ck up the phone and change your life. that's 105 meals free. call or click now. a year after the dow's worst single day point drop, and what's changed? what's improved? why is our financial system mired in the status quo? the price of a public option. senators are duking it out on capitol hill today. two of them proposing a plan for a government insurance plan. as always, the big question is what will it cost? the fed's announcing new rules governing credit cards. will it help you as a consumer? >> people in college are supposed to be smart. do students need written rules about not having sex while your roommate is present? apparently they do. this is tuesday afternoon. i'm melissa francis. >> i'm contessa brewer.

the senate finance committee could vote on a public option at any time. >> the committee just came back from recess after a morning of debating the pros. both sides spent most of the time arguing whether this is a government takeover. >> the horrors of a government-run plan that you elicited in senator rockefeller's amendment, you're supportive of medicare. i just don't understand the difference. >> it will come to a single payer. that denies the american people choice. >> m r nbc's kelly o'donnell joins us live. what were the expectations for this vote? >> reporter: the expectations from democrats who've been counting votes privately, they expect that the rockefeller amendment and one coming from senator schumer will both likely fail in committee. the vote wasn't so much the goal. of course they'd like to pass it. but the real goal, they tell me, is to force a debate all over again. we haven't heard public option lately. today that's what we're talking

about. and that's what they want. to try to outline what they believe should be in an ultimate bill. democrats who believe in a public option think that there's been too much expectation of it failing and kind of falling by the wayside. today they wanted to really put this to a vote so they can hold the members of the senate on this committee accountable, force them to cast a vote and to say things publicly about it. and to use that to build down the line. so it is likely not to pass this committee, because the makeup even among democrats is more conservative here. and those who favor public option, rockefeller, schumer and others, really use this as a way to try to fight hard for something they believe in. >> all right. kelly, thank you. joining us now, linda douglas, the white house office of health reform. she's in that office. linda, this is the fifth day of the markup by the senate finance committee. how does the white house feel about this work? >> very, very positive. they are clearly making progress. there are, as you know, already four bills. this is the fifth one.

they've all got common features. they all expand coverage, make coverage more affordable for people who can't afford it now. they all have strong consumer protections. the insurance company can't deny you insurance just because you've got a pre-existing condition. there's stronger prevention, money for more primary care doctors. there are 80% in common among all these bills. this bill is moving along on that track. we're feeling very optimistic about it. >> we know the house says that it's moving along on a bill as well, but that it won't come up for a vote until it's ready. when steny hoier was asked about what's in or out, especially regarding the public option, he says it's all still in flux. do you see this in any way as going back to the drawing board and lawmakers trying even harder to make sure the american people get what they expect zpl i certainly don't think it's going back to the drawing board. we are definitely closer than we have ever been in decades to achieving health reform finally that's going to lower cost and provide affordable options for people who can't get health

insurance. as i just mentioned, 80% agreement among these bills now. certainly there are points they're going to be working out amongst these congressional committees. but these are bills that are built on president obama's principles. and this is legislation that is now moving toward enactment for this year. members understand from talking to their constituents that doing nothing is not an option. the public expects them to finally relieve them of high costs. that's what they're moving toward doing. >> linda, another hot amendment, byron jorgen has an amendment to allow prescription drugs to be imported from canada, europe, new zealand and japan. critics say it would break up a deal the white house made over the summer? >> certainly the senator has a strong feeling about this. it is extremely important to lower the price of prescription drugs as part of health insurance reform. the white house and senate finance committee and pharmaceutical industry have an agreement to have the pharmaceutical industry

contribute $80 billion toward health reform. that's money that will lower the cost of prescription drugs for seniors. it is money that's going to help make insurance affordable for all americans and lower costs. so $80 billion is a commitment that the insurance industry has made so far. it's a good deal. >> let me ask you about senator widen. one of the things that he and a lot of others have been critical about with some of these democratic plans that it doesn't allow people, doesn't give them any room to maneuver when it comes to picking their health insurance. let me play what he said about making sure that employers who are already paying for health insurance are subsidizing if their employees want to go somewhere else to pick insurance. here's senator wyden. >> all we're saying is if your plan is not offering good coverage, and we give the employer right at the get go to take care of this, if the employer offers choices, the the employer offers a lost cost plan, that's the end of it. >> if they don't or if the

