folks, welcome back to the "closing bell." i'm matt nesto on the floor of the new york stock exchange. counting down here, unbelievable, eight of nine-day rally. the s&p having its biggest single day advance we've seen in four weeks. really being led higher by the financials. the commodities. the energy stocks. also seeing strength in discretionary as well as the materials stock. a little bit of weakness in health care today. the hmos are having a good day. back them out of health care this week, telecom continues to

be weak. and investors fearlessly driving the vix down to its low of the year and trying to buy up risk and performance. the "closing bell" continues now with melissa francis. it is 4:00 p.m. on wall street. do you know where your money is? welcome to the "closing bell." here's what we're following at the close. stocks make it three straight gains setting fresh highs for 2009 on optimism over economic growth. financials once again lead the way, setting the tone. a strong reading in industrial production. the second straight monthly rise. cash for clunkers, fueling the gains there. and keeping the momentum going, home builders are slightly more confident about the economy. a signal we may be seeing light at the end of the tunnel. take a look at how we finish the day on wall street. definitely a day for the bulls.

up triple digits, 108 on the dow. about 1.1%. the nasdaq charging up higher as well, up 30 points. the s&p, best day in four weeks. it's up above the technical level, 10,67, 1,053, whatever you want to call it. bob pa sanny has our eye on the floor. a day for the bulls. >> we move -- this happened three days in a row, melissa. let's take a look at the key highlights. they tried to sell them off at the open. and three days in a row, there's not enough selling pressure in the market. it's that simple. up throughout most of the day. most new highs since october 2007, that was the highs in the stock market, remember that? we're not near new highs, but we have the most new high, 52-week high, because of the terrible september and ost we had last year. take a look at stocks moving here. ibm, i call it the most important stock of the day. $120 early in the morning, and boom, volume picked up, and all

the stocks picked up. general electric, you know the story with our parent company. they have an analysts' meeting tomorrow. on monday the stock hit $15. ibm, once it hit that critical level, boom, volume picked up and hasn't looked back since then. it scattered across the board here. not like this big sectoral breakout. techs doing well. gold high for a while. gap's been doing great recently. emc following big breakouts in tech stocks like google and apple. take a look at the regional banks here. regions financials, reached a peak in the second quarter. regions bank has been strong since they made those comments. citigroup here, the ceo did come out and say that they expected to vest in smith barney. citi did drift a little lower toward the close. finally, some of the irish banks here. the irish government is proposing a good bank/bad bank

idea here. that the big irish banks like allied irish would be contributing toward a fund towards that bad bank aspect of it. those stocks moved up here in the middle of the day. in fact all the irish banks moved up. >> oracle's first quarter earnings are out. let's go to jim goldman to break it all down for us. jim? >> you know, you're looking at an interesting report here from the world's second largest softwaremaker. oracle, eps, 30 cents right in line with consensus of 30 cents. we're seeing oracle shares decline, actually accelerate the declines the company saw earlier in the trading day. that's probably because of the revenue. the top line number here. lighter than expected. $5.1 billion against the $5.3 billion that wall street was anticipating. the reason that's significant here is a lot of analysts on wall street were hoping to see some kind of strength as far as enterprise spending was concerned and we would get that from oracle which has become a real bellwether when it comes to this kind of thing.

if you look at other metrics that you want to take into account here, the company's operating margins are beginning to accelerate and nicely. it was 46% for the company's first quarter. that's up 570 basis points. that might be a little better than some on the street had anticipated. it's going to come down to guidance and what oracle is seeing on a macrobasis as far as the company's business for the back half of 2009 is concerned. all in all, that top line is going to be a disappointment, and we're going to see oracle build on the losses that the company suffered during today's trading. >> jim goldman, thanks so much. for more on the results, bring in dan morgan, a portfolio manager at sinova securities. dan, what do you make of the numbers? >> hi, melissa. well, you know, as jim was saying, obviously the eps number pretty much in line. i'm a little bit surprised in that. i was hopeful that they would actually beat the consensus and coming in light at $5.1 billion. as jim was saying, we'll have to see what the call is in terms of

