really, the standout has been aig, 80% owned by the government. some cite a short squeeze for this rally that squeezed 277%, 277% gain in the last 30 days out of a stock that was struck from the dow 30 last fall. let's bring in our bull and bear to talk about the rise of these stocks that have been left for dead. peter schiff, most lay bear with bullish tendencies and james, generally a bull. great to see a familiar face. i will start with peter, i will start with you. when you see this kind of activity in stocks some had left for dead last fall, what does it tell you about the state of the rally that has the dow up 45% from march lows. >> an old saying about suckers being born every minute. they're gambling, you can trade them but they're not viable investments. financials are a great place to work but a lousy place to v. i'd sooner buy and airline. the last thing you want to do is get in bed with the government. there were a lot of stocks around the world, they threw a lot of babies out with the bath water. a lot rose dramatically because they g

aig, we've already talked about. precision cast parts, boeing announcing a more ambitious timetable for the unveiling a dreamliner seeing big volume today, as well. also on that list, goodrich, mbia and king pharmaceuticals. >> let's find out where the smart money is going to put its money, especially as we go into september, which can be the cruellest month. legendary investor ron mullencarp is our special fweft this hour. >> you are a legend, ron! >> i'm not even dead just yet. >> well, you have an awful lot of money under management, and your fund is up well over 25% year-to-date. of you know, if you look back a year ago in september, we were in a world of hurt at this time last year, ron. as we go into that month, we're all going to be looking back and remembering those times. but what do you see ahead. how are you playing this upcoming month. >> we'll probably end up concluding that the recession ended right about now. the lock-up in the financial system is pretty much over, which is some of the stuff you're tal

let me just go back to aig. there may be something a little more fundamental going on, and i don't want to push it too far, but that stock split, that 1 for 20 occurred i think on july 1st. so the stock's been hard to borrow for a couple months now. and yes, it's moved recently, but they did announce earnings that were a little better than expected. that was just about a week ago. then benmosche came out, it was the end of last week, and said he thought there was a good chance they actually would be able to repay all of this debt. and you know the numbers are huge, 130 billion or something on those levels, that they still owe out there. and then of course we heard yesterday about the fact that he is in fact talking to hank greenberg. now, what factor, what play does greenberg get -- >> listen, i've known hank for a long time. i've reported on him. i wrote a pretty long profile of him in "forbes" that sort of detailed his concern. this was in 2007. his concerns for the company. he actually called -- in many respe

paulson should have never ll about goldman's sensitivity to aig's te. he'd been bo of goldman when many of the aig deals we struck. >> theeo of goldman sachs was the room during these negotiations and i know this from somebody who s also in the om at the time. whereas t primary regulator of aig, none in the office o supervision in the room at the same time. >> it's the heir principle competitors who fell athe waysid their guy was ithe chair. their guy is goingo maintain so influence. yoknow thers ju a poi wheryou sort of -- you haveo art shrugging off the noons that this is some kind of conspiracy thinking. d you've got start saying, ge one plus onequals two there is a proem. >> reporter:oldman was also permitted to cvert into a mainstream bank giving access to limitless cheap fundingrom the u.s. central bank. with its mainompetitors out of the game, goman's profited handsomely. e firm recently chose to buy back the u.s. governmt's share in the company and to therofit to t u.s. taxpayer b freeg it fro restrictionses nuses and pay. they may haveeen too c

it's more like aig and fannie and freddie. things like pets.com, people will pay anything for growth and it doesn't make sense. >> what does he mean it will be worth? to me, if you are saying that's not worth anything, we have a lot bigger problem than that. these are companies that have a built in put. >> does that mean you are buying these stocks? >> i'm not buying aig, but fannie and freddie seem reasonable to put money into. citibank jump and we just considered it in the trash pile. b of a and citibank maybe not also. either way, i'm probably a guarded buyer. >> hold o. got to take a break on the fast money. we will talk to obama's economic advisory board if she think this is recovery is for real. wal-mart taking on the banking giants. "power lunch" has the latest on what wal-mart is up to. back in a minute. >> the dow trying for the best winning streak since '96 as companies and consumers show new signs of life. is this market pulling a fast one on you? they sort fact from fiction. news flash, a billion dollar market and

