i watched the markets going up last week. i didn't believe it and now we're getting this. >> back here again. >> i don't know why we believe him. why do we believe him? >> thanks very much, good to be with you. that will do it for "power lunch." we will see what happens tomorrow with the jobs report. "street signs" begins right now. what a draghi. the head of the ecb not acting like the super mario the markets wanted. stocks slammed. we've got your road map ahead. man versus machine. would you feel more confident buying stocks if actual real-life human beings took a greater role? plus, we'll introduce you to a stock you've probably never heard of that's absolutely on fire. and a big fat flop. what's behind weight watchers weight loss on wall street? it's an all go-cart and turtle with a hammer hour ahead. in the meantime stocks remain, well, for august they're

not looking great with today's selloff. today's drop is the biggest for the dow since june 21st. a similar at the s&p 500 having its biggest drop since june 25th. this should not be a surprise, however. august has seen the s&p's biggest monthly loss over 20 years. history is repeating itself. the nasdaq is also lower. and like its counterpart it is down for a fourth straight session. and a notable negative milestone for the shares of facebook. they dipped below $20 for the first time ever, falling as low as $19.91 per share. facebook is a bargain. let's check in with bob and rick out there. bob, i want to get to you, first of all. i dropped you a note saying what would you like to start with and you said a beefeater martini with a twist on the side. jokes aside, where do we go from here? >> we've got earnings out of the way, central bank out of the way, tomorrow is nonfarm payrolls. 100, 105,000, somewhere around

there. we'll likely do the fourth month in a row below 100,000. traders were expecting something to happen now and it didn't. let me show you the s&p 500, because last week we moved 40 points on the s&p 500. this is what i'm talking about. that was all the expectations that we were going to get on an aggressive stimulus program from the ecb an it didn't happen. now that that's happened, look what we've got. the thing that i would watch next week is the spanish and it tl january yields. if they can hold there maybe they bought a little more time. but mario monte all but bedding them to buy an aggressive bond program and they basically ignored him. >> he really needs to learn how to use that microphone of his a little better. rick santelli, i'm sure you'd like to start off with a martini as well, but as bob was saying we're seeing investors dumping the shares issued by spain and italy and snapping up the u.s. government bonds, no? >> yes.

you know, if you look at a chart, i picked may 15th because you can really see the pattern of our ten-year. but this market continues to keep investors on the straight and narrow. we continually see consolidation, drop in yields. comes back a bit, consolidates, drops again. i think you'll continue to see that. but take it a step farther. bob is right. it is about funding and i definitely am looking at that 720 spanish ten-year as well. but if you look at the anxiety that led to the draghi comments last week that, actually steepened and it's flattening that scares mario draghi, so there are a lot of moving parts here. at the end of the day it's all really going to be defined by tomorrow's job number. then the weekend, two days to think about three central banks disappointing and whatever information we garner about jobs, jobs, jobs. >> rick, well said as always, buddy. thank you very much. so we've got europe, we've

got our fed, we've got flash crashes, we've got flash rallies and, oh yeah, we've got an election coming up? with all that, what is an investor to do? joining us the poet folio manager of the five-star fund and andrew bush, as well as a cnbc contributor. sandy, i'll begin with you. with everything going on, why should anybody buy stocks? >> you look at draghi made a lot of promises he quite didn't deliver on but i'm more focused domestally. you look at rock bottom interest rates, you look at falling oil prices, you look at a housing market that's probably -- maybe it's not going to zoom off but be l-shaped and maybe 1.5, 2% gdp growth to let us muddle along. i think it's a great opportunity to be an individual stock picker and find these diamonds in the rough. >> 2% gdp is hardly a ringing endorsement for a growing american economy and thus growing corporate profits. >> that's exactly right.

