paul volker is a top economic adviser to the obama white house. when he told the white house financial services today the administrati administration's proposed overhaul comes up short and could lead to future bailouts of non-bank firms, will you makers listened. >> extending that to the nonbanking world without the explicit promise -- and of course this is key -- without the implicit assumption that federal money will be provided in the case of the failed or failing institutions. >> reporter: meanwhile, elizabeth rar ren was also sounding the too big to fail alarm. toxic assets are still on bank balance sheets. commercial real estate is headed far crisis. time for a t.a.r.p. exit strategy. >> i am very concerned about the absence of an exit strategy for how we're going to withdraw those subsidies and whether we

will have confidence that we will continue to have a stable banking system afterwards. >> at that same hearing, the t.a.r.p. inspector general says taxpayers will probably never recover hundreds of billions of dollars invested in bailouts. at the top of the list, billions for automakers and billions more to modify mortgages for homeowners. larry? >> all right, hafr ton. thank you very much. the bailout nation just continues, folks. we're going to get to all of these stories in just a moment. this is just the tip of the iceberg. first of all, are tax payers ever going to get their t.a.r.p. money back in congressional democrats move to avoid a post office bankruptcy and guess who's going to pick up the tap. who? me? the american taxpayer? we've been bailing out the post office for years. do you remember this gaffe from president obama at a white house news conference in july? >> people say well, how can a

private company compete against the government. if you think about it, ups and fedex are doing just find. right? no, they are. i mean, it's the post office that's always having problems. >> right. the post office is always having problems. and it surfaced again today. we're going to give those boys a $4 billion bailout. they get about $1 billion a year for the last two decades. it's all being done with a democratic slight of hand. so let's look at this. wall street journal steve moore, the co-author of "the end of prosperity." you should be ashamed with your democrats today. now they're quadrupling that. this is insanity. bailout nation and no exit

nation from it. >> you want me to defend the post office, well, i have to do it. the bill to provide this directly, the so-called bailout to the post office passed overwhelmingly in the house. in fact, most republicans voted in favor of it. i'm not saying it's right, but to make this a partisan issue with republicans slamming democrats for doing this on a continuing resolution is the height of hypocrisy. but number two, probably a much more substantive issue is the post office already has a $32 billion fund with regard to retirees. this $4 billion is really a technical important, but nevertheless a fairly technical maneuver here. >> it's cash flow, my friend, to keep them afloat. and it is being done with a slight of hand. but the deal is, mr. reich, i am going to make the connection, because it was president obama who first made this connection. that, in fact, government-run health care insurance reminds all of us about the post office.

and the post office, like a lot of things in washington seems to be too big to fail. i mean, they've got what? 800,000 -- no 685,000 jobs across the country. only walmart is a bigger employer. and we put $1 billion -- >> you're absolutely right. military contractors and all kinds of other institutions are too big to fail in that they have so many jobs in so many congressional districts that nobody even wants to approach the possibility of fazing out a major military contractor or even fazing down the post office. i'm not defending it, but i want to make sure we're talking about really a phenomenon that spreads absolutely across the economy. >> yeah, but i want to connect the dots to government's involvement and control in the economy. and this is all about bailout nation. now, i'll grant you george w. bush started this, but mr. obama is raising it because of the government health care plan.

let geese to t.a.r.p. inspector general borovski was on wall street saying some of the banks will pay down t.a.r.p. but we will never get $50 billion for the mortgage modifications. aig. loan and loan guarantee, ain't going to happen. general motors and chrysler. $100 billion and growing. ain't going to happen. i'm already counting $330 billion. there's no exit strategy. >> you're not going to get any argument from me. i've been criticizing that for six months now. but why is the dow flirting with 10,000 when, in fact, every ceo i meet is saying oh, we're heading towards socialism. we're heading towards a government run entire economy. how can that be if the dow is doing so well? i'll tell you because consumers cannot pay, cannot buy, consumers and main street are

