david faber with the latest faber report. >> mat nesto, people may have seen penny mack, the ipo priced at 20. they continue to be few and far between than the initial public offerings, not secondary offerings. the stocks that caught my attention this morning. we don't talk about it normally. small company i know. the viewers know it. they have 930 stores across the country selling children's clothes. they've been involve in a nasty fight with their founder who owned about 16.6% of the company shares. wanted to place three new directors on the board and take control again of the retailer he started. that looks like that wasn't going to happen. the vote scheduled for tomorrow. he was nowhere near any hope of victory. he settled and is leaving. the company is buying back half of his shares, 2.45 million shares will be bought back below market at $28.88. he owns 16.6% of the company right now. soon he won't and they're getting a one-time marketed secondary offering for him to sell the rest of his shares if he wants to. yeah, just showing this to daba the door, so to speak. children's place

i'm david faber listening in still on that microsoft/yahoo! conference call. they are discussing their search deal. a long time in coming has been that yahoo!/microsoft search deal. well, microsoft potentially taking control of yahoo!'s search function. what can we tell you about it? well, a lot of things, of course. let's start off with take a look at how the stocks are going to open this morning. look at yahoo! it is down. i will get to why that may be the case in a minute. let's take a look at microsoft as well. of course, the impact on microsoft enormous company, not nearly as significant as it would be. but can we still have it or are we not going to? we're not capable of actually bringing up two in a row. all right. let's bring you the terms though. microsoft is going to pay tax, that is is traffic acquisition costs at an initial rate of 88% of search revenue generated on yahoo!'s owner operated sites for the first five years of the agreement. after that, carol bart said it was just but too complicated to explain on the conference call. it doesn't adjust

up next, the faber report. david has got more on cit and goldman. >> later, can the world's b biggest concert promoter keep people spending money on concert tickets as the country continues to struggle. ceo of live nation right here on "squawk on the street." you're the colon lady! diarrhea, constipation, gas, bloating. that's me! can i tell you what a difference phillips' colon health has made? it's the probiotics. the good bacteria. that gets your colon back in balance. i'm good to go! phillips' colon health. >>> all right, let's talk a little bit more about goldman sachs, not doing much of anything in terms of stock. you heard bob pisani talking about it. up yesterday, back it a level few would expect it would inhabit as little as six months ago. goldman sachs reporting record revenues for the quarter for the second quarter of 2009. almost record earnings but not quite. return on equity 23%, i'm looking back well below, for example, the 36% that they reported in the third quarter of 2007, for example, but take a

the pending collapse, david faber has been reporting the story and he is here with the latest. hey, david. >> good morning. cit is certainly going to be one of the focuses today, of course. the company is having a very difficult time throughout this week. a great deal of attention paid to its negotiations with the various federal regulators, including, of course, treasury and the fdic in terms of trying to get access to the fdic's program that would essentially allow it to issue debt. also being trying to ultimately move a number of assets from cit to the cit bank. we heard from cit in a press release that there did not appear to be a likelihood of additional federal support being provided over the long-term. and as i reported late last night, it does appear likely there will be a bankruptcy filing for the company as soon as friday. this is a very fluid situation. cit trying, of course, to do what it can to perhaps try and find either a buyer or some way to access that private capital that has been so elusive until it recently finds itself in this division. the stock trading, wh

david faber, over to you. >> all right, thank you, julia., from social networking to some of the latest trends in wireless communication, joining us first on cnbc, lowell mcadam, the president of ceo and verizon wireless. of course, a division, the most important division. lowell is in san jose, california, for the verizon developer community conference. let's start there. what is this community conference and how many developers do you have there and what are they doing? >> good morning, david. this our third open development conference that we've had since 2007, the first two focused on devices bringing mostly machine to machine device s s to our network. today, focuses on bringing applications to our devices, meaning the ones that we sell in our stores. so what we're doing today is talking about the partnership that we are going to develop to really take advantage of all the applications that can run on 3g net work as well as the upcoming 4g networks what would some of those applications be? >> well, if you look on the internet today ther

i'm david faber.tempts to keep you on top of all of those mortgages that were made that are going bad. take a look at pick a pays or what we call option arms. i've reported on this at least a year, year and a half now. interesting. you have to look at your data sources to be sure. but nonetheless, the latest news out from another one of these firms attracts these things. saying option arms a much smaller asset size than was sub prime or i guess these fit under all things. option arms generating more delinquencies and foreclosures than sub prime. we talked many times about having improved the sub crime catastrophe already. that's all declining. defaults and everything else. typically you're talking about a 2 and 28 loan. we sets have already occurred. take a look at delinquent option arms for april. 36.9% of people holding these mortgages are not paying them or at least missed a payment. option arms foreclosure, 19% compared to sub prime. unbelievable, isn't it? it is a more toxic, forgive me that word

