he's there now. as an elder statesman, the president probably won't disagree with a lot, but he's not, you know, not cautious a lot of times. he may say some stuff. he may disagree. he may say, look, i would have done this, i would have done that and we're going to give him the opportunity to do just that. >> and after carter's comments the last week, former presidents, when they speak, make some news. >> they do. and the guys on the far right say, who ever thought you would be pining for the days of jimmy carter at this point. it's a reasonable debate, but it can be a reasonable and thoughtful debate. reasonable people can disagree. >> and he's already focused on energy. north korea, with he was there with president clinton when he

went to north area. >> and the fed is convening a two-day policy meeting in washington today. a decision on rates will be announced a tomorrow afternoon. economists will be looking to see if that policy statement echos the comments last week, that the recession in his words are likely over. the government scheduled to auction that record $112 billion in debt this week. today it's a had 3 bill in three-year notes scheduled today. we'll see what demand is like as the new supply comes online. >> the fdic may soon ask banks for a bailout, but it's different, as you just heard, ask banks for a bailout. the agency's cash balance is down, probably not enough. the "new york times" is reporting that regulators are

considering a plan to have the neigh's healthy banks lend billions of dollars to help rescue the fund that helps depositors. >> that's what some of the guys complained about, if you're a healthy bank, you have to come in and help out the losers? >> and that can always happen and then you could, over time, get some of the money as they become more healthy and the yield curve -- >> cam fein, says sheila bair would take bamboo shoots under her nails before going to tim geithner and the treasury for help. she would do just about anything. >> apparently the relationship between sheila bair and geithner is strained. anyway, fine. in washington, the senate

finance committee just starting to say the part that was there and -- >> i had no idea that was there. >> no, no, not you. it was going to be really smooth. but anyway, also in washington, the senate finance committee begins marking up the health care reform bill today. chairman max baucus made changes to his bill ahead of the event that would add $28 million to the measure. the committee has its work made up for it. members have drafted more than 560 amendments for consideration. >> it's amazing any legislation ever gets passed. >> is that just on the senate side? >> the emergency t.a.r.p. funding, the bill that was this bill and they were supposed to read it overnight. >> is that for the senate side? >> that is for baucus, yeah. >> and then they have to reconcile that with the house and the question is who has more power once you get into committee.

>> tommy thompson told us yesterday it's the house. although others say it would be the senate. >> wouldn't it be good to have the firemen rule the world. all in favor, aye. let's do this. that's not going to happen. >> not this time, anyway. meantime, the president and other world leaders are in new york. today the president will speak at the u.n. secretary general's climate change summit. they'll host a working lunch with african heads of state and he'll meet with the president of china. he'll speak at president clinton's global initiative. following the u.n. meetings, he has -- other leaders will make their way to the g-20 summit meeting on thursday. they're likely to give power to limit the shares of profit banks can lend.

british officials say they expect the united states to agree with the proposal when it's introduced. meanwhile, we have all this drama on the new york tabloid that some are saying are his betrayal of govern paterson. >> and this is even worse. >> that shows him shaking hands in andrew cuomo. >> and government paterson. it's awkward region right? i'm not an expert on new york politics, but when we get paterson in here -- what is the worst thing he did for the approval public rating? >> you mentioned the kennedy -- >> it was an embarrassment to the political fiasco, i think a bigger problem since the corruption. people close to him, like there was a guy yesterday who

continued to draw salary forever eight months after leaving his post. >> i thought we had a lock on that over here with new jersey. >> we do pretty well with that, too. >> you have to remember, this is not a guy who was elected to the post, he stepped in to fill a void when there was another governor who fell. >> talk about awkward. >> we're going to talk to mayor giuliani about that, his potential plans. >> he's the wild card on why they decided to do this. i guess he's the only one that they think could give cuomo a run for his money. do you think rudy will announce today? >> on the show? >> yeah. >> yeah. >> he's a wide, influential -- in corporate headlines, bank of america will pay $425 million to exit the $ 18 billion asset guarantee program that it entered into with the u.s. government. the bank also announcing it's

received fdic approval to exit the debt guarantee program. meantime, the fdic is broadening its investigation of the company and may seek additional charges as it prepares for trial. last week, a judge rejected the agreement between the s.e.c. and bank of america. the shareholders were responsible for the board and the ceo because -- right? >> vote them out. >> right. >> if you want. it does eventually get back to them. >> yep. we'll see where that goes. meantime, check on the market this morning, unlike yesterday, today is one of those days where stocks are up, the dollar is down, a lot of commodities bouncing back after falling yesterday. there the dow jones futures are up by more than 60 points or so. decent day in asia. japan is still on a holiday, although the asian development bank did raise their forecast for economic growth for 009 and 2010 they're talking 6% growth.

ty a look at oil. we've talked about supply this week. the dollar, as you mentioned, down almost across the board. yeah. 91.34, almost to 1.48 euro. the year high is against the dollar. and with a weaker dollar, is gold rebounding this morning? >> yeah. up 12 bucks. $1,017.70. >> equity res rather oil, everything is up, but bonds are down -- or the yield was down, wasn't it? >> yeah, a little bit. >> let's get overseas and see

what's happening around the world. christine tan is in singapore, but before that, geoff cutmore is in london. hey, geoff. >> we've got the likes of bhp billiton, rio tinto, all those big mining companies listed on the london exchange are up about 1% to 2% at the moment and that's helping lift the european markets as a whole. i'll show you how that breaks down sectorwise. and it is the basic resources. the travel and leisure and autos seem to be picking up a little bit as does energy from this currency story. elsewhere, spain's biggest bank has talks of an ipo of about $8.6 billion for its brazilian unit. that would come in handy in terms of how you use cash if recovery is indeed on its way. and imperial tobacco just confirming they will meet their

year-end target. that's their expectation right now. now to christine in singapore. >> volumes were light with japan close to go a public holiday. helping to close with support from the asian development bank that you've been talking about, that the region is proving to be more resilient. over in hong kong, bargain hunting helped to lift the hang seng index to close higher, 1.1%. airline stocks benefiting from the brief fall in oil prices overnight. hang high lost more than 2% on concerns of oversupply. the stock regulator late yesterday said it had granted approval for four other countries to go public on a soon to be launched nashville style board there. the south korean mckospi is up 1.4%, a 15-month closing high. of course, the mixed session with asian investors keeping a close eye on the fed meeting today. that's it from asia.

sending it back to you. >> christine, thank you very much. it's time to bring in our tuesday task force right now. joining us this morning, darrel carsnot, also allan sinai. darrel, we were just talking as you were walking over to the set, talking about what's been happening with the dollar and how that seems to be driving all trades to the market at this point. is that continuing to be the case today with the dollar down? >> well, certainly it's been a major factor in the way it affects commodities as well as the expectations for inflation. it's going to be factored at that cross the full spectrum of investments. we have some concern that over time, the dollar will continue to be soft. and that frankly, the fed is going to be in a difficult position as we're focusing on the fed today and tomorrow of how things will turn out. it's going to be very difficult to have a soft landing on this economy given the propensity to keep the foot on the gas with

the concern being that if you take it off too soon, we'll be vulnerable still to economic decline. >> and this is a tricky time when the fed starts to consider something like this and you think it's going to have a tough time. >> well, you know, the very, very tight rope, the walk here between too much stimulus and too little at a time when the economy is still quite vulnerable, we think the fed will err on the side of being overly accommodating because the other side is too painful. >> allan, what do you think expect to hear from the fed today? do you expect any steps they may be taking to back away from some of these programs they may put in place? >> no, no. it's still too tentative on the economy. we're in the recovery. we haven'ted peaked out on the employment rate. for many of the fed, the infwlagz just isn't a concern on any reasonable time horizon. >> and do you agree with that? are they correct is in the thinking?

>> no, i don't agree with it, but it's the reality of the views. i think we're going to see way too high inflation sometime in 2010. it's going toby problem. but for the moment, we have a friendly fed, very acome dafb. are they going to stay that way? i don't think so, but i don't care it's at any time that's going to happen soon. >> allan, what do you think a fair time in the market would be the fed has been too acome dafb in too long? >> i think we're in a powerful upswing in surprises. i think it's going to continue. i just think that goes on quite a while exact markets are giving us signs of a global recovery trade led by asia. and it is in there and inflation and entrenched inflation view

that that will come back to bother us later on. but i don't think policymakers -- we'll see what they say at g-20 and at amf in october. but i don't think they're going to get in the way of this at all. >> darrel, do you agree with the specific contention that this is something that will cause stocks to continue to rise for some time? >> yes. we're less enthusiastic about the rise in stocks from here. we're concerned that from a valuation point of view that the market is getting ahead of the fundamentals. there's a lot of liquidity and liquidity is going into markets. but from a fundamental point of view, we thought the rise back up to around $100,000 level on the s&p was fully justified by the removal of the concerns about how badly it soundsed, but from here, it's going to take earnings and the growth for the economy. we think the expectations for growth might be overambitious and that the growth will end up being more muted as a result of

still tremendous head winds for the economy. >> even if the fed continues to be so acome dafb? >> ultimately, you get a generator and the earnings take top line revenue growth. and our sense is that while there's been a lot of cost savings and improvements and profits in that way, without the consumer, ultimately, it's going to be hard to get a lot of top line revenue growth. >> allan, you think the government is doing its part, not only through the fed, but all the spending that has been coming from the stimulus or will come from the stimulus next year to power that? >> the lags of easy money will be coming from the front of that. the same for 2010. but i think what people are missing is the tremendous upturn in so many areas outside the u.s. where they don't -- these countries don't have the overhang and the legacy that the u.s. does from the past that we have to work our way out of it, the american consumer. and a lot of our companies have shifted their businesses to the areas where the revenues will grow because so much of their revenues and earnings are

sourced outside the u.s., for example, from china and asia. and that's going to give us an outside, i believe, profit pick up. and the s&p 500. compared to real gdp growth and the growth of the consumer and that is a very sneaky thing that i think the markets have picked up and that is part of why we see some resilient city in the equity market. >> and the weak dollar, that's, you know, the weaker the dollar, the more that is pronounced. >> that is a big help. and why would any of our policymakers get in the way of that when the major concern is the federal reserve and if the treasury there's enough in running the u.s. economy and in particular, the jobs that we're not going to get, the sxwrobs that they want you to get, they're not going to get in the way of the dollar decline at all. >> and allan, if the bond market doesn't crack and all you're worried about is inflation way down the road with the weak dollar, if bonds hang in there and we can sell a lot more economies, let it go, right? i mean, that seems to be what

they're doing at this point. i don't see anyone saying, wow, we're in support of a strong dollar. >> well, like the lonesome dove, mcteer would say, give us a stronger dollar, just not yet, right? >> exactly. give me another couple of nights, the emperor's club. >> there is some danger that if that gets out of hand, it becomes difficult if the dollar decline becomes more -- >> what would the canary in the coal mine be? >> i think commodity prices have been a pretty good sign gold has run up. certainly if interest rates start to pick up, you'll be able to attract capital to keep our deficits financed. that is going to pe put a big on the economy, as well. >> thank you so much for coming in today. when we come back, your business traveler's forecast and early round of analysts calls

this morning.

