hello, everyone. i'm erin burnett. the bank pay czar briefing reports on new rules. in a few moments will hear from the president himself on that topic. major restrictions on compensation could also be slapped on every major american company. we're going to tell you who is fighting for that in washington. then, the biggest earnings day of the season so far. two ceos here exclusively, including the chief xnl officer of an american oil giant. and news of fraud abuse of the home buyer tax credit coming as american taxpayers are about to foot another $20 billion. first though let's get to the trading floors. the day's big stories are playing out. we have oil and the dollar. first we'll show you how oil is trading. down about 52 cents. $80.85, still solidly above the $80 mark. rick is in chicago. let's start with him and then we'll visit with sharon. >> tell you what, it is definitely not a wild day in

treasuries, and you can look at the intraday chart. twos are down a bit. ten-year yields are up a bit. the last chart is the dollar index. maybe we should freeze that one. why? because it's up. up about a quarter of a cent. it isn't up because somebody is out there defending it. much of the reason why it's up is its doing a bit better against the yen. even on an up day there's still an 80 handle, almost an 81 hnl on oil. this is why all americans need to pay attention to the weaker dollar. sharon, you can probably enlighten us as to which direction commodity costs will continue to go. >> it looks like they will go higher. momentum can't seem to be stopped. we have still risen above the $81 mark. some traders say that there was consolidation that was necessary in today's trade after rising over $10 for ten straight trading sessions. keep in mind though there are some that are very concerned about where prices are headed. the international energy agency

just out a few minutes ago saying they're concerned a price spike could hurt the global economic recovery. he's not saying we're at the start of that spike yet, but he is concerned about that looking at opec's spare capacity. that should keep us through 2010. he said we could see a tighter market in 2015. again, erin, we're looking at likely higher prices in the days ahead. >> all right, sharon, thank you very much. sharon is saying higher prices in the days ahead. let's talk about whether the elevated oil prices are the real deal or whether traders, not necessarily with bad intentions, but traders are causing prices to go up and that's hurting the economy. our next guest is finding oil right now in the world's most dangerous places. joining us is the occidental petroleum president. it's been a while. i wanted to ask you that question right off the top. we're at nearly $81 a barrel for crude oil. obviously, you know what's really going on with oil demand around the world. is that a real price or is a trader's price?

>> it's hard to tell. we're always cautious about oil prices. i think if you go back over the last few years, we tend to be fairly cautious about oil prices having lived through a lot of different prices. it's hard to tell. hard to imagine a single trader can make a difference, certainly for a day, but, you know, we're fairly cautious about oil prices, but we almost always are. >> well, then that certainly is something that speaks to how your company has run itself over the years. there are a few key issues i want to hit on with you. obviously occidental as brand name not as well as exxonmobil, but you're making a lot bigger bets in much bigger oil markets, places like libya and iraq. on the earnings call today i was reading the transcript. right up on the top couple paragraphs, iraq came up. you're in there. a lot of other american companies are not. why are you making the right choice? >> a lot of oil in iraq. while it has its share of

issues, obviously, you don't have to worry about finding the oil. our business is really exploiting existing production. so we think iraq is an interesting place to be. i would view this as an experiment to see how well it progresses over the next few years, but historically when you in a new area when you enter first, you probably do better than somebody with who enters later. there are american companies that are bidding and so we would expect that there would be more american companies shortly, but for us a good opportunity where there's a lot of oil and we can control the risk we think. >> and how much does it cost, just to explain to people who you're talking about, when you say there's a lot of oil. it's near the surface. how much does it cost to get oil out of the glouground in iraq c like the gulf of mexico? >> well, lifting cost, the cost to produce the oil in iraq is probably in the $2 or $3 range compared to $15 in the united

