stake in citigroup in half this morning. possibly signaling concern over outlook for the banking sector. >> see, that's the whole problem. citigroup that would not appear to be a healthy measure. so the smaller banks get so angry, they didn't do anything wrong and they're now health y so they're funding citigroup's fdic protection. >> stock's going up no matter what well, 4.43. let's look at eye. this has been a big story yesterday with a big drop. today, up $1.63 saudi's oil minister saying opec does not need to cut output next year, that demand is increase. citigroup upping macy's to a buy. stock was up 5% this morning. here's the bid/ask.

macy's has been outperforming for a while. hewlett packard. dell getting kwut kwut to noou neutral from outperform. it's at 16.01. so that would be neutral. we've got a lot going on as we said. let's check the futures which look pretty good. right now, they're up 5.5. about 6 points above fair value. 60 points on the dow. let's hit markets. scott, here come the judge wapner is with us at the big board. >> the table is set for a pretty decent open down here. dollar is weaker today, commodities higher. gold is up by about 13 bucks. oil is higher. also the asia development bank upped growth forecast for both china and india. world markets were strong. asia, that followed through into europe. as i said, the table is set pretty well for a nice open here. the financials are also higher. i know we were just talking about citigroup and singapores a sovereign wealth fund reducing its stake to less than 5%.

ig extending the rally yesterday. a government watch dog group saying it is showing signs of stabilizing. let me say bank of america, dick bo bove raising his price target to $25. >> we were one of the three major indices up yesterday. start with yahoo! a lot of report reports about which businesses they might be selling. talking about zimbra, but they went goat anywhere near the money they paid for it in '97. google is a possible buyer. speaking of googling, "the wall street journal" has a story about their phone service application where they can put everything on one nun. that might get fcc scrutiny and

they may not invest in development. dell right now, mixed picture. erin touched on credit suisse. on the flip side -- we've got to go back to erin for breaking news? excuse me. i just want to finish up with ebay. jeffries raised the price target from from 28 to 24. let's go down to bertha at the nymex. >> thanks very much, brian. as erin mentioned at the top, we are seeing a rebound in oil and commodity prices this morning. this day the story is as the dollar goes so go commodities. with the dollar peek peaking and the euro spiking, that's also positive as far as the upside for oil. we have the expiration today of the october contract. so that could add a bit of volatilit volatility. the saudi minister does not see a need for opec to raise production or cut production.

one of the other things folks watch is whether they are adhering to their quote to. looking at gold it is bouncing back. closed again yesterday by 1,000. this marx the third session trading above the 1 k mark. rick santelli onto you. >> it isn't a lucky seven. ing-the-unless you're long on sevens. i'm talking about the major currencies and futures. the yen, aussie, pound, you'eurd swis franc. if you look at some mores stow take, the asian, you'll see more. after the dollar index is right back to testing that 76 handle which we haven't tested since mid-september a year. if you look at interest rates, they're creeping higher, but no matter which vantage point, which tangent you look at to grab onto perspective and interest rate, the 3-year and

10-year isn't far behind. supply doesn't seem to be a problem just something to pay attention to for issues down the road. now back to mark and erin. >> in asia, overnight, here's how it looked. here's how it looked. we don't have it. and i don't know what it is off the top of my head. so let's find out how it looks in europe. guy johnson, live in london. what's going on? >> i can do that, mark, yeah. it's looking pretty positive over here. we are trading up on most of the main markets. risk on day today. doesn't feel that convincing though talking to people in the market. kind of a listless trade, we're looking forward to the fed and g 20 at the end of the week, so not a lot of conviction behind the early stages. let me show you the stoxx 600 so you what's happening there. this is what we've been doing since the start of the week. yesterday negative. today, positive. netting each other out. we're up by 0.8%.

i want to show you a story relating to palm. there's talk just knocking around the wires at the moment that maybe nokia is interested in palm. you saw a big pop yesterday. secondary. that's the story to keep an eye on. this is reyou surfacing a little bit. a number of brokerages have been kicking this idea around with nokia getting better access into the north american market may be a we have a chaefbing it. keep an eye on it, i suspect it's a story doing the rounds once again. m&a seems to be back on the table. cadbury beginning to make the right noises, maybe pushing this kraft story a little hard. maybe a higher offer would convince cadbury to go after the caste negotiation. back to you. >> we are now waiting for president obama. he's going to speak in just a few minutes, the subject being climate change. and the u.n. general assembly. his speech could be a major

sticking point with china. they are not so big on proposals to limit greenhouse gases. >> also ahead, the future of your health care plan could be at walmart. see what they're doing that is getting so much attention. this is "squawk on the street." we're live at the new york stock exchange. we have have a higher open and at president speaking in just a moment.

we're back. and it is time to go to hq and our daily dose of alpha waves. david faber with more on cadbury and kraft. >> thanks, mark. one of the more interesting takeover dramas unfolding. we are now starting to at least get a sense as to how long or how much longer it has to unfold. that's because we've learned that yesterday the uk takeover panel was approached by cadbury saying, let's get a put up or shut up ruling from you, the uk takeover panel. what does that mean? it means because remember things are quite different in terms of way they are done in the uk than here in the u.s., the process by which takeovers take place. the takeover panel will now talk to both sides or get a submission from cadbury and

kraft as to deciding when when a deadline should be set as to when kraft either needs to come with a formal proposal to acquire cadbury or step aside. the decision from takeover panel on that deadline probably will come quite soon. perhaps in a matter of days. certainly within a week of yesterday. so by next monday at the latest we will learn at least how long kraft has before it has to come with what is called a 2.5 filing or offering. namely a formal offer because remember, what has taken place so far is simply an unsolicited bear hug, if you fu will, a possible offer from kraft. how long will that be? kraft doesn't report its numbers until early november. so the thinking is that the least a takeover panel will say we want shareholders to have the benefit of looking at those numbers so we'll do that. could be five week, could be six

week, but the point is once that deadline is set. kraft will then have a date by which it has to have financing firmly in place and make a full or make a bid for cadbury. will that bidden higher is of course a key consideration. cadbury stock continues to trade well over the price of the implied bid. many think caste will improve that bid in its price and mix, namely increasing the cash portion which is currently about 40% of the current possible offer to as much as 60% or 70%. we'll see. do they have the capacity to did that? will that threaten their investment grade rating? all questions. let's assume kraft does come with a formal dlaurvgs will still be about 90 days of shareholders of cadbury it make decision. there is more time for potential bidders to emerge if there is another one out there. but that time is shrinking and we have a very decent sense of

how long this has to play out and how much time any potential bidder might have. for cadbury's part, they want to see if somebody else comes out to force kraft to bid higher f no other company does come to the fore, which seems to be the more likely possibility right now, then you've got kraft sitting there saying, how much higher should we bid against ourselves to make sure we win 50% of those cadbury shareholders once they decide on our offer. does that all make sensey i hope so. back to you guys. >> faber can make a anything make sense. advertising week is underwe and in full swing. facebook taking center stage today. the company's drive for advertising seen as a success for dot com overall. can this internet giant be an agiant in ad revenue? that's the co-for everybody, including our industry.

