be part of any consolidation of u.s. airlines. that's cnbc.com news now. i'm courtney reagan. good morning, and welcome to "the call," everyone. i am trish regan live at the nyse at the heart of the financial markets, where we are watching the dow still in positive territory here, but barely, up nine points as investors gear up for the start of a very, very important earnings season with alcoa kicking it off later this afternoon. what do you do with your money right now? 're going to talk all out 1 it.1 lay some. >> thanks, trish.1 m larry kudlow. will oil price swings event an economic rebound? just how bad is speculation in the market? oh, my go, eculation. we'll sort it all out, plus, talk commodity etfs. they've been on a roll, but it might be time to get out. oh, speculating, my lord. >> i'm melissa francis. in "call of the wild" taxing the rich for universal health care. wait until you see who the rich are. is that the right solution? we'll debate. this is "the call" on cnbc.

all right, stocks are modestly higher as investors look for bargains from the recent sell-off. all-important earningsean after the ll today. on the economifront, the international monetary fund saying the global economy is starting to pull out of recession in 2010, that is, but the recovery will be sluggish. the dow is up ever so slightly. by the way, ten-year treasuries well below 3.5%. the s&p has dropped slightly into negative territory. gold is down $13. the nasdaq is also down. none of this bodes particularly well for economic growth expectations. and trish, on top of all that, let's tax rich people. they are the real evil culprit -- >> all evil. >> the root of all evil, as miss francis just said. >> yeah, well, they want to pay for health care some way, and this is what they're talking about, larry. it certainly makes a lot of people very, very much outraged

by the news. and we're going to talk about that later in the program. but first, let's talk about this market. here we are up 3.2%. now, i feel like i have been saying for weeks, the start of the second quarter earnings season is going to be under way shortly. well, here it is, finally. and this is sort of the moment of truth for a lot of investors, because they have been waiting and waiting to find out just exactly what these results are and what are third quarter results going to look like, because that's so much key here. people are looking for some signs of economic recovery. here with me on the floor sorting it out, bertha coombs. good to see you, bertha. >> you know, it's a frustrating time, because we don't really know which way we're going to go. a lot of folks watching whether this market holds in. the s&p level at 880. it's fascinating, because it's just -- it could go either way. and it's interesting to look back to where we were going into the first quarter earnings season. we had that march low. we were expecting armageddon, and then we got something that, you know, that surprised us, a preannouncement by wells fargo that set things going.

>> that's right. >> and we started seeing commodities move higher. we started seeing the ascent of green tooth. >> it feels a little different. >> it feels different. because since we're not expecting armageddon, now we're looking for proof of the green shoes. whether they were green shorts. >> i like that. >> i like that. of course, alcoa kicks off today, very interesting. even as you're seeing some of the other commodities pull back, commodities were leading earlier, but now they have pulled back a little bit. we're getting little more defensive. we're seeing health care and utilities once again moving up. people looking for that dividend yield. >> yeah, okay, let's talk about american airlines. i know that's one that you wanted to get to today. >> no, actually, it's microsoft, mister softee. and goggle. they're kind of traipsing on one another's territory. google is now looking at the operating system android. but we've heard about these operating systems trying to topple microsoft before.

linix was supposed to be it, then microsoft is trying to challenge google. i'm a googler, not a binger. >> do we have any starts to throw off? >> i'm not sure. they were both moving higher, but the nasdaq composite is down four. doesn't look like they're doing the trick. but it's interesting to see some competition heating up. >> and i think you're right, we are feeling a little bit of a different tone. we'll see how this progresses as we go through it. bertha coombs, thank you so much. what is that? what is he saying, melissa? >> oh, you know. we'll talk later, trish. oil prices are sliding as opec is saying it's falling. crude oil right now is down $1.42, another 2.25%. >> did you say almost $20? did i hear you say that? >> that's what you were saying. that's what we were talking about. >> $20 a barrel oil -- >> there's no way it's going to $20. let's make a bet.

$20 that it's going to $20. you saw it right here. >> give me $40 and i'll take that. >> meantime, sharon epperson is in the nymex pit. is oil going to $20? come on, no. >> i don't think folks here would say that, but most of the folks behind me are sellers after the inventory report, definitely a bearish report. we have plenty of supply of crude, falling by 3 million barrels, but there's still plenty out there. but we saw big increases in gasoline and distillates at the highest level and demand is at the lowest level since 2003. look at the numbers. with gas and supplies up nearly 2 million barrels, this is the time of year we're supposed to see declines there. tightening of supplies. distillates up 3.7 million barrels. that is significant. look at the decline in oil prices over the last week. a lot of that has to do with demand concerns and the fact that we have seen distillate demand now, the four-week average down over 20% from a year ago. the volatility, though, over the

