double-digit percentage points. at least it was earlier today. a government watchdog group saying it is showing signs of stabilization. bank of america, the analyst bumps up the price together to 25 from 19. finally, citi is up about 5%, as well as singapore has reduced to less than 5%. commodities, we had five days of strength in the u.s. dollar. that evaporated again today. commodities higher, gold is higher by about 12 bucks, up to $1,016. oil higher as well today, back above a $71 a barrel. freeport u.s. steel and murphy, getting a look there. carnival raised their outlook and their earnings beat expectations. getting a jump of about 7.5% and

pulling royal caribbean along today as well by about five. weak dollar, higher xhcommoditc. >> we're near the session highs, about ten points. a couple of floors above me, ceo of yahoo! is doing a question and answer. really being asked several times about the stories the last few days, whether or not they're selling some of their businesses. she basically said generally, maybe. she says it's integrated into our system and let it at that. we'll see if there's truth to it. google, above 500. it's off the highs, but again, hitting another 52-week high. a lot of strength in big names. rumors of nokia take out out of europe. a nice note of citi saying it's

a short-term buy. dell slightly negative on that deal with perot. >> it's an interesting day. folks are starting to talk about whether the dollar is now the so-called carry trade currencies. you get the cheap dollar and buy up commodities. seems to be what's going on. we have the october futures contract expiring today. the crude versus the dollar in the last weekend, a very telling chart. we've got that dollar index perilously close. gold back up . rick santelli, boy, that dollar

index with the new lows. >> what's fascinating is that the bounce we had on friday and monday was real, but the fact of the matter is all the price activity in those upper two days has been completely negated because we are now in territory that would be a fresh, new, one-year low close. so bounces are interesting, especially when they take you nowhere after two days. that's the point of this long, trendy type move. two-year auction, 43 billion record. rates have come down across the entire curve. bill, sue, dennis, back to you. >> michelle's here, too. we'll be hearing about that two-year note auction. what happened? september, supposed to be a rough month, but the s&p is up nearly 5% just this month. so, what's going on? let's gather our task force

today -- guys, good to see you. welcome back. michael, what's going on? we were all bracing ourselves in august and so far, so good. >> i think the thing that's been roughest for september has been my nerves, bill. we watch these prices on the s&p and dow and others just go higher and higher. we've got from 11 times earnings in march when we were low, over 19 now. topline growth hasn't increased. >> so what are you saying? is the september fear going to be the october fear? >> i think this overhang just continues. absolutely. everybody's waiting for some pullback in here. so i think yes, we're going to

wait. >> i guess you agree, mark. is it too late to get in here? >> i don't agree with that at all. everybody panicked, trying to get out of the market. many have missed it all together. the best thing to do is not try to pick or time. pick a portion of your portfolio that will be steady. we know long-term, is next 100% is up and anyone that tells you they know the next 20%. run the other way. >> you're putting about 15% in the national arena. why is that? >> because they make great diversifiers in your portfolio. we're not gambling if they go there, but we know they have a great price move at long-term. because most people have way too much money, large company,

they're great. >> it's a hedge for you, in essence. >> we don't bet on sectors, we own them long-term to get the diversification. >> i would say don't misunderstand me here. i'm a long-term investor and i agree with mark. i don't think you play these, get me in, get me out moves. >> i like watching google as the symptom of stock enthusiasm and in november, google was down 60 bucks or so. do we think stocks are getting too inflated here or is this a sign of more rises? >> if we're going to talk about asset categories or individual things used to speculate or we shouldn't be doing, let's talk about gold. because here, we have an asset category, long-term, barely keeps up with inflation, 20, 30

years. if people are speculating, it's things like options, gold, even a real estate read. bad thing. if it's on the cover of a magazine, let's stay away from it. google and stocks in general, they're on told. >> dennis loves it when people say that because he used to run a magazine. >> not your magazine, other people's magazines. >> people who think the economy's in shambles invest in gold. >> it's a win-win situation. thank you both. >> thanks. >> yes, we always watch the cover of "forbes" very closely. when we come back, the s.e.c.'s getting tougher with bank of america. a powerful congressman is raising the heat on the bank as well. can ken lewis survive? also this hour, ben bernanke and company are meeting today to talk about interest rates and we just mentioned gold, at a record

high. should the feds really be focussing on inflation? plus, president obama speaking out on climate change. with the economy, health care and spirals deficits, is this the wrong time? and get ready for the "fast money halftime report." we'll be back in two minutes. in these turbulent times, you want a financial partner who promptly gets you... the information you need. at northern trust, our sophisticated technology... puts the most accurate information at your fingertips. so while you may find yourself waiting now and then,

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this is a newer ra, a new day. those ripple effects from that one year later still in evidence today because bank of america under heavy fire over bonuses and the deal with merrill lynch. how much longer can ken lewis keep taking the hits? mary thompson joins us with more. >> his future was the focus of a board meeting held yesterday. reports say directors have a

pool of candidates to replace him. the charlotte, north carolina based bank failed to comment on that, but he says he wants to stay on until $45 billion in t.a.r.p. funds are paid. but some wonder if he's going to last that long. at the root of his problems, what he knew about bonuses and losses, but didn't tell shareholders last year. new york's attorney general saying he covered four instances where the bank withheld information. the s.e.c. says it's going to vigorously pursue its lawsuit against the bank and will meet a new deadline monday, which is also probing the deal. a senior bank executive will be meeting with the chair to see if the bank can meet the committee's needs while

protecting the bank's attorney-client privilage. it's up 25% this year. some big investors saying the bank will repay the t.a.r.p. money. of course yesterday, the bank did take one step to loosen its ties from the government, paying $425 million for a government guarantee of risky assets, but never officially signed off on by the bank. >> there was so much into this story, but the s.e.c. says now they're going to vigorously prosecute, but only because the judge said he aided the deal. they were penalizing the shareholder. >> i guess you have to wonder at this point if the s.e.c. would actually pursue charges against the executive. could be a possibility.

>> i'm sorry. i just feel like we are so looking backward here, guys. and yet, merrill lynch added to bank of america's earnings. bank of america's stock is up 25% and we're still worrying about, what did you know. on one hand, government owns this big stake in bank of america. but now, our government is charging them $425 billion for a kill fee. you are hurting shareholders when you make a company pay a half a billion dollar fine and yet, government is the shareholder. >> shareholders do not disclose material information and the stock takes a dive after that. if you're a shareholder of bank of america and could have gotten out before all this -- >> a billion in bonuses, whatever that figure turned out to be, we are spending a lot of the time and ultimately hurting the thing that taxpayers are

mistaken. >> i think it's a broader issue. if his duty is to the shareholders, that's what they're getting at. as far as is government being a shareholder, really, they're a lender. it's preferred shares they own that could be converted and bank of america is still paying the government 8%. >> but they hurt shareholders saying they have to pay. >> at the same time -- you could argue that they helped shareholders because had the government not at least said, we will seize these assets, then the shares may never have climbed in the first place. so you know, $425 million may be, they may be getting off cheap. because if the stock is up 25%, what does that mean? >> mary, thank you very much.

by the way, a question we've been wondering. can they repeat the success of the da vinci code? "wall street journal" reporting random house has set a one-week sales record for the sequel. 2 million copies have sold in seven days. that repobook came out a week a today. >> a break down of hard cover. i bet it's hard cover. we're going to focus on the fed. mr. bernanke and company kicking off a two-day meeting. gold is up, the dollar is down. should the fed be talking about the i-word? and if they do, what will that do to the markets? and at the top of the hour. 43 billion in two years. it could be a market mover.