states or other places. the capital costs since the oil has already been found and is close to the ground are just a few dollars a barrel, maybe $3 or $4 a barrel. finding costs in more -- other places might be $30 a barrel. so a huge economic advantage. some of that, of course, is taxed away by the government there. >> right. some of it is tax. you obviously take risk, but it gives people a sense of you're talking $2 to $3 versus $15. you can obviously afford to take quite a bit of risk with those numbers. what about libya? that's another place oil is right at the surface. it's another place obviously that's controversial. it's the largest oil reserves in africa, but you're the only u.s. oil major and certainly were the first with a huge presence. what are the costs there in libya to get it out of the ground compared to where a lot of other u.s. companies are focused like the gulf? >> conoco and hess and marathon are also in libya as u.s.

companies, but libya also has relatively low lifting costs. cost to get it out of the ground, $5, $6, $7, more expensive than iraq for sure. capital costs are a little more than iraq, but nowhere near the united states. libya is not in the same league really as iraq as far as oil potential. it also has, you know, a more stable political environment, of course. >> wow, i don't mean to chuckle but that is obviously a statement there. okay. so where are you expanding right now? obviously, i know you're expanding in places like iraq. but on the conference call the ceo said he's going to spend several hundred million dollars on acquisitions by the end of the year. you just spent $250 million buying fibrofrom citigroup. >> property as opposed to companies. so it would be a lease, a

producing lease, usually in california or the permian basin in west texas. almost all our acquisitions are in the united states, direct property acquisitions and almost always in california or the permian basin. we're putting our money really in california now. we have a major discovery in california, major oil and gas discovery. we're putting a lot of money in california. we'll continue to do so. it's a major growth area for us. we've been fortunate to find a large oil deposit early in our exploration. >> well, it's kind of amazed a lot of people when that was announced. that there was still large oil left in the united states of america, right? this is the subject of books and movies earlier in century. you're finding it now. do you see it as evidence that we have more than enough oil out there whether it's in the u.s. or anywhere else, we've got plenty? >> world uses 85 million barrels of oil a day. the base declines 3%, 4%, 5%,

that number keeps declining. you have to continue to find more oil. it's a big challenge actually worldwide. there's still oil in the united states for sure. generally it's more expensive than elsewhere, although this particular find is not, but i think there's a lot of challenges in replacing just the depletion of the old fields. that's why you need to go to places like iraq. no more oil left under club med as they say. >> sitting at the surface there in iraq. one final question. the reason you own fibro now and pandit does not has a little bit to do with andrew hall. he was contractually guaranteed $100 million by citigroup. you're okay with those sorts of compensation packages. >> actually i'd rather call it a profit-sharing plan. what he gets is a share of the profits after a capital charge. if he can make that kind of money, that is his share of the

profits, oxyshareholders will do even better. >> mr. chazen, good to talk to you again, sir. >> thank you. it's the biggest day for earnings in the quarter. we'll tell you why today's worst performing sector might put the brakes on the entire market rally. that's the wet blanket segment. we'll then move to something more optimistic. the head of the world's largest warehouse company is talking about why he's seeing positive signs in a market everybody is terrified of, the commercial real estate market. president obama will be making comments live on the show about executive compensation. tdd#: 1-800-345-2550

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and manger market averages -- during the commercial we were up 100 for the dow. this is the biggest earnings day so far. it is earnings which is powering the market higher. earnings from companies like prologis which has to deal with warehouses. they are the world's largest warehouse company. they were down -- their funds from operations which is the key measure for a reit was down 59%. still, the company said it's seeing signs of restabilization, restabilization. joining us exclusively is walt, the ceo. good to have you with us. sir -- >> great to be with you. thank you. >> everyone has been running around terrified for at least a

year about commercial real estate falling off a cliff. you are the person who stores all the things that apparently couldn't be sold during the economic crisis in your warehouses. so how is the economy first? >> well, the economy is still soft, and as we said an our earnings call this morning, we're beginning to see signs of stabilization. we don't think it's a head fake, but it may be a head fake, and so we're being cautiously optimistic at this point. but the truth of the matter is the last two quarters, second quarter and now in the third quarter, we're beginning to see occupancy stabilize, and actually in the says of prologis our occupancy trended up for the first time in two years. we're optimistic about t we'll have to wait and see what happens over the next couple quarters. >> who is renting that space? what is seeing they have the need to store things that they think they can sell? >> well, it's interesting, erin.

