even produce new jobs. but i don't know when it means better payrolls. you've got to get down to the 400, 450 range. it still would be several months away, into early next year or mid next year. claims down much more than expected, 21,000. let me point out, economists like this number because there was noise in the prior data because of labor day. doing a little better there. 631. that's as of september 12th. the moving average ticking down to 553. we haven't been there since january. that's, again, getting there but not as fast as they had hoped. here's what we called the insured unemployment claims rate. this is the people getting claims, percentage of all those who are eligible for it. and that is now ticking down as well. pretty decidedly. although again, not as fast as some expect. hoarse the trouble with the claims data. they are actually three separate programs for claims.

continuing claims, there's emergency claims, and there's extended claims. let's just look at emergency unemployment because that's another 3.3 million americans that qualify for that. add it all up, and some 9 million americans are getting jobless claims or qualify for job ms claims in one form or another. so it's very hard to know just how much improvement they are when there are three separate markets out there. that number is a little delayed. we only have september 5th data. it did improve though by 100,000 if you add up the three different programs available. mark, i want to say one thing. the market may be fickle on a variety of things when it comes to, for example, the dollar. it strengthened yesterday as stocks put up. one thing i think is clear this morning and has been true for a while, the market likes to see improvement in the jobs market. mr. haines. >> mr. liesman, thank you very much. also see how all of this is affecting things premarket. bob pisani kicks it off here at the big board.

robert? >> futures rose as jobless claims were a bit better than expected. existing home sales at 10:00. that may be a market mover here. commercial real estate, where is the bottom? we had two weak ipos priced last night. priced half the amount of shares anticipated. we had a pile of commercial real estate, colony financial, both of them to buy the stressed real estate, distressed debt. where is the bottom? and a whole bunch of ipos, reit ipos are pricing in the next several days. let's talk about rite aid, posted nine straight quarterly losses here. sales continue to decline. we are seeing issues with them lowering their fiscal 2010 news. goldman also raising the price target on a whole bunch of retailers doing well recently. raised 10%. we'll keep an eye on that. national semi was raised to a buy at citi group. scott, how are we looking at the nasdaq? >> looking good. higher open. a lot of big cap widely he'll

technology stocks showing green. research in motion is ahead. report their earnings after the closing bell. nice gain yesterday. following it up today 1 3/4% premarket. electronic arts is down 3 1/2%. microsoft executive coming out and dismissing any talk of a potential deal between the two companies. electronic art shares spiked on speculation that maybe microsoft and electronic arts would get together. microsoft said not going to happen. shares down 3 1/2%. the price target was increased by ten bucks from $37 to $27. citrix is added to the conviction buy list at goldman sachs. bed bath and beyond is downed a correct dit swi credit suisse. hercules is down 10%. let's go to chicago and rick santelli. >> thank you very much, scott. you know, of course, we have the last leg of the coupon supply for the week in the form of 29

billion seven-year notes. of course, they will be auctioned at 1:00 eastern. we will be here live, of course, to try to handicap how the demand was in the snap shop form around the completion of that option. rates are virtually unchanged give or take a basis point. when they aren't, the longer maturities are are lower in yield. this ch is very interesting. of course if you look at the knee-jerk reactions after yesterday's statement at 2:15 eastern, the one market that really didn't have a knee-jerk, it moved and it stuck. that was the buying that occurred in treasuries. that, of course, probably won't hurt the auction. the buying index has a reprieve against most card, especially the pound it's rallying against. many like to look at the yen. and we're getting hurt against the yen. let's go back to erin on the new york stock exchange. >> thank you, rick santelli. g-20 getting under way in pittsburgh. now, a lot of the time when you see g-20s you get a lot of violent -- sometimes violent, but a lot of demonstrations. so far, not too much of that in

pittsburgh. traffic might be the bigger issue. i do not know why the guy is repelling down a bridge in the picture, but maybe carl and john will tell news a moment. carl and our chief washington correspondent john harwood, did you guys see that picture? what was that? >> yeah, they repelled up the west end bridge. and hung the banner and then hung there for two hours. there was a good way to make it difficult for the cops to get to him for as long as possible. >> wow. those pictures are pretty incredible. obviously everyone ended up safe. have you all, in terms of demonstrations and what we might see, any sense of that or are we really in the clear? >> john, i don't know. i don't get the sense that protestors here were threatening to disrupt "squawk box," but we got that under control. big metal gates around us. >> they have given the cops some special powers, erin. if you show up to the area with handcuffs, pvc pipe, chains, the

police can at least fine you. they're trying to get the people, even before they put those things to use, certainly they're hoping it's going to be nothing like seat until '99 where they had 600 arrests and some 50,000 protestors. these people know they're on a world stage. every camera in the country is on them, and around the planet. if they're going to make a stand, this is the place to do it. >> erin, we're staying in a hotel pretty near where they're meeting and they won't let us keep our car in the parking lot because they're being so, i would say anal, you know, attentive to security to make sure there's no potential problem there. >> it's cable, you can say that. >> anal? >> yes, i did. >> maybe the mayor won't be on later. >> we'll ask him -- >> the youngest mayor in america, you know. >> that's right, he is. he is. >> is this meeting going to accomplish anything? >> mark, you know, i think it's going to be just up your alley.

p it's one of the meetings where you have a lot of pogticians and they're going to talk a lot. and they're going to come out with those some vague kind of mush mouth communique without a lot of specifics and declare victory. how is that? is that a good meeting? >> well, for them, yeah. but does the u.s./china trade problem crop up in these talks or do they kind of look past that? >> well, i think that's going to be a slight embarrassment to the united states as the host on international terms. although, the obama white house, i'm sure, will embrace any barbs they get from other countries about the step on chinese tires as something that will help them with the constituency, laborers especially back home. but i think what the administration is hoping is that to the extent that becomes an irritant or a flash point, it will be relatively contained in

the broader context of the effort to bring this economy back. i would argue at least the conversations we had this morning, the take on the g-20 breaks down almost by whether you're a bull or a bear. the bulls say this will be a victory lap in large sense because of the step they did in april and in november and cure the crisis or starting to cure the crisis. the bears say you've got opinions that are diverging, brewing trade war on the horizon, you've got problems that are very difficult to solve. even building the framework for those kinds of things is going to be tough. depends on how good you feel about the recovery we're in. >> all right. carl, john, thank you. good luck getting back to the hotel, john. >> i'm walking. >> they have to walk. next, a top nintendo executive here to explain why the company is cutting the price of the wii. >> i can't keep track every week which gaming exec is on to talk about a price cut. we'll talk about it.

david faber talking housing. and we have the major of pittsburgh, how his city has turned around, economists ranked it as the best city in the u.s., mark, which made it good for the 29th best city in the world. we'll be right back.