that's why the market is 13 times versus the five-year average of 14 and probably longer term 17 times so i think there's a lot of value here. if you find really good companies that trade at reasonable multiples, dominate their niche, you can find good values here. >> andy, i understand you weren't at all disappointed with the nonaction we saw today because you never expected anything to start with. is this the way we should be approaching our investment strategy at the moment? >> well, it could be. certainly we have been advising our clients ever since draghi made his comments that the ecb meeting was going to be a disappointment so we were not disappointed by draghi disappointing everybody else. we knew this was going to happen. so it's a question where do you go from here. europe is going to remain a problem. political decisions have to be made to arrest the slide of those stock markets, to arrest the fiscal debt crisis, and that's what you should take away from draghi's comments today.

yes, the ecp is preparing something, but they have to get the go ahead from the governments to do it. so that's the key thing. looking out over the investment horizon, though, there's a massive opportunity here in the united states, and it has to do with the u.s. presidential election. and the possibility for corporate tax reform. that's a huge thing, a huge upside for the united states. if it's done properly. that's where i'm excited about investing in this country. >> you say there is the potential for huge tax reform. i think there are a lot of people out there, andy, who would say that that's not really a huge likelihood. would you really be investing right now with that potential for something major to happen? >> i would. and it's a 2013 issue, it's not a 2012 issue. but certainly there's vast differences between president obama's tax plan and mitt romney's. obviously we'll learn more after the conventions, but looking at the analysis that we've done, romney's cut the corporate tax rate from 35% down to 25% but

eliminates the extra territorial nature of the u.s. tax code which will bring back about $1 trillion into this country. now that's just part of some of the potential that's there. president obama could come out with a similar plan, that would be great. but both leaders on both sides of the aisle tell me that this is what's happening. i think that we're going to see something happen in 2013 and that's why i like investing in the united states. >> sandy, i'm getting depressed talking about all this europe stuff the last couple of years so help us make money. give us a name or two quickly and we can bank on it. >> one name i like a lot is constant contact. these guys provide their customers with e-mail marketing, event marketing and their customers can use facebook, twitter and linkedin. earnings have been growing 25% and it's been beaten up the last three summers. you can almost look at a chart and see.

based on their current weak environment. when you look into the fourth quarter and the first quarter, that's when investors start to buy this again. i want to buy this before that happens, so i think a really good stock. $100 million in cash by the end of the year. i think it will work well for people. >> okay, thank you very much. sandy, andy, great to have you on the show. general motors meantime is a teenager again on wall street. the headwinds in europe hammering the bottom line. but we want to know how does the new gm stuck up here in north america compared to the old gm before it went through bankruptcy. philip is joining us with that. phil, make a comparison here. how strong is gm now compared to how it was before it went into bankruptcy? >> well, there's no comparison, amanda. take a look at these numbers and you have a company that's very profitable in north america versus one that was hemorrhaging money literally every single day back in 2008. overall earnings for the company, look, in the second quarter of 2008, they lost $15.5

billion in one quarter. this quarter they made $1.5 billion. instead of losing $4.4 billion four years ago, they made $2 billion this year. so that's the bottom line there. but in terms of the guts of the company, the production, market share, workers, look at the change here. production, it's a little bit more now. market share has dropped a bit due to competition. but then look at the bottom line here for workers. there has been a dramatic reduction in workers in part because they have closed three final assembly plants and a number of other facilities here in north america during bankruptcy. finally i want to look at dealerships for general motors because this is becoming a hot button issue during the campaign. did gm have to close these dealerships? it had 6375 back in 2008. today it has roughly 4400. remember, some of those dealerships were pontiac, saab, hummer. those brands are all gone now, saturn as well. some of that happened there but some of it also happened during bankruptcy. that's what we're going to hear about the next couple of months.

did gm have to go through that bankruptcy. there's no doubt, though, it is a far leaner and a profitable company now. guys, back to you. >> and yet every single company has an achilles heel. i would argue that maybe europe si taj is the achilles heel. how much longer is it going to be a drag and how much longer is it going to have to post a loss? >> for quite a while. today the cfo told us on squawk box he does not predict when he thinks the losses will slow down, let alone break even. it's not just general motors but all of the automakers. the problem for general motors is that for europe they have been losing a little over $1 billion a year going back over the 12 years. they have lost $14 billion there. they're likely going to lose more than a billion this year again. europe will be dragging on this company for some time to come. >> thanks so much. let's get a market flash with mary thompson. >> we're taking a look at shares of prudential. the insurance company shares up almost 5% after the company came in with earnings that were