>> aig's 72-u.s.ed insurance subsidiaries were financially strong, remain financially strong, not one of those companies ever presented any systemic risk. >> as a group do they pose a risk? >> as the holding company, it's financial products division out of london whiffs not appropriately regulated but not a matter of insurance regulation, by the way, that clearly presented systemic risk to the count. >> so what you are saying that only the financial product section of aig posed any systemic risk, not any of the insurance operations and the financial product section was not an insurance of course in your view, that correct? >> according to the definition, yes. >> good, let's go on to mr. spence. which insurance entities today pose systemic risk to the system? >> thank you, congressman. as we detailed in our testimony, i agree with mr. gray. i think that on an aggregated basis insurance companies in the u.s. could, if there, a catastrophe or in the event of a terrorists attack. >> well, that's an intere

their trading with aig caused such a crisis.ur show starts now. >> ahead of the fed decision, which as you can see we're awaiting in a couple of moments, the stock rally is on. what a day it has been, we started out with virtually no direction in the market. then a sudden pop and that's the rally that has held through much of the day. it could dramatically change one or the other as in a bigger surge or losing all of it and more depending on what the fed says on a couple of key programs. right now we're up between 1.4 and 1.6% across the board. now, the worst performer in terms of sectors, health care and the worse is still up for the day. and i believe the best stock on the dow jones industrial average in terms of percentage gain is travelers insurance. let's get straight to our market reporters and find out what they are watching, we have bob pisani and rick santelli. bob, what can move it? >> reporter: changes in the statement on quan take tif easing, do my usual, most are not expecting a lot of changes. as far as the economy

aig, fannie mae, freddie mac also on the rise. we'll discuss whether there is still an appetite for these risky stocks. this is "the call." we are cnbc. >> stocks trading negative to find better than expected results on both gdp and jobless claims. and the fdic reporting the number of problem banks rose sharply in the second quarter. home builders also lower, after toll brothers reported a widening second quarter loss. right now, the s&p is also to the down side. and the nasdaq is not doing too much better, an over 1% drop for the s&p 500. and the nasdaq is only getting 1995, below 2000, a drop of 1.5%. we have hampton pearson in washtd, bob pisani with the market reaction. but hampton, let's begin with you. >> well, first, here at the fdic, its second quarter banking profile tells us that by the end of june, its list of so-called problem banks was at a 15-year high, some 416 institutions with combined assets of just under $300 billion. fdi-insured banks had a $3.7 billion aggregate net loss in the second quarter, two out of three

just look at aig. and of course we had a whole hour essentially discussing various aspects of aig. the bottom line is this. not only was there a short squeeze it has been going on for weeks, but in addition, mr. benmosche making some positive comments in the last week. then recent revelation that's mr. benmosche was in fact talking to hank greenberg, also helped move the stock up in the last day. i hope you heard what we were talking about in the last hour, mr. greenberg calling in to cnbc and saying those recent rumors on the chat boards that he might be leading an investor group to try to take over aig not true here. take a look at citigroup. you can see citigroup moving forward here throughout the day, over 1 billion shares there as well. finally, second leg of this whole rally occurred when the dollar dropped around 1:30 eastern time. that had a dramatic effect on some of the big commodity names. that helped more everybody forward as well. there's a big drop in the dollar. murphy, you can see a move up in some of the oil names. they have been lagging throughout this week. final

aig, the same thing. you can buy lots and lots of shares, relatively cheap puts at this point because on historical basis and implied volatility it's massively. there's a ton of short interest here. i think what's going on -- these are rented positions. these are not funds where the mutual funds are adding at this point. >> aig is probably -- pgd. sorry. >> aig is probably a special case here, though. i don't think it's people getting into aig because they're afraid they missed the boat. 3/it's the economic outlier of the three. is a proxy for the price of options. so you see implied volatility first and that means the options are getting cheaper. dan, you've got a trade on bank of america here. >> the stock has a great run. it traded in low single digits back in january. the stock is up here in the high teens. the company has made some pretty fine improvements here. they're trying to get that merrill listen acquisition in line. i think they're making some progress here. maybe the stocks are ahead. 57% or

so you can figure out the market value on aig.ember that tomorrow when we see just how good or bad things are at this company. erin, back to you. >> thank you, david. the dollar is looking stronger this morning the next guest says we're in three to five years of dollar weakness. take that premise, then how do you invest? he has ideas. let's go to our network. frank, looking at that three- to five-year horizon, what do you do? >> deja vu all over again. as you know, over the last nine years the dollar has developed 50% of the value. investors are looking to diversify. they seek to do this in deposits. they want to build a diversified portfolio to hedge against the global risk of dollar depreciation. >> okay. so are there -- i mean, any stock plays in particular or what? >> i think there's a number of different ones. if you want to play in the short term, which we don't recommend, etf, low price broker and great way to do it. in the long run, using deposits. norwegian chrome or the australian dollar and building a portfolio around i