tis almost the season. 91 days until christmas. although i've got to tell you i walked into my local lowe's store yesterday and there was the christmas display. but the shopping season is here. we're kicking off the official "squawk on the street" christmas countdown this morning. >> oh. >> yes, even we can't resist getting way out ahead of the curve and annoying everybody. nintendo slashing the price of the wi,by $50 a top to $199. the first on "squawk on the street" interview we have anyone ne nintendo's chief operating officer in the u.s., thank you very much. >> good morning, mark. >> all right. is this an attempt to get, you know, the christmas shopping season off to a good start, or what? are you just desperate? >> well, it's certainly not the latter. for us, it really is all about taking the best-selling video

console ever in the wii and making it that much more affordable for consumers and doing it at a time when we've got great content coming out with wii fit plus coming out on october 4th and super mario brothers coming out on november 15th. for us it's all about continuing to drive, the innovation, the experience and what's made wii so special. >> video game sales are down, aren't they, quite dramatically? >> total categories down 14% year to date. really unfortunately driven by our competitors who are down 22%. >> it's them, not you. >> you know, we've had a good year. i would say a good year, not necessarily a great year so far. >> you up? >> we're down 4% versus last year. but let me put that in perspective, mark. last year in the first half we had smash brothers, we had wii fit, we had mario cart. all of our big games are launching in the second half of the year with wi,sports resort, wii fit plus and then new super mario brothers. we're feeling pretty good going into this holiday, especially with the added value incentive

of the price reduction. >> are you going to be doing more of those -- our viewers are looking at pictures of people playing tennis and standing on one leg and doing things like that. but it's all of your games, the nintendo wii was to get physically interacting. are you going to do more of those? >> we certainly are. we've got all types of games to get you up and moving around. between now and the end of the holiday we'll be in about 40 states. 35 markets doing a range of different consumer sampling events, getting the consumer to experience all of these great games. so certainly that get upnd play aspect of wii is still a great object for us. >> thank you. i apologize for mispronouncing your name. >> no problem, mark. >> it's french? >> it is french. >> lovely name. >> wouldn't want to grow up explaining it everyday. thank you, reggie. >> thank you.

all right. let's get back to hq and david fab who faber who has something that apparently is pornographic. >> yes, in prompter i can see it says xxx. that should have been filled in, i guess, erin. more on housing because it con continues one op most important areas in the economy and the key to many recovery that many people are mapping for the u.s. economy. some positive signs. no doubt. of course, the federal reserve telling us yesterday it will continue at least for some time its purchases and mortgage backed securities in part to help keep interest rates quite low. the tax credit is available in home buying and positive sign in the home buying arena. no doubt. first amongst them, affordability has been restored for many americans in terms of where house prices have fallen to equivalent income. of course, remember that went way out of whack during the bust

or boom, i should say, years. a report out yesterday from our friends at amherst securities who usually have the best data on housing you can see and great analys analysis, points to the continued overhang caused by shadow inventory and what that will ultimately mean for the market. take a look. when we talk about housing inventory, they estimate that there are 7 million units destined to liquidate or be in the liquidation mode for some time. that's versus 1.27 million back in early 2005. that's 7 million worth of housing inventory, worth of shadow inventory. in other words, it's not actually out there yet. well that represents well more than a year's worth of housing sales. it is the opinion of amherst, at least, that with 300,000 new units transitioning into the non-performing bucket, these loans have a low chance of eventual recovery, and ultimately they believe that the

housing overhang is the single largest issue that will inhibit a housing recovery much of what we've seen lately, they believe, season seasonal. let's move on and explain what happens to a loan here, of course. you borrow or miss three to six months of papts. servicer files a notice of default. borrower has 90 days to bring it to current. servicer then sets a trustee sales date. typically notice a default state, plus 90 days. then you get the sale. and that ultimately is placed into real estate-owned by a bank. what does that that all mean? it's taking a long time for this stuff to liquidate. take a look. loans are taking a lot longer to liquida liquidate. look where 2009 liquidations are in terms of months. yes. amazing. and that is quite some time. so that means the shadow inventory is going to be out there. by the way, we're not counting all the stuff that is yet to be delinquent but might still become delinquent. let me end with an example to riverside, california.

ground zero certainly for much of the housing boom in this country. we spent a lot of time there for our documentary. look at the actual listings number, notice of default, the bank owned and auction dates set. that shadow inventory. that brings the total to 7 million units when actual listings are only 1372. yes, there have been signs, positive signs for the housing market. according to amherst,you've got to watch out for shadow inventory. it remains the biggest problem. up next, the word and the buzz, as we countdown to the opening. and later, part of my exclusive interview with julian robertson, why he thinks inflation could wipe out so many people in the united states.

we're back. we're on the floor here with warren meyers. futures have come off their highs. pointing to a higher open. i never would have thought 21,000 jobs would have made that much difference in the market but any flus is good news. >> every little bit helps. as long as the trend is in the right direction you can pull optimism out of the numbers. >> so far, about more than half a million. >> exactly. at least the trend is inching in the right direction. so, like i 15said, you can pull few positive nuggets out of

that. >> we've got g-20, do we care? personally, i do not. >> at the end of the day, are they going to come out with anything worth while? probably not. >> same thing with the u.n. general assembly. >> an opportunity for people like gadhafi to get up and show their stuff. interesting, though, yesterday afternoon, one they is not a trend yet but this is the first day in quite some time we saw a late afternoon sell-off. usually afternoons have been strong. that's really helped keep this market going forward. i'm going to be looking for the next few days to see if you have a continuation of any kind of afternoon sell-off. if you do, we may be ready to roll over here in a little bit. >> good point. you're right. we haven't had one in a long time. thank you, warren meyers. >> thank you. mr. haines, let's get the buzz beyond the big board. brian kelly is in boston, president of conundrum research. what are you looking at? >> a pivotal day in the equity markets here. it's a battleground day.

there's three possibilities i see coming out of this, which is the all clear, what we're seeing now. strong market, weak dollar, strong economics. a correction coming that warren talked about. that's a strong dollar, moderate economic response, and weak equities. and then finally, you can have a whole new phase of it. strong dollar, strong economic news with the housing sales coming out, and then strong equities. that would be something different. and that would change. >> and so the 10:00 a.m. data is going to be very important in terms of housing? >> you know what, the data is not important, it's the reaction. how the market interprets it. the market still goes up, dollar goes down, that's going to be important. that's the trend that's been going on. >> brian, so many people have talked to us about you can't fight momentum. the pace is going up. who cares what you think about the economy, buy. what d do you say? >> i think that's what has been happening if dollar weakness. as long as the dollar is weak,

i've got to be long in the stock. coming to a quarter end, some people start taking profit. that's precisely what is happening. we've gone way beyond what a v-shaped recovery would indicate in the equity markets. >> brian kelly, thank you. >> thank you. >> brian kelly from kanundrum. >> i like the way they spell it. final count down to the opening bell coming right up.

all right. you're watching cnbc's "squawk on the street." we are live and in living color from the financial capital of the world. the opening bell is going to ring in a scant 20 seconds. and we will head higher thanks to a slightly better than expected jobless report. >> we will. by the way, i see a123 at the nasdaq. that's an interesting story. that's one of those battery component companies. it's one of the really american ones. most of the ones that get the federal battery money is not american. but a123.