basically dead in the water. and so government is basically filling in where consumers can no longer go. >> the reason stocks are doing well -- and you're making a very valiant effort. i appreciate it. it's one of the reasons i have so much respect and affection for you. stocks are doing well because businesses are recovering. steve moore if you finally got your little keister strapped in there, let's bring you in there. le me see your picture up there. all right, buddy. you get two demerits for being late. borovski say wes ear not going to get paid back with nearly $300 billion in t.a.r.p. money. in fact, the democrats are going to refund a.c.o.r.n., steve moore. so all of this leads me to go to the health care plan, a government takeover of health care. this is bailout nation run amuck. the nightmare continues. >> yeah, larry, first of all, i

don't share your honor and respect for bob reich. just kidding, bob. >> you're the one that was late. >> one of the things that happened today, larry, also was that they froze the premium -- the medicare part b premiums and that means the system is now going to go even further into deficit. this is the whole problem, bob, i have with the takeover of the health care system with government spending. because they can not contain the costs. and we've already got a system that some $10 trillion to $20 trillion in deficit. congress is saying we're going to give seniors a break on the premium. >> this is apples and oranges. the health care system is already run on a fee-for-service basis with huge insurance fees that are going up. co-payments, deductibles, premiums. every american family knows it. it was 8% of the entire national economy in 1980. it's now 16%. we've got to control costs. the only way to control cost is to make sure everybody gets

preventive care, everybody is under the same umbrella. we spread the risks to everybody in this country. we don't have to be rocket scientists to understand that has to be done. >> we do have to contain costs, bob, but the democrats have voted down virtually every republican amendment to control costs. explain to me why they're against allowing people to buy insurance at lower cost out of their own state which brings down cost. explain to me why in the 1,000-page bill there's not one page devoted to medical malpractice reform. those are -- as larry knows, those will all save money and reduce the quality -- >> let me just say, i think a lot of those are very good ideas, particularly interstate competition. one of the problems, as you know, steve, and you know, larry is that insurance rates are risk rated on the basis of in-state insurance laws. that's been the case for kbreers. if you want to change the entire system, that's perfectly okay. >> i don't want to get into the weeds tonight. >> wait a minute, wait a minute.

the future is a public insurance option. >> nancy pelosi wants to put it back into the house bill. i want to connect the dots, steve moore. you came a little late. i'm going to give you a second chance to connect the dots from the post office which is going bankrupt and has to be bailed out to the t.a.r.p. money. aig, gm chrysler. let me throw fannie and freddie in. we will never be bailed out and paid back on fannie and freddie. i've got the post office, i've got all this t.a.r.p. money. you're mentioning medicare. medicare is probably $30 trillion or $40 trillion in the hole. that's an agreed upon number. and now we're going to have some massive government takeover, whether it's called a government insurance company or whether it's called a government-backed option. steve moore, there's a generic lesson here and i want you to stel spel it out. this is bailout nation. this is the never-ending nightmare of government spending

and borrowing. >> it is. and i like the way you connect the dots there, larry. it is true. if you look at all of these industries that are run by government, whether it's the education system, where costs are out of control and quality is going down, whether it's the postal service that cannot pay its bills and now needs a bailout. whether it's medicare. i mean, can you show me a single government program that works? you keep talking about how wonderful medicare is. it cannot pay its bills. congress is k not contain the costs. now you've got -- hang on. >> we talked about this before, it's much, much lower than the private sector and secondly, a huge number of americans are desperately relying -- are you saying -- are you daring to say and larry, are you saying publicly we should get rid of the medicare system? >> here's what i am saying robert reich, before we expand medicare, we ought to get its

expenses under control so your kids and my kids and your grandchildren and my grandchildren don't have to pay for an enormous deficit. >> something george w. bush would not do, the republicans would not dot and that is allow medicare to negotiate low drug prices with the drug companies. use its bargaining power to do that that. >> if you go back to president obama's gaffe at that july news conference in the white house, the bottom line is, we want medicare and any government involvement whatsoever to be run like fedex and u.p.s., not the post office. and the symbolic importance of today's$4 billion post office bailout is that it brings back all the discussion of what a new government insurance program, whether it's a cooperative or a complete takeover is going to look like. this is the nightmare of government economic control. nothing is -- you couldn't have