past year is really what a lot of folks are talking about here on the floor and on the trading desks all over the country. the fact that we were at $147 a year ago and $60 now, that and the price swings in between is the reason why france, the u.s., britain are talking about tighter regulations, melissa. >> thanks so much. stick with us. to say the oil market is volatile is really an understatement. a lot of people blame the speculators on that. listen to jim cramer last night on cnbc's "mad money." >> the oil futures market, it's a total farce. even i, someone who accepts that however awful it might be, a certain amount of legal manipulation is always going to be inherent in the game, because the regulators are almost totally captured by the financial industry. even i am completely stunned and outraged by the phoniness of this oil futures market, which is a total travesty of a mockery of a sham.

>> wow. laying it out there in very plain language. there were a lot of people out there that feel that way. joining us to discuss is independent oil trader dan dikram, who says this will prevent an economic rebound. and also, a chief economist at global insight. sharon epperson is with us as well. dan, let me start with you, okay? oil went from $150 down to $30. you're a guy who stood in the pits for years. i was there as well. demand didn't fall to one-fifth what it was. >> absolutely right. >> in july. speculation is that they're in part to blame. >> absolutely. i was talking about this on cnbc last year when i was up against paulson and others who's claimed it was entirely fundamentally based. so, this is not a new argument for me. but clearly, demand did not go down to a fifth of what it was. >> why is speculation bad? they're speculating on the outlook a, for the value of the dollar. the dollar is very much a part of this. >> no question.

>> is that the reason why you say if they pay the price, it's going to affect the economy. >> they're making a bet on long-term economic growth. those bets may be wrong. third, speculators add liquidity to the market, do they not? just like stocks or bonds, whatever. why do we single out oil? why do we always blame the messenger some. >> okay, you picked out four things and i'll try to remember them all. first is the definition of speculation. i don't like it because it implies manipulation, which in some ways i think jim is wrong about. what we have is investors looking for the next game in town, who want to be part of the inflation play, who want to be part of a market that happens to be going up and have some volatility to it. this is not what the commodity markets were designed to do. they were never designed to be investment vehicles. they were designed to be price discovery mechanisms, and we've lost that trend now, and -- >> you're saying, what about -- >> that's a significant trend. >> we have to bring -- >> index funds. there is criticism that there's too many index funds and other investment funds and that, in fact, the oil market is not

geared up to take that flow. >> definitely not. >> that's an interesting point. >> yeah. in the 20 years i was trading on the floor, i mean, you needed to have a specialty accountant in order to trade futures. with an etf now, you can get in like it's a sock. >> let's bring in merriman, because we ask what's the problem with this? the upside is it allows airlines, allows everybody who uses fuel to hedge on the other side, but the problem is, as goldman sachs points out, that for every $10 that oil goes up, gdp falls by 0.4%. what's the price being paid in the broader economy? >> in terms of the price increases we've seen recently, say from $30 now to, what is it, $62? is this fairly small potatoes. i can't get too excited about this. yeah, speculation has played a little bit of a role in this, but fundamentals suggest the price probably in the high $50s. there's still oil demand out there. >> but look at the volatility. >> the volatility, though, melissa, i think has a lot more to do with what larry was talking about before in terms of the money floes.

when you look at the indices and they've grown by $45 bill krohn in four or five months time this year, that's what we're talking about in terms of the price swings and what's moving. it and as dan points out, these players haven't been in the market before. >> but this is not going to threaten the economy. >> this is small potatoes. >> this is not big enough to threaten the economy. merriman -- >> you disagree with that, larry. >> no, i'm worried that it could, although i happen to think now it's going way down. but merriman, i think you're right. i looked at the personal spending numbers, the pce report, and gasoline consumption spending and total energy spending as a share of wage and salary income has it hard to move. >> it's tiny. >> you're right. so this is much ado about nothing. i've got to tell you another thing. what really annoys me, i mean, really annoys me, is that every time something happens, blame the market. all these government geniuses blame the market. so, fine, let the markets be taken over by the government. it will be like ge. it will be like gm and chrysler and aig and fannie and freddie

and health care and cap-and-trade. let's just take over the market, fine. nothing works according to these geniuses in washington, just blame the market. >> you know what that is? my letters for that? bs. and you can fill in the blank. >> i actually agree with you, larry. i don't think there are efficient ways for government to get involved and fix this, so -- >> government is much smarter than the market. government is much smarter than traders. government is much smarter about price discovery. let's let the government run the market. and by the way, there's no volatility in stocks. never, right? why doesn't the government run the stock market or bonds? in bonds -- there's no volatility in bonds. let the government run the bond market, merriman. government knows best, isn't that today's liberal left mantra? >> i don't know much about oil. i only traded it for 25 years, but the difference is stocks have metrics that you can use to apply value to, so you can decide where your value is. oil and other commodities really don't, because you don't have a

