investors? in today's cover story, a battery maker gets taken down by bankruptcy. why former competitors are fighting for the leftovers. plus, a former market maker wants to help the little guys. advice for the average investor from a pro. scholorship tips from an entreprenuer who went to college for free. plus, can the u.s. dollar be compred to the best house on a bad block? first business starts now. you're watching first business: financial news, analysis, and today's investment ideas.

good morning. it's monday, october 22nd. i'm angela miles. in today's first look: october is living up to its reputation as a wicked month. friday was the 25th anniversary of the 1987 stock market crash, and history did not repeat itself. but as you can see on the screen, stocks took a beating in across-the-board selling by investors. it's round 3 - the final night of debates for the presidential candidates. tonight, president obama and gop contender mitt romney go toe-to-toe over foriegn policy. swiss voters plan to cast ballots on whether millionaires and billionaires from other countries should continue to get tax breaks while living there. and starbucks will open 2 more coffee shops in india this week, after opening its first shop last friday. what will today bring? everybody wants to know the answer to that question. ben lichtenstein of tradersaudio.com joins us on this monday morning. what a

sell-off on friday, ben. what are you watching technically here to tell you whether this is a buying point or a selling point? > > i'm keeping an eye on this big level of support right now in the s&p. last week we had a low in the overnight session, headed into the morning session down below that key level of support, which we've seen hold multiple times in day-session trade - we're talking 1425. but that overnight session low that we saw was 1416. now, we did see high-energy trade to the downside on friday, a continuation of the weakness that we have basically been seeing all week last week. but still unable to breach that major level of support, that 1416 level. so that's certainly going to be a level to the downside. up above, i think it's around 1435 or so. that's really where the energy started to come into the downside on friday. so, it's really 1416 to 1435 if you will, but most of the other major markets - the broader- based market, the russell, and the tech sector, the nasdaq - have actually already breached major levels of support. so there's a pretty good possibility those markets are leading the way right now. > > ben, what are your thoughts on the dollar? some corporations are complaining the strength in the dollar is hurting their earnings. > > for the most part i haven't really seen a lot of strength in the dollar if you will. relative to other currencies, like the euro currency, for example, with the euro right around that $1.30 level, the dollar basically seems parked at this 80 level. we're just below it

right now. i think kind of the 80-even level is the line in the sand, if you will, in many ways for the dollar. if it can get up above, i certainly would consider that to be bid or strong if you will. but anything below 80 right now seems to be a little bit weak. and i've heard the dollar recently referred to as the nicest house in a bad neighborhood, if you will. it's not really that investors are flocking to the dollar, it just seems to be a better safehaven from some of the others. but again, friday, the dollar was basically sideways, which was really unusual considering the high-energy trade that we saw in the s&ps to the downside. you would have thought you would have seemed a bit of a bid come into the dollar. but, holding levels below 80-even still. > > ben lichtenstein of tradersaudio. have a good trading week ben. > > thank you. less than a week after electric car battery maker a123 filed for bankruptcy, there is an apparent bidding war over its assets. in our cover story - why the scramble over a technology that many people believe has yet to still catch on? the massachusetts-based battery-maker a123 systems filed for bankruptcy, selling off assets to u.s. parts maker

johnson controls rather than complete a more lucrative deal with chinese company wanxiang. several sources believe it had to do with keeping technoly from leaving the u.s. "the management team wanted to control its own destiny and make sure the technology would be in the place that they wanted." johnson controls paid $125 million for a123's automotive assets and to keep the company operating during bankruptcy reorganization. wanxiang had agreed to pay $465 million for a controlling stake in the company. "a controlling stake would provide access to all of the propriety information." a123 was the recipient of u.s. energy department investment and defense department contracts. a statement from the company read: "we determined not to move forward with the previously announced wanxiang agreement as a result of unanticipated and significant challenges to its completion."

