arguing for, the left wants high oil prices, david. come on were, fess up. you want high oil prices, yes, you do. you want high oil prices because you believe in global warming. we're going to go to $20 or $40 a barrel. you're opposed to that. >> no, as a matter of fact what we have wrong here is the spot market which is real oil doesn't match with what's going on in the futures market, and what you have the distortion that you have is instead of the old days, look, i'm a midwesterner, i'm from wisconsin, i love the chicago can mercantile, right? the problem is the spot market is being driven by futures, that's not the way it should go. futures drive -- >> let me do something irregular and quote galbraith, the countervailing power is still the seller without whom in agreement they can be no transaction. >> dave good frefriend, you're good man, and dick armey, you're a good man, appreciate it. we are ready for "cnbc

reports." i don't want price controls and regulation. in fact, i think sarkozy himself, along with gordon brown, they need some adult supervision, dennis. >> yeah, i'm worried the u.s. is getting more into the price-control thing than even those guys. >> we sound more like western europe. that cannot be a good thing. fight, fight, fight. >> all right, thanks, larry. >> have a great show. "cnbc reports" starts right now. tonight on "cnbc reports," here comes the earnings parade. alcoa out, family dollar out, and better than expected, see, it's all going to be okay. >> this horrible, frightening recession is ending now. >> new signs tonight, dennis is right. while traders may be fleecing, dennis is standing tall behind his call. hacker attack, someone is taking down u.s. government websites and investigators have a prime suspect. out, baseball player, turned sketchy investor, lynnthy dykstra flies out.

you want the real deal, stick with dennis kneale, "cnbc reports" starts right now. good evening, i'm dennis kneale. and an epic struggle between fear and greed is playing out in these markets lately, and you saw a lot more of it today. the dow crossed from up to down to up like 17 times today before settling to the upside a little bit. fear versus greed. i'm talking darth vadeer and luke skywalker, okay, darth vader and the forces of fear and darkness against luke skywalker and the forces of hope. in the markets, hope is the nice word for greed. you invest with the hope that you'll get rich. greed has so much moral judgment attached to it. too much, actually, especially when you're the pope which we'll get to a bit later. fear and greed are the yin and yang of the markets. you know the yin and yang, that chinese philosophy of balance from thousands of years ago that cold must be balanced by heat,

light by darkness, the sour by the sweet. and in the markets fear must be matched by hope, and lately the yin and yang looks way out of balance. there's way too much fear. at the market lows, in early march, the fear was so rampant that stocks were priced for armageddon. now, stocks are priced merely for great depression. but this ain't a great depression. this is a great recession, and this recession is ending now. i swear it. i like selling the hope. it's contrarian. there's way too much fear and malaise out there. we're still stung from that free-fall in stock prices the past 18 months. we need to forgive. and we need to harbor hope. that's already happening in some places. you know, the international monetary fund, tomorrow, expects to raise its forecast for global growth a bit, and way down under in australia, shoppers there have basically declared the recession is over. they have turned in the biggest jump in consumer confidence in 34 years. back here in america, our

oversupply of fear hurts capital spending plans. it crimps consumer spending, it quells the hunger for risk taking. so, even when a fear factor comes out, you got to look harder at it for a sliver of hope. even if no one else sees it. one fear factor that hit the markets today was the advent of earnings season. alcoa kicked it off with a jarring loss late in the afternoon. but, surprise, the loss was less than expected. 26 cents a share instead of 38 cents. and alcoa's chief executive says he sees signs of a bottom and recovery in some sectors, and he's focusing on using the downturn to muscle up and gain market share. now, that is hope instead of fear. and while alcoa struggles, at the other end of the economy, retail, a smaller player turned in surprising earnings. family dollar rose above 59 cents a share. look for a preliminary report tomorrow from chevron, who knows

what they'll say there. and big earnings reports next week from j & j., ibm, jpmorgan, bank of america. but the most important element won't be the actual numbers, it lfb the outlook that the companies give for the rest of the year. how much hope will they hold out? and lately i feel like companies want to kind of talk down. they're just so battered, and they want to kind of lower expectations. kind of like my approach to dating and i tell my friends, lower your expectations. go out with me. overall, though, second-quarter earnings will be tough. they'll fall 35% from the year before at the 500 companies in the s&p index. all right, that's tough. but third quarter earnings are seen declining as a much smaller amount, 21%. and even then banks are looking at 150% growth in the banking/financial sector. my gosh, in the third quarter that's supposed to be so bad. health care will be down only 2%. you got the consumer discretionary up 8%. that's not bad. and the fourth quarter this year is expobelgt ected to have a st rise of 183% in earnings.