julia boorstin is talking about that today. so very big news from facebook today. you're partnering with nielsen for new measurements to measure the impact of ads on facebook. it's called nielsen brand lift. what is it? >> exactly what you said. we're working with nielsen at measuring out the effectiveness of our ads. what we do is when we show an ad, we poll users before and afterwards to see what the differences are. so one example, procter & gamble ran an ad for secret deodorant brand and polled those who had seen the ad. there was an 11% lift of people who are extremely likely to buy the product. >> so facebook became cash flow tif in the second quarter. how is it s this going to affect revenues going forward?

w. did he announce being cash flow positive last quarter. we know our ads are working. our clients tell us our ads are working, but we wanted a third party to help us measure the effectiveness so our clients could not just take it to us but take it from someone they trust like nielsen. >> do you think this will dramatically increase the number of companies that start advertising on facebook? >> i think it will. we're already working with most of the large advertiser, so more than increasing the number, it increases their capacity to advertise with us. so already sony, one of our bigger partners, after seeing the results that nielsens were able to show them, that they're going to book the next number of movies in advance going forward. >> this news comes as media giants nbc universal advertising agencies like wpp and advertisers teaming up to form this new media consortium to measure new media advertising and consumer response. is this a direct response to this new consortium? >> i don't know.

because it wasn't something we were worried about. we measure results lots of different ways on facebook and this is another one of those measurements. if there are other measurements out, there you know, it's possible that they'll be measuring effectiveness across the web as well. >> facebook is over 300 million unique users monthly and you have about $500 million in revenues this year s the revenue going to catch up even more to the enormous user base? >> we're not confirming our revenue numbers for this year but we are growing as expected. and better. and we think the revenue is catching up. our user growth has been really strong all around the world and at the same time, our revenue growth has been really strong even in what has been a really tough year. >> we look forward to seeing how facebook continues to go. thank you for joining us. >> thank you for having me. >> thank you, julia. this video just in, fed chief ben bernanke arriving for the two-day fed meeting.

gosh, i miss the old days. remember when greenspan used to walk to the meetings. obviously pre9/11 and greenspan would sprint across the street to show how lively he was? even at his age. >> and he would carry a briefcase. >> they called it the greenspan briefcase which now resides in my home office. he was kind enough to give it to me after he retired. >> that's because you made it an indicator. >> now it's just, it could be o.j. for all we know. just cars pulling in. here's another shot of those cars in case you missed it. we're waiting on president obama set to speak at the u.n. any minute now. we will have it live. next up, word -- we don't know whether it's next, do we have? because it could be after obama. anyway, word on the street and buzz beyond are still ahead. >> and to be specific, a little later after that. how the transports are setting light and what kind of holiday

shopping season we're in for with some pretty telling statistics coming up this morning. we'll be back in a moment. "squawk on the street."

all right. let's check out futures. we are up. things have improved little. now we're good for more than 50 points on the dow. bernie mcsherr vi our guest. cuttone and company. when the president begins to speak, we'll cut away. what do you think here? we keep grinding higher. >> it's getting harder and harder to be bearish here. >> do you want to be bearish? >> i prefer to be bullish when things are going up. but i thought yesterday, we were

going to see a break to the downside. we closed well off the highs. i think it's going to big catalyst to move us down. >> you can't fight it. big catalyst, what? some warning from the fed. >> is the fed going to say something? i suspect nothing too overt. they want to signal the economy is getting better. they have a plan to unwind but don't want to spook anybody. we have to wait for third quarter earnings before we get a move on that. >> do you think we're in the cler on this? the complaint was top line lousy, bottom line good. do you think that top line is going to improve? >> no, i don't. i think we can so that adjustment at that point. the consumer is still holding back. business spending is improving somewhat. exporters are doing better. but there's still some concern out there. the market is flying high, but we could be in for an altitude adjustment. >> now let's get the buzz from beyond with dan deming joining

us. what do you think? you heard bernie saying, you can't fight the tape. he thinks we're going to get a break down, we aren't. >> i'm contemplating this wonder wall the market has been climbing and wondering if it's for real or just an oasis, it's amazing. same thing. what we're seeing is tremendous demand, last two weeks, sunday night, the futures trading lower, monday morning they rally and are able to sustain the rally. you see buyers coming, any down move on these vix. trading down around 22, 23, excuse me and pressing that 23 handle several times the last couple of weeks, i suspect if this market continues to hold up over the week, we'll see the vix actu actually close below 23 for the first time this year. >> would it be a feat to get through this week without any disturbance, you've got g-20 and

compensation, if we can get through this. >> there's a couple areas i'm looking at. also the repositioning at the end of the quarter is also something to consider. there's no question about it, there's one concern of pause, i'm looking at the tech sector, the semis, per se, what i'm looking see there is the sma is rolling over. that's been a leader for the last six months. we're seeing it roll over, not being able to taking out 28.16, stagnant. we're seeing the russell and s&p trading at new highs here. so that's something to keep an eye on. if that can't get through the 25 20.15 yeah. that might be a catalyst for for this market to come off a little bit. >> we'll keep a close eye on that and speak to you within that time. thanks, dan. >> thanks, erin. >> we're counting you down to the opening bell and -- >> right now, the futures are pointing higher and also still waiting for president obama to begin spebing at the u.n.

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you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell is going to ring in 45 seconds. welcome back. time for the countdown. the futures have finished trading up 64 okay, well above fair value. 60 points on the dow at the open. >> one interesting headline today, the vice president is giving a big speech to the national insurance commissioners which is interesting. that's where you'll hit on the issue, is it going to be affordable and are we going to get rid of those guys. by the way, outside the insurance arm, the insurance companies didn't get in the midst of the crisis and the mess. >> no, they didn't. >> was that because they have individual state regulators? i don't know. because it's, as we're still thinking about getting rid of individual regulator, i wonder if it's worth asking. >> that's a very good point.

because having one federal regulator didn't do a whole lot for the banks. here's the big board. a responsible investing discussion at the big board. at the nasdaq fia equity options conference doing the honors. >> we said we would open higher. we are. obviously not every stock on the dow is open. but we're going to start with stocks anyway. >> we are opening higher. dollar is weaker. commodities are up. gold is up, aig right behind me here. much of the financial sector is up. aig is up 11%. heavy volume as well. a government watch dog group saying is it it is showing signs of stabilizing. citi higher by 2%. singapores a largest sovereign wealth fund has reduced its stake by 57%. then bank of america. dick bove raising his confidence. let's talk about lows. that stock under pressure this

morning. they reaffirmed their '09 outlook, which was fairly week weak and their 2010 guidance was at the low end of the range. the street is looking for 134. car max is up as its sales top estimates. let's go to the nasdaq. brian shactman. >> i'm going to go through things very quickly as we wait for the president. tech leader yesterday continues to be today. yahoo! up 0.8%. google up 0.6%. and research in motion up 0.6%. bing gaining market share. three months in a row. there's a note out of citi, saying there's a trading opportunity with applied materials. momentum as they trend toward profitability. we'll see what happens in 2010. story out of note of on i cconi. for mark echo's intellectual property, he could pay down half

of his debt immediately. keep an eye weren't whether that goes through. upgrade at paychecks at wells fargo. now to bertha coombs at the meantime mex. >> thank you, brian. hovering above 76 that has seen the euro spike to a one year high and oil coming back both here and england. it's all about xax trading right now. some are wondering about china. china is actually exporting new gasoline. used to be they needed every drop they could handle. gold continues above that $1,000 mark but silver is moving at a faster pace to the upside. rick santelli off to you.