a stronger illustration of this poppite would actually offer competition. if it's not good, if it doesn't deliver, if it's like the post office, at least according to your vision of the post office, then nobody will buy it. it won't be there. >> are you kidding? hold on. we do have examples of how various health care systems work. this is the beauty of the state system and the system you want to impose on the national level has been tried in states like maine and states like massachusetts and states like ohio and guess what? their costs are two or three times higher than costs in states like new hampshire who don't have the -- >> get your facts straight. we have not had a national public insurance option. we're talking about an option, not a requirement. it's not going to be a takeover. >> i hope we never get it. >> without major health care reform, we are going to be in so much trouble. and individuals and families are going to be in trouble. >> just think post office.

that's why today's $4 billion appropriation announcement through various slights of hand is so absolutely ill lust t lly ritive. thank you to our dynamic duo, robert reich and steve moore. coming up, very own maria bartiromo talks to president lula about his country's hot stock market, currency and hot economy. and america's worst nightmare, the first al qaeda cell uncovered since 9/11. using weapons of mass destruction that were also used on the london subway and bus system in 2005. that's al qaeda. we still don't know the full story. and now we have news reports of additional terrorist threats from dallas and the quantico marine base in virginia. you're watching cnbc. we are first in business worldwide.

>> people say well, how can a private company compete against the government. if you think about it, u.p.s. and fedex are doing just fine, right? no, they are. i mean, it's the post office that's always having problems. could someone toss me an eleven sixteenths wrench over here? here you go. eleven sixteenths... (announcer) from designing some of the world's cleanest and most fuel-efficient jet engines... to building more wind turbines than anyone in the country... the people of ge are working together...

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welcome back. brazil's president lula was in new york before heading out to the g-20 meeting. brazil withstood the global crisis better than almost any other nation around the world. cnbc's maria bartiromo spoke exclusively with brazil's president today. this guy does have a hot story. what can you tell us? >> brazil is looking better and better, thanks very much. i spoke with the president tonight and, you know, he was very optimistic. this is a nation that's resource rich, flush with commodities like coffee, like iron ore, oil, soybean. that's driving economic growth in brazil. as you know, this is one of the so-called bric nation, brazil, russia, india, china, showing growth in a contracting world. president lula is looking at that momentum and trying to

drive it forward. >> we're very optimistic for 2010. i believe the brazilian economy can grow around 5% for the year 2010. >> now, of course, he doesn't necessarily want inflation, but he, of course, wants to see prices for those commodities rising. he doesn't, though, want to go back to the heady day whence we saw oil all the way up to $150 a barrel. he believes around $70 to $80 a barrel is just right. >> two years ago, the month of may, june, the oil went up to $150 a barrel. soya beans also went up. so all of the commodity, it was a bubble in the commodities in the international markets. what was that? what happened? that was already part of the investors getting out of the sub

prime market and rushing to the future markets and the food markets and oil markets because there was no explanation for the oil barrel for $30 going up to $150 in such a short time. so we cannot allow this kind of speculation. >> now, one issue that he is facing, the brazilian real is also soaring. the currency is up this year and over last year. one issue is the weak dollar. like many other leaders out there, president lula is trying to get away from the u.s. dollar. he's actually contacted the leaders of the other bric nations and he's trying to negotiate a deal where he will use one currency amongst those four nations to trade. >> we are proposing the trade exchanges should be done with our domestic currencies, without the need to buy dollar. so now we're discussing with china, india and russia that our

trade balance flow should be done with our own domestic currency. our exports and our imports would have a smaller burden. it will make things move faster and we don't have to buy dollars. >> larry, as you know, we've heard this before. a number of leaders out there want to step away from the dollar. i don't see the reserve currency being anything but the dollar anytime soon, but people are frustrated with the level of the dollar and they would like to start looking at their own currency. bottom line for brazil, larry, this is a growing economy. we're talking about 5% growth in 2010, relatively really strong. when you look at the rest of the world, and it's the commodities play. they keep rising, and this's where they're seeing the investment dollars. >> you know, maria, first of all, great work. >> thank you, larry. i appreciate that. >> when lula came into office some years ago, some called him