employer is offering insurance that doesn't cover what needs to be covered, should people be allowed to buy their insurance from the exchange and use the money that their employer otherwise would pay the subsidy they're getting to go pick their own health insurance? >> right now all of the bills are built upon your existing employer-sponsored health insurance system. that is one who people who work and get health insurance through their employer like in this country. many americans want to be sure they essentially keep the kind of plan they have right now through their employer. right now this is built upon our existing system. >> right now as it stands as an employee of ge, i get a very limited choice of what i can choose for health insurance. snf in fact, it's changing. what i can choose -- if i don't like that plan, why can't i take whatever money ge is paying for my health insurance and go to the health exchange and use that money that otherwise ge would be paying to our health insurance company. >> you know, right now, as i

mentioned, what we want to do is start with building upon the employer-based system. this is a system that works for many americans. this is a system in which employers are providing benefits as part of the compensation that you get for work. by the way, this is compensation that is growing and growing and growing as health costs continue to rise much faster than your wages. but this is part of the compensation that people get at work. this is the system that we build upon now. the health insurance exchange is for people who don't have health insurance who are forced to buy on a private -- >> so you're answering no. is that what you're saying? it sounds like you're say nothing to contessa's question? >> no. what we're looking at now, these bills are all evolving. there will be amendments coming forward. there are going to be discussions of specific provisions. but what we're talking about right now is that people who go into the insurance exchange will be those people who don't have health insurance, people in private markets. >> so it's no. >> people with small businesses. i'm not going to negotiate with contessa here in terms of how

all the provisions are going to unfold. that's where we're moving now as we build upon the current employer based system. >> all right. thanks so much for joining us. >> thank you. we're hearing from some of you about your stories, dealing with the health insurance system that linda douglass just described. today we get real with an msnbc viewer who e-mailed us. we are a middle income family with health insurance that costs around $1,000 a month. a few years ago i came down with a liver disease which needs a transplant. my insurance ruled pre-existing. a doctor recently confided to me that they would never waste a liver on me because my insurance company and bankroll weren't enough. my wife and i came to the conclusion, we have two teenagers, that we wouldn't throw good money after bad. i would go gentle into the night and the kids would still be able to go to college and my wife could still have a house, a good plan, considering. my wife was just diagnosed with a rare form of cancer. now we have little choice. our families are wonderful. now we're choosing surrogate

parents. we're worth more dead than alive. the insurance company has never paid for much. they're ahead of us. instead they pay a small portion of what they owe and in the same envelope give you an objection form under their auspices. that is by definition futile. this country is the worst. the senators and other legislators have a cadillac health plan paid for by us. why are they worth more? remember. if you want to get real share your story or opinion. reach me ve va facebook, e-mail or twitter. today is the anniversary of wall street's biggest one-day drop. the dow closed down 777.68 after the house voted against the $700 billion bailout last year. >> today we have a mixed bag of economic news. consumer spending takes an unexpected hit, dropping this month. it seems job security worries are keeping americans from shopping. that raises concerns about the

upcoming holiday shopping season. >> people could be on the job hunt longer. a new survey shows many are not ready to begin more hiring or increase capital spending. 40% plan to cut jobs. but a majority expect sales to rise over the next six months. the housing market inches up to recovery with the home price index rising 1.2%. overall it is still down 33% from the peak of mid-2006. looking at the boards right now, all the major indices are in the negative right now. the s&p was positive just a short time ago. it, too, has turned just barely negative. the dow down 23 points. >> joining us, russell pearlman, a senior market editor for "smart money" magazine. when we look at the day a year ago when we saw the dow plunge 777 points, how much has changed since then in terms of governing our financial market? >> certainly we're seeing a lot more government intervention here. the majority of this fall happened around after 2:30 in the afternoon, after the house