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intel shares are up today, but have been on a tear this year, up more than 30%. we have an interview with intel's ceo, paul otellini, at 1:30 p.m. eastern time here on "power lunch." also, today, the fed is meeting to decide the future course of interest rates and while most expect is fed to hold steady, the markets will be looking for language tweaks. more now from michelle jered and brian fabry. michelle, you say the question is against the backdrop of rising oil prices, rising gold, increasing treasuries supply and the dropping dollar, how long can the fed not mention the "i" word? >> if they want to keep the extended language, phrase, in the statement, it's awful

difficult to start sort of suggesting you have growing concerns about inflation. at this point, you know, so many of the members believe that the huge amount of excess in the system will keep pressures low. as a result, they're probably still comfortable with suggesting that interest rates could stay low alongside inflation for the foreseeable future. >> brian, often, we see the markets leave the fed. in interest rates, if they go much below fed funds, often, the fed has to respond. right now, oil and gold just to name two, inflation-related assets are making moves. getting comfortable around $70 in oil. how long before the fed has to respond to that? >> to be honest, the oil prices have been hovering around $70 a

barrel now for more than a month, maybe two months. we saw the push in june and july for those commodity prices to go up and now, they've been stable. but really, it's core that matters most to the fed and while they're always talking about inflation, they wouldn't be fed members if they weren't talking about it. they may talk about it when it doesn't exist and that's the possibility i can forecast for the end of second half. i think that's where the real concerns right now are rather than worrying about higher headline numbers. >> but michelle, this comes on a day when we have another $40 plus billion of securities being auctioned off. does the fed risk its credib credibility if it waits too long to approach the subject of inflation? >> i think that's ultimately the risk. first of all, while the year over year inflation numbers

still continue to trend lower, the three and six-month frequency changes have already started to turn up. we think the trend in inflation and core inflation is going to continue to deteriorate. at some point, there will have to be a recognition of that. as bill said, the markets will move ahead of the fed and at this point, i don't think the fed wants to do anything to sort of accelerate the process of interest rates moving higher. they want a signal. policy's going to stay low. they want to do what they can to help keep market rates low to allow the recovery to gather some momentum. i don't think they're going to go down that road too soon and at the meeting today, suggesting we're concerned about inflation. >> before we let you go, brian, what do you think they will say tomorrow? >> i think the key thing from the fed's point of view is whether or not that say something about their purchase program. last month, they said basically

they would extend purchases of treasury securities. this time, they may decide to extend mortgage-backed securities so they don't end that process at the end of the year, which would be quite detrimental. i think they may extend it for a couple of months into 2010. >> thank you. >> thanks. >> got me scared to death in his column, where he said you can have inflation even in a deeply disstressed economy. >> i think the indicators are we're not there yet. >> but they're there. >> starting to show signs. gold, oil, lot of those. >> and once it gets out of control. >> we all worry about it. it's definitely coming. gold is trading like it's coming now. >> i think so. by the way, before we go,

"forbes" magazine, has a terrific column online about ten uncommonly clever economic indicators which we'll get into later, but we've been asking you for some of your own off the beaten path. things you watch for that we don't often hear about. we've been asking you to send us an e-mail about that. this is one of my favorites. this is from captain john in virginia. he runs a docking boat. he watches the draft of cargo ships. that is the amount that goes underwater. the average two years ago was probably 37 feet. six months ago, it was 30 to 31 feet. now, it's close to 35. >> love it. >> that was really, really good. >> in other words, more stuff in the boat. >> we'll get some more coming

up. up next, president obama speaking out at the u.n. on climate change. looks like maybe action is coming, but with the economy, health care, the deficit, is this the wrong time? and at 12:45 eastern time, get ready for the "fast money halftime report." >> we're going to go behind the real stories behind palm. you'll be surprised to find out why the move. and what's the best currency to play against the weaker dollar? tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move. tdd#: 1-800-345-2550 doesn't matter if a company sells computer chips tdd#: 1-800-345-2550 or, i don't know, fish and chips. tdd#: 1-800-345-2550 i'll look at all kinds of stocks before i settle on one. tdd#: 1-800-345-2550 if i think i'm onto something i'll check it out, tdd#: 1-800-345-2550 you know, see what other traders are up to.

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we are almost halfway through the trading day and stocks are higher. and we have 14 stocks leading the s&p 500 hitting new highs today including google, morgan stanley and gap. carnival shares are at a 52-week high. and macy's getting a boost. retail giant upgraded to a buy at citigroup. president obama making a big push to reverse the tide of

climate change. should the president tackle global warming when he has health care, two wars and the economy on his plate? firing off on the grid -- you guys know how it works. you get 20 seconds to make your case. mark, let me start with you. >> two points. markets crave stability. the markets will become more unstable as time goes by. now is a good time to do it. second point, this is why this nation elected the president. it's time for a change. he's the man. this is what he ran on. it's time. >> all right. 20 seconds. ron, 20 seconds on why this is a bad idea right now. >> i think the number one domestic priority is making sure our economy is growing and that we have job creation and allowing more americans to keep more of their money and wealth.

this global trade initiative seems to be a hidden tax that will impact people at the lower end and middle class and i think it's the wrong time with two wars, we need to focus on the economy. >> mark? you're going to raise costs at this moment people need lower costs. >> everybody knows energy's going to cost more. every day matters. this president has a plurality. of course time rs tough, but you've got to be able to multitask these days. >> ron, what's your answer to that? is it a matter of waiting? is it a matter of not liking the current cap and trade system? >> all of the above. i don't like cap and trade. you're talking about china and india, they would not be held to

the same standards. why can't america look at nuclear energy as a viable alternative. france has nearly 80% of their needs meet through clear power. >> mark, are we going to put ourselves at a disadvantage to india and china if we impose costs? >> absolutely not because america has to show leadership in the marketplace. of course those growing economies are going to find ways to leap ahead. that's what they're about. >> maybe it shows a leadership position, but that doesn't exclude the possibility that it makes companies less competit e competitive. >> by america leading and planning for things, ron talks about nuclear. that's a decade away. we have to deal with fossil fuels now. >> guys, good discussion. >> pleasure. facebook. it's up to 300 million users.

teaming up with nielsen, the ratings guys. get the latest from facebook's ceo. and in just a couple of minutes, the president meets with china's leader. is it time to get tough or get real when it comes to trade with china? you're watching "power lunch" on cnbc, first in business worldwide.

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you want the real pulse of the economy? look at denim sales. often a leading indicator of how the economy's doing. according to forbes.com, we'll be talking with the reporter who wrote that. and we want to hear your own unusual economic indicators you watch. we'll get to those over the next hour or so. e-mail us. facebook is the spotlight today as advertising week gets underway. question is, can the social networks giant be a driver of the online revenue?

julia boorstin has an exclusive. >> dennis, today, facebook is partnering with nielsen for nielsen brands. a new system to track the impact of display ads on its site. facebook has 9.1 of ads used in july, second to yahoo!. the ceo won't confirm numbers. she says user and revenue growth has been strong around the world, despite being a tough year for ads across the board. now, she expects this new nielsen partnership to encourage advertisers to increase ads spent. >> we know they're working. our clients tell us they're working. we really wanted a third party to help us measure the effectiveness so our clients could not just take it from us, but someone they trust, like nielsen.