lula the lefty. i think it's fair to say -- i mean, you tell me, he has governed center, but almost center right and almost pro business, conquering inflation, which had to be a big positive for brazil. >> it's funny that you say that. it was my thought exactly after meeting him today. yes, he comes from the labor party. he grew up in the system really as a manufacturing worker himself. but he does look at business differently than actually the u.s. is looking at business right now. he's looking at business as a way to grow the economy even further. he wants tax incentives, tax cuts out there to support businesses so they create jobs. certainly feels a lot more right than it does left, larry. >> and last one, maria, when you pressed him on this currency, the idea of a bric currency or a regional currency, they're losing faith with the dollar. did you get any sense -- this is far out, maria, so slap me down if i deserve it, that these guys might actually come together to support the dollar in the short run so their currencies don't

get completely overvalued? >> well, you know, he did say straight out, i'm not going to be intervening. that was also one of the sound bites that i could have run there, which is going to run tomorrow on my show on cnbc. he said he's not going to inter ve vene and it's clear something has to be done. they want to step away from the weakening dollar. i think getting one currency between the bric nations is unlikely. having said that, you heard the same talk out of china and out of the russians. all we have to hear is that of the indians. it certainly feels like this is a group that can do something away from the dollar. >> i totally agree with you. i think where there's smoke, there's fire. there's just too many of these comments out there. and you picked right up on it. did you say you have a second half coming up on your show tomorrow? >> i do, larry. tomorrow, 4:00 p.m. and i just want to say i agree with you 100% on the post office. it's unbelievable. what a great conversation you just had. >> it blows me away.

marie bartiromo absolutely the best of the best. her next installment of the lula interview, tomorrow at 4:00 p.m. thanks for joining us. coming up on "the kudlow report" is the g-20 trying to rescue the dollar? i want to pursue this line of reasoning. it may be farfetched but in the short run, who knows. the dollar has rallied in the last two trading days. anyway, john harwood is going to join us live from the g-20 in pittsburgh in just a moment. this is "the kudlow report." we're coming right back. (announcer) when you buy a car

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president obama is in pittsburgh tonight for the g-20 summit and i' wondering out loud if the beleaguered dollar isn't moving to the top of the agenda. john, you look healthy. i'm glad to see that. '. >> well, larry, after a long, slow day, when there were as many reporters here as police officers, but not too many world leader, it's about time to get this party started. president obama arrived here this afternoon to pitch for a dinner tonight, a working dinner with other leaders. and the main topic under discussion is maybe a little bit the dollar, but mostly about trying to sustain this recovery. they believe they began in april at the g-20 meeting. tim geithner came and had a press briefing. he said it's time to keep it up.

>> we're seeing the first signs of optimism about prospects for global recovery. it's very important that as we lay a foundation for recovery, we don't sew the seeds for future crises. >> you're going to have a few thousand friends who don't like globalization protesting. it's difficult to move around the city. i think the disturbances which are going to continue tomorrow are likely to be contained so that they don't bankrupt these meeti meetings, larry. >> john, these whack co disrupters don't look like they're opposing the bailout of the post office. that was a joke, john. >> i know. you've got all kinds of protestors here. you've got greenpeace, you've got people who simply don't like trade expansion and, you know,

we've seen it before. seattle 1999. you remember what happened there. london earlier this year. the same thing. but boy, the police are covering this place like a blanket. i would be stunned if it got out of control. >> i'm sure all those protestors will take time to watch "the kudlow report." coming up, we're going to drill down with two big investors on what matters most in the stock market. what about a g-20 rescue of the dollar. gentlemen, real quick before we go to the break, how worried are you about the end of dollar supremacy? and what are the odds there might be a g-20 rescue in the offing? is that just too off the charts? >> i love to see it, but probability is zero pip's just not high enough on their list. i would like to see them do more there, but i don't think the dollar is going to get a lot of attention. >> hold on one second. give me a quickie then i've got a special phone call from -- all right, hold on.