>> really? here at the big board. the president of poland. at the nasdaq, as erin mentioned, a123 systems, ticker aone. maker of lithium ion batteries celebrating its ipo today. >> the senate banking committee holding a hearing entitled emergency economic stabilization act colon one year on. we are monitoring this. we will bring you the headlines. but, this is really -- let's put it in english. where has your stimulus money gone? that's what it is. >> i'd like to know. >> yes. that's what it is in english. our market reporters are standing by. we're up 17. let's check in with -- bob is back. >> hello. good to see you. futures rose a bit. although they're off the highs of the day. so we saw the jobless claims numbers a little bit lighter than expected. that's good news.

we're going to get existing home sales for august out as well at 10:00 eastern time. we're expecting best numbers in two years. we'll see that to be a market mover as well. crowd here, look. this is for a real estate investment trust, ipo. and what they are doing is they are one of several that has been announced in the last several weeks and months that are going to buy commercial real estate mortgages that are out there. we had other ones out there, including colony financial at the nasdaq this morning. both of these priced half the number of shares that was anticipated. demand still is relatively light for these commercial real estate ipos. we'll keep an eye on that. give you a price here as soon as it opens. elsewhere, here's rite aid down 8%. nine straight quarterly loss. sales continuing to decline in the second quarter to guidance a bit below expectation. a whole wrath of retail companies were given higher price targets at goldman sachs. the retailers have been doing well. i want to note that we had american it grooing around the

corner. i can't get to it. earnings better than expected. heavy cost cutting, sales were not particularly strong. another retailer, heavy cost cutting, light on the sales side. that stock up 13%. tradertalk.cnbc.com. scott, how are we at the nasdaq? >> bob, the open that we expected. up just shy of one half of a percent. you've got modest gains across the board from large cap and widely held technology stocks. research in motion ahead of the earnings after the closing bell today. another rise in the stock. stock had a nice run. of course, was up yesterday and up another 1% today. electronic arts down 2 3/4% after executive from microsoft dismissed talks of a deal went the companies. over the last couple of days there's been a lot of speculation. options activity as well around electronic arts. run the stock up. it's falling back today. microsoft executives saying today a deal there not going to happen. citrix is up 4% after it was

added to the conviction buy list at goldman sachs. bed bath and beyond downgraded at credit suisse. that is a valuation call. i want to call your attention as well to dendreon. said it will submit the prostate canner drug application to the fda looking for approval. they will submit it in the fourth quarter. that coming out today from dendreon. paychecks is off 3 1/2% sales forecast came in below expectations as well. rick santelli up in chicago, what's happening? >> well, scott, we're debating exactly that right now in the pits. and the major point of discussion, of course, is the n ongoing amount of supply a aand ongoing bid in treasurtreasury. they look at it as it is but they don't look at it in the marketplace. in the latest turnstile it represents buying in treasuries, keeping rates down above and beyond the buying of the fed

that will be on going as per the statement in various arenas like mortgages is the idea that we are pushing new buyers in direct briders and options because they would rather put their money and there's a lot of it that isn't making it to the public in many institutions in safe treasure ris as opposed to things maybe like money funds andal this, of course, is a new change based on guarantees being dropped last friday. back to you, mark. >> thank you, rick santelli. president obama arriving at the united nations security council meeting. this is a live picture. the topic, nonproliferation which he has made clear. next to him is susan rice, ambassador to the u.n. very, very clear, nuclear nonproliferation is the international issue at the top of his agenda. all right. stocks trading higher out of the gate, as we expected. ideas about how to play this recovery are david kelly, chief

market strategist at jpmorgan funds and eric thorne, investment adviser with brimmore trust wealth management. you know, david, sorry, but technically they are farther west and we give the people farther west the first shot because they got up earlier. you get first shot here. what's the best way to play this recovery? >> mark, we're convinced that over the next 12 to 18 months we will see continued gradual improvement in the economy and in the markets. but in the short term, we're particularly concerned the markets may have gotten a little bit ahead of themselves. >> join the freakin' club. come on, eric, everyone says that. >> everyone says that but are they acting on it. is anybody doing anything? so it's particularly important to cut positions back where you're overweighted. you know, look around to see, you know, what might be a little bit more conservative play. the large cap asset class, domestically probably does a

little bit better here. consumer staples does a little bit better here. and, you know, there's no question the economy is going to get better, but, you know, it's going to be probably october can be a cruel month for the markets. you know, we may see an interest 30g days here. >> all right. david, i want to point out to you, that, number one, we are located on a balcony which means there's nothing but air beneath us. and if you say the market's gotten ahead of itself, a trap door opening and you go. how do we play this? >> look, you can get very confused by percentages. i know we're up 57%. the best way to look at this is, in two weeks, going to be two years when the market peaks. we lost on the s&p 500888 points. we've got 384 of those back. we've got 504 to go. we haven't -- we've recovered 43% of our bear market losses. i think this market has a long way to go on the upside. and i just wouldn't try and time it in terms of week to week, month to month for a long-term investor. >> you say long way to go to go

back where we were, right? that would mean the economy would go ba to where we were. is that possible? >> yes. the good news is the recovery train has left the station. the bad news is it's a local so it's going to take a long time to get us to full employment. everything we're suggesting is economy is growing not just here but around the world, 3% to 4% pace. we we should sustain this for a number of years. while that's going on just play the recovery trade. >> eric, what do you say to that? do you believe that in terms of how you're investing money that we can go back to the same size economy that we had in, say, end of 2006 or early 2007, any time soon? >> here's what we're thinking. the market -- the economy is recovering. the problem is that expectations have now begun to get ahead of themselves here in the very near term. i think expectation is that we might get that normal kind of recovery where you're getting 2%, 4% growth. we might see 1% growth, 1 1/2% growth over the next several

quarters. this could be disappointment there. i don't think it's anything to be worried about because long term we continue to be bullish on stocks. the problem is where is -- where expectations currently. that's where you always have to be looking at. right now we think fundamentals have to catch up to the markets. so just be a little cautious in the near term. it doesn't mean those won't be buying opportunities when we get them, you know, maybe next month. >> david gets the last word. >> the point is we've had a very big recession. ea. normal recovery from recession this size to be economic growth 5% or 6% in the first year. i think we're going to be below that. 4% is not a heavy lift at all. that's actually below normal for recession this size. ng we will see numbers on growth, which is stronger than people expect although still not as much as we need. >> all right. david kelly, eric, thank you both very much. appreciate it. coming up, highlights from our exclusive interview with tiger management julian robertson. why he says it will be armageddon if the chinese and japanese stop buying our debt.

mark, note i didn't say sell, i simply said stop buying. >> except i've been hearing that for 20 years. and the mayor of pittsburgh on his plans to capitalize on the international spotlight and keep investment flowing into the city of three rivers after the g-20. you're watching "squawk on the street." have some fun with that truck.

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and that is downtown pittsburgh. ten years ago you would never have heard that that was a beautiful-looking picture, but it sure is now. >> what is that? that must be the convention center? >> got to be. >> you'll have to forgive me. >> looks like the grille on a mercedes. >> it's been a long time since i was in pittsburgh, wow. >> almost like the copenhagen opera house. they are 2% lower than the

national average. g-20 arrives in western pennsylvania, sharon epperson, pittsburgh born and raised, did you know that? >> no. >> she is. >> no kidding. >> she takes it back. >> steelers fan? ♪ >> the leaders will see a much different pittsburgh than the steel city i grew up in. technology companies and green space now line river banks. >> it's kind of a brain power center now instead of a braun power center. >> reporter: the steel mills where my grandfather worked, mostly gone. more than 100,000 jobs were lost when that industry collapsed in the '80s. yet, manufacturing now diversified into robotics, technology, and life sciences, contributes $14 billion to the rejo rejohn's economy. what strike mess most about pittsburgh is the transformation over the last 20 years is the global leader in education and health care. that's where the jobs are.

upmc, university of pittsburgh medical center, the largest tenant in the city's iconic u.s. steel building and the region's largest employer. carnegie melon university and the university of pittsburgh are collaborating to create technological innovations which can further advance the local economy. >> we're spinning off new companies from university-based research. those companies are rooting here and beginning to grow here. >> reporter: now small businesses like this dry-cleaners in my family for three generations may be the key to pittsburgh's continued growth. the new owner's son, a local entrepreneur, is scouring forgotten neighborhoods for new business opportunities. >> it's about using what's already here and using it in a new way that i can get us the best bottom line. >> reporter: that has been pittsburgh's promise over the past 30 years. and may be the key to its continued progress. sharon epperson, cnbc business news, pittsburgh, pennsylvania.