>> we are flirting with a 148 handle in the euro versus the dollar. of course the euro is higher. we're flirting with a breach of the 91 handle which is the dollar versus the yen in the sma smaller that number gets as it slips under, the weaker the dollar is. and the dollar is universally weak giving up a couple of days of what amounted to a short lived bounce. we continue to hover near and create fresh one-year lows. interest rates were slightly elevate boyd a couple of basis points a half hour ago. they've moved toward unchanged except for the longest maturity, the 30-year bond slightly elevate. . 2, 5 and 7-year assorted bills. 43 billion, record two-year note offering. mark and erin, back to you. >> thank you, rick santelli. stocks higher out of the gate. financials the early leaders. canada gains hold at the close. joining us at the big board this morning. fred dixon, chief market

strategist. and ted bearish, portfolio manager of the haenssler equity fund. ted,this market going to keep going up? >> i think so, mark. the news is getting much better, earnings revisions have been superior over the past couple of weeks and i think there's a lot of good things going on in the credit markets. m&a activity has picked up. that's a good sign. that's going to give investors more confidence in the prices they're paying for stocks. we expect that to be the best year at 1130. we've held that view all year, i think we're going to think. >> fred, you turned bullish back in march. bill bullish? >> we turned bullish on the day of the famous mark haines bottom. we're seeing market sentiment picking up. wife been using the term, we've been describing the market environment as with a degree of

rational optimism. we're saying that investors are looking for opportunities. they're not overly exsewauberan this point in time, they are aware of risk in the marketplace, credit risk, deficit, dollar. they're still looking for opportunities, want to put money to work. at this point in the economic cycle, we go higher between now and a year end. >> ted, is it for someone who missed the rally, is it in a sense that simple, that you don't have to make about kind of a bet on where the market is going. you just have to bet that every big fund manager wants to get in too until the end of the year and sew you can make some money and then deal with your fundamental viewy. >> you still need to look at fundamental, but the market still has a good ways to go, i think, the next year, the earnings estimates are continually moving up. ic see the s&p challenging the all-time highs in the next couple of years. so that leaves a lot of room for appreciation in the stock. i mean, stock market.

so you need to be cautious of what you're big in a few sectors, financials, there's still a bit of trouble ahead there, but some of these early cyclical stocks are going do. we industrials are going to continue to do well. so investors with money to put to work, i think they should go ahead and do it now before the end of the year. >> one thing that's amazing about it is things fell off a cliff last fall. when we look at it, you had a 700 or a 900 point gain for the dow and a drop. n in a space of two weeks, no one had any clue what a stock was worth. maybe no one has a clue now. we're still recovering from something so unprecedented. that our traditional valuation metric still not relevant? >> we're getting back to the point where valuation metrics are coming into more normal focus. we just had an abnormal period. when you go into, when you fall

off a cliff, you're looking for parachutes and bungee cords rather that enfiguring out the cash flow, dividends and gaines are going to be. now we can start thinking about rational economic cycles. it will be slower growth in our opinion, but investors are cautious in terms of valuation, we're starting to see money move out of the more highly valued stocks into stocks that can benefit from a lower dollar, better international growth as a result of that and valuation will always matter at this point n i think we're getting back into a normal, a more normal psychological environment. >> all right, fred dixon, ted parrish, thank you both very much for sharing your thoughts. >> >> happening right now in washington. the senate finance committee mark up the baucus reform bill. committee members have already filed 564 amendments to the -- >> only 435 of them. >> right. i mean, right.

>> they've been busy. >> probably one person did 500, i don't know. it was an $856 billion proposal. i should note that baucus amended it him s it was 88 o so he caught money out of the bill. now we have this other to look at. mark knows all the 564 amendments. >> i do not. >> we will let you know on which ones matter. on that, i'm being serious. not far from the hill, ben bernanke starting the two-day fed meetings. which car is is he inside? >> we don't know. we don't know if he's inside the white one or the black one. he arrived at the fed just a little bit ago. the meeting is today and tomorrow and it will conclude with a decision decision on interest rates and a much more important statement. not going to move rates tomorrow but may move in the direction of taking away this for the foreseeable future, rates are going to be zero forever and ever and every. >> they're mixing and matching. the lead cars were a chevy

suburban and black car is a lincoln navigator. >> well, they weren't to show support for -- >> i guess so, for both, yeah. that's probably it. we're still waiting on president obama at the u.n. he's speaking on climate change today. a big issue for big business. later this morning, much more on the possible collision course with china. from climate change to the chances of a trade war. that's all straight ahead. >> also coming up, the stocks you'll need be to watching throughout the day. we're talking movers and shakers and you are watching "squawk on the street." boss: so word's gettin' out that geico can help people save in even more ways -

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bailout. "the new york times" reports regulators considering a plan to have nation's healthy banks to lend billions to sis the insurance fund that protects depositors. facebook and nielsen teaming up to measure ad performance on the social network. facebook will poll users about display ads that runs on its site. nielsen will pack it for clients. trying to reduce carbon emission, the prince of wales is urging people to give up their cars. >> who would give up that car. look at that thing. that's a boufl car. looks like an old mgb. this recommendation comes from man who owns two jaguar, two audis, a range rover and still drives an aaston martin.

given to him by the queen on his 21st birthday. >> is that it? >> hard to tell. if it was three quarters. you know what, you're right, it's not an mgb. it's too big. anyway, where are we going now? i guess -- >> kahuna and brain. we got side tracked looking at that car. aston martin. >> how old is the prince? he's in his '60s. >> that's a 40 yerltd car. >> that would have been prejames bond aston martin. >> that's so gorgeous. >> but you wonder if the prince's aston martin had all that stuff on it, if you put on james bond's car, you could put it on prince charlsz' car. >> and aston martin was in dr. no in '61 orr '62. >> right, but it had machine guns. >> almost 50 years ago. >> almost 50. why are you telling me that in such a pointed fashion.