and look at these sectors. consumers financials earnings are expected to double. financials, earnings expected to triple or quadruple. materials, the stuff that goes into making all the other stuff, up 170%. tech up 15%. and overall, 183% rise expected for the fourth quarter. that's a forward look. that's worth looking for the hope. roll that thing up a little bit more, will you? okay. now, hang on. so, we got to look at other times. bad numbers have come out, but you got to look at context, all right? "the wall street journal" reports today that delinquencies on home equity loans hit a record high. yikes! that's scary, until you read further to learn that this delinquency rate, that consumers were basically 30 days or more late on their mortgage payment is 3.23%. big deal? so, almost 97% of home equity loans are being paid on time? and we're supposed to worry about it? that is not ominous. that is encouraging.

that is darn right encouraging, okay? then there's also the jobless problem. all right, we're up to 9.5% unemployment. that's tough. i'm sorry for those who have lost their jobs. and all year long, the number of job openings each month has fallen rapidly. until the month of may. new data show that in may, the drop in the rate of job openings started to flatten out. now, that's a silver lining that "the wall street journal" today says is, quote, the latest in a string of indicators that show the u.s. economy may be nearing bottom. now, i got a passel of other signs of hope that i'm going to run through real quickly. vo of the rnado setting up a billion dollar fund to buy distressed assets in real estate. when one investor loses, a buyer comes in to reap a gain. that's the way capitalism works. google is going to do the unthinkable, it's introducing a new operating system for little netbook computers.

it's invading the turf of microsoft. this comes just after microsoft made a foray into google's search business with a new search site called bing. that's hope, too. big, fat, tech companies still hungry enough to go after each other, and it's a perfect illustration of why the fearmongerers in the obama administration are wrong to target tech with antitrust investigations. tech is the most competitive, innovative, enriching market in the world! now, other signs of hope, standard & poor's analysts are put out a strong buy recommendation on microsoft today and they raised their view of cisco from a buy to a hold. david kelley, chief market strategist with jpmorgan funds, says that we are at the bottom and the worst is behind us. jpmorgan sees mild growth in worldwide gdp in the second quarter that just ended. now, from the economy to a quick note on the politics of the economy. a new poll shows that the president's approval rating is shrinking in the key state of ohio.

now, the numbers from quinnipiac, that is the name of the guy that took the poll, showed that his approval rating now is somewhere around 49%. and his disapproval rating is at 48%. now, given that ohio is a key swing state, that has got to be disturbing. in may his approval rating was 57%. now, this is a superstar performer who is not really accustomed to getting a bad review from anything. and check this out, our crack research staff here found that the -- since the president was elected, the s&p has fallen 9%. since the president started his job, january 20th, the s&p is up 3%. hardly the jump i'd been hoping for. actually, i was hoping for an obama hope rally. and in the same time period, the dow is down more than 1%. all right, let's talk to the dog town about it. karen handready served as deputy communications director for the fred thompson presidential

campaign. kevin madden served as press secretary for mitt romney. and both our republican strategists. and then liz chatterdon is a president of the chatterdon group and a democratic strategist and martin hutchinson is a correspondent for breakingviews.com. so, should the president's men and women be concerned about the president's falling numbers in ohio? let's first talk about the president's poll numbers in ohio. liz, you are changing your head. i was thinking you'd have a big old apology for obama. go ahead. >> it's not a big old apology, it's three years until any poll numbers coming out of ohio matter. the president was just elected. sure, we're going to see some fluctuations in poll numbers, because that jobless rate is not pretty. and as long as we stay at 9.5%, the recession is going to stay in place. it's not over yet. people are still losing their jobs, and they're angry about it. they have every right to be angry about it. but the president's approval

ratings in ohio make no difference as to whether or not the president is going to change his direction, and they certainly don't have an effect on whether or not he's going to be ere-elected three years from now. >> i think you would be worried about it. >> his election may not be until 2012, but we have gubernatorial elections coming up. u.s. senate elections, the 2010 elections, could very well be a referendum on him, on this economic agenda. and if he loses seats in the house and senate, if the democrats lose, you know, governors' seats around the country, that's an indictment on obama. and, you know, i think joe biden's right, three did misread the economy and i think they continue to misread where the american people are at on issues like health care and cap and trade which are not inspiring confidence in the business community. >> kevin, are we looking at a midcourse correction here? >> well, you know, the thing to remember about ohio is pchld j. o'rourke said it's an normal.