>> all right. luke ravenstahl is the mayor of pittsburgh. mr. mayor, good morning. good to see you. >> good morning. thank you for having me. >> i still don't think that trade has worked out. but how do you keep the ball rolling for pittsburgh after gir g-20? >> well, this is a great opportunity to showcase our city. the story that sharon just did highlights all the wonderful things that are happening here in pittsburgh. we have troansformed as a regio. we have an opportunity with the g-20 here in pittsburgh with the world descending upon pittsburgh to reintroduce everybody to pittsburgh. it's not the steel city anymore. we do still do have steel but we also have advanced manufacturing, high tech, biotech, health care, higher education. so we've diversified our economy. we have a balanced economy today. that's why our unemployment rate, for example, is 2% below the national average. things are happening in pittsburgh. that's why the president chose us to host this summit. >> did that come about that diversification, did that come about by design or was it just

the luck of the draw? >> by design. when the steel industry declined in the late '70s, difficult time in pittsburgh. at that point our unemployment rate was approaching 20%. to the credit of the people of pittsburgh we had to pick ourselves up. we refrained ourselves. we focused on health care, higher education, using the knowledge base that is here to create opportunities and start-ups in small businesses. that's how we've grown this economy. that's how we intend to continue to grow it even after the g-20 summit leaves here on friday. >> mayor ravenstahl, one thing that has interested me lately is there's been a lot of talking about training and how we need to train people to do different jobs. and people say there are all sorts of training programs out there but they're only a month or two months. what we really need is significant long-term training programs. in pittsburgh, when you talk about retraining, how long were the programs? how many people participated? >> well, it was a citywide and region wide effort. i'll give you one example that

we like to highlight. our unions and trades here in pittsburgh. this is a union city. the city behind me, gorgeous city was built on union labor. today those workers are training a little bit differently. we were at a rally last evening talking about clean energy and green jobs. the men and women of these labor unions are doing things a little bit differently. the roofer, for example, is learning how to install a green roof or install solar panels on roofs. and so those workers, to their credit, realized that they had a stake in the game, realized that their jobs are on the line and realize that they need to diversify as well in order to continue to have a good, vooi brant economy. we're all in this together. that's the pittsburgh mindset. that's the way we've approached it since the early '80s and that's the way we continue to approach it today. >> almost out of time. last question. only one chance to get it right. this sunday, the steelers are in cincinnati. you pick it, who wins? >> steelers. we had a rough one last sunday,

but i can't even remember the last time the bengals beat the steelers. i'm confident in make that prediction. >> i couldn't remember the last time the bengals beat green bay. >> that's true. they're doing well this year. they arguably could be 2-0, but pittsburgh seems to have cincinnati's number. hopefully that holds true this weekend. >> i kind of figured you would go that way. mayor ravenstahl of the city, the great city of pittsburgh. coming up, exclusive interview with tiger management chairman julyian robertson. why he says we would have an armageddon situation if china and japan stop buying as much of our debt. and in the next hour, ceo, carlos ghosn on his company's big bet on electric cars. xwxwxww

and now, a peek at our exclusive interview with hedge fund julian robertson. tiger cubs now, one of the best performers in the world of help funds. two years ago at the top of the market, he told us wherp in for a doozy of the recession.

the market that day, opened at 13,888, mark. it posted the first big plunge on the day of the doozy, down 366 points. we were only one week past the high of 14,000 then, little did we know. where is the man who called that now? here's your peek. >> i think we are in for some real rough sledding. i really do think that t. e rec is, at least temporarily, over. but we haven't addressed so many of our problems. we are borrowing so much money that we can't possibly pay it back. and i think it's tragic that we've let ourselves be put in this position by our leadership, who seems afraid to tell the people that we have problems, that we've got to quit spending,

cut back, start saving, and scale backward. and until that happens, i don't think we are anywhere near out of the woods. >> some of the optimists out there say, well, the savings rate has gone up and we had an increase actually in income in this country. and maybe even though we fell off a cliff, we're actually going to come back and we're going to be okay. and it sounds like you think that that optimistic scenario is missing something pretty crucial. >> well, i think that it's almost armageddon if the chinese and japanese don't buy our debt. i don't know where we could get the money. i think we've let ourselves get in a terrible situation, and i think we ought to try to get out of it. >> do you think we can grow our way out of it? >> i think we can grow and save our way out of it.

and i think that's the only way we're going to have that threat removed. >> what is a better risk right now, inflation or deflation? >> i think we can't deflate too much. i mean, our interest rates aren't terribly high. and so i think inflation is very high. i mean, i think that risk is much worse. >> we are going to have much more of what julian has to say and frankly where he sees interest rates going as we go through the day and roll this out. but it seems like he's raising this fundamental point that we are borrowing at such low rates that interest rates will have to go up. people keep buying. the question is, how much. now, he will tell you how much he says later. but that's that treasury bubble concept. >> well, you know, julian robertson is one of the smartest

guys around. so i hate to disagree at all with him, but i think that in terms of the japanese and the chinese, they're going to keep buying because there is no place else they can put their money. you know, no other market is liquid enough for them. right now, they're stimulating themselves, pardon that image -- >> i didn't have that image until you pardoned it. >> -- sending their money at home. sooner or later they need to invest it. the fact is the united states and dollar is the only liquidity pools deep enough to dive? >> i think that's a fair point. >> they can try on the margins to diversify, but, you know -- >> i think that's what julian's point is. again, we'll have more of it later in the day, but even on the margin, we could see a big impact on our rates. you don't need them to wholesale, say we're going to sell treasuries. it's just we're not going to buy as many as we were. in that case, to get other

buyers into that market, we would have to both increase our interest rates and, frankly, cut back on spending and promises, which is his broader point, there was some talk about sacrifice earlier this year but now it's, hey, we're coming out of it, back to normal again. >> there's no question, i agree completely with him on how much debt we've gotten into and how that's not a good thing. it wouldn't argue with that at all. and it's true, too, that in many markets prices are set at the margin. if the guy wants to buy or sell today, who determines what the stocks costs today. >> right. we'll see if he's right. later on, we're going to tell you where he sees interest rates going in the u.s. and what he's trading. all right. i can't wait to hear it. moments away, existing home sales figures for august. plus, instant reaction to the numbers from the pits of the cme. cme. >> we'll be back. ident.

a double dose of breaking news. senore steve liesman.