pe, don't have an earnings ratio. when someone wants exposure to oil, they don't care the price, they just come in and buy it. so it doesn't operate the same -- >> that's not true. we have a good sense of the fundamentals. what's your disagreement? >> we know what the fundamentals are. we know what the fundamentals would suggest the price should be. right now we think it's in the high 50s. we have a good sense of what the price should be. >> well, the last time natural gas was down to $3.20, oil was closing to $20. i don't know how you get $50 -- >> i think when you look at that -- >> let's get phil burlinger's forecast. he predicted the big rise and now says we're going to $20. economic demand is lousy. world recession is lousy and there's overinvestment and overproduction. >> $20? come on! >> what do you think about that? $20? melissa can't deal with that because her opec friends don't want. it i would love to see $20. representing opec tonight, i mean this morning. >> you're not going to see that,

either, larry, because a lot of folks are waiting to see what happens with the tightness in supply that we have and we're going to have because of the lack of investment. that's why we're not going to get that low, because folks know that once we do see a rebound -- >> i think there's a massive overglut of inventory. >> now, but once we see a rebound -- >> $20? no chance. >> give me $40. >> you've got $60, $100. what do you want? she's representing opec. they want $75. >> they want a billion. that's got nothing to do with it. >> they're not going to get $75. >> would you take $40? can i get a bid for $40 here? >> i'll take the high 40s, low 50s. it could happen, sure. >> it's not going to be $20. all right, guys, that's it. we're going to leave it there. thanks, that was fun, trish. >> that was fun. >> yeah. >> that was good. >> you could tell we were having fun. >> i could tell, but melissa, i can't believe you let him get away with saying that about the oil friends -- >> he loves to say that. he loves to say that. >> i know he loves saying that. >> going back to the meeting, did you see melissa walking hand in hand with the opec guy is

this. >> she wasn't walking hand in hand -- >> he had his arms around her and they were walking together and she had a big smile on her face. i'll never forget that picture. >> oh, dear. >> we want to talk about commodities here. >> rumors. >> this is so exciting. we're going to have more on the volatile commodities market. it's all coming up in today's "call to action." what should be buying, selling or holding as far as energy etfs go? find out next, larry. all right, plus, the battle over health care reform turning into a tax-the-rich debate. should america's wealthiest health-insured individuals foot the bill for everyone else? coming up today d the "call of e wild." les run the oil markets.

you have questions. who can giveou the financial advice you need? where will you fd the stability and resour to kp you ahead of this rapidly evolvi world? that'why we brought togeth two othe mosttions. introducing morgan stanl smith barney.ry. here to rethink alth management. here to answer.. your questions. rgan stanley smith barney. a new wealth management firm rganwith over 130 yearsey. of experience.

okay, welcome back, everyone. that last discussion was so exciting, we thought we'd continue with the commodities theme here. commodity etfs have been on fire, and some are suggesting the run has been fueled by oil speculation. but with oil now on the decline, is it actually time for you to get out of these things or are there still good buys in commodity etfs? joining us is the president and commodities analyst of equidex and paul justice from morning star. great to have you both here. what was interesting to me, as i was reviewing some of your notes ahead of this segment, is that you both seem rather pessimis c pessimistic. it's unusual on this show because usually we have people going head to head, but both of you seem rather negative on energy etfs. paul, what's your concern right

w? >> well, i mean, number one, you've got the price situatio and the volatility. itould bring abou another state of extendedcantgo like earlier this year. that could be damaging. plus the cftc says it's reviewing these funds and all the commodities out there, which might not be a good thing for share issuances. >> and philip, you think etfs are about to get hid hard? >> they very well could. >> well, etfs are an agglomeration of various commodities and indexes, and commodities are not investments per se. they have no yield, they have no dividend. i think the last guest was talking to that point and larry was very animated. he should have been a trader in the pit when it existed. but the realities are that you cannot hold commodities beyond their useful life. so, if you're storing oil as a result of speculatie ining an e eventually, that oil has to be burned.

