time winds down on uncle sam's cash for clunkers program...how successful has the program been and the impact it's had on auto makers. plus, a check-up on banks...why some say there's still reason to worry despite recent bright spots in the financial sector. and...we head to a co-op bookstore to see if some of its same business principals could be successfully applied to the healthcare arena...plus..viewer mail...it's all ahead on this edition of first business. cost and running and buckled up and ready to go welcome and everybody cut ahead of wednesday's market action of the second corner core earnings season in a workable say you wouldn't know what the market 10 month highs that very few companies actually reported. high-end home unbelievably here

take a look at the s&p 500 sent july 8th when companies started reporting seventh quarter earnings for the s&p 500 is up 14% during that time so the entire time that companies have been reporting second quarter earnings to market is up by them what pretty unbelievable and we will see if the momentum can continue this week which some housing data and top as well as consumer confidence. big numbers and we get our second look at the second quarter gross domestic product yes the economy likely continue to shrink in the second quarter but may be at a slower pace than originally reported. many car dealerships across the nation have already stopped selling new cars under the cash for clunkers program... even though the official end date is monday at 8 pm eastern time. dealers have been complaining about the extremely slow reimbursement process.... which has put many of them in a cash crunch... as they wait to get back back for the deals they've completed. cash for clunkers.. is now

becoming synonymous with a back log of paperwork... as dealers wait to get reimbursed from uncle sam... anywhere from a couple hundred thousand dollars... to even one million dollars in select cases... but some dealers are staying optimistic that the government will come through on the money. i don't know exact number. but i do know some paid.. and some in process.. we're confident.. not worried about it but other dealers.. including group 1 automotive.... ... have stopped selling new cars under the program... at many of its dealers across the nation. in less than 1 month, more than 450,000 new fuel efficient cars were sold under the program.... totaling about 1.9 billion dollars. and out of that.. the government has approved only 140 million in payments to dealers. while the payments have been slow in coming... dealers are still grateful to the unexpected boost in sales... and they're hoping that current

incentives will keep customers coming through the door. manfucaturers did good job as far as supporting program.. i suspect they will continue to do that.. inventories low.. may be adjusted. but incentives still very good the goverment has tripled the number of workers who are processing applications from car dealerships... and even though the program lasts until monday at 8pm eastern time... the government is encouraging dealers not to accept new deals... unless customers have all the necessary paperwork. the best economic news story in america is how the secretary of transportation has described the cash for clunkers program. here it is by the number: the program began with one billion dollars on july 27. two weeks late, congress okayed another $2 billion dollars and expected the money to last to early

november. but by late last week, two-thirds of the money had been allocated, leading the department of transportation to close it down at 8 p-m eastern time monday. it has taken 29 days to burn through the three billion dollars. and what's been the impact on the auto industry? certainly sales have spiked and no fewer than five automakers have announced increase production to replenish dealers lots. g-m, ford, chrysler, along with toyota, honda and hyundai...all have bumped up production in response to demand. coming into this new week of trading the stock market close to 10 month highs lori living in with us at the cme group just a week ago creepers and downdraft in the market and nothing but a buyer since then. real strong move on friday and probably expecting more of the same talk about a short squeeze it was obviously a good housing number and i and exciting about that it's coming up all to the bottom is another story is a situation where you are seen

institutional buying coming into the recipes nasdaq in the dow jones traded above the you haven't seen the number in a long time. does it make sense to you from a fundamental expects? emotional force short and i know people are excited when they see a decent housing no. but it's not as good as people think if there are a lot of this press housing and there are a reason people are buying things in 54 and 30¢ on the dollar i get excited when everybody else until then i'm not. if your looking at the index s p five pondered the think it's over about you? i said it was over by you at 1015 i said was about u. s. 10 05 floor traders may not be the best we like to see a market go down when the fundamentals should say it would go down but we have been proven wrong time and time again to 25 were probably be a level i would buy back. barry levin and secrets of traders. c o m over at the cme group. thank you. faugh

still to come chatter continues over healthcare co-ops...why one small co-op bookstore * *works * ...but is it a good idea when it comes to healthcare? but first...how healthy is the banking system...why some aren't convinced we're out the woods just yet.

relatively slow but beginning to emerge.that's how federal reserve chairman ben bernanke is describing the return to economic growth. still, worries continue about the health of the bank industry, considering it continues to sit on so much toxic debt. the tarp watchdog warned this month that 10 months after the bailouts began, - quote - substantial troubled assets remain on bank'' balance sheets. michael iannaccone is an independent banking consultant with mdi investments. is always nice to see you. thank you very much. we can position has been focused almost a year now how have banks been using their capital where there belau capital? that pretty much have been using them to shore up their balance sheet. there is not enough capital around to shore up the balance sheet and up for them to a write off nonperforming assets and because the value of the industry puts on assets are probably 20¢ and the banks came

take the 80¢ hit so that's why the assets aren't moving off the balance sheet. i and lot has happened in the 20 years since the savings and most prices so there are same solutions that we use in the rtc days that we can use today because of banking regulation and because of accounting changes. the big banking has been relatively active we have seen certainly a significant increase was star tube as a strategy of the fdic going forward? i think is one of more of the three arch strategy than anything else. if you look at the institutions and financial institutions out there there are close to 2000 who have significant that breed of trouble clearly the fdic doesn't have the money the resources nor the political clout to take over the financial institutions with that. there's probably 600 or so will need to be taken over in short order and

