bills no longer considered risk free by chicago mercantile exchange c.m.e. group announced monday that as part of a normal review of market volatility they claim it is determined that t. bills should no longer be treated as a gris cre when used as collateral haircuts on t. bills will rise from zero point zero percent to point five percent and. let's talk about this for a moment treasury bills you say when you have them in your portfolio and you use them as collateral you can borrow against them one hundred cents on the dollar and this is interesting because if you remember going back to the construction of collateralized mortgage obligations what they did was they created collateralized mortgage obligations as a way to skirt the margin requirements set up by bows will in switzerland that's the genesis of collateralized mortgage obligations it's all about the margin requirements and margin requirements are different for different classes of assets so a junk bond you have to put up more of the junk bond if you want to put it into an account and borrow against

. >> reporter: at the chicago mercantile exchange, john brady put it this way: >> until the job market starts to contract and we see outright negative job growth or job losses, the chance of a double dip are still rather small. >> reporter: but the markets remain highly volatile, scott, and two out of the three major indexes still ended the day in the red. >> pelley: anthony, we had that big drop in the dow earlier in the day, and then it turned around. what made the difference? >> reporter: well, the first shift in mood came with the job numbers, but the second real rally came when the word leaked that the european central bank was intervening to help italy and spain, which many feared were going the way of greece. that's when we had that 400- point swing inside of one hour, scott. >> pelley: thank you, anthony. while the unemployment rate fell in july, the government said it was only because people dropped out of the labor market, too discouraged to look for work. this latest trouble in the financial markets started overseas, where we have liz palmer in london. >> reporter: in august

ted is at the chicago mercantile exchange in chicago where these commodities get traded, where s&p futures get traded. you're in the only place on earth right now, ted, where money is actually going in. money is coming out of every other market. give me a sense of what's going on with treasuries. the one thing that should have been hit hard by this downgrade didn't get hit hard. >> yeah. on one level that's accurate. but people are saying, listen, this downgrade did one thing. it was another negative component into this fueling of the selloff that we're seeing today. as you've pointed out, what happens when you sell off? you have this money to park. where are they parking it? ? treasuries because it's the only game in town in terms of a safe-haven. people are selling because they heard of this downgrade possibly or at least it's a component. then they're going around a circle and buying that same product which was downgraded because they think it's safe. they know it's safe. the bond market trading just ended here at the top of the hour. investors, while they're surprised somewhat that the

sandra smith is live a the chicago mercantile exchange. sandra, what's going on there? right now we're watching prices charging higher. even above 87. now we're staring $90 a barrel straight in the face, up 1.57 up on the day, just at about 88.50 a barrel, so we're starting to talk about # \on/zero dollars a barrel yet again. what's pushing prices higher today? well, there are some reports on the economy that investors are choosing to look at the positive. we got the price index of 20 u.s. cities that did show a drop, but it was just a .1% drop, and that indicated that there may be some stabilization in the u.s. housing market and that has some bullishness in oil prices. when the perception is that the economy is improving, we do see buyers in oil. so that's what's pushing prices higher today. where do we stand as of now? we're up 18 percent as far as oil prices are concerned, over just the past few weeks, and analysts say right now that oil prices are likely to continue higher, gregg. gregg: and that cannot be good for consumers. sandra smith, thank you very much. >>>

. >>> let's take it to the nation's heartland and the activity rumbling to life at the chicago mercantile exchange. ted rowlands is there. what's the early view? >> the bond market has been open for 40 minutes, kyra. as christine talked about at the top, short-term ramifications of the downgrade are that interest rates are actually going down. people are parking their money in u.s. securities, despite the fact that the u.s. has been downgraded. it is still the safest place to put your money worldwide. that's what we're seeing early on here. one of the effects that this downgrade could have on local government sincere a concern, and that is that municipal bonds around the country could get downgraded because they're tied to the federal government. communities across the country are watching very closely, because it will mean more expense to those local and state governments. right now, the headline here is that everybody is watching for that opening bell in new york and interest rates actually going down a little bit in the short term, because people are are parking their money with the u.s. govern

. >> well, on that note, with us now from the chicago mercantile exchange, rick san telly.o talk about? >> what's it look like right now? >> let's talk about something happy. >> you want to talk about what movie you've seen lately? you want to talk about baseball or the world markets on fire. >> we could talk about the world markets, you know, it doesn't sound pretty and it's nothing i ever thought i would say on tv but after all of the programs, the band-aids and failed policies and promises, whether in greece, portugal, europe, the u.s., intervention by the japanese, panic by the swiss that everybody wants to pile into their currency, close to $1700 goal, we're seeing worldwide somewhat forced financial enema that will cleanse the system because it has to happen. and no force is going to prevent it from happening and i think it's a lot more orderly than i would have thought. it's going to progress and i think when we're done with this we'll be better off for it. it's kind of sad we had to create this debt to come back to the same intersection and have the same accident. >