while all of america's been gripped by the current economic crisis, folks in troy and upstate new york have been dealing with what amounts to almost a permanent recession for years. and economic downturn that's driven more and more young people from their hometowns. i also know that while a lot of people have come here promising better news, that news has been hard to come by. despite the determined efforts of leaders who are here today and many who are not, and part of the reason is that while people in this city work hard to meet their responsibilities, i have to confess that some in washington haven't always lived up to theirs. for too long as old divisions and special interests reigned, washington has shown neither the inclination or ability to tackle our toughest challenges. meanwhile businesses were saddled with ever rising health care costs, the economy weakened

be ever growing dependence on foreign oil, investment in cutting edge research declined, schools fell further short, growth focused on short-term gains and fueled by debt and reckless risk which led to a cycle of precipitous booms and painful busts. and, meanwhile, too many in washington stood by and let it happen. now, after so many years of failing to act, there are those who now suggest that there's really not much the government can or should do to make a difference. that what we've seen in places like troy is inevitable. that somehow the parts of our country that helped us lead in the last century don't have what it takes to help us lead in this one. and i'm here to tell you that that is just flat out wrong. what we have here in this community is talented people, entrepreneurs, world-class learning institutions. [ applause ]

the ingredients are right here for growth and success and a better future. these young people are testimony to it. you are proving that right here in the hudson valley. students here are training full time while working part time at ge energy in ske nektty. becoming a new generation of american leaders in a new generation of american manufacturing. ibm's partnered with the university at albany. their partnership in nano technology is helping students train in industries in which america has the potential to lead. partnering not only with this institution but with businesses throughout the tech valley. and early next year, hudson valley community college state of the art tech smart training facility is set to open side by side with global foundries coming state of the art

semiconductor plants. [ applause ] so we know that upstate new york can succeed. just like we know that there are pockets in the midwest that used to be hubs of manufacturing, they're now retooling. they're reinventing themselves. we know that can happen. we know in a global economy where there's no room for error and there's certainly no room for wasted potential, america needs you to succeed. so as we emerge from this current economic crisis, our great challenge will be to ensure that we don't just drift into the future, accepting less for our children, accepting less for america. we have to choose instead what past generations have done. to shape a brighter future through hard work and innovation. that's how we'll not only

recover, but that's how we'll also build stronger than before. strong enough to compete in the global economy. strong enough to avoid the cycles of boom and bust that have wreaked so much havoc. strong enough to create and support the jobs of the future in the industries of the future. so today my administration is releasing our strategy to foster new jobs, new businesses, and new industries by laying the ground work and the ground rules to best tap our innovative potential. this work began with the recovery plan that we passed several months ago. which devoted well over $100 billion to innovation from high-tech classrooms to health information technology. from more efficient homes to more fuel-efficient car. from building a smart electricity grid to laying down high-speed rail. but our efforts don't end there. for this tragedy is about far more than just recovery. it's about sustained growth and

widely shared prosperity. and it's rooted in a simple idea. that if government does its modest part, there's no stopping the most powerful and generative economic force that the world has ever known, and that is the american people. our strategy began where innovation so often does. in the classroom. and in the laboratory. and in the networks that connect them to the broader economy. these are the building blocks of innovation. education, infrastructure, research. we know that the nations that outeducate us today will outcompete us tomorrow. the ability of new industries to thrive depends on workers with the knowledge and know how to contribute in those fields. unfortunately today our primary and secondary schools continue to trail many of our competitors, especially in the key areas of math and science. hundreds of thousands of high school graduates who are prepared for college don't go to four-year or two-year schools

because it's just too expensive. they run out of money. and roughly 40% of students who start college don't complete college. so all along that education pipeline, too many people, too many of our young, talented people are slipping through the cracks. it's not only heartbreaking for those students, it's a loss for our economy and our country. i know that for a long time politicians have spoken of training -- of job training as a silver bullet. of college as a cure-all. it's not. i don't want to pretend that it is. we know that. but we also know that in the coming years, jobs requiring at least an associate's degree are projected to grow twice as fast as jobs requiring no college experience. think about that. twice as fast. we will not fill those jobs or keep those jobs here in america without graduating more students. including millions more students

from community colleges. that's why i've asked dr. biden to travel the country promoting the opportunities that community colleges offer. that's why i'm grateful that senator chuck schumer who couldn't be here today has shown tremendous leadership on this issue. that's why i set this ambitious goal. by 2020 america will once again have the highest proportion of college graduates in the world. we used to be number one. we should be number one again. [ applause ] now, to achieve this goal we're going to need motivated students, motivated families, motivated communities, local leaders who are doing their part, state leaders who are doing their part. but the federal government has its part to do as well. to reach this goal we've increased pell grants and created a simplified $2,100 tax

credit for college tuition. we've made student aid applications less complicated and ensured that that aid is not based on the income of a job that you've lost. i hear too much from folks who say i can't get any student aid because they're still looking at my incomes t taxes when i had ab as opposed to my situation right now. we've passed a new gi bill of rights to help solders coming home from iraq and afghanistan begin a new life in a new economy. [ applause ] and the recovery plan has helped close state budget short falls. i think the governor will testify. because those shortfalls put enormous pressure on public universities and community colleges. also we've made historic investments in elementary and secondary schools. so we're helping states get through some very tough times

without having to drastically cut back on the critical education infrastructure that's going to be so important. now, finally, through the american graduation initiative that i proposed, we're going to reform and strengthen community colleges to help an additional 5 million americans earn degrees and certificates in the next decade. because -- [ applause ] because a new generation of innovations depends on a new generation of innovators. and just last week the house of representatives passed a bill that will go a long way to reform the student loan system so that college is more affordable for more people. right now the federal government provides a subsidy to banks to get them to lend money to students. the thing is, the federal government also guarantees the loans in case the students don't

repay. so we're subsidizing banks to take on the risk of giving loans to students, even though t taxpayers are absorbing the risk anyway. that doesn't make much sense. it costs us more than $80 billion. if we just cut out the middleman, the banks, and lend directly to the students, the federal government would save that money and we could use it for what's actually important. helping students afford and succeed in college. that's why -- that's what the bill -- [ applause ] i want to emphasize this. just because every once in a while, you know, you may not know what your members of congress are doing for you. these three guys right here are standing up for young people. we need senators to do the same. [ applause ] the bill that they voted on, the

bill that i proposed, here's what it does. it takes the $80 billion that banks currently get and uses it to make pell grants larger. uses those funds to focus on know vative efforts to help not only students go to college but to graduate. just as important, these savings will allow us to make the largest investment ever in the most underappreciated asset in our education system, and that is community colleges like hudson valley which is so essential to the future of our young people. [ applause ] so we hope to improve on this bill in the senate and go even further on behalf of the students. ending this unwarranted subsidy for the big banks is a no brainer for folks everywhere, except some folks in washington. in fact, they're already -- we're already seeing special interests rallying to save this giveaway. the large banks, many who have benefited from taxpayer bailouts during the financial crisis, are

bob l lobbying to keep this easy money flowing. that's exactly the kind of special interest effort that has succeeded before. we can't allow it to succeed this time. this is exactly the kind of waste that leaves people wary of government, leaves our company straddled with trillions of dollars of deficits and debt with little to show for it. that's why i went to washington, to change that kind of stuff. and i look forward to winning this fight in the senate, just as you won it in the house, and signing this bill into law. [ applause ] now, another key to strengthening education, entrepreneurship and innovation in communities like troy is to harness the full power of the internet. that means faster and more widely available broad band as well as rules to ensure that we preserve the fairness and openness that led to the flourishing of the internet in the first place. so today fcc chairman is