the guidance going forward. we had adobe last night come in with numbers, revenues up about 16%. they did about $400 million only the quarter. i was kind of hoping we might get a little bit of, you know, a little bit better than expected, actually maybe not have a negative number in terms of growth versus year over year in revenue. surprising we came up short on the top line. >> the stock was already a little bit beaten down before the number came out, and now down about 5% in after-hours. what would you do with the stock right now? >> well, we currently have a stock on our buy list. it is a stock that we're involved with right now. the stocks trading a little bit below the historical average in terms of pe ratio. historically trades about 18 times earnings, now about 16 times earnings. from a valuation perspective, it's somewhat attractive. >> but would you add to your position here as somebody who has a bunch of it? >> like i said, it is on our buy list. it is a stock we're actively involved with. whether your viewers should buy it or not is up to them in terms

of their risk tolerance and overall object i was. it is a stock we're currently involved with in terms of buying the stock. even though this report is a little bit below expectations, i think, you know, oracle going forward in terms of fundamentals is still pretty positive. >> what would be your first question on the call? >> i think the big thing we don't know, maybe you have the numbers is, i really want to know what the data was in terms of new licensing growth. we're looking for $1.11 billion in terms of revenues, in terms of the amount of new software they're selling. i think that's a key right now. we've got to know, have we come out of the bottom of the valley, and are we starting to see companies spending money in terms of adding software, not just using support, maintenance, revenue, which we know oracle gets about 75% of their total sales from. are they buying new software. i think that's the key number, that we'll get more information as we go forward in terms of revealing the report. >> the licensing number is a key thing. thanks so much, dan. appreciate it. >> okay. thank you, melissa.

consumer price index increased by a larger than expected 0.4% last month. gasoline prices soared. the cpi rose by just 0.1%. industrial production jumped by 0.8% thanks in large part to auto manufacturing tied to the cash for clunkers program. that helped the utilization rate rise to 69.6%. defense secretary robert gates returning the air force's authority to pick the winner of a $35 billion refueling tanker contract. they stripped the air force of that authority last year from boeing and nor through grumman and expressed the importance of getting it right this time. >> we are committed to the integrity of the selection process, and cannot afford the kind of letdown, parochial squabbles and corporate food

fights that have bedeviled this effort over the last number of years. >> the current tankers, some of which are 50 years old, need to be replaced soon. let's break down the trading action. david kelly, chief market strategist with jpmorgan fund. and the group chairman and cio. thank you both for joining us. let me start with you, susan. what do you think of today's action and how about all the people that say september was going to be a tough month? we're obviously not out of the woods. we've got a half a month to go. what do you think of that sentiment now? >> i think the people who bet that way are sorry they did. a lot of the action you're seeing are in the most controversial stocks, melting up. i assume there are a number of bets placed against them, and that that is going against a number of people now. i think it is pretty impressive. but i think a lot of it's because people don't really know how to put a valuation on a number of industries,

particularly in the financials. because what is bad to come, we don't really know yet. we know that this is a very profitable time. because of a positive yield curve. we really don't know what is going to be written off against those earnings over the next two to three years. there's no information, so you can kind of make up your own stuff right now. >> david, do you believe in this reluctant bull rally, someone called it earlier today? >> sure. i think what's happening is it's really about the economy. people are reluctant to believe the economy is recovering. but what we're actually seeing is, the opposite of inflation. we're seeing a disinflationary surge in economic growth. good cpi numbers, but a strong number on industrial productions. >> susan, what do you think about the monster rally in goldman? it's kind of telling a different story than we're seeing in treasuries. >> i'm sorry, go ahead, susan. >> go ahead, susan. >> i think the gold is the other side of the treasury. so really, probably the other

