>> ♪ money, money, money, money, money, money, money ♪ >> ♪ money, money, money, money, hi, everybody, welcome to the wall street journal report. the jobs report and america's economy, what it all means for the markets and your money. will president obama's economic policy shift to the center? if he wins another term, my conversation with a man who knows. the new york institution that's a slice of history, a wall street watering hole where you still might find the three martini launch at harry's cafe. the reality tv star who has become a household name, can she make the move from party girl to mogul? the "wall street journal report" begins now. >> now, maria bartiromo.

>> but first, here's sue herrera with the stories and headlines this week. >> thanks, maria. here's a look at what's making news as we head into a new week on wall street. it was a disappointing jobs report. the labor department reporting the economy created 96,000 jobs well below expectations of about 125,000. but the unemployment rate did fall to 8.1% from 8.3%. but that's because fewer people were participating in the labor force. revisions to june and july data showed 41,000 fewer jobs were created than first reported. mario delivered. the european central bank president announced a new aggressive plan to help fight the fiscal crisis in europe and bring down borrowing rates for italy, spain and portugal. they will buy government bonds with maturities of three years or less and will have no limit to the amount that they can buy. countries that want ecb assistance would have to apply for it and meet economic

reforms. the program will be monitored by the international monetary funds. the markets like that plan a lot. a monster rally on thursday fooling that announcement and the dow and s&p 500 getting three-year highs and nasdaq posted a nearly 12-year high. stocks continued to rise on friday. auto sales continue in high gear. gm rising 10% from a year ago. ford up 13%. chrysler criming 14% and toyota up a whopping 46%. that's compared to earthquake related supply disruptions last year. all came in ahead of expectations and annual sales rate stands at 14.5 million cars. it is an extraordinarily busy and important week from the jobs numbers to the ecb plan but there are plenty of other things to pay attention to as well. joining me to talk about that is black rock's chief global investment strategist ross

koesterich. let's start with the jobs numbers, 96,000 jobs created, fewer than the market expected but the unemployment rate did fall to 8.1%. what's your take on the numbers and what does it tell you about the economy? >> you know, this was a bad report. it was a bad report on several fronts and even the drop in the unemployment rate was negative. i'll explain why in a moment. you're below expectations an job creation and sharp slowdown from the rate in july. we're seeing wages slow down, this is a challenge for consumer with not much wage growth and too much debt. even a drop in the unemployment rate which you referred to, it happened because more and more people are leaving the workforce. as a matter of fact, today the participation rate is the lowest since the early 1980s, that has negative implications long term so all in all a pretty bad report. >> does it increase the chances of action by the federal reserve when they meet next week or not? >> i think it does.

my read on the fed is that they are inclined to go again. they believe there's less risk to extending the quantity take tif easing program and some benefits. if you're looking for an excuse for another round of qe, this probably gave it to you. >> all right, let's talk now about how europe plays into all of this. we did see the european central bank come out with a plan, a bond buying plan and basically the market loved it. the market rallied on it. do you think it's enough and do you think it solves the problems for europe at least near-term? >> well, i think the short answer is it's enough for now but does not solve the long term issues. what the ecb did, they gave the european politicians the gift of time. they've effectively been able to, hopefully be able to cap the bond yields on southern european countries and spain and italy and make that less of a threat. you don't see rising bond

yields, this gives the european politicians time to address structural issues and fiscal integ race of the european banking system and structural problems. these issues still need to be addressed and there's still work to do over the coming months and years. >> you mentioned the fact that the ecb bought some time. the clock is ticking in the united states, however, on the fiscal cliff, which you are very concerned about. the xpiration of the bush tax cuts and automatic spending cuts that come if there's no budget agreement. how do you view this playing out? what are the implications for the market? >> i think this is very important. last week maybe the point when investor sentence focuses on this instead of europe. first of all, the size of the fiscal cliff at about 650 billion, 4% of gdp. it would be hitting at a time when the economy is weak and particularly the consumer is

weak. i do think this represents a big danger to the economy. the challenge is it's not discounted into the price. we're all talking about it, i've met very few investors who believe it will happen. if we do start to move to an environment where it becomes more likely, it will create volatility and also hit equity prices as well towards the end of the year. >> how do you invest against that kind of back drop? where would you put money to work right now? >> i think there are a couple of things investors can do. one thought is for those that have the flexibility to buy insurance such as options -- those are relative ly, hopefull mitigate the impact if we go over the cliff. the other is to look at assets that will cushion the downside. for example, mega caps one place to look. another thought and this goes back to europe. if we've reached an inflection point where the u.s. is now the

problem child or potentially the problem child of the global economy, investors may want to look overseas even in places like europe that may hold up better if the focus shifts to the united states in our own economic problems. >> russ, thank you very much. we'll leave it at that. appreciate it. now back to maria with the rest of the show. >> thanks, sue, up next from the wall street yournl report, obama versus clinton, bill clinton that is. will the current president follow in the footsteps of mr. clinton and shift to the center if re-elected? >> why decades of wall streeters have found friends in the crowd at harry's. here's how the stock market ended the week.