actually below expectations, about 21 cents. but unlike a lot of companies this quarter, it reported stronger than expected revenue and saw strength in its international operations and that's giving a lift to its shares, up 4.8%. up next on "street signs," rage against the machines. is it time for wall street to do a robot reboot and put human traders back to work? we're talking real-life people with a pulse here, mandy. >> we sure are. and also you'll meet the ceo of a company that's booming thanks to record-low mortgage rates. what does that say about our housing hope? find out when "street signs" comes back. ttd#: 1-800-345-2550

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shares of knight capital group getting hit hard for a second day. this after electronic trading glitches in its system caused price swings in dozens of -- actually more than 100 nyc stocks. stock is trading down 59.5% today. a lot of questions about the future of knight capital. of course that story continues to develop. meantime, the glitch, as it were, could cost knight about $440 million in losses, which leads us to the question of man versus machine. do we need to slow down a bit and put more actual real-live

human beings back on wall street. joining us joe saluzi, author of the book "broken markets." also with us joseph fox. joe saluza to you first. this is not high frequently trading.pparently it was a soft glitch. it's not technically a glitch. >> it's like you get run over by a train and you've got a flesh wound. i want to ask you, does this really put us back to the idea we just need more real-life human beings involved? >> first of all, yesterday was a terrible day for the market in general, right, and we feel obviously -- we're market participants. it's terrible what happened to one particular broker. there's a lot of good people out there and a lot of smart people that will feel the effect of this. so people have said you guys should be happy because you've been talking about this. no, absolutely not. we are concerned about the long-term health of the equity

market. bill gross talking about the death of equities the other day, he's kind of right but the reason why there is a death is we did it to ourselves. we've hollowed out the core. yesterday shows you that there is systemic risk built into this equity market. it pierces that thin shell of liquidity that we think is always there and it shows that hollow core. that's pretty ugly when you get down there. >> when you look at the volumes collapsing, joe fox i want to ask you, if we did have more humans back in charge, would that instill confidence, even though we know that humans make errors too? >> well, obviously we do. we're not infallible. joe, you have been screaming from the mountain tops for years about what's been happening with high freaks frequency trading. part of the issue is -- the big

mistake is decimalizing, going to decimals from fractions. this can put servers -- how in the world does a guy in toledo or poughkeepsie compete with that. >> joe fox, sorry to cut you off. i'll take the other side of that. this was not an exchange problem, right? this was a software issue at a market maker which then fired off what we know hundreds of thousands if not millions of orders, right? i'm not defending the exchanges, but this was not an exchange issue. >> this is not necessarily just about knight, though, guys. this is not just about knight. i feel for them obviously and i feel for their clients. but this is about the bigger -- you know, joe was saying 15 years, when online trading first started, it was great. we gave individuals the access to the markets, lower costs. but then the institutions took over and now while we open the door for them, they have access,

the individual, to the market, they get hit by a mack truck. so the knight issue is one small issue of a much bigger issue. >> the decimalization and the demutualization of the stock servers set the stage for what we have in the frankenstein market. >> there's years of regulations that kind of created this, but there's one thing, really one thing that really needs to be actually taken away right now the make or take model called where there's rebates. exchanges will pay you to add to their liquidity and then you pay to take away. this creates a distortion to the price discovery process. this creates a distortion of the smart order routers. this creates the dark pools for coming in. all of these various dark pools. why are there so many? because there are cheaper destinations and ping for order flow. it's this entire artificial game that's been created --