>> this comes on the heels of a new media. friends and foes coming together to better measure new media ads online. this has been seen by many as a challenge to nielsen and it seems like now, the partnership with facebook is a way to show their new media savvy. this isn't being stopped at all by the con sorgs of media giants. they plan to roll it out to all of their advertisers over the next couple of months. we'll see what kind of impact it has on their ads. >> i've watched nielsen crush every challenge that's been made to that company. the thing i'm wondering, i imagine this deal was in talk

for months, or did the talks come after the announcement of the rival plan? >> that's a good question. they wouldn't say. seems like they want to make this seem like a really big deal. sounds like she wasn't even that much aware of what was going on with the competitive con sor sum. they keep on insisting it's not supposed to replace nielsen. it seems in this era of new media, you're going see a lot of the different ways to measure that. >> cant wait. thanks a lot. michelle? >> thank you very much. yes, you are here. minutes away. 43 billion in two-year noets on

the market. and intel's ceo, paul otellini, on his outlook. he'll join us live from san francisco. don't forget, your e-mail, your uncommon economic indicators out there. when we come back, the "fast money halftime report." we'll see you at the top of the hour. esesesesesesesesesesesesess

welcome to the "fast money halftime report." financials and materials leading the charts. where are your best opportunities? let's get to the word on the street and our crew -- mike, i will start with you since you are in london. you are doing us the honor of gracing us with your presence today. are we hostage to the dollar since the s&p is reliant on the weak dollar? >> without question, you're seeing this amazing drawback. you just saw this knee jerk reaction of a rally only two days prior.

with the g-7 coming up and this whole thought of a coordinated event with other countries, that leads to really nervous volatility out there. i'm seeing two different things. one, is dollar getting smoked against the kiwi. at the same time, you're starting to see the way the euro has moved up. the equation is a weaker dollar and people believe that's going to continue. >> patricia, there are some interesting moving. in particular, the retail index hitting a 52-week high. 10% of its components also hitting a 52-week high. is this a real turn around? >> the macy's upgrade is helping. i think people are looking at the weaker dollar and saying, well, even though it's going to cost more to get these in, there's going to be margin

improvement. beyond that, i don't know what people are looking at because i'm still looking at the consumer. >> with job loss stabilizing, we know people spend what they have and whatever credit they can get, so even as the psychology becomes more less negative, that allows people to spend the money they have without the level of fear we saw a few months ago. >> i want to go to straight to the trades here on the back of the dollar. commodity names trading higher with the dollar losing momentum. now, at a one-year low. lower dollar also helping gold push higher. pete, you've been watching some of the upgrades. what, in your opinion, the best way to play? is there an opportunity one can take today to commit fresh capital to a dollar related

play? >> i think you can go to the copper names. look at freeport. it continues to perform at such strength. >> i think that we lost pete. forgive us. we are operating by a web cam. as soon as you rely on technology, it goes out on you. zeke -- give me some plays here. >> i don't like gold -- the fed and g-20 are going to lead to policies that will trigger that, i am not excited about gold in general. i can't figure out why anyone buys it as opposed to copper.

>> pete is back. pete. >> i think you guys didn't want me to talk about the dirty coal trade. that's what everybody was so angry about. we had the ceo from peabody on. he said demand is real. it's not just a restocking trade. that's been the trade all along. the demand for steel, for thermal coal. peabody continues to find the strength by people willing to upgrade them. i like these names. i like a coal space in general. i still think it's a winning area and a usable commodity. gold is where people go for a little bit of a safe haven trade, but a usable trade, copper, coal, that's the place to go. >> you want to feel smart at a cocktail party, say metal next

we've had palm up for two straight sessions. you were noticing the call activity was very active. this is all surrounding some rumors that perhaps nokia might be interested in buying palm. what do you think is behind this news? >> well, i mean, even just forget that rumor for the moment. when they came out with the earnings last week, going into that there was an incredible amount of not just opss but the stock volume was off the charts. we've not seen that lag. as a matter of fact, traded 110,000 contracts yesterday. we've traded 90,000 contracts already today on the options side. keep this in mind. there's about a 30% short interest here as well. so as that stock starts to move a little bit higher, obviously there's some nervousness on that side, too. there are several factors pushing this. forget the rumors for a moment. that pre sold over 800,000 units. >> patty, given all the cross currents surrounding this stock, is this one you would touch with

even a ten-foot pole at this point? >> i have been wrong on palm. i woulded ed admit that. i don't want to buy based on rumors. the fundamentals for me still aren't there. >> we're seeing banks trading to the upside. the fed kicking off its two-day meeting. bank of america leading the space. up graded to 25 bucks a share. michael gurka is this a reason to buy when we're seeing across the board strength? morgan stanley up by almost 3%. same with jpmorgan. without questi . >> i'm not surprised you're starting to see that action. i'm not surprised you see a little more sector reallocation at quarter's end. the problem is right now the global space, is it enough for bank of america to look like on the domestic front that that's enough they can compete with some of their contemporaries. what i'm seeing is that the quarter worked out very well for

them in regards to spending, and i think it's going to stop right here. >> okay. let's move on to the next trade and get back to the story of the day. that is the u.s. dollar. equity markets seem to be following the dollar's move closely with the dollar taking rein. let's get more on this story. we're joined by brian kelly of conundrum research on the fast line. brian, how do you interpret the dollar's move and how should one position themselves. >> you have to look at the dollar index and the reason the sentiment in the marketplace. you're looking at a weak dollar that's fueled materials, oil, the tech sector. that's somewhere between oil and materials is 20% of the s&p market cap. if you add in everything else, you easily get north of 50% to 60% of the s&p market cap is trading on a weak dollar sentiment. so what i would look for is if you see a reversal in the dollar, i'd be concerned that the reason to own all these stocks completely disappears, and so that could be the last leg of this rally. >> so what do you do here? are you short the markets?

>> well, not yet. i mean, the dollar obviously is still pretty weak and it hasn't reversed yet. what i'm just looking at is you see that reversal and that's going to be the first key for me to say, hey, wait a second, maybe this rally has ended here. for right now i'm actually long british pound versus short u.s. dollar. you can play it against the fxb for this last leg of the short dollar trade. >> quickly on this, could you also say these things are trading based on a lot of fundamental demand picking up that's given added wind by a weak dollar. just because the dollar reverses doesn't mean the fundamentals of a lot of this disappears. >> and i agree with that. if you look at the valuation of these things, we're not in a cheap range here. the market is certainly priced in a lot of the fundamental change. we'vesurprise e ed -- priced in "v" shaped recovery. tonight we talk to the top housing analyst to get his top plays. coming up next, plunch has

an interview with the ceo of intel. "fast money" halftime report continues right after this. >> bernanke and his gang are gathering again, but will they continue to let the market horses run free or rope them in too soon? and a year later, and it's a changed street. does this survivor have what it takes to dominate on the new wall street? plus, move over drew carey. we have the best deals for the market's hottest trade on america's post-market show tonight.

