approaches that we feel are consistent not only with our desire to help improve health care in this country, but also consistent with our principles that first and foremost says, let's not do health care reform that undermines innovation. we don't want the same health care system three years from now that we have today. we want a better one.. we think medicines are a big part of that. >> sorry to interrupt. we've got to go. thanks again, lilly chairman and ceo. back to you guys. >> thanks very much to you. health care the big topic. and the other financial services reform in the economy, we are awaiting the president. he's in the air. and then he'll be here. here across the street, in fact. our special coverage begins at 11:00 a.m. eastern time. >> thanks so much for being with us and for melissa for comes in f . time for "the call."

good morning. welcome to our special coverage of the president's historic visit to wall street. as we await his arrival, we will talk about what wall street is anticipating for his speech as well as how you might want to invest in today's environment. larry? >> thanks, trish. i'm larry kudlow. we'll also discuss what exactly wall street and the financial world is expecting to hear from the president. and we'll debate on if the president should insist on limiting executive compensation. >> i'm melissa francis. everyone has been talking regulation reform over the past year. has anything really changed?

we'll discuss. has the administration lost its will to regulate? this as we begin our special coverage of president obama on wall street right here on cnbc. an historic day on wall street to mark the one-year anniversary of the financial crisis, specifically the fall of lehman brothers. president obama is coming to town. he's set to deliver a speech at federal hall at noon which we will, of course, cover live. michelle ka ru scaruso-cabrera . >> it's significant and symbolic because it sits right on wall street, faces the new york stock exchange. we have a palpable air of excitement here. if we could pan the camera here, there's a crowd building out front. i'd estimate there 200 to 300 people here. increasing throughout the morning. i would say there's only one protester holding up a sign that says wall street reform first.

he says he thinks basically health care reform should be put aside and first go after wall street reform. because he thinks financial reform is far more important at this point because it did cause the financial meltdown that we dealt with. so many dignitaries are here. important people from wall street. no surprise the former fed chairman paul volcker. don maren is here as well. roj cohen, one of the individuals in the room for nearly every single one of the mo mentous, calamitous moments. we also got a brief interview with the chairman of citigroup, dick parsons. >> what do you hope to hear from the president? >> well, i think that the president is here essentially to try to give a state of where things are, build some confidence or continue to build confidence. and hopefully to sort of acknowledge the significant role that new york and wall street, in particular, play in terms of

this whole economic recovery and turnaround. >> reporter: does he see wall street as a friend or a foe can be be, do you think? >> we'll find out. i'm hoping a friend. >> reporter: that is one of the key questions. what is the tone going to be? how does he see wall street? is it a friend or a foe? how hard is he going to push for financial reform and regulatory reform, which seems to have been stalled in the wake of health care reform.. back to you. >> thank you so much. i want to get everyone caught up here on today's action. take a look at this market here. you can see how it's almost trying to rally here, at least rally back to the flat line after a big selloff initially. take a look at that chart. we're down just eight on the dow right now. a lot of concerns about a trade dispute with china really weighing on investors early in the session. s&p 500 trading pretty much to the flat line. looks like we might be eking out just barely a little positive growth on the nasdaq.

bob pisani, people woke up this morning and were concerned this might be a repeat of the tariffs in the 1930s. that seems to be wearing off at this point. >> it's certainly not of that magnitude. it's funny, the president is here to talk about regulatory reform. what everybody in the trading community is worried about is potential trade wars. this initial shot about 35% tariffs on tires in the united states, imported into the united states. here's what's going on. the chinese have about 17%, 18% of the u.s. china market. it's growing every year. they've got a big problem.. they've got to keep up those exports to keep their economy going here. this is very important to them. slapping a tariff on it is a big problem. so beijing is taking this to the wto. they're investigating u.s. chicken exports and auto exports to the united states. the concern is this could spiral to the downside. in the meantime -- >> go ahead. >> the tire manufacturers are all up this morning.g. they might have higher pricing and better pricing. goodyear, cooper, they're doing a little better.