had voted down initially the $700 billion bailout plan. then we saw the market fall completely. look what's happened since then? we had that $700 billion plan taken over. aig has been effectively taken over by the federal government. general motors has been taken over by the federal government. >> you're talking about intervention. i'm talking about governing the financial industry. are there new laws that would protect us, the taxpayers, from this happening again? >> right now the only laws that are going into effect in january are these new credit card restrictions. stopping what certain type of marketing techniques for a credit card. towards financial reform, that's kind of the next shoe to drop assuming we ever get health insurance reform, yay or nay, out of the way. i assume that's going to be the next big issue to come forward. >> let me ask you some of the economic issues of the day. the ceo survey was interesting. it showed even though the majority of the ceos think their sales will actually improve in the next six months and in the current quarter, 40% of them

said they think they will have fewer people on the payroll. that means that a lot of ceos are still planning on laying people off. that's kind of a surprise. we thought we had turned the corner there a little bit. >> yes and no. not really much of a surprise. what's the one thing ceos, what's the worst thing they can do. lay people off. what's the second worst thing they want to do? rehire people. >> why do you say that? >> because it affects corporate profit. that's why i think we've only seen the market from last year since this huge down fall we saw a year ago, the dow is actually only down 6%. which is a huge roller coaster ride. we saw all these layoffs and they haven't hired more people. they're going to be reluctant to hire people until they can see several quarters of sales increases. >> everyone would say it's a vicious cycle. if they're not going to hire how can consumers go out and spend if they don't have the job. this is the chicken and the egg. >> we're going to finally have to see banks be willing to lend

to ordinary people. you're right. we have not seen that. we're starting to see at the corporate level, you're seeing banks occasionally lending to people. lending to companies. but at the individual level it's still really tough to get a mortgage, really tough to refinance a mortgage. until you see banks being willing to do that, that's going to be -- >> people are out of work. they don't want to take the risk. you can kind of see their point of view. why would you make a home loan to somebody that doesn't have a job. it continues in this cycle. >> it's going to be that cycle between fear and greed. i hate that cliche. at some point a banker is going to see i can actually make money loaning to these people and finally start loaning the money. we'll see the economy will turn around. we're not in a depression forever. >> thank you so much for joining us. >> thank you. we're following breaking news right now. a 7.9 magnitude quake has hit american is a mo ya according to the u.s. geological survey. it was 120 miles southwest of that remote pacific island.

the bad news. now there's been a sue ntsunami warning issued for small pacific islands because it is such a large earthquake it would be capable of causing a tsunami. that's the warning. we're keeping our eye on this. if we get any more reports of damage from the earthquake or reports of an actual tsunami we'll bring that to you asap. the fbi says it's watching three other suspects who may have helped najibullah zazi with his alleged u.s. bomb plot. showing him where to buy certain chemicals and even consulting the bomb making recipe. zazi appeared for the first time in a new york federal court today. he pled not guilty of charges of conspireing to blow up targets in the united states and was ordered held without bail. prosecutors believe zazi took a bomb making course in an al qaeda training camp in pakistan. the fed proposes new rules on credit cards to better correct consumers. we'll tell you how it affects you and your bank account. plus, java giant starbucks

rolls out a new cole of joe across the nation. will it be an instant success? a growing movement of bloggers who are betting on the dow's demise. completely. they think the dow should drop to zero because it would force the financial system to re-invent itself. that's an interesting prospect. access to favorite courses chef's meal with pommes frites perhaps a night at the theater with extra special seats additional hotel night, our treat your world in perfect harmony: priceless look for world on your mastercard to get rewards and offers that matter to you. it doesn't cover everything. and what it doesn't cover can cost you some money. that's why you should consider...