welcome back. time now for our business traveler's forecast. scott williams is here with a look at the next couple of days. morning, scott. >> good morning, carl. we are watching for travel problems later on today. we'll start with parts of the deep south where metro atlanta, numerous road closures, secondary roads and interstates are closed due to the roadway just being washed away. we are seeing flooding in parts of the south, epic proportions, especially into atlanta. houston, getting ready to see showers and storms in parts of san antonio, western parts of illinois seeing showers this morning. western parts of michigan, watch out for fog. interior sections of the northeast seeing showers. eastern sections of north carolina along i-85 and i-40. flash flood watches are in effect along the i-20 corridor as you move through parts of jackson, birmingham and in atlanta, we will see the threat for flash flooding concerns. turn around, down drawn, find an

alternative route. we will see the chance for airport delays as we move into metro atlanta. the world's busiest airport, chicago, houston and d.c. but the weather should be okay for traveling in the major cities along the east coast, boston and new york city. but expect cloud cover as we progress throughout the day. rainfall moves into parts of the northeast major cities later on tonight. back to you. >> all right, scott, thank you. i like that. listen up, listen to me, if at 7:00 you're not going to like all they politicians you have, i'm going to give you upgrades and downgrades right now. do you want business news -- get it out of the way. >> i'll give you the important ones right now so you won't need them later when we're talking about global initiatives. >> which will all impact the markets. >> thinking deep thoughts. we do business news, but we get a chance to talk to clinton and poe defendant ya.

here they are. do we have a drum roll, anything? >> hewlett packard, upgraded to outperformance to neutral by credit suisse. 55 is the news price target. it hasn't been at 55 in a while. that would be breaking out. cost cutting and leverage from operations, as well as the potential for catalyst in the analyst state. which is coming up on thursday. dell was downgraded to neutral from outperform at the same company. the target reduced to 16 and there's concern about dell's acquisition strategy, noting the difficulty of integrating perot. citigroup changes macy's from buy to hold. target integrated to 30 from 15, doubling the target. revenue improvement is seen from the my macy's initiative as well

as potential operating market improvement after citigroup raised management. bank of america with info as rockdale raises the price target from 29 to 19. and u.s. steel was upgraded from neutral to perform. coming up, more of this morning's top stories. we'll get the story from the futures pits this morning. if you want to understand what's going on with the u.s. banks right now, mike mayo says you have to look to asia first. he will join us with that full story when "squawk box" comes right back. our star studded morning on "squawk box," former president bill clinton, former new york city mayor ruledy giuliani and steve forbes, all still ahead.

♪ >> tired of old music. good morning. welcome back to "squawk box" here on -- if i hear another led zeppelin song -- i need new. >> i don't like new. >> you want to hear songs you've heard a thousand trillion times? >> no. but -- >> i'm joe kernen. becky is here. carl is here. the futures at this hour started yesterday bad. they never got really that

serious. and actually, i think it was positive a couple of times. finally, i think it was down -- down by about 40. >> yeah. but it looks like it was ominous the first thing in the morning. monday, the other averages were down about 85, 90 points. sometimes that ends up at 200 or 300 points down. and some important stocks, blue chips were up yesterday. the federal reserve is convening a two-day policy meeting in washington. i don't know whether this has anything to do with -- probably not. it probably has to do with the dollar again. the bank is expected widely to keep rates near zero and keep emergency programs in place that encourage spending and borrowing. a sdig on rates will be announced tomorrow afternoon. economists will be looking to see if the policy statement echos chairman bernanke's comments from last week that the recession is very likely over. >> we've got a busy week ahead for the bond markets. you may already know this, but the government is scheduled to auction a record $112 billion in

debt, $43 billion in two-year notes is scheduled today. plenty of people are asking if we can continue to absorb this sort of treasury issuance. to this point, the market has and it has done it fairly well. $112 billion. >> yeah. so even though futures didn't tell us a whole lot at this time yesterday, we're going to pay close attention to it. there's a look at what treasuries are doing and futures are gaining a little steam here, 60 points or so above fair value. with the dollar weaker, oil and most commodities are doing well. oil has come down. it's been awfully tough to break out of this range of 67 to 73, really stub born for the past few weeks. for the time being, we're up a buck. ten-year note, we'll keep a close eye on. 3.487%. dollar weakness is the overwhelming theme of the day. we are close -- actually, we are at a new one-year low against

the euro at almost 1.48. we're at 91.39 yen. weaker dollar typically means stronger commodities. we still haven't crossed over. we set that new record, i think we touched 1,030 and change but we haven't settled back up there recently. >> both are getting excited. they think this might be their moment. >> what did they say yesterday, 25,000? >> yeah, next stop, 25,000 an ounce for gold. >> a lot of people that write in here that gold bugs were angry that we were doing the low ball estimate, for what gold is actually worth, in their view. >> what is the whisper? >> whisper number is 100,000 an ounce, which should be there if not in '09, 2010. >> that almost makes up for the fact that it doesn't pay dividends. >> if you have any comments or questions about anything you've

seen here this morning, e-mail us at squawk@cnbc.com. we're going to take a quick break right now and we have the news that's making headlines outside the world of business when we come back. stay right here. >> announcer: tomorrow, "squawk box" is live at the national energy summit, academic leaders and washington power players driving competitiveness through sustainable energy. the squawk lineup includes dupont's chad holly day, jim owens and more. that's tomorrow starting at 6:00 a.m. eastern. here some 45 year. actually, 47. ladies and gentlemen, mr. larry mccarthy. amidst today's financial turmoil, our sophisticated wealth transfer strategies... and philanthropic expertise ensure your legacy... is passed on to family or your favorite pastime. ♪ northern trust. wealth management. asset management. asset servicing.

t. oh please. you got the presentation? oh yeah right here. 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.

the world's top strategists, some of them are in hong kong,

they're taking on the global economy with a big emphasis on the u.s. banking crisis and the fed. new york financial analyst mike mayo, renowned bank analyst is in hong kong. he'll with calyon securities, which is running the conference. also with us this morning is eric fishwick, chief economist with clsa. welcome, gentlemen. you probably have a delay. you're all the way over there. we appreciate you being with us. mike, the first question to you. this is a very eclectic group. i see you have sarah palin talking and shreyl crow singing. it might be like anti-matter if those two get together and the entire universe as we know it could end. can you make sure it doesn't happen? >> i think we can do a better job with that than resolving all the problems in the world today. but this event hat 1,300 fund managers from 30 countries. it's the largest event of its kind and there's a lot going on.

and the main purpose is that -- go ahead. >> one of the things that you're emphasizing is that that area of the world went through a large amount of deleveraging in the financial system over the past decade and maybe we can look to them to make sure we do some of the things they did right versus some of the things that they didn't do so right. >> i think what's interesting, i have on the ground conversations with people experiencing the asian crises first hand. so look to japan, indonesia, thailand, and there are two very important lessons from those debt busts. number one, the deleveraging is likely a lot more than people expect. and number two, it takes longer to get back to normal than people expect. so there's a lot to learn to what happens to asia to what's going on in the u.s. today. >> all right. eric, some people think that -- on or at least i'm reading that

anecdotally, you're hearing that there is skepticism from some of the players over there that were out of the woods here and that this recovery that we're seeing is unsustainable. are you hearing that? >> i think the risk is there, but we need to make sure it's skepticism about growth in the west. there's a lot of confidence about growth out here in asia. >> but i guess maybe those were your comments that i'm looking at, mike wab that there is a feeling that our government needs to know what's on the books of our banks in terms of we haven't dealt necessarily with all the tock ix assets that got us into this mess. does that make you still bearish, mike mayo? >> well, i didn't get the memo. i didn't get the memo saying that the credit cycle is already over. and even if the credit cycle, you know, was over, there's still five difference thes versus coming out of past recessions. number one, you have

disinflation, number two, you have deleveraging, number three, you have the deposit insurance fund to figure out and you have deposit service charges going down, or at least overdraft fees. so the credit cycle is not over yet. even if it is, normal might not be as good as meets the eye. >> what would that mean for the prospects for gdp in the rest of this year and 2010 here in the states? >> for the states, i think you have to be very cautious. and i think that growth next year is going to disappoint. i think there is still a lot of debt to be repaid. but there is one other word that i need to add to milk eeps word, and that's decoupling. because other countries are taking over from the u.s. as the biggest importer. out here in asia, china is dragging the rest of the region higher. and why that matters for the u.s. is that china is not

spending its savings on stimulating its own economy whereas last year it was spending its savings buying u.s. treasuries. >> net-net, eric, the dollar has been benefiting a lot of different asset groups, including equities. can that last forever or is there a day of reckoning coming? >> i wouldn't own dollars myself, so i think you would have to be long things like commodities and gold especially, absolute physical values. but i think now is the time when the strength of balance sheets in economies really brings dividends. and that means that i would favor asian equities over equities of any western country. >> mike, before we go, do you see the dollar weakness the same way or does it give us an opportunity to pay some of our debts back that we've built up and it doesn't cost us quite as much because the dollar is declining? >> well, what i find interesting is the fed easing as eric and

others at our area have mentioned. the liquidity is not necessarily helping the u.s. economy. it's going directly to asia and asian securities and there's no better evidence of that than this 16th annual conference. of the 1,300 fund managers, there's many from the united states that are hear looking to invest their liquidity into asian stocks. so that's direct evidence of liquidity from the u.s. inve investing into asian securities. >> gentlemen, good luck. i hope you find out a lot of stuff and maybe you can report back when you get back here. >> on the banks or on shreyl crow's -- well, on the banks and on shreyl crow -- who can we get to meet shreyl crow and have them meeting in the ladies' room over there? >> fair or square? not for you.

♪ >> what is that? >> i don't know. i just think it's -- when they pass, it might be -- there may be some sparks, might be some fireworks knowing shreyl's politics and -- >> we don't know who would win that fight. >> no, you don't. shreyl and i had our fight with global warming -- >> you don't, i know. i'm told this is the music from when aspect and carpetan kirk were fighting. >> we have a clever and quick control room. monica novotny is here with a roundup of the lineups. >> christen wig plays shreyl crow. that's my pitch. the southeast is bracing for another round of severe storms today with entire neighborhoods submerged in flood warts.

at least six people have been killed across the region. two others are missing. since friday, some parts have seen 20 inches of rain. today, president obama is making his debut at the united nations in new york city. the president will deliver remarks pe u.n. climate summit and then will hole tri-lateral talks with politicalan and israeli leaders. it takes a big mon to love little dogs. the ninth annual running of the wieners. the matching dachsunds were matched up in size. >> oh, my dodd, there's congressman weiner. >> the running of the wieners. >> in honor of carl. clearly, monica, your story selection is way too focused on me, but i love it. >> i'm just here to serve you, carl. >> it's a tender man to love a -- someone else got in trouble with that analogy, monica.