we have polled a lot of our large customers recently. it's interesting, two-thirds of those customers said that they expect expansion in 2010. now, some of them said it may not happen until later on in the year, but nonetheless people are feeling more optimistic, and the other thing is that inventory levels are actually at a very, very low point today. companies don't have excess inventories in their distribution facilities. both of those trends bode pretty well for what we see moving forward. >> people looking at the overall industry and who are afraid of commercial real estate, maybe they'll feel a little better from what you have just said, but obviously a bit cautious. they're going to want to know what you have to say about rents. if rents keep dropping, there's going to continue to be a lot of pressure on a heavily indebted industry. are rents stabilizing? >> well, we think they are, but they are -- they're still at a very, very low level today, and if you look back on the empirical evidence over the last

10 to 20 years, you will see what happens is occupancies first need to move up, and when occupancies move up, a quarter or two later rents then stabilize and then rents move up with the occupancies. you need to see the occupancies at least stabilize. we think we've seen them strabl i stabilize. we haven't seen them move up. after we do, we think we'll be able to see a reversal in trends on market rents. >> sounds like what you're saying probably a couple quarters away from real improvement on rents. is that soon enough to prevent some major bankruptcies or major issues in the industry? >> great question. and i would say that our focus in the vi is on distribution facilities, and that market while soft we think it will move up over time and most of the commercial real estate issues as it relates to debt are not in the industrial sector, which is not to say that we're immune

from it, but we feel like our sector is stronger from that perspective. i can't comment on office and retail rents, but i can comment on the industrial space which i think the rents moving up will certainly help the industry. >> we appreciate you taking the time. thank you very much. >> thank you, erin. great to be on. >> all right. as we said, it's a major day for earnings and a major day for transports in particular. eight major transportation companies reporting today. let's talk about how the rubber is meeting the road. matt nesto. >> or how the wet blanket is wrapping the reporter as we say. it's not a pretty picture. we're not going to sugar coat it. just trying to look for some trends that are developing. we've had a lot of transportation stocks reporting yesterday and today. we have eight out today. but take a look at the transportation index over the past week. you're down almost 3% versus a 1% or 0.7% decline for the s&p. but really in two days the

transports have now given back 3.1% at a time when the s&p 500 is flat. so if we take a look at some of the transportation troubles we're facing out there, you're going to see as i said eight of them are out there today. at last check seven of eight were down. when i started a little while ago, it was eight of eight. delta appears to be getting a little bit of a bid late in the session. if you take a look at the average gain, this is a group that's had a very, very strong run, up about 30% since the beginning of the third quarter. july 1st at a time when the s&p is up 18%. that's 60% outperformance as a group. just the eight stocks reporting here today. and if you look at earnings, well, the reports are, yeah, they're down year on year, but the fact of the matter is wall street knew that. they have been bidding up these stocks. six out of eight beat on eps and five out of eight beat on revenues?

so what the heck is the problem? we heard a few moments ago from ryder's ceo and here is what he had to say. >> i think you're going to have a lot of caution in spending. when you're not spending, people aren't putting anything that needs to be moved, whether it's trucks, trains, air, or anything else. so i think that's going to be a long climb out. >> so i don't want to get all biblical, but let's be not afraid and look at some of the stocks out here today. if you look at the biggest of them all, united parcel service, they're weak by 1%. you can see union pacific out. we're going to get burlington northern after the close today. ryder is down almost 40 cents. just about a 1% giveback. and old dominion is the weakest of the pack. if you look at the airlines, there are four of them that are deplaning here today. i mentioned delta with the uptick, but you can see pretty good giveback in alaska air and u.s. air looks to be climbing back as well. maybe there's some hope in the