i've got to go straight to steve liesman. he's got some breaking news on a possible fed exit strategy, op-ed piece. hello, steve. >> larry, thanks very much. kevin morris is writing in "the wall street journal" with tough words about an exit strategy that it cowl begin before it's obvious that it's necessary. and this is the thing that stands out to me. the fed exit strategy could have more force than is customary. he goes on to sate fed will need to account for policies of other authorities. if the treasury doesn't get the deficit under control, the fed is going to be tougher. whatever it takes that applied on the way in applies on the way out as well. he says now is not the time to judge victory. this comes after the fedex tended the exit strategy into 2010. but it's important to note kevin is one of the more influential members of the fed. very close to ben bernanke.

we like to watch his words carefully. he said he thought about this for a long time. and he's warning of potentially harsh exit strategy. back to you. >> can i follow up? kevin is a bright guy. my favorite guy on the federal reserve board. is he talking about an exit strategy in my lifetime? >> he's saying if it's not going to be in your lifetime, you would be wrong. he's saying it's going to happen before it's obvious it's necessary. maybe before unemployment furns that might be one way to read it. the fed usually doesn't change policy until the unemployment peaks. one way to read what he's saying is maybe before this time. and it might be tougher. in other words, you might have quicker increases in interest rates or quicker withdrawals or declines in the balance sheet than perhaps maybe wall street is now planning on. >> all right, fair enough, steve liesman. i do believe he's probably the soundest thinker on the federal reserve board. i thought that for a long time. i didn't mean to interrupt and

break off. what do you think about steve liesman's update, ed? >> it's very interesting. it's pretty ambiguous what exit strategy actually means. just yesterday, the fmoc said they're going to keep the fed funds rate pretty close to zero for an extended period of time so there seems to be a d disconnect between what the statement officially said yesterday and this piece by wersch. >> is this kind of so much brovado before the g-20 meeting where the u.s. is coming under more and more attacks for its dollar, losing dollar confidence around the world? is this one of these last minute pr campaigns, bob dole? >> perhaps the case. the headline just read certainly not negative for the dollar. we'll see if it makes any difference. we've got a long way to go to rescue the dollar, which has had a problem as you well know. of course, to not like the dollar, you have to like either the yen or the euro and i think that's tough arguments. >> how about the bric argument

that president lula made to maria bartiromo? >> you've got to love their spunk. there's no question about it. look, we know that the reserve currency overtime is going to broaden but i don't think it's going to happen that fast and i don't think the bric countries will be on the action anytime soon. >> what do you think of a steadier dollar? >> steadier will be fine. larry, i think from what i recall, you prefer to see a stronger dollar. i was just in cleveland, i was in akron and the reality is, in the midwest and the industrial heartland a weaker dollar is welcome, as long as it doesn't bring inflation back or push bond yields higher. and so far so good. >> yeah. well, i don't know. i am in the king dollar camp. i would like tok see america keep its promises. we guarantee the dollar today should be the same value it is in the next -- >> larry, we have to do something about the federal deficit. there's no fiscal discipline in

washington at all. >> i agree with that. they're bailing out the post office. we did that the first segment tonight. they're bailing out the post office. that's got to be a high priority. >> absolutely. i just sent some envelopes. i hope they get delivered. >> the price of stamps keep going up and they still can't fund it. gentlemen, stay with me. other side of the break, much more on the dollar. the g-20, the price of stamps, the post office bailout. and the stock market view as well. please stay with us. have some fun with that truck.

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we're back with our two investment gurus. we have ed yardenny and bob dole, we call him the trillion dplar man .i want to go from the banking and post office to political news. paul kirk, a long-time senator ted kennedy confidant has been appointmented temporary senator to massachusetts.