taking aig, cit off the board.e know those are huge media stocks up, gannett, louisiana pacific, masco, building products company, very strong. macerich, the financial sector 72% in the last four weeks. real titans of the trough, aig, of course, has an unbelievable run.n. look at trw, over 1,000 percent. genworth 1010, office depot, ford, another $1.50 to $8move. take a look at aig, we keep holding that up as the darling of the clunkers because of its short-term and surprising move to many. if you look at super composite financial index which is small, mid and large cap financials, there are 20 stocks that not only beat aig but buried aig from the trough, i showed you gen worth, bank of america, hartford, capital one all beating aig off the bottom. >> matt, what's our takeaway here? those were some incredible numbers. is it luck? is it the rising tide, they were off. look at office depot. look at the mall read. malls aren't doing well. >> you're lucky if you bought them, had the confidence to really buy into the so

it's short squeezing aig. i consider that kind of the outlier of the three we talked about. >> and we want to clarify for all of the viewers out there, volatility on the vix or applied volatilit volatility, it's a proxy. you see volatility coming in, bank of america, the options are getting a little cheaper you. have a trade on bank of america here. >> the stock's had a great run. traded in low single digits back in january. the stocks are up in the high teens. one of the things i want to do here. the company has made the fine improvements here. they're trying to get that merrill-lynch acquisition in line. they're trying to make some progress here. maybe the stock has gotten ahead of itself. 57% or so off of last september's high. 57.5% off of the january low. and if you look at that on a technical basis, it's a reflection point. so what i want to do in the bank of america is buy the november 15, 121 by two put streds, i want to buy one november 15 put for $1.10. two november 12 puts for combined 80 cents. it

let's get back to aig itself as it tries to transform the company. it does appear, at this point at least, the capital structure it has in place and all the different ways it's being aided by government money are at least working to stabilize the situation. one key part of the company, of course, is unwinding that financial products unit run by joe cassano that run swaps on pretty much anything to anybody without reserving, of course. losses were only $132 million. there also, they benefited from gains in the securities held in the portfolio during the period in question. notional amount of their derivatives is now $1.3 trillion, down 17%. and their trade positions have declined from 36% from what had been 35,000 to that current trade positions of 22,500. as for funding at aig, the federal reserve bank currently has $40 billion of net borrowings. and this is important, $4.8 billion has accrued in interest and fees. they're not paying any interest on any of this incredible amount of debt they have outstanding. it's simply occurring. on the preferred,

why are investors flocking to aig? that's another big one. aig, high risk at least until today. that former ceo hank greenberg is returning at least as an adviser to the company? hi, may i help you? we're shopping for car insurance, and our friends said we should start here. good friends -- we compare our progressive direct rates, apples to apples, against other top companies, to help you get the best price. how do you do that? with a touch of this button. can i try that? [ chuckles ] wow! good luck getting your remote back. it's all right -- i love this channel. shopping less and saving more. now, that's progressive. call or click today. and you know what, it works. nutrisystem for men: flexible new programs personalized to meet your goals. what's great about nutrisystem is you eat the foods you love and you lose weight. i'm dan marino. i lost 22 pounds on nutrisystem and i've kept it off for three years. for a limited time, get an extra three weeks of meals free! that's right, you can get an extra 21 breakfasts, lunches, dinners, desserts, and snacks. that's 105 meals free! i

aig, i agree with you. it went down to 134 million and they have earnings coming and they might spin off a bunch of different divisions and take cash in. that's all contributing to the big rally to the upside. i would take profits on that if i was in aig still. we are out of that. >> jeff, you are a trader who looks at levels very, very carefully. when you see a name like aig, and we do have news events, by the way. this is not just a short squeeze. there might be events on this. earnings coming out friday and a new ceo on monday. how do you trade this? >> melissa, i trade this purely on momentum. i tell you, you have to strap your seatbelt on when you trade this. i'm long when it goes up and short when it goes down and i pray to the market gods i don't get caught on the wrong side. the volatility in the volatility in the stock is crazy and for an interday trader, there is a lot of money to be made. >> jump in here. >> you have to be careful. first of all, talk about a short squeeze. that is moving the stoc