"those challenges came from congressmen opposed to the deal." more opposition came from members of congress. a123 received a $250-million federal grant. some analysts say the bankruptcy fuels debate over whether the government should invest in private companies, particularly those in emerging technologies. "in the long run, i think this is what's needed. more risks." general electric owns nearly 5% of a123 - an investment of 70 million dollars. but daniel holland, sr., equity analyst at morningstar, does not believe a123's bankruptcy will negatively impact ge shareholders. the number of deals involving venture capital funds is declining. according to dow jones venture source, the pace of deal-making fell 9% in the third quarter compared to last year. v-c investments dropped 32%. companies backed by venture capital money- raised a total of $6.92 billion.

a new study shows consumers are getting more comfortable in the economic enviornment. consumer confidence recently rose to a 6-month high in the latest survey from bankrate.com. "it actually got better. better relative to the past few months, and we can thank the better job market news, improving housing market and the strong stock market performance, all of that has been enough that consumers now feel positive again when it comes to things like job security and their net worth." the bankrate.com survey also shows 74% of americans are not inclined to borrow more money even though the fed is keeping rates at historically low levels. instead, americans are more interested in paying off their debt. wealthy homebuyers are taking advantage of low interest rates as they reach for risky arms to buy homes. at bank of america, "adjustable rate mortgages," better known as arms, reportedly account for up to 40% of private jumbo loans. rates on the 5-year arms remain around 2.82% on average, compared with 4.06% on a 30-year fixed-rate

jumbo loan. average home owners could be forced into foreclosure if rates suddenly rise, while lenders say high-net-worth homebuyers can afford to take the risk because they can quickly pay off the house. you can now put more money away for a rainy day. next year, the irs will increase the maximum level of money employees can add to their 401ks tax free. it will rise from 17,000 dollars to 17,500 dollars. a state by state check shows unemployment rates dropped in 41 states and the district of columbia last month. unemployment rose slightly in massachussets, pennsylvania, west virginia, vermont, oklahoma and mississippi, while remaining unchanged in virginia, new hampshire and maine. the state of nevada has the highest rate at 11.8%. the national unemployment rate was 7.8% in september, the lowest in 4 years. greece is expecting its bailout will come just in the nick of time. prime minister antonis samaras said on friday that he

is confident greece will receive another round of bailout funds by mid-november. the country expects to run out of money november 16th. after meetings in brussels last week, samaras says e.u. leaders have applauded greece for making progress with its finances. in an update to a story we've been following, hmx group has filed for bankruptcy with a plan to sell its assets to new-york based authentic brands. hmx lists assets as less than $50,000 and a debt load of more than $50 million. hmx group is the parent company of both the hickey-freeman and hartmarx clothing brands. the union representing the company's garment workers told us late last week that they will do whatever it takes to keep hmx from liquidating jobs along with company assets. in what's being labeled one of the worst cases of child labor violations yet in a chinese factory, reports say foxconn employed children as young as 14 to manufacture nintendo's we- u. nintendo is investigating. a spokesman confirms to the wall street journal the plant makes parts used in the videogame

console set to launch november 18th in time for the holidays. prescriptions without permission are being probed. the nation's second largest drug store chain, cvs, is under investigation for allegedly re- filling prescriptions and then billing insurance companies for those medications despite customers never ordering the drugs. cvs is also accused of enrolling customers in an automatic prescription renewal program without their consent. cvs maintains that they require customers to give permission before a prescription is refilled. a popular sunscreen is being recalled after some users have caught on fire. some spray-on ultra mist sunscreens by banana boat are being taken off the market. the company says the lotion can catch on fire when exposed to open flames. 5 burn cases have been reported. 20 million bottles of the sunscreen have been sold since 2010.

in corporate earnings, mcdonald's missed on earnings for the second quarter in a row. the burger chain blamed weakness in europe and china. at ge, revenue edged up 3% to $36.35 billion, falling shy of wall street estimates partly because the company repaid $3 billion to warren buffett's firm, which invested in ge during the financial crisis. google has yet to recover from its earnings miss last week and early awkward release. the stock fell well below $700 friday. you are not alone if you have your heart set on dressing up as big bird this halloween. thanks to mitt romney's debate line about cutting funding for pbs even though he loves big bird, the muppets' big yellow feathered costumes have been flying out of stores. creative trick or treaters are said to be making their own with yellow construction paper. still to come, a former trader takes his skills to the airwaves. that's later. but first, student debt has hit new highs. our next guest will

tell us how even the average student can find a grade-a scholorship. bill moller has that next.