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welcome back to the "fast money" halftime report. time for your "power lunch" trade to go. we turn to the pit boss. hopefully no gremlins in your web cam. you want to talk to tjx. >> here is why. the stock just hit a 52-week high. jus

just announced a $1 billion buy back. there's no options telling us anything or anything of that nature, but this stock just continues to impress. you look at the pe levels this, stock is doing everything right right now and i still think there's much more upside. >> time to call the close. do you buy or sell? >> definitely oversold dollar and overbought stock market. i'm short s&ps right here getting long the dollar. >> zeke? >> i'm buying with a little downside coverage. >> patty. >> i'm market neutral. got a couple longs on individual issues. >> and pete? >> there's so much protection in place, the market is going to continue to go higher. i think there's still strength and a lot more upside going to shake these guys out. >> that does it for us. on tonight's "fast money," as bernanke and his gang gather in washington, d.c., we have your best trades ahead of tomorrow's 2:00 p.m. decision. tomorrow, breaking news from the 3w07nd pitts as "power lunch" breaks down the results of the two-year note auction.

>> we're going to be watching that closely. steve liesman waiting in the wings with rick santelli. then is the fdic about to ask for a bailout from the banks? steve liesman will have that. also ahead a first on cnbc interview. you mentioned paul otellini will join us leave from the company's development forum in san francisco. plus forbes magazine ten uncommonly clever economic indicators and the ones you would add to the list. we'll see you on the other side of news now. this is cnbc.com news now. they have been ordered to make restitution to customers in connection with the ipo vonage several years ago. although borrowing banks is an option, it's not being seriously considered. and shares of carnival are up about 8% following better than expected earnings. that's cnbc.com news now. i'm courtney reagan.

all right. second hour of "power lunch" continues now. welcome back. i'm bill griffeth. wall street bracing for some numbers that could move the markets here. we have $43 billion in two-year notes. the results of that auction due out any moment now. we'll bring them to you along with some analysis and, of course, market reaction. >> i'm sue herera, stocks are moving higher. the dow recouping losses from yesterday's session thanks to the likes of caterpillar, jpmorgan chase and alcoa. >> i'm michelle caruso-cabrera. paul otellini addressing developers in san francisco. he's comments are helping to lift the chipmakers stock today and right after he wraps up his remarks, jim goldman will interview him live and first right here on cnbc. >> i'm batting cleanup. president obama meeting today with china's president as our countries remain at odds on key trade issues. is it time for the u.s. to get tough on china trade? or do they already own us?

a debate is coming up. >> how do you really feel about it? >> we have had a number of people writing in with their favorite uncommon economic indicators. something they personally watch. anything that you watch that don't come out of the government numbers? anything fishing related? >> fly rods. >> fly fishing related? >> that can help, but along those lines my favorite indicator is what i call out your window. >> okay. >> which is? >> people forget to look out their window and see what they see there. there is an awful lot of stuff that comes at us day in and day out that if we would just take the time to realize that it is different from what we normally are expected to see, that we would be -- we'd have our own sort of forecasting economic indicators. >> that's the whole point. we have gotten people -- >> two years ago when i went to home depot, i couldn't get a spot. now it's getting tougher to get a parking spot. that kind of thing. >> the beauty salon i go to, women who get their hair colored, stretching it out.

instead of going every three weeks, they go every eight weeks. >> yeah. >> and now when things are getting better they come back every three weeks. >> you stretched out your haircuts when economy goes bad. >> only a little more than you do, bill. >> listen, it's different when you're going gray and you need to cover your roots, okay? just a thought. >> here we go. two-year note auction is in. we're going to get the results of that and some analysis with rick santelli who is looking at the numbers. >> there he is. >> cover 3.23. what do you think rickster? >> 3.23 is the best bid to cover in about a year on a two-year note. the yield at 1034 is a little on the high side. the wi was 104103 and 34% and change on indirect bidders. institutions and large central banks. so given the record size, really good bid to cover. the pricing wasn't super aggressive. i think i'm going to go with a "b" on this auction and, of course, the fact is $43 billion

gone, an "a" for effort continues, but a "b" on the two-year note auction. >> how about the rest of the week, rick? >> what do we have coming? >> we, of course, have the five-year tomorrow. we had two bill auctions today that were really solid, and the response in the marketplace isn't really too much. once again we're getting into that mode where short maturity auctions are kind of considering lay-ups even though a couple months ago there was one that made us a little bit nervous. we can't even hold above 3.5 on a ten-year note yield. >> does the fact we have a fed meeting influence the purchases? >> i don't think it can. i think there's sort of a sense of what people know what the fed is going to do and there's a question as to whether or not -- i think it's interesting to kind of get at rick and ask him what he's grading. are you grading spelling? are you grading handwriting? are you grading content here? let me just say why -- >> you seem like the kind of pupil that would always argue about grades. >> oh, man, did i argue.

>> this is about demand. >> here is my point. my point is that i don't have a big question about investor demand to the two-year point, rick. up to two years, i feel pretty secure about -- >> hold that thought. >> -- the americans' ability to sell bonds. it's beyond two years, five years, seven years, ten years, where if the united states were to ever have issues about placing paper, that's where it would show up first, and i can tell you one more thing, rick, before you comment on my comment, which is as follows, that even -- you could argue that strong demand down towards the two-year could be a negative at some point, a negative sign for demand further down the curve. >> what if -- >> my point is what are you grading? >> i'm just grading the fact of who shows up at the auction and trying to grade the peanut gallery n terms of moving the auctions, anytime we get people around the world and domestic investors, which is getting to

be a bigger group, to show up, that's always an "a" on the issue witness side. >> right. >> but i disagree. i understand the short maturities are important and they will probably always go well and the guy at the other end of the teeter-totter on the long end is going to be in trouble when the market reverses. but we need to issue it no matter if they show up in big parades or not, which means you will get more and more and more -- >> i want to ask an extreme example. if the yield on the three-month "t" bill went from 0.17 to 0.34, would you say that's a good thing? >> i think it would be on the right course to tell me the market is outgrowing their training wheels. >> that's my point. in a certain case, a bad auction could be a good thing. >> thanks, rick. we had this front page story in "the times" about the fdic needing to replenish its

coughers acough e coffers. and they might be looking to commercial banks. >> i don't think it's quite what it's made out to be. a spokesman telling me the idea of borrowing from banks, it is an option, but andrew gray saying it is not a serious option despite the mosht"the ne times" article. under the plan as listed in "the new york times," banks would loan the fdic money to close the costs of closing down institutio institutions. bankers say it was far better than a special assessment. it gets rid of the idea of making the current situation worse, taking away from loanable funds, but the fdic spokesman says the board will meet next week to determine how to replenish the fund. among the options a special assessment and/or borrowing from a $100 billion credit line from the treasury. no indication as to where they're leaning. just this idea on the front page of "the times" is not a serious

option. they've closed down 94 banks leaving the fund with $10 billion. >> on its face it seems like why would the regulator be borrowing from the institution that it regulates? it would put them at a deep conflict of interest, wouldn't it? >> it would, especially if they're reluctant. i'm not sure that's true, to go to treasury and borrow, which is a mechanical thing, by the way. i do like the idea that it would be, you know, not procyclical because a lot of the things we have in place right now make the current situation worse, and if the end result is you stretch this out over a time period and get away from taking away loanable funds from the banks, then i think that's a good thing, but i think the issues that you raise of conflict and -- >> so you think it might be the lesser of two evils. >> it could be. i don't know what they see that's wrong with the plan. >> as much as all of a sudden the general public hate bailouts, the thing about fdic is they are using money not from taxpayers. they are using money contributed by the banks. so if they go to a point where