>> so what's the solution real quick. >> let me tell you -- go ahead, joe. >> no, you go ahead. >> i was going to say people like to say oh, these institutional traders, hedge fun have liquidity but it's a false sense of security. so what needs to happen is there has to be change, whether it's the exchanges themself have to be put back as a mutual, and i know that's a big thing. or a company has to say where they want their stocks traded. now, that would be novel. >> right. >> quickly joe, you mentioned the word "cheap" and that's what we always hear. do you believe that mom and pop would pay more, not less, to trade if they felt it was safer? >> yes. >> because we have a race to the bottom in execution costs on the retail side. >> absolutely. i can tell you -- we're not retail brokers, we're institutional. but our phone rings off the hook from retail people complaining all the time about this type of market. the corporate issuer needs to speak up and walk with their feet if they don't like this current market structure. yes, the cost of a trade is -- it's kind of explicit and

implicit way. people are tired of the shenanigans and the game. they would pay more to have a real market with real liquidity again. >> i'm going to tweet that out. would they pay more if they knew there were more humans in charge. >> i don't think the prices would go that much higher, though. i don't think it would go that much higher, it would be better for the customer. >> understood. thank you very much. just ahead -- >> all right, an alleged insider trading scandal that has us all shaking our heads. it involves google searches or yahoo! searches or bichng searches, an executive's computer and everyosearching th praise insider trading. "street signs" is right back. and win fifty thousand dollars. congratulations you are our one millionth customer.

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of housing hoping? sid, great to have you with us today. how much do you have to thank big ben? essentially how much do you have to thank record low interest rates right now for your performance? >> well, low interest rates obviously help increase volume in the industry, although we're still close to record lows in terms of mortgage volume over the last ten years. last year's volume was about $1,200,000,000. this is still well below the average of $2 trillion a year over the last ten years. but we're thankful for record low interest rates as well. >> you're obviously in an industry here that is gradually shifting from pen and paper over to software. i want to ask you, are you at the start of that cycle? are you sort of like a trail

blazer in terms of a shift to software in this industry? >> well, we've been around for about 14 years and we are viewed as the innovator in terms of automation of the mortgage industry. and, you know, the ellie mae solution is being used by about 30% of all of the banks and credit unions and mortgage bankers in the united states, accounting for about a third of all of the loans being written. so we were a trail blazer and we're thankful that we still remain at the forefront of automation in the industry. >> are you agnostic as to whether or not these are new money or new purchase mortgages or refis? >> absolutely. it doesn't matter whether it's a refi or purchase or fha or conventional mortgage or second mortgage. our software is used to originate all of those loans. >> who are your competitors? >> there are many, although we have 30% market share. our largest competitor has just

about 10% market share. and it's a very fragmented list of competitors that we have. there are probably 25 or 30 competitors that work for the rest of the market. thank you very much. coming up next, the team trifecta. while skinny jeans and jess sa simpson are moving today's market. and later on, the king of the water is underwater on his baltimore home. how much of a bath will michael phelps take on his place? we'll let you know when "street signs" returns. [ male announcer ] it's a golden opportunity...

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welcome back, everybody. it's "street talk" time. gap is really on fire today. reporting a really strong july. people just love those colorful

pants. >> you know, this is a heck of a turn-around, mandy. same-store sales up 10%. way above estimates. the stock is up 70% year to date. northern american sales up 13% since february. it has well outperformed. the gap was left on the scrap heap of stocks but it has been a heck of a year. >> i think this gain of 10% is the biggest gain since 2008. a couple of teen retailers are really taking it on the chin today. >> it's an interesting dichotomy here and it goes with the gap story, i guess. anner kraum f er kraubercrombie sales. a lot in europe. parading half-naked teens last year clearly not working. >> nipples froze off, snap. >> that's not a good thing unless you've got three. then you've also got aeropostle,

this is tanking. these two stocks are sticking it to a company that did not cut their forecast. in fact raised their guidance. mandy, that's american eagle. aeo actually raised guidance. i thought they all sold kind of the same stuff, but that stock is down. >> you better know because your daughter is going to be a teenager in a few years' time and you'll be spending a lot of money in a few places. weight watchers is really getting crushed today. what's going on with that? >> they cut their guidance. that stock is down 12.5%. over the past week it's down about 14%. they cut their forecast. a lot of concern out there too about these new weight loss pills that have been approved. they hired jessica simpson as their spokesperson or one of them. that clearly has not necessarily worked. credit swisse is defending the stock. clearly not as worried about the weight loss pill.