anyway, to get the inside scoop, david faber has the latest. hello, david.. >> hello, larry. this is like as we say a fluid situation. as we reported yesterday, cit still embarking upon an attempt to line up as much as $3 billion in private financing thatat wou be secured by some of the company's unencumbered assets. a number of banks are trying to help in that effort and listing fixed income investors, perhaps private equity, but all of this happening in a very, very tight time line, or needs to happen, to allow cit to avoid a chapter 11 filing. that filing may not come today. the board met yesterday, no decisions made at that point. but nonetheless, time is of the essence, because frankly, if you're going to file, you want to do so with as much cash as you possibly can. and then it moves on to what the recovery value will be, of course, for bond holders and the like. i should also add that in speaking to a number of people who have been approached who run funds, been approached about participating in a financing, they have been approached on both, well, could we do it out o

. >>> i'm david faber. that the rating agencies completely missed the boat when it came to the securitization made up of the awful mortgages given out in 2005 and 2006. something i detail in my new book. but beyond that and as they play catch-up, of course, downgrading everything that never should have been aaa we watched in horror, many of the people who, of course, foreign investors who certainly bought many of those securitizations. interestingly, though, this morning and recently s&p as well, this morning moody's downgrading securitizations made up of jumbo loans that were not given out during the crazy years, but prior to that. 344, 61 jumbo residential mortgage-backed securities. the time period is interesting. '02 to '04. sweeping downgrades here significant in nature. and what i think is interesting, of course, is these were not jumbo mortgages given out during the height of the insanity. these are the mortgages that have been performing okay for recently. let's give you more of the details here in

i want to thank david faber, the brain show will continue at earnings central straight through 11:00 i think. for me, don, david, thank you. make sure you join us and becky quick. join us -- >> i'm joe kernan. spongebob marathon this week. "squawk on the street" is next. >>> live from the financial capital of the galaxy. stocks on a four-day winning streak into today's session but results from ge, google and bank of america keeping futures under pressure as caution takes hold. >> happy friday.. i'm rebecca jarvis in for erin burnett. builders are starting to regain some confidence as they emerge from the housing implosion. >> that's what we need. more houses. >> more of them.. >> we don't have a glut. wait, we do. futures not too bad. i'm not sure that number is accurate. i have a different number down here. so we'll double-check that. i have them down only 130. we'll triple check that. >> on the economic front, construction of new homes in june rising 3.6% to a seasonally adjusted annual rate 582,000 units. the highest level in seven months. it was driven by a rise in single family h

david faber, sue herera standing by. looking at this market, do you see any evidence of breadth?ue, i know you're very often looking at the internals of this market. what do you think? >> i agree with jordan. we don't see all that much in terms of confirmation of breadth, but what we do see is that traders are starting to take on a little bit more risk. as a matter of fact, they seem to be embracing it right now. and part of that is linked to intel. but if you look at the currency market, you usually see risk trades put on in some of the key commodity currencies. we saw that today in the canadian dollar, in the australian dollar, in the euro, and that to me signals the fact that the repricing of risk is going on and investors are taking a look at risk in a different way and willing tome brace it. whether or not they do that on  long-term basis as jordan alluded to remains to be seen, but today certainly risk was back in favor with investors, maria. >> david faber, it's certainly a positive to believe that this market is once again trading on fundamentals, and it does appear tha

let's get over to david faber at hq with the faber report. >> thanks, mark. yeah, brings a tear to my eye to think that earnings central, earnings central is over. but i'm not done talking about earnings. we've got disney last night. i don't know, they didn't talk about disney there. i'm sure they did at some earnings central. the stock this morning looking down just a bit. not too much. there was a downgrade from jpmorgan, you also had a target increase. let's take a look that if we can, please. it is going to be down but we're not talking -- well, maybe as much as a buck. we'll see. and that was right around where it looked last night in the trading after we heard the numbers. take a look at them. eps was 51 cents. $54 million, down 26%. and revenue decline on the top line, down 7%. as for segment revenues, let's go through those and i'll give you -- try and give a sense of what's going on here. media networks, abc? of course not, it's espn. espn is the engine that drives the media part of this company, for sure. parks, disney world, disneyland, the studio.