it has to be used, turned into chemicals or fertilizer or fuel. so, the problem is that the etfs get into downtrend volatility that is unexpected because most stock traders are anticipating an inevitable rise and a continuous rise. you buy, you hold, you buy, you hold. this is not the case in the commodities market and it's a lesson that's going to be learned by people holding etfs in metals and in oil and in agriculturals. >> philip, i want to continue that thought, then. are you saying that, in fact, these etfs have become too powerful? >> it's not a question of whether they're too powerful or too weak. it's a question of what kind of liquidity do they add to the market? for example, if you're looking at soybeans that are trading in the stratosphere relative to other situations that have been crisis situations, it doesn't make any sense. a $10 soybean per bushel, a $12 soybean purr bushel implies that the entire crop has been worked out, and that's not the case. yes, we have tight supplies in the oil profit. that's not the case. in the case of oil, we're

looking at tremendous demand destruction. people are not driving. discretionary driving is down. more hybrids are going to hit the market. there are all kinds of programs for -- >> seems like this is an issue of supply, what we were talking about earlier. they're making so much supply. let's get paul in here. paul, so much supply on the markett some point has got to depress prices. >> at some point it m have to, but the big question is, it may go up, it may go down. the volatilit is just too great and we have so many pe in these passive investments. theyay be speculating or just sitting on these investments and not realizing what they're holding on to, which goes back to the point that they are nonearning assets that have to be consumed at some point in time. >> if i'm an investor and i'm watching energy and i want to get in or get out, what is your advice to investor right now? should they stay clear this sector, paul? >> i think they do stay clear at this point in time. i think there's just too many question marks around the

sector. if you're going to be picking up commodity exposure through etfs, stick with the broad basket exposure, something like an elements s&p s&p cti , etn, something like that, but only from an allocation perspective. right now i don't feel comfortable. >> philip, your take? >> the only thing that i would hold for the long run might be a precious metals etf, a gold etf or a silver etf, only because everyone knows that if the government continues to print money to get us out of the mess we're currently in, eventually, inflation's going to rear its ugly head, and these are absolute responders to inflation. whereas other commodities have demand and supply issues, you could have inflation and soybeans could come down because there's a bumper crop. but gold and silver reflects -- >> gold and silver is safe. >> -- reflects this monetary reality. >> it's a pleasure having you both today. thank you for your insight. >> thank you. g-8 leaders stressing the

economic situation remains uncertain. we're heading live to italy for details, next. plus, america's call to arm the u.s. air force with a new tanker fleet could resume next month. we'll hear exclusively from eads north america's ceo. this is a controversial debate against boeing, all coming up here on "the call." (groans) a lot of people are gonna kicking themselves for not buying in this market. a lot of people are gonna (woman) visit remax.com where you can see all the listin

in thousands of cities and towns. where do yant to be?

credit group out with a big upgrade for dry ships, raising the greek shipping company from underperform to outperform. analysts upped the price target by $3 to $8 a share, citing the recent rise in oil prices that will help the company secure contracts for its drill ships. right now you can see it's up there about 4.33%, larry. >>old index. very strg. world leaders gher at the g-8 summit in italy. the global economic recession and the role of the dollar certain to be at the top of the agenda, we think. steve sedgwick is in l'aquila with more. hello, steve. what can you tell us? >> reporter: larry, those issues certainly will be on the agenda. coming into this meeting there was controversy about it. it's one of the most controversial build-ups to a meeting i've ever known. basically, controversy about

silvio berlusconi himself, his private life about his government policy, whether he should be leading the g-8 itself anyway, about the relevance of the g-8 as a forum. of course, it doesn't include china, it doesn't include the powerhouse of india and brazil as well. some are saying the g-20 is about a forum, and others are saying the u.s. thinks it's too unworldly. too many powers giving their five cents worth to the debate. but now we're here. it's a meeting, like a reality check, really. i don't know if you remember back in london in april, gordon brown and president obama were saying about how we had these trillions of dollars we're pumping into the economy to save the world. now here we are, the markets are falling and the same questions abound, questions about climate, questions about free trade and questions, of course, about the dollar as well, and whether there should be other reserve currencies. that one, though, will be left lingering, because the chinese leader, hu, he's gone home to sort out problems in his own country. larry? >> stay with us.

let's bring in andy bush. andy, do you hear any growth messages coming out of this? that's what i want to know. world trade expansion, some stability of the dollar? dines hear any grow, but you tell me. >> right. no. i thk they were, asthe  repoer mentioned, i think  there was some hope lastime  they met that the ney being  pumped in would pump up the world economy. the onecountrthat's pumped a lot more than just the stimulus, obviously, is the chinese, which have made now, i believe, over $1 trillion worth of bank loans. that's really the thing that's pumping in china and will probably get them to 8% growth. but it really calls into question this whole thing about the dollar, calls into question, really, when does the far east want to stop being export-focused and be domestically growth-focused? because that's the key. otherwise, this whole discussion about the dollar being a reserve currency is their own making. and as soon as they make this