aig received $180 billion in government loans. >> well, he has the say, right? >> why does the government have say -- >> are they have a say, and just handed out $7 million. >> here is the problem. the industry standard is about $14 million. if you look at what jay fischer at travelers is getting, $14 million. also, if you look at what benmosce was making at his lost job, this is a company in distress. you need a really good guy to come in and turn this company around. we going to come in and pay him way below industry standards and think you're going to get somebody qualified to do this, it's just not going to happen, whether it's fair or not. >> you're exactly right. that's the difficulty. we've got to focus on a situation where taxpayers have essentially taken over an insurance company in aig. and now you've got the policy goals, he wanted not to put a lot of taxpayer money in someone's pocket, be frugal with taxpayer dollars, however, want to get top flight talent that can turn around and get some of that money returned to taxpayers in the long-term. the rea

aig was a big topic of conversation. 134 million shares of aig traded today. it normally traded 8 million, 9 million, 10 million. 134 million. okay, we've got a new ceo that's coming in very soon. robert benmosche. we know that. earnings report. we know that. what precipitated this gigantic bout of what looks like short covering is not exactly clear. those were the obvious explanations but that's not entirely satisfying because freddie mac and fannie mae also had big moves to the up side as well. some people speculating some quad fund was covering the shorts. not entirely clear. let's talk about the rest of the financials that were strong today. jpmorgan up nicely on strong volume. again, back to where it was prelehman bankruptcy prices for them. citi was strong. i just showed you the rebalancing. they're still waiting here to rebalanc

aig common received $311 million. that is what it amounted to, that $2.30 number that we've been talking about because there are 134 million fully diluted shares out there. remember, of course, there was a 1 for 20 reverse split not long ago. $2.30, that's what you get. the american government gets $1.2 billion. as i said earlier, so many different things going on at aig, it's hard to keep track. at the end of june they announced that plan to put aia and alaco to their huge farm shuns companies into specialty vehicles which the u.s. government would own a significant preferred amount of. i told you it was complicated. all of that by way of reducing outstanding under borrowings from the federal reserve bank of new york line of credit. that is still on going. that is still happening. we also have a change of management, of course. liddy is leaving. some changes on the board. and profits. so things are stabilizing at aig as it tries to basically pare itself down to an insurance company. remember joe's unit where the dwap

citi and aig on fire.e us an update is the market analyst, warren myers is with us as well. thanks for joining us. >> this morning, everything looked weak, but what's interesting if you look at the market, the market reversed with oil and much of the market cap is energy of related when oil started the reverse, everything reversed. >> do you agree with that? i was down on the floor this morning with no energy. everything turned around. >> i think he is right. it was the dollar taking a beating in the mid-afternoon that forced crew prices up and energy prices in general. that being a weight in the industry, it was a combination of the dollar getting crushed. the energy is up and that moved the market up this. >> is it light volume and is everyone on vacation. will this not continue? >> i said this morning, i don't buy the light volume. i don't buy the everybody is on vacation excuse with i phones and blackberries. i can't believe you are not paying attention to the market. if you go through the list, today

i have to tell you, i think that aig -- i think that aig is problematic. the stock is up on a very big short squeeze. they were betting against it. i got to tell you, i think the the guys that firehouse should wait until this cools down. 74% of this company is owned by the u.s. government. i think even though the new ceo took over, i don't think this stock is going to end up being worth anything. don't chase, my friend. don't chase. hello to the guys at the fire department. you do a terrific job. i am telling people don't throw out the baby with the bath water. do not substitute huron for superior, duff and phelps. i'll see you at mo's tavern. stay with cramer. >>> coming up, jim goes fast and furious as he faces a non-stop barrage of calls, giving stock after stock their final verdict on the "lightning round." it's the chevy open house. and now, with the cash for clunkers program, a great deal gets even better. let us recycle your older vehicle, and you could qualify for an additional $3500 or $4500 cash back... on top of all other offers.. on a new, more

aig is up another 10% here. it's up a 50% so far this week. a lot of traders have noted the preferred shares still pricing in considerable risk. tiffany, numbers good. we did have same-store sales down 16%. beat on the bottom line and raised the guidance for the third quarter although it is still below the analyst consensus here. mickey drexler knocking the ball out of the park. of course, they did have michelle obama. outlook for the third quarter was risen above analyst expectations. tradertalk.cnbc.com. hot in the nasdaq as well? >> big day for technology shares. dell is why. they exceeded expectations. a number of firms out this morning bumping up the price targets as well. the company also saying it is seeing improvement. here's dell shares in the premarket, up 5%. i hope you saw the headlines related to intel, raising their revenue forecast for the third quarter. now seeing rev at $9 billion. you see a big pick-up in activity. intel shares premarket as well. up just about 3%. all across big cap tech this morning you're seeing a lot of ac

