up the capital business, and gmac was part of a larger government solution.the options here, they have treasury and the federal reserve -- >> right. >> -- to give them aid, and we'll see if they do, but i got to say, it seems like the issues are real from the fdic's standpoint and they have not gone away just yet. >> thank you very much. >>> thanks so much for watching. see you tomorrow. you really need it these days. how come? well if you're hurt and can't work it pays you cash... yeah to help with everyday bills like gas, the mortgage... ...and groceries. it's like insurance for daily living. so...what's it called? uhhhhh aflaaac!!!! oh yeah! that's it! aflac. we've got you under our wing. a-a-a-aflaaac! come on in. you're invited to the chevy open house. where getting a new vehicle is easy.

up the capital business, and gmac was part of a larger government solution.s here, they have treasury and the federal reserve -- >> right. >> -- to give them aid, and we'll see if they do, but i've got to say, it seems like the issues are real from the fdic's standpoint and they have not gone away just yet. >> maria, thank you very much. thanks so much for watching. see you tomorrow. welcome to the now network. currently, thousands of people are enjoying the new palm pre with its revolutionary web os. they're running multiple live applications at the same time. - ( thunder and rain ) - 3 million are using the simply everything plan. each is saving $1200 - over an at&t iphone plan. - ( cash register dings ) together that's over $3 billion. - enough to open a dunkin' donuts in space. - lkie-talkie sounds ) from america's most dependable 3g network. bringing you the first and only wireless 4g network. get the palm pre from sprint. only on the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com.

the key problem: itsll-fated investnts in automaker chrysler and lender gmac.he firm says in the fute, it'll avoid ose kinds of hene-grabbing deals. >> paul: tomorrow, our fday market monit guest is robert drach, editor of the "drac weekly research port."  >> susie: ponzi schemer rnie mado is not going to appeal his 150-year sentence. maff's lawyer did not give a reason for his cliens decision. madoff w sentenced last week for masterminding one of t biggest financiafrauds in u.s. hiory. he still doesn't knowhere he'll servhis time. the u. bureau of prisons will make that decision. >> pau for millions of people it wasn't a simple gamof tag. new york's aorney general plans to chargsocial networking web sittagged.com with iasion of privacy and deceptive marketing. the mpany is accused of luring new users by tling them a frnd has posted photos to share. there were no photos instead, tagged algedly raided users' priva accounts for eml addresses. taggedays it has temporarily stopped the practice. euquu@@ >> susie: here's a look what's happeningomo

of that $30 billion, $27 billion was from their finance business, gmac. they made a lot of money in subprime mortgages and mortgages and they don't own gmac anymore, eric. they have a business model that is completely upside-down, analysten, i have a -- and listen, i have a better chance of waking up and being tom cruise tomorrow than we have a chance of getting money back. physically, literally, economically impossible. eric: kevin, he is probably not going to wake up tomorrow and i won't wake up and be glenn beck, but fritz said we're going to concentrate on customers, cars and culture, but credit, can people get loans to buy these cars? >> well, the most important thing this plan leaves out is the magical elves that come out of the woods and start sucking that causes people not to buy them. >> the credit situation will loosen up in the next six months when we will be out of the recession, almost certainly within the next 12 months but just because people have credit doesn't mean they want to buy crappy cars from g.m. fritz is setting up a website calle

need i remind you that gmac is also known as ally, the bank that won't admit they're part of gmac. >>se are the ones where they have ads where they torture children. >> ubiquitous ads, they are everywhere. let's show you the internals. there they are, mark. this happened yesterday, too. literally on the new york stock exchange it was closer than this. dead heat, the market going up and done and got a bit of a bounce. we'll see if happens today. on the nasdaq, declines outpacing advancers. >> the fed and u.s. treasury are extending the definition of systemic risk. now they're including small businesses. still a course of disagreement though over what the fed's role should be when it comes to overseeing risk. is it a natural fit to give the feds supervisory authority over institutions deemed too big to fail? or the fed taking on too much and moving away from its primary aim of fighting inflation? here to weigh in, alan blinder, professor of economics at princeton university and a former vice chairman of the federal reserve. and john taylor, former undersecretary of the u.s. treasury for

and oh, by the way, they sold gmac, so they weren't going to go bankrupt, when they went bankrupt. what a fabulous company to invest in. brenda: they are a leaner organization, they pitched massive debt. they got rid of losing union contracts. isn't there something to be said for that side of the story? >> absolutely. financially, they're in -- they have to be in much, much better shape. they got rid of all their losers. they kept the winners. but here's the problems. except for the -- except for basically a few of the top guys and the board, all the people under them are still there. and what those people lack, for better or for worse, was a vision. and even if they kind of get it, it's not like toyota and honda and ford are just going to look the other way and wait for g.m. to regain market share. so you got the same kind of tired thinking, and now they're way behind the curve regardless of the financials. i just -- i think they'll be going back in bankruptcy within a few years. brenda: do you think, though, will we, taxpayers who own it now, we'll get a better return on our inve