side of our currency. and the way our currency gets expressed, obviously, is through treasury oftentimes. i think because our currency is a fiat currency, that people are using gold to hedge what they believe may be potential problems in terms of deficit financing down the road. >> but david, if you look at treasuries, the appetite for them out there is pretty strong, if you look at households and central banks and foreign investors, they're holding about twice as much as they did a year ago. it doesn't seem like they're shying away from treasuries. >> we don't have one aggregate investor here. what's going on with oil and gold, you can't be diversified enough, so people are putting into -- money into gold and into oil. but there is a contradiction between these very low treasury rates, where they say everything is fine on the dollar. and on federal financing. and i think the treasury market in the end is getting this

wrong. i think treasury rates will move higher. >> susan, would you jump on this rally at this point? would you put fresh money to work? >> we put it to work. we have a number of mutual funds when the money comes in, we know the people expect us to put it to work. i do think there is a divergence between the v-shaped recovery we're seeing in the financial markets and the kind of recovery we're seeing in the gdp markets. i think that's going to be a little bit slower than what we've seen in the credit markets. and there could be some bumps along the way, as we move out. i think the economy's going to take a little bit longer than, let's say, the spread we saw collapse in high yields. >> david, that's a story that people have been saying for a while, that they said stocks don't match what we're seeing in the economy. so far, it hasn't really mattered, stocks have continued to go up. what do you do? >> of course. because the stock market is a leading economic indicator. it moves before the economy itself. if you think about the stock market rally, we lost 900 points on the s&p 500 between october

of 2007 and the low this march. we've got 400 of those 900 back. we still have 500 to go. i think the market still has to go a long way up to match an improving economy. >> we've got to go, guys. thanks to both of you for joining us. we appreciate your insight. >> sure. a new health care reform plan sees the light of day. we'll look at what it means for the president's bill. and a year after lehman's collapse, many questions still remain about the health of the financials, and the overall economy. ba ri a bartiromo sat down with two of the bigger names in the financial world. we'll hear from bob diamond, up next, blackrock chairman larry fink talks about what kind of recovery re might see. >> people ask me, the severe economy, the new economy. i like to call it the, essentially the swish economy.

a power player in restoring liquidity to wall street. larry fink was the government's go-to guy to help put a price tag on troubled assets at fannie mae, freddie mac and aig.

his firm was willing to take the risk. backing a $1 trillion fed program to acquire residential mortgage-backed securities. fink also counseled then treasury secretary henry paulson on the original rollout of the t.a.r.p. plan. he was convinced that using t.a.r.p. funds to acquire toxic assets from the banks was the right move. if paulson opted to acquire equity stakes, which fink says was a major mistake. as a stock market has rebounded in 2009, economic recovery has been slow to follow. blackrock chairman ceo larry fink shared his opportunity and what it will take for a broader recovery to truly gain traction. based on the economic backdrop, is the market and money on the sidelines moving into the market expecting too much? >> see, i don't think so. i think there's just so much money sitting earning zero or

close to zero with the two-year note, trading below 1%, so there's huge pools of money earning very little return. the federal reserve has been very adept at keeping it very short and very low. as i said, in the short end zero. the curve is very steep. you're being paid now to take on more risk in the form of equities, and in the form of credit. i think for us to say we could go up another 20%, that's -- that should be in doubt. but where we are today is we're probably in a good setting to re-look at where we are and where we're going. i believe the equity market can go a little higher, because there's so much money sitting in liquidity. i don't believe the federal reserve is going to raise interest rates anytime soon. and so i think the environment to invest out the curve, to put

some money to work in equities is probably a responsible thing to do. >> how are you investing right now? >> we are constructive in equities. we've taken a view that equities can earn a risk return that is appropriate for the asset class. we believe there are still opportunities in credit. but i believe, for the markets to do substantially better, we're going to have to see validation in the economic news and we're going to see validation in the economy. and i don't think we're going to see that much validation in the near term. we are still going to be in an environment where employment is going to struggle. we believe unemployment will be over 10%. we believe the next wave of