. >>> a quick re >>> david is back with the faber report. we were discussing, were there any american beers left? some of the biggest names in media earnings and you can find out a whole lot about an economy if you look at media. >> you certain can. advertising is the heart of all media business. for the last year the heart has had a pretty faint beat. on the local front the decline of retailers and the near death the automakers savaged. cable networks has been far stronger, that's not to say it has been anything but bleak. with viacom reporting earnings and time warner reporting today, what have rewe learned about the health of advertising? it appears the ad market has bottomed. off less in the second quarter than the first in year over year. and 3% year over year decline in advertising revenues. the ceos at both companies did not provide a great deal of visibility. the upfront market in which networks sell much of the ad inventory had a slow start and less indicative of ultimate demand and pricing for ads than in years past because so far

cnbc's david faber joins us. david, last we heard from you, they were on track, you thought, most likely scenario, towards bankruptcy. but there was still these negotiations going on on the side. any revolutions either way? >> no. steve, based again on the conversations i'm having with any number of people who are both close to the company and also potentially thinking about investing in some sort of financing, the expectation i would say is still more likely than not that they file chapter 11. that being said, on wednesday night, and speaking of people again close to the situation, there was an indication that our -- or an expectation that a filing might be likely today. that seems to have abated a bit. the company, as i reported yesterday, still trying to line up for what would be a secured financing, as much as $3 billion. but there is another path that's also being followed. pitched to the same investor base, namely a debt-earned investor financing, as much as 3 to $4 billion, according to sources i'm talking

david faber. what do you have? >> not going to follow-up on what you just mentioned about gannett. one of the largest, of course, newspaper companies in the country, and the world. 84 daily u.s. newspapers and not dead quite yet over at gannett although they still continue to take their lumps. 30 cents a share when you put up eps item, you get 46 cents. and it was above what people are expecting. revenues at 1.4 billion. net income what we're talking about, making $70 million in a quarter. hey, they made money. look at revenues year over year things continue to deteriorate. maybe not as quite the same rate that they had previously, but listen, you know, your publishing revenues down 20%. advertising revenues, that's by the way combined. uk worse than the u.s. in terms of advertising revenue.e. that's what you get now. 32%. digital, consolidated career builder. that's why you're seeing a huge increase in digital revenues and broadcast also down sharply.. you see it there. down over 20%. obviously the company needs to reverse in some fashion those disturbing trends. one reason why th

well, david faber, thank you. >> thank you. >> a new use for tidy whities. and it is a business story. it is a business story that only jane wells could find and tell appropriately. and that's next. tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move. tdd#: 1-800-345-2550 doesn't matter if a company sells computer chips tdd#: 1-800-345-2550 or, i don't know, fish and chips. tdd#: 1-800-345-2550 i'll look at all kinds of stocks before i settle on one. tdd#: 1-800-345-2550 if i think i'm onto something i'll check it out, tdd#: 1-800-345-2550 you know, see what other traders are up to. tdd#: 1-800-345-2550 when everything feels right though, tdd#: 1-800-345-2550 that's when i get serious. tdd#: 1-800-345-2550 and the minute i get into something, tdd#: 1-800-345-2550 i already know when i want to get out. tdd#: 1-800-345-2550 of course, every now and then i'll talk with somebody tdd#: 1-800-345-2550 who knows what i'm trying to do. tdd#: 1-800-345-2550 (announcer) switch to schw

i think we're right at the neckline of the dreaded head and shoulders formation. >> david faber weighing funny how many guys are technicians this week talking about head and shoulders. >> i always thought it was a shampoo. >> so i did. we have earnings starting next week. interesting, there are any number of people who sort of have seen the earnings so to speak, who i speak to. they don't tell me what the earnings are, but they see a cross section whether they be an attorney close to a company or pr person. will be very interesting to see these numbers. things are not going to look particularly good. that's just anecdote. doesn't mean it will be borne out in fact. we'll see that when earnings season begins in earnest next week. interesting to see if the move up in the markets will be borne out by these numbers. >> the question then is what's bad good enough? it was good enough for the first quarter, but the second quarter are we looking for more? are we looking for something tangible to hang our hats on to say things are actually moving in the direction where we were hoping they were mov