>> jessica simpson has a $4 million with weight watchers. she's got to lose another 20 to 30 pounds of her maternity weight by the end of this month. she gained approximately 70 pounds over the course of her pregnancy so she's got a little ways to go. it's a program, right? it doesn't send you the food. i don't know. >> yeah, i don't know. >> i think you've got to count your calories. >> they have points, right? >> yeah, you have points. that's it. yelp, we talked a lot about yelp on this show. it's actually doing pretty well today, 16% gain. i'd say that's a five-star rating for that stock there. >> five-star rating for that stock, but how do we know that's not a biased user review. revenues rose 67%. this company breaking out in a big way. sales and marketing, the biggest expense, did jump, by the way. this is something i just plucked out. their active local business accounts grew 113% year over

year so yelp's active local searches more than doubled in a year. sometimes yelp gets lumped into a lot of the social stocks. yelp has done very, very well today, up 47% over the past six months. facebook officially a teenager, trading in the teens now under 20 bucks. 1990 for one share of facebook. >> you know what, i have nothing to add. the stock has been slaughtered. black eye for wall street. over a billion shares will be unlocked by the end of the year. stocks down below 20. what else can you say about facebook? >> i think you've said it all. here's an interesting note on netflix. since the olympics started last friday, netflix streaming in the u.s. has fallen off a cliff. it is down 25%. the ceo predicted this would happen on his last earnings call apparently. >> people watching nbc, nbc

olympics coverage i think has been spectacular. comcast -- >> could not have been done better. >> i'm done with that. they said they're going to break even. ad sales have been strong. obviously ratings have been good so a lot of people watching and there's only so many hours in a day. obviously people aren't watching netflix as far as they are watching badminton scams. >> here in america is now the time to investment in the middle east. this is chairman and managing director for the artab group. it's great to see you. i was hoping you were going to be in studio today, my friend, but i'll talk to you no matter how we can. as an egyptian and as one of the visionary voices in the business community for the largest arabic nation in the world, where are we going to go now that we've seen the results of the election? what's going to happen to egypt and the 83 million people who live here?

>> first, it's great to see you and mandy, very nice to see you too. i hope i will be at the studio the next time i'm here but at least i'm here in new york and happy to be. the situation in egypt is very different than when you were visiting, brian. the situation today has moved into a whole dynamic. and the jury is still out in terms of how egypt is going to come back economically as it was prior to the uprising of january, 2011. we were growing at 6.7%. right now the growth is below 2%. so also egypt is suffering as europe is, as the united states is. we have our own dynamics. the political transition is taking much longer than what we had anticipated. but to be very candid, i'm still investing in egypt an i'm investing also in other countries that are moving in transition, so long as the signposts show positive reaction to what's going on. >> and you know when i was there we talked about the growth of

western brands, u.s. companies, not just oil and gas interests but consumer brands that have moved aggressively because the positive demographic profile of not only egypt but also north africa is under the age of 20. do you believe the economies will grow and justify more western investment? >> i have no doubt about that. some of them are going to take a longer period. some are going to require structural changes. some are going to require an acceptability of the political reality. but the movement is going to be a positive one, brian. and to a large extent i think the region can benefit from opening up very similar to what we have envisioned during the time prior to the uprising by opening up and breaking down barriers between countries, so that foreign investment that comes in not necessarily just looks at one market, but looks at multiple markets. >> real quick, how can american

investors invest in the middle east or even just egypt, and specifically what industries or sectors? >> several. the financial sector, the energy sector, the engineering sector, because there is a huge number of different industries that are building up, especially in areas that are serving infrastructure development, airports, roads. all that, i believe, presents a unique opportunity and my serious thinking also is not only the financial investment that is required, it's the expertise. because the capital exists in the middle east and can be utilized in partnership with the expertise that may come from the west. >> it was a pleasure to have you on the show. hopefully we'll see you in the studio next time. >> i look forward to it, brian. thank you. thank you, mandy. >> thank you very much. a huge drop in netgas today. sharon epperson is joining us. >> it looks like the biggest drop for natural gas.

this big drop after the energy department reported a bigger than expected increase in storage levels. now, storage levels are still increasing by far less than they did a year ago with a five-year average. we know there's been increased power demand and, therefore, that's been taking some of the natural gas stoenrage levels lor than what they were. but it was a big surprise and there was a big drop-off. the ung taking a huge slide. >> sharon, thank you very much. coming up next, another told you so moment for mr. herb greenberg and a frightening drop for today's disaster du juor. >> and we found something worse than watching dirty stuff on your computer. an unbelievable story of alleged insider trading that will make you scratch your head and go can anybody really be that foolish? we're back after this. the first trade route to the west, the greatest empires.