>> mark, thank you very much. we do have breaking news that's coming out. i can tell you it's coming out from the federal reserve and they will be scaling back to emergency lending programs. the fed is deciding improvement in financial markets as the reason why it can now reduce the programs. it's still though concern about market pressure to the end of the year. that's why what you're seeing here, among the things it's doing. 28-day term option facility. that's when the fed took its discount window money and it auction itted it off. it's going to reduce them from $75 billion to $25 billion on the 28 day one. it will assess where it should be made permanent. as we said over time, they like the program. the 84-day taft wi is scaling b only 28-day money will be available to the taf. the fed is, remember, optioned out collateral. treasury on the books. it's going to reduce from 75 billion to 25 billion.

these are not bold steps by the fed. as can see in the next two charts, the markets of these two facilities have dwindled down. this is the tslf, down zero. the market has not been going to the fed for collateralize it. as i'd did, you can see there, during the emergency days. i don't know if we have the taf but the taf came down quite a bit. let's go to diana olick for breaking news out of existing home sales. >> the existing home sales fell 2.7% in august to a seasonally adjusted sale. big disappointment. they are up 3.4% from august of 2008. median existing home price down 12 1/2%. but that is the lowest percentage decline in ten months. july business was up 81,500. inventories fell 10.8% to an 8 1/2-month supply, 3.62 million

homes available. that is the lowest in two years. breaking do it unsingle family versus condo. single family home sales fell 2.7%. prices down 1.8%. prices down 15%, remember, con s do only make up 15% of all existing home sales. foreclosures and distressed sales made up 31% of home purchases in august. first-time home buyers, 30%. the nar says they've been surveying buyers, not realtors, for this, not buyers, 40% of buy ners august were first-time home buyers and push that first-time home buyer tax credit. 70% of home sales were below $250,000. rick santelli, go to you for reaction. >> well, thank you very much for that color on the number, diana. what we are seeing post-number is a bid of bid coming in on treasuries. nice bid in the dollar index. specifically the pound. really the dollar is just cranking against the british pound at this point.

and all of that might be the relationship with the drop in equities since the number. now, the relationship may be difficult to explain, but it is what it is. and, also, remember a key point that the japanese are on the march-september cycle which means it's not only the end of the quarter in the state, but it's the end of the half-year in japan. there's repeat repatriacian issues. it's doing better, al bit nbeits better. on the floor, steve was talking about treasury pulling back on the program, home sales data was crossing. market up 50. now negative barely, up about three. people are hoping at this point where they want things, the data to be good. >> yeah. 5.35 million is what we were expect expecting.

we got 5.31. 40%, first-time home buyer tax credit. we've been hearing it from the national association of homebuilders, they call to extend that home buyer tax dread dit which expires around november. now you've got another government dilemma. more government spending. and again, is it worth the cost of actually helping. >> a lot of people saying really glad you raise that point, unmitigated -- positive saying to extend it. it could cost a lot of money, anywhere from 50 to 100 billion, depending on what you do. >> could take sales away from next year as well, cash for clunkers. >> an issue. but they may not call it stimulus, but this is stimulus borrowing. >> yeah. one of the things you want to watch is yesterday we had a big drop late in the day. we hit intraday highs for the year. pull up the s&p here. we got a three-day chart. there's a three-day chart. moved up there. all of a sudden in the middle of the day, dropped down. this is an outside reversal day. we took out the lows and the highs for the day, the same day.

and hit a high for the year. this just dropped down. technically that's not a good sign. that means there's a lot of volatility all of a sudden and they can't keep the trading. watch this trend. if that happens again, pushing a little bit higher here. late in the day we all of a sudden come out with the s&p down 10, 15 points by tend of the day, you will start hearing the technician start squawking here. that's a sign of weakness again. >> bob pisani, thank you very much. so we'll watch that s&p. and, of course, bob will be here throughout the day doing that job for you. all right. let's get to the nasdaq. and what are you looking at there? i was talking about, we're struggling to be up here, but you're down. >> we are down about 7 1/3 points. 0.3%. one of the most interesting stories i'm watching today, research in motion had a reversal here in this early trade. they're going to come out with earnings after the bell today, erin. the stock has been on a tear. in the last or year to date it's up better than 100%. the stock was up yesterday quite nicely, about 3% or so ahead of this earnings report. it was up off the open about

1 1/2%, 1 3/4%. but it looks like the profits are being taken out of this stock. that was probably the most interesting thing that we were going to be watching for today is how the stock would react to an earnings report that i think many analysts and people on the street expect to be fairly good. the other big story here is electronic arts shares are giving back some of the gains they've enjoyed after an executive for microsoft came out and really squashed speculation that there could be a deal between these two companies. there was a lot of options activity in electronic arts over the last couple of days. that stock ran up 3 1/2%. again, microsoft comes out and says don't look for a deal here, erin? >> thank you, scott. as we're watching the dow, nasdaq now at the lowe's level. the dow is down 7%. back of you, mark. >> erin, guess what's happening in washington right now. the house oversight committee holding a hearing on what role ratings played in the financial crisis. you know, the ratings from the

rating agencies. moody's eric is going to testify. he went public this week with allegations that credit agencies are still inflating their ratings. we are monitoring this. we will bring you any developments. it is a fascinating part of this whole financial crisis story. up next, the g-20, together make up more than 80% of the world's economic activity. but what happens when those 20 nations get caught up in a global banking battle? and then, famed investor julian robertson on what stocks he's buying now. it's another interview you'll see only on cnbc. plus, how one company says it can single-handedly cut wastes from our health care system. the ceo of e-health coming up later this hour, right here on "squawk on the street." bbbbbbbbb

we just got existing home sales. unexpectedly falling 2.7% in august. the other piece of data tomorrow when the census bureau releases new home sales. let's bring in our task force to talk about the challenges ahead for the housing market. senior seller with brookings and tom, economic and housing consultant. tom, let me start with you and get reaction to the existing home sales number. good, bad, indifferent? >> to be honest with you it was a little better than i thought. i track 80 local mls and it looked like in my mind sales were down a little bit more than supported. a down was not a surprise to people who track the market. it looks like in a lot of areas the the decline was because of foreclosures. >> do we expect foreclosure sales to begin to pick up again? >> at virtual certainty they will pick up.

various mohas actually diminish the pace for sales. the backlog for foreclosure rising and foreclosure sales will 100% certain pick-up. we just don't know when. >> ted, earlier i did a report from root firm that talked about that shadow inventory, including things that are working through the system and ultimately will make their way through the market being as much as 70 million homes. a, do you buy that? b, is shadow inventory a key consideration? >> i certainly think the shadow inventory is a key concern on the downside risk of the inventory. it is a open question about how big it's going to be. we have option, arms, recapping, reos, bank-owned properties coming on to market. it's a concern. the exact number, you know, i'm a bit ambivalent about picking an exact number. i think there's downside risk there. >> we have seen some positive signs for housing, no doubt about it. affordability has come back down

to a level that historically has been a good one in terms of sustaining or creating home sales. ted, are you getting more positive, given some of that data? >> well, yeah, you're right. i mean, there's been an uptick in housing prices in the summer months and more pontly as you look at inventory data and the inventories -- excess inventories have been coming down, i would agree with the fed yesterday saying that there's increase activity in the housing market, but i definitely think it's still a soft market as i'm sure the fed does in their decision yesterday. and as i said before, there's still some substantial downside risk there going forward. >> tom, do you think this tax credit is helpi ing home sales? it. >> did. if the government gives you money to buy something, you're going to buy more of it. it's been very expensive. if you look at the number of people who have claimed the credit versus estimates and numbers of sales that wouldn't have occurred otherwise, it's costing the government $40,000 for every new home sale generated. >> mark haines has a question.