announcing a set of principles to preserve and open internet in which all americans can participate and benefit. i'm pleased that he's taking that step. that's an important -- that's an important role. that we can play. laying the ground rules to spur innovation. that's the role of government. to provide investment that spurs innovation and also to set up common sense ground rules to ensure that there's a level playing field for all comers who seek to contribute their innovations. and we have to think about the networks we need today, but also the networks we need tomorrow. that's why i've proposed grants through the national science foundation and through the defense advanced research projects agency, or darpa, which helped develop the internet, to explore the next communication breakthroughs, whatever they may be. that's why i've appointed the first ever chief technology officer charged with looking at ways technology can spur

innovations that help government do a better and more efficient job. we also have to strengthen our commitment to research. including basic research. which has been badly neglected for decades. [ applause ] that's always been one of the secrets of american success. putting more and more money into research to create the next great inventions. the great -- great technologies. that will then spur further economic growth. the fact is, though, basic research doesn't always pay off immediately. it may not pay off for years. when it does, the rewards are often broadly shared. enjoyed by those who bore its costs, but also by those who didn't pay a dime for that basic research. that's why the private sector generally underinvests in basic science. that's why the public sector

must invest instead. while the risks may be large, so are the rewards for our economy and our society. understand, it was basic research in the photo electric effect that would one day lead to solar panels. it was basic research in physics that would eventually produce the c.a.t. scans. the calculations of today's gps satellites, they're based on basic research. equations einstein put on paper more than a century ago. nobody knew they would lead to gps. but they understand that as we advance our knowledge, that is what is going to help advance our societies. when we fail to invest in research, we fail to invest in the future. yet since the peak of the space race in the 1960s, our national commitment to research and development has steadily fallen as a share of our national income. that's why i set a goal. of putting a full 3% of our gross domestic product, our

national income, into research and development. surpassing the commitment we made when president kennedy challenged this nation to send a man to the moon. [ applause ] toward this goal, the recovery act has helped achieve the largest increase in basic research in history. this month the national institutes of health will award more than $1 billion in research grants through the recovery act focused on what we can learn from the mapping of the human genome in order to treat diseases that affect millions of americans from cancer to heart disease p disease. i also want to urge congress to fully fund darpa. since its creation it has been the source of cutting edge breakthroughs, from that early internet to stealth technology. so as we invest in the building blocks of innovation, from the

classroom to the laboratory, it's also essential that we have competitive and vibrant markets that promote innovation as well. education and research help foster new ideas. but it takes fair and free markets to turn those ideas into industries. my budget finally makes the research and experimentation tax credit permanent. this is a tax credit that helps companies afford the often high costs of developing new ideas, new technologies, new products. which means new jobs. and this tax incentive returns $2 to the economy for every $1 we spend. time and again, i've heard from leaders, from silicon valley to the tech valley, about how important it is. i've also proposed reducing to zero the capital gains tax for investments in small or start-up businesses. because small businesses are innovative businesses, they produce 13 times more patents per employee than large companies do.

[ applause ] now, these tax incentives will sp entrepreneurship. there are other important steps to value risk takers and idea makers. that's why it's essential that we enforce trade laws and work with our trading partners to open up markets abroad. and we reform and strengthen our intellectual property system. that we sustain our advantage as a place that draws and welcomes the brightest minds from all over the world. and that we unlock sources of credit and capital which have been in short supply as a result of the financial crisis. there are some other fundamental barriers to innovation and economic growth that we're going to have to tackle in order to ensure american leadership and prosperity continues into the 21st century. for, as a nation, we face enormous challenges from ending

our dependence on foreign oil i all americans with quality, afortable health care. we've got to attack these challenges to create a climate for innovation. and innovation can then be an important part of how we meet these challenges. so let me give you an example. health care costs. they leave our small businesses at a disadvantage when competing with your large businesses. and they leave our large businesses at a disadvantage when competing around the world. we will never know the enormity of the costs of our economy that the countless of americans unable to become spre preneuros or to start a small business, to follow their dreams, because they're afraid of losing their health insurance. so to lead in the global economy, we must pass health insurance reform that brings down costs and provide more security for people who have insurance and offers options for people who don't have health insurance. [ applause ]

>> health insurance reform will be good for business and especially good for small business. especially good for small business. now, in the meantime, the recovery plan that we passed earlier this year has begun to modernize our health system. so innovation can also help drive down the cost for everybody. we are taking long, overdue steps to computerize america's health records. this is going to reduce the errors that cost billions of dollars and thousands of lives, while protecting patients' privacy. it's important to note as well that the records that are held, each of us having our own medical records in digital form, holds the potential of offering patients the chance to be more active participants in the p prevention and treatment of illnessness. and health information technology if implemented -- it provides patterns of data that we don't yet collect.

but could reveal discoveries that we can't predict in terms of how to cure illnesses. the same thing is true when it comes to energy. no area will -- will need innovation more than in the development of new ways to produce and use and save energy. and you understand that here at hudson valley. i firmly believe that the nation that leads the clean energy economy will be the nation that leads the global economy. and that's why. [ applause ] that's why we're doubling our capacity to generate renewable energy, building a stronger and smarter electric grid. i was meeting some young people who are being trained right here so that they're going to be working on creating this smart grid. we're investing in technologies to power a new generation of clean energy vehicles. we've helped reach an agreement to raise fuel economy standards.

and for the first time in history, we've passed a bill to create a system of clean energy incentives which will help make renewable energy a profitable kind of energy in america. while helping to end our dependence on oil and protect our planet for future generations. this bill has passed the house. we're now working to pass legislation through the senate. it is time to get this done. we have to lead on energy. we can't be lagging behind. [ applause ] >> so that's an overview of our strategy. all these pieces fit together. the strategy that's essential for our recovery today, but more importantly, for our prosperity tomorrow. it's a strategy rooted in a deep and abiding faith in the ability of this country to rise to any challenge. because that's our history. we're people with a seemingly limitless supply of ingenuity and daring and talent.

and at its best, our government has harnessed those qualities without getting in the way. that's what led to the building of the erie canal. we then helped put cities like troy on the map that linked each a -- east and west and loued commerce and competition to flow freely between. that's what allowed a pretty good inventor and businessman named thomas edison to come to schenectady and open a driving mom and pop business that now today is known as general electric. our former senator from new york, robert kennedy, once told us the future is not a gift. it is an achievement. it was not an accident, not a gift, that america led the 20th century. it was a result of hard work and discipline and sacrifice and ambition that served a common purpose. so it must be in the 21st

century. future success is no guarantee. as americans, we always have to remember that our leadership is not an inheritance, it is a responsibility. so from biotechnology to nan nano technology to research in the treatments of ancient diseases, there is so much potential to change our world and improve our lives while creating countless jobs all across america. the question is if we are ready to embrace that potential. if we're ready to lead the way once more. i think we're ready. i've seen it all across america. this generation, generation of young people sitting here, they have an unparalleled opportunity. we are called upon to help them seize that opportunity. that's what you're doing here at hudson valley community college. that's what i intend to make sure that we do in washington. that's what we will do as a nation. thank you very much, everybody. god bless you.

god bless the united states of america. thank you. president obama there up at hudson valley community college up in upstate new york today with education and innovation on his mind. today announcing he wants to earmark as much as 3% of the gross domestic product of the united states for basic scientific research to try and spur what he feels could be more innovation in the united states and that in turn would spur growth and more jobs. bill griffith along with -- dennis neil, i told you we'd leave the light on for you. they're all back together again here. the president taking time away from the campaign for health care reform to talk about another program that is very near and dear to his heart, that would be education. >> but a sizable reform if, indeed, what he said in his speech takes place. which would be basically cutting out -- in his own words cutting out the middleman in terms of student aid financing and

basically going around the private sector. >> eliminating the private sector and having more and more government involved in student loans. what i didn't understand is he said, look, the government's been on the hook for these loans in the past. i don't understand how shipping them to the government improves the situation in any way, shape or form. >> he thinks it might improve efficiency. the stock of sallie mae is down 4% today. >> better at the business of making loans andsy assessing risk than a banks are. it turns out this government student loan takeover is a trillion dollars over ten years. >> guarantees. >> not quite the same. >> the message is the same. it's always more government. not less. at every turn that we see, that is the message. >> that is the message. we'll talk about that message. we've got john harwood standing by. much more to come as we get

under way. the stock market seeing positive economic data. dollar's stronger. commodity's lower. much to get to. esesesesesesesess

welcome back to cnbc's "power lunch." we just listened to president obama. let's bring in john harwood and greg knapp. let me start with you. big headlines? >> pretty elaborate warmup considering he was just getting prepped for the letterman show this afternoon. but, you know, the president was trying to drive his economic argument while pushing health care at the same time. he embedded health care in the speech. and was trying to make an integrated argument for why all the elements of his agenda, from job training to the stimulus package to energy to health care, all flow toward building a solid economic foundation. >> you just created a great segue to the broader discussion we wanted to have. he's going to be on letterman later today. he was on all the sunday talk shows yesterday. we've got speeches nearly every day from president obama.