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all right. now to our money minute. are the dollar's days numbered? according to to head of the world bank the dollar will likely start to lose its place as the world's dominant reserve currency. the president of the bank

forecasts other currencies like the euro will start to gain ground as an alternative for financing international transactions. they've been saying that for a while. i don't know. >> the federal reserve is proposing new rules to protect consumers against ridiculous hikes in their credit cards interest rates. >> the proposal would bar companies from increasing rates during the first year the account is open. with us now, carmen wong ulrich. cnbc's personal finance expert subpoena this going to cover it? is this a good proposal? >> it actually is the fed implementing, policing, the card act which is in law. the credit cart accountability responsibility act. that was passed in the spring. police need to come in and enforce it. that's what they're doing. basically they're enforcing parts of the act which include, for example, that you cannot change your interest rate for the first year that you have your card. only under certain circumstances. for example, you're late by 60 days. also, no more cards for the under 21 sets. you have to have a cosigner gl that's a good idea. >> that's really a good idea.

growth in their industry of piling on credit card debt, especially for college students. also, you cannot overdraw or overrun your account. here's the thing. right now back in the day, you'd get declined if you went over your limit. now they let it go through and they pile on tremendous fees. that's going to be banned. >> that's for credit cards. that's not for banks? >> no, no. this is for credit cards. there's also regulation coming into effect for debit cards and such. for the credit cards you have to authorize you can overdraw your account first. now there's no preauthorization, they'll just do it. >> this was actions the fed -- it's not like they're doing it on their own. they were required by congress to take this action, legislation that was passed earlier this spring and signed by president barack obama. we saw this revolt last week. the lady went on youtube and was just raging against bank of america because they had hiked her credit card rate up to 13% almost up to 30%.

now bank of america is going back to her and saying, okay, we'll put your rate back where it was. it sounds like this legislation, though, is only going to protect people for a short period of time. it's not going to be never ending protection. >> that's why some people in congress, including barney frank, are trying to implement these changes as soon as december 1st before the holiday shopping season when people really pile on the credit card debt. what the banks and lenders are doing, they know all this reform is coming on february 22nd of 2010. they're going to pile on as many changes, expensive changes, to us as they can between now and then. >> but the problem is is that the fed's going to police this? they've got a lot going on. this doesn't really seem like a fed type thing. who are you going to complain to? >> this is going to be very well regulated. it's also going to be part of an amendment to the truth and lending act which is really heavily enforced. we saw in august actually some things went into effect. for example, 45 days you have of notice they have to give you if they change your account. and the billing cycles, they have to give you 21 days. they were giving some people a week to pay their bills. some of these changes are going

into effect. they will. we want to see them sooner. because as we see from the youtube reports and from myself going to 17.9% on no balance, these changes are coming on right now. it's very expensive for the american consumer. >> i'm not really for rules that don't allow an 18-year-old to be an adult. anything that's -- i think if you're going to be an adult at 18 -- i had my first card at 19. it helped build my credit. as long as you manage it right. >> that's a good point. that's a fair point. starbucks is handing out ten of thousands of free samples of its newest product. get this. it's instant coffee. >> you're so excited! i can't believe it. >> it goes against their brand, i think. whatever. something hard core coffee drinkers most likely would not touch ever. starbucks is hoping via will help give its bottom line a boost. >> i tried it. >> did you like it? >> before my kitchen was installed in my house.

>> because you were december tr -- >> it's kind of powdery. gets all over the place. it's very messy. >> that was a great little tidbit from contessa. [ birds squawking ] [ moos ] [ man announcing ] if you think about it, this is what makes theladders different from other job search sites. we only want the big jobs. welcome to theladders. a premium job site for only $100k+ jobs and only $100k+ talent. i live in northport, alabama. i'm semi retired and i'm here to tell a story. my parents all smoked. my grandparents smoked.