is traders point to improving fundamentals at banks and aig. and maybe more importantly, they say, the fact that investors are much less risk-averse these days. add to that, investors like john paul son taking stakes in citi and bank of america and significant trader or investors take that as a significant voeft of confidence in both of these companies. as for aig, traders point out with this stock there is a short squeeze going on. short sellers who borrowed stock to sell and buy back at a higher price will buy back sooner as it rises to limit losses. along with aig, their significant short interests in bond insurers in mbia. and the market rally generating two things for these stocks. big returns and much higher than average volume. for example, both aig and mbia already trading well above their ten-day average volume, just two hours into the trading session. and there's something else that's interesting to note in all this activity in aig. traders say a lot of the volume is being generatesed by retail, not institutional investors. and aig, f

let's talk about aig. again, second day, big volume here, two theories about what's been going on. number one, earning coming out. maybe a really good quarter. maybe they'll get some news on their investments, maybe announce a debt for equity swap. i heard half a dozen theories today. more importantly stock lending desks appear to be making it more difficult to borrow. announcement the government was banning naked short selling may have made many lending desks more conservative. take a look at the big financial names. huge volume in bank of america and citigroup. other citi did over a billion shares several days in a row now. two-month high for citigroup. bank of america, that's the high for the year. 300 million shares a day for five days in a row now. as we know, michelle, yesterday radian, some of the other mortgage companies came out and made some positive comments. back to you. >> thank you, bob. we have quarterly results from cbs. cnbc's julia boorstin has the details. julia? >> hi, michelle. yes, we're getting earnings per share on an adjusted basis of 8 cents on revenue of

[laughter] i am happy to talk about why they did not save lehman and why they did save aig. it sms to be a subct of endless fascination. but i thought i would ask a couple of other questions which have come up. one is, if is guy is so smart why did he see this coming? after all, he was not a princeton when some of the stuff was going on. he came to washington and was a member of the federal reserve board under alan greenspan. he worked for awhile for george bush, and i think there really are two very simple answers. es simply a failure of imagination. a lot of people have likened th to 9/11 and it is a metaphor that makes me uncomftable beuse a lot lot of people died in 9/11 and this hasn't been that kind of event. there were pele who have said that the people who defendedur country did not think it possible that someone could commandeer freer for airplanes and fly them into the pentagon and the world trade center and so forth. this was a similar thing. it simply did not occur to people who were responsible for managing t financial system that so much of the financial system

citigroup got a boost from aig's positive news and end of the day up 8.5%. and more proof the recession is probably over, the index of leading economic indicators was up in july for a fourth month now in a row. both helped offset the second unexpected weekly rise in job claims. consumers don't appear to be cutting back on staples. heinz and hormel beat achb lists's estimates. shares of google were up more than 3% after goldman sachs gave its vote of confidence adding the enter set search leader of stocks to buy. starbucks, vente caramel could cost you 25 cents more while a simple cup of joe will likely cost a few cents less. starbucks started raising prices on its complex drinks and lowering the price of basic ones. wall street will wait for any update from fed chairman ben bernanke when he speaks at a meeting in wyoming. and finally, former pick pocketers in london are giving new meaning to the term pay it forward. in an effort to brighten people's days, one person enlisted 20 former pick pockets to push cash into people's pockets. the plan, to give out 100

, this is clunkster city. >> they're the hottest group. >> freddie, fannie, aig? >> in the short term. the financials have the big mo as george bush used to say. >> government welfare banks. >> people are buying them. badly beaten. some is short-covering, aig, five or six different specklatory reasons why that stock moved here today ahead of earnings friday. the truth of the matter, a long way to go to get back. the best short term but they still are the worst on a aany -- >> jpmorgan closed above, pre-lehman high last september. thank you, matt. we appreciate it. >>> we will come back to the bank story. i think it's really important to the stock market and economic recovery. but first we must swing over to tech land. cisco beat the street. the silicon valley bureau chief straight from the west coast, jim joins us, one of the world's greatest businessmen, what's going on? >> see if you like this report. good evening to you, good but not good enough, stable but not solid. does the cisco dip spotlight opportunity for investors, 31 cents a share against 29 expected w

that's your upside in aig. other than that, i don't understand why people are getting so hopped up. >> you might also be getting a slight exaggerated move, too. when you look at the names, i'm talking about options that are unbelievable. aig traded over 300,000. cit, fannie, freddie, hartford. they started buying the august calls. today they bought over 25,000 of the august 20 calls. so people are -- you've got to do a hedge. if you're a market-maker standing on the trading floor and selling these calls in aig and the rest of it, you have to do a hedge. your hedge is going to be stocks. that's the only hedge that's left. >> the other thing that people don't realize, fannie and freddie, mortgage yields are at two-month highs right now. if you start to see mortgage defaults begin to increase, these securities are going to go way down. the other thing with these guys, huge delusion in the shares. no one knows what the fair value of the shares should be. if they're trying to value them, they're not even close. >> y