is he overexposed? is he risks overexposure? >> i think we'll know when the president is overexposed when he asks to meet with reporters and no one's interested. but right now -- >> so that's a no. he is not overexposed in your opinion? >> there is a huge demand for him because he is the best spokesperson for his own platform and people respond to that. you saw it just now. it was a brilliant speech that tied together a lot of individual moving pieces of this president's agenda. even health care, he pointed out, will help small businesses most of all. just the same way that an innovation economy helps develop growth across the entire economic spectrum. >> david, does he run the risk, once again, of not picking a lane of what's most important to him? you know, if it's health care, should he focus more strictly on health care? this student loan agenda that he put out is a very aggressive one. the research and development agenda is very aggressive. they're all very costly. does it blur the lines of what he thinks he needs to get passed first? can they do all of this at the same time?

>> here's what i think. of course they can. but it partly stems from the fact that this president inherited multiple crises of all time. two wars. worst economic crisis since the '30s. >> greg knapp, i'm really surprised. a lot of my democratic friends, and i do have them, believe that they think the president is simply on television way too much. what do you think? >> yeah. hello. this guy's on tv more than a sham wow guy. barack obama here. he's given more speeches in the first eight months on tv and interviews than clinton and bush combined. three times as many print interviews as them combined. of course this guy is overexposed. usually his speeches don't give anything new. he thinks he's such a smooth talker, that if he just keeps talking, people are going to go, wow, now i want the health care bill. >> who would be the better spokesperson for the obama administration on health care, on education in this country

other than barack obama? who would be a better spokesperson, in your view? >> great question. i don't think anybody. he is the right guy. the problem is he's got to start changing his message. it's not his speeches. people don't like the policy. you've got to start switching and changing, reaching out, actually working with the republicans and trying to come up with a bipartisan deal. you can't just keep saying the same thing over and over and say i must not be saying it loudly enough. >> david, that's a very good point, isn't it? at lot of people say he hasn't gotten the message out. the message is out. maybe it's the substance that people don't like. >> my ear piece might not be working. i think i heard a right wing say barack obama needs to reach out more to republicans? did i hear that correctly? very interesting assertion for you to make, sir, when you've got the fact that this president has invited every single one of those republicans to the white house, has asked the republicans to work with the -- >> david, get to the spirit of his point. which is is it really that he's not selling the message well or

is the problem the substance? >> what you have in the polling, if we believe polling, and i'll assume that people on the show watch the polls and we all watch the polls. what you have is the democrats, including the ones in congress, are still trusted more by the american people on economic matters than the republicans. you can't deny that. that's just a fact. >> it's going down quickly. in fact, 53% -- >> i knew you would like it. >> it's the truth. it's at 53% right now. 53% of the people now have a bad approval of obama on health care. >> you noticed how you changed the subject? i was talking about economics. let's stick to economics here on cnbc. >> okay. let's do it. >> the american people still trust democrats more than they trust republicans. >> what's the number on that? what poll is that? what's the number and what poll. >> take your pick. the reason for that is -- >> give me one. >> the reason for that is because under -- guys, got to go.

thanks very much. >> it would never occur to us. >> you're quiet. >> they carried it well by themselves. b of a is in a standoff with congress right now over the merrill lynch deal. sc scott cohen has the latest. >> bank of america shares down just under 2% at $17.31. that's a loss of 33 cents on the day. back in a moment. the products are best. especially for beef. consumers will go out of their way to find a better cut. so to round up more business, smart grocery chains have partnered with cargill who supplies stores with a line of top quality beef hand selected and specially prepared so grocers can sell beef so appealing it will have more shoppers blazing a trail to their store. this is how cargill works with customers.

(announcer) when you buy a car what are you really buying? a shiny coat of paint? a list of features? what about the strength of the steel? the integrity of it's design... or how it responds...in extreme situations? the deeper you look, the more you see the real differences. and the more you understand what it means to own a mercedes-benz. the c-class. see your authorized mercedes-benz dealer for special offers through mercedes-benz financial.

dow jones industrial average off about 29 points on the trading session. and keep in mind we have a fed meeting this week as well. the market will be watching that very closely. investors in bank of america watching that stock which is on the downside today a little bit, just under 2%. b of a says it is complying with the house committee's demand for documents on the controversial merger with merrill lynch, but that it is not ending a standoff with congress or the court. senior correspondent scott cohen following the story. he's here with the very latest on that. the story that keeps on giving. >> it does keep on giving. it doesn't get any less complex

as it keeps on give ing. the house oversight on government reform committee is one of many in the government looking at the merger and why shareholders were not told about billions of dollars in bonuses and losses at merrill before the deal closed. all indications are that the bank did meet a new deadline today to turn over thousands of pages of documents requested by chairman ed towns about things like what ken lewis disclosed. the bank is sticking to its guns when it comes to documents it says are protected by attorney-client privilege which means that this is not over. not by a long shot. representative towns like new york attorney general andrew cuomo has suggested the bank is using their privilege issue as a way to hide information. the bank is said that waving the privilege could set a dangerous precedent. meantime b of a and the sec are supposed to tell u.s. district judge in new york today how they'll proceed with the trial now that the judge has thrown

out their proposed $33 mill kio settlement over the issue. the b of a board of directors was reportedly set to meet today what to do if b of a executives are charged individually. no comment from a company spokesman. we're taking a look at b of a stock which has been on kind of a tear since the deal closed on january 21st. up 22% here to date. the great debate is whether the ends justify the means in all of this. bank of america now fighting on that privilege issue which is an important issue for all of us. >> back in a few minutes with the halftime report. [ birds squawking ] [ moos ] [ man announcing ] if you think about it, this is what makes theladders different from other job search sites. we only want the big jobs.

welcome to theladders. a premium job site for only $100k+ jobs and only $100k+ talent.

welcome to the fast money halftime report. market prices to the downside today. the higher dollar pushes commodity stocks lower. we have strength in technology with a multibillion dollar deal in the space. where do you place your bets today? the word on the street. our fast money scrcrew today. j.t., let's start off with you. certainly the dollar seems to be weighing on this market. if you are in the camp and you believe that the fed meeting combined with the g-20 will potentially give the markets a reason to be spooked, then you should believe that there is dollar strength at least in the

near term. >> absolutely. let's add in addition to that you have three treasury auctions this week. there is a lot out there for investors to be nervous about this week. if there's any opportunity for the impending correction the entire market has been looking for it comes from now until the end of september. >> at the same time, there seems to be this curious appetite for high beta stocks. citigroup moving higher by 3%, aig up by about 10%. we're seeing this move to safety but also this willingness to increase bets in some of these areas that are very, very risky. how do you reconcile this market? >> i think that's sort of ebbed and waned. towards the tail end of the rally that went on for probably eight or nine days that we just came off of last week, one of the things we saw was actually broadening out to some of the bigger names. away from the high beta stocks. now that the market pulled off a little bit we're seeing it go the other way. doesn't come as a huge surprise. >> you know what stock really hit my screen today was general

electric. ge shares are higher by 1.25%. it is curious. out performing the market, continuing its nice run. what would you say to investors looking at this stock feel like they missed out on the big run in the past week or so. >> for the fers time today i saw an analyst come out and say folks should be in the industrial business and not so much on the capital part of ge financial. that's something we saw two weeks ago. it's something we've always looked at. and we think that, yeah, you can buy ge here. i think that that probably earns -- announcement from analyst played some part in investors feeling more comfortable. >> doctor, you are so happy right now. you're not the only one who gets my name wrong. >> that's a fact, yeah. i love that. >> that's okay, eugene. i forgive you. >> that's all right. but a lot of institutional activity in ge for the last week, heavy institutional buying. we have that aig trade that michael just spoke to. a lot of activity in that name.