they're borrowing from the treasury, i worry about the backlash from the public. >> that's another big concern. except for the fact that it is the self-contained thing, and eventually the banks will have to pay it off anyway. the key things are policy that is make the current situation worse. we need to get away from procyclicality. it's been on the table for several years. >> when times were very, very good, they stopped taking this money from the banks because there were no banks failing. we don't need that money. instead of building up the cushion. >> people criticized those who came forward and said now is the time to be building up the cushion. but we need to as we have learned a little bit here. >> steve, thank you very much. we'll let you go look out the window, gather more data. >> my window here looks into -- >> at least you have a window. we don't even have a window. you have a wandow with the atrium view. >> sue, you will get there

eventually. >> thank you. >> let's see, 25 years -- no. time to look at the housing market. there's more evidence out today that home prices appear to be stabilizing. diane ina olick joins us with details. >> that's right. in a new government report out today from the fhfa it shows home prices were pretty flat in july. still down 4.2% year-over-year. this as we head into what's traditionally the slower season in real estate. we have seen some price stabilization over the past several months, but will it last into the fall? which is a slow season. good news joining us today is the ceo of chulia.com. pete flynn. thank you for joining us. as we head into fall which is traditionally the slow season, what do you see for home price recovery going forward? >> we have seen thed news in the real estate market. the good news is that home prices have started to stabilize over the last couple months. the big question is we're

something like 30% of home sales from first time home buyers, there was a tax credit that expires at the end of november. is that artificially keeping prices high? the big question is when it expires, what's going to happen to the housing market? >> i'm building on that, not only the home buyer tax credit, but we also have the federal reserve buying mortgage-backed securities which is keeping mortgage rates at historically low rates right now. what would happen, do you think, if towards the end of the year we started to see a pull back on and mortgage rates inching up to the 5.5% and 6%. >> mort zage rates are extremely low. home buyers are thinking about cash flow, not equity. they're think being what are my monthly payments, should i rent? should i buy? they're not thinking about what's the appreciation on my home. the mortgage rates have a very real impact in what's -- what the cash flow of every homeowner feels in the household. changes will be problematic for the housing market, and the

government looks like they're trying to do everything they can to keep mortgage rates low. >> but you talk about people thinking more about their income rather than as an investment property, which we saw during the housing boom. when we talk about consumer confidence in housing, which is so important right now, going forward as we get these new statistics showing sales increasing, showing prices perhaps stabilizing, do you think people are really ready to get off the fence and get into this market or is there still just a lot of caution out there? what do you hear on the website? >> so the volume and interest in the housing market is greater than ever before. the amount of volume is truly uncommon. so the big question is while there's an increase in consumer confidence with 10% unemployment, close to 10% unemployment, it's tough to be very confident about the housing market. if you haven't got a job, it's tough to pay your mortgage. >> you're not really seeing that translate -- you're seeing more volume on the website but it's not showing up on the sales figures? >> sales prices have been on the

rise, but there's a ton of pent up demand that we believe in time that market, that interest will come onto the market, but it's absolutely they're looking, and they're thinking about buying, but they're not jumping in in huge volumes. >> we'll see what they have to say. thanks so much, pete flint. >> we have been looking at uncommon economic indicators. reason we're looking at this today, forbes.com has an article about that. we'll talk to the author of the article about ten uncommon, clever economic indicators that we don't often think about. they don't show up in the data coming from government on the economy. and we've been asking you folks for your personal observations looking out the window, as steve liesman put it a little while ago. here is an interesting one. here are two on the same subject, and they draw the opposite conclusion. powell noticed the rate of growth of the power ball jackpot grows rapidly during good economic times and slows

dramatically during the meltdown of the economy. it now seems to be back growing at a more rapid rate in the last three or four months. >> i thought it would be the opposite. >> here is raj. he agrees with you, sue. he says he noticed there are longer lines and more people buying lottery tickets during bad economic times and it drops when the economy recovers. >> i vote forage. >> what do you think? >> i think overall numbers are a better indicator because that would suggest how much people are putting down. >> and we have seen records. >> lately we have. >> but during the worst times, isn't a lottery really the poor invest in the lottery a lot more than the rich? >> yes. >> and in a bad time you would think that the poor can afford the lottery expense far less. >> there are a lot of rich people out of work that have nothing in their portfolios anymore. >> they're willing to take chances to try to recoup what they lost. but maybe we're really overthinking this. >> yeah, but it's so much fun. >> yes, i know.

we will get to more of these. >> what happened to the lotto we all entered? >> we lost. >> the fellow that compiled the money headed to the dominican republic. hasn't come back yet. >> i thought he was a brave soul to even attempt it. >> the market is going higher. about 160 points away from dow 10,000. we will round up the all-stars and take the realtime pulse of the markets for you in just a moment. >> also ahead, tariffs and tension. should the u.s. get tough with china on trade or get real about the relationship between the two countries. we have a debate on that. and then a first on cnbc interview with paul otellini in san francisco. and, of course, the uncommonly clever economic indicators. we're going to do that again. i'm shopping to buy an apartment. there's my indicator. >> there you go. eseseseseseseses

welcome back to "power lunch." i'm phil lebeau in the chicago bureau with some breaking news out of the auto industry where general motors has announced it is going to be adding a third shift at at least three plants around the country. this is going to be another 2,400 jobs as they add production at these plants. bill, sue, you guys were talking about economic indicators. this is another one in the auto industry. >> i was just thinking about that. >> keep in mind they're coming off a low production schedule, but this is part of what they're doing, they will be ramping up production. >> phil just looked out his

window and saw a third shift lining up. thank you, phil. >> you bet. let's get to our market reporters beginning with scott wapner at the new york stock exchange. we're at session highs after that auction went off. >> yeah, you know, we were up 51 points on the dow. pushed up to 58, 59. the dow is good for about 46 right now. that story continues though. weaker dollar, higher commodities, higher gold as well. go gold is up by 10 bucks. the financials is a sector that's toward the leadership side today. aig, that financial outlier, is up another 4%. government watch dog group saying it's showing signs of stabilizing. citi is up despite the fact singapore's largest sovereign wealth fund has reduced. i mentioned what's happening in commodities. take a look. freeport is trading higher. u.s. steel, murphy oil.

want to mention carnival cruise because they raised their outlook. that gave a lift not only to that stock but to the sector in general. to the cruise lines. you're going to get a look in a second. that's up 4%. i quick will i want to mention general electric. i know it's the parent company of this network. the stock got a lot of play when it was technically at $15. had a technical breakout to the upside. it has to close above $17 which would be the highest level since january. let's go to brian shactman at the nasdaq. >> i want to start with intel. mr. jim goldman will sit down with the ceo in just a few minutes. he already delivered his keynote address at the development forum and a few headlines came out. one being he sees pc sales to be flat and slightly up in '09. said in the future the chips of intel will be in daimler and bmw

vehicles. take a look at the philly semi-conductor index. applied materials got a favorable note out of citi and rambus to name three components. also yahoo!, the ceo taking questions from a range of topics. if it's not a core business, she says, it's on the table. zimbra we have it integrated in our systems. that's all she has to say about that. bertha has a lot to say about gold. >> continuing on the move. we're about $3 off of the record close. gold closing at $1,030. we're watching that dollar intention. we fall below that 76. we came close today on the new one-year low. we are likely to see yet another record high in gold. as far as oil, still above $71 a barrel. we got the october contract coming off the books today. tomorrow, of course, we'll be looking at inventories. the expectation is for a drawdown of anywhere between $1 million to 2.5 million of crude.