>> oh, that's right. that's right. >> plucking that chicken. you see, i can say it. >> that's brave. i wouldn't even go there. not at this hour. >> monica, thanks. >> thanks, guys, have a good one. our guest host this morning, joe po defendant ya. he'll join us at the top of the history. desta. he'll join us at the top of the history.

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first of all, i think it's important to realize that i was actually black before the election. >> really? >> that was followed up by saying, how long have you been black? the president on letterman last night talking about race. john harwood our chief washington correspondent joins us from d.c. sometimes it's amazing this is happening, our president on the late night show discussing questions like that. he's trying to do so many big things this week. climate change, clinton global initiative, bilateral ralls of china, israelis, g-20. yet we're talking about race on letterman and whether or not he

supports a new york governor. is he tramp ling his own ambitious schedule this week? >> full disclosure. i was white before this week, too. the president has a lot to do. he believes most of the elements of his policy agenda are with each other, so you can't disentangle. economic recovery, climate change and an economy moving beyond fossil fuels. some of this other stuff, that's a different angle of pursuing his vision and the race discussion got further as it did on some of the sunday shows. that's a bit of a diversion, which is why they are trying to tamp it down and make light of it. certainly the new york governor's race is another distraction. anyone wants to positively influence the direction of their party and performance of their party before the election.

the question is how transparent you are in doing it. sometimes white house's would prefer less transparency than more. you have a little excessive transparency of the obama white house in this case. >> you still think there is the possibility of generating serious headlines before the end of the week. >> oh, yeah. but i don't think -- i think the headlines that come this week, carl, are likely to come out of the senate finance committee than the g-20. when you talk to white house officials and others on the fringe of the g-20 process, they tend to think this is going to be a fairly low-key summit affirming the actions that were taken in london in april but not really coming out with any big new initiatives, sort of a stay the course summit. >> interesting. some have made the point that health care is maybe getting more traction when the president is out of town than when he was in it. is the baucus move to modify his own bill an attempt to assuage

republicans or fellow democrats? >> both. because olympia snowe, like liberal democrats, from maine wants higher subsidiaries from low and moderate constituents in maine as people like jay rockefeller, fine gold. the question is how do you pay for that. what olympia snowe wants to do is increase subsidiaries but decrease the generosity of the benefit package people are required to buy. we'll see how that tradeoff goes in committee. this process in finance committee is where you're going to see the deals get cut that bring it to the floor and potentially line up those 60 votes to get past the filibuster potential. >> we were wondering in the last half hour how you manage to read 500 plus amendments. >> actually you don't. >> you have staff people that do that. >> yeah. >> we'll talk to you soon. >> i think you and i will be the

steel curtain in pittsburgh. >> your. >> i'll be jerome bettis, you are roethlisberger. >> we got carl protection from rendell. >> what's the protections. >> just a couple of troopers. not for the protesters but for the groupies that follow him just about everywhere. >> no autographs. >> that is true, carl. i'll help you fend them off. >> i don't have the dance partner, that's harwood. talk to you soon. >> wow, you were white before the election. >> john, thank you. we'll see a lot of you this week, too. let's get a jump-start on the trading day. joining us from chronos futures management. kevin, the futures are looking better than yesterday. is it a bounceback or talking about just what's happening with the dollar affecting all trade? >> right. i think the latter, becky, yet a couple of days friday and monday

where it's all began to shift and people began to weigh in the possibility that the fed meeting would be more about exit strategies, so the market took a little pause. now how quickly you can see it swings back, that the fear now or talk now is that slowing down and extending policies if not mortgage sector is the talk and keeping rate down as the market is saying but the fed has had a hard time believing for some period of time is back in vogue. the dollar taking a beating. stock market likes that scenario. >> kevin, i know it was a rough morning. we appreciate you rushing and getting here, i'm sorry we have to cut it short. thank you for making it. >> okay. >> former mayor giuliani, well-known businessman steve forbes coming up in the next hour or two. first a look at president's former right-hand man, he ran

the west wing. john podesta joins us when "squawk box" continues. you're watching "squawk box" on cnbc, first in business worldwide. $$$$$$$$$$$

good morning, american leaders step up to the "squawk box" podium. the economy, the job the current administration is doing handling the financial crisis. >> our guest host the former president's chief of staff and member of the current administration's transition team, john podesta. his thoughts on the many programs to right the economy

and his involvement with foreign policy initiatives. >> restoring investor confidence. america's mayor rudy giuliani will talk about the market one year after the downturn, what has changed and where we're headed. the second hour of "squawk box" begins right now. good tuesday morning. welcome back to "squawk" on cnbc. i'm carl quintanilla with joe kernen and becky quick. john podesta, former white house chief of staff under president clinton who will be joining us in just a bit. not to mention, giuliani, steve forbes, a big hour ahead. good to have you with us. >> good to be here. >> look at futures this morning, markets. things looking okay. asia for the first type in three days will open up about 60,

almost 70 points higher as futures have been building steam for most of the morning. some of the stories, fed convening a two-day policy meeting. central bank widely expected to keep rates near zero and emergency programs in place to encourage spending and borrowing. senate finance health care reform chairman max baucus making changes ahead that would add to the measure. bank of america paid $425 million to exit the $118 billion asset guarantee program it entered with the government. the bank also announcing it received fdic approval to exit the debt guarantee program. >> as we mentioned, our special guest host is john podesta, president and ceo for the center for american progress. john, thanks for joining us today. >> glad to be here. >> we have a full slate of things to talk about. last few times we've spoken, it was about what we're doing with energy and where energy programs stand with the capital.

that's been overshadowed by everything in health care but maybe you can give us an update on both situations, where energy stands when it comes to the house and congress. >> of course the president speaking today at the u.n. on climate change. he's got to speak to two audiences, one the global audience america is ready to lead and global, an opportunity to move forward with an important stimulus to the economy, one that can create innovation and jobs and investment. i think what's happened on capitol hill, energy has taken a back seat to health care, as i think is probably appropriate. there is -- the house passed a bill last summer. the senate is looking at it. they are trying to put together a bill particularly headed by senators boxer and kerry, but right now it will have to wait its turn until health care is completed. >> is it something the senate will address this year or too much on the agenda. >> i'm still hopeful. there's a lot of complication in

that bill. you have to get 60 votes in the senate as we have learned with health care. right now it looks like there may be a majority but it's still a tough road to get to 60. i think a lot of determine aegs and a lot of work. last time i was out in nevada with senator reed, the majority leader. he's committed to move forward with robust energy in the climate bill. i think it's possible to get it done. copenhagen deadline moves, i know the administration wants to put effort into it once health care is complete. >> what's that bill going to look like once the senate passes through. what are the key points that will still be left standing? >> i think it's going to change from what passed in the house. but i think the structure of trying to put an overall cap on carbon emissions and global warming emissions will likely remain in the bill. i think there's more support for nuclear power in the senate than there was in the house so you

might see additional support for nuclear power. there's an effort to try to utilize the very big, abundant supply of natural gas that's available through what are referred to as national resources, shell oil, gas, et cetera. you might see some amendments coming from people from those states that's distributed across the country, not just in traditional energy producing states like texas and arkansas, but in pennsylvania and michigan. so you might see some activity on that. but i think what this is about is putting together kind of one vote at a time the supermajority that's going to be needed to really get the country on a path to clean energy future. >> did natural gas -- did they have a raw deal the way it stands versus coal? >> in my own view, they get a reasonable deal because once you put a declining cap on carbon emissions, then you're going to see more natural gas come online. there's a lot of capacity to

produce gas right now that's already built. there's a lot of supply of gas that's been unlocked and unleashed because of advances, really, innovation, technology that was developed here in the u.s. in just over the past decade to really unleash these unconventional sources. so if you marry a lot of supply with a lot of capacity, i think even in the bill that passed the house you're going to see a lot more gas come into the system. at least that's where the growth will be, electricity generation. i think the senate may even go further and try to get more fuel switching in place. >> so you can sort of cater to the coal guys, give them what they want, bring them on board, and then down the road you do what you need to do for the natural gas guys. is it politics? >> yeah. i think it's part of -- particularly part of american politics, which is based in this context partly on party but a lot it's based on regional

policies. and where people see the future of their own state's economy going. so i think -- i think the deal is there. people understand that we need to get on with this. global warming, as the president will address this morning will exact a tremendous toll on the economy and obviously on the environment. so this needs to happen and this is where the future is. chinese are spending $221 billion over the next two years on clean energy. they are spending $12 million an hour on clean energy development. the biggest solar power announcement in history just a couple of weeks ago. so, you know, the president of china is here. he's going to also speak about it. but we've got to -- we're going to be left behind if we don't get on with efficiency in these new green technologies. >> john, there are some people who have said why bother going through congress to put a cap, especially on utilities, when they are regulated so closely and regulators could say tomorrow do it, without trying to go through congress. >> it will be interesting to see

if the president leans into that argue today. his epa administrator lisa jackson has said that she has the authority under the clean air act not just to regulate automobile emissions, which he did last week but stationary sources and power plants if congress fails to act. so i think both president and epa administrator said, congress, it's better if you act. but if you don't, we will. it will be interesting to see whether with this murky situation in the senate, whether the president leans into that in his speech to say one way or another we're going to be the leader again on controlling global warming, pollution and on building the clean energy future for our country. then you've got the g-20 at the end of the week where the financing question is on the table. >> some worry that the fight over health care, however it's resolved will be so bruising there won't be the energy left, particularly in the senate, to tackle other big issues. >> there's two theories of that.

one is success builds on success. the other is that you can kind of be out of breath and your tongue hanging on the sideline. i choose to at least at this moment believe the former is possible. you know, there is an awful lot going on on capitol hill. i think the president kind of laid it out there last spring when he said, look, in order to have a strong, sustainable economy for the future we've got to do three big things. we've got to reform the way we produce and use energy, reform our health care system, reform the way we educate our students so we have the human capital that's going to create an innovative economy for the future. he's at work on all those. but i think that, you know, obviously over the course of the summer, you know, it felt like things were particularly bogging down on health care. i think he reinvigorated that speech in congress. >> do you ever wonder whether or not they should have put maybe all of those three aside and just focused on jobs at least through the end of the year? >> you know, i think he is focused on jobs.

and let me finish, carl. i think you saw that big infusion in the stimulus in money spoke these clean technologies and these green jobs, into health care, education, $100 billion for education. that's the basis of why even the most pessimistic forecasters say we've either created or stabilized a million jobs in the economy. some people say it's up to a couple million or as many as 3 million jobs. i think he's trying to build for long-term success. i think if he had said all i'm going to worry about is the banking crisis and i'm not going to worry about what's doing on on main street, i think that would have probably been both a bad economic program, and i think it would have kind of slowed down as well. >> john is going to be with us for the rest of the program. we have much more to talk about. but we've got other things coming up on the agenda, too. >> just looking, a few other comments the company is making.

given a lot of forecasts on total sales, the stock, though, at this point doesn't appear to be -- i think there may be comments. they are making impairment charges, same-store sales, down, opening 35 to 45 new stores. fiscal 10, same-store sales up 1%, total sales 3 to 4. i don't know if any of those are versus a prior expectation for lows. not a whole lot happening with the stock. we're just getting started, still to come america's mayor rudy giuliani will join us on the set for a live interview. then former president bill clinton. we'll hear about his global initiative meeting and much, much more. up next, the president -- the current president set to give a speech at the united nations on climate change. before he does, we speak to the u.n. climate change chief right after the break. hey, it's great to see you're back after that accident.