ensive college has gotten? the middle class is being priced out. parents have to plan early, they need to hustle for any means to bring a college education within the budget. ben kaplan is an entrepreneur. he's been through the process. he's got a model that really helps families make it. he wrote the book 'how to go to college almost for free,' and he runs

the company cityofcollegedreams.org. let's talk scholarships. doesn't every parent hold this dream that there's got to be a scholarship out there for their perfect kid? > > that's right. great to be with you bill. you know, that was the dream actually of my parents not too long ago. i had grown up and played competitive tennis. always assumed i could go to school on a tennis scholarship. i got an injury in my back and needed a different way to pay for school, and i discovered there are corporations, foundations, associations, community groups that all reward different scholarships. and the key is, this isn't just for those with high gpas, this isn't just for amazing athletes. so i personally applied for three dozen scholarships. i won two dozen of them and the accumulated $90,000 in scholarship money. it got me into harvard and paid for almost everything. and i've seen thousands of other families do it too. the key is, you have to be proactive, and actually right now is the major scholarship season. the fall of each year is a great time to search for scholarships.

> > but aren't there all these find-a-scholarship websites and services out there? they're all over the internet. > > there are, and actually people kind of use them incorrectly. there are these internet scholarship databases. what you do is you fill out a questionnaire. it's kind of like, if you've ever been on a dating site, where you fill out the questionnaire and they try to match you with a date. this time they try to match you with a scholarship. there are about 12 to 14 pretty good free ones. but the mistake people make is they search one and then they stop. none of these are national clearinghouses, none of these are comprehensive. so you have to search multiple ones, and you have to vary your criteria multiple times. for instance, if you're interested in physics, you might turn up a scholarship for physicists. but that doesn't mean you going to also be matched with a general scholarship for scientists. vary your criteria, and actually you can link to all these at my website, cityofcollegedreams.org. > > when should parents start this process? > > this was surprising. if i could do this all over again, i would start as early as middle school. seventh and eighth grade. because there's actually learning programs that have scholarship money attached. for instance, toshiba has a

scholarship for grades k-12. that being said, it's never too late. certainly junior and senior year is prime time to do this in high school. but also college, graduate school, and even adults going back to school. for instance, talbot's, the women's clothing store, has scholarships for women who have been out of school for at least 10 years who want to go back. so the key is, start now, start right away, wherever you are. > > are you looking for full- ride scholarships, or are you just sort of cobbling together a collection of scholarships? > > i like your word "cobble," because the scholarships that i loved were the small local scholarships that were only a couple hundred dollars. i won 24 of these scholarships. i love those awards because hardly anyone applies for them, and there's a snowball effect. you win the smaller ones and they help you win the larger ones. so, don't neglect the small ones. you can put these together. and also, all of the awards i won were portable, meaning i could use them at the school of your choice. you don't have to sacrifice school choice or the best fit school solely for financial circumstances. > > i've got a 13-year-old. i'm going to go home tonight and get right to work. ben kaplan, thanks so much. > > great to be with you. thank you bill. still ahead, how a former trader aims to help the outsiders manage the markets. that's next.

the general public is becoming more savvy about the stock and options market. much of that has to do with the financial news shows that give you the real deal on how traders think. this morning we are so pleased to have tom sosnoff of tasty trade on our set this morning. good morning to you. > > hi angie. > > similar to us, you are trying to level the playing field and give insights into what traders are really thinking about. and you started up tasty trade. but before that, you were an options trader. tell us about that. > > i was. i was a market maker on the floor of the chicago board options exchange for about 20 years. > > from there you started up an options firm. > > we started up a firm called think or swim, which turned out to be one of the largest online brokerage firms specializing in

options. > > and wouldn't you know it, td ameritrade came a-knocking, and they were very interested in what you had to offer, and they purchased your company! > > yes. > > for what, $700 million? $600 million? > > $750 million. > > not so shabby there. > > it was ok. > > are you using that money now for your financial online news network? > > yes. and we're having some fun with it. i wanted to have one more stop in life, and i wanted that to be to build financial content. > > you really bring an entertaining look into finances. when you're on the show, you are so full of life. is that what's attracting audiences to your show? > > i think it's a combination of the energy that we bring, because it's a fun group of people, but i also think it's the content. we are delivering a message about finances, personal finance, but without any of the fear, without any of the news, and without really any of the markets. it's really a discussion about actionable, investable ideas that you can do, like, tomorrow. > > that's great. and what do