it is a place where it is a leading indicator of where a lot of voters are going in this country. and to disagree with what liz said, the most important thing you look on polling, the trend line. and as karen pointed out, the trend line has gone from something like the mid-60s down to the high 40s. so, that's a very, very troubling sign if you're inside the white house. so, i think it has a lot to do with americans essentially looking to see if this president is actually going to deliver. and so far on the economy, he has not. >> okay. martin? rather than have you talk about the latest poll number in ohio, i want to pick a fight with you over this incredibly intelligent, incredibly depressing article you wrote recently, i believe it was for "breaking news," wasn't it, at what point does the economy stop working? martin for a couple weeks now i've been selling my own story and i'm sticking with it. i think the economy is recovering and i think the recession is over and i think the actual numbers are starting to show it. tell me where you come down on

it, marten? >> well, i come down with sort of rather going down more slowly than we were by all means. only 475,000 people were out of a job last month. but there were two big problem. one's the money tree problem that they've been printing money at 15% per anam since last september and that's going to cause inflation at some stage, and the other is the huge deficit which is 13% of gdp this year and round-about 9%, 10% next year, but that's on an assumption of 8.5% unemployment and now we're at 9.5% and we're still going up. >> it's one thing to print money on top of a whole bunch of other money that's already there, in this case if i go to the find a silver lining, martin, we are printing money on top of a whole bunch of money that got wiped out. it isn't there, it isn't necessarily inflation, all the bond prices are predicting 1% or 2% or less inflation over the next two years, so we can work our way around the problem. the huge deficit, all right, deficit, bad. but we're borrowing money in the

cheapest rate in something like 50 years. >> yes, but we're not. we're borrowing money at 2.07 on the ten-year treasury and it blipped down today and that's because everybody thinks the economy catastrophically bad. >> do you think the factors you just cited they are reasons we should be worried two, three years out, you say they are reasons we should be worried about right now and they are derailing the economy i'm trying to build? >> i think they'll stop a recovery. i think we're getting fairly close to a landing but we haven't landed yet and i think the recovery is some way off. i think the other think you need to look at are the two pieces of legislation that is wending our way. >> the people with the british accent sound so much smarter than me. not only has it landed, it's taken off. the dog pounders, stay there. we're coming back with the pope's plan for the economy. some might say he has a lot in common with president obama's plan. i think they're both

anti-business. also tonight, clear evidence president obama is making some rookie mistakes. i'll take you back to that meeting with medvedev. and look at that look on the russian's face. and i'm comparing the russian meeting with president kennedy's first crack at khrushchev. kennedy came out shaking. we're coming back in two minutes. are you all right? a ferocious white whal wrecked my boat. ll, i'm sure we can helpou, captain...

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all right. we're back with the dog pound. we're talking economy. we just heard martin hutchinson insist that this baby is not taking off yet and i'm looking for some pork for me, because i say, yes, it has. liz, the old obama apologist, you, you must join me and say the economy is turning around. >> not going to do it. listen, i think things are getting better, i certainly hope they continue to get better. but the jobless rate is not good news. the people of ohio knows it and the president knows it. we've got to figure out how to put people back to work and back to work fast. >> a backward indicator. >> the only indicator that matters in washington is the way voters look at it. >> exactly. >> public mood right now, and you've got bipartisan agreement against you here, public moods

are driven by job creation and they're driven by cost of living. and americans just feel right now that the more important indicator right now is whether or not they have a job and whether their neighbor has a job. they have their own job, they are still nervous because people in their neighborhood and community are losing jobs. so, that's really the anxiety that's driving the public mood and then it's hurting consumer confidence. >> let's talk another source of anxiety and i wonder whether it isn't president obama. let's remember he served in the senate all of two years. he had never before done much of anything before joining the u.s. senate. he was a community organizer, so what, and his rock star persona, it didn't do much to impress russian president medvedev. can you see this photo? look at the look on medvedev's face while obama so eagerly embraces and wants to shake the hand of the other guy? he's barely tolerating it. the trip to russia is one of key mistakes the rookie has made. the unexpected handshake with