former president bill clinton and president obama were not exactly the best of friends during the 2008 primary race but a lot has changed in four years as president clinton took center stage in a prime time address during the democratic convention this week. now the question is, will president obama's economic policies start to look like president clinton if he's re-elected to another term. i spoke to a man who knows. peter orszag. >> i think what's going to happen is probably early next year, late next year if president obama is re-elected you'll have a big fiscal deal that gets cut. with a republican house and in that scenario a democratic president, it will be a centrist deal. and it has to happen because we've got some constraints that need to be lifted and both sides know that. >> might get a little rocky before we get there but we will get there. >> what do you think the deal looks like, peter, in terms of

the fiscal cliff and tax cuts and the spending programs? >> i unfortunately think that most likely scenario is still is that we go over the cliff and then if a deal that's cut in early january, if which you can combine a more progressive tax cut than what would have just expired with entitlement reform and simultaneously raise the debt limit. that's eminently doable and most likely scenario. >> will that be enough to avoid a recession in 2013 even the congressional budget office is saying we'll see a recession in 2013 because it isn't being addressed. >> if you go over the cliff and stay there, that is such a fiscal constraint that will cause a recession. that's different than the theory of the case mr. romney is putting forward. the cbo's perspective is that what will cause the recession in that case is spending restraint and tax increases too large.

under this and sscenario, you'le mild fiscal constraint, maybe 1% of gdp and ongoing anxiety emanating from europe. >> president obama constantly talks about returning to the policies of the clinton years. what specific policies do you think he should be returning to? >> don't forget his tax proposal at the upper end would simply return top tax rates to the rates that existed under president clinton. so he's actually got a more mild version what he's getting attacked for is a more mild version than existed under president clinton. for the top 2% it returns to the clinton rates. for everyone else the tax rates are lower. >> we talk about different times, right? >> because we're in the 90s, it was boom time. the internet age. so you had a different landscape. >> there's no question that times are changing. by the way that's also why the comparison often done over the past 40 years, tax share of gdp has been 18 or 19%. that's also misleading because

we may not be in the 1990s and certainly not in the 1950s. we need to talk about what is the right policy on a going forward basis to address economic weakness and longer term fiscal problem. >> if president obama moves more to the center after re-election, how does the impact the fiscal cliff issues? do you think he gives into republicans when it comes to taxes on the wealthy? >> i don't think so. that's why i don't think you have a deal before the end of the year. you go over the fiscal cliff and everything expires and you come back administration comes back with a universal tax cut that is universal again and applies to everyone so it's not picking -- it's not no class warfare charge there but more progressive and even across the income distribution than the 2001 and 2003 tax cuts. >> so many scenarios to look at, peter. what if the president wins and republicans hold the house and senate. are we deadlocked? >> i don't think we're going to be deadlocked. it's going to be rocky.

we're going to have a period in mid to late december that where it's not going to be apparent how a deal will come together. ultimately we will get a deal and the only question are the big danger here is that we have such a prolonged period of uncertainty and anxiety that will provide lots of discussion on your show and other shows that there's a longer lasting harm that comes out of that. if we spend a month or two in the anxiety mode, you could have a longer term dill tear yus effect from that. >> that's the -- that's certainly the word. thanks so much. >> good to be with you. >> peter orszag joining us in new york. a neighborhood legend shares his american story and it centers on a place where wall street isn't just business, it's family. you can find us on facebook. take a look for wsjr with maria.

restaurant harry poulakakos served the area for more than four decades and no one knows the triumphs and fears of this community better than its favorite bartender. the very sidewalks surrounding his business have changed. harry finds himself at the intersection of old and new. luckily for the gang at harry's wall street will always be the

family business. the wall street journal from september 20th 1976 and right there in the middle of it after the exchanges close, harry's bar is a market indicator. >> in those days it was. they used to come here because this was an exciting place. and no matter what problems they have, they used to forget the problems. when i first arrived from greece, i never expected to own a restaurant. i wanted to race canopies and i met all of the wall street people and a lot of good friends and maybe they could help you a little. but that worked the other way around, not only helped me, they enjoyed my success more than i did. >> when peter was born, did you want your son to work with you? were you even given a choice? >> actually, i don't think he really wanted me to work with him to tell you the truth. >> i wanted peter to work for