employment problems are going to be in local governments, state and local governments are going to have severe shortfalls in their revenues. they're going to have to manage their balance sheets and budgets. they're probably going to have to downsize their employment. and so we're going to have strains that will persist in our economy for the next year. i think companies are starting to see reasons to hire again. i think there's a reluctance. i think ceos are reluctant today to add too much unemployment, because the uncertainty of where we are today. i think there's -- i think our memories are still pretty vivid how bad it was just five months ago. and then i do believe there is great uncertainty with the -- with ceos and management teams in terms of how will our economy look in terms of our government

in terms of taxation. there is talk about raising income tax. there's talk about cap and trade. there's still an unsernlt how the health care bill will end up. is it more expense onto the corporation. so i think there's just enough uncertainty that we're not seeing the increase in employment that i think some people would have expected. so i think we're going -- we're going to have a period of stability, but it's going to be a long process. you know, people ask me, is it a v economy, a u economy, i essentially like to call it the swish economy. like the nike swish, it's just going to go up very modestly over the next few years. and it's going to be better, but it's not going to be what we expect after a very severe recession. >> the swish is a new one, actually. >> the swish. >> rovini said it could be

double-dip because of worries about the exit strategy from the federal reserve, and what happens with inflation, or commercial real estate is another issue on the horizon. where are you on those issues? >> i agree that we can't have an inflation threat. the inflation threat, though, i don't believe is going to be anytime soon. as i said earlier, i think the federal reserve is going to keep interest rates lower for a longer period of time. there's so much excess capacity globally, that i don't believe t the -- that we're going to have really any inflationary threats. we have -- and so we -- the double-dip, in my opinion, is not through inflation. i don't see that at all. i think inflation could be a problem out two or three years. but i'm not terribly worried about that at the moment. in terms of commercial real

estate, this is a problem that we all know. this is a problem we're all facing. bubbles that blow up generally happen because people are not paying attention to the problem. there's no one who is not paying attention to this problem of real estate. it is on the minds of everybody. so i don't think commercial real estate will be the cause for another dip in the economy. it is a severe problem. we have huge refinancing risks in the commercial real estate area. but it's a known problem. >> what are your recommendations for the federal reserve to start unwinding some of the programs that are in place as far as stimulus is concerned? a big concern is the exit strategy. how should the fed do it? do you worry the fed will have to start tightening, raising interest rates at the time unemployment remains at 10%? >> i don't think they will raise interest rates anytime soon.

as i said, i'm not terribly worried about the exit strategy at the moment. i believe it is a real issue. chairman bernanke has spoken about it. once again, this is an issue that i think our federal reserve will have time to manage it and to navigate this issue. there's no question the balance sheet of the federal reserve has risen in the trillions. it went from a balance sheet of approximately $800 billion to something that -- some estimates are $4 trillion. this will have to be resolved. they'll have to manage it down. they can manage it down by doing repo, as chairman bernanke suggested, which would raise short-term rates. which was not a recommended path at the moment, but they could do that if they really see the economy start improving. the another way to do it if there is a stability in residential real estate, because a good part of the balance sheet is in that asset class, they

could begin selling that. there are many ways they could mitigate some of those inflationary risks because of the balance sheet issue. but once again, this is a known issue. i'm not frightened of known issues that we can look out on the horizon. we have time to manage it. >> what do you worry about? >> i worry about the dollar. i worry about that we don't pay enough attention about how we are positioned as a country worldwide. i worry about our competitiveness as a nation. i believe other countries are doing some very interesting things about stimulating businesses. what brazil is doing now in terms of lowering taxes for companies, and building long-term infrastructure projects. you see what's going on in the stimulus package in china. almost the entire $700 billion stimulus package was toward infrastructure.

and so i see other countries spending more time working with business in building a better and brighter future. i see other countries building infrastructures, and preparing for the future in a much more dynamic way. i think we are spending too much time worrying about the next election. we're worrying about the next quarter. we are still way too focused as a nation politically and maybe even in business on the next quarter. and i do believe we need to start focusing on long-term planning. >> the obama administration's efforts to reform the financial system and the industry, is it stuck in a rut? what's going on? >> we are a large believer that we need international central regulator. we need to have our regulators work together globally. our capital markets are globally.