aig shares rose 4% in after hours trading yesterday.you can get more news, videos and blogs as ross mentioned at cnbc.com. >> absolutely. still on the program, another twist in the opel drama. could the german government be forced to refinance? investors will be looking at a u.s. revised gdp data due out today. >>> a mixed association right now for global equity markets. adam will wrap up the asian session for us, stephane is in paris, sylvia is in frankfurt and first, becky is in london. >> it has been a bit mixed today. ierpan markets did open a little lower. let's check, as well, on some of the earnings news that we've had out this morning so far as we watch the ftse going higher by about 0.2%. we are tracking biaggio particularly. that company came out with figures showing earnings rose by about 10%. they cut their outlook and that move does seem to push the shares lower. we expect to the ceo of diaggio earlier on "squawk box" in europe, let's hear what he had to say. i think the world is stabilizing. i think things are sorting them

. >> it should do wonders for aig shares. >> that short squeeze that mr. grasso talked about all of a sudden becomes a monster, it will. again, aig it fell off a cliff after their reverse stock split and then it went back to work, i think in the same v in citi. >> there's no loan growth, a long-term story, no it's not that bullish, but short-term, that's why these stocks are running and they could run another two months before they get hit. >> you know, when you look at these financial names, i don't know if you can make the claim it's not seeing any improvement in consumer banking because clearly you are. look at the wells fargos, u.s. banks, jpmorgans, there is an improvement right now in the consumer. housing, housing, the loans, they service those loans, consumers feeling better about that balance sheet. so i think that when you look at the entire sector, you also have to say, yes, the fundamentals have improved slightly and they have improved to the advantage. >> i agree with you 100%, i'm talking specifically with the aig fannie, freddie, citi. >> an

the dash for trash started with citigroup and aig, we could have extensive garbage as aig is joined by fannie and freddie, all up 200% this month alone as the shorts continue to get squeezed. but in options trading, saner heads are prevailing, energy stocks and home builders start to move sharply. this does seem good news for the stock market to see this rally broadening out. >> i think that's true. two things i'm looking at i think are encouraging. the first is seeing bets that volatility will come in. we saw that in the form of somebody who came in and paid for 25 puts and bet volatility will decline. that's a good thing. when volatility comes out of the market, encourages more participation and will encourage a broadening of the rally. home builders, we saw somebody sell 11 puts and buy an 18/20 call spread, if you're willing to draw a line the sand and say, i'm willing to get long, that's good sign, conoco phillips, we are seeing a number of things, all very encouraging. >> what is optimistic, not only broadening out but, scott, you're seeing call buying in tech land, a good sign t

aig. back over a billion shares today. aig, 134 billion shares trade over there today. million shares, excuse me. the credible volume. when you look at what's trading right now. aig right now, trades about a third of the outstanding shares every single day. i mean, it's really very, very active. last 30 days, it's averaging 35 million shares a day. incredible activity out there. we all know how volatile it is. i think to guy's point, the reason you're seeing some of these shallow pullbacks is because of that put protection. people have been able to buy those puts at lower volatilities than they had in months. they're able to buy those puts, get that protection that allows them to hold on to stocks without actually pushing those stocks to the down side. >> let's drill down on aig. it was a big mover it in today's session. that is -- you mentioned second-tier. this could be like fifth-tier financials. whatever you want to call it, it did move higher today. we had comments today from a town hall meeting that aig held this month with its new ceo saying that they're not look

i have to tell you, i think that aig -- i think that aig is problematic.he stock is up on a very big short squeeze. about 40% or 50% of the volume every day. they were betting against it. i got to tell you, i think the the guys at the fire house should wait until this cools down. 74% of this company is owned by the u.s. government. even though the ceo is trick, he took over, i don't think this common stock is going to end up, worth anything. don't chase, my friend. don't chase. hello to the guys at the fire department. you do a terrific job. i am telling people don't throw out the baby with the bath water. do not substitute huron for superior, duff and phelps. well, let's just say, i'll see you at mo's tavern. stay with cramer. >>> coming up, jim goes fast and furious as he faces a non-stop barrage of calls, giving stock after stock their final verdict on the "lightning round." >>> and later, cramer goes head to head with linn energy ceo michael linn. having the right tools is crucial to being able to manage your diabetes properly. it's very important for