yeah, i was around. i got to see that. do you have anything besides aig to talk about? can we look at it. >> let's look at it. i'm glad you brought it up. the reports today kim out yesterday. the research arm of congress saying aig's family condition has stabilized, but also say it's completely unclear whether they'll be able to fully repay the government, yet look at the move this stock has made. granted. reverse split, 20 for 1. so a stock that's worth $2.50 or would have been. but nonetheless, a $7.2 billion market value on the common there. there's a separate preferred owned by the government that represents a stake of 80% of this company. then all the different ways, the u.s. government, the trae, the fed are supporting this company. wow. i didn't know. when you look at that and you wonder whether, will they ever really be able to operate on their own without government assistance? are they taking the company apart? or is ben going to listen to

greenberg and they won't take the company apart as much? >> the thing,david, i don't think you can overstate the 20 for 1 reverse. because 2.50 verse is the 50, 6 okay, 7 okay, 80, whatever it was. the inherent value in that company wouldn't be surprising. but your point is a lot of times weird things happen in common shares. people treat it almost as a stand alone entity, not as a rae si residual value of the company. lehman is trading. people will buy things as a flyer and not understand the chance -- is that what we're seeing here or the insurance units are stabilizing, it was a huge company. >> it was. >> it was well thought of all around the world but there's a lot to pay back first, you would figure. >> we have to wrap now as the president is about to take the stage at the general assembly of the u.n. >> okay. we can do that. >> good morning.

i want to thank the secretary-general for organizing this summit and all the leaders who are participating. that so many of us are here today is a recognition that the threat from climate change is serious it is urgent and it is growing. our jgeneration's response to this challenge will be judged by history. for if we fail to meet it boldly, swiftly and together, we risk consigning future generations to an irreversible catastrophe. no nation, however large or small, wealthy or poor, can escape the impact of climate change. rising sea levels threaten every coast line. more powerful storms and floods threaten every continent. more frequent droughts and crop

fa failures breed hunger and conflict in place where is hunger and conflict already thrive. on shrinking island, families are already being forced to flee their homes as climate refugees. the security and stability of each nation and all peoples, our prosperity, our health and our safety are in jeopardy. and the time we have to reverse this tide is running out. and yet, we can reverse it. john f. kennedy once observed that our problems are man-made, therefore they may be solved by man. it is true that for too many years, mankind has been throw to respond or even recognize the magnitude of the climate threat. it is true of my own country as well. we recognize that. but this is new day. did is a new era. and i am proud to say that the united states has done more to promote clean energy and reduce

carbon pollution in the last eight months than at any other time in our history. we are making our government's largest ever investment in renewable energy, an investment aimed at doubling the generating capacity from wind and other renewable resources in three years. across america, entrepreneurs are constructing wind turbines and solar panels an batteries for hybrid cars with the help of loan guarantees an tax credits, projects that are creating new jobs and new industries. we're investing billions to cut energy waste in our home, our buildings and appliances, helping american families save money or energy bills in the process. we've proposed the very first national policy aimed at both increasing fuel economy and reducing greenhouse gas pollution for all new cars and trucks, a standard that will also save consumers money and

our nation oil. we're move iing forward with ou nation's first offshore wind energy projects. we're investing billions to capture carbon pollution so that we can clean up our coal plants and just this week, we announced that for the first time ever, we'll begin tracking how much greenhouse gas pollution is being emitted throughout the country. and later this week, i will work with my colleagues at the g-20 to to phase out fossil fuel subsidies so we can better address our climate challenge. already, we know the recent drop in overall u.s. emissions is due in part to steps that promote greater fish sa eer efficiency use of renewable energy. most importantly, the house of representatives passed an energy and climate bill in june that would finally make energy the profitable kind of energy for american are businesses and dramaical iically reduce greenh

gas emissions. i look forward to engaging with others as we move forward. because no one nation can meet this challenge alone, the united states has also engaged more allies and partners in finding a solution than ever before. in april, we convened the first of what have now been six meetings. major economy's forum on energy and climate here in the united states. in trinidad, i proposed an energy and climate partnership for the americas. we worked through the world bank to promote renewable energy products and technologies in the developing world an have put climate at the top of our diplomatic agenda when it comes to our relationships with countries as varied at china as brazil, indy and mexico. from the continent of africa to the continent of europe. taken together, these steps represent an historic recognition on behalf of the american people and their government. we understand the gravity of the

climate threat. we are determined to act and we will meet our responsibility to future generations. but though many of our nations have taken bold action and share in this determination, we did not come here to celebrate progress today. we came because there's so much more progress to be made. we came because there's so much more work to be done. it is work that will not be easy. as we head towards copenhagen, there should be no illusions that the hardest part of our journey is in front of us. we seek sweeping but necessary change in the midst of a global recession where every nation's most immediate priority is reviving their economy and putting their people back to work. and so all of us will face doubts and difficulties in our own capitals as we try to reach a lasting solution to the climate challenge. but i'm here today to say that

difficulty is no excuse for complacency. unease is no excuse for inaction. and we must not allow the perfect to become the enemy of progress. each of us must do what we can when we can to grow our economies without endangering our planet and we must all do it together. we must seize the opportunity to make copenhagen a significant step forward in the global fight against climate change. we also cannot allow the old divisions that have characterized the climate debate for so many years to block our progress. yes, the developed nations that caused much of the damage to our climate over the last century still have a responsibility to lead and that includes the united states. and when he continue to do so by investing in rekn ing iing in r

and reaching the targets we set for 2020 and our long-term goal for 2050, but nose rapidly growing developing nations that will produce nearly all the growth in global carbon emissions in the decades ahead must do their part as well. some of these nations have already made great strides with development and deployment of clean energy. still they need to commit to strong measures at home and agree to stand behind those commitments just as the developed nations must stand behind their own. we cannot meet this challenge unless all the largest emitters of greenhouse gas pollution act together. there's no other way. we must also energize our efforts to put other developing nations, especially the poor es and most vulnerable, on a path to sustained growth. these nations do not have the same resources to combat climate change as countries like the united states or china do. but they have the most immediate stake in a solution.