you know, we're a big believer that we need to have a better system, a more -- a system that has more symmetry worldwide. we also believe there needs to be a lot more transparency. we need to have much more of our markets trading on exchanges. especially the derivative market. to me, this is critical. one of the big problems we have faced is people are worried about the derivative market and its size and the impact on the overall economy. and i would like to see more -- a greater and faster movement toward putting more of the derivative market on exchanges that -- so we can have more transparency, and we could have margin requirements on these derivative contracts. so we are much more protected as a system. i believe even as a large money market participant, the money market funds need to have higher

level of oversight, and we believe organizations like hedge funds and private equity firms that are private probably need to have more regulatory oversight, too. so we believe we need much more -- we need a much more contained system. we should never allow our self to be in the same situation we were a year ago today. and if we don't make these regulatory changes for greater transparency, more oversight, more consistency worldwide, we'll be put in a position to have the same problem again. >> what about the ppip plan? >> hopefully the next few weeks this will be announced. we're very excited about it. we're seeing very large interest from investors from the retail side and from the institutional side. >> in terms of buying those assets? >> yes. >> did barclays global investor deal? what do you need to do in the coming weeks and months? >> we expect them to close

around december 1st. that is going great. we are announcing our new leadership team. we're very proud of the success we've had already in organizing our new platform. i'm also very conservative in my views in how well this will work out. but i could say at this moment in time that we're getting more optimistic about the opportunities we have. our clients worldwide have resoundingly said this is great for them. we have won some very large assignments together already. we'll be a very unique platform with close to $3 trillion in assets. we're going to have at least a good majority of our assets in retail. other assets in institutional. about 35% of our clients are global. the rest are here in the united

states. we have a leading product in ishares. and i believe the markets are going to grow dramatically. we believe etfs provides more transparency, lower fees, and are very tax advantage for the individual investor. >> that was blackrock chairman and ceo laurence fink. one bank's downfall, another's opportunity. the collapse of lehman sent shock waves throughout the financial system. the remaining pieces became a valuable edition to barclays national. bob diamond just ahead. thanks, maria. shares of amazon on fire today. we'll tell you what's behind the sharp move, and why one analyst thinks there are still loftier levels ahead for the retailer. look at the stock coming up next. we'll be right back.

here are some of the other stories we're following on the "closing bell" ticker. andrew cuomo upping his investigation into merrill lynch. cuomo has issued subpoenas to at least five bank of america board members requiring them to testify about their knowledge of

mounting losses and bonus payments of merrill lynch prior to the acquisition. bank of america would not comment on the story. bank of america shares up more than 2.5%. amazon.com upgraded to buy from neutral by boosting to $103 from $95. because of the sustainable competitive advantage in e-commerce. including customer loyalty and distribution infrastructure. amazon shares charging higher up on the day, up better than 8%. continental airlines with a $20 price tar guess but argus. what appears to be a bottoming in consumer demand. kond nen tal shares trading higher on the day by almost 2%. bud is back. anheuser-busch inbev trading under the ticker bud. it was acquired last year, and stopped trading in the u.s. but the ceo says growing interest

from american investors prompted the return to the nyse. taking a look at the stock on the day. well, we don't have that one. you have to take our word for it. senator max baucus puts his health care reform bill on the table. that's coming up next.

welcome back to the "closing bell." another big day for the bulls. the dow charging up by 108 points. the s&p closing the day at 1068. we had a key technical there. it closed above that, the nasdaq having a good day as well. gold closing up at 119. the white house is calling a health care reform bill an important building block in the process. chief washington correspondent john harwood joins us from the white house with more. >> reporter: the important thing today was less the details than the fact that max baucus has finally laid out a bill after months of negotiation. he spent most of his time talking to republicans, trying to come up with a deal. he says he thinks he's come up