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u.n. gearing up for high-level event on climate change a today, president obama's attendance. joining us united nations secretary climate change joins us from new york. good to have you with us. >> good to be here. >> crunch time in copenhagen around the corner.

a lot of work done. you've been quoted saying the current draft is awash in the sea of drafts, the pieces of the drafts yet to be agreed upon. is the president's appearance or any of his words going to have a meaningful affect today? >> i think they are going to have a huge impact. you were talking about health care before the break. i think the situation we're in in international negotiations is they are in cardiac arrest, they need a couple hundred volts of yes we can. i hope he'll inject energy, relief today. >> what's the toeb going to be. >> i think copenhagen, it's just around the corner. it needs clarity on three things. we need to know how countries like china and india will engage to reduce emissions. we need significant finance to help poorer countries impact

climate change. if we can get that we have the basis of a strong deal. >> china has been one of the countries at least here in the u.s. we have been after to improve the way they handle the environment and climate change. there's been some reports, though, that you say china has now adopted somewhat of a leadership role. have we switched places with them? >> it will be interesting to see what chinese president says today. before the break they talked about huge investments in energy, efficiency, closing down highly polluting small or medium-sized industries. china out of concerns over energy prices, energy security and climate change is really taking this issue seriously. >> are they at an advantage because of their structure, ability to make decisions faster, with less debate if you can call it that in this country. >> i wouldn't like to comment on

whether that's a good thing or bad thing. china is taking it very seriously and driving a strong policy forward. >> you've been watching the u.s. grapple with health care and i posed this question to john a couple of seconds ago. assuming we get through that and it is a relative success for the president or for the opposition, what have you, will there be the wherewithal, the political stamina here in the u.s. to confirm whatever happens in copenhagen? >> i think there has to be. i think people around the world understand poor people in this country are concerned about health care. that is agenda item number one. if it's a consequence of that, hundreds of millions of poor people around the world are going to have to wait for an agreement on climate change. i don't think that can be explained to anyone. >> can i jump in? what does the g-20 have to produce on financing in order to move this process forward? you mentioned financing in your opening comments. >> well, let me begin by saying

what it does not need to agree to in my mind, that is how rich countries are going to mobilize financial resources to help developing countries. i think that should be left up to each nation to decide itself. but what g-20 does need to give us an indication of is how financial resources can really be made available to developing countries using existing institutions, perhaps new financial avenues as well. >> mr. deboer. busy morning for us. we're going to move along. great having you. we'll be watching closely today. >> thank you. >> following the meetings, president obama and other leaders will make their way to the g-20 summit in pittsburgh on thursday as well. the london times reports the leaders are likely to give regulators the power to limit share profits that banks can spend on bonuses. the uk is said to be more receptive to the compromise proposal which will help put more cash into capital reserves among other things. british officials say they

expect thens to agree to the proposal when it's introduced down in pittsburgh. up next clinton global initiative, 2009 annual meeting kicks off today. a lot of global stuff happening this week. >> really? like globalization, we're seeing it. >> right before their eyes, global leaders in politics, business, humanitarianism. president clinton join us next to talk about his hopes for the event. you are watching "squawk box" on cnbc, first in business and really politics, i think, worldwide. still to come on "squawk box," america's mayor, rudy giuliani joins guest host john podesta to discuss health care, energy policy and american business. how concerned is he about commercial real estate? how can the united states become energy independent? and is this stock market rally for real? those questions and more when "squawk box" continues on cnbc,

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all right. we are back. unfortunately we have commercials because we talk about a lot of stuff during commercial and john podesta is here. i ask a lot of questions that i

think of myself, john. you look at all the problems we've been through as a society over the past 18 months, and you ask the normal person where you put global warming on that list of priorities. in recent polls like that, it's at the very bottom. that maybe one of the reason it's so hard to get things moving. as a chief of staff or policimaker, you have to be part pr and part hammer, i guess. why not emphasize -- how can you go wrong getting hydrocashons and moving into the future and jobs. why not shift the emphasis so people can understand and it increases the skids. >> i think the president, as i said, he's talking to two audiences. so internationally i think he has to align himself with people who are really trying to fight and struggle with this problem, a global problem that will create a tremendous security issue for the united states. here at home he's really got to

emphasize the upside, the ability to get more efficiency, lower consumer prices by making their homes more efficient use of energy. i mentioned gas earlier in the program, using natural gas as a transportation fuel, particularly in heavy duty trucks to dramatically reduce the amount of oil we're importing from saudi arabia, mideast, i think -- >> even in the third world, it's asking a lot of foreign countries to forego their move into the 21st century because of something that can happen 50 years from now. china, too, for jobs and technology more for the specter of rising tides in 20 or 30 years. >> they also have severe pollution problems. >> they do. but that's not global warming. that's a breathing problem. >> i think they get that. but i think ultimately what they are doing is investing in industries of the future. they picked out solar, wind.

they are investing in nuclear. they are investing in -- >> not allal truism over there. >> they want to make the stuff people buy in the future. i think they see the trend line coming. >> i think the green they are interested in is stuff they can spend, not necessarily the other. >> john is our guess host for the rest of the show. he's going to be talking to us. right now we're going to be joined by a special guest, clinton global initiatives 2009 annual meeting kicks off today. global leaders in politic, business and humanitarianism have gathered in new york to address education, climate change, gobble health and the fight against poverty. joining us right now is former president bill clinton. sir, thank you very much for joining us. it's good to see you again. >> thank you very much. it's good to be here. i enjoyed your conversation on energy. i agree that we should emphasize both the security aspects of becoming more energy independent and the economic potential of

changing the way we produce and consume energy. this is a huge economic opportunity for us and for poor countries dependent on imports. i think we should season it. the chinese see it for what it is, an enormous economic opportunity. so should we. >> there are some people who wonder about that, wonder if we're taking on too much, if it's gotten put on the back burner. do you think we've taken on too much or something we need to do right now? >> i think as we see there's a limit to how much you can do in the congress at one time. but there's been an enormous amount of work done on this global warming legislation. john podesta knows a great deal about it. i think after health care is resolved, and i think it will be resolved with the passage of a bill that will substantially improve the situation i think congress should take it up. i think it's important from a national security point of view we need to be independent of foreign oil and our economy needs to be stable over the long run. we can create literally millions of jobs out of this.

about a million in a hurry we get serious about efficiency. i think it's important for our standing in the world. i cannot tell you what it will do to america's standing in the world if it looks like the chinese are more aggressive than we are in combatting climate change. it looks like in the face of evidence that the best performing european economies in this decade were those that did the most to produce greenhouse gas emissions we say we can't do it. people will start looking at us like we're long in the tooth and yesterday's country. these people that come to my global initiative, these business leaders, they think we have to produce greenhouse gas emissions. they think it's a moneymaker, not a money loser. that's what we need to get across to the american people. >> you've been involved in the climate initiative and clinton global initiative in trying to bring people together to really make these investments. this year you've kind of changed the format. you're talking about the how of this business, how we're going

to get this job done, how we're going to get investments flowing to clean air technologies. >> what we tried to do this year i think is important, not just deal with the topics and get as many commitments as we could but get people to really focus on what works. what works in innovation, what works in human capital, what works in developing finance. we really try to get people to think about that. you know, frankly, we've done better this year than we normally do in commitments and raising money for education, for health care. we're about where we normally are on economic empowerment of poor people. the energy projects are more expensive, not as much money out there. big energy projects. so i think that i hope will come out of this meeting is a whole lot of partnerships between the non-governmental organizations like my foundation, and we work, as you know, john, in 40 cities on six continents. between us, the business

community, and the governments, because we have to proof this is good economics. we're not going to really get the progress on this climate issue until we can proof there's an economic path forward that is positive for ordinary americans and ordinary people in the rest of the world. i'm convinced we can do it. and we've just got to figure out how. the world is organized for yesterday's energy patterns, not for tomorrow's. we've got to use the non-governmental movement in a creative way to organize for tomorrow's energy patterns. that's the best thing we can do to help the president pass climate. >> when tom friedman comes out in a column like he did this last week end and suggests or tries to provide the idea of taxing gasoline, is that an idea that is gaining traction at places like cgi in are as operational ideas like that melting into the mainstream? >> i think a lot of our people would probably support it. but if you did it now with this economy the way it is -- keep in

mind, even before the financial collapse a year ago this week, september 15th, 2008, even before then, the average american median income after inflation was $2,000 lore in september of 2008 before the collapse than it was the day i left office. so when health care cost doubled, cost up 5%. it's not that i love the column, real men tax gas. i think how he proposed to divide the money is not politically palatable today. i think if you had a gas tax today, you would have to rebate the money from the median on down. you have to realize most americans are having a heck of a hard time paying their bill. the unemployment rate is still crushingly high, underemployment rate is high. i think if we did it in a way that gave the money back to people -- by the way, sweden did this in 1991 with carbon.

proposed a tax and gave the money back, so they actually raised the disposable income of the people. i don't think that the government could keep money from people that can't pay their bills today, but i think they could do it in a way they said, look, we're going to use this to make this country the first country in the world that goes to electric cars. if you did it. i also think they should announce right now that they are going to make the purchase of electric cars more attractive or hybrid electric vehicles. i think the cash for clunkers program was great for giving detroit a boost, i think there ought to be cash for 20th century cars. i go with john podesta, i think that should include using natural gas for the big trucks. we don't know how to run them on electric yet. >> it's only been five years,

during that time you provided 34 million people with treatment for tropical diseases, reduced malnutrition among 42 million children, provided more than 8 million children with schooling, clean water, all these different initiatives. with that backdrop of the financial collapse, what that ha that done not only for the amount of monday you've been able to raise, the amount of contributions but also needs around the globe? how has that changed? >> well, first of all, we need to admit the needs have gone up for people particularly in the economic area. i must tell you global warming gets worse their ability to grow their own food will go down. and the main money casualty we've had is in the expensive energy projects. we don't have as many mega solar projects or mega wind projects we've had in past years but we have just as many -- we have more business people showing up than ever before. we have the same number of people we had last year coming.