chavez, the guy that hates us with the meeting in latin america. he has utterly reneged on his campaign promise, you've got to close guantanamo, you have to let go the people that have been falsely accused. today there's a story they will continue to detain some suspects even after they are aquitted. i think suddenly he's showing he was naive back then. what do you think, karen? >> yeah, you know, poor obama, you know, he goes on his worldwide, love-me tour and all of europe seems to love him and we've got opposition out there and rivals out there who aren't embracing him. this poor man is going to have to go back to france, you know, and get some kind of love-fest from europe after this trip to russia. he probably doesn't know how to deal with it, or maybe he needs to do a photo-op with his dog bo and remind everyone how lovable he is. >> and, karen, he must be so shocked he's not getting the same public adoration that he's getting from other elected

officials that he gets here in the united states? >> he does like to be loved. >> he's like a fish out of water. >> he does like to be loved, martin. >> yeah, he likes to be loved. but putin will not love anybody. bush thought he saw into putin's soul as well. nobody understands this guy. he's an ex-kgb agent, we've got to deal with him carefully. but i think obama has a pretty good understanding of people and that's perhaps something that kennedy didn't entirely have, kennedy was a little rich kid. >> if obama had a better understanding of people, why didn't he make russia come to us and why did he have to travel over there? they are a former superpower. they don't count, liz. >> what does it matter if they come here or he goes there? >> the thing that matters is show. >> the thing that matters is missile defense. i don't mind taking -- >> missile defense, who even cares? the russians are the guys with missile, it's iran, north korea, liz. >> but we need to have missile defense in eastern europe and the russians don't want to us have it. >> star wars with president reagan worked so well.

go ahead, liz. >> wait a minute, i think we're forgetting the main reason why we went to russia, which is we needed their permission to cross their territories to take troops and supplies into afghanistan. oh, have we forgotten, we're fighting a war in afghanistan? so, we needed to make sure we had their permission, otherwise it was going to cost us a lot of lives and a lot of money, not being able to cross the territories. we had to go. it was the right thing to do to protect american lives. we had to go. whether or not they embraced us with open arms, they're russians for god's sake. they're cold. whatever. >> liz, let me ask you a question. do we have to ask their permissions to stay out of the k the region? >> we know it that we needed to cross there. >> do you feel safer? i don't feel any safer. >> i bet our soldiers on the ground in afghanistan feel safer. how's that? >> i do think it was a mixed bag as far as coming away with some agreements on afghanistan.

but the region question is still out there and he showed tremendous hesitation in front of the russians and they will take that to face. let's cut to the pope. you don't hear that on television very much, but let's cut to the pope. the g-8 summit and he meets with pope benedict txxxvi, the pontif wrote "the market is not and must not become the place where the strong must subdue the weak. every economic decision has a moral consequence." you know what, guys, here's the thing, i think every moral decision, every moral pronouncement from the pope, has an economic consequence. and i would like the pope to look at the economic consequences of telling the third world where people are having way too many babies and getting way too many cases of aids to tell them not to use condoms and birth control, how about that from the pope, kevin? >> well, look, you brought the irish catholic former altar boy to get me in trouble with my

former parrish priest, didn't you? >> yes, i did. so, do it. >> i think the pope has all the moral authority he needs to speak on the issues, but i do not look to him as a financial authority. >> you don't think it's the poach's business what business does. i think the pope should tend to his flock. >> listen, i'm a fan of this pope. i liked him when he was r rattenger. what he came out and said is more mystifying to me than governor palin quitting the governorship in alaska. you are going to take this hedonistic, corrupt group, the united nations and turn it into a god-fearing global political power is absurd. >> wrap it up for us, liz, what do you think? >> i got to be honest. i think the pope like my 11th grade algebra teacher, someone i have to listen to, but i don't pay attention to. he's way out-of-bounds here. >> you don't have to listen to him. thanks, guys. next up, i'm railing against washington for the four-letter word, f-e-a-r.

strike three for len dykstra, the former mets turned day trader. he files for bankruptcy after living large lieu the boom times. and someone has been hacking websites. the authorities think they have suspects. it's a whole country. it ain't russia, so that made us no safer. we're back in two. (anuncer) we speak car.