for these are the nations that are already living with the unfolding effects of a warming planet. famine, drought, disappearing coastal villages and the conflicts that arrive from scarce resources. their future is no longer a choice between a growing economy and a cleaner planet because their survival depends on both. it will do little good to alleviate poverty if you can no longer harvest your crops or find drinkable water. that is why we have a responsibility to provide the financial and technical assistance needed to help these nations adapt to the impacts of climate change and pursue low carbon development. what we are seeking after all is not simply an agreement to limit greenhouse gas emissions. we seek an agreement that will allow all nations to grow and raise living standards without endangering the planet. by developing and disseminating clean technology and sharing our

know-how, we can help developing nations leapfrog dirty energy technologies and reduce dangerous emissions. mr. secretary, as we meet here today, the good news is that after too many years of inaction and denial, there's finally widespread recognition of the urgency of the challenge before us. we know what needs to be done. we know that our planet's future depends on a global commitment to permanently reduce greenhouse gas pollution. we know that if we put the right rules and incentives in place, we will unleash the creative power of our best scientists and engineers and entrepreneurs to build a better world. and so many nations have already taken the first step on the journey towards that goal. but the journey is long. and the journal is hard. and we don't have much time left to make that journey. it's a journal that will require

each to us persevere through setbacks and fight for every inch of progress even when it comes in fits an starts. so let us begin. for if we are flexible and pragmatic, if we can resolve to work tireless ly in common effort, then we will achieve our common purpose, world that is safer, cleaner and healthier than the one we found and a future that is worthy of our children. thank you very much. >> president obama addressing the u.n. general assembly, focusing exclusively on climate change and acknowledge, thought it was important and interesting, the long divide between developing nations who say they should be allowed to put the same stuff out that we did and europe did to become wealthy. he addressed that one head on and walking off the stage. in response to president's speech a little later this morning, we have the ceo of peabody coal. we'll talk about all things energy and whether clean burning

coal is really an option or an oxymoron. >> coming next hours, the walmart model for american health care. they have the right idea when it comes to retailing. is the walmart health benefits plan something the rest of the country could learn from? we're back after a quick break. taking its rightful place

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

. welcome back to "squawk on the street." new data is out. and it's lateral with last month. at 14 and a bit disappointing with expectation for this month but once again, we see that at least from the smaller part of the economy, the manufacturing side, there are some bright spots. will they last? will they make a big difference in gdp? of course we'll continue to pay attention. the market response is more a function of equities coming off their overnight and early morning best levels pushinging a bit into treasuries even in the face of record two-year and t-bill supply. now let's go it erin thank you, rick santelli. markets not moving much. stink bugs invading pennsylvania. >> forget manufacturing, the g-20. >> that might move it.

>> poor folks in pennsylvania. >> the g-20 is going to get invaded by stink bugs. speaking of the g-20, that could be the big thing this week. there could be disturbing headlines, and a fed pete meeting chchlt do they care about more? >> perhaps for the near term of the market it's the g-20 because of talk about the dollar. it has reversed three straight days of strength to be negative again and that'ses trade that's really been work. that's the scenario we're seeing today oil, and gold is up like 13 bucks right now. i would bet you. i know you talk about this as well. it's probably 5:1 down here, traders who think the market is going to go higher by the end the year rather than lower and reassess where we are, right? >> right. and we were saying any big fund managers who admits at this point, forget what i think the real situation is, i don't want to miss the rally. i'll deal with it at the end of

the year. >> serve saying either close your eyes or hold your nose an buy this market. because the prevailing thought is that we are going to go higher until the end of the year. >> what about financials? especially give en the other headline today, singapore cutting its stake. >> that's why financials like aig continuing off of yesterday's rally to the upside. bank of america to the upside, dick bove raise the price target, giving that stock a lift as well and citigroup getting a lift as well. so the commodities trained a financials lead iing today. >> scott wapner, the as the stink bugs fly into pennsylvania -- >> that's just stinky. >> exactly. let's get to brian at the nasdaq. speaking of citigroup itself, not the singapore stake, they've got calls on chim makers. >> specifically applied materials, there's a near-term

trading opportunity with a mat and the thinking is they're trending towards profitability, 2010 looks better than now. when you look at the nutews, th had a management organization with a solar nirm china and the market is interpreting that as a net positive up 2.6% when the nasdaq composite is nearly flat. >> and yahoo! may be selling some businesses. is it moving to stock? do you know which ones and what it might sell for? >> the stock is down 0.9%. zimbra, the open course remail is up for sale. google is a surprising name to be mentioned as a possible b buyer. so it's comcast. probably won't fetch near lit $350 million they paid for it in '07, but maybe they're just raise a little cash and focus on their core business which long

term could be a net positive. >> thank you, mr. shaktsman. >> oil, side down, higher, oil is up. let's check in with bertha. >> as we watch that dollar today weaken. we've seen a complete reversal of what we saw yesterday. much of the volatiltiy, in october contract. that's going af the books today. we're still $71 as you look into november which will begin trading tomorrow. inventories for tomorrow, when he see a drawdown in part because we had lower imports. a lot of folks still not sure the demand is there, but as withing tos, you can't real lie die knee rally and go along with the pullback we did see it with gold in particular. dipped below 1,000 closed above

there. this is the 11th straight session we're seeing gold above 1,000. be but if gold is on fire, take a hook at copper. above 3% today. we're seeing the base met nals silver as well. even attracting more investment here than gold. gold continuing there. that 1k handle, mark. back to you. >> thank you very much. let's get to diana olick with breaking housing news. >> that's right. these are the home price index from the fafha. these are fannie and freddie loans so these are $400,000 and un. that said, home prices rose 0.3% month to month in july from june. year over year which is the better number to look at because these price numbers are very seasonal. prices are still down 4.2% and the index is now down 10% from april 2007 peak. now a lot of people are talking about month to month increases in home prices. ren, this report is for july. so we did see the bump up and

that's along with the s&p case-shiller home price index which we've also seen rise from the spring again seasonal month to month through the bring. but we have have to look year over year to see if this is a true home price recovery. mark? >> macy's a stock to watch today. citi upgrading the retailer from bye to hold. citing top line and margin potential. debra wineswig made the upgrade. >> good morning, thank you. >> what is it that cause ud to change your opinion? >> well, i would say in the past weak and a half we've had the opportunity to meet with some of the senior folks on merchandising and planning teams and private brand teams. what it looks like is the company's new unified organizational structure so everybody being in new york, working together, making decisions faster, should lead to stronger top line and also gross margin improvement.

>> it's nice to know management has got its ducks in the row, but don't they have to have the right merchandise in the stores? >> that's critical. what happened is previously, let's say before january, they had four different divisions across the country buying product. everyone has now been brought into new york, into a centralized structure, looking across the organization to try try and get the right ate tell mes to the right store at the right time. they put in new technology to support this and also new peo e people, new infrastructure, so the key is that the department store where you have about a million different skus a year, as opposed to at grocery store writs 50,000, because it's the same box of cheer yeses, et cetera. this is a significantly more complex organization. they put in technology to support this and the right people. hopefully we'll see the right sizes an colors and items by store. >> i would imagine that you don't put the same items in the store in yonkers as you do in glendale, california. >> and that is the key here.