>> ted, i'd like to hear tom's thoughts as well, but ted, real estate has been a great investment because historically it appreciates more than the rate of inflation. so you're borrowing money against an appreciating asset. is that going to change? how do you see the -- what do you say is the nature of the housing market as we, you know, recover and move on? >> well, i think you're getting at a point here that with the broader economy in particular with the housing market perceptions matter. and i think a lot of people. >> reporter: sitting on the sidelines as the housing prices went down and as their expectations of abysmal future of appreciation were still prevalent. so, yeah, there needs to be expectation. the recent uptick in housing prices might be bringing some otherwise people that were sitting on the sidelines into the market. kind of hard to figure out whether or not how much the tax credit brought them in or how much this change of expectation brought them in. but, you know, again, we haveta

about it yet but the movement of the federal reserve and as they pull of the of the mortgage finance market will have an affect on interest rates, not on expectations going forward. >> tom, same question to you. the there going to be a new normal in housing? >> i think we're close to a new normal. right now home prices have moved down to the point that they're consistent with incomes and rent. other good news, home construction remains low. we need it to keep low because actually new home construction is now south of household summations and so, finally, the government has made mortgage credit a very accessible and affordable, the most folks, as long as you're willing to go the full monte of qualifying with full documentation. i think things are looking better. >> gentlemen, we're going to leave it there on that optimistic note. my thanks is ted and tom. hey if you want to understand where this housing bubble came from, the my book is still selling and still out there. "and then the roof caved in." one of the a kind of how the market contributed to the things

for letting me do that. thank you. thank you. as the g-20 summit kicks off, how crucial is a coordinated effort as the world recovers from the crisis. in pittsburgh, greg thomas, senior economist at pmc financial. and in charlotte, jay bryson, global economist as wells fargo securities. start with jay. you know, forgive my cynicism, but usually what happens is once a crisis passed all of a sudden self interests resumes and cooperation becomes more difficult to get now that we see we're not going to go right down the tubes. is that going to happen this time, too? >> well, i think your skeft sic skepticism is somewhat warra warranted. last year it was hard to get everyone to cooperate. we're at a point now where different countries are going to

have their different imperatives. not like the major economies like the united states and western europe and japan. growth here all remains very, very sluggish. it's more in the developing world. we're starting to see growth in the developing worldcom back. if there's any inflationary pressures in the world it's going to be there. those are the countries where you're going to have to see tightening first rather than here in the major economies of the world. >> and, of course, the follow-up would then be is the world economy on a sound enough footing now that it can weather that kind of the old-fashioned tensions between interests? >> well, you know, if the rest of the developing country goes slamming on the brakes then there may be repercussions for that. i don't necessarily think they're going to be slamming on the brakes i think they're going to be gradually tightening as they go forward. you will see it show up in exchange rate pressure. the gopping dworld will appreciate further versus the currencies of the major

economies. >> craig, i guess respond to that but i'm getting at a question of, people seem so confident right now that we're through the crisis and there's going to be some lumps but fundamentally things are going to be fine. when you steak a step back, julian robertson is saying there is fundamental imbalances in this economy still and they're only, frankly, bigger than now than a year ago. >> plenty of reason to be optimistic. expansion in europe, expansion in asia, broad range of economic indicators look good in the u.s. we are improving. that is why now we need to start the discussion as to how we're going to start studio unwind some of the public interventions in the market. you know, markets are perfect, information is imperfect. we're craving information right now. how are we going to unwind the situation? even if we don't unwiped it for a year or two, i'd take to start to see the plans develop and take hold so we can return to a

more normal way of doing business. >> are you comfortable with government extending the home buyer credit and extending unemployment benefits and various other measures that americans may not hear a lot about but are going to cost potentially another 100 plus billion dollars? >> unemployment benefits are publicly acceptable program. everybody pays into it. it helps people that are paycheck to paycheck. that's a great idea. first-time home buyers program,well, you know, you're giving people money to buy homes. they didn't suffer the downturn in the home prices. how about a little help for us who actually bought a home? >> sorry, sorry, you don't qualify for a government handout. thank you both very much. >> mark, i know we're low on time but it's politically easy. it's politically easy to spend money on people. when it's politically difficult is to at some point tell people they can't have that much. and if nobody does that, that's when you do end up with a bad

situation. up next, as the dow approaches 10,000, yes, we've got the party hats ready to go. should we be getting more conservative or less? advice from cnbc's adviser network. and we'll have the market view from julyian robertson. find out what he is buying now. that's next. when this school district added aflac to complement

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quarterly 401(k) statements are coming. a lot of the us will still be on hold. what should you do? today steve, financial planner has come advice. all right, steve, break it down into a couple of pieces. what's the first thing you should do? >> well, the first thing is open your 401(k) statement. that's key now. probably had a bad year in 2008. you're having a better year in 200 2009. biggest question is going to be should i get heavier into stocks. the answer is, of course, depends on your time horizon. a five- or seven-year time

horizon is appropriate if you're looking at stocks. 60 years old, you still need stocks in your portfolio because most people will live into their 80s. if you're low in stocks, you need to start adding. it's much better to add stock when the dow is around 10,000 than 14,000. >> you're saying a lot of people go and look at the best fund in our 401(k) over the past three or five years and put money into that, you think bad move? >> huge mistake. huge mistake. think of it this way. most of the returns come from the market. if the market has been up a lot, and you're looking at the past three to five-year returns, mutual fund manager, you're already -- it's already made its money. it's already too late. if you were going to buy a gold fund now which is going to have a very good three- to five-year return, it's tripped in the last few years. do you want to buy it after it's tripled or before it's had a chance to go up. stock is going to have a terrible track right now.

it's probably a better place to put your money than to put it into a gold fund because it has a good track record. >> thank you, steve, we appreciate it. well, now, what julian robertson is saying about the market and momentum, we want to talk about some of this names. last year when he was on, he was a buyer of names like visa, buy due, apple, google. see them all on here. all of them, by the way, over the past year are up. the worst is up 40%. the best more than doubled overall market up 26. on those names, julian crushed the market. we asked him what he's doing now. >> well, right now we've actually own a lot of the ones, i think, i gave you last year. unfortunately, we did not keep baidu and -- but i think i gave you mastercard and visa and apple. we're still in those.

as you can tell, i'm not that berserk over owning stocks as i am shorting bonds. >> you may think we're in for more trouble, but that doesn't mean the market is going to go down. i mean, do you think that the market -- that we're in a bull market and it's going to keep going higher? >> i think that we're going to have to pay the piper. and i don't know when that is. but i would almost say we are going to pay the piper and it's when, not if. >> meaning stocks are going to go down. >> well, meaning that interest rates are going to go up, and i would think what would go along with that, if you have had my kind of interest rate scenario, that that would put the brakes on the economy, earnings would go down like crazy. you know, if we have 20% interest rates and 20% inflation and the market goes up 5%,

that's not really good scenario. >> one short you did share with me last year, was copper, which was a miss. shorted it. it went up 67%. but i guess that is a broader view, which is you think we do have this -- maybe you wouldn't even call eight double dip, but there is another sharp leg down to comfort economy, which regardless of whether you still short copper, that's what that was. >> i fortunately got a little bit lucky on copper and got out. but i am looking at the red metal once sglan all right. see what he said on that and what is his single biggest play right now. it really surprised me. you're going to see the full interview with julian robertson today at 2:00. up next, breaking energy news, national gas inventories.

i'm matt nesto at the nymex. welcome back to "squawk on the street." we just had the natural gas weekly inventory number. 57 million btus. in line with expectations. it's been a day where we've seen the natgas and oil seem to profit take, particularly in crude. but the natgas itself right now is down 76 cents at $3.78 which is close to the low of the day. joining me now to give us insight on the trends in the marketplace is john woods of inti ingritty energy. we hit the number but seems to

be more afoot here than the weekly inventory number. >> yeah. it comes in line. that's pretty much what we expected. we had a run-up over the past week but it's a lot of people getting out of insurance. here we are, number comes out and rip lower again. we're pretty much where we started a week or so ago. >> a run-up could be the understatement of the month. what, 2.50 all of the way to 4. >> $3.90 and change, that was yesterday. we were very low. dwl you have to take some money off the table eventually. >> thank you very much. appreciate it. there you have it. busy day here at the nymex. aside from natural gas we want to look at other commodities on the move this morning. p heating oil down 44% over the past year. take a look at crude oil. i'll show you the change there. amazing, right? right. but -- >> 66, we were at 74 a few days ago. >> yes. most amazing thing, look at the chart a year ago, north of 100

in january. look how low we were. one year you're down. year to date, oil has surged. let's look at gold because it is just shy of $1,000 an ounce. $999.40 an ounce. that one is up 15% up for the year. and it is up, as you can see, on a year on year basis. let's look at stocks. right now the dow has slipped to minus 43. we were plus 50. we've had about 100 point swing on the dow today. nasdaq getting hit the worse, down 1.2%. s&p down 0.84%. advance/decline is going to be moved. that's sharply negative. a little -- that's not good that ratio. that's more than 3-1 negative. so is the nasdaq that would suggest, oh, my goodness, yes. i just noticed that. the volume situation is much worse than advance/decline.

