citigroup's fine for its role in wreaking havoc on the financial system amounts to nothing more than a tiny traffic fine. hear what one critic has to say. plus, we talk a walk down memory lane at the cme group. and how to boost financial literacy among young people. those stories and more on today's first business you're watching first business:

financial news, analysis and today's investment ideas. good morning everyone, welcome to the show. it's friday, july 30, 2010. and we've got big economic data on tap for today. this morning which could really move the markets. plus, over in congress they're debating a small-business bill that could also help the job creation, angie. well happy friday to you beejal. and i know a lot of small business people out there are just waiting to hear what the news will be. but big news coming in on oracle. the department of justice is alleging that they may have defrauded the government with software sales practices. interesting story. lots of investigations going on at corporate levels these days, angie. and there's news coming from james r. bullard, st. louis federal reserve president this week. he's been highlighting the dangers of keeping rates too low for too long. here's what he said. so he's basically warning of a possible deflationary

environment if rates are cut too low for too long, spooking investors just a little bit this week. and let's on the financial markets with alan knuckman of agora financial. he's over there at the cme group. alan, it looks like the stocks are really fighting to hold on to the gains for this week. do you really think the bulls have a chance here? well, i'm increasingly optimistic. i think the longer we go without any sustained sell-offs, and we're getting these minor pullbacks, we bounced right back up. i think we're positioned for the markets to move higher because of such negative attitudes toward a market. and all of our other markets, if you look, the euro's rallied above 130. we've seen gold sell-off, we've seen the dollar now at the lowest its been since april. and bonds made new highs last week and then closed lower. so all those your assets are getting deflated right now and the market may be positioned to make another run to the upside and get those guys that are short. and do you really think that friday's a second quarter gdp forecast can really make people bullish about things? i don't the end of the numbers are going to make people bullish. the

housing numbers, the employment numbers, the gdp numbers, they're all kind of baked into the cake. and the market's fully aware of this data. the market's are a leading indicator and i think we put that behind us, unfortunately the society is not benefiting from all these economic numbers. and this employment situation, but the stock market has great earnings. they're sitting on lots of cash and that haven't been forced to hire people back. and the companies have learned how to make money, being lean and mean and working smarter and harder. but alan, aren't you worried about any disappointing or disappointment in the numbers? if we don't hit that 2 1/2 percent gdp for the second quarter, that's going to be really disappointing. yeah, we've been disappointed so much in the last couple of months that we are in a overly depressed mentality in my opinion. and that's part of trading, its psychology. and i think if you think about how many people have a negative opinion of the market and being a contrarian, the masses are often wrong. so, from a risk- rewards standpoint, i'd rather

be a buyer that a seller down here in the hole and look for it to rebound. and again for me, the big issue is getting over the 1130 here in the s&p, and then we can make a nice move. you have to remember, it wasn't so long ago that we made new 18 month highs in the stock market. ok, we'll see what happens. thanks very much alan knuckman of agora financial. critics say citigroup's 75 million dollar penalty amounts to nothing more than a tiny traffic fine. the bank agreed to pay the fine to settle sec charges against the company and two executives for misleading investors about the bank's exposure to subprime mortgage assets. "between july and mid-october 2007, citigroup represented that subprime exposure in its investment banking unit was $13 billion or less, when in fact it was more than $50 billion." regulators say "between july and mid-october 2007, citigroup represented that subprime exposure in its investment banking unit was $13 billion or less, when in fact it was more than $50 billion." the sec says that citi mislead investors during 4 occasions

when the company held earnings calls. critics say citigroup and its officers have gotten an easy pass with a 75 million dollar fine. janet tavakoli of tavakoli structured finance said "basically, american taxpayers are being mocked by the way investigations are being done and how lightly these officers of banks are being let off. issues are not being brought up in congressional hearings. they are a mockery, just pr stunts." citigroup received more than 50 billion dollars in bailout money during the financial crisis. tavakoli says citigroup is still on government life support and the 75 million dollar fine is being paid for indirectly by taxpayers anyways. as enbridge crews work to clean up a massive crude oil leak in michigan, the company is reportedly proposing to building an oil pipeline between british columbia and alberta, canada. earlier this week, one of the company's pipes burst in marshall, michigan, spilling 1 million gallons of crude into a tributary of the kalamazoo river. it's devasting wildlife and could make it's way into lake michigan and the detroit river.