>> we're seeing a little bit of optimism as this market starts to climb back. obviously another thing taking center stage today is the president and his historic address here to wall street happening within the hour. how are investigators reacting to that? >> i think the important thing is they're already looking past this to try to figure out what's going to be happening in the next three months, six months, whether or not the economic situation will hold up, earnings are going to hold up. by and large, they're getting more optimistic all the time. traders are a more optimistic now than they were a month ago. >> good to have. bob pisani, thank you so much. >> all right, trish, thanks very much. what can we expect from president obama when he comes to wall street? joining us to discuss, we have howard scott, jared seaburg. hello, gentlemen. hal scott, you first. one of the big issues, the fed's authority to resolve crisis.. the uberregulator role.

what's going to happen here?? is the president going to clarify that today? >> i would expect he'd stay with what he's already recommended, larry. but, you know, i think the problem with the regulatory structure plan is it's very partial. the president has stayed away from recommending any real consolidation of the rest of the agency. until you have a credible alternative to the fed, there's very little alternative but to trust new authority in the fed. this could be avoided by the kind of reforms that senator warner has been talking about recently. >> jared seaburg, get you in on this, on the fed as uber-regulator. related to that, jared, what about the issue of too big to fail? what about the issue of moral hazard?? isn't that part and parcel of any reform and future stability in the financial system? >> well, larry, we all might wish that it could be part of any reform. but, you know, politics at pls play here.

the notion we'll step up and break up large banks really isn't -- you hear the administration talk about higher capital levels for the big banks and higher reserve levels. >> hal, what do you think he's going to say today? why did he come to wall street if he isn't going to make mayor changes? >> i think he's going to reiterate what he's already proposed. he's got hundreds of pages literally of proposed legislation in front of the congress. his problem is that it's been stalled. the congress is not pushing it forward. whether this be because of the health care issue or because congress has fundamental disagreements with his program. so he's going to try to push his own program. i don't expect any new initiatives. >> jaret, do you think we should make changes or is it too o complicated at this point? >> i think the obama plan is too complicated to pass as is.

it's a mammouth proposal. >> what should we do instead? >> we can pass all the regulations in the world. we're always regulating the last crisis. it seems like a smaller plan that focuses on derivatives, has -- and credit raters and mortgage underwriting. that has a much better chance of advancing. it'll be interesting to see whether the president signals a willingness to compromise or if he's really going to go for the whole package. >> hal scott, i just have to ask this somewhat mischievously. how important is this? the financial markets have healed enormously. stocks are way, way up, the bank stocks, as you know. the quality spread, the credit spread, fear spread,

everything's immove iproving, h. i got to ask you, maybe they should stay on that track, figure out an exit strategy and not worry about complex regulatory reform that may not get passed in our lifetime? >> they obviously should be focused on their exit strategy and they are. but these are not mutually exclusive matters.. we need to reform our regulatory structure. it's highly fragmented. it's outmoded. it did not perform well in the crisis. we don't have to deal with tomorrow. we've stabilized the existing situation. but we do have to do it. if it takes us two years to do it, so be it. we've got to get this right for the future. >> what's the first step? what would you do first? >> i think we have to have a more comprehensive plan than obama's put forward on the regulatory -- >> what would that include? if it was your plan what would be the first step? >> well, the first step would be consolidation of all these various regulators into something that looks like the uk. this would permit, by the way, as i said earlier taking

supervisory authority away from the fed and putting it in that agency.. right now we have no credible alternative. >> jaret, that's just what sheila bair at the fdic does not want. that is one of the biggest sticking points for this whole thing. is there a deal there or is the fed going to roll this or what happens, jaret? >> i can't see them consolidating the agency. the lessons from the uk suggest that consolidating the power doesn't do any better of a job than the system that we have. >> didn't they miss the crisis also? >> yeah. it happened regardless of the structure. i think the first step that needs to be taken is they need to revamp the capital rules. they need to get rid of many of the exceptions. they need to get rid of some of the sec problems that discourage building reserves. and that should be the first step. and then they can spend some time to debate really what the most ideal structure is. >> all right. we've got to leave it there, gentlemen. thanks so much for joining us. we appreciate it. also a programming note.

john horowitz sits down with president obama one on one this afternoon. "mad money" 6:00 p.m. eastern time. then "1 year later" tonight at 8:00 p.m. >> we are in recovery mode. i just want to make that point. we are in recovery mode. it is going to happen again. that's the nature of markets. that's the nature of capitalism. and i'm glad the fed did most of the things it did. i wish we'd know who's too big to fail and who isn't. that's what's still out there. sorry. >> all right. our special coverage continues with in-depth analysis of the regulatory landscape. more from larry including caps pay and bonuses. and have we lost our overall l will to regulate? first, as we await the president's arrival, what does wall street really want to hear? that's coming up next for you.