>> speaking of power, oil, the california energy commission is targeting big screen tvs. they are proposing new energy efficiency standards for tvs sold in 2011. it would reduce each set's energy consumption by 33%. they're doing this because these machines are big electricity hogs. they've gotten so cheap during the recession some people have numerous ones in their house. california's power grade can't keep up with it. this is government trying to solve a problem they created. they don't allow people -- they don't allow the utilities to charge what they need to for electricity. >> how are they going to reduce consumption by 33%? how is that going to work? >> i guess you just -- when you're a government you can merely order industry to do stuff. you have to do it. >> i can see 5%. >> if you're a tv maker, you have to meet a different standard in california, and a different standard in new york. >> i think it might be hard to make it stick.

>> first blush i thought where are most television shows produced? >> california. >> uh-huh. and people like to watch their products on big screen tvs, right? >> right. >> deregulate the energy industry. allow them to charge what energy costs and people will make their own choices about how they're going to spend it. >> well, she's, if nothing else, consistent. >> yes. >> you're very consistent. >> broken record, michelle. straight ahead, the president meeting china's leader, plenty of buzz about jacking up tariffs and possible trade war. >> don't get her started zwroo. is it time to get tough with china or time to get real? we'll have both sides of the debate. >> check out some of the stocks that have been trading very high volume lately. apollo group down 4%. mbia up huge. >> only 23%. holy cow. >> you're watching "power lunch" on cnbc and we are first in business in the entire universe. um bill-- why is dick butkus here?

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

a few stocks we're keeping an eye on. novellus systems, we have broad com, kla-tencor, sandisk. >> president obama meeting president hu in new york today. should the president get tough on trade or because of our relationship with china get real on trade? joining us to talk about that, cnbc contributor peter navarro and dan griswold from the kato institute. i will start with you, peter. you think it should be issue number one, but you think he has to get tough at this point. what about the risk of a trade war? >> michelle, we have been in a

trade war since 2001 when china joined the wto and started using all its unfair trade practices to destroy our manufacturing base. 55% of our trade deficit is with china when you exclude oil imparts. i'll tell you this, president obama, it's big political stakes because he's going to be a one-termer if he can't bring in ohio, michigan, illinois, and pennsylvania, and he won't unless he deals with the china problem. he's out of there. >> okay. >> it's in the interests of china though also because this is an unsustainable equilibrium. china needs to most its consumption sector. >> i have to get to dan. dan, you think this is basically about the unions and he should not get tougher. he should extend a hand in essence. >> yeah. the tariffs on tires was a purely political decision. it was a sop to one labor union. it will do nothing to create jobs or encourage the economic recovery. it's not economical to make these tires here in the united states.

if we don't import them from china, they will come from indonesia and brazil and venezuela. this is why the tire manufacturing industry itself didn't support these tariffs. the only people the president is getting tough with are american consumers and low income consumers who would buy these tires. they're going to pay 20% or 30% more for firtires for their car. >> dennis. >> this is going to be the poorest people -- >> michelle, hang on. wait a second. >> actually -- >> i want to ask you, peter -- we started this fight because we did the tire thing and now they're doing the chicken thing. but look at what happens, peter, when a little thing like this is allowed to -- >> this isn't a question. it's a rant. >> look at the front page of the "wall street journal." look at the story on the front page of the "wall street journal" today. >> dennis, you're on all hour. give me a few minutes to talk. give me a minute to talk. both you -- >> if i could speak, please. in the 196 0s lbj passed a tarif

against europe, and today 40 years later ford is having to rip the seats out of a van it imports. >> you and dan are both playing checkers in a chess world. it's not even about tires, dan. this was simply a probe to see what the obama administration would do on the general question of trade reform. dan when he was working in the bush administration, bush said no four times on these kind of complaints. now obama says yes. what this means sta tegeically is there's going to be a lot of different complaints that will come forward and we'll crack down on china indirectly through this process rather than obama and who is sitting there and doing what they need to do, which was get the currency reform. >> quick response, dan, if you could because we have to go. >> this was a failure of the president's leadership. the timing couldn't be worse. he's telling the rest of the world to keep markets open to u.s. exports and president obama raises tariffs on imports to the united states. we look hypocritical to the rest

of the world. >> glad we solved that, gentlemen. >> great stuff. >> coming up next on cnbc and first on cnbc, inside intel with intel's ceo paul otellini from the developers conference in san francisco. then coming up in a few minutes, pink tides. wine auctions, denim sales. we'll check some of the uncommon economic indicators. the dow is up 45. at the end of the day in sitka, alaska, everyone awaits the return of the fishing boats. ♪ their safe arrival is highly anticipated, ♪ as is something else. a shipment of natural sea salt from cargill, essential for preserving the catch. we deliver the salt on precise schedules... and ship it efficiently all along the alaskan coast; saving the fishermen money, and their catch. this is how cargill works with customers.

intel chief executive paul otellini expects pc sales for the year to be flat or slightly better than in 2008. comments coming from the firm's developer forum taking place in san francisco today. our silicon valley bureau chief jim goldman is there and he joins us now with a very special guest. jim? >> hey, dennis. good afternoon to you. indeed, i am joined by ceo paul otellini of intel, the world's largest chipmaker, just finishing with your keynote address. thank you for being with us on this first on cnbc interview. good morning to you. >> good morning. you're welcome. >> you spent a lot of time talking about technology. that's what this forum is all about. let's talk about technology because the big trend at intel is this atom microprocessor powering all those netbooks. it's been a godsend for intel.

how long do you expect the netbook momentum that we've been seeing to last and, indeed, how big a deal is this going to continue to be for intel? >> i think it's going to continue to grow. it's clearly established itself inside of the mobile marketplace as being a pretty constant percent. the interesting thing is it really hasn't started penetrating emerging markets. most of the people who are buying them are buying them as second or third machines for something that's ultra portable in mature markets or tier one cities. as the cost continues to come down, i think the opportunities shifts from those to also include emerging markets. >> when we see this big momentum that we've already seen, which has had such an impact again on your sales and even on your margins, it sounds like you're saying it's only going to accelerate from here as opposed to slowing down. >> i think so. in general we're putting atom into a lot of places, not just net books. i think all those devices, you start looking at markets counted

in billions, and the issue is how fast can we penetrate those. >> intel used to play in smart phones. but during your keynote today you also seemed to hint that a version of the atom microprocessor or a new device from intel will be targeting the smart phone market. we know smart phones, that is the big trend in technology where all the momentum, all the excite am, all the innovation seems to be. how important and how big of a market can that be for intel. >> i hope i did more than hint at it. we're going after it in a forforth right fashion. we're driving for low power to be able to fit in those all-day battery lives. we want to increase the performance and the usability of those machines to make them even better than they are today, and in 2010, next year, you will see us in devices you can put into your pocket and in 2011 we get into the true hand set format. >> are we talking millions,