we found the ceo of aig. he is speaking out. we bailed out his company to the tune of about $180 billion. the ceo is defending his vacation. >> i started working a week before i was supposed to work. it was not a matter of starting, it is getting in and started. i have conference calls every day. i can work from here as well as an office in new york. greta: he could get paid up to $10 million which he calls the bottom end. he has some choice words about people who are angry over the bonuses aig handed out. he said "a lot of people have lived in fear because of lynch mobs with pitchforks." really? he will be back in new york on september 7th. still ahead, your last call. to remember an this is a honda . and this is the all- new chevy traverse. it has more cargo space than pilot, including the most space behind the third row. and traverse beats honda on highway gas mileage too. more fuel efficient and 25% more room. maybe traverse can carry that stuff too. the all new chevy traverse. america's best crossover. it has a motion senso

aig, the initial testaments on theig bailout worth 30 or 40 billion and within a month and a half thevernment is telling us it will be $200 billion t bail out aig and some of that money goes to goldman sachs because they weren the other side so it was going on but i think the failure lehman brothers cost the u.s. taxpayer ,140,000,000,000 dub box -- 140 million. you would see a natural on wind. wh should have happened he would bring in a u.s. bancorp, ken lewis when they sad merrill lynch geiner and paulson ne essentially put ken lewis in they have a lot and ordered him to bail out merrill lynch. if you put people in headlocks you could put the seal of u.s. bancorp and said phe reason that is important you can have 700 billion worth of commercial residential real-estate oil, ld, stocks andonds they had a lot of assets when you have a company that goes into bankruptcy come you have a reorganize the -- a reorganize there come in and they are just interted in selling assets and unwinding their risk and this was the most horrifying of unwind in theistory of all bankruptcy is. no preparati

we found the ceo of aig. he is speaking out.ailed out his company to the tune of about $180 billion. the ceo is defending his vacation. >> i started working a week before i was supposed to work. it was not a matter of starting, it is getting in and started. i have conference calls every day. i can work from here as well as an office in new york. greta: he could get paid up to $10 million which he calls the bottom end. he has some choice words about people who are angry over the bonuses aig handed out. he said "a lot of people have lived in fear because of lynch mobs with pitchforks." really? he will be back in new york on september 7th. still ahead, your last call. to remember an introducing the all new chevy equinox. with an epa estimated 32 miles per gallon. and up to 600 miles between fill ups. it's the most fuel efficient crossover on the highway. better than honda cr-v, toyota rav4 and even the ford escape hybrid. the all new chevy equinox. was it really for fun, or to save money on heat? why? don't you think nordic tuesday

. >> investors are waking up to headlines of aig. michelle steel joins us live with that story and the rest of the business news in the bloomberg news report. >> good morning. aig is well known for getting billions of dollars from the government. now the guy who led the insurance company for 38 years may be facing a federal government lawsuit. they may sue the executive. he was pushed out during a government probe into its business. they accused of hiding losses and inflating reserves. the government is weighing a reorganization of fannie mae and freddie mac. they may put it in a government supported corporation. no decision has been made yet on whether to go through with the good bank-bad bank option. stock futures are pretty quiet indicating a slightly higher open. the government july jobs report comes out tomorrow. that is business news. reporting for wbal-tv. >> see you back here at 6:15. if you are in the market for new technology, now may be the best time to buy. >> the computer section at best buy was busy this afternoon. peop

. >> aig, dennis, what about aig. >> exactly. >> i'll bet neither one of you has reported this with wall street sources on aig, i happen to know those $20 billion at risk, aig gave goldman $10 billion in cash and goldman did default swaps with the remainder. goldman would have been covered by aig if it faltered and they did not need a government bailout. >> why did they turn theirselves into a bank holding company to get $10 billion. the bailed out banks got $35 billion in bonuses. banks who got bailed out, so cash for yachts is different than cash for clunkers. the american public knows it was their money in their banks and don't want to see flashcy displays. >> tony fratto, get in there. we let the two lefties go at it. >> goldman employees are getting compensation packages they negotiated with goldman. that's the way they're going to get paid and the way they get paid on the st. the only thing lloyd blankfein is saying there's enough sniping, goldman envy on the street and they make money and smarter than other guys on the street, they will get their compensation and saying, don't buy