buying calls all the way up to the 60 and 65 strikes. keep an eye on that. they've shifted back into these high beta stocks with the exception of ge. i think aig is continuing to play out. whether the government adjust terms of the payback, and if they do, obviously the stock lifts significantly higher. >> right. let's move on to the next trade and talk about the corollary to dollar trade, commodities trading lower today. oil the biggest loser of the day off by almost 4%. j.t., the liquidator, tell us what your expectation is for oil given your expectation for short-term dollar strength here? >> before i do that, when you talk to jew neeugene again, remm you play for the cowboys, not the redskins. when you talk about oil and commodities we're going to have a rising dollar about concerns throughout the week on what's going on at the g-20, the treasury auctions. you are going to see significant weakness in the commodities. you're seeing it today in oil.

oil today cannot rise with the rest of the tape that's actually trying to rise here. toil tape right now appears to be pointed to the downside. i want expect that to remain in place, again, through the remainder of the month. i would think today we actually go below $69 in oil. >> among the oil equities, what sort of leaps out at you as potential buying opportunities given the weakness we're seeing here? >> what joe's talking about, which is how crude is going to behave this week and towards the end of the month is one thing. i think the longer term picture, though, is probably not so dire for crude. so i still like the integrated name. names like conoco and chevron. >> just quick touch on gold here. we are seeing weakness off the back of dollar strength. eugene, are you a buyer of gold at these levels, whether it be the commodity itself or the gold miners. >> i'm not. i'm not a big commodity player. i said some time ago it would bounce back from 1,000. i don't see any reason to change that opinion. >> we look at gold. maybe that's a buying opportunity.

my, things have changed. change. dell announcing it will acqui acquire. trading low irby 4%. tech sector pushing higher. the nasdaq is in the green although barely. dr. j, who really jumps out in the call activity, that was a little peculiar, wasn't it? >> it's one of those things that makes you say hmm as guy would say and he did say. i know he and pete were pounding the table for dell doing some sort of deal. sooner or later it's going to be a device as well or something in the video game space, i believe. but this is a $4 billion deal done without financing. i think a lot of the big tech names will continue to just gobble up smaller companies in the space and this is just one of many that are going to happen between now and the end of the year. >> options value -- >> melissa, the template was put in place by ibm and

hewlett-packard. they were able to navigate through the recession by being in the computer service sector, and this is exactly what dell needs to do. >> right. it's a smaller scale purchase than say hewlett-packard and eds but both an acquisition that di fers f diversifies dell's base. is there any peculiar activity in the options space in terms of potential acquisition targets given the high activity we saw in perot? >> one of the reasons that stuck out was perot didn't typically have a lot of options values. i think the next most active option was 700 contracts. that represents about 200,000 shares n most tech names, this would be a blip. you're going to see more options

activity in general when a deal like this gets announced. i don't know if it will be as easy to read into it as that happened to be. we look at in retrospect, you say that's a little strange. i don't know that you can necessarily read into what the next target would be. >> i wonder if the s.e.c. is going hmm about that as well. retailers after being helped by shares of dollar trees, trading higher by more than 4%. the theme in today's retail space is sort of the value plays. eugene profit, any of these you like? it seems like only when the tape is down do these names work? >> i don't like really. dollar tree you have had 8% increase year-over-year in store traffic. sears you had a director buy $1 million worth. so if you're looking at insider trade transactions you might look at that. >> walmart is up 1.25%, but it doesn't do well on a good tape. >> i like costco better than

walmart even though we own walmart. i think that there are more defensive plays here and investors are trying to find a little bit of growth for turnaround play in our overall economic environment. you only see this kind of divergence when the market is going to sell off. >> on tonight's "fast money," we break down dell's deal. coming up next, a cnbc exclusive with aol's new ceo. how will he get this internet giant back on track? the "fast money" halftime report continues right after this. merger monday. dell makes a big dive into services. what other tech transformations are ahead? a top analyst gives us the trade. and trading the globe. brazil is about to throw a $7.5 billion ipo party. tim seymour on how to join in. plus, one year later we break down the street survivors this week. we start with a favorite on the desk on america's post-market show tonight.

is

welcome back to the "fast money" halftime report. where is the money flowing in and out of today? steve grasso is on the floor of the new york stock exchange. steve, it feels to me sitting here looking at my screen like a slow day, but what is the buzz on the floor? >> it is definitely a slow day, but there's still institutional buying. >> of what? >> it went from buying dips to shut up and buy them. that's what i'm still seeing. still seeing buying across all sectors although they have hesitated today. >> which sectors in particular? are they going after the market leaders like technology or are they going into new sectors? >> they've always been going after technology. they never ceased on technology, but i have seen a fair amount of chasing in the high beta names, but across the board if i told you that on these dips these commodity dips they're still buying the gold stocks, energy names. they're still poised on all these. you think the market is going to cave and it never does.

they come right in and pick up the pieces. >> steve, thanks for joining us. appreciate it. steve grasso, joining us on the fast line. do you buy or sell on this seemingly slow day? dr. j, what are you doing? >> it just feels like the market wants to lift into the bell here, so i'm a buyer along with it, melissa. >> eugene, are you also a buyer? >> no, i'm a seller. i think i will wait and see what the fed does. >> mike, what do you do? >> i'm actually taking a look at the options markets and i think some of the insurance has gotten a little cheaper on the downside. i might look to buy some of that and hang onto my longs with it. >> you heard grasso talk about the institutional buyer still going into gold on friday on the desk you said that you are defecting and you're not going into gold anymore. >> time to move to the sidelines in gold. i think you could buy gold back at a valuation of $979.75 in the next few weeks. oil today is the key. oil moves lower. the equities markets will move lower with it.

>> okay. that does it for us on the halftime report. on tonight's "fast money," we trade the globe ahead of the g-20 meeting. where are your best opportunities abroad? coming up next, the best plays in alternative energy. >> we have a terrific show coming up on "power lunch." when you access the web, what kind of information should you be able to get? what access -- what type of access is fair? >> then in the cnbc exclusive aol's new ceo, he's also a guest blogger on cnbc.com. go there and find out what he's say being whether or not the recession's silver lining is intact. and then empty calories. this one has michelle all worked up. should we bail out failing newspapers? that and more when we come back. this is cnbc.com news now. fed chairman ben bernanke's next date before congress is on the calendar. he'll testify before the house financial services committee on october 1. the internal revenue service has extended an amnesty program

until october 15th. the index of leading economic indicators rose 0.6%. that's the fifth straight monthly gain. this is cnbc, first in business worldwide. i'm courtney reagan. welcome back. the fearsome foursome back together again. i'm bill griffeth. stocks have been lower for the most part. been an up and down kind of day cutting earlier losses. health care stocks among the best performers. our parent company, general electric, citigroup and walmart leading the group. >> aol used to be king of the hill but how times have changed. we have an exclusive interview with the new ceo and he will tell us about his plan to revive that battered internet giant. >> i'm mischelle caruso-cabrera. g-20 leaders meet today in

pittsburgh. they're going to change the world. hardly. one of wall street's top analysts with the best bets in the alternative energy space. >> and i am last. i am dennis kneale. >> welcome back. >> dell ceo michael dell appeared first on our network earlier today about his $4 billion deal to buy perot systems. jim goldman joins us for a look at what the deal means for dell and investors. jim. >> good afternoon to you. by now you know the details. dell spending $3.9 billion, 68% premium to perot systems. putting a little krism crimp ins $12 billion in cash. perot is reacting as you might expect. 80% of dell's business comes from government contracts. it should strengthen dell as it tries to take on ibm, hp, cisco, and oracle and sun in services.