transition, the rest of the world will be on board, but that's the key question, and you're not going to see too much of it addressed. >> andy, larry loves king dollar. what do you think is the right level for the dollar, if you take into account everything? if you take into account companies that import, companies that export, what we want to happen to our debt, whether we want people to buy our -- all of that. because we saw it up near $90, now back near the $80 level. what do you think a good equilibrium is? >> well, i would say that -- >> for everyone. i mean, it's a crazy question, but there's people on both sides of the debate. >> it is a crazy question, because what i expect to see is that, i think the dollar is going to continue to weaken. i know larry doesn't want to hear that, but i think what we're going to see is problems towards the end of this year about funding the u.s. budget deficit and the amount of treasuries that are going to have to be sold. that's my key concern going forward with the buck and towards the end of the year. the best level for it would be a level that would reflect its weak economic condition, which means it should weaken a little bit more to stimulate exports.

we'd like to see the far east actually start to buy imports, and that's just not happening, so -- >> well, i think that, you know, your forecast may be right, andy. i'm just saying that relative to the chinese yuan and the european euro, i would like to see some pledges of stability. those are the key currencies. >> right. >> let me go back to steve. steve, these countries become the greatest bond salesmen in the history of global finance. there is some loose talk about exit strategies from this massive spending and borrowing, which i sometimes call in the u.s. fiscal nimphomania. do you hear anything about exit strategies from this massive borrowing expedition? >> reporter: absolutely not at the moment. let's remember, there was no coordinated action globally about the strategies that we got in the first place. the uk, the united states very big on the quantitative easing, but we didn't see the same

appetite in germany as well. let's make a point about these foreign holdings and the fear enveloping a lot of people in america about diversification of these chinese holdings. the chinese hold around about 70% of their $2 trillion in u.s. assets, in dollar-based assets. that's not going to be good for the u.s. as well, because if that buy goes on strike at some stage, then as you say, the treasury's not going to be able to do its own funding going forward. it doesn't suit anybody to have those kind of imbalances, as well. but as you and your guests were saying, we're not seeing the chinese buying imports from the likes of the u.s. >> all right. we're going to leave it there. thanks for joining us, guys. trish? coming up next, capitol hill's health care plan turned into a tax debate. should the rich pay for health care? should we tax the rich to pay for all this? that's today's "call of the wild." plus, sun valley's summer camp for billionaires. we'll tell you where the money is going the media conference coming up on "the call."

in thesekets, i'm glad turned to fidelity for an annuity with guaranteed income for life. that's rig, guaranteed income for fe. my annuity from lity means my retiremt come is safe. it'suaranteed, no matter what happens. if guarantd inco for life sounds good toou, do whai d -- let fidelity byour guide. for t aranteed income for life.

welcome back to "the call." stocks are modestly lower, off about 29 points right now on the dow. members of congress are looking for ways to pay for health care reform. some are considering an extra tax on wealthy americans to alleviate the cost of the program, but could taxing the rich actually stall an economic rebound? that's today's "call of the wild." and for that, we have with us jim pasikoukis with reuters and

keith boinkin, cnbc contributor and editor of "the daily voice." great to see both of you guys. >> hey, trish. >> jim, growing up, my parents always told me, if you can't afford something, you don't buy it. we're in a critical time with this economy right now, and no matter how noble a goal it is -- and i would say it is -- to make sure that every single american is insured, is this really the appropriate time to be thinking about taxing the wealthy in order to fix the health care issue? >> well, you could look at it like, well, what's an extra percent or two, you know, on the rich? it's not like we're already raising their income taxes -- oh, wait, we are. it's not like we're raising their investment taxes. yeah, we are. it's not like we're already raising corporate and energy taxes. yes, we are. i think that's a problem. it is death by a thousand cuts. it's one tax increase after another, and a very weak economy. and remember that the original tax increase they want to put on wealthier americans by letting the bush tax cuts expire, that was supposed to pay for health

care, but it's not going to. that's another 2% or 3% or 4% on top of it. >> it keeps adding up. >> that's right. >> keith, it keeps adding up. the reality is the economy is struggling to get over one of the worst downturns it's seen in decades. really just the chatter of something like more taxes is enough to scare a lot of people in terms of their spending and what they're going to do. why have a program like this right now? it seemsike the ting is off >> ll, i understand the concern, andobody at the white house, at least, has confirmed that the will be a tax increase. rememb, presint oba last year said heas opposedo taxing health care benefits, although senator bachus on the hill is considering that proposal right now. i don't knowwhere it's going to go, buthave a huge problem. health care premiums are increasing 58% since 2000, but wages are only up 3%. it's not just a moral issue, there's an economic imperative to do something. we've spent twice as much on health care as europe or canada per person, and yet, we have a