legacy carriers. what i can tell you, the big point still stands that in the past two days of heavy earnings volume, the transports have shed 3% on numbers that pretty much beat expectations. back to you. >> thank you, matt nesto. just ahead, a half a billion fraud in the housing market that you are financing. and we are awaiting the president. he will be making comments live on executive compensation. that's coming up on "street signs." let's ask. when you're trading a stock, every penny counts. i hate when the trade is done and you find out you paid more than the quote price. i want it at the price i expect... or better. td ameritrade's unique trading platform uses multiple market centers to help you find the best possible price. i like those odds. i know they can't flat out promise a better price, but they're always looking for it. they know what matters to me. every online stock trade is always $9.99. not a penny more.

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welcome back to "street signs" with your daily reality check. mortgage rates are edging up again for the second straight week. they're back at 5% on 309-year fixed. new york state's highest court rules against the owners of the largest apartment complex improperly raised thousands of rent to finance a deal during the height of the commercial housing boom. and the first time home buyer tax credit is fraught with

fraud. that according to testimony before a house subcommittee this morning. claims were filed by over 600 children. some as young as 4 years old. thousands of claims were filed by those who hadn't even bought a home yet. treasury watch dogs say the irs has paid over half a billion on potentially fraudulent claims. thank you very much. stick around, we want to discuss whether the government should extend the first time home buyer tax credit which is set to expire next month. congressional budget estimates say it costs $1 billion a month to provide the credits w a growing deficit, can the government afford to continue the program? here is ken rosen from uc berkeley and j.d. foster from the heritage foundation. good to have both of you with us and diana, too. ken, why should we extend this credit, especially given it costs $1 billion a month. senator dodd has a plan that would also let it extend, not to

just people buying new homes but anybody buying a home. his bill of another $17 billion. >> well, erin, i think the most thing to say is the housing market has been the center of the difficulty that we've had in the economy. and if we stabilize housing prices by bringing demand forward in time, because that's what a tax credit does, it gets people to move forward and buy earlier than they would have otherwise, that will help -- has continued to help stabilize the housing market along with low interest rates and some of the fha programs that have provided mortgage credit. i think it's a vital element. we have a lot of risk that housing could fall back with all the foreclosures coming unless we keep the demand side strong. so the tax credit is probably the most cost efficient mechanism we have in the stimulus package. it creates obviously for every dollar that's spent, it creates five times as much. this far gtargeted temporary

program is critical. >> what do you say, j.d.? should we be spending this extra money, especially considering we're hearing about fraud in the program already? >> it's kind of funny to hear fraud in a major federal program of this sort where you're relying on the irs to administer and watch over it. it's really a casablanca moment. we're shocked there's fraud in a major federal program. there was always going to be. that's sort of accepted when you have a major program of this type. it has probably stabilized the housing some. it is a marginal effect. we're talking about a marginal effect on marginal buyers. first time home buyers. whatever the effect has been, the markets now have stabilized. housing sector is stabilizing. it's time it get ourselves off this make sure it is a temporary program, end the temporary program as quickly as possible so the markets can stabilize. otherwise, we're going to have the same kind of situation as we had with cash for clunkers. you know, we have a big program to get people to buy cars. you end the program, the demand falls off. that's what we're going to have

to go through to to normalize. we can't keep extending this program. at some point we have to go through that process. >> ken, do you think your plan to extend it another nine months fits within what j.d. is saying, you are pulling off the support and the life support or no? >> sure. i think nine more months, the reason for nine more months is the housing market is just bottoming now. we have this wave of new foreclosures coming. so to pull it out now would risk a very good probability of another slowdown in housing and the overall economy. and to j.d.'s point, i would actually have extended cash for clunkers for six to nine months. get the economy going now. then pull it off. no question that we are still in the middle of this recession. we're not over it. gdp numbers look stronger, but the real -- at the consumer level, this is a program at the consumer level. most of the programs have been so macro around so shotgun. i like the rifle approach. housing, cars, areas that we have a big multiplier effect on the economy. that's where the stimulus plans should be.