>> we have 10 million small business customers. we sell directly to consumers with 100 million visitors a month to dell.com and 42,000 retail locations. so our business is very broad in its scope and now we're expanding those capabilities to bring more solutions to more customers around the world. >> and you heard bill talk about health care stocks today. our pharma reporting pointed this out to me this morning. a report from the health care industry research firm, perot systems generates half its business from the health care industry. leering swan points out today serner corporation and computer program and systems and eclipsys will be going after further outsourcing customers.

health care could be the prime beneficiary of this deal but dell and perot hope down the road they become the prime beneficiaries, too. >> i'll be interested to see how this deal turns out to dell. dells problems are not just a bad tech market, but it's strength was it was only focused on pc and it's weakness was it's only focused on pc. you buy services you're rounding out the business. >> they grew tremendously in the '90s but they became a commodityized company. >> if you feel dell falling further and further -- >> there was also an intangible they lost their cool. >> kind of moves on. >> can't necessarily measure it but apple came on with amazing products and they just weren't as cool as they were before. >> and they were victims of their own success. >> they drove it down for everybody. >> succeeded beyond their wildest dreams. >> let's look at the trend itself. will we see a lot more deals

like this? how will this affect investing in the future? joining us frank with sullivan and cromwell. frank, what do you think? are we starting to have more companies test the waters here? >> bill, this is what we talked about a few months ago, that as the recession sort of bottomed out, that a lot of companies have very good cash flow. they cut early in the recession. they were able to beat profit expectations, build up cash positions, and to a certain extent the last two years there hasn't been a lot of activity, and so there's a pent up demand for these really strategic transactions. so i think we're seeing just the beginning of it. >> a missing piece in the equation for a while was financing. is that back? that will be a critical part of this. >> it is. i mean, certain companies

obviously have plenty of cash on hand, but the companies that have cash on hand that may be not enough to do a particular deal, they're the most likely ones to be able to get financing because they're not highly leveraged, and so you're going to see these stronger financial companies -- financially stronger companies do these type of deals. >> but that's good, cannot it, carmine? ideally that's what you want. you want more deals, but if you get deals you want stronger deals, and that will be, i think, much more beneficial for the market, would it not? >> for sure. right now what we're seeing i think is the early stages of a major pickup in m & a activity. everything else is pointing up. val situations are low, interest rates are low. the dollar is low and there's this massive need to restructure within the corporate structure. >> frank, investors want to take a broader view of the next takeover activity, one key thing to look at is cash. cash is a percentage of your

annual revenue and a data guy here put together a couple charts for us. i want to go through these. if you look at other companies super cash rich, they're especially focused in tech where dell is. microchip technology, 170% of their annual revenue cash in hand. ciena, verisign. and celgene, cisco, google all have almost 100% of cash on hand. do you buy or sell those stocks? >> dennis, you're making a very good point. really since the subprime bubble burst and the credit crisis began, cash has been king, and even though credit is coming back, you're going to see the companies with a lot of cash on hand be able to do deals. buying and selling. i think you have to look at individual situations, of course, but clearly if you have a lot of cash on your balance

sheet, you're likely to be in the dealmaking game. >> carmine, do those stats actually maybe an argument for small cap technology stocks? >> for sure. you want to be the one that's being acquired, not the one that's necessarily doing the acquiring although those could benefit longer term. i would look beyond the technology area to look to some of the staples sectors. that's a sector that's lagged the market overall. i think valuations are very favorable. you should see more activity because of stable earning streams. >> good to see you both. thank you for your time today. and the ipo market may be having a bit of a comeback. we have eight initial public offerings this week alone. many of them in the real estate space. diana olick joins us from washington with more on that. that sounds like a bullish sign. >> reporter: it does certainly, sue. it's interesting because as commercial loans delynn quincys

rise, it would seem you would not want to get into the real estate sector. foursquare capital managed by b of a. mer and colony financial, managed by b of a, meryl, goldman, morgan stanley, and ubs planning on commercial mortgages and real estate debt. >> there's a lot of money sitting on the sidelines. last week was a banner week for reits. tons of money flooded in. you could look at most of the rager reits in the country and they have all done essentially rounds of new money raising which will help them defer some of their -- >> reporter: take a look at the dow jones reit index, up 84% in the last six months. in that same time 60 different reits have raised more than $16 billion in new equity. as for the decline in commercial

real estate value, reits, unlike private buyers, can only take on up to 50% debt on their investments so they're not as hard hit by the declines. industry folks tell me these reits are looking to buy up distressed properties and make a killing in the long run. for more you know where to go, realtytech.cnbc.com. >> thank you very much. what did you just say? >> i'm just wondering, is this top of the market because you go public at the top? i hope not. >> diane kna shows the choart r are up 83%. >> we're going to round up the all-stars. we'll take the real time pulse of the market for you. >> who pays for the internet. should everybody be allowed equal access to the broadband lines? here is what else is on the menu. >> i'm julia boorstin. advertising week in new york.

aol plans to spin off from time warner by year end and the new ceo of aol, tim armstrong, says the recession has thinned out the traditional media business. i'll be speaking exclusively to tim armstrong. let me stow that for you, sir. thank you. you know, just to be safe i used fedex office print online. oh you did? yeah -- they printed and bound 20 copies of the presentation, shipped it to portland, they're gonna be there waiting for us. that's a good idea. yeah. you have a nice flight. thank you. (announcer) print online...you upload your document -- we'll take care of the rest. if saving money happened as automatically as everything else? at bank of america, it practically does. use the bankamericard power rewards visa credit card and earn rewards like cash back with every purchase. cash you can put into savings.

or even use to help pay down your credit card balance. it's one of the many ways we make saving money in tough times a whole lot easier.

we have seen a strong sign on the asian markets.

it was one year ago today that both goldman sachs and morgan stanley were both approved as bank holding companies. a move by the federal government that many believe saved their skins although lloyd blankfein said the company was never really at risk when it came to goldman sakes. >> i just finished reading that new yorker reconstructionist. mary thompson is at the new york stock exchange. >> reporter: the dow jones industrial average certainly off its worst levels of the day but certainly not at the best levels either. right now down 50 points. what we're seeing today is stocks have actually recovered from the session lows as the

dollar has given up some of its early gains. we have drugs, airlines, biotech stocks, they're all moving higher, but energy is a weak spot today. we have, of course, crude oil down about $3. take a look at the airlines because there's some positive comments on this group coming out from barkleys saying there's some compelling valuation in this group. operating margins actually improved in the second quarter. one of the reasons was because of those higher fees for extra baggage. that helped to improve their operating margins. aig in the news and very active as well today. one of the most active stocks here at the big board. two pieces of news. first of all, the company says it's open to talks about improving shareholder value with one of its biggest shareholders, that being the former ceo hank greenberg and mr. greenberg also sent a proposal to the government which would include

cutting the interest rates the government charges the company for its loans and reducing the government take to 20% from 80%. now let's go to brian at the nasdaq. >> we turned it around. we were positive for a good stretch of the morning trade, and we just went a smidge negative down less than half a point. the names with some strength, research in motion up nearly 1%. google up a full 1%. and cisco up 0.8%. overnight in asia some analysts saying the recovery in the semi-conductor market should be lasting. bed, bath, and beyond, price target raised to $50. costco gets an upgrade to outperform at william blair. sears holding, they report some insider buying at sears holding. it's up 2.4%. but all is not 100% positive. we have some laggards in the big cap names. we have dell, of course, we