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the no slip white strips. crude oil right now down along with stocks, down 46 cents. ung is up more than 12.5% on the day today. >> what exactly is wall street expecting to hear from president

obama? let's bring in dan fitzpatrick and mike williams. good to see both of you. i was looking through some of the notes that you had sent. and it looks like both of you are expecting a big scolding from the president. mike, what do you think? is his tone going to be rather scolding and offensive, you think, to some traders out there? >> well, i think politically he's going to have to show the public that he's standing up to the issues that caused some of these collapses. but i have to agree with something larry said just before you went to break. this really is more about getting back to what capitalism is all about. and i hope that the president suggests that we will allow banks to fail. we will allow this too big to fail to leave the situation. because without it, we're really not learning lessons. and, therefore, we won't do the things that are required to really fix this for the future. >> dan, you know, one of the concerns, too, is that there might be some inconsistencies

here. one the one hand the government's talking about having an exit strategy to eventually pull away from all these businesses. on the other hand, the expectation is that there's going to be talk of more regulation. how do you reconcile those two? >> right. well, happily, i'm not the one that's giving that speech. because it really does -- he really has to strike a balance. and i think we're going to see something that's probably a bit generic, devoid of a lot of specifics. because we have had, you know, to kind of modify larry's phrase of free market capitalism as the best path to prosperity, it's kind of been capitalism gone wild. and i think the real issue that i'm looking for is what he says about executive compensation. because that speaks more to his whole approach to the financial markets versus just executive compensation. we don't want a heavy-handed government. but i think we need some more transparency in our financial institutions. so we know what the heck they're

doing. >> mike williams, president obama, there may be a scold line or two. but we are recovers. we're recovering. >> yeah, we're recovering. >> stocks are up. the economy is about to register positive growth. the financial system has greatly, greatly, greatly improved. isn't that what he's going to talk about at some length today? >> i certainly hope he does. this is really all about confidence and allowing the markets to heal themselves.s. if we can rebuild confidence and the public can hear the president saying that we are coming back from this debacle and it isn't armageddon, and, yes, there's more work to do but we're going to get over these issues, i think we'll see a tremendous improvement even more. >> if that's the case, why do you need more regulation at a time when the economy seems to be healing itself? >> trish, i don't think we do. i'm going to agree with larry. the less regulation we have, the more effective business will run. i was simply stating we must

allow things to fail. that's the way we learn not what to do. >> dan, wouldn't it be nice not to have a trade war with china now? do you think president obama will address that friday night, the weekend news cycle, hey, guess what, we're going to protect one union from trade -- >> you know how i feel about the unions and how they impact our economy and the way we interact with the rest of the world. i think it is going to spark a trade war. frankly, what i'm more concerned about, larry, is its impact in the way china handles our currency. >> bingo. >> we're not gaining any friends here. >> right. some wise old sage, it might have been confusci efrks us said never poke a stick in your banker's eye. >> he did say that.. >> they're financing the dollar. they're financing our bonds. this doesn't sound terribly clever to me. how about you? >> you never chop off the hand

that feeds you. >> do you think it's real? do you think this could be a little bit of a threat, a little bit of a prod to have china start to moderate their currency and start to -- i mean, do you think it's for real in the sense that it could have a very big effect long lasting?g? >> no. because it's too illogical. i think it's probably a ruse and in a week or two it's going to go away because they'll have some other event discussed behind closed doors. we'll have another headline in ten days that says we've resolved our issues and the tariff will go away. >> i hope you're right, buddy. i'm not so sure. coming up next, regulating wall street compensation. should the government impose pay caps? eliminate bonuses? allow clawbacks? all options on the table. we'll discuss them next. plus, nyse traders can't help but wonder if president obama will stop and walk on to the floor. we'll show you last time it happened coming up on this cnbc special. i've been growing algae for 35 years.