temporarily moving demand forward in time to stimulate the bottom of the market. >> diana, politically what bill will pass? >> that's the $60,000 question, erin. you have bills that range anywhere from just extending it one month through thanksgiving in order to find out whether or not they want to expand it, and then there's the bill by senator isaacson and dodd who want to expand it to all home buyers, raise the level of income to $300,000 and allow it to go through june of next year. now, you have to look at where the housing market is now though. you have to say, are we looking at a double dip recession in housing or not? do we really need this. >> i'm sorry to interrupt you but veterans health care event going on. you see the president walking out. we anticipate he will be making comments on executive compensation and some of the news that's come out from kenneth feinberg on limits in compensation. let's listen to the president. good afternoon. before we begin i'd actually like to say a few words about

something that is of interest to the broader public. obviously how we tret our veterans is hugely important, but i just want to make a quick comment about the decision made public today by ken feinberg on executive compensation. you know, i have always believed our system of free enterprise works best when it rewards hard work. this is america. we don't disparage wealth. we don't begrudge anybody for doing well. we believe in success, but it does offend our values when executives of big financial firms, firms that are struggling, pay themselves huge bonuses even as they continue to rely on taxpayer assistance to stay afloat. that's why last summer we gave ken feinberg and his team the task of making an independent judgment on the executive pay packages on firms that received extraordinary assistance from the federal government. he was faced with the difficult task of striking the proper balance between standing up for taxpayers and returning a measure of stability to our

financial system. under these competing interests, i believe he's taken an important step forward today in curbing the influence of executive compensation on wall street while still allowing these companies to succeed and prosper. but more work needs to be done which is why i urge the senate to pass legislation that will give company shareholders a voice on the pay packaging aw d awarded to their executives. i urge congress to continue moving forward on financial reform that will help prevent the crisis we saw last fall from happening again. now, in just a few days, a few weeks, we will be observing veterans day. we'll pause again to -- >> the president is obviously speaking on health care to veterans. we'll keep you updated on that. we wanted to let you hear live on his comments on ken fine burbur -- feinberg, the pay czar. saying this is an opportunity to

passe on pay for all companies. we'll get analysis on that and whether pay on say for all companies means massive cuts in salaries. neck on tnext on the show, the uncomparable jim cramer and his reaction and we'll talk about what the president just said and ken feinberg's decision today. we have a round table on that. we'll be back in just a couple moments.

hello, crazy. >> how are you? >> i'm good. so -- >> no, no. i'm interrupting you because i want to congratulate you as my colleague to being in the 40 under 40 -- >> oh no. >> no, be proud. don't be embarrassed. don't do that to king burnett, who happens to be your dad. she's number 33 on the list. i urge everyone to go to fortune magazine which you can get online and be as proud of erin burnett as i am in the 40 under 40 list. >> jim, you're very nice. thank you. >> you deserve it. >> obviously is on the cover with some google glasses. >> obama is less popular than you are, at least on wall

street. >> i just heard what he had to say to the veterans, right, about compensation? we've got this confusion over what chuck schumer really wants to do, whether he wants to cut pay for everybody or wants to provide a say on pay for all companies. it looks like he's doing the say on pay, but it's not totally clear. where are we going here, jim? >> i have to tell you, a friend of yours and mine, ron hermanz, not a t.a.r.p. recipient, pointed out two things. the t.a.r.p. law basically said the government could do whatever it wants, so maybe these people ought to face the music. but if you need the government assistance you can raise equity, raise money, look at marshall who last night did a deal to raise money. the stock is up. you can pay the government back. so i think that the government has every right, ken feinberg, a hero from the 9/11 victims disbursal. the government has every right to demand that people at these banks don't do as well until