reports say the canadian company was previously cited for failing to monitor corrision in the pipes. wednesday, enbridge energy partners released plans to acquire a pipeline system from atlas pipeline parnters for $682 million dollars. the crisis in the labor market has highlighted the need to put america's education system under the microscope. this week, president obama spoke about his goal to reform education and prepare students for college. the president called education the economic issue of our time. especially when the unemployment rate for people who have never gone to college is 8.2%. almost double the rate of unemployment among college graduates, which stands at just over 4%. "it's an economic issue when 8 in 10 new jobs require workforce training or a higher education by end of this decade. it's an economic issue when countries that out-educate us today will out-compete us

tomorrow." one area that has been severely lacking is teaching financial education to kids in grade school. a recent survey showed that 64% of k through 12 teachers feel unqualified and unprepared to teach personal finance topics. meanwhile, there is growing pressure on many states to mandate financial education in schools. "there are a lot people not exposed to the basics. this idea of budgeting and managing credit cards, one thing the financail crisis may have done is made people resolve to learn more about those fundamentals." for tips on how to teach kids the basics of managing credit cards and bank accounts, you can go to the website smartaboutmoney.org. it's run by the national endowment for financial education. corporations such as ford and apple are often mentioned as great american success stories. but perhaps cme group should be added to the list. the company hit a growth spurt over the past few years and

shows no signs of slowing down, no matter what the ceo says. it started in a simple way in the 1800's. farmers and businessman exchanging butter, eggs and cheese. 1870 telegraph ticker. the chicago butter and egg exchange was estalibished in 1898 and turned into the cme in 1919. by the time the american industrial revolution open out cry in the pits at the chicago board of trade. fast forward to 1929, crash on wall street. not open to the public trading history. it's all chronicled on the awalls of cme group headquarters where... "what you see is the development of the markets frankly over the past 150 years, and what you really see are amazing parallels in terms of

what has happening the development of oil and seed markets and egg, dairy and livestock markets at the new york exchange, so it really shows how our business has responded to world events in the development of the markets." agriculture, energy and financial. all reprensing a major slice of americana. "i am excited by the fact that there are very few businesses that are 150 years old and are on the absolute cutting edge." the company's efforts to remain on that edge. global trading 24/7 and growth by other succesful exchange purchasing power chicago board of trade making it the world's largest. much speculation the chicago board options is next on the list. something donohue dismisses. "we are just not expecting for the foreseeable future any large scale m&a transactions." concerns about government and keeping the exchange

profitable. "i think that the effort to strengthen the financial system, to encourage investor confidence and reduce systemic risk that were realized during the crisis of 2008 and 2009, i think are valuable." concerns about overregulation high frequency trading which flash crash. "it's safe to say electronic and high frequency trading are a valuable addition to financial markets." innovative, hedging and risk management. as you heard, he no plans for a major merger, but admits he has eyes on opportunity. "are you sure this isn't about world domination? you know i don't think that is really our ambition, but we are a bunch of creative and ambitious so we have a lot of fun things to work on. no, domination itself is not a goal." "it's safe to say electronic and high frequency trading are a valuable addition to financial markets." "what you see is the development of the markets frankly over the past 150 years and what you really see are amazing parallels the development of oil and seed livestock markets at the new

york exchange, so it really shows how our business has responded to world events in the development of the markets." cme group released earnings thursday, profits were up 22% strong growth in currency futures and interest rate contracts. and later in the show we have viewer mail. but first, should you save for your kids' college education or your own retirement? the surprising answer after the break.

it was more surreal than anything. you're under fire. you're getting blown up. there's definitely adrenaline. there was the explosion, and i remember just opening my eyes, and it got both of my legs. i had surgery after surgery, you know, i was on a lot of pain medicine. "what's going to happen next? and how long am i going to be here?" the wounded warrior project dropped off a backpack for me. and it had everything in there that i could possibly have needed at that time.

peer visitors, people who have been where i had been before, said, "look, brother, "everything's going to be okay. "three months from now, or four months "from now, a year from now, you'll be fine." that type of thing was an invaluable service. to be honest, i don't know if i would be as well adjusted as i am now if it wasn't for them. to learn more, call... or visit woundedwarriorproject.org.

putting money away for college or putting your kids through school. its a decision more americans face in an uncertain economy. and a new survey has some surprising results on what is becoming priority number one. mike fisher of country financial joined us in the studio to discuss the current trends and why you may be better off saving for one before the other. i want to start with one really interesting figure that jumps out at me from the country's financial survey. and that's that the number of college responders that think that a college education is a sound financial has dropped since last year. what do you attribute those changes to? i think the skyrocketing cost of college certainly coupled with uncertainty about the economy has led many americans to rethink the value of investment in a college education. as you mentioned, our latest survey shows 64 percent of americans, only 64 percent of americans now feel that investment of college is really a sound

financial investment. that's a 16 point drop from last year and a 17 point drop from the year before. do you think that's coming from the generation of students that are about to head to college or coming from their parents? primarily coming from parents. what's also interesting is that the drop in those results also was coupled with an increase in the number of americans who now feel it's more important to save for my retirement than it is to save for my child's college education. that number has sort of flip flopped from last year. it's up 2% to 43 percent of americans now feel that saving for their own retirement it's a little more important. so are you surprised by that? i'm not surprised by that, but i think it's not necessarily bad news. you can always borrow for college tuition, but you cannot borrow to retire. i think the key is no matter where you start from, most american families