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as we await the president's speech on wall street. it was one year ago the financial world found out that lehman brothers wasn't going to make it and wasn't going to be bailed out by uncle sam, either. cnbc's bertha coombs is live. it's now the epicenter of barkley's capital in new york. >> reporter: lehman brothers moved here to these offices after 9/11. although one year ago tonight, the storied firm came to an end. many of its employees continue to show up to work here to the same trading floors where they worked for years. now behind the blue marquee of barclays capital. one years ago it was under lehman's green logo that many unpacked their belongings, expecting they would not have jobs. but barclays would keep most of the 10,000 employees here, build

its new network operations with senior personnel like jeremiah stafford. >> we prepared for the worst all week, watching the stocks slide. >> reporter: he was a bond trader, you recall, who spoke with us a year ago today unsure of what his future would be. but he remains here today. barclays ceo told maria bartiromo last week for many like jeremiah, this is a tough anniversary. >> for the people who work in barclays capital today who were part of the lehman operation, there is some difficult emotional when every single day you pick up the paper, turn on the tv and people are talking about the one-year anniversary of lehman in a negative context. >> reporter: as emotional it may be for those who remain, it's certainly to be a more difficult time for some 3,000 employees who were laid off earlier this year by barclays. but barclays did say with its most recent earnings that it is

looking to actually continue hiring now. so some on wall street may find themselves back with possibility. back to you. >> thanks so much. we are waiting for president obama to arrive on wall street. financial regulation and reform among the topics he'll approach. executive pay limits. should there be a pay cap on wall street compensation and bonuses. let's ask jay brown and jim bassen, employment attorney and little and robinson. jake, let me start with you. seems like almost every article on this topic starts with excessive compensation led to excessive risk.. i'm not sure i accept that as the truth. isn't the reason we saw all this risk, maybe it was competition between banks trying to keep clients? do you really think it's the compensation that caused the problem? >> you can't say that it was the entire cause of the problem.m. and i doubt anybody would really say that. i don't think there's any question that when you have a compensation system where there are massive bonuses and the bonuses are calculated

essentially on december 31st based on whatever the metric is you use, you have tremendous incentive to get that metric up at all costs. even if it means taking excessive risk. i don't think there's any question. it played a role for sure. >> i just want to point out that live picture we're looking out is where we're expecting president obama. jim, let me ask you the same question. do you think the compensation was one of the main causes of this problem?? >> i don't think it was a main cause at all. certainly risk taking is a problem. but what the real problem here is the pay struck cur on wature street, the way it's determined. these really aren't bonuses. they're year-end payments accrued during the course of year. to the public they tell them this is a pay for performance system. but to the employees they're telling them it's purely discretionary and as john just said a minute ago, it is determined at the end of the

year. we need a system where that's transparent, where we know exactly what people are going to be paid and how it's going to be determined. we don't need to shift the th m numbers. wall street executives make a lot of money. so do professional athletes. i don't think that's going to change. >> back to you, jay brown.n. is it government's role to set compensation? that's a key point. >> yeah, no. absolutely not. it's the role of the board of directors. >> right. >> but i have to say in looking at the past few years, they've done a crumby job of it. when you have a pay czar for these t.a.r.p. companies, the purpose is to say we can't trust the board of directors to make the right determination. we have to take it away from them. >> how do you solve it? >> you can do a couple of things. if you really want to focus on the board of directors, that is barney frank's bill, you can try to sort of tighten up the process, make the compensation

consultants independent. but the truth is the only way to really reform it at the board level is to make sure that there are people inside the board room whose experience and goal is to watch out for shareholders and are not captured by management. the only way to do that is to get shareholders to nominate and elect directors to the board. right now all directors pretty much are not named by the bord itse board itself where the ceo sits and have all kinds of reasons to do what the ceo wants. >> whether you call it a bonus, give it in stock, whether you know what they're going to get at the beginning of the year or not it ends up being the same number. what are we really changing here by changing the structure? >> what we need to change is transparency. we need people to know how they're going to be paid so we don't have a situation where people think they're working towards one end, like a risk adjusted return -- >> if they know what they're getting what incentive do they have to work hard? you take the incentive out that doesn't make sense. >> i'm not suggesting we set