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i'm bill griffin. coming up at the top of the hour on "closing bell" we're all over this big market selloff. the continuing falloff from knight capital's trading glitch but a trio of exclusive interviews with those men right there you won't want to miss. they're talking jobs with the

ceos. that's all ahead at the top of the hour. we look forward to seeing you here from the new york stock exchange. in the meantime, back to you guys. >> thank you very much. well, today's disaster is monster worldwide. it is down 13% on earnings and revenue that was lower than expected. herb, you've been following this stock and it's not looking good. >> back in january of 2011 i was mentioning on air here that i thought maybe newspapers were doing to monster what monster is doing to -- what they are doing now to what monster -- social is doing to monster. what i think is interesting here right now is on their earnings call today, the company said nothing about social, but it did talk about price competition in its markets in the u.s. you can see this is what's going on. social is having an impact. they're trying to fight it there, but it's certainly not something that is not a commodity. >> is linkedin the biggest threat to monster worldwide? >> is it linkedin, is it facebook, who is it? it's a market who keeps evolving.

they have their own social now. but i think what you see today, $6 stock or so, is the result of lots of changes in that marketplace. >> all right. well, today's sunshine stock, med assets. raymond james sending that stock soaring. they upgraded to a strong buy. the stock is up 64% year to date or so. the past year it's up a little less, 25%, but mdas, small company. and the medical space, raymond james loved them, stocks soaring today. >> computers are a fad. i keep saying that and i'll believe it until the day i die. >> me too. herb, we've got to stock navistar. >> about the best you can possibly say for navistar is that vicki brian now says the possibility of bankruptcy may, and i stress, may be off the table. the company announced today it got a commitment letter from a bunch of banks for a $1 billion loan that vicki bryant thinks

are likely at loan shark rates. now, the loan was one of a number of things navistar announced. with the engine strategy back firing, they plan to buy parts for a more traditional engine from rival cummins. at the bottom of the news release today, navistar has received a formal letter of investigation from the s.e.c. over accounting and disclosure matters. all of this makes the ceo a key nominee for my worst ceo list this year. and green mountain, this one is for the books, guys. the company announced second quarter results and post guidance yesterday. that guidance was well below expectations. the company also said its hypergrowth days are over. its stock originally fell on the news around 11% after hours. but then during the conference call when there really wasn't any real news coming out of it, stocks started rising and rising

and today it's still rising. currently up, what is it, 30% or 28%? 24%. it's actually coming in a little bit. >> it's still down a lot year to date, right? >> you had $109 stock come down to $16 before the conference call yesterday so it was huge. some people think based on what the company says in its guidance that it's worth $30, that's assuming their guidance is right. >> can i ask you, they recently hired vue. is this going to help or too early to tell? >> way too early to tell. this is an increasingly competitive market and a very expensive product. >> thank you very much, herb. now, you want to know what is dumber than watching porn on your work computer? well, googling how to inside trade before you allegedly do it. eamon has the unreal details. what was this guy thinking? it's almost as if he wanted to give himself away, right? >> it's a very good question in this technological age that we live in. you'd think that you want to

cover your internet tracks. robert ramnarine was arrested at his new jersey home this morning. the insider trading case against him reads like a how to not do insider trading. take a look at the things that he allegedly searched on his computer before engaging in the trading. he searched can stock option be traced to purchaser. he searched illegal insider trading options trace. and he viewed an article called ways to avoid insider trading. the government says he did all this before engaging in insider trading himself. i can tell you that the criminal complaint in this case says that he made some of these alleged insider trades from his work blackberry. >> wow. what i want to know is who's writing these sites of how to insider trade, right? are they people who have been criminally convicted and have been finally let out, done their time and now they're teaching everybody else insider trading 101?