they return the money. >> that's fair. but what about this second point, the thing shum ser saying in his bill of rights for shareholders. would require all public companies to hold an advisory shareholder vote on executive compensation. it's advisory, right? so the point is just to prevent boards from just rubber stamping things they haven't really thought about. it's hard for me to understand, jim, what's really wrong with having advisory say on pay. >> okay. let me give you the flips. i'm chairman of a publicly traded company, and first of all i think that it's perfectly realistic to give a referendum by the shareholders and i think that's right. more importantly, what happens is there's a compensation committee on every publicly traded company, and unless you have a publicly compensated man like my friend bill groover, who is on the board of the street, used to run sales and trading at goldman, now a professor at bucknell, most compensation committees are part time guys who don't understand. they typically get buffaloed by pay consultants who say this guy is making billions, so our guy

should make billions. it rests with the compensation committee. most of those need backbone. that's more important than the share hold. as much as -- shareholders come and go. compensation committee has to stand up to management. >> sounds like you're saying, a, advisory say on pay, fair, we should have it, but that's only one thing. you got to deal with -- and this is a broader issue. not just the comp committee. >> right. >> how do you get smart, thoughtful, engaged people who understand the topics and have the time to serve on corporate boards? >> that's really the issue, and i think that what has to happen is that we have to get away from cronyism. we have to have people on boards who perhaps are doing something else that is not as strenuous as the day-to-day rubbing of a company or may not be involved in a public job, but really is in the nitty-gritty and can say, listen, if i take this job, i have to spend at least two or three days a quarter specifically going over compensation and making judgments. it's the compensation committee that's the problem, erin, not the shareholders.

because we all want to do what the shareholders want, but they don't know enough. only the korch committcomp comm and too easily they're rolled by management. >> we'll follow up on that. >> people should look at this example. this guy, bill groover -- >> he's head of your comp committee you're saying. >> what i'm saying is he's a rigorous thinker who is a tough guy. you go against him, i think you're going up against what's right. he also wrote an excellent article for "the new york times" about the need to bring back glass stegal. thoughtful people who run compensation committees will make a far more and bigger difference than what senator schumer wants. >> it's an interesting point. i think a very fair one. we're going to talk about that with our round table in a moment. first, whichever name? what's your name to highlight? >> i think we have a lot of things happening today that are very mixed. you have a new core, big industrial company. i have dan d'amico on tonight. they're not doing well. that's interesting because they're a very important

industrial manufacturer. then you have 3m and they are doing well. today is a day where literally you are seeing the haves and have nots assert themselves as opposed to economic plays. because 3 misdemeanor is up and mcdonald's are up and one needs a strong economy and one doesn't. all that said, there is a boom busting element that's happening today that i like. we all came in very negative. this is a day that's not hostage to oil. it's also a day i'm not hearing as much chatter about the next people who are going to be arrested in the hedge fund business. >> we're too busy chatting about their pay cuts. it's all a matter of priority. >> look for silicon valley arrests. people who literally gave up the joint, their companies, in order to enrich themselves and hedge fund managers. that could be the next shoe to drop, and i think it's a size 18 ugg. >> is that a shaq? that might be a shaq size. >> it's an ugg. >> thanks, jim. >> congratulations 40 under 40.