so what they've done is they've actually pushed people into the local markets called district planners. district merchants. retail development people. each is responsible for ten stores. so you have these three senior folks work iing together on ten stores. they're in the stores every week. talking to the sales associates. talking to the customers toy try and get the right product in each store. so while they've centralized a lot of this, were you're seeing a real change in terms of more localized product. >> all right, debra, thank you very much for your time. appreciate it. farm equipment maker adco slashing their profit outlook citing weaker demand in places like western europe. since the march low, they are up 83%. that would be nearly doubling. agco's ceo joins us here on set. nice to have you in person, martin. when you were talking about the warning, you talked about

weakness in western europe, germany, france and the united kingdom, is that economically driven? >> it is. we have a plan in jermaine and in england. and what happened is that based on the lower commodity prices, thought to be a little more conservative in buying. so we saw order intakes slowing down basically in august. and that hurts us a little bit more than some of our competitors because we have such a strong market share in europe. >> so prices for commodities are going up. >> they're going down unfortunately. >> because they can't sell through? >> first of all, we had a very good harvest last year and everybody is expecting globally good harvest also this year. whether conditions were good. also add to that speculation in the commodity prices which i think now are out. the question is always how much is speculation and it's hard to

know. >> you know it seems to me you have a real challenge ahead of you here because we really don't know what the new normal is going to be. and commodity prices are going down. commodity prices are going down. oil is going up, down. in the old day, you could rely on relatively steady commodity prisses, could you plan. now your customers are dealing with great volatility, that's got to be a great challenge for you? >> exactly. that is why you have to be flexible in your factories. we were in a position to reduce head count within a few months by 20% globally. that means you need to organize yourself in a way that you can very quickly react to the more volatile markets. >> your biggest markets are where, europe and south america? >> yes. in south america, we're number one with quite a distance, we have more than 50% of the market in brazil and good news is that south america starts to recover.

so south america looks more positive which might help us for the remainder of the year. >> tell us your opinion of the economy in brazil right now. we have been -- i have been hearing almost as long as i've been alive that brazil is the country of the future. has brazil's future finally arrived? >> in farming, yes. we have actually four factories in brazil. we have a super distribution network and brazilian farmers are extremely professional and actually also making money. so that means the volatility comes a little bit with the c l culture, but in general, in farming, brazil doing very well. i think also in automotive they went to eth knowledge veanol ve. 90% of the cars sold in brazil last year were flexi-cars, using ethanol or any blend which is

good news for farmers. sugar cane farming is almost exploding. >> martin, thank you very much. we appreciate you taking the time. >> thank you. up next, a high stakes poker game being played by u.s. and china. at the ten of it all, trade, enormous implications for the global recovery. >> walmart, is breaking ranks retail industry over he can coverage. it is a model for the rest of america or a job killer? and the ceo of parkway body energy. we'll be right back

it's not surprise that during a recession, more americans go back to school. a lot of people would say can you teach entrepreneurship, isn't that some sort of a drive you're born with? some people say yes, you can.

princeton review has the top 25 entrepreneurship schools across the country. joining us with more is the publisher of the princeton review and undergraduate dean. it is the leader of the pack in both undergraduate and graduate rankings. rob, you believe -- what does an entrepreneurship degree do that, i mean is there some sort of you have to be born with it on this or no? >> there's some contagious a energy that students can start with early on, whether high school or before that then i believe the value of entrepreneurship at the undergraduate level is the basis of business and entrepreneurship. so supports folks, many of whom are working to be successful entrepreneurs and then great financial resource from the university. >> have you seen a shift during this recession specifically to programs that are targeting entrepreneurship as opposed to the way it was before?

>> yeah, entrepreneurship is a pretty new field anyway. five years ago, ten years ago, we wouldn't have be having this conversation. but it's a if he can cuss on the practical liberal arts. so it ties the things you're learning in regular liberal arts with very practical entrepreneurship and marrying those two together. >> i knew someone 15 years ago at babson folcusing on entrepreneurship then. this not new for you. >> no, we've been focusing on for years now and looking at new and exciting ways to do it. >> what has changed for u have you seen increased applications on interest in anything that's changed during the recessiony. >> oh, absolutely. the last two years at the undergraduate level, we've seen the highest number of applications ever. this year is ease first year class is the largest in babson's history. we have more students on campus

than ever. we're looking at a bigger application poll and more enrollment. students look at it as a way to solve the world's problems, so we're try ing ing to work with to come up with creative solutions to the challenges that face the world today. >> what do you teach them? here's what i teach someone who wants a an entrepreneur they wouldn't learn on the ground just trying it out themselves? >> when we talk about entrepreneurship at babson college, we look at things from multiple perspectives, to analyze every situation from a number of different facets and then lastly to really have the confidence and ability to take action an be a leader. and i think when you put the whole curriculum and undergraduate experience together, we are able to create this environment that instills all of those qualities in students. >> what are the other highlights? who made the cut. >> a lot of other schools. university of houston, drexel undergraduate level.

babson is number one. usc, top honors as well. schools you may have heard about to understand they're also offering that concentration is entrepreneurship is especially inspirational for college students looking to foster the contagious energy they have around business. >> some of these somebody may have heard of. and others you've got new names. >> depaul university in chicago is on our top ten list. fairly new program. no more than five years old, capturing the energy around those students and putting into a pragmatic use. >> thanks very much. dennis, thanks for being with us as well. next president obama sitting sown down with china's president hu jintao to talk about climate change. will tires be a big bump in the road? later, walmart breaking ranks with the retail industry and backing employer mandated health coverage s this a model for corporate are america or a jobs killer? it's a big story because the largest private employer in america is walmart. we'll be back. ♪

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one year ago today, kraft repl replaced aig as a member of the dow 30. over that time, kraft shares were down about 20%. now aig had been a component of the dow since april 1, 2004. mark. >> all right, president obama talking climate change at the u.n. today. he said climate change was at the top of the diplomatic agenda when dealing with brazil, india, mexico and china. this afternoon, the president will continue the conversation with china's president hu jintao, but will a recent tire terrify dispute overshadow the climate change front? who knows? let's get to our panel. joining us now is john sylvia, wells fargo chief economist and daniel iconson with the cato institute trade policy studies. is the terrify dispute together

goek a problem? >> it is a problem. the relationship between china and u.s. are multi facetted. there are many things going on, when we look at china's response in terms of u.s. pressures. it's a mull tie fti facetted n relationsh relationship. the challenge in diplomacy is never to let it get out of hand. >> all right, what about you, dan? >> well, i certainly agree with that. what distinguishes this measure, the tire terry mckavena tariffs first time in history that the president himself has imposed this on china. his hands are dirty on this. he doesn't pay attention to other measures which are on statutory autopilot. i think chinese are going to take offense to this especially

when juks that position that he found it was not in the national economic interest. to impose duties on tires. >> they're saying they're going to talk about chiment change. will it come up today? and if it does, will we know about it? is this all on the record or is there perhaps a back door conversation between the two? >> i imagine at the -- beneath obama's level, there's always back door conversations and that's been pretty active in the last week or so. but there are three or four differents a respecteds of this. but brian's point is well taken. once a head of state gets involved in the diplomacy, it changes the character of the diplomatic exchange and makes it much more serious an direct and often times brian is correct, diplomacy carried at a lower level doesn't carry quite the risks that are involved once the head of state is involved. >> you know -- >> i'm sorry, go ahead. >> i was going to say, dan, do