certainly, if you look at who they bailed out, they bailed out gmac. they're a factor, right? >> yes. >> why don't you tell us about that. >> gmac is a factor, wells fargo, dbmc and cit being the biggest factor. i don't think people understand how factoring works. that what you're doing is you're assigning your receivable to the bank. they're guaranteeing that it's going to get paid. i'd kind of use it to -- look at it like a big credit card, okay? so you go into the store and you're buying. and you place your credit card in there and it goes through and the store gets the credit immediately. right? so they get the money immediately. and then you don't pay for 30 days later. right? >> right. bew, summer classic -- >> this is the same thing. this is the same thing but for business. so you take your receivable and you give it to cit. they guarantee the credit because they know the people that you're selling to, right? >> correct. like if you're a company that's making something, like, let's say, patio furniture like you make, some patio furniture and garden furniture, you're sel

. >> mike: and not suggesting like a specialist gmac now. >> mike: amorites or anything like that keep you. >> now. i went back and got fed up with the doctor had sort of a new doctor. he was sympathetic to my pain. he ordered an sri, mri, ct scan on the same day. it took me months to get them good show that a condition called spondylolisthesis that required surgery. he said that the surgeon would give me a call for a time to come into his office and that was nine months away. >> mike: nine months? >> nine months. >> mike: your son is a similar situation it's like an inherited condition cemented his communist. >> mike: were taking a different course for him and us to go through timely medical alternatives and then come to united states with her son. >> i will. going to the canadian healthcare system i was forced to deteriorate to a point where i was basically addicted to morphine. i was using a walker to get around. i was wearing diapers because i know control of my bladder because the nerve to my bladder. >> mike: you are 20 years old kick your sumac*nobody would listen to me. twenty-

do you believe that they do, because of the gmac status? is. >> at the present time, we see no indications that we're being disadvantaged. now, clearly, that's an area that we want to watch, because we -- you know, we know the government wants to have an equal playing field. we are very supportive of the u.s. government temporarily helping gm and chrysler for the good of the industry and the good of the economy. so right now, we don't think we're going disadvantaged. but it's something we all want to keep our eye on. >> your stock is up 200% since the beginning of the year and we talked with one analyst this morning on "squawk box" who said, risen, if these guys continue at this trajectory with breaking even, we see the industry going up 11 to 11.5 units, there is a chance we could see a 15, $16 stock. what's your perspective? >> well, again, the stock price is a result of all of the actions we're taking. so the most important thing we do is stay on our plan, keep restructuring, production is a real demand. keep accelerating the development

one of my lenders gmac did it two years ago, i have 5% loan and every year pay principle and interestthat worked, i'm neutral on the property, making payments on that property. i called washington mutual and now chase and call them on a regular basis and get someone being paid minimum wage says we can't do anything for you this week, next week we can do something for you but here are the rules next week. >> how much money down? did you have to put 10, 20, 25% down? did you get any with zero percent down. >> i did 10% down with an option and second behind it. >> gary is showing us if you do pay your mortgage right now, you're a chump. >> gaming the system. part of what's wrong with the entire thing. real dealers thank you very much. special thank you to terry, awfully nice of you, good luck with gaming th system, babe. still a lot more to come tonight on "cnbc reports." >>> g8 to g 0. is anything accomplished? does anything ever get done? is this just a big waste of time and money? see what dennis thinks. plus, the picture that has heads turning all over the globe, this may be the bigg

gmac has received $12.5 billion in government fund since december and was one of the companies that mailedhe government -- the treasury's stress test. the latest survey shows optimism from small businesses fell to a reading of 87.9 following two months of modest improvement and comes mostly because of concerns over lower sales and profits. only 7% of the companies surveyed say they expect the economy to improve. that's down 5% from may. >> the debate over the creation of a consumer financial protection agency heats up. today the senate banking committee heard testimony on the impact of such a regulatory body on both financial institutions and the consumers it would protect. our next guest offers the view of the banking industry to the committee. he joins us in in this exclusive to tell us how it all went down. ed yingling is president of the american bankers association. welcome. >> thank you. >> give us a sense what went on today in your testimony. >> i think there is broad agreement in the congress and in the industry that we had some real regulatory farrells. the prime example is with s

