to come work in government at a time of crisis and bring great expertise and talent. you want to have working for the american people, people with the greatest sophistication about financial markets so they can drive a hard bargain in the interests of the taxpayer, and i think that team at treasury is doing a good job. just a few initial remarks. last september, of course, we faced the risk of catastrophic financial failure and the risk of a great depression. today i believe because of comprehensive policy actions put in place since then we are back from the abyss. the consensus is that the u.s. economy is now growing again. the financial system is showing very important signs of repair, costs of credit has fallen dramatically, not just for homeowners for households but for businesses as well.

because of these signs of early progress, we're starting to adjust our strategy moving from crisis response to emergency response to recover, from recuckrecu recueing the economy. as we enter this new face, with he have to begin winding down in programs that are no longer necessary and that by design do not need -- are less needed, less important as the economy recovers. let me just highlight a few things that underscore this transition we're in the midst of now. earlier this year we put a reserve fund in the president's budget that would have recognizing the possibility we might need more authority to fix this problem. we believe the money is unnecessary. we removed it from the budget projections. we are borrowing less already than expected to resolve this crisis. later this month the treasury's money mart guarantee fund will be allowed to expire earning

more than $1 billion in income at no cost to the taxpayer. the fdic's program to guarantee senior debt, which has generated more than $9 billion in fees, has seen very, very dramatic declines in muusage. the suite of facilities we put into place to provide broad support to credit markets, have seen dramatic reduction in usage. we are at a point where reliance on these facilities are down 80% to 90% from their peak. from swap lines to a backstop to commercial paper, the details are in my testimony. when i took this job the government had outstanding commitments in terms of capital to the u.s. banking system in the range of $240 billion. today we have $180 billion outstanding. so that is a dramatic reduction in the scale of our exposure,

direct exposure to the financial system. in large part it is because of the success of our efforts to force a greater level of disclosure and make it more possible for private capitol to come in. the dividends paid on those investments now total $12 billion and for the 23 banks that have fully repaid treasury has earned a return of roughly 17%. now, all these steps underscore our commitment to unwind these extraordinary programs put in place during the crisis as soon as conditions permit. at the same time though, we have to recognize that we have to continue to reinforce this process of repair and recovery until it's self-sustaining led by private demand. the classic errors of policy in crises that governments not only act too late with insufficient force, but they put on the brakes too early, and we will not repeat those mistakes.

now, millions of americans are still suffering depply from this crisis, still facing probably the most challenging economic and financial environment we've seen in generations. unemployment is still at unacceptably rates. the mortgage market outside what is supported directly by fannie, freddie, fha is still significantly pared. commercial real estate financing remains strained. small businesses because they are more dependent on banks, have less options -- >> mr. secretary -- five minutes. >> i'm winding it up. foreclosures are rising significantly because of the high rate of unemployment we're seeing as a country. because of those challenges we need to make it clear we're going to keep those programs that are necessary to recovery in place as long as conditions require. there's a lot of concern that as things have improved we're going to let the market go back to the

conditions it enjoyed before the crisis, and we're not going to let that happen. we've seen dramatic restructuring in the financial system already. if you look at the list of the top 20 firms in the country two years ago, a substantial fraction of those firms no longer exist today as independent entities. it is going to be smaller, but stronger. that's a fundamentally healthy thing for our economy. for that to happen, the congress of the united states needs to come join with us in passing comprehensive reform so we have stronger rules of the road and constraints in place to prevent this from happening again. i look forward to your questions. >> thank you. so, mr. secretary -- >> i was only about six minutes. >> and 19 seconds. a year ago secretary paulson told us that we were in a financial crisis because of toxic assets on the banks' books. in fact, he came to congress and explained that congress needed to give $700 billion to the

treasury department to deploy in order to remove those toxic assets. and we've had a year to get rid of them. does treasury know how many toxic assets remain on the books of the banks? do you have a dollar figure for that? >> probably because of the stress tests we put the banking system through, you have an unprecedented level of disclosure about exactly what loans and securities they hold with a pretty careful estimate of the potential losses on those exposures you might face in a worse economic environment. that gives us a much better picture today, but the critical thing to recognize is, and the reason we care about these toxic assets and their losses is because they require capital. and we came into this crisis with a banking system that did not have enough capital to cover losses in a deep recession, and that's what helped produce the worse financial crisis in generations.

because we put the system through this incredibly exacting set of what we called stress tests with much more disclosure, the banking system today has much more capital in it, and that makes it much less likely that the financial system is going to be a source of head winds, a constrain on future recovery. if they had not been able to raise private capital, if they were still left with too little capital, then we would be facing a much greater challenge. but the problems posed by those assets are substantially addressed by the dramatic improvement in capitalization. >> let me see if i can pin this down. you say for the 20 largest banks for which we have stress tests ubl we ha you believe we have a sense of what's left. >> absolutely. >> do we have a dollar figure? >> i'd be happy to have the fed summarize for you. they put detailed composition -- >> for all the banks which a stress test was not run, do we

have any sense of how much remains in the way of toxic assets? >> my compliments to you for highlighting this question. we're a country of 9,000 banks, not just 20 banks. >> that's right, although fewer every day. >> but that's sort of a necessary process of repair and restructuring. many of those banks came into this crisis with more capital than the big banks held, but many also had more concentrated to commercial real estate. there's a lot of challenge ahead for the financial system. we decided not to put the rest of the u.s. banking system through the kind of exacting stress we applied to the biggest institutions. a lot of complicated judgments went into that. you're right to point out we're left today with somewhat less disclosure of that. the supervisors of the country are spending a lot of care and attention looking at those risk to those institutions, helping them work through that, and but you're right to highlight this is a significant challenge