what they're going to get but how it's going to be determined. if you get a risk adjusted return of x, expect a bonus of y. the discretionary bonus is tiny compared to what it is now. >> why not tie it to long run equity. they lost their savings. they lost the equity they had in the firm. and it seems to me what both of you are inferring is there should be some longer term equity ties to the compensation package. did i hear that right or are you cooking something else up? >> i agree with that. >> here's the problem with long-term equity. the problem that has to be addressed with that and why it's not a panacea. the riding tide raises all ships. a sinking tide brings them all down. long-term equity is going to have sort of a universal effect between firms. we want to reward the individuals themselves. sure, some components should be in long-term equity. what's more important, i think

we need to see is clear cut definitions of how they're going to be paid during the course of year. >> we got to go. all good thoughts. thank you for joining us. >> my pleasure. coming up, tyler mathisen with an exclusive look inside the -- traders can't help but wonder whether president obama will stop in here at the new york stock exchange. here's a look at some of our presidential visits from the past. >> the president. >> in a few minutes, i'll ring the bell so trading can begin. but i know that if i don't, it'll ring itself anyway. >> we're going to see if we can talk to the president here very briefly.

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welcome back to our special coverage of the president on wall street. former president george w. bush was here at the new york stock exchange. he was actually the last sitting president to visit the nyse. that happened in january of

2007. in fact, president reagan was the very first to visit back in march of 1985. well, bob pisani, he wasn't there in '85. he was there for the 2007 visit with president bush. and he lived to tell about it. >> it's funny. those are the only two presidents that have ever been here while they were president. truman came after he left office. it's very funny covering the president in an informal organization. he came down on the floor, started shaking hands. i walked next to him trying to put a microphone getting comment about what was going on. what you end up doing, not advisable, is surrounded by secret servicemen who basically come up against you in very tall trench coats with stuff underneath them, believe me, and eventually at the end they came up to me and said, listen, don't put a microphone in front of the president again. >> there you are. >> several times i walked behind them, they would come up and push me back a little more.

they're very nice people. when the last one said, i will take you out, that is not advisable. he said, do not do that again. i have already advised you. do not do it again. and the guy came up to here on me. but he had an enormous trench coat on. >> it is exciting. there's some hopeful people thinking it might happen. >> the expectations are low. there is a gap in his schedule afterwards. we're sort of hoping he might just walk by. >> great to hear the story. thanks so much. back over to my pal, larry glnchts thank you. the purpose of the obama visit is to instill confidence among investors in our financial institution. how should you be investing in this environment? in a cnbc exclusive, tyler mathisen is at the schwab impact conference.

>> there is no place in america where more financial advisers are gathered this week than right here at the schwab impact conference. i know politics aren't your thing. i know that. but i have to ask you, what do you expect wall street wants to hear from the president today?y? >> well, first of all, i think wall street expects to hear something about increased capital requirements. i think there's an expectation of great eer transparency in th derivatives area. we've heard talk about desired greater transparency on compensation structure as opposed to the blunt instrument of caps on compensation. there certainly is a desire for the root to be towards transparency more so than caps.

>> a year ago when we were here, people were worried about their money. how far back has the economy come since this day a year ago? and is the economy and are the markets getting the credit they deserve for having come back as far as they have? >> that's what we talked about before coming on air here, is just the incredible lack of respect, i think, certainly that the stock market has gotten. it's amazing up 55% from the lows in march. that there are still so many disbelievers when the math is right there in front of you. i think it's because people think the market has become disconnected from the economy. i think the economy's recovery is not only sharper than a lot of people think but will continue to be at least in the near term. it's this coiled spring pop that i don't think is getting enough respect. >> you called it earlier the rodney dangerfield market. if i want to put money to work, where should i do it right now? >> that's such a common question. i don't think that that has an answer. i think that that begs, at least from our perspective, with

individual investors or clients, who are you talking to? are you an older investor that needs every dime you have and needs to earn income on that? are you a younger investor that can be more aggressive? look at your overall asset allocation. if you're out of whack, get back in whack and do it methodically. i think the market looks pretty healthy here. that doesn't mean go out and buy for every investor. >> you say the market looks pretty healthy. you think the economy is going to continue to outpace expectations in the near term.m. that feels to me like a fairly favorable environment for equity investing. >> it is. i think one of the things we're likely to get going forward is the denominator in the p.e. equation. >> the e. >> the e. just the natural movement of the market reflect the prospects for a better economy. classic leading indicator kind of stuff. now i think we're going to get the e. i think the earnings piece is

going to help support the market. it's probably easy to say that the lot of the easy money has been made given the trajectory of the rally. but i think from an investor putting money to work, particularly the individual investor, i don't think we've had that capitulation in moments fully yet for the individual investor. >> thank you very much. always great to see you liz ann sonders at the impact conference in san diego. if you're out of whack, get in whack. >> okay, tyler, thanks so much. regulation is front and center as we await president obama live on wall street. did the administration wait too long? have we lost the will to regulate our financial system?? plus, what the traders have to say about today's market action?