can achieve both with the proper financial planning. starting early is a big key to that. ok, now given that difference between the ability to borrow for college and saving for retirement, does that make retirement more of a priority? i think it should be a little bit more of a priority. because again you can borrow for tuition and there are other services of financing for tuition. but very limited support for you when you retire. now talk about the differences between saving for college and for retirement. should individuals go about an investment strategy in a different way for those two situations? i really think they're similar because you need to take a long-term perspective and start early. i think the biggest thing is really developing a tangible plan and coming back and reviewing and adjusting that plan periodically. depending on your strategy, your strategy is gonna depend on how old your kids are when you actually start

and how much time you have. as well as how young are when you start thinking about retirement and start to make a plan. many of us don't think about retirement until we get a little bit older. but if you start early, that's the best key for success. now talking a little bit about plans, we spoke a little off camera about how you had to address the same concern and that same decision of saving for college for your two kids and also saving for your retirement. how has your strategy changed personally? so far so good, i wish i had a little more. i have one in and i've got one who will be a senior this year. so i'm no different than any other american wrestling with that cost of tuition and a little worried about where our youngest will choose to go. considering what the tuition maybe. good luck to you and your children. mike fisher is with country financial, thank you very much for joining us. after the show be sure to head to our website firstbusinessnews.com to see why major corporations want to know

what women want. a look at positioned to profit from the back to school shopping season. and a market pro tells us whether the stock market needs a dose of reality. you can find these stories plus daily updates from traders on our website firstbusinessnews.coinesews.com. and straight ahead on the show... mail segment. that's coming up after the break.

time now for viewer mail. and paul, we have our first caller miles edwards who has a question about some numbers that we reported on hamp modifications.

and let's take a look at the graphic here that he's talking about. it's the president's loan modification program. and yes indeed it is a 3.1 million, that is the actual number of total eligible loans that could be up for modification. so that a number, not a dollar amount. yeah, these numbers really show the problems that foreclosures are causing. i've spoken with realtors here in chicago who said that as much as 50 percent of their business is with foreclosures and short sales. and i also spoke with the owner of it junk removal franchise and he says that he's getting contracts from banks to clean up these homes. it's interesting what's going on. in fact, some recent numbers from realty track showed that three out of four top metro areas in the united states has seen

foreclosure and activity increase. so, clearly these modifications are now working as well as we hoped. and now moving on to an e-mail we received about our web site. well thank you very much jessica for that e-mail. and yes, our web site is kind of a work in progress. but, i know there's some technical issues depending on if you have internet explorer or another web browser. right, it's a good idea may be to update the webbrowser you're working, that can overcome some of those problems that we also have in the newsroom. also, speaking as someone who's worked on the show for four years, i'm more proud of our web site now than i have been at any other point in time on first business. i've got to agree with you paul, i think our web site looks better today than it did four years ago. well we certainly appreciate the criticism and the opportunity to

improve it. exactly, so keep your suggestions coming, whether it's on our web site or on our show or anything you've seen on it. you can call us at (312) 660-8397 or e-mail us at comments@firstbusinessnews dot com. as always we love to hear from you. and still to come... trader matt cavanaugh talks about how to make money on a stock that's stuck in a rut. we'll be right back with that after this break.

and on this friday morning we're bringing out the chart on wal- mart with trader matt cavanaugh of cmz trading. good morning to you matt. it looks like the stock is range bound. it is, it's been much like the overall stock market. we're stuck in a range between 47, 48 and 52. 52 seems to be the long-term resistance or at least within the last six months. we're getting close to

bumping up against that. and what about the support? well, it seems to kind of follow the overall market. you know, wal- mart is the industry leader and best of the bunch and kind of a more mature business. but people really look at it as one of those bellwethers. on thursday, we had colgate's earnings come out, we had kellogg earnings come out and they weren't so great. we didn't see too much of a reaction with wal-mart, but kind of trended with the overall stock market carry it so, how does one make money on this stock? what they get a boost from back-to-school sales perhaps? well that's definitely something to watch. consumer is sold imported here in america. but one of the important things to do is when you are looking at one of these range bound stocks is maybe if it goes up with the top of the range, maybe you want to sell some calls on it or buy some puts and see if you can capture some of that range movement either way without sticking your neck out and either going all out long this stock or short this stock now you own any of these stocks matt? i do not own wal-mart. all right, thank you very much. great to have you on

the show this morning, take care. that's it for today's show, thanks for joining us everyone. have a great day and we'll see you on monday. it was more surreal than anything. you're under fire. you're getting blown up. there's definitely adrenaline. there was the explosion, and i remember just opening my eyes, and it got both of my legs. i had surgery after surgery, you know, i was on a lot of pain medicine. "what's going to happen next? and how long am i going to be here?" the wounded warrior project dropped off a backpack for me.

and it had everything in there that i could possibly have needed at that time. peer visitors, people who have been where i had been before, said, "look, brother, "everything's going to be okay. "three months from now, or four months "from now, a year from now, you'll be fine." that type of thing was an invaluable service. to be honest, i don't know if i would be as well adjusted as i am now if it wasn't for them. to learn more, call... or visit woundedwarriorproject.org.