>> there's all sorts of weird stuff on the web, as you know, mandy, so i think you can finding it anywhere. but when you look at what happened here, so many of these insider trading cases, you see people are using disposable cell phones, meeting in secret locations, not calling each other. there's a lot of subterfuge that foez goes on in insider trading. it appears that this guy who was a bristol-myers squibb executive was insider trading ahead of that company's purchase of other firms, wasn't really taking any of the basic precaution that say we so often see. was doing a lot of this allegedly from his office and from his work equipment. so it was very easy for investigators to track down. >> even avon barksdale knew to use a throwaway cell phone, a burner as they called it on the wire. but wasn't this the gentleman that was in charge of their pension fund? >> yeah. this was a guy who was a treasury executive inside bristol-myers squibb. we have tried to reach out to him. he has no known defense counsel.

i left a voice mail for him. his work voice mail is still on. i left a voice mail for him a couple of hours ago. obviously with his arrest we don't expect him to be returning calls right away, but we'd love to hear from him and aer his side of this story because as you say there are two sides to every story and what we have right now are just the government allegations. >> it's a good story, though, whether it is true or not. we'll keep on following it. up next, you will not believe where home prices are rebounding. plus michael phelps' big flop, and this one not in the pool. and why are the hamptons empty this summer? robert frank shows us there are so many homes still up for grabs.

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so he might be the most decorated olympian ever, but he to a big hit in the real estate area. he bought a home back in 2007 for $1.6 million. he put it on the market for $1.42 but sold it for $1.25

million, don't worry about him though. all day we have been digging into the question should you buy, sell, or rent o house in this market. here on "street signs," it's opposite day, mandy is the tall one. >> robert frank is here. take us to the hamptons, where it's a pity party for the rich. >> usually by now it would all be booked up. according to realtors, there are hundreds of still available. we have a couple properties, maybe we're not going to show them -- >> we've got them, let me tell the viewers what happened. i was supposed to get go to jane wells. it's opposite day, i made a

mistake. robert -- we're going to compton now. it's all you, i destroyed the show. in the hamptons, talk about h p hampto hamptons, playground for the super rich. there are hundreds of homes on the market. we have a cottage which is for rent this summer, still available, three bedrooms, two baths, not much of a bargain, but the fact that it's available is news here. for a higher budget, we have this eight bedroom place, and it's $275,000 for a month. it's cheaper than the one that beyonce and jay-z are renting, that one is $400,000.

sales in the hamptons up 9%, the highest level in six years, so a lot of potential renters have purchased. there's still deals out there, maybe we could do a hampton's bureau. >> that would be great, we can skype in. let's get back to jane, how far have prices fallen in compton? >> here i am from the compton bureau, how far have prices fallen here, here is that report from 2005. all righty. it was a great report from 2005, because my hair was shorter, and i think i look better now, prices back then were well over $300,000. since then they have fallen nearly 50%. it is still 40% below the

current medium price in l.a. county, but prices are moving up, listen. >> you've got to get the place cleaned up, do the outside first. >> a house flipper is back in compton. compton is heating up in part due to foreign investors. >> since i started, they're up like 25% easy. now another flipper has bought and sold dozens of homes here, he used to did 20% cash on cash returns, and that's now down to 15%. >> the biggest challenge to my business model is sourcing the inventory right now in the right areas. there's intense competition for people who do exactly what i do right in this town. >> now cumins bought this house

and sold it for about $250. gains got an fha loan. >> this was our last resort. we went to other areas, but when we went to compton we were not too sure, but when i saw this house that was it, the yard is beautiful and the neighborhood is really nice. >> a lot of people are wondering compton may go bankrupt, will that affect utilities and the home market, most don't think so because they figure that's happening everywhere in california. >> by the way, we like your hair long, jane. harry potter trumped. why the boy wizard may want to whip up a horn spell. mamama

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