lower life expectancy and millions of people uninsured. >> keith, i've heard these talking points -- >> let me just finish, jim. we have huge problems that need to be resolved, whether we raise taxes or not is a question to be answered, but the issue is you have to do something about health care reform, and you can't just say we're going to pass it off, because it's going to be expensive. >> listen, the problem is that there's all these great ideas about how to reform health care, but at least proposed by the obamacrats, people don't want to pay for it. they don't want to pay for it and they don't want to pay $1.5 trillion over the next ten years and all the other ideas have failed, so now they've relied on their one default idea, when in doubt, raise taxes on the wealthy. >> jim, that's just not true. the polls show, too -- >> oh, actually, he's right on that one. the polls do show -- >> i know the polls very well. >> no one wants to pay! >> no, the public is in favor of, including the idea of tax increases, for health care -- >> no, they're not.

>> 70%. >> until you say that you pay $100 or $200 or $300 more and the answer is no. >> without being interruptive, jim -- >> the trouble is -- [ everyone talking at once ] >> they're opposed to taxing health care benefits, not tax increases. >> keith, the trouble with this story is on the one hand, you can't have vice president biden and president obama telling us how worried they are about a rising unemployment rate and a weaker-than-expected economy, and on the other hand, taxing capital, taxing investors and taxing businesses. the trouble with this administration is they have a disregard for the precise institutes and channels that would create new jobs, namely, business. they have a disregard for business and they have a disregard for the investors that finance business. and until you solve that disconnect, my friend, you are not going to get the kind of job creation that they so devoutly want and that i totally agree with. >> we're talking health care

here, larry. they're talking about raising taxes -- >> wait a second. >> -- on the wealthiest people. >> trish, i'm going to correct you on this, because you're talking about small business owners. >> that's right. >> let me give you an example. let me teach you something here. hold on a second. let me make this point. >> no serious proposals that doesn't exclude an exemption for small business owners. >> keith, listen, let me make a point. they are proposing a program that says small businesses with 25 or fewer workers would be exempt. these are owned or operated businesses. >> thank you. >> that means you will never hire the 26th worker. that means you will never create new jobs, because what you want is an incentive system to create the 26th, the 27th and the 28th worker. >> larry, larry -- >> that's one issue. larry, that's one issue. and jim pass koukis, what's the other issue on taxing the income of wealthy americans? >> the other issue is, keep the idea about taxing the benefits. that's not flying.

now they want to tax the income. >> that's not my idea. >> we're already going to raise the top rate, and this is 2% on top of that. it might wind up being 4% because they're not going to get the $30 million they think just from 2%. >> so it's a double whammy, small businesses -- >> larry, you have a lot of taxes on the table. >> there are a lot of taxes on the table, a lot. >> i'm opposed to the idea of taxing for the sake of taxing. i don't think the tax idea they're talking about on wealthy americans to fund health care is the best approach, but the president hasn't approved or proposed that. what he's proposing is cost-saving, reduce the amount of money we're spending on medicare reimbursements and so forth. he's proposing reorganizing our records and modernizing them. those are -- >> you've got to be kidding me. >> those will help to pay for it. >> i don't know what you're talking about. i don't know what you're talking about, keith, because nobody thinks ip, record modernization, all that stuff -- >> not going to save enough money. that is a fantasy. >> the one thing we should have

done, the one thing we ought to be doing is solving the $70 trillion, $80 trillion hole that now exists under current law for medicare and medicaid. now, that is something worthwhile -- >> that could take some money. but you know, the good news here, larry -- >> and that's where they should have gone. this other stuff is pie in the sky liberal, social policy -- >> no, it's not. economically inefficient. we have an inefficient health care system, larry, everybody knows that. >> let's go to canada, then they'll come back to detroit to the hospital here. let's go to england, let's go to france. let's go to italy. you know, we have the worst health care system in the world, keith, except for all the other socialist health care systems. >> i didn't say -- >> we're going to end on a positive note, because keith did say he did not think it was in the best interests of the economy to be taxing the wealthy for health care, so we'll leave it there. >> keith is a smart guy. >> they're going to tax them one way or the other. >> jim, thank you, as always.