talked so much about the deal today, so i won't get into too many details, but they are under pressure being the acquiring company of perot systems. apple down 1%. yahoo! down 2% as well. ebay seeing a little weakness. let's go to bertha at the nymex. >> thanks, brian. an analysis by bank of america merrill lynch says here in the options pit, buying downside protection is the most expensive it has been in an awful long time, and today it's paying off for those as we are pushing towards the lows here in the session on crude. we're seeing it sell off with crude following stocks and the fact that the dollar is stronger. it's that dollar/euro trade that often puts a lot of pressure. we see crude selling off. it's happening across the energy markets as we're getting more indication that is one of the big drivers of this move up, the fact that china was ramping up its energy demand. it's softening. reporting last month china's oil demand was down 5%. also, china's biggest refiner

saying that diesel demand is off. nat gas, which rallied last week on a technical rally and short covering 9% on friday is the best performer. we're watching gold. we're looking at the close. gold has closed above $1,000 for six straight sessions. we'll see if it can make it seven. it's come off the lows. >> bertha, they're also watching that in the bond pitts in chicago, and they're watching the dollar, which you mentioned, as you look at the yield on treasuries, we have, of course, the fed meeting this week. in addition to that we have the g-20 where they're going it talk about a variety of things. it's not expected to have too much market impact with the exception of the fact they're going to be talking about executive bonuses, which could roil the markets a little bit. the dollar index right now up about half a percent on the trading session. markets been able to absorb supply in the last couple weeks pretty well. they're expecting that to continue, but the dollar is a major component. the rise in commodity prices, which actually dennis you mentioned just a couple minutes

ago, the move we've seen all the way across the commodity curve is something that the bond market is watching very carefully. >> all right. straight ahead, you know, obama and the unions, they are like this, okay? the president delivering a rousing speech to the afl-cio. that's good for the economy. we'll have both sides of that question. >> as we go to break, monster worldwide, netapp and novellus systems.

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.

president obama praises the american people for driving our nation's economic power, and to that end he's long-cited organized labor for creating the middle class. but are unions ultimately good for the u.s. economy? a difference of opinion now from rick berman and jonathan casinni. good to see you. jonathan, let me start with you. >> hey, michelle. >> 20 seconds, unions, are they good for the economy? >> if you want an economy that has a middle class and people who can make a decent living and buy all these products that companies are produce and have dignity and respect in the world place, yeah, they're good for the middle class. the stagnation of wages over the last 30 years mirrors the decline in unions. >> rick, are unions good for the u.s. economy? did they help create the middle

class? >> i don't know if they helped create the middle class but they're helping to destroy the economy right now. the president talk today about education. what he didn't say is we are behind. we're 34th in terms of math. we're considered to be 28th behind somalia in science -- >> and that has to do with the unions how? >> nonsense. >> and you cannot fire an incompetent teacher and it's because of the unions in education and the list of disservice to the economy goes on. >> michelle, okay, so let's come back to the real world and reality. the fact is that the middle class was built by the american labor movement and if we want to have a middle class, a vibrant middle class, the labor movement is the best middle class jobs program we could ever create. >> if i could press you a little bit here, did the labor movement get lucky that, in fact, manufacturing was dramatically on the rise and so their

salaries rose and that's what created the middle class? did not employers help create the middle class? >> no, actually what's funny about this, and i'm glad you bring it up, manufacturing jobs, we have this romantic vision of that. once upon a time, those were terrible jobs. people died at those jobs, got paid poorly. it was the labor movement that maid those jobs good jox. if you look at the service sector today, there's no reason that we can't have good paying service sector jobs if they're unionized. jobs in and of themselves are good when people have the power to demand and get their fair share of what is the sweat ever their productivity. >> let's get rick in here. >> jonathan thinks all this money comes out of no place. the fact is that when the labor unions are at their zenith, there was a noncompetitive world economy. it was the u.s. and the u.s. now that we're in a world competitive economy, you can't have the same sort of union power forcing companies into uncompetitive positions. if you want to know why there's no steel industry in this country, if you want to know why

the auto companies are down on their luck, you just have to look at the unions and lack of productivity. >> john than? >> one second, jonathan. >> you made some great points. jonathan, go ahead. >> it's not based in facts. the fact is that if you want to take the auto industry, the number one reason that the auto industry are in trouble is health care costs. >> rick, hold on. jonathan, hold on. no. i'm running this show, jonathan. jonathan, you're absolutely right. it was the health care costs, but let's point out the difference between the autoworkers' health care cost versus the salaried plem tess. the salaried employees have to face higher premiums every day, higher co-pays, et cetera, et cetera. the unions never, ever, ever gave a break on those health care costs. you're absolutely right. health care costs were the problem. >> it's also -- >> if you look at other highly unionized countries around the

world, canada, where people actually have very good health care benefits, their industries have thrived and have been very, very competitive. >> with huge tax rates. >> the problem in the global economy is not the question of uniization. frts a workers' standpoint, and the reason we have stagnation of wages, we have a trade policy that forces wages down. >> come on. >> you get the last 20 seconds. rick gets the last 20 seconds. >> jonathan, you know, the problem is that you guys change your story all the time. you used to say -- >> rick, you don't -- >> let him finish. >> hey, jonathan, enough filibuster. jonathan -- >> turn off jonathan's mike please. >> the fact is that the last comment about the auto industry out of organized labor is that the manufacturing companies didn't produce the right cars and therefore they weren't competitive. you look at the gm contract, the unions demanded that certain cars be produced in certain plants for certain periods of time. they made the industries totally unproductive and that's really at the heart of why the unions have destroyed some of the --

>> thank you, gentlemen. rick, jonathan, good to see you. >> bye, michelle. >> did you teach fourth grade at one time. >> no, i want to be able to hear people. >> you did it well. >> it makes me frustrated. >> mrs. caruso-cabrera's class is now in session. back if 2004 you might recall cnbc's david faber took you inside walmart for an exclusive look at how the world's biggest retailers does business. now five years later he went back and he will take you back inside to see how walmart has transformed his business in this challenging global economy. the new age of walmart airs at 9:00 p.m. eastern time right here on cnbc. we're coming up on the half hour, so we'll head down to the floor of the big board and get steve grasso's take on where the markets might be heading. plus, big stakes for big kms. the administration wants to bar energy service providers from potentially blocking or limiting online services and content. it says web access should be open and fair. but is it fair to the company

who is paid to build those broadband lines? and didn't we settle this five years ago i thought? what happened? why are we revisiting this again? we'll dive in on the other side of the break coming up. xwxwxwxww

welcome back to "power lunch." here are some of the stories we're following this hour. dell, the big headline, paying almost $4 billion for i.t. service provider perot systems. the move helped dell diversify from its core pc business. shares are down about 4%. the index of leading economic indicators rose four the fifth month. and lennar posted a wider third quarter loss. totaling almost $172 million, however the nation's fourth largest builder did say improving orders could bring the company back to profitability next year. shares of lennar have been lower by about 4% so far today. sue? >> markets a little lower as well. let's go back down to the floor of the new york stock exchange. steve grasso is standing by. we got a little better economic data, but we have a fed meeting this week and we have a g-20

meeting this week. what are you watching? >> i'm watching -- bill just spoke about it before, the dell deal. when you start to see the m & a coming back, the ipos coming back, that's when you know the market is in recovery mode. that's what you want to see when you start to kick off the bottom. we're way off the bottom now but we have higher to go. >> we had a big terrorism bust, steve, and yet the markets down just 42 points. is that a victory? have we become too complacent? >> i would say it's probably the latter. i think we've become way too complacent. i think that, you know, being down here a block away from ground zero, you know, it's always kept at the forefront of your mind. >> i would highlight if this had happened a couple years ago, it would have been horrendous, right? >> it would have been horrendous. as a side war bbar, we've been