with a reasonable compromise. i guess we do not have that sound from max baucus. but what his plan would do, it would cost $850 billion over ten years. it would require every american to purchase health insurance. it would include fees on companies that do not provide health coverage to their workers, to cover the subsidies that their workers would get. it includes levies on insurance companies for medical plans, medical device manufacturers. some liberal democrats saying this is just a first draft here. this is a beginning part of the process. that's okay with the white house. because they believe that this is what's going to get the process started. and most importantly, the congressional budget office has blessed this plan, saying it would save $49 billion over ten years. any long-term estimates like

that are very imprecise, and you can't be too literal minded about them. but the key point is, they at least embrace the idea that this would not escalate costs in the long run, melissa. >> john harwood, let me ask you one question before you go. what do you think is the chance now that we've heard this plan, that we're going to see some sort of coming together on a plan? >> reporter: well, i think we will see a coming together. but i think it's likely to be within the democratic party and perhaps with the addition of one or two republican senators. you are not going to see a big bipartisan accommodation. max baucus took his best shot. he couldn't good there. chuck grassley, his partner on the finance committee, the republican ranking member on this committee, said he can't support this plan. >> democrats as well. john harwood, thanks for joining us. maria bartiromo sits down with barclays' president mr. diamond. >> the question is, how

sustainable will it be.

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a $1 billion fire sale of lehman's banking business would give barclays the edge. bob diamond seized the banking business after it collapsed.

making barclays a formidable competitor on the world stage. the firm has a strong foot for global deals, transactions worth $130 billion this year. diamond looks to capture more market share across an industry shaken to its core. over the last year, britain's barclays capital has integrated the pieces of lehman brothers it acquired. it was a prime opportunity for barclays, then its president to expand and grow internationally. i sat down with bob diamond to gauge his thoughts on where we are one year later. >> i think surprisingly the recovery began in china. earlier in the year. you and i talked about that. and that really lifted many of the stronger asian economies. but we've seen an economic rebound in france and germany and some of core europe before most people expected. it began in may and june. and i think when we get the

figures for the third quarter in the u.s. economy, we'll see that the u.s. economy began growing again sometime around june or july. so still big challenges ahead in the financial markets, around what will happen specifically with regulation. big challenges ahead in terms of the economy. but one year on, certainly confidence and stability have returned. >> give me a sense of where the weak spots still are, and where you think we have turned a corner? >> well, we have felt for a while, and larry kantor and his team have done a terrific job since march, in signaling that we had seen the worst. and again, starting with asia, moving into continental europe, and now seeing a recovery of growth in the u.s. and there's a lot of really positive signs. i think the challenges are on the global economy, and the challenges around the u.s. economy have moved from the day-to-day crisis to much longer term issues. and i think in terms of the u.s., it's around the deficit.

it's around spending. it's around the stimulus. it's around the competitive position of the u.s. economy versus europe and more importantly versus some of the more important economies in asia. and i think in terms of the global economy, it's similar. but it's really around sustainability. we feel confident that the worst is behind us. but we feel confident that growth has truly come back in the global economy. the question is, how sustainable will it be. >> there must be people on this trading floor right now and throughout the firm that are feeling quite emotional about this time of the year, given it is one year ago that the firm declared -- >> i think it's positives and negatives, maria. i think 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 and turn on the tv and people are talking about the one-year anniversary in a negative context, in that it was the

lehman bankruptcy that triggered the most serious of the financial market and economic consequences. on the other hand, this is a very, very motivated group. if you can get away from the emotion of that, and i remember when bart mcdade and i came onto this floor to announce the combination of lehman's u.s. businesses with barclays capital, i was very clear, that if we could put the emotion behind us, this is a good deal for lehman. lehman needed to do a deal. >> you also had an emotional sale when you did the deal with blackrock. but that was also an opportunity in terms of raising capital. but that must have been tough for you to do as well. >> it was very difficult. but strategically, it was very sound. and once we acquired the lehman brothers business into barclays capital, we now had one of the strongest equity distribution houses in the u.s. with bgi, we owned the largest manager of institutional