hundreds of millions? i know intel doesn't do anything small. >> we would have -- i would be d disappointed if we didn't have a decent share of that market. >> we have a $1.4 billion fine that you have already writ an check for but you are appealing that case. we got new disclosures about intel's behavior as far as antitrust is concerned against rival advance microdevices. these were new disclosures that seemed to indicate that intel was engaging in some pretty aggressive behavior. how do you react to that? what do you tell the eu, that they continue to just get it wrong? >> well, how i react to it is there's nothing new here. they're telling their side of the story. they're selectively looking at documents and selectively releasing documents. we're not allowed to tell our side of the story. the documents that we have in our possession that we think tell our side of the story and that tell the oem side of the story in a much stronger fashion

are not yet available for release. we're under a protective order. i look forward to the time when we can have those in open forum and get a fair hearing. >> i know intel is in its quiet period. i will not ask you to forecast what sales are and how things are going for the current quarter. but your stock is up 30%, 35% year-to-date. we are in recovery mode, some would say, but when you look at a stock performance for a company like yours at that level too much too soon? does the market, investors, seem to have it right? what's your sense? >> i think you can argue we were too far down. technology went into this business cycle probably sooner and deeper than other industries, and it seems to be coming out of it faster and steeper than other industries. in the keynote this morning, i showed some data on pc unit sales that i think actually will be at a point in 2009 where the unit sales in pcs are probably equal to or slightly up from last year. there aren't many industries that can say that today. i think it points to the indispensable of the pc

nowadays. >> a final question, you look at the health and welfare of the pcmakers out there, hewlett-packard, dell, you sell to all of them. you spent a lot of time with your customers traveling the world. are we in recovery phase? what are you hearing from them that we can now take as a message to investors watching this today and to customers out there who are going into the holiday shopping season wondering if things are going to be turning around anytime soon? give me your best guess on the health and welfare of the economy? >> i think it varies by country. certainly china has been one of the engines of unit growth this year. their gdp even if this downturn is 7.5%. so you see a lot of momentum coming out of that economy. you're also seeing i think consumers have been the drivers so far this year. businesses have not yet. we're starting to see the beginnings of enterprise purchases again. i think as capital budgets start opening up, as cfos get a little more confident, and i think win 7, windows 7 out of microsoft,

will give us an opportunity for the so-called corporate refresh. >> paul otellini is the ceo for intel. thanks for joining us. >> you're welcome. >> back to you back east. >> thank you very much, jim goldman. the fcc new york attorney general andrew cuomo and congressional oversight leaders are all turning up the heat on bank of america and its ceo. but in all of this, is ken lewis being treated fairly? charlie gasparino joins us now. what's the feeling inside b of a. will lewis survive this? for months now we've been asking how does he keep his job? >> i'm looking for a quarter because i want to flip it. here is what i hear from senior people inside b of a. if andrew cuomo sues lewis for, you know, his role, his culpability in the failure to disclose the bonuses for the losses, if this is a cuomo case against ken lewis and if it's civil, which it will 99% sure

it's civil. i don't think cuomo has a criminal case here even if he had the most damning e-mails in the world. it's kind of hard to get that level of intent here. if it's a civil case they are going to fight it. ken lewis at least right now sources inside b of a tell me will not resign amid a civil case from andrew cuomo. however, if their primary regulator, the securities and exchange commission, sues him for civil securities fraud, and you know this case has been reopened, the s.e.c. is now -- i think they came out a statement saying they're vigorously pursuing every angle, if the s.e.c. does sue, then, according to a senior person inside bank of america, when i asked about lewis, whether he will stay or go, he said that's another story which means if the s.e.c. sues

him, he's done. it would be unprecedented for an s.e.c. -- for a wall street ceo to withstand -- to basically stay in his job amid being charged for civil securities fraud by the s.e.c. so he's probably gone if the s.e.c. sues. but that's a big if. >> who have they got in the wings? anybody. >> they have a horse race going on. isn't sally there? i don't give her much chance. i give brian moynihan a better chance. there's two other people i forget. moynihan is supposed to be a smart guy. and then it comes to the question of fairness, and, michelle, you and i both covered this, the maelstrom of last year, and i will say this, i've been critical of ken lewis in the past but put yourself in his shoes when the nonsense, the crap was hitting the fan, okay. he did what a lot of people thought was the patriotic thing to do, and that was buy merrill lynch. you can make a case he should have known about the bonuses, he

should have known about the losses. >> no, it's much simpler than that. if you thought you were going to go to the government and say i can't do this deal, why didn't you tell the shareholders. >> right. he maybe should have told the shareholders but he also had the government telling him probably not to tell the shareholders. >> that's where you need a spine. >> i know. but i don't know -- listen, we sit up here and we joust with each other, we all have our opinions -- >> he gets paid a lot more than you and i, charlie. >> i know, but i'm just saying play devil's advocate. put yourself in his shoes. i would say when you have bernanke and paulson telling you not to do that, if you have bernanke and paulson saying we're going to help you through this, do you back out of that deal? by the way, if merrill lynch did go, let's add up what would have hached. >> it would have been horrendous. >> remember, lehman brothers, and i write about this in my book, the sellout, which you failed to show at the beginning. >> we'll show it on the way out.

>> i had to remind you of that. lehman brothers had a $600 billion balance sheet. merrill lynch had $1 trillion. and even more than that, they had 16,000 brokers who sell with customer accounts probably totally at least $1 trillion, maybe more. i can't remember the exact number now. you are talking about systemic risk out the ka zoo. i'm just saying -- >> and they're wrapping me, charlie, but it's sellout." ken lewis, the story right now, the feeling right now if cuomo sues him, they're saying he's not going, the board is behind him f the s.e.c. does, well, it's another story, he's probably out. >> thank you, charlie. >> i don't think it would be a very civil suit. i think it would be very acrimonious. >> i have a quiz for you. hotel cancellations, garbage piling up outside of restaurants, shopping bags. what do these things have in common? >> they are uncommonly clever economic indicators. seriously, we're going to tell you how they are all connected

and what they tell us about the economy on the other side of the break. you are watching "power lunch" on cnbc because we are first in business worldwide. when this shoe store added aflac to its employee benefits package at no direct cost to the company... it was a perfect fit. find out more at aflac!... ...forbusiness.com

so if you're looking for proof of a rebound in the economy, forget studying all the economic data and simply follow the bouncing pink tie it says

here. forbes magazine compiled a rest of real life indicators they claim are the best proxy for the health of the economy, including the color of men's ties. more now from staff writer maureen frill who is in new york. >> thank you for having me. >> it's all anecdotal but these can be really reliable indicators. >> exactly. a lot of people in a lot of different industries we spoke to feel very op at this mistake based on things like pink ties, restaurants, garbage. one economist i talked to in alabama said that for 30 years he's been tracking pink ties, and they're a clear leading indicator of where the economy is heading. >> take that, dennis. >> i got a tie like -- >> guys feel better about themselves, they're willing to buy brighter colored ties. >> exactly. they're not even buying, they are taking them out of their wardrobe. last summer people were wearing what he called funeral clothes. this summer he's seeing salmon,