ahead. important to recognize they are -- those banks together, those remaining 9,000 banks together account for between a quarter and a third of the u.s. banking system. >> all right. >> smaller share, so we are probably likely, as a country, to be able to manage through and withstand those remaining pressures. we can do so with much greater confidence because of the actions we took to stabilize the rest of the system. >> so when "the washington post" this morning summarized yesterday's federal reserve report, the beige book, they summarized it by saying the banking sector remains a mess. would you take issue with that characterization? >> i guess i would say it this way. i think the u.s. financial system today is in substantially stronger shape than it was three months ago, six months ago, nine months ago, and on the eve of this recession. there is, again, more capital, greater recognition of losses, and we are in a better position to get through this. but, remember, this is just the

first quarter. we're just starting to see signs of growth. it is very early, and we did a lot of damage to the financial system of this country and it's going to take a while to get through this, and it's going to take longer to do it because we're going to do it right. so i would not want anyone to be left with the impression that we are not still facing really substantial and enormous challenges throughout the u.s. financial system. where there's been improvement, it's been dramatic. much more than i would have expected at this stage in the crisis, but a lot of that has come through the direct effects of policy. policy to put capital in banks. policy to provide support to the markets that were most damaged. we do not have a mortgage market today except that directly supported by the government that. underscores the basic fact that we've got a lot of challenges ahead. >> thank you, mr. secretary. congressman. >> thank you, madam chair. mr. secretary, under the statute, how do you define financial institution? >> i was looking forward to this

discussion, and i think i understand where you're going. the statute was written, as you implied in your opening statements, really quite broadly. as you also said, my predecessor, the previous administration, made a judgment not just that it was in the economic interests of the country to provide support for the automobile industry but that it was legal and appropriate to do so using this legislation. >> and you concurred in that opinion. >> obviously, we would not have spent a penny of taxpayers' money using that authority if we did not concur in both those judgments. >> if you concur clearly you believe chrysler and gm are financial institutions. is at&t a financial institution? >> again, i understand why it would appear, and if you look at the basic plain facts of i

inherited, why it might be hard to explain why an automobile industry is a financial institution, but again that was the judgment made by my predecessor -- >> i understand that, mr. secretary, but you voluntarily chose to continue the practice, and i'm still trying to figure out your legal interpretation of the statute. so clearly, i assume you don't believe you're breaking the law. i believe chrysler and gm meet the statutory definition of a financial institution. >> as the law was written. >> well, of course, so again the question is, is at&t a financial institution, is american airlines a financial institution? >> no, no. >> no and no. >> but, congressman, i think it's important to recognize two important things. one is that the statute -- i did not design this statute. i was not in office when -- >> i assure you i didn't either, mr. secretary. >> but it did what was necessary

for the country which was give the executive branch of the united states broad authority and discretion to fix this, and the fact we waited so long to make that authority available made this crisis more damaging and worse. one other important fact in reality, in a crisis of this severity, a recession this deep, we have to do, have to do things we would never want to do. >>. i understand that. as you well know, the house had legislation that dealt specifically with the automotive industry, so really some members of the house clearly did not believe that chrysler and gm came within that statutory image. so what i hear is chrysler and gm, yes, are financial institutions. at&t, american airlines happen to be two dallas-based companies, are not, so is there any additional clarity, and i believe one of the things the markets continue to demand is clarity of public policy, who will you bail out? who will you not bail out?

and so i again ask you for some clarity on what is a financial institution? >> congressman, i don't think we're going to be able to take this further. i want to revise slightly how i responded to your question about at&t and american airlines. i think i would say it slightly differently. i do not believe you can read the statute today, now things might be different in the future, but i don't think you can read the statute today to justify action beyond the scope of the actions we've taken in this context. >> i personally hope, mr. secretary, that the legal interpretation of a statute doesn't change with the passage of a handful of months. in the remaining time i have -- >> no, no. that's quite right in the sense we have to pass two tests to use this authority. one test is does the law give us the authority to act? and the other is are those

actions necessary and prudent in the interests of fixing this mess, restoring financial stability? it's not the simple test of what -- >> mr. secretary, forgive me, unfortunately, our time is constrained and i may have time for one more question here. leaving the question of the definition of a financial institution, there are roughly, i don't know, six, eight major programs under t.a.r.p. now, and i'm curious having been serving on this panel for almost a year, i think with perhaps one exception i'm having trouble discovering where treasury has identified any particular metrics of success beyond financial stability. >> i can -- i'd be happy to help you. >> i look at the capital purchase program. it's purpose is to stabilize the financial system, the automotive program, prevent significant disruption of the automobile industry that can pose systemic risk to the financial market stability -- >> i'm going to have to stop you there, congressman. i'm going to be disciplined

about time. >> could i say on this, i think -- >> i'll give you 20 seconds. >> okay. you can look at each of these programs and this is the great virtue of the markets we live in today and you can see almost day-to-day evidence of whether they are having an effect in lowering borrowing costs, improving confidence in the system, and one of the great things of what you can see today just thinking back to two areas, you can look at the cost of borrowing for businesses and families. the cost of mortgages. confidence in financial institutions. price -- those things are a good day-to-day indication of where these programs are having an impact. >> thank you, mr. secretary. thank you, mr. secretary. let me say, we all have to be quiet here or else we'll have to clear the room and then we'll lose our opportunity to talk with the secretary. mr. silvers? >> yes. mr. secretary, i want to pick up, i think, on the threads of