it's about 8-1 negative. eight times down volume over up volume. >> let's get back to the fabe. >> i wanted to start byic taking a look at some of the we call them reits but really they're the funds being set up, colony, apollo, starwood did eight while ago, bear stearns looked at it, to buy commercial real estate debt. offerings have not gone that well. you heard bob pisani talking about it earlier. in this environment where we've seen so many follow-on offerings and ipos, apparent interest it would seem in the p ur suit of commercial real estate related debt which people think they can buy at a discount, one might have thought differently. take a look if we have it, apol apollo, we'll start there. ari, the symbol. they wanted raise 400 million. now i'm hearing more.

it was citi and jpmorgan as underwriters. they only came in at 200 million. not really a lot. kind of use that up pretty quickly, one might imagine. $200 million is raised from 10 million shares to 20. look where the stock is. that's not good. that's not good. but interesting, it's an interesting market in which people are certainly making choices and not just buying wholesale across the board any and all of these kinds of things. i don't know if we have colony to see. we don't. here's starwood, just to give you a sense of the performance of that reit. call them a reit, fund, let's call it a fund, right? it's the property. there you see it. they're going to get managers, of course, to, again, buy all sorts of different commercial real estate-related securities. and there's a look at that one. that did a lot better in terms of raising a lot more money. first out of the gate always

helps. of course, a lot of companies had been out of the gate both with secondary offerings and with ipos. another ipo to tell you about this morning, bear, are to, ipo raises $650 million. they priced 25 million shares at $26 a share. that will boost that company's, what they're calling acquisition war chest. i think we do have that as well, perhaps. art, the symbol there. curious to see how that opened. we're talking about ipos. not a bad thing. there it is. and that one is actuallying looking up. secondary offerings as well. you may have heard about them getting active here in the states, offering big numbers. a couple of weeks ago i did a story on compensation creeping back up and guaranteed pay packages. one of the reasons, they're very aggressive in terms of trying to take some market shares from employees in the states and investment banking. they're going to raise $5.6 billion, through issuance of 400 million shares. this is the first time they've

come to the market since lehman assets. finally, let's end with just taking a look at where we stand in terms of global equity capital markets activity. aren't those nice colors? there's ipos, convertibles, follow alongs. but it gives you some sense of what we're talking about here and how active a quarter it has been. mr. haines, back to you. >> do can you see all those numbers? >> that is some pretty chart. >> nice. a lot of color. >> lots of pretty colors. thank you, david faber. reports this morning, goldman sachs, not expected to -- this is going to make some people really ticked. the goldman sachs bonus bill going to be $16 billion this year. bonus pool, i'm sorry. ceo lloyd blankfein struggling to figure out how to pay his employees while avoiding looking really greedy, especially after he publicly declared that wall

street pay is too high. >> he did. he wrote an op-ed in the financial times. >> it's interesting here, though, because i've been working on this. there's a story out there on wall street, mark and erin, that says goldman may start accruing at a lesser rate. they accrueded 48%, 49% for the revenue for the first six months of year. if that were to happen, because they're trying to keep that populous outrage at bay, and the comp ratio came in lower for the full year. that would all fall to the bottom line. hence, earnings would be a lot higher. not completely clear that that's ultimately going to happen. when you talk to goldman, they haven't even come close to figuring out what they're going to do in terms of the comp ratio for the fourth quarter. but it will be interesting to see those third quarter numbers because things are going quite well for the firm and it is an interesting line that mr. blankfein is trying to walk there. >> david, you know, i've heard that, too. i wonder what would the -- you know, they're looking at that comp rare you. if they bring it down, i guess

their concern would be, how low. once you do it can you ever bring it back up? >> historically their comp ratio has been 48%, i believe, over the last eight or nine years. and one would imagine that's where they want to keep it. we're very close to that. >> on the other hand, you have to pay to keep good people. so, coming up, shares of nissan motor down 4% over the past year. but soaring more than 130% since the you know what bottom. ceo carlos ghosn, next. please help me welcome a long-time friend of glencoe baseball. a man who played second base here some 45 years ago. actually, 47. ladies and gentlemen, mr. larry mccarthy. amidst today's financial turmoil, our sophisticated wealth transfer strategies... and philanthropic expertise ensure your legacy... is passed on to family or your favorite pastime. ♪

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welcome back to "squawk on the street." i'm mary thompson. reports that citi is thinking about shrinking the retail branch while those reports may be premature, people close to the bank down playing the main thrust of the new strategy to shrink citi's network of t. in the u.s. it's too early to say if they

would close branches in cities of new york and boston. the main octobernbjective to is improve customer experience at existing branches. increase citi's deposit base, 3 1/2% of the u.s. market. they didn't deny branches might be closed but improving citi's online and banking functions are a higher priority. cities like new york, miami, and san francisco. even if the bank did close branch necessary cities where presence is smaller, it would have a minimal impact on deposit base. deposits are more reliable source of funding, less banks rely on the capital markets. like the rival, citi's deposit base has been growing as consumer staple while deposits grow in the second quarter. still, citi's base is much smaller than rivals like bank of america and wells fargo which hold 12% to 11% of the world's

market share, respectively. so for now, it's focused on growing the base from within. i'm going to turn it over to my colleague maria bartiromo. >> joining me right now is carlos ghosn, ceo of fis saniss. welcome back to cnbc. you recently told a french newspaper, quote, the financial crisis is over. is that judgment premature. do you feel that things are back on track? >> for us, it's over. i mean, we -- cash is back. credit is open. the spreads are down. so for car industry, for car manufacturer, yes, the crisis is over. the conditions are not totally normalized but 9 a percent of is it normal. >> that is wonderful news. how would you characterize the

market today around the world? how would you characterize sales? >> i would say it's stable at the very low level and i think it's going to continue like this in 2010. i'm talk globally. i'm talking globally. the prospect of the united states is better than the prospects in europe. the prospects in china . without any doubt, people are trading down. without any doubt, the fact that in many countries there are scrapping systems, incentive for environmentally friendly cars is really bringing the consumer to consider cars they didn't consider before. overall, we are setting globally much more smaller car, lower price car than before the crisis. >> what about margins, though?