we have the non-governmental community coming from all over the world. and we have raised as much or more money as we normally do to fight poverty, education and health care around the world. so i actually feel good about where we are. the money for the big energy projects will come back as the economy continues to improve. so we're actually in much better shape than i thought. now, i can't do anything about the fact that the global prices has led to increased poverty and that the needs are greater. people seem to get that. we have everything from big commitments from companies like companies here to helping countries all over the world fight cervical cancer, which can be dramatically reduced, to two young americans upset because they have a friend with leukemia stuck in the hospital with no support systems. two young people started this

whole movement and they have collected and distributed 48,000 dvds, movies, in a year to 480 hospital. so everything in between. what we're trying to do is change the ethic of what is possible for citizens to do. i think particularly on this energy thing you all were talking about, if we got enough organized effort, we could do half of what we need to do in america just through efficiency. so i'm encouraged. >> will you put some ideas on the table on how to finance the big energy products so necessary in the developing world? >> yes. we will. now, you know, i have supported one of our big projects here in the global initiative involves european solar company working with american who are putting up solar villages in africa. one of the places where i work in ethiopia, we work on health

care, so through my direct foundation i visited one of these villages. they have these little microsolar reflectors on every home and then they put four on the villages public building. so for a pittance of money they brought solar power to a village of 5,000, which enables them, this is interesting, to use compact lighting and led lighting in ethiopia, one of the most advanced lighting in a poor village in a poor country because of the non-governmental movement. and it's all good economics. so what we're going to tried to is highlight what we know works now in other places and get people to accelerate this. because there are lots of -- haiti is a place where, as you know, john, i'm working on behalf of the u.n. for the next two years. most patients don't have access to central electricity. you've either got to take the time and raise the money through government or utility companies to expand traditional electrical

guide or do more locally deliverable small scale solar and wind energy that's localized. so i think you're going to see a lot of focus on how to get this done. there's more focus than ever this year on not just what should you do but how should you do it. and the more we can show people how to do it faster, cheaper, better, the more we're going to be able to raise money to get it done, both government money and private sector money. >> president clinton, i've got to ask you about health care. i'll make it simple. what would you prefer 60 votes with no public plan or 58 with a robust public plan. which way would shoo we go? >> well, i favor a public plan, and i favor one that's broader than has been proposed. if i were making the world over, i'd let any american that's

paying a portion of income, including small businesses, have access to the public plan if there wasn't a competitively priced private one, not just those that don't have insurance. but i think that first -- john can explain this better than i can, because he's got the pressure on it. they can pass this bill, some health care bill in the reconciliation process as part of the budget. only the budget bills require a majority vote. in the senate they can make you get 60 votes for everything else. that means 41 senators can derail the traditional legislative process in health care. that's what happened to me in '94 when i tried to do it. he only had 41 to kill it and he did. probably 33 or 34 and he killed it. but this year, i think the most

important thing is for the president to pass the bill. now, there are more budgetary constraints on administration and proponents of health care if they do it with the 51 vote option. john can explain that after our section is over. but i personally think that he's going to get 60 votes in the senate for a bill that will dramatically increase coverage, improve the health care delivery system and make health care more secure for the people that have got it. and i think the most important thing here is that we do something that improves these things. it may not be perfect. keep in mind, when we passed the children's health insurance program, it was the biggest advance since medicare and there were only 5 million kids on it. today there's 12 million. when franklin roosevelt covered social security, it didn't cover farm workers. it's a different program. medicare and medicaid are

different programs. the main thing is to get together and do as much as they can, whatever that turns out to be. i think that's what's going to happen. >> i guess i was trying to get you to decide whether -- who we should not worry about -- whether you should worry about the far left and disenfranchising the far left or worry about 18% of the economy it would be good to have something that looks bipartisan. in your view, which way should we go on this polarized country right now. >> well, first of all, every time we tried to do something enhealth care it's been polarized. so that doesn't bother me. i think what i would do is to look at how much -- what he had to give up to go through the 51 vote process. in other words, what do you have -- what are the budgetary problems. as i said, john knows more about the details than i do.

they can have a ten-year budget plan if he passes health care stand alone but he has to have 60 votes in senate to do it. i think you can have the thing pay for itself in fewer years if they do it in the budget process. so we actually may -- to get a public option, we may have to give up other things that would be quite painful in terms of health care reform. i don't know the answer to that. >> you wouldn't even worry about political considerations. you need to do it, there's been enough talk, enough polarization in the past, if you can do it with 51, go ahead and do it, damn the torpedoes. >> keep in mind the position of those opposing president obama, we spend 17% of our income on health care. no one spends more than 10 1/2. that means we're spotting all our competitors between 8 and $900 billion a year. that means every year employers are putting money in the health care premiums that are otherwise going to the wages of

hardworking americans. and for that 17%, we say to the whole rest of the world, because we believe in the so-called private insurance sector and we believe in the way we distribute health care and deliver it, we're sorry, but we just can't cover 16% of our people. everybody else in the world can do it but we poor americans can't do it. furthermore, we are prepared to accept an international health outcomes rating of 37 -- that is there are 36 countries, including columbia where i have worked, which only spends 6% of its income on health care that gets better health outcomes overall than we do. now, that is the position of the opponents of change. we've got to get back to that big stuff. the american people have been led to believe they will be rendered insecure in the health care coverage they have got. they have no idea what they are paying for it, those that get it at work because they only pay 27% of the cost. this is killing the economy. it is totally insecure for people who have health care, because when they really need

it, they often are canceled. and everybody just assumes we're delivering the best health care we can for the lowest possible cost when two-thirds of the expenses go to 10% of the cases that could be much better managed with better health outcomes. so i think the president made a good start with his address to congress. we ought to keep hammering home the big realities and put the people who are against this right where they belong. they like distributing the money where we are, even if it means 16% of the people have no health coverage, the other 84%, except those insured by the government could lose it, and we are killing our competitive position by spending too much money on health care. i still think the president is going to win this battle. >> you mentioned the president's address to congress, mr. president. have you considered or thought about how you would have reacted if you had been at that podium and a sitting congressman had said," you lie." >> given what i went through, i might have said that's one of

the nicest things said. but i -- you know, i might have tried to make a yoke about it. but i think the president in just blowing by it probably did the right thing. look, i didn't like that. but we have since the hard core right wing of the republican party took over their party in the late '70s, we've become more partisan and polarized. i remember i was kidding newt gingrich the other day, we're out of politics, we can be nice to each other now, that he once -- we were at not lott's portrait unveiling, the worst thing he ever said was that i was a spoiled brat but newt said i was the enemy of normal americans. but you should -- let me put this in some context. roosevelt was called a traitor. we've had all kinds of things

said. i remember when president johnson could over some guy wrote a book, the texan looks at lyndon and virtually accused him of murder. if you go back, this has been a staple of politics. when i get really upset about this, i go back and read a book in the second century by a roman historyan who still had access to the transcripts of what went on in the roman senate. when you look at what cicero said about julius caesar, he was a lot rough on him than anybody has been on bill clinton or barack obama. >> but he didn't have the internet. >> yeah, he didn't have the internet. but instead of -- i think what we ought to judge ourselves by is whether we're getting anything done here. do i wish it was more civil? yes was i upset the guy called the president a liar?

yes. it was done and the house sanctioned him. let's move on and deal with the underlying issue here. what should we do about this unsustainable condition we have in health care. like i said, i may be wrong, but i think the president is going to succeed. i think we can succeed in climate, too, but we've got to prove it's good business, more economics, higher incomes, more disposable incomes. people like me who aren't in politics anymore, i tell john this all the time, he needs to be in washington hammering out a better climate change bill but my job is to prove it's good economics. that's what the clinton global initiative tries to do with climate. we try to use the opportunity of this horrible crisis to make economic growth more widely available. if you change the way you produce and consume energy, it would give us the biggest economic boom we've had since we mobilized after world war ii. >> mr. president we want to thank you so much for your

generosity and time today. >> thank you, he enjoyed it again. >> john says thank you, too. we'll be watching the clinton global initiative all week. thank you for your time. >> thank you. >> up next former presidential candidate and new york city mayor, this is america's mayor, rudy giuliani. we're going to have him in just a moment. as we head to a break, let's take a look at some of the moths widely held stocks. "squawk box" will be right back. national car rental knows i'm picky.

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all right. throughout this month, cnbc has been looking back at market events that have shaken and transformed the financial system. this morning "squawk box" regular, former new york city mayor and presidential candidate rudy giuliani is on hand to talk about his company's latest initiative to restore investor confidence. let's start with that. >> it's a joint venture with 930 capital, which we're doing a different kind of due diligence. they do portfolio due diligence, figure out whether it's a good investment or not. that's not my expertise. we investigate due diligence. we do things that weren't done. check and make sure transactions are taking place, make sure the business has the people it says it has. go into their reputations, their background. >> visit the auditor. >> lessons learned not just from

madoff. >> new one every day. >> i was involved investigating and prosecuting the cases back in the '80s, so i have a long history in knowing what wasn't done. the idea is the fbi office in new york, terrorism in washington for a while, he's in charge of this. he uses techniques the government would use investigating fraud but we do it in advance. i remember a long time ago i was involved in an investigation, with a bank involved in money laundering. one thing we told them was know your customer. actually they were opening up accounts for businesses that didn't exist. got up from your desk, walked four blocks down, you'd see the business wasn't there. go kick the tires. we'll be doing that in a systemic way. >> who would pay you. >> you get paid -- >> a fee paid?