david faber joins us now with more news on the deal. hey, david. >> thank you. yeah, you know, you notice, of course, that stock price of yahoo down. now, it had been up in part on speculation that a deal would get done. nonetheless, there is some disappointment in the lack of an upfront payment. let's bring you some of the details on, as you said, trish, this long-awaited deal, one, of course, that was -- well, out there more than a year ago. at what is at the time were perhaps more generous terms for yahoo. this time, microsoft will pay for traffic acquisition costs at an initial rate of 88% search revenue generated on yahoo's sites for the first five years, but carol bartz indicated it stays in that range. there is no upfront payment, however, with the deal. different than an offer that microsoft made about a year, a little over a year ago, which included a billion dollars up front and some guaranteed revenue from the deal. the companies could face -- well, they will face scrutiny. likely they'll get through it, but nonetheless the close is hopefully for 2010

david faber has been all over this story answered joins us now with more. hi, david. >> we should mention, scatten a long-time adviser to the company, well-known law firm. so, with he will see. they do need some advice over at cit because they are facing what, frankly is a crisis that has been in the making for quite a long period of time. as you look at the stock, well down over 20% all this morning and of course, trading at only 1.17. you need look only at the last 10q, the one that was filed for the first quarter of 2009 to see what i'm talking about, these problems only exacerbated the last couple of months, so much of the collateral ci it has declining in value. said listen we need liquidity, funding, including the ability to issue unsecured term debt. private capital hard to come by for the likes of cit, they tried get around that saying fdic, allow us to come into your tlgp program, temporary liquidity guarantee program, we can issue debt backed by you. they haven't done that the fdic seems to have said no thanks to cit's application, hey, we are stil

." >>> cnbc's david faber reports cit's talks with potential financiers continue with discussions centering on a debtor in possession loan. accepting ious for another week as state lawmakers continue to break a budget impasse. >>> and delta airlines is raising airfares by $10 per round trip. if matched, it would be the third successful fare hike by u.s. carriers in the past six weeks. that's cnbc.com "news now." i'm julia boorstin. >>> stocks are limping into the weekend here today, folks, but that four-week losing streak is over with. our best weekly advance since the trough in march. hi, folks. welcome to "the closing bell." i'm matt nesto. maria bartiromo is going to be right along any moment now. but as we take a look at this marketplace here today, we're looking at a mixed situation. it's certainly been interesting from the outset. we have some of the biggest members in the dow duking it out at the top and the bottom of that index.x. but the dow right now up 22 points. 32 points of that 22, i remind you, is all coming from one stock. if you can guess it i'll give you the answer in a co

thank you, david faber. >> well, it is -- i try not to use hyperbole and explain something that it's impossible to ever prove, now that it didn't happen. but at least i believe -- i had -- when we had this debate, i had some people say, well, listen, look at everything that's been in place since the great depression. we can't have that. you know, we certainly couldn't go through that again. i looked at it -- the opposite. when i looked at in the world where information can flow, money can move, with the -- with the speed of light, electronically, look how fast this liquidity went, looked at the ripple effect and looked at when a financial system fails, a whole kre country's economic system can fail. i believe we could have been -- gone back to the sorts of situations we saw. saw in the depression. i remember asking ben bernanke what he thought the world would look like. and he said, well, just take a look at what happened in the depression. but i didn't spend a whole lot of time thinking about that, because i knew it was going to be very bad, and i never wanted to experience very bad

because we're going to talk more about this and bring in our david faber, and also greg farrell, wall street correspondent at the "financial times." david, i'll start with you. one of the questions being bandied about is whether the guys at goldman are just that much better than everybody on the street to come in with a profit like this, or are they basically taking advantage of the government's safety net that in some ways they still have, and trying to redefine the role of the bank and how it makes money. >> yeah, that's always a larger question. listen, goldman did distinguish itself during the beginning of the credit crisis and throughout the crisis, the financial crisis by buying better openly, i think, sue, at understanding its risk and therefore positioning the firm appropriately. while on september 18th, goldman was on the brink, just like every other financial firm in this country, nonetheless, they ultimately did not get sucked into the subprime, the mortgage area in a way that resulted in significant losses for that firm. here we are now in this period where there are simil

. >> and i'm david faber. the spotlight on media and the box office is the latest harry potter movie opens in theatres.. we're going to tell you which stocks could be the big winners from this multibillion dollar franchise. here's what else is on the menu. >> in washington, this next hour and several hours after that are crucial to the senate's attempt to come up with its way of paying for health care reform.. they don't like the house surtax on the wealthy, senators and staff in both parties are meeting right now at a tax on some provider employer provided health benefits is not dead yet. >>> a disappointing earnings season for the airlines. oil prices down substantially. but so are passenger revenues. we'll have all of the numbers. >>> i'm jim goldman in the silicon valley. com score says google's search market share was unchanged at 65% in june. yahoo fell fractionally, but check it. microsoft's bing, the only gainer, 4/10 of 1% to 8.4% on the eve of google's earnings.. more on that, coming up. >> and that'