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this is the "real deal" with dennis kneale. we talked about points of hope, that's the point i like. now, for some points of fear. house majority leader, steny hoyer, today seems to come out in favor of a second stimulus package. this, as new congressional testimony came out today saying that the first stim-pack, the $787 billion monstrosity that congress approved just six months ago, the first one only $21 billion in construction contracts have gone out so far. how about we wait, guys, instead of ginning up a trillion dollars in bogus spending yet again which is only going to raise taxes in the end for all of us? and obama-care scares the daylights out of me. it is just too much, too costly at the worst possible time. what troubles me most is that all of the focus now on the health care debate is how to raise the $1 trillion to $1.5

trillion that obama wants for his plan to reduce health costs. we should focus instead on the right fixes and then figure out the tab and how to cover it. now, instead of wiping out the system and starting over, we going over here now? instead of wiping out the system and starting over, we should use searchable strikes, all right, boom! target the 5% of patients in this country who run up 50% of the costs, all right? and figure out how to handle them. boom! target the four chronic diseases that make up 70% of health care spending. heart disease, cancer, arthritis, diabetes, and then give hospitals some kind of tax break to set up outpatient care for cheaper treatment. boom! learn from the private sector on what they're doing to trim costs. you know, safeway stores, they've kept their health care costs flat for four years while everyone else's rose 40%. couldn't the white house ask them for suggestions? and a story in the "journal" today tells how one firm,

amerigas, it pushed its employees into health checkups by threatening to take away their health coverage if they didn't go to the doctor. now, that health workers mount a preemptive strike against diabeteses and other maladies, carrot and stick instead of wallet and tax hike. you see what i mean? see, today, three or four new wrinkles emerging in the obama's big health care plan came out. first, the white house chief of staff, rahm emanuel, he put out a big carrot to the health insurers today. he said, hey, maybe the feds won't start their own rival insurance plan after all if the industry gets more competitive. now, liberals are going ballistic over this, but i see hope here, because a government hmo would be an unmitigated disaster. also, support for the idea of taxing employer health benefits, that support is dying, and that gives me a bit more hope, because i don't think you force employers to cover their workers and then you tax them on it. but now, the fear part again.

the way the obama posse would pay for this $1 trillion health care disaster is to soak the rich again. democrats are even thinking about a new and extra surcharge on household earnings over $250,000 a year. now, that smacks of the new york congressman charlie rangel back in 2007 he proposed a surtax of an extra 4% on income over $200,000. it would have raised, like, $830 billion over 10 years. way to go, guys. economy crumbles. capital growth is flagging. but let's hit up high earners again. don't the democrats get it by now? when you raise taxes on the rich, you get less money. when you lower taxes on your highest earners, you get more money. two charts make this point pretty devastatingly clear. all right? in 1990, when the taxes on the rich were higher than they are today, the top 1% of earners paid 25% of all federal income

tax collections, okay? now, that's a lot. considering that almost 40% of people in this country, those in that lower half of income, they pay no federal income tax at all. now, look at the results when you cut tax rates on income, capital gains, dividends at the top income levels. by 2006, the top 1% of earners paid 40% of federal income tax receipts. up from 25% to 40%, even though their tax rates went down. wow. that's why reagan liked supply-side tax cuts. and look no farther than this state right here of new jersey for the reverse effects. when you soak the rich, you lose the rich. as steven moore and art laugher put it in "the wall street journal" a few weeks ago, new jersey raised its income tax from 9% from just over 6% back in 2004, and do you know that as a result, 4,000 payers at the top end left the state and paid no taxes at all?