check out shares of eli lilly trading up about six-tenths of a percent or so. $33. it will eliminate thousands of jobs and reorganize and defines business units in an effort to slash costs. right now the traders seem to be taking that news in stride. melissa. >> just min ults away from president obama's message to wall street. you're looking there at the live picture of the podium he'll be at in a little while inside federal hall. we're wondering, have they already missed the moment? have we lost the will to re-regulate the financial system? we have eleanor block.k. thank you for joining us. it seems like the economy heals, the focus turned to health care. has the momentum been lost?

>> more than anything it's the fact that stock prices are rising. people are seeing their 401(k)s go up in value. they're putting less pressure on politicians to make significant changes. i think the air has come out of the balloon . >> do you agree with that? >> actually, i don't. i think the momentum is there globally. the g-20 will be meeting at the end of september. they have been rather consistent in terms of their suggestions and policy recommendations ever since they met back in november at the bush white house. >> vince, i think eleanor is closer to it. i think everybody wants to blame the bankers and wall street. we may hear some of that from the president obama.. what i want to ask you, vince, will we have smart regulatory reform or are we just going to ignore the government's regulatory role and just blame bankers willy-nilly? >> two points. first, i am completely confident the g-20 will declare victory.y. they are going to have to do something.

and i think the point is that when multiple countries are moving, we're more likely to get something. we'll get something on executive compensation and like.. but are we going to get the big, sweeping overhaul envisioned in the treasury blueprint?t? not quite as likely. to your question, are we going to get smart reform or are we going to get reform. we're going to get reform.. we're going to add another layer of supervision on top. effectively we're going to create a two-tier banking system. there are those too big to fail. the big guys, the complicated guys, well connected guy. then there's everybody else. >> what would you do instead? eleanor, i was shocked to hear larry agree with you. i don't know the g-20 really leads the way for anything we do. but that point aside, what do you think we should do at this point? >> i do think that we should be a beacon, actually, for the rest of the world. because i think we need to support this nation's idea of capitalism. >> what exactly?

what steps would you take? >> i think we need to support mechanisms for better supervision of risk and risk capital measure. i also think that it's very important that we have adequate disclosure for investors and consumers with respect to financial institutions. >> all right. setting leverage, then, setting capital requirements. those are pretty good ideas. i think they're very good ideas. what about too big to fail? what about "the wall street journal" editorial today asking what exactly is systemic risk? i mean, otherwise we've created a special class of banks, vince. is that what we want? >> that's not what we want. the fundamental problem is our banking system is too complicated. we create incentives from the tax code to accounting rules so that the big guys get so complica complicated, at a time of stress regulators are afraid to wind them down. we have to simplify the tax code, simplify the accounting rules, simplify the regulation.

make the firms more modular so they can be closed. >> this is great stuff. taxes are going up, not down. regulations are going up, not down. i know that. what no one wants to explain, let me ask eleanor. no one wants to tell me how many banks will not fail. this is a question. moral hazard had a lot to do with this crisis. how are we going to solve that? what constitutes too big to fail?? >> well, i think, larry, that that is a central issue here. i think to get out of this moral hazard issue, we actually have to have some regulation with respect to capital and capital restraints. and we have to have a system where regulators can move in and close down institutions so that the government doesn't end up in a situation that cascades into this moral hazard area.. >> all right. we're going to leave it there, guys.. thanks to both of you for joining us. we have a programming note.

john harwood is down with president obama at 6:30 p.m. tune in at 8:00 p.m. for a special. "1 year later: the week that shook the world." that is tonight at 8:00 p.m. eastern here on cnbc. a quick break and we're heading back to the floor of the new york stock exchange. >> i'm going to head down to that floor and talk to some of the traders and find out just exactly what they are expecting to hear from the president. this is humiliating. stand still so we can get an accurate reading. okay...um...eighteen pounds and a smidge. a smidge? y'know, there's really no need to weigh packages under 70 pounds. with priority mail flat rate boxes from the postal service, if it fits, it ships anywhere in the country for a low flat rate. cool. you know this scale is off by a good 7, 8 pounds. maybe five.