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the urges weren't like they used to be, and that help me quit. (announcer) talk to your doctor to find out if prescription chantix is right for you. big earthquake to report here off of american samoa. it is a 7.9 earthquake there that has hit. as a result, we're looking at a tsunami warning for new zealand, american samoa and some of the other small pacific islands. again, 7.9 earthquake that hit about 120 miles off of american samoa. we'll stay on top of it if we learn more about any damages or injuries. new developments in the kayly anthony murder investigation. florida prosecutors have released about 1,000 pages of

documents in the case against the child's mother, casey anthony. a forensic report shows there was one hair found in the duct tape taken from caylee anthony's body. and it's not from casey. it's from an unknown person. there were no hairs found from her mom, casey. according to the papers, there's also dna on the duct tape. again, that does not belong to casey anthony or to the little girl, caylee. new today in the multimillion dollar john travolta extortion trial, the actor's attorney allegedly got the threat firsthand and is expected to take the witness stand in the bahamas. john travolta is expected back on the stand tomorrow. in the meantime, a travolta security employee has testified that a paramedic treating jet travolta in the hours before his death threatened to release a private medical document unless the movie star forked over $25 million. "tonight show" host conan o'brien is talking about this onset accident that sent him to the hospital. ouch. he was racing actress teri

hatcher during a taping on friday when he slipped and his head bounced off the concrete floor. >> in that moment, i just saw stars. but i tried to keep going. >> yes, i know. i know. >> so i think we have -- and i don't even -- honestly don't remember this part. but i guess i threw -- i tried to stand up and i couldn't stand up. i tried to throw to a replay. which i did. >> yeah. >> so, you know -- >> on autopilot. >> i'm on autopilot. >> wow. announcer andy richter rushed o'brien to the hospital after it was clear he was disoriented. doctors treated him -- >> did you see how hard? it was so quick. >> think they need a rubber floor in his studio like a children's playground? >> affable thatobviously that's

play really well on high definition television. stop racing teri hatcher? >> no, no. investors are hoping the dow hits 10,000. one group wants to see it hit zero. we'll look at the bloggers who want to bring down the financial system. connecticut police nab a female bank robber who hit six different banks in six days. that's what the police say. we'll tell you how drugs may have played a role. n%n%n%n%n%n%.

call or click today.

welcome back to "it's the economy within" on msnbc. check out the boards right now. we are one year past the historical low one-day drop of more than 777 points. we have turned positive there on the s&p during the break but can't hang on. just flat. voices rising from the ashes of the past year's turmoil. >> financial bloggers are attracting attention like never before, influencing even the

white house and capitol hill. joining us is a contributing editor for "new york magazine." his latest piece explains this very powerful trend among bloggers in the financial world. tell me how much influence they have. >> the latest we've seen is one called "zero hedge." it brought up the issue of flat trading. which is sort of high-speed computer trading. as a possible way that big banks were manipulating the markets. he was the first to mention it in blogs and to focus on it. eventually hit the front page of the "new york times." senator chuck schumer of new york read that article and -- >> it's not like he broke the story, that no onecy trading wa. people in the industry for sure knew. the difference was, i guess he brought it to a whole new --

it's debatable whether or not. i've heard both side of the debate about whether or not it's fair. whether or not it should be banned. >> it may have been politically expedient because people are looking for -- there's pop list anger for regulation. this looks like a target for it. he bounced on it. it made some noise. >> yeah. he got some action. here's the interesting thing. what he writes ends up influencing big media which influences big government. the curious thing is, doesn't this guy with "zero hedge," really he's aiming for the dow jones to hit the zero mark while the rest of us are hoping it goes up to see an improvement in our 401(k)? >> he's a very, very bearish person. >> i would say an anarchist. >> he has elements of that. he's more radical and extreme than other financial bloggers. he's probably the extreme end of it. >> is that the people you want influencing big business and big government? >> not necessarily. but that's maybe -- we're in an environment where that's the most effective way to make noise