>> very nice of you to bring it up. a lot more of jim tonight at 6:00 and 11:00 eastern here on cnbc. we have more analysis of president obama's remarks. you're going to hear what one ceo thinks about ken feinberg's plan. the ceo of one of -- it's number one or number two biggest companies in the united states. we'll be back.

because of the government's involvement in the companies, i think you just have to think about it as an anomaly and then it's a question of government policy. i'm not a policymaker. i know these are exceptional cases and exceptional times. >> part of that was microsoft ceo's steve ballmer to matt lauer this morning talking about the seven companies being targeted by the feinberg plan.

what if extraordinary times become the norm and the feinberg plan is extended to call companies? here is robert, partner at jones day and mike, senior partner and host of ring of fire which airs on air america. good to have both of you with us. you heard steve ballmer there. saying the government has a stake in the seven banks that are under specific discussion here. they're extraordinary, put them over there, but i don't think that we should be having a say on pay for everybody else. he wasn't talking about shareholders. i should be clear. he didn't think the government should have a say on pay. what do you say, robert? >> well, i'm really quite surprised by all of this. i'm not surprised that there's been sort of a feeding frenzy about it, but i thought that the government was going to take a more principled and process-oriented approach, one that really would have relevance to many more companies. i think what mr. feinberg did,

and granted he is an extremely difficult assignment here in terms of balancing politics against a very nuanced set of problems, but i had expected a pronouncement of policy and approach. say on pay in all honesty is yesterday's news. i don't think, as jim cramer said, i don't think that's going to change much of anything. now, my view is that things are a lot better i suppose than jim cramer might say, but what happened today is so technical and so focused on the t.a.r.p. companies, as steve ballmer said, that i don't think it's really going to have a heck of a lot of significance elsewhere. in addition, the fed came out today just before the president spoke with some concepts that are going to apply to bank regulatory matters. once again, i would have thought that the government would have been trying to get a board of directors in dallas, texas, of some leasing company or something like that to be paying attention to this, not really just limit it to the t.a.r.p. recipients. >> mike, let me follow up on

that point and what jim cramer had to say because jim's point, you know, it's a really hard one to find an answer to because he's basically saying something everybody knows. you've got a lot of hard working people oge mag on major boards, really have a lot of people who don't have a lot of time, don't really understand the pay packages they're signing off on. how do we fix that? >> we have to remember how we got here. we had corporate mbas and silk stocking lawyers who scammed capitalism for a decade. they used weapons to destroy the economy. had you had more involvement by the people who own those shares rather than the good old boy nepotism testimony that exists in these boards -- now, i have to tell you something robert talks about how he's surprised. how there has to be principle

involved. what kind of principle was involved when a corporation like bank of america and citicorp bundled up worthless toxic trash, financial paper, and sold it to mom and pop pensions? if you have more involvement from people who aren't part of the gold old boy, you give me a raise and i am going to give you a raise, that's how it works. remove that from the system and make it more transparent. that's all this feinberg is trying to say. >> how do you make it more transparent because logistically just a couple years ago, we had the whole shift in regulation, fair disclosures and company have to put every use of a corporate detail, every free bathroom fixture. it's all already disclosed. even when it seems high, shareholders aren't raising a finger because maybe the shareholders are big institutions, too, mike. >> here is what it is. we definitely know this. we know a compensation board that's made up of the same people who move from corporation to corporation who are paid from

citicorp, paid from bank of america, they're all part of the same game. look at the board sometime. they just move from board to board. those people aren't going to go public without outrageous events like we saw happen over this last decade. they're not going to go public. >> robert, but the point i raise is that it's already disclosed to shareholders. >> yeah. that's the whole point of this. the point of this debate which is so frustrating is twofold. first of all, i agree that there were lots of instruments sold that in hindsight look a bad idea. that has nothing to do with the topic we're talking about. compensation, everybody is saying there's this risk-based compensation, stimulated risky behavior. that's not been demonstrated. more importantly, and this is the central point of all of this, is that we're using this as sort of an execution for all this other stuff. the average compensation section in a proxy state is 30 pages of printed detail required by the s.e.c.