equities in the u.s. and in the world. in the u.s. because of the eris laws and afforda laws, they were prevented from doing business. so nor barclays capital and bgi were prevented from doing business. we thought with larry fink, someone i've known for a while, he discussed possibilities of combinations with over the years, if we could get our ownership of the combined group down below 20%, we could begin to resolve all of the issues around erisa and fordi act and it could flourish. so the opportunity to take a significant position in the combined business, below the regulatory threshold, to resolve some of the counterparty issues was strategically very sound. and we're very happy. >> so one year after that weekend, tell me how the landscape changes. i mean, clearly you saw a tremendous opportunity, and have

truly strengthened this firm. i mean, it's obvious. but what about the rest of wall street? give me your picture of what mohammed elaan calls the new normal? >> there's been significant consolidation in the industry. if you look at the u.s. participants, bear stearns is no longer a stand-alone operation, lehman brothers is no longer a stand-alone operation, merrill and b of a have combined, wachovia is no longer a factor in the business. you have a number of bigger universal banks in the u.s. that have government money who are retrenching from some of the global positions. equally in europe, we've had a number of competitors pull back. we've had a number of competitors become more focused on european or domestic european businesses versus global businesses. the result is that the top five

firms in global investment banking today, in fixed-income currencies and commodities, are getting over 50% of the client business. so we've seen a significant consolidation. >> what about the role of regulators? bigger government? tell me how they've done and how you think the regulatory environment will change for your business and your colleagues in the business? >> i think the key for banks, for regulators, for everyone, is to learn from the mistakes that have been made. and we're very support of the recommendation that the fed becomes the lead regulator of financial institutions in the u.s. we think that clears up a lot of confusion, and absolutely the right regulator. we're very supportive of more global integration amongst the regulators. we recognize the need for change around capital levels, leverage ratios, liquidity ratios. and, you know, banks like

barclays capital are not waiting for all of that to be very, very clear. we're already beginning to move in that direction. we've boosted our equity ratios. we're working with bigger liquidity buffers. and that will be the new world that we operate in. more equity, less leverage, larger pools of liquidity. >> so with your new bigger operation, what's your biggest opportunity? is it america? is it asia? is it around the world somewhere else? where do you think the biggest opportunity lies right now for barcla barclays? >> if we step back and say what are the key priorities, the key priorities are around clients and relationships. and i think more than ever in the time i've been in the business strategic relationships, both from the point of view of corporate being closer and more strategic with the financial institutions and us being closer and more strategic with our corporate counterparties, that's the single biggest thing that is changing. i think also the role of risk

management. you know, the equity markets are looking at corporates. not just in terms of their business opportunities but also how they're managing their risks. it so if you're an airline, what have you done about your exposure to oil? if you're the government of mexico as we've read in the last couple days, have you hedged yourself against higher oil prices? if you're an auto manufacturer in germany, what is the lower dollar doing to your sales and to the u.s.? so the role of the investment bank of working with our corporate clients and our government clients around managing the risks of duration, of interest rates, equity prices, steel prices and other commodity prices, that's the new normal. >> it sounds like an enormous opportunity. final question here, bob. you know, a lot of debate still about where we are in this recovery. do you worry about commercial real estate having a problem? 2010? >> you know, it's very hard to catch a knife that's dropping. and i think we've seen such a

dramatic decline in the value of commercial real estate already in 2009. is it at a bottom, or -- it's certainly much closer to a bottom today than i think it was at the beginning of the year. clearly. so where does it -- where does the bottom in that market come? is it in the fourth quarter of this year? early next year? hard to tell. >> my thanks to barclays capital president bob diamond. >> all right. the markets will likely focus on housing tomorrow. we'll tell you what else might drive things at the opening bell when we come back.

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here's what to watch for tomorrow. >> i'm diana olick in washington. home builder sentiment picked up in september, but will sentiment translate into real housing starts? we've got the report tomorrow at 8:30. >> rick santelli on the floor of the cme group. tune in tomorrow at 8:30 eastern. hey, 550,000 on initial last week, basically lowest read of the month. are benefits running out? continuing claims last week over 6 million. lowest level since april. is that also giving us an accurate read? tune