and get it into the ear of these politicians. i'm not saying it's right. the thing is, he's drawing a huge amount of readers. because what he's really exploiting is emotion. there's like an intense anger about what's happened in the last year. and a distrust of the government's bailouts and these big banks. he's sort of chaneling that for good or ill. >> the flip side of that, the thing you have to be careful of, we all remember during the dot com craze people would go into various chat rooms and say i know this about this stock. maybe it was good information. maybe it was inside information. you would go on the web and get ideas and maybe make money off of it. until you realize that person was in there maybe lying, promoting a trade. that chat room lot its effectiveness over time. this feels like a similar trend. >> i certainly do question whether it will -- whether this particular blog will have as much influence six months from now. he goes under the cover of

anonymity. many people question what is his agenda? is he shorting goldman sachs and therefore attacking goldman sachs. he's making money on his website. that's one thing. we don't know. that's a whole conversation about whether -- should he be transparent in order to be a credible messenger. >> and you can actually broaden now that whole argument. that's the argument that goes on every day about bloggers in general. are they adhering to a code of standards that journal itselves do, financial or otherwise. >> the media eco system exists. reporters follow them. the get ideas, see the battle of ideas that's going on. i don't think they're bad. and i don't think that, you know, they have a necessarily negative influence. although i do feel like they tend to me tastesize and grow tanger. >> it's worth pointing out he can report on goldman sachs.

we have no idea what his position is. we report. i'm not allowed to own goldman sachs stock no matter what my position is. >> he doesn't even consider himself a journalist, per se. he considers himself kind of a freelance citizen. that's a gray area. >> freelance citizen. you remember president obama visited the so-called rv capital of the world, elkhart, indiana, this year. he's promoting the success that city's had because of the stimulus plan. there's something new for them to celebrate. sales of recreational vehicles jumped 16% in august. >> that's a 136% jump since january. though still down from its peak in 2006 like so many things. the sales jump is good news for the economy as a whole. because it is considered a leading indicator of the economy's health. rvs are one of the largest discretionary purchases out there. >> if someone wants to buy a home on wheels, that means we're

all going to do better in the future? >> it means they have the money to spend. more trouble for a.c.o.r.n. today. they're under investigation by both the justice and treasury departments after videos recorded on hidden cameras by conservative activists showed employees allegedly giving advice on how to run a brothel. the group is also conducting its own investigation through an independent auditor. accused female bank bandit healther brown is behind bars being held in a krlt krth jail on $1 million bail. >> police believe the 34-year-old brown robbed six banks in six days in three new england states. she was arrested in connecticut on monday. nbc's mike taibbi joins us live. i understand she didn't wear a disgiese. >> not so much as a pair of sunglasses. an amazing story. that's one of the reasons why so many people following the story last week as it developed started seeing her as an

evolving folk hero in a way and started cheering her on. i was reading the blog posts. you go, girl. go for another one. wow. that kind of stuff all week long. she walked into each of these banks, one after the other. one each day. as you can see, knowing there were cameras there. basically asked for a very little amount of money. $500 in one case. $600 in another. $1,000 in another. saying she had a bomb in most cases. not really having one. while she was arrested she had very little of the money left and no weapons on her. that was her story. it did get a lot of people really thinking this was somebody kind of the in the same vein as bonnie and clyde or thelma and louise. successfully eluding the law for a full week until she was arrested yesterday. there's more to the story. >> what is it? >> the other part of the story is it's really a very sad story. she has a life which was derailed at an early age. promising young life. good student. she worked as a chef at one

point. managed a horse farm. drugs got ahold of her, she got ahold of drugs. drug costing her at one point $1,000 a day. crack the primary drug. she was arrested 23 times. when i pick up crack, i pick up a pair of handcuffs. in fact, people who know her including a lawyer who was a good family friend for many years, actually had her as a babysitter for her young kids. the way she pulled off these crimes, if she did pull them off, suggested she was begging to be arrested. >> that's what i was thinking as well. tonight a new series day butt debuts on cnbc. "executive decision." i'm hosting the series. i asked the ceo prescription drug maker medco what it's like when walmart comes gunning for customers. when walmart comes on to