to -- >> should we be holding to every piece of news about terrorism for the rest of our lives? >> no. >> no. >> no. >> we should not. >> we have -- we del have define to get on with our lives. >> one last thing, every asset class sup. i have been waiting for something to go down. now oil is down i think more than 4 bucks today. is oil the asset class that's finally giving some ground here, losing? >> well, oil is trading right in line with the dollar. so whenever you see the dollar strengthen, oil is going to trade. it's not on supply/demand anymore. >> thanks, steve. the chairman of the federal xhuncations commission this morning proposes new rules for who should control the internet. supporters including amazon, ebay, google, consumer groups,

they say the new rules will ensure everyone has access without interference from internet service providers. critics though, comcast, a tt&a verizon, they say it will raise costs and stifle invasion. we have mark ericsson. thanks for being with us, sir. let me ask you something. shareholders, not monopoly rate payers, shareholders of at&t built this network. they paid to build it. why is it that government is now allowed to come in and say, we're seizing control of your network and making sure you can't price it any way you want? >> well, that's not exactly what is being proposed here. we do want the isps, the cable companies and telephone companies, to make a profit, and they will make a profit. in fact, they're doing very well in the face of the worst economy we've had in 70 years.

it's important to remember though that it was the government that funded the project which created the internet in the first place. >> you mean like 1960 or something. >> we just faced a 40-year anniversary. >> i thought al gore did this. >> but at&t is not using some twisted pair of copper wiring. it's fiber optics that shareholders built. >> i'm running my network. there's a guy that comes out with a volkswagen beatle and a guy with a high tractor-trailer. why can't i charge a higher toll to the wide guy and a lower toll to the beatle. >> what the chairman is proposing to do is to preserve the basic rules that have made the internet so incredibly beneficial to innovators, to businesses, and to consumers. and so what we're talking about is ensuring that consumers are

able to access the content, the applications that they choose, that they're able to choose the winners and losers in the marketplace. >> i'm having major deja vu here. wasn't it 2004 or '05 if i'm not mistaken that the government finally said we're going to side with the gate keepers. those who built the build out of the broadband internet out there and said, you're right, you guys should decide the access and all that stuff. can you point to a time when they denied access to anybody to the internet in the last four or five years that would spark a move by the government once again to provide, quote, net neutrality? >> yes. there's been several high-profile examples in the last three or four years. in today's speech the chairman referenced those. >> can you give me one? >> there's been examples -- well, last year comcast was found by a republican fcc to have illegally blocked a lawful

application, and, in fact, held that comcast was impermissibly engaging in behavior that violated the communications ak. >> they blocked what? >> they blocked a certain application found to be a lawful application from consumers. they didn't provide notice to that. the only way the fcc found out about that was because some technologists had discovered what was happening and reported that to the fcc. >> so why isn't the solution then to slap comcast? why do you need to then just come up with a full blanket regulation for the entire industry once again? why not just go after the company that violated the spirit of the industry at this point? >> i think what the chairman is proposing is a very common sense light touch rule that does exactly that. it would, as he announced, create a rule that would allow the fcc to handle issues on a case by case basis, but at the same time provide some basic rules of the road that provides certainty to the innovators, to the isps themselves so they

understand the rules of the road, and to consumers. >> one more question. google, which created -- helped create this net neutrality issue, google also runs one of the largest private fiber optic networks in the world. under the fcc approach will they have to open up their network and not be allowed to pick and choose between what traffic it wants to carry? >> well, what the chairman is proposing are rules that apply to the open internet to ensure consumers who are accessing the internet are able to do that in an unfettered way and receive content and lawful applications that they choose. he's not proposing to interfere with a private network that both google and isps and other companies and most corporations run in some form or another. >> sounds a little inkifertant to me. if you cut customers off from access, check say we'll quit your service. thank you very much for being with us. we appreciate it.

>> thank you. >> michelle? >> we are standing by with a look at the most wide ly looked at stories. what's the hot story? >> remember barney five? yes. >> whenever bill grows comes up, this morning he called it a barney five market. it's just bumbling along, waiting for something overextended, and it's probably going to pull back. people are just diving into that story. >> chrysler, number two story. >> close to home. it's one story that we're getting the most comments on right now. it's phil lebeau's blog. he talks about chrysler to save money as they always want to do is going to cut back on its owner's manuals. not put the thick book in the glove compartment. apparently they're going to do away with those. a lot of people are weighing in. phil says pretty good idea. a lot of readers are saying, no

way, phil. >> i i thithink it's a terrible. >> most people only use it once or twice and it's the moment you really need t finally, the hottest thing we have, a slide show of the world's best banks from "global finance" magazine. they rate the banks, best investment bank, best consumer bank. they rank them out like that. we have the tom ones in each category on cnbc.com. >> sue, you know what allen is telling me, that my chicken feet column did very well. >> of course it did. it was brilliant. >> and right now dennis is on fire, too. he has a column. >> you put that baby up there. good. >> all the more reason to go there. all the more reason to go there. >> and straight ahead, a "power lunch" exclusive. rescuing aol is a tough job. time warner thinks they have just the guy to do it. what is his plan to revive the stumbling online service? julia boorstin talks to the good looking, tall aol ceo tim

armstro armstrong. here is a look at how shares of aol parent time warner have done over the last year as it has been shedding limbs. up 1%. and down 7% still for the full year. national car rental knows i'm picky. so, at national, i go right past the counter... and you get to choose any car in the aisle. choose any car? you cannot be serious! okay. seriously, you choose. go national. go like a pro.

in a long line of amazing performance machines. this is the new e-coupe. this is mercedes-benz.

america online is in the spotlight as it prepares to spin off from time warner by the end of the year. cnbc's julia boorstin joins us from ad week with an exclusive

interview with ceo tim armstrong. julia? >> thanks so much. this is tim armstrong's first interview since becoming ceo of aol a couple months ago. >> thanks for having us. >> i have to start with the big question on everyone's mind, aol has been such a drag on time warner's results for so many years. ceos have tried to fix the company. why is the company worth saving? >> i think for several different reasons. one is it's the 25th anniversary of aol. i think when you look at the phases of the internet it started with access to the internet. the second face has been about platforms and technology. the third piece which we're excited about it and what i think will save the company is a real focus on content and building scalable content systems and they're bringing great content to the job. >> you had a plum job at google. why did you think it was worth making this your mission? >> i think it starts with the people at time warner and jeff is somebody i have looked up to for a long time.

when we talked about the opportunity, for me it came down to three things. i think one is we have a great opportunity in the future of the web. when you think about the next business opportunity and the next $50 billion, it's really up for grabs. i think other areas have slowed down. we can build content. i think the second thing is aol has a lot of great assets. i think it's been inside of time warner and people haven't realized how much energy are inside the company. the third thing which i really wanted to check into was did the employees want to win and do we have an employee population that really wants to be successful and are willing to make the tough changes. i think the answer is yes. those three things. i feel like it's a great time. the recession is a benefit for aol. for us to come out of the recession in a growing market will be beneficial. >> why is the recession a benefit to aol? >> it's created a lot of white space on the internet. when you look at blockbuster

shutting down 1400 retail locations, if you're netflix that gives you an opportunity to grow. we see clear white spaces we're going to go after and be aggressive at. >> if aol is on track to spin off with an ipo from time warner at the end of the year, why does it make sense for aol to be a standalone company. >> i think jeff has done a really nice job being very clear about what time warner's direction is, and i think on the oal side it's really about use of capital and being competitive in the internet space. right now aol's earnings go to time warner. i think if we spin out, we may use that capital in a different way to make us more competitive. >> you wrote a guest blog on cnbc.com today that talked about the value of monetizing content online. if you're focused on content right now and time warner is