>> i'm sorry to jump in here because i know you're both impassioned and we do love that. i would reward it if i were on your compensation committee, but instead i just have to send you away because we're tight on time. thanks. china says its economy grew nearly 9% last quarter. next, can you take advantage of it? we have the trade and a special report from darren.

dow's up 119. news out of walmart giving a fill up to the markets. yuch dating capital spending plans. up from what they spent this year at 11.5. where are they spending it? they're spending it in emerging markets which they say specifically, and they're going to be growing their square footage, particularly brazil and china. that means they serve confidence in china's growth rate. let's talk about how to take advantage of, well, if walmart's right, maybe you want to get on the back of that. tomorrow, china's launching the nasdaq of china.

what do you say, sir? i guess you probably agree with walmart. china is a place to expand. what would you do with this exchange? >> i do agree with walmart and coca-cola and intel and i agree with young brands. china's growing. and they're buying a lot of our stuff. and thor's buying some of their own stuff. and then the chinese government is taking the necessary steps to encourage that domestic growth, and the gem market's another great example of that, where it's really the nasdaq, if you will, of china, where they're encouraging young, more nasent more growth companies to enlist more capital. >> for an investor right now, are there going to be -- the exchange is new. are there going to be ways to take advantage of that anytime soon, given that it's going to no cuss on biotech and technologies? >> yes. foreigners can invest like they do in the shanghai index, if you

have a special q fee license. but for others trying to take advantage of that, i would invest in things like maybe civic securities, who are going to be underwriting a lot of the companies that are listing on the gem exchange. or if you believe in the growth in china, and the consumption story, and the infrastructure story, another idea is something like volkswagen, who sold over 1 million cars already this year. in china. >> thank you very much, matt. we appreciate it. >> thanks. >> all kinds of new ways to think about it. volkswagen. market up more than 100 points. a big reason for that, walmart. in 60 seconds, brian kelly. >> i'm here. >> i wasn't sure if you were there for a second. >> no, i'm here. >> what do think? >> i think we're looking at a market that is almost at a meltup condition here. we've had -- earlier in this week what you had is a lot of people selling the news, taking profits, maybe buying some

protection. the vix low, so it's cheap to buy protection. if we break through 1,100 on the s&p 500, i think 1,200 is easy to hit. >> 1,200 is easy to hit. would you agree? i'm noticing the market go up and when it went up and noticing the walmart headline. walmart not moving as much as the market. >> i think it's the excuse for driving stocks higher. they're spending in the emerging marks that really should be driving up brazil and china, not driving up the u.s. but walmart doing better. any of these companies doing better is going to be the excuse for people to say, listen, i've got to perform here. i can't underperform, i've got to be long in the market if it goes up. if it does go up, i will tell you i'll be selling into that rally. >> thank you very much, brian. good to have you with us. >> nice to be here. next, a sport that just might have the perfect business model. hmm. but first, your trend of the day.

sports teams have been created during these trying economic times, and things like ticket prices, you name it. something getting a lot of attention is the drag racing league that's giving away tickets. dan rovell has this strange success story. drag on its own line there. i didn't know what the next word was. >> you moved with it, erin. you probably haven't heard of the national guard drag racing league. what they've done is getting around. actually they gave away all their tickets this year, forsaking the core of revenue, and instead selling the fact that they can draw huge crowds of more than 35,000 fans a day to sponsors. and they're offering sponsors something that no other league can. a shifting demographic depending on who they want to target. one hispanic audience in the stands, the circuit will hand out more tickets in hispanic areas. this strategy has enabled them

to double their revenue from $6 million to $12 million this year with the likes of ford, safety-klein, and hardees. you have to give your name and address and opt in to receive information from the sponsors. the league says the free tickets help them get accurate information, more than half the time, which is a higher hit rate than usual. while many are admiring this league, and its novel idea, the question is, who is it right for? the president and ceo says it will work perfectly for an upstart martial arts league or united football league which is struggling to sell tickets these days. we've said, never give your product away, but they're giving it away and making money off of it. >> i always wanted to see a drag race. >> in drag. >> maybe so. all righty. having flashbacks to a robin williams movie. big market day. "closing bell" will have the close.