>> you get paid privately, the way it should be done. the problem here, the government can -- private. >> the government cannot do all this investigation in advance. the government only comes in when something goes wrong. this should be paid for privately. this should be paid for out of the fees, the profits. there's plenty of money to pay for a lot more due diligence than has been done before. >> are you packing heat right now? i'm getting nervous. >> this is a different kind of gun, it's a laser gun that goes in and takes a look at -- some of the most obvious questions. are they actually trans acting the business they say they are trans acting, do they have the people they say they have. what are their backgrounds, have they had problems in the back. private money should do this. the s.e.c. can play the role of back stopping that we'd have to have an s.e.c. 100 time the 75 central what it is now to do this. >> you might still have

investment bankers figuring out ways to lever up and totally legal, the risk. that's not going to help with our biggest problem. madoff wasn't the biggest problem. >> a thousands other problems like that, where not enough investigative due diligence was done. reminds me of bank robberies. in the old days there were a lot of bank robberies. all of a sudden they stopped. why? they put cameras in banks. >> they didn't stop completely. >> there are still people who think they can get by the cameras. that's what you have to do with white collar crime, cut it down significantly. there's always some guy who will try. >> the president was pitching for consumer agency, that is a good idea? >> no, i don't think more government agencies. we have plenty of government agencies. all these institutions that got in trouble are heavily regulated over and over and over again. the government agencies didn't

do a good job because they are not focused enough. almost like search forego a needle in the haystack. the morag sis you have, the less strut any you have. i prefer to see a lot more transparency, a lot more requirements that things have to be disclosed and let people make a decision. >> so onto mongolia by comingling some of them into a super agency? senator dodd taking them, rather than have the fed be the cop. >> basically a super failure. you just take five failures and make it one big failure. talk about improving the way in which they do this scrutiny. >> let's look at the banks that got into trouble. there was one serious problem with those banks, undercapitalization. the whole capital rule was incorrect. they took base two. the last five years were

terrific years and you got a very, very real unreal capital requirement. so i would say let's focus on that. let's make sure the banks have enough capital. let's have an agency that really knows how to scrutinize. i don't care if you call it a super agency or something or other agency, anything you call it, it should do its job. >> you need to take the other side, what do you want -- president clinton. you can do climate change, health care. you need to represent the other side for three minutes. >> health care, i think the reform should be a more robust private sector, not a more robust government. i think the way to do that is not for the government to add people to government coverage, whether you call it a co-op or anything else, but for the government to break down barriers that lead to too few insurance company, the ability to buy insurance across state lines, all 50 states. there should be a major tax deduction, so i get the same tax deduction my employer gets. i think that's the single

biggest reason we have a market. there should be a lot more options for the individual. then if we want to cover people who can't afford it, we should do that in the form of tax credits or subsidiaries. the way we give people money to choose their own college, instead of you all have to go to one college. if everybody was required to go to one college, it would be the biggest failure in the universe. >> not enough income where the tax credit, you'd actually -- >> i would do a pell grant, similar to a pell grant scholarship, something like that. but let them then choose among the private options which there will be many, many more if we do intrastate purchase and if we do 15,000 odd tax deduction. instead of my employer buying health insurance, i could buy my own. >> a co-op. >> in the detail. is it a private detail or one by the government? a private co-op with great ideas. if it's one run by the government, you might as well have a public option. medical malpractice should be the first thing we do, not the

last thing we do. it should be the first thing we do. we don't have enough doctors, if you cover 10 million, 20 million, 30 million, 40 million more people, it's not going to be deficit neutral. the president should stop that. that is not -- it's not accurate to say you're going to cover 40 or 50 million people without affecting the deficit. i don't have my glasses on. >> let me just describe it. this is the president and he's shaking this guy's hand. >> that guy who is the governor. >> he might run against you, cuomo guy. he's the only guy that can beat you. is he running against you? >> not running against me. i have to decide who is going to run. >> i think the president decided who would run on the democratic side. then the republicans get to decide. despite the headline here, the people of new york get to

decide. >> he's dancing around. >> where is your thinking right now? >> my thinking is i'm not going to decide until after the elections and nothing will change that. >> an all italian race. >> the whole ticket. >> i hope we -- you've got 15 seconds for everything we talked about on climate change. i guess my question would be, would you disagree the government would try to emphasize things to get us away from hydrocarbon. >> i would say it should slow down. it's the highest. it's increased more than any president in history. to add this kind of government option or co-op option, health care reform of a trillion dollars to the deficit, then do the same thing with cap and trade, which will require about 50 new buildings in washington, that's really an attempt to regulate our entire economy. how much carbon do i contribute, how much does my house

contribute? how much does my building, my business? how much does my truck contribute? that's a regulation of our entire economy. before we do that, we should slow down, figure out how we're going to do it, just exactly how much we're loading on our children. now we're kind of burying them in debt. >> unfortunately we're going to have to end it, which will give you an opportunity -- you'll have free reign. >> i did two hours with you guys and it was great. very fun. >> thank you. >> get a chance to say all the rest of that stuff you like. >> bill is paid for, america. health care bill is paid for. >> a lot more "squawk" still to come, we have president clinton's former chief of staff john podesta for the next hour. also presidential candidate steve forbes will sound off on health care and the economy. first, though, the stocks to watch.

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focus on the feds. central banks kicking off a two-day meeting. interest rates not expected to change. will ben bernanke tip his hand about a possible exit strategy. >> former president clinton talks about his initiative dmobl reform and keeping the economy on track. >> these people that come as business leaders, they think we have to reduce greenhouse gas emissions. they believe it's a moneymaker, not a money loser. that's what we've got to get across to the american people. >> and we get the republican response. >> irnd get the same deduction my employer gets if we buy. that's the biggest restriction. >> steve forbes will sound off on the challenges facing the white house as "squawk box" begins right now.

good tuesday morning. welcome back to "squawk" on cnbc. first in business worldwide. i'm carl quintanilla along with joe kernen and becky quick. our guest host we're having a lot of fun with john podesta, former chief of staff for president clinton now ceo for center for american progress. we have a lot to talk about with him but first to becky with headlines. >> the federal reserve convening a two-day policy meeting in washington. the central banks is expected to keep rates near zero and emergency programs in place to try and encourage spending and borrowing. the decision will be announced tomorrow afternoon. economists will be looking to see if policy statements echoes last week, the recession is very likely over. if you've been watching futures, we've been keeping track too. dow futures up 62 points above fair value.

this comes after a day where the dow was down by just over 40 points. also the fdic may soon ask banks for a bailout. the agency's cash balance is down to $10 billion. probably not enough to get through the failure of any single large bank. that's why "the new york times" reports regulators are considering a plan to have the nation's healthy bank lend billions to rescue the insurance fund that protects depositors. bankers like that idea more than the other alternative, something like another emergency assessment of financial firms or tapping an existing $100 billion credit line to the treasury. by the way, fdic chair relationship with tim geithner, it's reportedly very strained. the "times" article says she's unlikely to turn to the treasury for help. how unlikely? the paper quotes the president of independent bankers, a frequent "squawk" guest saying sheila bair would take bamboo shoots under her nails before going to tim git and the

treasury for help. >> meantime, top official at bank of america will meet with congressional staffers in washington today in the hopes of ending a standoff over the bank's disclosures in the merrill lynch deal. one of the growing headaches for the bank. our senior correspondent scott coen. this getting into high drama. >> easier for the bank. over site government reform committee. by noon yesterday missed the deadline claiming attorney-client privilege and now the committee could issue a subpoena unless they reach some agreement which the bank says it is trying to do. this is over what it disclosed or should have throwing bonuses at merrill lynch before the taxpayer take over last year. the president will meet with committee staffers today. even if she can appease them, there's still the s.e.c. now that a federal judge has thrown out a settle memt with b of a, they are going full speed

ahead with the lawsuit against the bank which could go to trial february 1st. we will vigorously pursue our charge against bank of america and take steps to prove our case in court the agency said in a statement last night. there could be additional charges if new evidence comes out in discovery. first order of business in a plan filed last night, b of a has until friday to respond to the soot. there's a feeling, cord to some people we talked, to bank could win this in court. fighting this out in the open is not what anyone is hoping for, least of all the ceo who could be the target of additional charges, already facing the threat of charges for attorney general cuomo. the board met and reportedly the agenda was what to do if others were charged. the board degree to reduce the size to 15 members from 18, appointed dupont chairman to the board and the board reshapes itself the question then becomes

is ken lewis more isolated here as we go into this battle. >> this is like a soap opera, the bank of america. it's going to go -- how long -- at least you're not in houston. is there anything that could bring you to houston? you were there for enron. >> sanford. >> my home away from home. >> i'll find a way. >> something will get through. >> they are trying to pay back their t.a.r.p. money, too. do you think that can happen if they can't resolve what's going on in the house? >> it seems like they are trying to do that as maybe a way to get some heat off after all of this. they just reached a deal with treasury to basically buy back a guarantee in the merrill lynch lawsuits, $425 million, want to pay back the t.a.r.p. money. maybe that will take some of the pressure off. the thing you kind of get when you talk to folks at b of a, look, this deal has worked out okay. stock is way up since the deal closed at the first of the year. >> you're welcome. >> for saving the nation. >> taxpayers are making money.

>> all right. thanks, scott. i want to get back to john podesta now, our guest host, former white house chief of staff under president clinton, also president and ceo of center for american progress, i want to talk about this what president clinton said about how to handle this. >> health care. >> about how to handle health care. we talked to you off camera. you said maybe 60 would be a better way to go even if it didn't include a public option. we had the president on. he was so definitive in that he said do 51. we've messed around long enough. i know this polarization. let's just do it, which is an amazing thing to say. because 17% of the economy and half the country, you see this stuff, the town hall meetings aren't all crazies or whatever. there's a real strong feeling among the two different sides. why do you think he comes down so stridentally on that side?

>> i agree with him about one thing, the job needs to get done but has to be done through reconciliation, so be it. there are restrictions under reconciliation, he alluded to them. >> yes. >> that make it a little more difficult to do. makes the procedural constraints mean he can't get some of the insurance reforms done probably. >> you can get the public plan through. >> you could conceivably get the public plan through if there are votes for the full blown public plan in the senate with 51 votes. i think what we're going to see emerge, though, and what the white house strategy is try to work and get 60 votes. try to get at least one republican, olympia snowe on board, maybe she'd bring a couple other on board with her. what she's argued for is the so-called trigger public option, in states that don't provide cost effective and affordable insurance, a public option will be put in place. seems to me that's where the debate will be, between what

snowe has put on the table, she's filed an amendment to that affect, when she offers it in committee or not and where the house is, the full blown public medicare option. in between that, the debate has been channeled. if they can get the 60 making some accommodation, the public will probably accept that better. we can see how it works and make adjustments as we go along. >> if president clinton was till president do you think he'd take this pragmatic view? you mentioned the success he had. he had one republican, right? >> no, he had none. >> none. >> okay. so maybe he's influenced by this. in 1993, the basic economic program that put in place an era of the strongest economic growth in history. >> a continuation of the reagan era, but go ahead. >> i think we had a little drop-off during the bush era. >> inevitable, cycles are inevitable. >> when he came to office and i came into the white house, we

had deficits as far as the eye could see. he fixed that, created a surplus on the federal account, led to this great, strong boom, throwed 23 million jobs being created. that bill passed in reconciliation. not a single republican vote. one vote. gore broke the tie in the senate and we won by one vote in the house. >> people said he did so well when the defeat of health care moved him to the center. it defined the rest of his presidency. >> one they think about bill clinton he worked to the very end, kept going back on things. when he failed on health care, he came back with children's insurance. >> he's a centrist, you'd agree with that? >> absolutely. he operates from the center. but most importantly he operates to get stuff done. that's what he's always been known for. >> appease the far left at this point. >> i didn't hear him say that.