also focused on content now, does it make -- would they want to own aol? >> i think actually time warner, which jeff has really talked about, has focused on tv and really building the next video flat form. i that i they're aggressively moving in that direction. on our side i think it makes sense for us to be standalone because the content we're going after is is different types of content and build around engineering content management systems. when i have meeting at aol, i'm talking about product and engineering plans and those things, and i think jeff's world has really been built around building the world's largest company in terms of entertainment media. >> i look forward to hearing more about aol as we near the ipo and follow you as a company. thank you for joining us. >> thank you. breaking news concerning bank of america. >> we reported earlier bank of america had a noon deadline to turn over documents to the house oversight and government reform committee about the merger with

merrill lynch. we are now told by a spokesperson for the committee that bank of america did not meet that deadline. and the chairman, ed towns, is disappointed we are told according to the spokesperson. the next step for the committee would be to issue a subpoena to bank of america. we had been led to expect bank of america was going to turn over at least some documents but they are still sticking to this whole issue of attorney-client privilege and not wanting to violate that. bank of america's shares are down 2% on the day. >> that's a sell-off from where they were when you did your report a bit earlier. they were down much less than that. so, you know, so you think there will be a subpoena, correct? and then do we have any indication as to whether or not they plan to file some of those papers later today? i mean -- >> well, everything is kind of up in the air at this point. the next step, if they don't get anything today, would be to issue a subpoena. we don't know if bank of america has been delayed or what, but the indications we got according to sources was that -- were that

they were going to submit some documents. >> maybe they did, right? did we get the impression they didn't submit anything? >> that's what the committee tells us, they have not gotten anything. >> we know the story, you will be working it for the rest of the day. >> meantime, climate change is on the agenda this week. global talks scheduled during the 64th convening of the u.n. general assembly this week. but what does the push to clean up the environment mean for investors. >> here are some of the stocks where we're seeing unusual trading volume. eastman kodak. baker hughes, tellabs, and molex also on the list. um bill--

why is dick butkus here? i hired him to speak. a lot of fortune 500 companies use him. but-- i'm your only employee. we're gonna start using fedex to ship globally-- that means billions of potential customers. we're gonna be huge. good morning! you know business is a lot like football... i just don't understand... i'm sorry dick butkus. (announcer) we understand. you want to grow internationally. fedex express ok ! ok. whoooa, heyyy !

see, the terms require that you keep the bike within this pre-determined space. if you want to take the bike out, i'm going to have to charge you a penalty. i can't really ride in this little space. you can't ride very far. even kids know an offer shouldn't come ha, ha, ha... with ridiculous conditions. why don't banks ? at ally bank our 9-month no penalty cd gives you a great rate with no fees for early withdrawal. it's just the right thing to do.

for the first time in history we passed a bill to create a history of clean energy incentives which will help make renewable energy the profitable kind of energy in america. while helping to end our dependence on oil and protect our planet for future

generations. >> president obama speaking on the importance of clean energy and its impact on the global economy. on that note veteran wall street analyst steve milonac krmilonav just released his outlook and he joins us. it's a pleasure. >> thank you. >> you make the point that we should expect increasing corporate climate change disclosure, but my question is why is that important? how is it going to help people make better investment decisions? why are you watching this? >> that's right, sue. today the carbon disclosure project put out a report in which they survey s&p 500 countries. two-thirds of them talk about what their carbon emissions are and the impact of climate change on their business qualitatively. investors need to hear this because it is material. companies' earns will be impa impacted over time 678 it's obvious in some sectors like utilities which are putting a

price of carbon into their thinking, but you will see it spread across the s&p both for new companies like alternative energy as well as incumbent companies where it's an opportunity and a risk. >> what about the company that is will make money here? you focused on a lot of different areas. let's go with the electronic vehicle ecosystem as you call it. are we finally going to have electronic vehicles? infrastructure? who is going to build that? how can we invest there? >> i think eventually. it will take some time. it is an infrastructure that's needed. not only do you need the batteries and the cars but you need to have utilities involved. you need charging stations. a lot of car companies will be repositioning for this. we have a buy on a lithium ion battery company. that's the way we think it could be played by investors. >> steve, at what point does wall street start to give companies points for reporting this kind of information? i mean, do you think this is a

long way off? do you think the walmarts of the world, the gas of the world who may have some exposure to this part of the economy will start reporting this soon or is it a lock way down the pipeline? >> i think it's already happening. it depends on the company. ge is not a pure renewables company, but they are the largest maker of wind turbines in the u.s. ibm services business increasingly is driven by the smart planet they talk about, working on smart grid and things like that. cisco telepresence which you see on tv, that's going to become aven increasing part of their business as well. it's starting to become material. i think you will see it over the next couple years. investors will have to pay attention to this. >> steve, good to see you again, thank you. >> thank you. should we bail out the newspaper business? >> what? >> no. >> i thought you were going to say -- >> why not? >> because newspaper -- a full

serving of "empty calories" coming right up. but these are not empty this time. [screeching] [dejectedly] oh. [screeching] [barks] (man) if you think about it, this is what makes the ladders different from other job-search sites. [screeching] we only work with the big talent. [all coughing] welcome to the ladders-- a premium job site for only $100k-plus jobs and only $100k-plus talent.

♪ yes, you're lovely... ♪ what 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.

let's talk government bailouts for newspapers. president obama saying he's happy to look at bills before congress that would give struggling newspapers tax breaks and a government bailout if they would restructure as nonprofits. >> if they structure as nonprofits, which confuses me because i thought they were. >> but you're not for this. >> i was at the "wall street journal" for 16 years. i love newspapers, but if they cannot survive as a business on their own, i'm sorry, then they don't deserve to survive with a government bailout. look what happened when the banks took t.a.r.p. money and the second guessing about pay scales. >> there's a new business model coming. are we there yet? no. but we do this, we'll never get there. only if they become nonprofit, because he doesn't like profits? >> very quickly, what about the issue of, you know, the journalism as a profession and its role in public debate and society.

>> the newspaper as a platform lasted 250 years. all right. the fact it gets replaced by blackberry, you still have people who produce content and can do it for any platform. >> i'm covering the truth. >> you make an assumption it can't be done? >> it becomes more difficult with government assistance. >> and the second guessing. >> we'll be back to uncover more truth tomorrow here on "power lunch." thank you for joining us. "street signs" with erin burnett gets under way in about 30 seconds. >> thanks so much. i'm happy to be back with you guys. >> see you tomorrow. >> this is cnbc.com news now. a government ordered more vaccinations of h1n1. max baucus plans to revamp his health care reform proposal to address the issue of affordable. and bank of america has

failed to meet a deadline to hand over information regarding to its acquisition of merrill lynch. that's cnbc news now. i'm mike huckman. hello, everyone. i'm herrin buerin burnett. we're live from the big board. stocks have really come back. a tax hike is what everyone is talking about though. are most americans about to pay more in taxes? income taxes or say even higher drug prices because drugmakers pass along their taxes. call it what you will, it will be a feat to avoid a tax increase. the white house joins us, and we have analysis on that topic. then the president spoke this afternoon about green jobs. today some jobs that at least pay green, as in money, one hotel in america has 9,000 open jobs. one hotel. you'll meet the man in charge on "street signs" today. plus, trading based on inside information about a

company's business is illegal. but trading on political inside information, say, what's in the health care bill before anyone else knows about it, not illegal. there's a bill in congress that would ban it, why they're not passing it. let's get straight to the trading floors. get a sense of whether we could pull into the green. mary thompson, brian shactman and mary. >> we are just about 18 points -- 16 points below the best levels of the day and 60 points above the worst levels of the session. this is what's happened today. essentially stocks have trimmed their losses as the dollar has trimmed some of the gains. the u.s. currency still moving higher. the tone coming into the session was weakness in the global markets. as the u.s. currency, which moved close to a two-week high started to pull back, stocks started to recover a little bit. the dollar strength is putting pressure on commodities so commodities are pacing the decline. we are seeing strength in