aig continuing its staggering run.or the week, aig has doubled after posting its first profit in two years. let's talk citi, though, first. aig, a lot of people are saying that's a short squeeze. grasso, what do you make, though, of citi? we had cramer recommending to buy citigroup. seems like the tide has changed on this one. >> i think people thought citigroup was susceptible to a government breakup and selling off the parts. now people are starting to look at citigroup as maybe i could put it into my child's college fund. maybe i could put it away and maybe it will be a team stock in the next couple of years. definitely more attractiveness to citigroup. >> by the way, citi at $4.15 or so, it becomes margin eligible when it crosses $5. and also institutions more likely to pick up this stock. nearing that level now. phil, you're watching the xl up. the etfs attractive figes. you're noticing a nice breakout here. >> we've looked at this chart a couple of times in the past. it's been very telling. before we focused on t

finally, take aig. please. it got 170 billion in taxpayers' money but ate lot of that money went straight out the door to creditors like goldman sachs, who now along with taxpayer bailed out banks may charge us a billion dollars in fees for advising us how to break up aig, the company we own. melissa, i think i need a drink. >> hey. this is why we should just lower taxes. because it's like writing a check to ourselves as opposed to sending the money around and around and around in a circle would everybody teaking a little bit along the way. but whatever, that's my editorial. jane wells, thank you so much.. the "financial times" is reporting that u.s. banks stand to gain a record $38.5 billion in overdraft fees. many of the banks in fact have received tarp funds. like jane was saying. so is this fair, all this money going around in a circle? again, especially to the most financially strapped consumers. joining me now to discuss this, daniel alpert, managing director at westwood capital. we also have john ultheim

>> i am not an aig fan. fannie and freddie, a 50 cent price target.on is they're into the government by over $100 billion. charge-offs continue to rise. nonperforming assets can't to get very high. there's no value here. a lot of this was caused by the aig stock situation where the stocks off and fire, everybody's looking for them to do the same thng. you're not going to see reverse stocks. the government doesn't need it, doesn't want a lot of value here, the government knows there's no value here. the only reason why the government is they don't want to put the debt on the government's balance sheet. >> if the government knows the stocks are worth zero, why doesn't the s.e.c. warn people like they did for gm? they're saying the government knows they're worth nothing, not doing anything about it in materials of the investor. >> i can't speak for the s.e.c. or what they're warning. i can tell you given fannie and freddie, the amount into the government, the shares are worth relatively nothing. >> is it compartmentalized? will that sift its way into the

>> look, goldman sachs was owed $6.35 billion by aig and they got it because gostz rescued aig.they did an accounting move and hide all their losses in a previous year. now, they can't even say thank you by giving a little more money to americans hard working ferari dealers, you call that gratitude? >> at least they can do if they are making all this money, they could spend a little and share it with us. the bottom line, this is pr? they are afraid of the taxman. >> unfortunately in a heavily regulated society wall street servicing pr. >> one thing we should mention they do gifz away a lot of the money they receive. i know we would like to think of them as robber barons but there a lot of charity they use with the bonuses. >> of course. and they are concerned about the goldman sachs banks. we need to get people spending again. >> this is not about pr, it's about gm, government management. they are trying to get their hand out of pocket and their employees out of the newspapers. i think it's fine for them to say this but goldman sachs is now back in business again. this money is

aig, 180 billion. so hay, 15 billion for bear stearns, that is in the discount rack but the thing that keeps coming out and began another false statement people don't and draw the conclusion by letting lehman brothers fail, aig collapsed and that is kind of an interesting way to look at it. they came right after another you had fannie mae and lehman brothers dan aig, but did lehman brothers really cause aig to collapse? you go and look at all of the derivatives aig had and remember, aig is a 100 year old insurance company that is broken into pieces, the big insurance half is fairly clean, fairly conservative, fairly well-run and then there's a sort of structured product hedge fund on the side that was very aggressive, very reckless, very speculative. all that stuff started out in that structured product half, and some of it adrienne better than others. in general it was pretty much a mess because again, you are dealing with numbers that are so huge there is no room for error. perfect example, aig essen

let me start with aig. the new ceo said he was going to repayment the government debthe- owes them, $180 billion, folks. good he is reaffirming that, but i think there is more of a technical thing going on this is a short squeeze, not a lot of shares outstanding, i think 134 million. remember they had that 20 to 1 reverse stocks and we talk more about that in the next hour. financials are all doing well, citi passed its moving average, $4.30 now above that. much other stocks have also been rising in the middle of the day in the financial areas. if you're wondering why stocks are up even though the weekly jobless claims number was weak, we had positive data elsewhere with the philly feds, and normally that's not a big market-mover, but traders were impressed with the first positive reading since september, 2008. most important thing, inventory levels are starting to rise a little bit. of that's a good kay tore overall that the economy is definitely hitting some kind of bottom. tradertalk.cnbc.com. scott, how