>> you didn't. >> robust -- >> strong enough -- >> what i heard him say was if you have to do it through reconciliation, do it. >> even a more robust public plan. >> i think, you know, he -- i didn't hear him say take the 60 vote option off the table. he said get the job done here. get the substance right, get the job done. if you can do it -- if you have to do it through reconciliation, maybe he'd tilt a little more into the notion that's a path that is -- you know, that can be done substantively, a little more easily than i do, and what i think the people in the administration -- certainly people in the senate think. so be it. what you'll see this week emerge in the finance committee is a bill that sets the boundary, if you will, on the conservative side of what might happen. i think baucus has had to come a

little bit more to his democratic colleagues and some features of the bill that will make insurance more affordable. i think you'll see debate around this so-called triggered public option versus full blown public option. we'll see where the votes are. if there's 60 votes for what the president wanted, i'd certainly endorse that. let's see where the votes are. >> put a number on just the odds. their backs are against the wall and reconciliation is -- how many percent? >> i think there's 80% chance health care will pass before the end of the year, and i would say there's probably an 80% chance -- >> john, you're with us for the rest of the hour. >> i think it will get done and they will go to reconciliation if they have to. if they can't get to 60, if in the end of the day senator snowe says it's not enough for me, they will go to reconciliation.

>>enedel was here, his concern a lot of mandates handed to the state. we have the rest of the program so we can ask you about that later. that's a big question, how it's going to be paid for and even the democrats are concerned about how that's going to come together. john will be with us later in the show. we'll get to that. coming up, tackle the market and fed as we counsel down to the opening bell on wall street. before we do, republican response as well. candidate steve forbes will sound off on health care reform to revamping financial regulations. "squawk box" will be right back. >> tomorrow's "squawk box" line at the national energy summit. captains of industry, academic leaders and washington power players driving competitiveness through sustainable energy of the "squawk" lineup includes dupont's chad holliday, caterpillar chief jim owens and more tomorrow at 6:00 a.m. eastern. 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

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the president made a big start. we ought to keep hammering home the realities and put the people against it right where they belong. they like distributing the money where they are even if it means 16% of the people have no health

coverage, the other 80%, unless insured by the government, could lose it. we' i still think the president will win it. >> that was president clinton talking to us on the last hour of "squawk box." joining us now, steve forbes joins us. steve, maybe not too surprising. the president still believes president obama has some fight in him despite all the tramp ling he's had in terms of criticism this summer. >> i think it's true president obama is going to try to push this thing, cost be damned. he's going to go for the nuclear option, what you want to call it, he's determined to push it through. even if it costs democrats next year, so be it. they will be martyrs to the revolution. he will make a push in the next few weeks new york city doubt about it. >> martyrs to the revolution.

what kind of price will they pay, if in fact that does happen? >> well, in terms of political cost, this is -- a lot of this is very unpopular. people like harry reid could easily go down next year. right now the white house says just get it through, worry about elections later. ram the thing through, don't pay attention to the polls, get the thing done. they are going to put every bit of pressure they can to get the thing done, including reconciliation, massive reform to 17% of the economy, doing it this way, bad for the future but they are going to do it anyway. >> i'm tempted to jump in and say, steve, that's what conservatives said about medicare in the '60s, social security in the '30s, it kind of worked out for the public and ultimately politicians were rewarded for moving forward and addressing the needs of the country had at the time. right now what's your answer to the problem of what the president talked about, which is we're spending so much money

getting results for so many people. >> we get very good results. you look at actual outcomes of things like cancer, 13 out of 16 cancers under the circumstances a much better result here than you do around the world. heart disease, we're ahead of the rest of the world. specific outcomes we're far ahead. innovation we're far ahead. in terms of the system instead of going to third party, in this case government, open up the flood gates to real competition, starting by allowing consumers to buy insurance across state lines. my home state of new jersey, you want a family policy, you pay 15 to $20,000. across the line in pennsylvania, you can get a perfectly excellent policy as good as new jersey for 6 or $7,000, wisconsin even cheaper. allow people to buy around the country. bring in the interstate commerce cause. on tacks, equalize taxes between individuals and corporations and buying health insurance. tort reform, genuine tort

reform. allowing small businesses to pool together to buy insurance. those are positive reforms which this administration really won't listen to. >> steve, are you suggesting that the fractious qualities we've seen in the democratic party, the inability to agree on certain elements of the bill, are they coalescing around something, getting this act together as a party? >> i'm not sure in terms of left to their own devices if they would get their act together. they are determined the white house will do everything possible to get a bill through the senate. particulars don't matter that much in terms of reconciliation, they can sit down with the house, which will pass a bill more to their liking and try to do it that way and avoid the filibuster. >> you are at the week long conference here in new york, talks about mostly media and advertising. we got figures for the first six months of the year.

overall ads down 4.3, which sounds incredibly painful. is the second half leveling out any way as far as you can tell? >> yes. people know that starting the fourth quarter of last year you saw the thing fall off the cliff. i think people here are happy that the world has not come to an end. the thing appears to have bottomed out. certainly recent weeks it's gotten better. we're a longways from where we were two years ago. at least the fall has stopped, purses are starting to open again. people are now starting to think about campaigns for next year instead of just clutching cash. >> newspapers have been the ones taking it on the chin the most, down 24. tv, good for our purposes, down only 10. what does that tell you about the economy for next year, steve, if, in fact, the purses are opening up? >> well, the economy you're going to get growth. the question is how big a surge will we get and how sustainable will it be? the worry is that, yes, we'll

get bounceback from the devastation from the first half of this year and third quarter of last year. more like the 1970s or '30s, where you get the bounce back and the thing peters out again, unlike the '80s and '90s, over that 25-year period, couple of recessions. but still you saw very, very vigorous sustained growth. that's the worry, will the growth bounce back from this poll that's going to be anemic because jobs aren't being created and small businesses still don't have real access to the credit markets yet. >> you refer to the recovery as jagged we're showing on the screen. that's a quote from you. some are worried we're igniting a trade war, disputes over tires with chinese, holding a bilateral with chinese today. how serious is that? do you see that as a little bone to the unions or the start of something big. >> the potential is it will be

the start of something big. in the past administrations have thrown bones here and there for short-term political reasons or vigorous positions on free trade. bill clinton, for example, i wish the president listened to bill clinton on trade. he went against his own party to get the north american free trade agreement. he pushed the bill around and others. bush had some last throes in his term but in terms of bones he pushed hard on it. what this president has not done, free trade agreements in columbia and south korea. he's not pushed real vigorous surviving of the doha round. if he doesn't take the lead it's going to spiral and hurt all of us. >> john, you hear all these comparisons, how do they talk that back? >> i think that's got to be on the table. the president said we need to keep our markets open and global

markets open. the higher decision by the administration was a shot across the bow for the chinese. things they were doing have to be adjusted. so i'm sure -- the president's meeting tomorrow in new york, i'm sure this will be a topic of cooperation. i think now you see a lot of cooperation between united states and china trying to get in a better more balanced place between our two economies. >> the worry about him being a free trader date back to the ohio primaries, remember the campaign season the comments, the controversy. has he been as clear as he can be in terms of commitment to free trade. >> i think he was clearest in london during the last g-20. i think this upcoming meeting in pittsburgh will be the next opportunity to really say something strong about the commitment of the united states

for keeping markets open. in fact expanding open mark around the globe so we can fit anywhere for strong growth. >> but that's the problem, though. the rhetoric belied by action. he did the entire thing after g-20. even the tire industry didn't push it, just a particular union. he could have easily sidetracked it and he chose not to do so. others of the g-20 have been back sliding as well despite the rhetoric. unless the u.s. takes the strong actual lead, not rhetoric, this thing could get worse before it gets better. why doesn't he push columbia or south korea? that would send a strong signal their heart is in the right place on opening markets and being free traders? >> can we just embrace the new guys in honduras? why can't we do that, steve, for your sake? do you think we need to hang onto the chavez clone trying to get back into the country?

>> look, there's an election scheduled in honduras coming up. it would be better to put the president, the old president back in and then have an election that's free and fair and let the honduran people make a decision. >> that make sense, steve? doesn't the supreme court -- weren't they able to oust this guy. >> i think it would have more legitimacy to do it that way. >> we shouldn't be telling small countries in latin america about legitimacy. this guy was trying to subvert the constitution. the supreme court said he was subverting the constitution, so he was removed. that's the lawful way to do it. and to have us not denying visas to supreme court justices and stuff like that, beating them around, slapping them around on the face because we won't return that clone to power, that's outrageous. that goes back -- the only thing we haven't done is send in the marines. >> steve, good to talk to you as always. steve -- >> a lot of bang for our buck

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the chocolatemaker resist ag takeover by kraft foods. the company ceo did tell "the wall street journal" there would be complimentary elements there. a lot are taking that as a signal he may be warming to a bid, if that bid is raised. >> snr investment arm cut its stake in citigroup. it's stake had risen to 9% after the conversion of some preferred shares to common. look at citigroup, higher in the premarket bid. saudi arabian oil minister says opec did not need to cut output based on supply and demand or based on what he's seeing in the price of crude oil up 2.2%, 71.25. he does say, they could change their outlook and what they think is happening depending on broader economic outlook. again, oil prices are up by $1.50. coming up the economy, fed and markets. what are the traders expecting from chairman bernanke this time around? a preview ahead of the opening

bell right after this right here on "squawk." you're watching "squawk box" on cnbc, first in business worldwide.

it is that time, the fed two-day meeting with major issues on the table from the outlook for growth to a special program to buy securities. steve liesman joins us now with what to expect. they talk in silence today, they say something tomorrow, get all excited. no one says they will do anything with the actual numbers but maybe they will come out. >> i think this one is definitely worth watching. giving in is history, giving up is, too. may seem anti-climatic. to me it will be just as interesting and consequential, i think. tomorrow you may get what is the most optimistic by the fed of the economy in months a potential movement toward the exit strategy.