keith, a pleasure. >> let's teefer the oil market. >> and the over oil market. >> come on, guys. >> thanks, guys. up next, the battle over arming the u.s. air force with a new tanker fleet could resume as soon as this month. cnbc's jane wells has an exclusive interview with the details. take it away, jane. >> reporter: bigger than that battle we just witnessed. you'll hear the ceo of the u.s. air force talk airbus tanker and airbus safety as well. after the break. i'm bob pisani with this week's "etf 101." diversifying your portfolio into commodities has never been easier, thanks to exchange-traded funds. having been primarily accessible to professional futurist traders in the past, individual investors can now gain exposure to a host of different commodities. concerned that an upcoming hurricane may cause a spike in energy prices, for example? you could reap potential profits by buying etfs tracking the energy complex like crude oil or natural gas and gasoline. if you think a change in global

demand could raise metal prices, there are etfs to track gold, silver and copper, too. or do you think rising global consumption could be bullish for prices of agricultural products? you could even buy an etf that tracks corn, sugar and wheat. be aware that the holdings of these commodity etfs vary. some hold and store the actual commodity like gold bullion or bars of silver, while others more often own the futures contract tied to the commodity itse itself. that's your "etf 101" for the week. taking its riul place

in a lonli of amazing perfornce machines. th is the new e-coupe. this is mercedes-benz. kn-it-all... expert. a guru. how abouwu? wu will do. where to? first stop... peru. vincent wu tkatmandu. what's next? timbuktu. area code 212. so, timbuktu, katmandu, pe. all by half past 2:00. not a problem. [ female annncer ] need an expert? sh a button. that's e human network effect. learn more at cisco.com/newways. phew! hi, may i help you? yeah, i'm looking for car insurance that isn't going to break the bank. you're in the right place. only progressive gives you the option to name your price. here. a price gun? mm-hmm. so, i tell you what i want to pay.

and we build a policy to fit your budget. that's cool. uh... [ gun beeps ] [ laughs ] i feel so empowered. power to the people! ha ha! yeah! the option to name your price -- new and only from progressive. call or click today. see, i cld get up. see how-- see? whereas if i didot have it, i would, uh, like this, oh-oh-oh. only two aleve n stopain all day. that would take si tylenol arthritis pain. this feels good! laughing )

welcome back, everyone. check out family dollar there, up better than 10%, $30.57 a share. the company reporting a 36% jump in quarterly profit, topping market estimates, as what do you know, more and more shoppers came in looking for low prices on food and household goods. it's really affecting the stock, you can see there today. melissa? it's the third attempt to replace the u.s. air force tanker fleet could be coming this week. the prior contract awarded to northrop grumman and eads collapsed after losing bitter boeing challenged the deal. so, what's next in the long-awaited big-money battle over america's call to arms? cnbc's jane wells is live in

l.a. with a cnbc exclusive interview. jane? >> reporter: hi, melissa. the pentagon has sent signals that it will finally send out a request for bids later this month in the nine-year saga of trying to replace the air force's 51-year-old tankers. does the parent of airbus regret ever getting involved? >> why should we regret it? we're going to win again. >> reporter: that's eads north america's ceo ralph crosby in an exclusive interview with us. crosby part of the team that originally won that contract last year, partnering with former employer northrop grumman and upsetting boeing with the win before boeing prevailed in the challenge. crosby says a split buy is a government decision, but he doesn't plan to change the offering when the competition reopens, saying the airbus tanker has already beaten boeing in four other global competitions. >> first thing i'd say is let's get on with it. i mean, these things are getting older. you know, it's nine years since

this process was started, and it will be another five years before we get aircraft into the inventory, and it will be 30 years at the presumed production rate before we finish reconstituting the structure. so, there's kind of almost not when you start, but when you finish that's the big deal. >> reporter: we also asked him about the safety of airbus aircraft, which seem to be involved in every major airline crash in the last year with the biggest concern surrounding the crash of the air france a-330 in the atlantic. >> those are very modern aircraft. they operate every day, hundreds of flights a day. so, we've got to make sure we really do understand the phenomena at work, and i don't think we understand it yet. >> reporter: crosby says to look at the safety record of the aircraft over the many years it's been in service. as for the big picture, he believes the economic cycle for his industry will improve by the end of the year. the company may benefit with frustration over delays in

boeing 787, and reuters reports that for the first half of this year, airbus sold 68 planes to boeing's 1. but the real competition will begin anew with the tanker, and the hang-up, which we are told should be resolved soon, is the decision over who has the authority to pick the new tanker, whether it will still be the air force or if the secretary of defense wants to award the contract. melissa? >> but jane, i mean, it's just a joke at this point. we've been reporting on this story for so long. do you think we're really near a resolution? we thought that before. >> reporter: yes, we did. you know what? i really don't know. i can't figure out what's taking so long, whether it maybe is a bit of a power struggle between the air force and the secretary of defense. >> it's got to be. oh. >> or, perhaps, this pressure by politicians for a split buy, which the secretary has said, insisted from the beginning he didn't want to do. who knows? >> this is a domestic content issue, jane. you know this. this is about who's producing what in what states. that's what this is really all about. and i don't know how this is going to be resolved. >> no. >> jane wells, thank you very