someone's turf as they have with yours, you have sent a lot of people, quote, shake in their boots. how do you get your own employees to not do that? we talked about this before the show. you chuckled the way you are now. >> okay. so you said it. clear vision. we have a strategic plan. and we're very comfortable competing with walmart. with cvs. with all of our competitors. that's what makes the private sector good. there is real competition. people have choices. when a walmart says we're coming in, remember, walmart's a retailer focused on primarily selling things in their store. they do not have a service model. the individual patient walking into the store is not making these benefit purchasing decisions. it is a client who's a payer for many employees. and it's a totally different conversation with them. they have a completely different set of needs. if we structure our business and innovation on the needs of the

client, we'll win in the market. >> "executive vision" debuts at 9:00 p.m. eastern. the secret service is investigating a facebook poll asking whether president obama should be assassinated. the survey posted over the weekend gave respondents four choices. no, maybe, yes, and yes if he cuts my health care. a facebook official called the poll offensive and says it was taken down as soon as it was s discover discovered. president obama always jumps at the chance to get in the game of basketball. the white house has released new photos of the president. newly up loaded shot of the commander in chief in action on the court. here he is playing against white house staffers on vacation in martha's vineyard. they caught him mid-air. getting ready to slam the ball in. >> you can do that, can't you? >> oh, yes. i'm phenomenal at basketball. >> i thought so. still ahead, a search for the biggest loser in the stock market. a hedge fund looking for the three worst investors. we're going to talk to the

company ceo about this innovative concept. home prices rise higher than expected. we'll get the latest numbers from cnbc and show you what a million bucks will buy. say good-bye to dorm room sex at one university. the new ban on nookky comes up after the break.

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...and new questions about which pain reliever is right for your body. tylenol 8 hour works with your body, with one layer that dissolves quickly... ...one layer that lasts all day ...and no layers that irritate your stomach the way that ibuprofen can. it's tough on your body pain. not on your body. a report recommending bold changes to california's tax system is expected to make its way to governor arnold schwarzenegger's desk today. it's already been met with skepticism by politicians in the cash-strapped state. the report is expected to include a recommendation on repealing the sales tax and corporate taxes, as well as flattening the income tax rate and a new way of taxing businesses. it's expected to recommend the state change its personal income

tax structure to reduce the burden on the wealthy. that's got some lawmakers up in arms. schwarzenegger has called for a special legislative session to address the tax overhaul. fresh evidence today the housing market is inching towards recovery. >> new numbers show home prices rose for the third straight month. cnbc's diana olick joins us. >> reporter: the key is what you just said. the third time in the third straight month. if you look month to month, home prices are increase ing. that's not the way you have to look at home prices. because they're very seasonal. those numbers aren't seasonally adjusted. you've got to look year over year. we're still seeing home prices nationwide down about 13% year over year. yes, they're better than they were back in january when home prices were down 20% year over year. what am i talking about seasonalalty? the people in the market in spring or summer are generally families dominating the market. they want to get their home bought and move before the kids start school. they're move-up higher. they're looking for bigger, more

expensive homes. in the fall single folks buying smaller, perhaps less expensive homes. that's why you've got to compare year over year. >> we look at home prices falling as bad news. there is a plus side for the people that want to buy them, right? and a million dollars goes a lot further today. we pulled some stats. in saginaw, michigan, a person can scoop up almost 18 houses now for a million bucks. >> what's not to love? >> or a bigger than 6,300 square foot house, two stories. sits on five acres. a palace, they're calling it. >> location, location, location. you could also go to detroit and buy a house for $100. the question is where do you want to plying you don't want to live in detroit? >> i have some fun numbers for you you don't always see in the realtors report from last week. if you look by price point at what's selling in the zero to $100,000 range, sales are up 21%

in august year over year. go to the million dollar box right here. sales are down 22% year over year. >> because who's got a million dollars to spend on a house anymore? >> pre sisly. what i'm saying is when you get above the $250,000 mark on any home throughout the nation you're seeing sales plummet. you're only seeing the gains in the zero to $250,000 range. that's what's selling. >> is that true you can buy a house for $100? you could spend that on a pair of jeans. buy the house in detroit. maybe there's going to be a big turnaround. who knows. a great investment. the next victim of the down economy could be halloween. americans are expected to spend less on costumes and candy. are you kidding? shoppers plan to spend an average of $56 for this year's halloween. down from almost $67 in 2008.