upgrade from o o perfrforonon the waytoto 11 it's's made big j jpp there reread let's get t erero david faber for the veryry lesesrenditionff the "fererrerepo." >> thanks.. there we e.e. usually we're overnn that dede. things arereversed. i've been having iueueshis momorng.g. we've g got importantnt c chaes citi group. onef the nioiosargest babank hobbled, to say y ee asas soonon tbebe owd,d,34% b by youd me, , thu.u.s. toks taxpayer. some signinicacant management anans they want to go over f yothth morning.g. what can i iell youfirst? gary, rerember, long-time cfo,o had been c chamaman the citi holdings. he aving. he's out. he's had enough, i gus. he's going to utut,,t least that's what it says hehere he's's relocating tootatah to devote more time to o hi f famy anand other businines iintests. yes. we're gogoin getto eugugen mququaid. why dodot t we do that rightnow? th is one of f e e bi additions at citi groro.. eueuge m mquades going to join as ceo,o, t bank. look at thiss gguy workk industst.. i dodon'knkn jean mcquadede, bu he was at merrill lynch fromm february of '0808 until feuaua o

. >> let's go to david faber who joins us with details of cit, the story, of course, still developing and evolving. >> exactly, sue. cit right now the finance company struggling to avoid a chapter 11 filing that could come as soon as tomorrow is looking for $3.2 billion in secured financing from private investors over the next day. that's according to people close to the situation. a number of private equity firms and six income investors have expressed interest in talking to cit about providing that financing that would be secured by some of the companies currently unencumbered assets which numbers about $30 billion. things like airplanes and rail cars. but obtaining that financing in such a short time frame, well, that will certainly be difficult. private equity firms typically require at least a week's worth of due diligence for such an investment. hedge funds that have already taken a position in cit's bonds, might prove willing to offer some assistance. but how much and at what price remains unclear. as well, sources tell me to the extent the financing materializes, it would be l

joe's back at headquarters with david faber and done marin of lightyear capital.k. >> now i'm understanding that citigroup is hitting right now, and this is one we've been waiting for as well. and i'm certain we'll have to go through this and look at t metrics. revenue $29.97 billion. that's for real? 49 cents.x net income of $4.3 billion or 49 cents a share. $4.3 billion. and those numbers, that revenue number is like so far above nsensus expectations, it almost makes me wonder what we're talking about here. whether there's a reason -- >> $6.7 after-tax gain on the sale of smith barney. >> i wonder if that was in -- you never know what analysts are including in some of the revenue numbers. the 49 cent number is also so far above what the -- i mean, we're looking for i aloss, so a loss of 37 krebcent of -- >> but the number includes that gain. >> it does? >> so they're giving us a -- >> and they did not -- you know, i've got to read through this. i just printed it out. >> and as we always point out, citigroup, with a number of outstanding shares, it's hard to mov

david faber is here to tell us what he's hearing this morning. we're glad to have you here this morning because this is a very confusing story. >> yeah. well, at this point the confusion will probably get clarified quite a bit. we'll see whether, in fact, it's today. unfortunately, as you well know, becky, these things have a tendency to feed on themselves very quickly. >> can i ask you -- >> so cit's inability to reach a deal with the government yesterday -- >> is it the death nail? some people say maybe they can somehow sell something or raise money somewhere or do you -- >> according to "the journal ", they had a stress test that indicated they needed $4 billion. it's hard for people who know the company that i've spoken to or investor who have been studying the company for some time, imagine they could be in a position to raise that much money quickly. >> although they have profitable ventures. >> and they've been on the policy of trying to sell assets. it's a difficult period in which to do that. they've been unable to raise private capital.

and, david faber looks at the economic crisis in "and then the roof caved in." for more best-sellers go to nytimes.com. >> 2009 books expo america book sellers convention in new york city and here with stacy lewis out of san francisco, what do you have coming out this fall. >> this fall we have a couple books coming out from angela davis. a clicks of essays, her first book that has been published in four years that covers themes she's particularly interested in, racism, sexism, and the prison industrial complex. and then, particularly, interesting, book we are publishing with angela is a new edition of the narrative of the life of frederick douglass, an american slave which contains douglas's narrative as well as essays by davis that were part of a course that she taught at ucla in the '70s. so, it really brings to life that essay and will also include a new essay written by her this year. so we're hoping that people who have read the narrative before, take a look at this book as it will be enriched by the new and this old work. and we're also publishing the awa