wall street. one of the big firms. i got him interview with everybody and everybody told me peter is not going to work for us, he's going to work for you. and still -- dad, i got a job. i says, great, but i'm not taking it. >> we've been working together since i graduated college and since then we've opened up now -- we have 22 different types of restaurant operations. we focused in developing stone street around the corner from harry's. >> i know it was originally known as the street for beer brewers in the 1600s. >> yeah, one of the first paved street in manhattan. in the '80s and 90s it was the most unsafe unsanitary street in manhattan and the city downtown alliance worked with the city in redoing stone street the way it

was in the late 1600s. the street was completed prior to september 11th. then when 9/11 happened, everything went on pause and rewound a little bit. >> i wasn't here i was in my home in brooklyn and called me and said, what do you like us to do? i says, i didn't know how bad it was so i says prepare the restaurant and have the food ready and we'll see what's going to happen. people came but nobody wanted to eat. we had seven girls in the office. they came down and became nurses. they started cleaning their faces because people couldn't see, they couldn't even see walking in here. >> peter what about from your standpoint in terms of the aftermath of 9/11. >> it was difficult for a good year and year and a half and then you saw things were going to get better and turn around. that when we decided in 2003 to

start to do our development that we had planned prior to september 11th. we have a wonderful irish pub called ulyyes and vintry wine and whisky and a pizza place named after my mom, adrian's pizza bar. >> who are the customers? >> you see a lot of young people. but you see a lot of older people too with it. jackets and ties and everything else. people love to sit outside. >> i have to tell you, all of the businesses that have opened on stone street, ours have been great for the neighborhood. >> in the 11 years since the terrorist attacks in 2001, stone street is one of the largest commercial developments in lower manhattan. a neighborhood with changing businesses and demographics. more than 25% of households south of canal street have children. >> tell me how the neighborhood has changed. >> when i started downtown, it was 9:00 to 5:00 job.

those days a restaurant was closed at night. the most you could find 8, 8:30. i was the first one here kept my kitchen open up to 10:30 at night. our business now is completely different. >> we try to create things good for both neighborhood, meaning you have your wall street financial community down here and then you have the people who live down here. if you walk down the street with him in the '80s and 90s, it's everyone in a suit saying hello harry. and now someone with a baby carriage, hello, har rery. >> i was very lucky. i work hard. the people of wall street and american people especially, they were very helpful to me. i will never forgot that. >> my thanks to harry and peter

poulakakos. we'll look at the news this upcoming week that have an impact on your money. then one of the famous names drops by to discuss the importance of brand recognition. in my discussion with kim cash dash yan, business is in fashion. stay with us.

for more on our show, check out wsjr.cnbc.com. follow us on twitter and google plus. now, a look at the stories coming up in the week ahead that

may move the markets and impact your money. on tuesday we find out in the u.s. is importing or exporting for goods. on wednesday apple is holding an invitation only event in san francisco. widely believed to be the unveiling of the new iphone 5. will the federal reserve step in to help a stalling economy? we'll find out when the fed open market committee wraps up its two-day meeting. wholesale inflation, the indicator for the price index will be out on friday. friday tracking inflation at the consumer left. also reported on friday, last month's total retail sales numbers. meanwhile, new york fashion week brought some of celebrities best dressed names to manhattan. when one's own last name is as hot as the clothes on the runway, what does it take? i talked to kim kardashian about her business empire. >> it's been a huge goal of mine and my sister's to launch our

own color cosmetics line. we were looking for the right partnership and right time. and bold face is exactly what we were looking for. >> i think that the party girl image has never really been who i truly am. it's a side of me and i like to have a good time but my focus has always been business. i have worked since i was 16 years old, worked in my dad's office for six years. having the show has given me the platform to build the brand but that's not i'm most passionate about. i'm trying to use social media to figure out what my fans like and make a brand for my fans. fashion, beauty, you know, diet, fragrance, that is what they are asking for when i'm reaching out to them via social media. >> and it's interesting because retail has been so hot on wall street actually. as a burjening business woman

that you are, what's your take on the economy right now? >> i think that we've made definitely some adjustments in the way we do buying for dash clothing stores. it's a typical boutique and we've made adjust. s. within the brand, selling to mass but making the quality as luxury as possible to mass is definitely the way to go. >> my thanks to kim kardashian. that's the show for today. thanks for being with us. next week michael lewis. join us for that. each week keep it here where wall street meets main street. have a great week. i'll see you again next weekend.