so the o business model, to pickn gm, where you didn reallyorry about how you paid for car, the old gmac would finance it for you,r a bong or a caterpillar or a deere or indeed parts ofge are very dang to be going long at this moment in my opinion. >> do you want to avoid that area or no? >> yes, i would too, maria. i would say the things you want to avoid are many of the areas that have done well since march 9th. i think the companies that have done well, the banking side may be okay for a week or two, but not beyond that. and i would say commodities, energy, which has been down recently, i think it's likely to pick up later on as a defense, especially if the dollar gets to be a lot weaker and if inflation fears start to rise. so i think in terms of the future, you're looking for worse than in the recent past. >> we'll leave it there. great conversation as always. we appreciate it and we will be tracking the earnings numbers all week and throughout the second quarter and we'll check back with you. thank you, gentlemen. >>> just ahead, the latest on bernard madoff. where will he b spendi

the recession we're in, but our problem is financing our cars because the government is backing up gmac and ford's financing arm. that's exactly what would happen in the health care system and i think people on my side don't like it, and, you know, it's interesting. the democrats are having a hard time selling it to their own members, as well. >> let's talk about another issue on the table. public option non-start with senate republicans, how to pay for this is another thing. they have a surtax on wealthy americans. one of the things they're talking about in the finance committee where a few of your members involved in the negotiations trying to find bipartisan ground is this so-called cadillac insurance plan tax. you would tax the most lucrative insurance plans that give way above average benefits. are you okay with that? >> well, some of our members think that's a reasonable way to go. but if you're talking about paying for it, let's look at the plans actually out there, john. the health bill and senate health committee bill. they pay for it by cutting doctors, cutting hospitals, and

and between gm and gmac, $60 billion, really actually closer to $65 billion administered to both of them, so, we're starting to see the car resale values, heidi, are rising. gm, of course, emerged from bankruptcy court this month. so, this is an important tool for them for overall sales and it could happen very quickly, heidi. >> but people have been getting at least some financing from credit unions, other lenders. how important exactly is this? >> well, to gm it's huge. really to almost any car. i mean, leasing by some estimates 20 to 25% of gm sales. and you know, i mean, how many people do you know that's leased their cars, especially high-end cars. so, this is something gm wants to get a piece of the action and, of course, to do the financing and to do one-stop shopping that's what they want to do. so, that's what's happening with gm. we did get a report on big-ticket items such as cars and took the biggest drop since january and you're seeing stocks dropping, too, right now. one hour into trading. the dow and the nasdaq each down about 0.5%. heidi? >> all right, susan lisovicz, we'

related payouts after gmac returns dividends on its stocks. that's cnbc.com news now. i'm courtney reagan. %% >>> hello, everybody. welcome to "power lunch," i'm sue herrera, pour partner paul griffith off this week. sizeable rally, or at least what a lot of people would like to see turn into a sizeable rally. energy shares leading the advance. good news on the retail front also brightened the mood, and is chevron, the big winner in the dow. >> i'm michelle cabrusso-cabr a cabrusso-cabrera, he is the fixed manager of the year, and he hasn't lost money since it started 25 years ago. he's going to tell us how you can cash in by betting on bonds. >> and i'm brian shackman, president obama making a good push toward alternative energy, and china wants a big part of the action. the question is, will protectionism push the u.s. aside and make china the power player for renewable energy? we have a first on cnbc interview with the chair woman of jpmorgan china equities and here is what else is on the power lunch menu. >> goldman sachs just finishing up its second quarter confer

citi, bank of america, aig, gm, chrysler, chrysler financial and gmac must all submit compensation proposals to treasury on august 13th. fineberg's decisions are not subject to appeal. >> speaking of compensation, the big story over the weekend, a top citigroup trader pressing the bank to honor a 2009 pay package that could total $100 million. that's what this guy makes. what he's made a couple of times per year because he eats what he kills, i guess. it stays dead. the move could set the stage for a showdown between citi and pay czar fineberg. the trader's name is andrew hall. he heads citi's energy trading unit. he argues he's contractually obligated to receive pay based on profits. what do you do here? >> pay him. >> taxpayer money. it's fungible. but there is a lot of taxpayer money in there. >> is the contract intact? >> i guess. we threw out a bunch of contracts already, didn't we? >> gary? >> if you throw this contract out, what will happen in terms of the domnee effect, multiple contracts tied directly into revenues. >> this guy is threatening to take his whole unit with him too. >>

it along with gmac could make leasing available august 1. it hasn't been lucrative lately because resale values are bouncing all over the place. it's starting to stabilize. it's not clear whether chrysler is going to return to that leasing option. robin did you have breakfast this morning? >>. >>> i did. >> i'm not sure if you had anything organic. hit cost you more at the checkout. could you be wasting your hard earned money? new research indicates it depends on why you're buying it. 50 years of data on organic food found they're not any bet when it comes to nutrition but a big selling point, of course is the lack of pesticides and organics. researchers did not research that. >> hope you had breakfast too. >>> michael vick may be able to return to football but he is not necessarily winning the popularity vote. he leads the recent survey for the most disliked athletes in the america. we're taking your thoughts and who you would vote for that slot. >>> well, obviously not everyone is seeing eye to eye on what's going to be the best for your h