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welcome back. to our special coverage of the president on wall street. you can see that is a live picture there. we are awaiting the president's speech. you see treasury secretary tim geithner there on the left. the president will be speaking momentarily. expectation is for him to be speaking about financial reform. we're going to go to that momentarily. in the meantime, joining me on the floor of the new york stock exchange, allen valdez, nyse

trader. here we are off 25 right now on the dow. how much of this is tied to concerns about a potential trade war with china?a? how much is concern about the president's speech that we'll be hearing momentarily and the expectation for more reform within the financial system? >> it's more of the latter. i think it's more of the reform that we're going to see. i think it's got more to do with that versus anything else. >> a lot of people kind of pulling back. >> seeing where the -- >> i agree with steve, i think 100% that's right. we'll like the president to talk about how good the market's doing, instead of lecturing us. how good the market's come, how far we've come in this year. any given day, the ebb and flow in the market is due to confidence. confidence has come back. i think he should address that. >> confidence has come back.

i've been a bull. i think we go to 1100 in the s&p by year end. what is the real growth?h? where's that going to come from? >> okay. larry is standing by. >> i want to ask both of our distinguished contributors, was letting lehman go down a good idea or a bad idea? because over the weekend, you had liberals like "the new york times" and others saying letting lehman go was a good idea. steve grasso, was that free market capitalism. >> i think free market capitalism was letting lehman go. bear went under. no one knew where the government was going to step in or step out. i think that was the problem. >> do you agree? >> i agree. i think you had to let lehman go. i think if you saved lehman, what was going to happen to aig would have been another domino fall down the road. >> what if you had let merrill go as well?l?

look at barclays, right? they got a heck of a deal for lehman after it had gone under. had you left merrill do the same thing -- >> what we're missing in this marketplace is creative destruction. >> i'll ask either of you guys, is there anything the president could say today that would change your view on the market, make you more nervous or more optimistic. >> if he starts to overstep again on his reform actions, that's probably not anything new. so probably not. >> define overstep. are you talking compensation? >> i think we could start with compensation. you start to dictate what these ceos can make, we saw that in the past in the last year, it has a ripple effect through the market. it's always negative. >> on the one hand, they seem to be wanting to suggest an exit strategy. that the government is not permanently going to be involved in all of this. on the other hand, there's an

effort for all this reform. how do you really get the two of those together, or can you not, allen? >> it's a fine balance. they're going to have to work on an exit strategy. they can't continue this. the cash for clunkers was a gimmick, but it worked. it was a good time. it did work at the right time. >> it worked.. maybe nobody's going to buy a car for three years. >> that's just it. the old soviet union, they were always propping up their companies. they were all too big to fail. >> the problem is this. >> you're bullish in the environment. how do you stay bullish when those are your concerns? >> because we trade.. we're traders. we have to trade the market in front of us, not the market we wish we had pip still think the trend is higher from here until it's not the trend. >> there's an economic recovery. there's a financial recovery. there's an economic recovery. there's a zero interest rate. there's a lot of positives here. let me ask you this, steve grasso. what about the october 31st -- excuse me. october 15th deadline for fdic debt guarantees?

should that debt line be paid? debt guarantees. that was one of the biggest and most efficient bailout mechanisms. >> here's the thing. you're asking an equity guy a debt question on the fdic. that's a little far off on my horizon. i'd leave that to rick santelli. we'll leave the boat in his harbor. >> this market now, you think it's still poised for growth?h? >> it's still poised for growth. >> i think till the end of the year, at least, this market is poised for growth. 2010, we've g 2010. no one's talking about the housing market. >> this market has done nothing but tick up from there. >> we'll leave it there. thank you so much. we want to await now the president's speech on wall street. much more coverage ahead live from wall street. >> thanks so much for joining us. stay tuned for that speech coming up next. i'm trish regan. >> plus, full analysis on regulating wall street all coming up with bill griffith,

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