bob dole, that could give the democrats the 60th vote to pass some kind of government takeover of health care. i want to get your quick thought on that. it's almost an instinct right now and what does that mean for invest inve investors in the health care takeover? >> while it might be easier having that 60th possibility, i think there's still a lot of work to be done from a stock market standpoint, i think getting health care behind us, that is if we're going to have a bill, let's get it past, the uncertainty i think will allow health care stocks to lift, but there's still that probability that we can't find a bill. i think that's not a very high one but it's not zero. >> okay, i appreciate the uncertainty tax and getting beyond that, but this bill, whatever the it rations, you're talking about taxing families, taxing individuals, taxing

businesses for the universal mandate. you're talking about the government reaching very deep. they're tacking instrument makers and technology, ed. somehow this doesn't sound great for investors. the democrats don't even know what they have. this bill is 1,000 pablgs and it's on somebody's word processor. it changes all the time and most are really clueless of what's in there. and the concept of putting a tax on health care companies as a way to cut health care costs doesn't add up to me. it doesn't make any sense. >> you've been a proponent of reforming medicare which to me i agree would have been the simplest best building block for this whole conversation. give me a quick thought on your medicare reform ideas. >> we do need a market solution. we're not going to get the

superb health care we all want. i'm not talking about putting the uninsured in the system. i'm talking about all the baby boomers that are going to turn 65 years and older. and in order to accommodate everybody's needs, we need to give everybody a voucher for $10,000 and go out and buy your own insurance. and instead of being limited to only two or three insurance companies, you should have the option of picking and choosing among numerous insurance companies. if you have anything left after you bought your insurance, keep it. >> that sounds sensible to me. and what about the issue of taxing opponents of health care which would drag the economy, would it not? >> absolutely. competition would allow the system to operate more effectively.

>> i don't think they stand much of a chance. >> there's a political agenda in washington. >> really? i agree with you buddy. >> let me get your quick take. the dow is off 200 points from its peak. gold is down, the dollar is up. commodity stocks are down. it's like a little ripple of deflation going through the markets. is this a new trend or is this just a correction? >> well, at first relating to our conversation on health care, i think that the stock market goes up when it sees gridlock. the stock market doesn't like when washington can pass 1,000-page bills that nobody has read that just increase the federal deficit without limit. i think if suddenly the health care reform plan is more likely

the market goes down. i think this is just short-term volatility. i think the markets are going higher because the markets are going higher. >> that's pretty highly correlated with earnings. i think they're going up. i just hope we don't get expectations ahead of schedule. . >> how bullish are you, bob dole? >> well, i'm productive. i don't want to go overboard. the stock market is up 60%. there's got to be some improvement news there. i still think we work our way higher, but we'll get bump ace long the way. we're in the middle of them. deflation never really left us. we still have a commercial banking system that's not expanding credit. we would like to see that

changed. >> we're now closer to 9700, ed. down 10,000 before year end? >> i don't know if before year end. i think by the end of next year, the market will be up 30% from here. >> that's a great way to end. >> thank you ever so much. tom coming up, folks. more discouraging and worrisome developments in the alleged murder plot in new york. nor threats coming around. one reported for the marine base in quantico and another report coming out of the dallas. we've got pete williams who's going to fill us in and then roger cressey will give us more details.

shepard najibullah zazi was indicted today on conspiracy charges to commit terrorism. >> the weapons of mass destruction is legal terms for planning to use a bomb. authorities still believe he was

planning to carry out some kind of terror attack in new york. first, he faces a much more serious charge. this is a terrorism charge that carries a maximum penalty of life in prison. he had been charged earlier with lying to federal agents. secondly, we learned that according to the government, after coming back from pakistan, he moves to colorado and then with at least three other people starts buying the chemicals that would be needed to build a very powerful explosive, the same this was used in the 2005 london subway and bus attacks. it was also hidden in the shoes of would-be airline bomber richard reid. they're trying to find these chemicals at three separate times in late august and early september. he rents a hotel room with a stove in it and is heating them up to try to concentrate them. while he was doing this on the last day on september 7, he was

urgency communicating with someone, we don't know who. we assume someone in pakistan, trying to tig you're out how to master this formula. it's not working for him and he's more urgently each time trying to get advice on how to combine the things and in what order. so what this tells us was that he was very earnestly trying to gather the components he would need to make a bomb and really working hard to try and do it. we've been told by federal officials, though, they don't believe he ever succeeded in actually making this stuff, but he was on his way to new york. he had already scouted out other place where is he could continue buying these chemicals, according to the government. >> pete, this is very interesting stuff. do we have any sense that of the other people in the group -- >> at least three. >> up to six or nine. were any others trying to make