now new jersey ranks 49th in percentage-to-increase in healthy taxpayers and wealthy taxpayers. and it has one of the largest budget deficits in the nation. way to go. the emphasis is clear here, you soak the rich and they end up paying less of your total tax bill or they leave your state. and i believe that the other issues can be looked at through this same prism that i talked about at the opener on fear and greed. now, the commodities future trading commission, that new move to crack down on commodity speculators? that's about fear. when greed should rule. why not let the speculators make tons of money? the market always corrects itself, that's why oil prices suddenly have tumbled, because the speculators couldn't hold prices up so high for so long. and another fear-and-greed example, all right, china's crackdown on dissent involving the minority tribe known as the uighurs, this is one of the biggest tests china has faced

since becoming a global economic powerhouse. just leave that photo up there for a moment, if you would, guys. china will have to choose between fear of democracy and fear of dissent and the home of growing its economy and enrich its people and sell to the rest of the world. i'm hoping greed and hope will win out on all of these points. if you look at that photo, what it showed is you had the uighurs, a picture at the bottom, which is basically most of them women, many of them crying and in distress and then you have the majority han tribe in the top photo, a bunch of guys carrying clubs and sticks getting ready to go do violence. the chinese government can go in and stop this, and if it wants continued investment in its country, it had better do so, all right. so, our thanks to the dog pound. there's still a lot more on "cnbc reports." under attack, the nation's government websites have been hacked and taken down. the investigation is on, but fingers are already pointing towards one country who's been in the mood to pick a fight for quite some time.

we have the damage report. and lenny dykstra was known for going all-out on the baseball diamond. then he became known for going all-out in sketchy stock trades. now, he's all outta money. strike three for money for lenny as he files for bankruptcy protection. and remember president obama swatting that fly on cnbc last month? president ahmadinejad, not so skilled over there in iran. see it, swing and a miss! this is report, and we're back in two minutes. nnouncer) this is ne genations of the world'sost revered luxury sedan this is a history of over 50,000 crash-tested cars. this is the world recordor l. and one of the most technologically adnced

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helping the 1986 mets win e world series made lenny dykstr famous and reallrich. after basall he became day trader. he was an occaonal guest on cnbc. now dykstra is broke. he filed for chapter 11oday in california. dykstra's financial troubles kick off tonight's edition of "over, under." i got to say this story is kind of overplayed, just another day trader gone bad. our panel, lea goldman of "marie claire" magazine, and james pethakoukis of thomson reuters and jason brooks of kiro radio is still with us. start us off on lenny. >> this is too juicy of a story

to be overrated. remember the wold wold phrase, tie goes swimming, somebody is drowning. he's swinging wayne gretzky home while the markets are crashing and he opens a magazine as the magazines are crashing. it's underrated. >> jason, having a little bit too much money is a bad thing. >> underrated. lenny dykstra nailed. he played hard as anybody. great at steeling bases, 272 in his career, apparently not quite so good at stealing people's money since he was caught this time. he was a guy that didn't have all the talent in the world but got it through guts and gumption and they saw it coming full circle with the day trader. >> and given money to manage. hackers attack they hit the nyse, nasdaq, white house, treasury department, other government websites, disrupting the sites for an unusually long

period of time. some investigators think it may have been orchestrated by north korea. this hasn't been confirmed. i say the story way underplayed, lea? >> ay, way, way underpled. where is the cyberspace czar that he promised us. he has czars for anything. he has nor czars han the kremlin, a car czar, a cyberspace czar. if the white house technology is more about facebook and twitter and flickr, then real nitty, gritty, unsexy stuff like cybersecurity. >> it's the next battlefront. >> maybe i've watched my director's cut of "live free or die hard" i'm extremely worried about cyberspace and warfare and north korea is a rogue regime that ought to be decap tateed by us and china, and it's one more reason why. >> next up, the crackdown on cannabis clubs, also known as pot houses in california, just when most businesses are struggling, it seems pot is going big business. the l.a. city council wants to

close many of the clubs. says there's a glut in the market. i think the market should decide this, but i think this story is underplayed. jason, in seattle, you know, the it is popular your way. go ahead. >> we know about the west coast. it is a story that's underplayed, obviously. we're looking at tremendous costs for states and cities to incarcerate people. you're looking at billions of dollars a year that's spent on policing people for minor pot possession. not a big thing right there. there are states leaning in the direction of finding ways to work around this, california knows that they can wipe out a significant portion of their budget deficit if they find a way to legalize it. there are many ramifications, a lot of it moral, but there has to be a way to find around it like thedid with prohition in 1933. >> what do you got? >> what's underplayed is the opposition from the foodies. where is taco bell and burger king, they will suffer, too. i got to wonder if we're shutting down a whole other sector of business if we know that california can't do it. >> unintended consequences.