fuchsia, red. >> what is the garbage indicator? >> a restaurant consultant i talked to walks the streets and alleyways around restaurants looking for garbage at the end of the night. if you have a lot of garbage in front of a restaurant, it means that it was a good night at the restaurant. >> pretty good. >> shopping bags, right? they put these people in malls. you're going it stand here once a week every week at the same time for one hour and count the shopping bags. >> exactly. and it shows if you see them, it shows that consumers are buying again. and an analyst i talked to said the shopping bag count had dropped in august 12% year-over-year. but that's actually a lot better because in january that same drop was 20%. so what he says is a rebound is coming. we're not there yet, but people are buying again. >> chances are there may be denim in some of those bags. why is denim a leading indicator? >> because it's a cheap way to reinvest in wardrobe. so an analyst i spoke to said that it's the first thing people stop buying and the first thing that people start buying again

when they feel hopeful. >> for me it's shoes. how about you, michelle? >> i like shoes. they're saying denim sales have been rebounding. he said over the last seven or eight recessions, they've rebounded about six to nine months ahead, denim sales have spiked before the rest of the economy. >> maureen, what do you think is the more important indicator, the one at the high priced end for the rich or the low priced end? >> everyone has been pulling back for the low and high end of the economy. we saw things happening at different price points. >> what about wine sales? we have heard anecdotally on the retail side of things people were buying more wine recently, but from the investment side of things, are they doing that? >> yes. christie's wine auction, they

sold the most wine, about $2.6 million worth of wine at this auction. the most in two years. nearly double what they sold last year. so they see this as for them the $60,000 bottle of wine is a commodity in the market, and that -- in their market compared to french furniture or art. that's rebounded very significantly. they see it as a very auspicious sign of what's to come in the economy. >> maureen, stay right there. we'll take a quick break because in good and bad times we must take commercial breaks, and then we'll come back and we'll share some of what our viewers have noticed from their own standpoint of what you feel are some uncommon but accurate economic indicators and we'll get maureen's take on those as well. we'll be back with more "power lunch" in just a moment. stay with us. tdd#: 1-800-345-2550 i want everything right where i can find it. tdd#: 1-800-345-2550 anything that makes trading easier. tdd#: 1-800-345-2550 i want to be right in the middle of the action-- tdd#: 1-800-345-2550 you know-- i have to see what's going on. tdd#: 1-800-345-2550 and when i pull the trigger... tdd#: 1-800-345-2550 ...i've got to get the best price out there. tdd#: 1-800-345-2550 (announcer) try the new schwab.com tdd#: 1-800-345-2550 for yourself.

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we are back with maureen farrell of "forbes" talking about uncommon indicators. from the most part we heard from people who saw open store fronts. they counted the number of trucks on the highway. mike in new york city lives in

manhattan. every day he walks where all the shoes have been repaired in brown paper bags. the more brown paper bags there are, the weaker the economy. yesterday when he walked by that shoe repair shops there were as many bags s s s s as he has s years. >> i get my shoes repaired all the time in the best of economic times. >> it could be the people wait and take a bunch in at once. >> what do you think, maureen? >> it could go either way. maybe people are buying shoes and getting them repaired, but as i just said in that shopping bag indicator, people are buying less. shopping bags were down, so you know maybe it's not what people are reinvesting in yet. that's a sign that we have a ways to go with this economic rebound. >> here is an interesting one. this is linda who owns a jewelry store in puerto rico. she says that when she sees

customers paying with $100 bills instead of the charge card, she knows they're in their rainy day funds. isn't that interesting? >> that is really interesting. >> when they're paying cash. >> instead of charging it, they are into their rainy day funds. >> starting to use the cookie day funds. >> meaning they don't have access to credit or their credit cards are too high, maxed out. >> why are they spending 100 bucks at a jewelry store? >> that's a whole other question. >> they're using 100 bills so they're using more than that. >> don't get so complicated on me here. i hear we have one more. i have no idea which one it is. >> all right. this is from -- >> there were two on this topic here. >> s.s. wrote he lives on a golf course. his grand kids enjoy hunting for golf balls. there seem to be fewer available when the economy took its dive. >> that's because you get better at golf during a recession, bill. >> no, no. that's because when you hit the ball into the trees and it's a bad economy, you go get that ball. >> instead of leaving it. >> you don't leave it behind. >> that makes sense. >> we also heard that the golf

course industry and the country club industry is one area that hasn't seen a rebound. i heard corporate and charity events are down about 50%. everyone i talked to said the number of rounds at golf courses are down. they're not optimistic this season. >> golf courses go first and come in last when the economy improves. maureen, thank you. that was a lot of fun. >> thanks for having me. joo. still ahead, dennis like you have never seen before. >> we'll gather around the water cooler, tell you all about t we are back in two minutes. >> set your dvr for this one.

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.

now, what is this? who put this here? >> today on twitter because you can follow me, get this. i had not seen it. look at those hot pants and those dance moving. we're trying to figure out who the guy is on the right. >> tim geithner. >> i wonder why they have me as the girl. >> you got to be in a jib jab video. >> i never have looked so good on the dance floor. >> you do dance well. i will give you three 8s.

>> actually you look you're having a good time. the guy next to you, whoever it is -- >> i'm thinking that's geithner. >> i don't know who did that but thanks for that. >> i love soul train. my brother and i would dance to it when they were a little. >> you're a good sport, dennis. >> thank you for that e-mail, that was a lot of fun. >> that does it for the whole crew on "power lunch." >> "street signs" coming up with erin burnett in about 30 seconds. we'll see you tomorrow. >> you like to dance, come on. >> this is cnbc.com news now. general motors is adding third shifts at three plants restoring some 3,000 jobs, and toyota is reportedly raising its fisal 2009 production estimate by 10% thanks to the popularity of prius. jerry brown is the latest to sue investment adviser stanley chase accusing chase of funneling hundreds of millions of dollars into bernard madoff funds. and the treasury sees strong demand in today's auction of $43

billion in two-year notes. that is cnbc.com news now. i'm scott cohn. hello, everyone. i'm erin burnett. here is what wall street is talking about at this hour. we have stocks higher, up about 50 points. the biggest story today it seems is citigroup. singapore's massive money fund curbing its straake. what would a new tax mean to citi and you? the murmur of a tax on trading is turning into a rumble. france's sarkozy and britain's browns say a new tax should be on the table. we'll tackle it head-on on "street signs." as world leaders convene in new york for the u.n., one of the most well-known faces of global affairs, queen noir of

jordan is here with us. she's a passionate proponent of nuclear nonproliferation. scott wapner, and brian shactman, and scott you are first. >> oil is higher and so is gold. gold is up by better than ten bucks. want to talk about those stocks moving as a result of that. and certainly within the commodities space, miners, freeport is to the upside. that is one of them. murphy oil and then u.s. steel as well. financial stocks, aig, a lot of focus there as well. it's up yet again today. you're looking at the financials. aig is up 6%. a government watch dog group says it's showing signs of stabilization. dick bove raised his price target on bank of america. you saw citi to the upside as well. i want to mention general electric, and wondering whether it's another key level now that this stock, if it closes above $17. remember when it hit $15, that was a technical