bombs? >> as far as we know he's the only one activity trying to put the components together. but he certainly had help acquiring the material he is would have need popped. >> and now the charges have moved from lying to terrorism. so the similarities with london and presumably other factors, everybody is pretty sure now he's a terrorist linked to al qaeda. is that pretty much definite from the authorities? >> that's what makes this such an interesting and worrisome case. they say he went to pakistan, got training from al qaeda operatives and came back to the united states and was apparently somehow staying in touch with them. so they do believe he was acting on al qaeda instructions. >> right up to the night he was trying to work out the bomb. you're saying it's not like he left camp al qaeda and pakistan. he was talking to them recently. >> yes. you get the sense, not to trivialize this. but you get a sense this is sort of like a bachelor in college trying to call his mother trying to get instructions on how to

make a recipe work. that's the sort of picture you get here. he's either e-mailing or talking on the phone to someone to try to figure it out. >> all right, nbc news, pete williams. can't thank you enough. >> nbc news terrorism analyst roger cressey is going to have more on this terrorist story. we have something cooking in dallas, new information. and we also have a north carolina terrorist who was thinking about bombing the marine headquarters in quantico, virginia. it's all unbelievable. coming at the same time breaking news on a dismal suggest, but we will cover it on "the kudlow report." man: when we want. man: when we're in the mood. woman: it's our choice. announcer: today, guys with erectile dysfunction can be ready with another dosing option from cialis. cialis for daily use is a clinically proven low-dose tablet you take every day, so you can be ready anytime the moment is right. so relax and take your time. man: tell your doctor about your medical condition and all medications and ask if you're healthy enough for sexual

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welcome back to "the kudlow report" everyone. joining us now, nbc news terrorism analyst roger cressey. thank you for tonight. thank you for helping us last night. roger, we heard from pete williams on an update on the al qaeda plot, but i just want to ask you about two other very disturbing stories i'm sure you know about. first of all, in north carolina, potential terrorists, they looked at a possible attack on the virginia marine corps base in quantico? going for the mat reens? and then there's another report, roger, coming out of dallas about the potential bomb problem there. what's your take on this. >> well, the one in fk next was daniel patrick boyd, larry. he was arrested a couple of months ago. now we see new information that he identified quantico as a

target, bought some maps and was doing some initial reconnaissance. he lived in pakistan for a number of years. clearly he was radicalized. clearly he had the intent and with small arms, he could certainly have caused some significant damage. then we have the guy in both chicago as well as dallas who were self-starters, who identified on their own that they wanted to do something and the fbi posing as informants tried to help them do it. it's important, larry, to separate zazi and that plot where he was in direct contact with known al qaeda people and these other guys. so there is a difference here, but it just demonstrates that we have a broader issue that we have to deal with. >> a couple of things first of all, this guy daniel patrick boyd. you say he went that pakistan. how can we be sure he didn't have contact with al qaeda or another terrorist group? >> we only know what the government is telling us. they found no evidence he was associating with no known al qaeda operatives. this guy was a bit of a loser,

and who he was interacting with in pakistan, we may never know fully. but in terms of the known al qaeda people we worry about, there's no reason to believe he had that interaction yet. could have he have? certainly but we haven't seen the evidence. >> and you're saying the dollar story is just an outliar. but that's just really an older story? >> it's a young guy, 19 years old. he wanted to conduct jihad on his own. the fbi, and this is a good story from a law enforcement perspective, identified him, tried to convince him that this is counter to islamic culture and tradition. he kept saying no, i want to do it. they helped put him in a position where he would conduct an act that he would ultimately be arrested for. >> i'm just down to the last 25 seconds. our worst nightmare is what some people are calling this zazi al qaeda thing. a group, american citizens going to pakistan and back. where does this lead us? >> it's a number one priority

and demonstrates the importance of eliminating the safe haven in pakistan. this will continue to happen if we do not eliminate it, larry. >> so this is international, pakistan-afghanistan, as well as u.s. security. this is the whole billion of wax, roger. >> absolutely. that's why this is not just a u.s. problem. it's a global problem. >> roger cressey, you're terrific.

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