thanks a lot, folks. we're going across america, next, seeing how the big headlines are impacting the country from coast to coast. we've got big headlines tonight and i'm taking aim at man warning investors to steer clear of china. despite big problems, there's a lot of upside beyond the big wall. i'm dennis kneale, we're back in two minutes.

time now to "mind your business across america." we've got a couple journals, we've got andrew cafferty is the assistant business editor for "the boston globe." jason brooks is money editor at kiro in seattle, he's way too good looking for radio. and michael canal is a writer and jan katzenberger, a business columnist for "the indiana star." let's start with earnings and our man in boston, andrew. alcoa came out and the earnings surprise less bad than expected. what are you looking for on your turf? >> the big thing today, or tomorrow, is that tjx is one of our big retailers based up here,

they're an offbrand or offdiscounter and retailers have been doing very well in the recession and obviously the stock has been way up for the year, a lot more so than other retailers. >> jason, sorry, i got to go. jason in seattle, what do you have, boeing and who else? >> two weeks from now, we'll get a trifecta, starbucks and microsoft and boeing. frankly none of them are probably going to shatter any sort of dreams of any illusions going on. all face big problems right now. boeing obviously facing further delays. they did have more deliveries in the second quarter could help out a little bit. microsoft continues to see pc sales slow and that's not helping. and a number of continuing contracts with business clients are expiring in that time. could they renew? we'll find out soon. all right, guys, stand by. we'll be talking mortgage fraud. here is cnbc's diana olick with an explainer for us. go ahead. >> a new fbi report shows financial institutions lost $1.4 billion to mortgage fraud last

year. the report blames falling home prices and rising foreclosures for creating a climate crooks can't resist and today desperate borrowers are easy pickings. a few months ago president obama committed half a billion dollars to fight mortgage fraud, but the report said new programs to save the housing market actually provide new opportunities for scam artists. >> all right, thanks, diana. so, how is mortgage fraud impacting your backyard, guys, michael in atlanta? >> well, we don't have any ongoing public investigations i can tell you about. but i can tell you that we've got the same kind of situation that you've got elsewhere, only a little bit more so. something like 7.5% of all the loans, all the mortgage loans, in metro atlanta are 90 days delinquent or more, and we've got 2% of all the mortgage loans in foreclosure, so this thing is nowhere near over. >> john, what about fraud, outright fraud? >> well, we've seen outright fraud. and we've had situations where the u.s. district attorney has been investigating a couple of cases here, the east side of

indianapolis a has been especially impacted by it, but we had a spectacular case who made off with a bunch of people's money and went down to florida and ditched his plane and crashed into the ocean. >> i remember that guy. >> he ended up pleading in florida. >> all right, a quick preview on what your papers are working on tomorrow, andrew at the "boston globe"? >> speaking of mortgage fraud, we'll report on how the state of massachusetts in its first year of licensing loan brokers, loan originators and the like, 1 out of 4 were rejected or had their applications otherwise turned down because they had -- >> all right, cracking down. >> bad stuff. >> jason brooks in seattle? >> big deal for us, boeing bought a plant in south carolina. the question is whether or not they will open a second 787 line in south carolina and what it will do to keep the jobs in seattle. a big fight between boeing and the union. will the union be willing to give up the right to strike in order for job guarantees. >> my guess is no, given my view of unions. michael in atlanta, what's going on for tomorrow? >> we'll tell you about the

opportunities for hiring in health care. if you were smart enough to make yourself a physical therapist or an occupational therapist. you can pretty much write your own ticket. >> good. i like that. you're selling hope. and finally, john, at the "joins star" what you got tomorrow? scoop yourself? >> well, scoop myself. we've got commercial real estate. believe it or not, absorption rates are going up, the vacancy rate is stable. indianapolis despite all of the problems is staying in pretty decent shape when it comes to ral and commercial deft. >> all right. andrew, john, jason, michael, nice job. fast job. thank you very much, guys. and moving from the u.s. to china. ethnic violence showing no signs of letting up. the muslim uighurs battling it out with ethnic chinese in a remote part of the giant nation, death toll is at 156 after new clashes today. it's the worst ethnic violence to hit china in decades. in some ways, this is the most underplayed story in the world right now. you know, china faces the biggest test, i think, to its embrace of capitalism and