is probably what they are trying to do and letting the other ones mentioned them to be more than and adequately capitalized and hopefully at some point in the next five years get back to being more been well- capitalized or maybe get some consolidation. consolidation is being sold in today's market because the private equity firms that want to come to market are being hampered by the constructions the bank holding companies guidelines put on a private equity also many people don't want to do deals outside and when they deal with the fdic which gives them a soft loft situation in many of them are under the false belief that all private equity money will be able to do we deal with the fdic in that's not the case. he brought a list of small banks we think are well positioned in this environment before we get to that list when separating the difference between those banks that are in the position in those may be subject to this

tree arch? i think there's two key issues and one is long composition which is how much did they have in construction and development. thus the loan portfolio of the banks. and the second one the trio that you brought along hudson city bancorp washington federal first financial northwest these are all relatively small cap companies in the banking industry was says these three part? i would tell you all of them had a construction and development portfolio but the portfolio was either a small portion of their benxi where you have seen most of the bad portions of those portfolios come to light and has increases they increase to of the construction and development

portfolio get to 40 percent of the portfolio being bad and the last two quarters really haven't seen in increase which means they found problems. the other big difference i would say is in hudson city case hudson city had a construction and the ball and it porfolio but it was less than 1% of the institution. even though 44 percent of their portfolio is nonperforming it is pretty much and consequential to the whole thing. in the ownership positions in either of those trio? no i do not. michael along with us and opinion banking consultant with mti investments. online items while students prepare to head off for college..many parents are worried how they'll pay for it...on our website...a financial expert gives you tips on how parents and students can help cut the cost of college. plus, why a record number of americans are falling behind on their mortgages...and why it's impacting more prime borrowers today. and...do health care

cooperatives really cut the cost of insurance premiums?... you can catch these stories and more on our website at firstbusinessx.com. and still to come on the show... we're checking out a co-op bookstore...can some of it's same principals be used in the healthcare industry and actually work... that's coming up next.

though health care co-ops are just now a part of the national health policy debate in washington, there's nothing new about structuring a business as a cooperative. indeed, electric, telephone and farm

coops are relatively common and operating successfully across the nation. and to understand how a co-op actually works, i visited a cooperative book store in president obama's backyard near the university of chicago campus. walking in to 57th street books, a customer wouldn't know right away that the shop was actually owned by its customers, a trade mark of any coop. but that quickly changes if they buy a book. "the first question anyone's asked at the cash register is are you a member of the co-op." store manager jack cella knows what nonmembers will inevitably ask about joining. "why should i?" by buying three shares at 10- dollars each, the customer then holds equity in the store. they then get 10% off of every future purchase. owners can redeem their equity and get their 30 bucks back anytime after 6 months. "the membership has grown from 17 in 1961 to 54-thousand right now." the co-op structure has helped foster a connection between the

store's customers and its management and staff. "customers are not shy about what we are doing well and how we could do things better. and those things result in changes. cella points to the opening of 57th street books, one of three shops run by the seminary coop bookstores, as one of those changes. "one of the reasons we actually opened up 57th street books was people kept asking about children's books. there was no place in the neighborhood to buy good books for your kids. so that's something we focus on here." barbara o'connor has been a member of the coop since the store opened in 1983. "i buy most of my books here." and she believes customers as owners helps build loyalty to the store. "it shows that coops work. in this climate, in this economic climate, people come and buy books here because we want this

book store to stay." "we try to operate in a way where someone would want to be a shareholder. that's the only way a coop can grow." as for how a coop structure would work as part national health care policy, cella is unsure. "i'm happy with the co-op structure. my only knowledge of it is in this relatively small community focused bookstore operation. beyond that, i really don't know." and though the store does have connections to the president "we had an event for the president in 1995 for his first book" cella doubts its had an impact on any policy leanings. "so do you think president obama got ideas on coops through the store? no. no. no. definitely not." cella added that the store does offer health insurance to its employees and that the co-op board has recognized the plan as a significant business expense. still its a benefit, along with disounted books, that they want to continue to offer to

employees. has been a while since we talked about gold in chart talk it's been hovering around $950 an ounce mark. we will take a look at the charts coming up next.

talking about the gold market now and the melody is the exchange traded fund attractive market and it's really flat aligned for the most part since about february. stuck around $950 an ounce for gold and around 594 $95 a share for g l d. looks like this: did little bit is getting tighter and tighter rein does are getting a little smaller and made them run up to over $96 in down fell 88 in the annals 95 and then it was 92 and now it's seems to be getting tighter and tighter likely to explode one way or the other. the question is will fundamentally would drive that break out put the mark yes gold is really a reaction is a hitch to if inflation as the

purchasing power increases investors want to flock to gold but inflation is not a problem are now so it's hard to tell which way this could go. it could be worth it could be bothered this point we have seen oil prices by up recently in relation to a weaker dollar and the same thing goes for gold you take that and correspond to the silver exchange traded fund s l b again very similar: pattern i think it could break up over 16 or maybe it breaks down over 12 at this point and it takes cues from the currency market gold and silver and this commodity move in inverse relationship to the dollar so the u.s. dollar goes down commodity often to kohl and vice versa. we want to hear from you let us know the gold and silver in your portfolio comments at first business x. c o m we'll see you online and back here next time. thank you for watching everybody.