you think it's possible that hu jintao understands the political pressure barack obama is under from this union perspective and that even lower level conversation, he said let this one go, let's move along. >> i think that's quite possible, but let's also realize that all political leaders face protectionist pressures at home n april in lon at the g-20 summit, all 20 leaders pledged to avoid new protectionism through 2010. so hu jintao faces the same pressures as other leaders. he's concerned this isn't a one-time deal but now president obama has opened the door to other u.s. unions an domestic producers that might want to use this law. it was considered a dead letter under bush. now president obama has sort of rhesesuscitated it. this could create a big problem with new duties in the united states but also retaliation, china is not entitled to retaliate under the law, technically speaking but they can harass you as exporters, i

hope they don't, because they're going to hurt the chinese people more than anybody else with new duties. >> seems to me the global recession has highlighted something about the debate over protectionism that i find fascinati fascinating. it showed that we tried to stimulate things, the than in had to go to american companies or american products, people started discovering, it's not so easy to tell were at a an american company or product anymore. >> and when the consumer spend, so much of what they spend on isn't imported goods, one has to look into your closet or kitch ton realize we import a lot of goods around the globe. so last stimulus goes to importing goods from abroad. >> also in terms of look at the stick other an general motors vehicle. >> yes. >> a lot of it is coming from mexico, a lot of it is coming from canada. >> right. >> go ahead, dan. >> it's no longer appropriate to view the world as us versus them.

it's really competing global supply chains that have value added from many countries. united states our steel producer, is indian company and a germany company is building a greenfield investment in alabama to make steel there and the entire u.s. california steel industry which consists of rolling mill, they don't make and mix the steel, they import slab from brazil and canada and russia and finish it and make products to sell to u.s. customers, they're foreclosed because of the buy american america stipulation, because it's not made here. >> a lot of final products come from china. >> it's been assembled from parts coming from a myriad of different places. >> thank you both very much. >> good to see you both. coming up on street sign, an exclusive interview with jordan's queen noor. obviously international relations has been an issue near

and dear to her heart, particularly nonproliferation, we sew we're excited to have her the program later today. >> handful of stocks are making big news, including a cruise liner and a coal producer. coming up.

welcome back. the stocks hitting a new high. amr hitting a one-year low. other airlines are also trading down today. rail transports moving higher. norfolk southern moving up 1%. here at the big board up 19. how are the internals, mark? >> let's take a look at the markets first. i'll speak softly because i don't want to make anybody up. dow is up 0.04%. s&p not doing too badly. internally the nyse, hey, that's not bad at off. almost 2:1 on a very quiet day, that's very good. on the nasdaq, that's more what you would expect on a quiet day, about 300 more winners than losers. >> we should switch our things on screen. the decliners have red on the left and the advancers have a

green and unch a yellow? they're all red. >> when you go back to he headquartersy. >> go into graphic arts and fix that. >> let's get to mr. nesto with thoughts on the move. hello, matt. >> i hope to be color coordinated. we'll start a with a green one. carnival cruise lines very strong. third best performer in the s&p 500, up about 5%. their third quarter results were better than expected at 1.33. interesting their fourth quarter forecast is soft but investors in this marketplace bidding it up and royal caribbean as well. btu is peabody energy, we'll hear from the ceo later this hour. they raised the buy from hold at citi group. interestingly citi group raised their forecast for metallurgical coal helping the entire group here today.

mass, consol, et cetera. yesterday, big run up in the education stock, a today, a big give back for the same reason. the gao analysts there looking at it. if you read the headline it said more oversight needed. yesterday, that was a good thing, today they think it's a bad thing. the entire group is getting beat up. coming up, walmart, once vill fid for its health care practices is now being called a model for the rest of corporate america. it is it really the best option out there? >> the ceo of 350e body enerpea exclusively here on "squawk on the street." we'll talk about him about demand from china. so many people are skeptical about steel being up next year. it is this man, the coleman, that will know the answer. we'll be back. would you like a pony ?

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as president obama tries to gain support for his health care plan, walmart is a key part of it. the idea of an employer mandate on health care insurance, is this a model for corporate america or a killer of jobs? the president of harbig consultants is a health care advisory firm. mr. fister, let me begin with, walmart is the largest retailer in the country, you're with the national retail federation and yet, you are against an employer mandate. why? >> well, basically, first of all, let me say that walmart came out supporting an employer mandate, we were surprised not only that they came out with that position but also who they part nerd with which was the service employees international union when we look at an

employer mandate, you don't need an a ph.d in economics to understand that if labor costs go up, a row tailor which operates on very slim profit margins only has couple of option, either tore increase their price, passing them onto the consume other to address the workforce by reducing jobs. we feel that a one size fits all mandate that's been outlined would be a job killer t would indeed lead to even greater increases in the number of unemployed in this country. >> so do you believe walmart is supporting it in part to put other retailers out of business? >> i would have you draw your own conclusions on that. but certainly when you look at a company that has the buying power walmart has, when you look at the fact that not only do they have instore clinics but also dispense pharmaceuticals in store, there are also clearly competitive advantage that can be gained. there was recently an opinion piece in "l.a. times" by nelson liechtenstein who drew many of

those same conclusions regarding the competitive nature of this move. >> do you think the employer mandate makes sensey do you think it's helping the been on that front? >> i'm not surprised a at all that wall smart being helpful. they've looked at the situation and realized that american business is being crushed by skyrocketing health care costs and they're trying to find ways to be helpful. their partnership with sciu is a positive step and they've looked at the situation and trying to move forward because american business cannot continue on the path it's on with health care costs. >> walmart has been criticized in the past and has improved their health care insurance offering to their employees. but only 54% or so take the benefits that are available. is that really a blueprint for the rest of corporate america? >> walmart has fundamentally changed the way they've approached their health insurance practices in-house in

the past several years and they're on the right bath to offering affordable choices and more choices to their employees. there's room to do better and let's be clear, they certainly did it under pressure from the outside but they really took the opportunity and stepped up to the challenge and they're moving in the right direction. >> mr. pfister, they're actually better for those eligible for benefits under their plan than much of the retail industry. >> wall martz has made strides an should be commended for that but you cited the 50% fact. if you look at retail statistics there's broader coverage than people believe. this isn't about the fact that retailers don't want to provide health insurance to their associates. it's a cost issue. again, when i mentioned the one size fits all mandate, i would remind you that this process in congress has a very long way to go. the mandates that walmart has alluded to their support for, could change drastically as this process moves through the

congress. so you know, they're making progress, i think everybody wants to offer health insurance, but it comes down to costs. we're still mired in an economic slowdown. retail numbers are still not good, although we've been hea heartened by recent numbers. the american consumer has really kept their wallet shut. so if you're going to mandate coverage and increase in labor costs, you either ver to raise your prices, you have to let people go or do both. >> mr. pfister -- i'm sorry, mr. harbage, your response to that. >> no were one is talking about the one size fits all man day. the bills under consideration, excludes small business, makes subsidies available for other small businesses. that's a bill that's going to help business by getting costs under control. and when we do that everyone has to play their part. everyone has to put in their fair share and take a little bit more responsibility to get to a more effective, more efficient system. >> gentlemen, we have to leave it there, of course, but the