fed chief bernanke that the recession is almost over. the market committee upgraded take on the economy, remember the tepid leveling out we got in august has improved from there. the committee on average estimates the economy contracted 1.5% last year but acknowledges economy has returned to growth. in the second half members could upgrade second forecast. don't get back to the forecast for potential growth, two three-quarters. despite higher growth the fed will stick to the forecast of continued lower inflation and only a gradual decline on unemployment. there's little affect on the interest rate side of the fed's policy. where there could be an effect is on what they call the credit easing side. the fed announced an end to the treasury program a month later at the august meeting but extended the end date to october. the fed may do something similar with mortgages, reducing mortgages. you can see where they are on strategies. almost done what they said they

were going to do on treasuries. a ways to go on mortgages. they are close on agencies. so what they could do is on one side, extend it but not increase the amount. they use the term "tapering" which is what they want to do, make it so there's a smooth transition. treasury market took it very well and rallied since then. the question is whether the first time credit for home buyers set to expire, remember, talking about redoing that. it is set to expire. the fed will get such positive results from the mortgage market. the problem for the fed, remember, joined with the treasury to coordinate the rescue programs. it's going to have to coordinate exit strategies as well. time geithner and ben bernanke have to do this together to make sure there's no huge shock to the economy. with you on mortgages over here, what you do over there with agencies and things like that, a lot of work to do. >> all right. two questions. how do they tiptoe out of the room without getting everybody to run for the exits how do they

work together when there's this bubbling between the fed and treasury, reports about fed denying treasury's ability to look into some of their numbers? >> i think the relationship between geithner and bernanke is pretty solid, despite operational differences. i think will smooth that over. on the first question, i don't think they tiptoe. i think they have to be very clear about what they are thinking and doing. i wouldn't be surprised to see something. if they wait until november, remember the next meeting is november, to tell the mortgage market they are getting out of mortgages, doesn't give very much time. there's very little liquidity at that time of year. it's time to put them on notice -- let me remind you, rick santelli speaking for traders, he did not believe when the fed said it was ending the program for treasuries, he didn't believe that was actually going to happen. >> go ahead. let's bring rick in, always todd

coleman at the cme group. rick, i don't know if you heard steve's point on this. do you believe the feds this time around. if we don't hear anything this time around, is that going to be signaling to you that these programs are going to continue? >> in terms of the treasury purchase program, that was supposed to sunset last month, now we have the extra meeting. they are pretty much running to the end of the money line. my guess is whether they sunset this one or not, they still have a few shillings left in the piggy bank on the bigger purchase program, which is agency and mortgage securities. but yes, we're looking for information. and to all arenas that subsidize the interest market. >> rick, the issue, though, is my records show they are supposed to end it this moment, by the way, supposed to add the treasury person. what they did is they extended it by a month and said they weren't going to increase the amounts. there's about $600 billion left in the mortgage purchases. my question to you is whether you think -- first of all, were

you surprised by how well treasuries have behaved in terps of the yield since the fed announced it was getting out? and second of all, do you think the mortgage market will be as well behaved if it feels the fed is getting out as planned in january? >> no and no. you know, behavior is a tricky word, steve. they are not behaving. they are being massaged, a huge difference. if the government fought 1/15 of all the autos made by x, y, z, i would support the idea their sales would be distorted like interest rates are. wy would you call that well behaved, it's well manipulated. yes, they have kept rates down more than they probably would have been otherwise, yes. >> let me ask you how the market will take all this. if the fed comes out with a roser picture of the economy but doesn't change policies is that going to spook inflation concerns in the

market. >> rick, let's let todd get in there. >> i think what happens is the affects of the feds gives a rosier than expected outlook, it will creep higher. remember, feds said rates will remain low for a very long time. the implementation of exit strategies, that being credit facilities will also take a long time. steve, i agree with you the mortgage backed area is the first area they will look at and probably decrease, not eliminate but slowly decrease their purchases of mortgage backed to test the markets to see how firm the credit market really is. so i think this meeting doesn't really give us a full impact of the future of inflation expectation as well as i don't think it gives us the picture for the exiting of the credit facility. >> steve, what do you think? if we don't hear from them, can we vet on these programs

continuing. >> no. if we don't hear from them the fed maintaining flexibility, doesn't feel they are on the firm enough ground to make that decision now. the question for the fed is weighing the option in the first instance giving the market enough time to adjust. the second instance the trouble they have making a decision in a premature way before they feel like the market is on firm enough ground to really accept or take it. remember, it wants that mortgage rate at 4.5 or 5%, wherever it is right now in the markets, doesn't want to see that get up while housing is just getting back on its feet. to me it's a tough decision but i think bernanke is going to sign on more information sooner. i remember when we interviewed bill dudley earlier this month, his take was he was going to listen at this meeting and kind of make up his mind whether or not what should be done with the mortgage purchase program for this meeting. we know when we talk about things we tend to over a matter of days give us information

about that. >> steve, rick, todd, thank you very much. we'll talk a lot more about this tomorrow as well. come up. art cashin giving this morning's traders edge. fixing the economy. we still have much more ground to cover with former white house chief of staff john podesta, who is right now sitting by and ready to jump in. "squawk box" will be right back. >> tomorrow "squawk box" is live at the national energy summit, captains of industry, academic leaders and washington power players driving competitiveness through sustainable energy. the "squawk" lineup includes dupont's chad holliday, caterpillar chief jim owens. tomorrow at 6:00 a.m. eastern. you're watching "squawk box" on cnbc, first in business worldwide.

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time for the trader's edge. joining us, art, director of floor operations at ubs financial services. art. he's coming back in a second. >> here i am. >> are you back? >> yes. >> all right. >> checking on the trade. >> you just thought it was

kevin. >> were you checking on a sell trade or over there buying? >> i was over there trying to check the futures out to tell you the truth. >> the futures. it's weird, these one-day pullbacks, art, one of these days it's not going to be like that. i was trying to figure out what 5% or 10% would be. we really need to go back down to 9,000 or below to have this -- to have an actual correction. i'm trying to figure out what that would look like, how it would start, what would start it, how it would be slow. >> what might start it is some movement in the dollar, since it's the lead are for all kinds of asset classes. i would think that the other thing we want to watch is you and i discussed last week is the end of the quarter coming up. so what happens if the portfolio managers stop buying. a couple of interesting spots. we peaked out at last thursday's

highs. bears are hoping topping process of slowing down in here. bulls are hoping to punch through, maybe catch some shorts off base and catch them rolling in. so in the near-term, that's what we're looking at. longer into next week, we're looking at end of quarter. >> then we have the reporting season. carl and becky are going to peerhead it. >> what? >> the best earnings central. not only, art, maybe this quarter will show some good comp, that's going to be good but better in the outlook as things are supposedly improving. it should look good in the period ended, but how good will it look for the forecast? >> in the comp, you're looking more and more at the top lirngs the revenue line, see if that's showing. that will be a little bit tough tore make good comps. you can probably make them by cost cutting. but when costs get to zero, where are you? >> anything else coming up we need to know about?

>> the equinox. >> that's right. we've got a sun spot coming over from the other side of the sun. >> too long. >> it has been quiet. every month the full moon tucks our brain up into our head and causes us to get hairy and everything else. >> what? >> art, thank you. we want to know everything. and you give touchlts thank you. what have you got there. >> you are are part of the e-team, too. >> you were doing that when becky and i were in elementary school. >> do you want to push me over the edge? >> we try every day. >> we're children compared to you. >> i have to do another earnings season i'm going to start the show with -- that's all i can going to do. i can't. >> that's something to look forward to. what is it, two weeks away.

>> all right, grasshoppers. i feel like potter. jimmy stewart. >> coming up, we'll have a final round with our guest host today. former are white house chief of. joe mentioned before, the dollar has been weak and that's pushing gold and other things higher. right now up to $1,018. stay right here, "squawk box" will be right back. ♪ look at this man

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would elcome back, everybod. let's turn it our guest host. currently the president and ceo of american progress. let's do this rapid fire. a bunch of issues we haven't gotten to today. first up, the economy. where do things stand right now. are we on our way towards improvement? >> we've seen a little bits of improvement, but the real question is when is the unemployment number going to peak and start turning down and see actual job growth in the economy? so far we've taken pleasure in that the job losses are smaller than a month before but we've

got to see job growth coming in order to see wage growth coming again, i think. >> the g-20 is this week. u.n. meetings today. how significant are each of these going to be in the larger role? >> well the president has gut a full week. he's got the u.n., he's got climate, the middle east, he's doing a special session at the national security council on nuclear proliferation, then out to the g-20. the interesting thing, i think, is that all of the pressure that atte attended the g-20 when they met in washington in november and in london in the spring seems a little bit dissipated right now. i think people are feeling like the worst is over. and so whether it's looking domestically at what's happening with the banking legislation or whether it's looking internationally at whether they can come together, it feels like a little bit of the steam out of the pipes right now. >> we've talked an awful lot about health care and climate change but at the end of the year, where do you think we'll stand on what we've gotten accomplished at that point and what are we going to see at the beginning of next year?

>> i said earlier, i'm very confident that health care will pass, bill will pass, i think that will happen before thanksgiving. i think climate and energy will come behind it, whether they can get to 60, you know, i think the betting is against t but i still there's an tunt to do it. they're going to try to do financial service regulation reform. it seems to me there's a vast difference between where senator raised that with mary giuliani where he's going and barney frank is going. that's going to be a longer term proposition, spill into 2010 before that can be resolved. then, i think when the president comes back, he's going to have to turn his attention essentially to the state of the union, a new budget, what's happening with the deficit, getting the country back on a path that's sustainable and builds for the long term. i think that's going to be a preoccupation, i think, once the new session start,s budget starts. he's got the 2010 tax provisions

expiring. he's going to have to present a plan to the congress that's going to provide broad based, i think, tax program that's going to benefit the middle class but he's got to deal with the deficit in the relatively near future and signal where he's going to go with that. >> is the ron paul led threat to the fed, their independence, their survival is that a serious threat? >> i don't think it is at this stage. if anything, people look at what happened under chairman person areky, i think he's getting pretty good marks right now. there's a little bit of, i think there is no sentiment to enhance their power. >> which is part of what the president wants. >> at least on the systemic risk side, it's what the president wants. so there's some pushback against that, both amongst the moderates in the house, amongst the people on the senate banking committee, but i don't see the senate really taking on bernanke right now. he's one guy who looks like he

rose above it all and really helped the manage the economy become to a better place. >> we've only got one minute left. if the unemployment rate is continuing to rise come the beginning part of next year, will the president be able to tackle raising taxes? >> the if the unemployment rate is rising, that's a bad time to raise tax, but i think he's got to signal at least what his mid an long-term are plan is to get the deficit under control. because in the out years he's got to basically do what he said he wants to do which is to get the debt to gdp level flat. that's going to take a lot of work. he inherited a mess, quite frankly. obviously because of the downturn in the economy her, had to stimulate it, a big package do that but now he's got a structural deficit he needs to deal with and has to come back with a credible plan do that. >> did you have fun? you broke news on politico this morning. >> i had a lot of fun. >> i'm afraid to see what's on politico. >> we've got an opening next

friday. >> john podesto. make sure you join us tomorrow. >> i'll only come back if i can do earnings report. >> you got it. >> he's going to spearhead earnings central. >> see you tomorrow. live from the financial capital of the world, this is it, "squawk on the street" begins right now. good morning, everybody. i'm mark haines. we have a lot of things going on this morning. sheer what is front and center. the president set to make a key speech in just about 15 minutes on climate change. we're going to have that for you live. >> i'm erin burnett, last night, president obama was addressing the nation from a different podium. late show with david letterman. letterman brought up that atmosphere of poor decorum. listen in. >> this unease or poor decorum was because people -- it was

rooted in racism. is he on to something there or is that just something to talk about? >> first of all, i think it's important to realize that i was actually black before the election. so the -- >> well, it is late night television. that was a good laugh. >> he's got a very sharp wit. there are reports this morning, banks are lending to the government, rather than the government lending to the banks. we get some money back. >> that's sort of the circular reference. they're lending back the money they -- >> healthiest bankses are being considered to lend billions of dollars to the fdic to protect the insurance fund that protects bank depositors. banks like this because they think it's the least bad of a bunch of bad things that can happen. so this is the least bad option. the government of singapore investment corp