you think your future plans will be? is this it for you? > > this is it. > > this is it. you're loving it. > > i'm going to do this until i can't do this anymore. > > that's terrific. and what about the current condition of the financial market? what do you think is really going on here? > > i think that, to me, there's no difference today than there was in 1999 or 1989. i think what we're seeing here is, we're on the doorstep of something really special happening. i'm not negative at all. i think we're basically in our infancy and are about to go to the next level. and i think the markets have become so efficient, they have become so tight, so efficient, so logical and so electronic that i only see the business growing exponentially over the next decade. and i see the financial markets responding to that. lots of new customers, lots of new participants, amazing technology, people taking over their own investing. so i think we're going to explode. > > it's good to hear some

positive thoughts once in a while. good to have you on the show. that's tom sosnoff of tasty trade. > > thank you. just ahead, postioning in apple stock ahead of the ipad mini release tomorrow. and, is facebook a shorting opporutunity ahead of earnings? chart talk is coming up.

andrew keene is here now to talk about a very talked-about stock, and that is facebook. good morning to you. > > good morning angie. > > just the other day we had a trader on the show, and he mentioned that he was comfortable owning this stock at $16. what do you have to say? > > well, first of all, the stock's not trading at $16, and it's trading close to $18.50, and that would be under the all-time low. so i would say, yeah, i would be happy owning apple at $500, but when it's trading $620 it doesn't really make much sense. but anyway, i don't feel comfortable owning

facebook at any price. they have earnings later this week. the stock looks rotten. the ipo price was $38, it couldn't hold $38. then it couldn't hold $30. then it couldn't hold $25. now it can't even hold $20. the 52- week low, the all-time low, is $17.55, so that will be a key level. i think it's going under $15 to be honest. if google cann't perform and has problems on revenue because of mobile, facebook is in a lot of trouble, a world of hurt. i think it's headed lower. > > will you be shorting the stock? > > yes. i like to see a little bit of a run-up in the stock. we had a very, very strong down day on friday. facebook really didn't perform. we also have the november date when 1.5 billion shares are released that people can start trading that. that means they're going to push the stock down even more - we saw it pushed down in the first thing. so i'll be looking to short it. what i like to do on weak stocks, i like to look for a rally and short them on a rally. the zuckerberg rally, when he came out and said he thought things for mobile were going to be good, that should have been my opportunity to short. i didn't get in there. if it gets to this $20 level, i will definitely short it. maybe a dollar stop. but i think it's going down to $15. > > would you short apple ahead of the mini ipad? > > not ahead of the mini ipad. however, i will actually, for the first time in maybe my life, have a short position on for earnings. i haven't

established that. that will be through options as well. apple always implies about a 6.5% move on earnings. they have earnings in i think about a week, week- and-a-half. so that's implying the stock's going to move probably around $30 on earnings. i will put on a short position. we've seen earnings very, very weak. we've seen some companies report good earnings, but google is selling off. microsoft, selling off. alcoa, selling off. coca-cola, mcdonald's. everything you can possibly think of. yeah, we've had some stocks rally, but for the most part, it's down, down, down on earnings. i don't think apple is going to beat their numbers, especially with those foxconn riots in china. i think apple is actually headed lower. > > andrew keene, president of keeneonthemarket.com. have a good trading day andrew. > > thank you. have an excellent monday! from all of us at first business, see you tomorrow! a chill settles over the market. will the month of october turn

san mateo bridge is back in business ahead of schedule. we will tell you why cal tran has more good news for commuters. flooded freeways and spinouts as rain moves into the bay area. we'll tell you about the spots you need to watch out for. giants fans celebrating this morning but the team still needs one more win to go back to the world series. we are counting down to game seven. it's all ahead on the ktvu channel 2 morning news.

thank you for joining us on this monday morning october 22nd i'm pam cook. raining most of the night. steve, will it be with us oleate? >> off and on. mainly for the morning hours, yes. heaviest rain has been to the north bay. there is a fine line between decent rain and light rain. and that line will continue. mainly north bay again where the heaviest totals have been. there is plenty upstream. we'll have a wet morning. highs in the 60s. here is sal. steve, good morning. right now traffic is going to be effected by the wet weather. as we look at the san mateo bridge you can see traffic is moving along very well there. also the morning commute is moving along very well on san francisco northbound 101. be careful there is flooding out there. and east 80 at 7th you will see traffic coming to a standstill because they are repairing sand barrels there that were hit overnight. just be careful as you drive through the bay area