foreign investment since it arrived as an economic titan. look at these at the two photos front page of the "wall street journal." one shows the uighurs like america's african-american population before the civil rights movement, unarmed, they are women, they look upset. the other photo at the top, members of the chinese majority, the han tribe, looks like a bunch of thugs brandishing weapons. the country is building up a dynamic, growing economy. i feel a special link to china because my daughter was born there. some years ago i was in shanghai interviewing an executive at the stock exchange, the economy was booming and i asked him what's the biggest risk to all of this? what could derail the move to capitalism and he instandly responded "social unrest." if china were to crack down on the population with all of the oppression it embraced through history, you can guess what will happen to foreign investment, it's going to go good-bye. i'm taking a hopeful view of china's role in this unrest.

it has too much to lose to pull an iran-type of action, and systematically oppress the dissidents. let's bat it around with one of my favorite china experts peter and a half row, author of "the coming china wars" and cnbc contributor. peter, i know you're thinking this is just another example of why china bad so go ahead, you first. >> dennis, it's important to understand the background on this. it's basically an energy story. the western part of china, one-sixth of the land mass in china but the most sparsely populated. it's got 40% of the coal reserves and about a third of the oil reserves and that's why china wants that territory. they have very weak territorial claims to it. here's the deal. here's what's making the uighurs angry. there is aa policy, hanification. it consists of importing chinese han, ethnic chinese into the province. >> peter, we have to wrap up. here's the one thing i want.

you think china will be the same old china in the tiananman square days? ? there's no way they're going to stop cracking down on that population. >> crack down, but if it makes american companies want to stop investing there, you watch. >> it's not going to have any impact on it because it's in the west. they view it as a muslim uprising. it's not happening in shanghai or beijing. >> the rest of the world doesn't. thanks for being with us. come back soon and thanks to our guys across america there. next up, blog you. another day, another chorus from the dot-compeanut gallery. when we come back i get a chance to defend myself from all of those guys sitting in their parent's basement, eatingco cheez-wis sitting in their underwear. and you'll take care of everything? whatc if you can't come to us, we'll come to you

wh if mother won't let me drive? thenou probably wouldn't have had an accid in the first place. and we're walkin'! and we're walkin'... making it all a bit sier - now that's progressive! call or click day. . evans? this is nice from onstar. i ha received an automatic snal you've been in a front-end rash. do you need help? yeah i' contact emergency servicesnd stay with you. u okay? ah. onst. standard for one year on chevy models.

i came across two surprises in the blogosphere today. the first one was this, actual civility, kindness. this guy writes, "dennis kneale was out for the bloggers again this evening and i must admit i'm beginning to move to his side. this is becoming a case of the blogosphere making a collective ass of itself." hallelujah! never mind for a moment the same gentleman says i'm mediocre. that's ak. he laments the same anonymity i decree. frankly, if you haven't got the cahones to put your name on your work i can't take you seriously.

second blog surprise from another guy, carl deniger of market kicker. a week ago he posted under this headline to dennis kneale, you're an idiot. not a great start. he makes an intelligent, well-informed argument on what he calls my idiotic and utterly unsupportable the recession is over call. he talks about the difference between inventory and credit recession and this is a much worse credit recession. a credit recession can't end until the factors that caused it end. excessive credit. i understand. keep going up a little bit more there, it's true logic, anyone's iq larger than their shoe size. he complains we're doing too much to avoid the banks and others to take medicine to avoid the defaults. i agree with that. i don't see any economic data in the argument, i got no new numbers showing the economy is headed down instead of up and a bunch of theories. in the meantime i think we are starting to take out the root

causes, leverages heading down, consumers paying down far more debt. while this guy is worried, there's more hope ahead than there is fear behind us. get on the program, guys. go with me here. let's build some hope. thanks for being with us tonight. i'm denni kneale. "cnbc reports"s back at 8:00 torrow. you're the colon lady! diarrhea, nstipation, gas, bloating. tt's me! can i tell you at a dference phillips' colon heth has made? 's the probiotics. the good bactea. th gets your colon back in bance. i'm good to go!

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