what does that do to your margin? >> we're learning how to make profit tons small car. the industry is moving in that direction. >> let me ask you about the electric car. you first came out with an electric car 15 years ago. consumers didn't buy it. >> yeah. >> why are you sure they're going to continue to buy it this time around? >> conditions are completely different, maria. first, technology changed. what we are capable to do today with factories, completely different from what existed 15 years ago. in terms of the size of the battery, in terms of the longevity of the battery, how long we can keep the bat friday. second, today, the problem with the environment is not anymore a problem for specialists. the public want more environmentally friendly car, which was not the case 15 years ago. third, oil price, $70 a barrel today in the middle of the recession. imagine what's going to be the price of oil when all the countries are going to resume growth. so the conditions are such today that we think that there is room

for zero emission technology to really become the factor in the market. >> this is a very important point and you said a lot of things i want to hit on. first of all, on oil, $70 a barrel. what is driving oil prices? we all remember the days it went down to $32 a barrel. you know, you had the russians prepare for $20 a barrel. you had people worried that $1.50 was a dream. what's driving $70 a barrel oil in your view right now? >> you know, $1.60 was here in july 2008. now we're down $2.72 in the middle of the recession. obviously nobody is capable to forecast the price of oil. but, if we really line up the pro and the cons of the higher price of oil, today our bets, our analysis is that the price is more likely to go up than down, particularly when the u.s. economy is going to start, you know, growing when europe -- western europe is going to start growing. i don't know -- i don't see how oil being at $72 a barrel today

is going to be at the lower price when the u.s. is going to be back on growth in one year or two years and whenever western europe is going to be joining them. >> one reason for the commodities strength recently is a weak dollar. what kind of an impact has the weak dollar had on your business? you've got implications for the yen, obviously. you've got implications for the brazilian real. what's going on in terms of impact for the dollar? >> there is no doubts on the fact that the weakness of the dollar is favoring a little bit higher price on commodities but it's very likely that this is going to continue. it doesn't look like all of a sudden we're going to have a reversal of trend because everyone explaining the weakness of dollar is it's going to continue for the next two or three years. this has an an impact, particularly on large companies which are exporting two the zone and producing in non-dollar zone, the japanese industry, for example, is struggling because of the strength of the yen compares to the dollar.

you can always adapt to a, you know, a change in exchange rate. but what people don't like is when you move from 110 to the dollar at 90 yen to the dollar, you know, we have a problem because we need to adjust. >> what's the weakest economy in the world right now? is it europe? >> the weakest economy, at least seen from the car market tux weakest economy is russia today. we are minus 55% for the car market in russia. after this, i'll say japan is not in very good shape. some countries, not all europe, but some countries also in europe are successful. >> carlos, it's wonderful to have you. i'm looking forward to driving the electric car and plugging it in. i'll report back to all the viewers as well. carlos ghosn, ceo erke nissan. >> we will singlehandedly cut health care costs from our system.

and that's the start of coffee, down 5.25%. why? well traders are saying, it's due to the dollar. so this is a technical trade, but coffee prices are

descending. >> i wonder if starbucks will cut its prices 5.25%? >> i bet not. >> all this week, the finance committee has been marking up the health reform legislation, introduced by committee chair, max baucus, one the key components of the reform, creating health exchange, where millions of uninsured americans can competitively shop for coverage. here with more is gary lowery, chairman and ceo of e-health, this is a defacto health insurance exchange, which claims to do for the uninsured what orbitz does for travel. gary, thanks very much for being with us. >> great to be here, thank you. is this on the level? you've got a website, i take it, right? >> we're more than a website, we're a publicly-traded company. we operate in all 50 states, we're actually the largest form of health insurance for families and small business, aun doll electrically. >> can i call you? >> you can call us. >> or i can go on the web. >> and yes the majority of

people do this online with no interaction at all. they don't talk to us. >> that's good, because i don't like people. how does it work? >> you go online, you give us a few pieces of information like your birth date and gender and zip code. we show you all the health products in your area. >> how long has this been going on? >> we've been in business ten years, almost two million people have actually transacted or purchased health insurance through us. i want to emphasize exactly what the president is talking about. we do this in an electronic fashion, no paper, the economics are very, very efficient. >> can i buy across state lines? >> well, you can, but it probably won't serve you well today. because a health insurance product in michigan, for example, doesn't tie into any networks in new york. >> it depends on what the company is willing to do in. >> in most cases, that's right. and health insurance is very localized. >> you and i were speaking before and you were saying there

were 10,000 potential insurance plans on the web? >> yes. >> and something like 180,000 in the country or something like that? >> there's 180 quality carriers, companies like blue cross/blue shield. >> 180 quality insurers. >> and when i say quality, we maintain a fairly high threshold. but through those health insurance carriers, there's almost 10,000 unique health care insurance products. this is a daunting process for most people. and we've harnessed this tremendous volume of text and data on internet and reduced it to something that's hopefully more understandable for people. >> so requiring care for everyone would be wonderful for you. that would mean a lot of people that would be covered. >> it would mean a larger market that would be eligible to purchase health insurance today than perhaps today exists. over 40% of people who purchase health insurance through the history of the company were previously uninsured. >> are there any tutorials

available? because as you say, this can be a complex decision, a lot of moving parts. >> yeah, we've tried to reduce it on the site. go to ehealth.com. you'll see, it's anonymous, you don't have to tell us who you are. we show you the products and give you decision tools. most people have got a favorite physician. tell us who your physician is, we'll show you all the products that support that physician, for example. >> wow. i had no idea you were out there. thank you very much. >> pleasure. >> appreciate it. it's just ehealth.com? >> yes, or ehealth inrinsurance.com. >> maybe you're going to get a lot of traffic today. thank you, gary lauer. >> thank you. >> up next, a final check on the markets for you. you're watching "squawk on the street." >> go to our website, cnbc.com. actually, 47. ladies and gentlemen, mr. larry mccarthy.

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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. we're back, as you can see among the widely-helds, most of them are down, the market, the dow is down 40, the s&p down eight, almost nine. the nasdaq down 2.5. and the volume of the market

spread has gotten a little more normal. now we're at about three to one negative volume over up volume. >> and it's also interesting, we're right in the range to watch on the s&p, but just to think about the housing numbers coming in. and you're still seeing improvement. but people's expectations have started to rise, that we're going to have better and better data on housing and employment. and it's just not quite matching up to expectations. and a few weeks ago, market would have gone up, anyway. saying oh, it's improving. now they're going back to comparisons with expectations. >> oil is down $2.50. existing home sales unexpectedly fell 2.7% in august, economists had expected an increase. the treasury will complete a three-day sale of $112 billion in debt today by auctioning $29 billion in seven-year notes. and we're waiting the first trade for lithium ion car maker battery, which raised more money than expected in the ipo.

cnbc.com. first in business worldwide, i'm courtney reagan. welcome "the call." 90 minutes into the trading day, an early-morning rally stalls after weak home sales reports. what it means for stocks, housing and the economy. larry? >> i'm larry kudlow. leaders are arriving for the g-20 summit in pittsburgh. we'll have a live report. plus discuss whether regulation reform will put some countries at a competitive disadvantage. this is "the call" we are cnbc. welcome back, everybody, stocks opened higher but reversed course after home sales dipped for the first time in five months. however, however, unemployment claims did fall 20,000, that's a big plus. meanwhile, leaders descending on the city of pittsburgh for the g-20 sult. more on that in a few moments.

right now the dow is down 40 points. the nasdaq was done about 10 points. big news today, nasdaq down 26, i beg your pardon. big news, gold is getting clobbered, down $17, falling below $1,000. crude is getting clobbered, according to the opec chief and the dxy dollar index is strong. and speaking of strong, let's check in with bob pazani at the nyse. how is your gold position? >> that's nonexistent. but besides gold, copper is also weak here. multi-month low there. there's a little bit of discussion about some of the weakness in the last few days, we saw it in july, a couple of sideway days, it amounted to nothing in july. no worries yet. let's take a look at the reits, the ipo's, half the shares offered that were initially thought of, th