debate continues. thanks to you both. >> thank you very much. >> you can see a lot more on walmart tomorrow evening when i take you back inside the world's largest, most powerful company in my new documentary, "the new age walmart" and we do deal with this very issue of health care insurance and so many others this company has been confronting since the last time we took a close look at walmart. that airs tomorrow night at 9:00 eastern right here on cnbc. back to you. thank you very much, david. time for a quick check on what's making news outside of the business world. here's monica novotny from msnbc. good morning, monica. >> president obama with a full agenda today as he makes his debut at the united nations in new york, just a short time ago, the president delivered an address on climate change. later today, he'll focus on the middle east peace process holding meetings with israeli and palestinian leaders and tomorrowings the president will address the u.n. general assembly. severe flooding in the

southeast is now blamed for eight deaths after two more bodies were found in georgia. the regts is now bracing for another round of severe storms today with entire neighborhoods already sub mechbd by floodwaters. senator max baucus says he's open to revising his plan for health care reform after criticism that many americans will be forced to buy insurance plan plans they couldn't afford. although the changes could add billions of dollars to the plan, baucus suggests it could help attract bipartisan support zplnchts and a colorado man finally solved a four-month mystery in his own backyard. every evening, he says would practice golf and leave the balls behind and every morning they would be gone. so he set up two cameras and p captured this fox in the act. sly thief probably thought they were are eggs. that's what they think or maybe he likes to golf. he hoarded up to 80 balls apparently. >> what was that. >> they're calling it a hairless fox. i've never seen anything like that before. >> no, neither have i.

a hairless fox, huh? >> that's what monica said. >> i didn't know. the tail was so long, that's what-anyway, what's coming up? >> peabody energy is coming up. stock is up 72% since the haines derrie derriere. >> is it due to demand from china? what does that say about global recovery? another cnbc exclusive. in these turbulent times,

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citigroup upping peabody to a buy this morning on demand for coal in the united states. peabody shares are higher since the march low -- on march 9th. up 5% today. peabody is the world's largest coal kane company, provides 10% of the electricity in this company and has been optimistic about coal demand in asia. here now is the peabody energy chairman and ceo.

mr. boyce, thank you for in. everyone's talking about this demand from china. steel ceo says we're going to see an increase by 10% next year. you're the guy that makes the coal that makes this steel work and china run. so what's the truth? >> well, the truth is china an india are driving the pacific rim for the coal that feeds the steel sector. china's gdp probably around 6% this year and higher next year. we see the rim markets growing at about a 7.5% compounded annual growth rate for the next five plus years. it's a demand for electricity feel and steel sector feel. >> is it hoarding or hoped for demand or buying for use now? >> right now, it's buying for

use. the chinese have been very efficient at spending their stimulus dollars on projects. their steel sector has been producing very well and they have a structural shortage of quality coal in china, so they've been importing at record rates. >> coal used for energy. either heat or electricity. is there any way to clean it up? >> there's a lot going on with carbon capture. there was an article in the times this morning on a large power plant in virginia. there's work on precombustion capture of co2 as well as post, all designed to take the emission is out and use it for enhanced oil recovery or store

it underground. >> a lot of people are talking about a new age of nuclear for generating electricity. what would that do for demand? >> we think there's going to be a new demand for new coal as well as nuclear. we need all types of fuel to be in the energy mix. we need to build new coal facilities. they're being built around the world at a record pace and we need new nuclear. the numbers globally for electricity demand are staggering and that still assumes that over half the world's population does not have access to low cost electricity. >> two questions. one on sticking it in the ground thing. seems to make sense. the problem is, do we really know what happens to it when it's down there? is it one of those, oh, sounds good now, but in ten years,

serious consequences? >> we don't believe so. for the last 50 years, the oil industry globally has been taking liquids out of the ground. finding them, removing the liquids. they've started to reverse that process. stat oil in norway has been putting co2 under the north sea every year. >> what happens to it when it's under there? >> it either gets trapped in the same geologic structure that trapped oil or gas or it will react with the minerals that are in the salty water and form a solid carbonate and then it gets stabilized. what they've been looking at with stat oil, some of it will migrate along the structure, but

they're finding it stabilizes as it moves along the structure. >> i'm gathering -- okay. you just really answered my question. if it is injected into the ground in gaseous form. >> no, in liquid form. yes, under certain amount of pressure, it stays a liquid form, so the secret is to inject it deep enough, below 3,000 feet, so that the pressure naturally keeps it in a liquid form. over time, the co2 actually react ws the rock to form another rock, a carbonate rock, which stabilizes it as a mineral. >> boy, is that going to throw geoologyists off.

where did this carbon come from? >> as a natural part of the cycle that's been going on since the earth was formed, but in terms of coal markets, the pacific rim is very, very strong. >> you're worried about carbon zilla. what's it going to do down there? mutate? >> it might. up next, a check on the markets, but first, oh, trish. >> hey, guys. carbonzilla. in the next five minutes. we will be talking live with the aflcio president's going to be holding a news conference at noon calling for financial reform. the columbia trade minister will join us talking about free

trade and investing in this country right now. we're back right after this breek. could someone toss me an eleven sixteenths wrench over here? here you go.

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we're back. a financial check on the markets. the dow, it's been a quiet day, but the dow and all the markets have been hanging above break even. >> just so curious about what the liquid carbon looks like. you know, what is its consistency. >> i don't want them pumping it into my yard. time for "the call." the government says home prices rose in july compared to june, but fell 4.2% compared to a year earlier. the federal reserve begins it policy meeting today and sbris rate to come tomorrow. retailer lows giving a cautious

outlook to 2010. good morning, everyone and welcome to "the call." this rally in equities, somewhat out of steam, however, we are still in positive territory, up 11 points right now on the dow. this as the u.s. dollar continues to weaken. we're going to talk about thwha that is right now. >> i'm larry kudlow, the fed beginning its two-day meeting on interest rates. we'll discuss what it has to do with propping up the weakening dollar. and i'm melissa francis. aflcio president richard trumka joins us live. he's holding a press conference, but will join us first. why? because this is "the call" on cnbc.

stocks open stronger, but that rally soon stalled. dipped into negative territory within the last half hour. it has popped back into positive. this as the fed begins a two-day meeting. the dow right now, we are up about 12 points. the s&p right now is also to the plus side. up about four points. the nasdaq on the plus side as well, about 3.5 points. what's happening on the floor? >> it started out really well and could still end up really well, but just on that chart you were showing, how things have teetered out. we still are up 14. scott wapner with me on the floor. good to see you. so, you know, we were talking about that weak dollar. the dollar