much. "power lunch" is coming up at the top of the hour. bill griffeth, what's in store? >> larry kudlow, we're going to give you $500 billion worth of investment advice, meaning that's how much they manage at jpmorgan funds. we have a chief market strategist to talk about the markets -- oil, stocks and the dollar. you know, with the g-8 summit well under way in italy there, wherever they are, the dollar is down 2% today, especially against the yen. is this the problem right now? we'll talk about that and where the dollar goes from here and what the government leaders havf to do about that. and these strange cyber attacks, where do they come from? remember just about a month ago, larry, the president was going to appoint a cyber security czar. i wonder if they had wind of it at that time. we'll talk about that and how safe the u.s. is, coming up at the top of the hour on "power lunch." see you then. trish? >> sounds like a good show. thanks so much. a quick break, and then, the media call on the sun valley summer camp for billionaires. cnbc's julia boorstin is standing by live for us there. hey, julia! >> reporter: well, trish, here

in sun valley, it is all about the money at the allen cove media conference, which is oximetried to cost them about $10 million, but the benefits could be much better if any of the rumored acquisitions here come through. what are the potential des? i'll have more coming u only on "the call

google taking aim at microsoft's core business, announcing plans to launch their own pc operating system to compete against microsoft windows. you can see google there up about 1% on the day.

google chrome operating system will be available in the second half of 2010, and shares of microsoft, as we said, are trading higher. it's referred to as the summer camp for billionaires. hundreds of media? >> reporter: yeah, it sure is. >> sorry, trish. >> that's okay. it is the summer camp for billionaires, as melissa was saying. you've got hundreds of media chiefs there, venture capitalists, politicians, and they're all coming together in sun valley, idaho, for allen and company's annual media conference. cnbc's julia boorstin is right there in the thick of it all to tell us what's ahead on the agenda. julia? >> reporter: well, trish, this morning's kickoff panel hits home to all in attendance here at sun valley. it focused on navigating companies through tough economic times, an issue that is particularly close to home for the media moguls who are battling the squeeze of declining ad revenue and also consumer shift online, where they're not used to paying for

content. john malone told me he thinks distributors like cable companies have to work together to protect their revenue, saying it's hard to make the transition from free content to paid content online. >> at some point, why would distributors pay retransmission consent for something that's free on the internet? they'll start telling their consumers, hey, if you want a cbs show, get it on the internet. >> reporter: media giants here, including youth corps's rupert murdoch and disney's bob iger are trying to tackle digital distribution. the two companies also have plenty of cash on their balance sheet to enable acquisitions. and old media is more likely to be looking at itself when it comes to deals. dreamworks animation is one rumored acquisition. and twitter's ceo evan williams is a newcomer to the sun valley scene this year. the media conglomerates have low valuations and little access to debt to bid on media sites that don't yet have huge revenue

streams. still, start-ups have reason to be optimistic. just this week, barry jewelers iec paid millions on netescape media and a new vc found by barry diller was announced. looped is a map-based social network that lets you keep track of your friends on the go as well as zynga, which is a facebook applications developer. trish, the ceo of social networking site bing told me yesterday that in the social networking world, there is really no sense of a recession. business is booming. back to you. >> julia boorstin, thank you so much. a beautiful shot behind julia. much more from sun valley coming up today on cnbc. erin burnett is there, anchoring a special edition of "street signs" for you. she's kicking it off with two big, exclusive interviews. she's got american express's ceo along with jpmorgan chase's vice chairman james b. lee jr.

it's coming up on cnbc at p.m. eastern time. larry? >> thanks, trish. we'll be right back for the last call on free market capitalism! you're wating cnbc, first in business worldwide. intrucing one a day women's . the first completeomen's multivitam in a ink mix. with more calcium d vitamin d... to support bone and . while helping you hyate. one a day womes 2o. refreshingly healthy.

♪ finally lover know no shame ♪ ♪ watching in slow motion ♪ as you turn to me and s ♪ take my breath away (announcer) ge locotives. customers love them alst as much as we love ng them. my love ♪ (announcer) novation today for americs tomorrow.

trish, did you see the bottom of the screen there? >> yeah. >> a canadian just paid $1.68 million to have lunch with buffett. >> i hope he gets some really good advice. >> i hope he gets some great food. >> yeah. all right. >> i hope they talk about $20 oil. by the way, phil is coming up -- >> $20 oil. >> i'm melissa francis. >> thanks for watching, everyone. i'm trish regan. >> and i'm still larry kudlow. see you tonight on "the kudlow report," 7:00 p.m. eastern. "power lunch" up next. this is cnbc.com news now. >> stocks have lost their early gains as investors worry more about the economic recovery and the upcoming earnings season. alcoa kicks it off when it reports after the closing bell today. vice president biden says hospitals are ready to give