total spending expected to decline 18% this year. halloween is the eighth largest u.s. holiday, or spending holiday. >> maybe they'll go back to making their own costumes instead of those $30, $40 kids costumes. >> that's cute, though. >> they're everywhere, these costumes for little kids. i feel like i need to rent a child just to buy one of those costumes. can i have yours? >> yes. i'll lend you mine. she's a handful, though. >> i never had a roommate in college. not one who actually shared my bedroom. this wasn't a problem for me. i know for you perhaps it was. there was a rule governing whether your roommate could engage in sexual activity when you were there? >> having sex in your room while someone else was there, this was a problem for me in college? which side of the equation are you imemplplying there? do you need a rule for that?

>> apparently they've got about a dozen complaints this year from roommates placed in rather uncomfortable situations. now they've put it into place. you're not allowed to get it on if your roommate is there. i propose this is like if you have a party at home. you know your neighbors are going to be upset. invite them to the party. and you've solved it. >> wow. let's take a commercial on that. contessa's more fun than iing the thought. >> i'm just kidding. to build tomorrow's technology in amazing ways. and reshape the science of aerospace... forever. around the globe, the people of boeing... are working together -- for the dreams of generations to come.

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breaking news. the senate finance committee voting right now on the public option amendment offered by senator jay rockefeller. >> that's right. and they are voting right now. this is expected to fail. but it does look like voting is getting under way. let's listen in.

>> 15 nay. >> the amendment fails. i'll address senator schumer for purposes of offering his amendment. i might just note that the debate took many hours. another amendment, same subject, but different. >> there you're seeing senator max baucus talking about the fact that rockefeller's public option amendment has just failed in the senate finance committee. senator chuck schumer also is offering a public finance amendment. we're expecting to see voting on that today as well. we'll keep our eye on it. it's been a rough year for stock trader. now wall street's biggest losers have a chance at success. >> hedgeable.com, an investment startup is -- >> you're awarding people who made unwise choices? >> we're actually awarding people who lost the most money during the financial crisis. a lot of people really were hurt during the crisis. they saw 50%, 60% of their i.r.a.s or 401(k)s lost during

this time period. we're sending them on some unique trips to reward them. for not just poor choices that they made, but poor advice that they were given. also to really symbolize the debt that we have in this country. this is the big reason why most of these investors lost a lot of money and probably in the future will lose money as well. >> give us a breakdown on the numbers. what are some of the scariest numbers you've seen? >> the s&p was down 50% during this time period. >> right. how much have people lost? >> some people have lost 60% to 70%. a diversified portfolio could have lost 40% during this time period. >> i say it's unwise. i'm one of those who lost 50% of my 401(k) when the stock market took a plunge and when we saw the banks imploding. i thought, geez, why didn't i pay attention, see the bubble coming? you know, i think everybody does that. >> you didn't exit at that

moment? >> i did not. i hung in there. what do you hope to accomplish by helping the people who lost and giving them trips? >> trying to show americans two things. there's not any reason why you should lose a lot of money even during a crisis. this is what we do at hedgeable.com. we give people a few trades every few months. help them hedge their portfolios. it's up to anybody as low as $5,000 in their account and free to try. with the trips we're trying to move a point that we could see the same types of losses in the future if we keep going down the same path. a path of destruction. >> we started this hour with that, wondering what's changed. we end it with that. appreciate you coming in. that's it for this edition of "it's the economy." i'm contessa brewer. >> i'm melissa francis. david shuster and tamron hall pick things up next. more on the breaking news out of the south pacific. tsunami warnings for new zealand and american samoa after a magnitude 7.9 earthquake hits. ♪

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