hi, everybody. welcome to "the wall street journal report." i'm maria bartiromo, once again reporting from outside the new york stock exchange this weekend. market mayhem, turmoil and tension, fear and greed. stocks do something they have never done before as investors are whipsawed with massive moves. what does all the volatility mean? time to sell, stay put or make bold moves? we have expert advice. and if you can't find a job, how to create your own. searching for your inner entrepreneur. "the wall street journal report" begins right now. >> this is america's number one financial news program, "the wall street journal report." now maria bartiromo. >> here is a look at what is

making news as we head into a new week on wall street. it has been as volatile a week as the markets have ever seen, bouncing between fear and greed all week. and for the first time ever, four days in a row of 400-point moves on the dow jones industrial average. on monday, the dow fell 634 points after the u.s. was downgraded by standard & poor's. tuesday the market rose 429 points after the fed pledged to keep interest rates low. wednesday, the market down 519 points on worries about europe. and then the market up on thursday, rebounding 422 points led by energy and financial stocks. the markets continued up on friday. the federal reserve signaled that its plans to keep short-term interest rates close to zero for at least another two years after its meeting on tuesday, the fed changed the language of its statement and said the weak economy would warrant exceptionally low levels for the fed funds rate at least through mid 2013. in previous statements, the fed had not specified a date.

almost lost in all of the market moves this week, it's still earnings season. disney surpassed analyst expectations while technology giant cisco beat lowered estimates. and who is number one? apple and exxonmobil have been battling it out for the largest market cap recently. and for the first time apple surpassed the oil giant. we're coming up a dramatic week on wall street that caused in to look back to september of 2008 and wonder if history is repeating itself. our next guest says what is happening now is just what he expected. joining me is harvard professor and former imf economist ken rogoff. and ken, it's always wonderful to have you on the program. thank you for joining us. >> pleasure, maria. >> so is this a new crisis or the aftershocks from the last one? >> this is absolutely the aftershocks of the last one. you have slow, grinding, halting growth. that's normal. but especially what is going on in europe had sovereign debt crisis that happens almost invariably a few years after a

deep financial crisis like we just experienced. >> isn't that interesting? the debt has moved from an individual and a corporate level to a sovereign government level. so how severe is what is going on in europe, then, in your view, ken? every day this week on wall street i kept hearing it's because of europe, europe is worse off than the u.s. how would you compare what is going on there and here? >> oh definitely europe is the risk in the global economy. maybe the u.s. will go into a slight technical recession unaided by europe. i think it won't. but maybe it will. europe, there is really no bottom. the best case and the most likely thing as they figure it out, but essentially, they have the euro. they all use the same currency. but they need to either really get married at this point and have political and fiscal union, or they've got to break up. and they can't figure out what to do. and they need to move

decisively. markets are not going to let them wait. they're not going to let them temp rise. they're not going to get them kick the can down the debt road much longer. >> $14 trillion and we've just raised the debt ceiling. why is europe worse off than the united states? >> so the europeans like to say that if you add up everything in europe, the debt load is not that bad. the trouble is when greece owes money to germany and when italy owes money to germany, and spain owes money to france, it's not the same thing as being held within the country, because they're not in a fiscal union. they haven't agreed to share everything. they don't even have anything like perfect labor mobility. so we're looking at a mix between a country crisis, but something really much more like a sovereign debt crisis. these are still independent countries. >> talk to us about the panic that we've seen this week, ken. gold, briefly hitting a new record, $1800 an ounce this week, gold was at for a bit.

are these emotions based on fundamentals? on politics? can we get past market psychology to move forward with this recovery? >> thing is no question the word you would use panic hits the nail on the head. we have had a financial panic this week. maybe a third of what has happened or a little more of what has happened is due to a realization that this is not going to be an ordinary recession. but i think at the same time, there is a panic that oh, my gosh, who is going to step in to provide some policy support, some leadership. you look at the debt debate in the united states. maybe there is a silver lining there, but it's pretty depressing. you look at europe where they're talking what they're going to do, but they're not doing anything. the central bank has been tightening monetary policy in europe and the united states until now. so i think there is a sense of panic that hopefully will subside when someone comes forward. but we haven't seen that yet. so i expect continuing volatility next week.

>> the fed keeping interest rates near zero. and then they say we're going to keep rates at exceptionally low levels until at least 2013. very specific language in terms of how long rates will be at these levels, another two years. i don't know if i should be happy about that or look at it as a suggestion that the economy is going to be weak for the next two years. >> well, i think this week was close to a path. and you have described it very well. clearly we see disagreement. there were three dissenting votes. i think the encouraging thing is that ben bernanke, the chairman showed he was willing to press ahead despite that. this was a compromise, but as the economy lingers, as it twists in the wind, they will do more. i think they're going to have to come out with a more aggressive inflation targeting policy, a better, bigger version of quantitative easing. i know it was very unpopular. but that's still the textbook

move. they're going to bring it out if the economy continues to grow slowly. >> but, i mean, the fed do anything else? or now it is up to policy out of governments? >> there is room for policy out of government, although it's hard to see anything rational happening after the last few weeks. but i would particularly do something to address the overhang of mortgages instead of let that just slowly work its way out of the system. there have been a lot of plans put out there. there have been a few tried with no take-up. but there are ideas out there to try to restructure, in some cases forgive mortgages partially in return perhaps for giving up some upside to the house. i think that would be a good idea. and of course, you know, continuing structural reforms, infrastructure, and investment, the usual laundry list. there are things they can do, but i do think some inflation would be helpful. because the big problem here, maria, is an overhang of debt. private and public.

and it may sound like heresy, but a little bit of inflation would help. >> thank you so much, ken. we'll see you soon. we appreciate your time. >> my pleasure. >> ken rogoff joining us. and another major story this week, bank of america stock plunged 20% on monday. on concerns about its mortgage business as well as whether it may need to raise capital. the financial giant's stock is down more than 40% in 2011. i spoke with the bank's ceo, brian moynihan about his plans to help stop this slide. >> we're going to keep doing what we've been doing for the last 18 months. if you look at where we started in january 2010, we raised our capital level significantly from then. and also built reserves. so we have $128 billion of common equity. and we have tremendous ability to continue to retain earnings, manage our balance sheet and continue to drive the company forward, like we have done the last six quarters. in the last quarter alone, we took a $20 billion charge and put more of the mortgage stuff behind us and we still have more

cap than we had in the third quarter of 2010. >> brian, can you really go forward and say we're going to do the same thing that we've been doing? because what we're doing is obviously not working. the market is not believing you. your credibility is obviously on the line right now. how you going to get it back? what is your plan? >> it's the safe. we're going to get it back by continuing to do what we're doing. we have a customer-driven business. if you think in the second quarter we grew our checking accounts, we grew our deposits, we grew our investment banking fees, second in the world in, that had good trading results on a relative basis, wealth management business continues to make money. five of our six businesses are profitable. we have to keep driving those businesses, and then we have to keep moving the mortgage mess behind us both getting through the pile of mortgages that have to be dealt with in terms of default of customers and modifying. >> why do you think the market is reacting the way it is? there. >> are two or three issues around our company that are holding us back. one is the mortgage issues you talked about. the other is will those resolve and us needing capital. we showed we have been able to

put aside the mortgage without raising capital. and the third is the general economy. if you believe the american economy is slower, most people will say bank of america will suffer. but what we have actually seen is as the economy has slow down, as unemployment has not gotten any better, our credit continues to get better, even in the month of july. delinquencies are down, and all that seems to show that because of the underlaying change we made two or three years ago, the portfolios are in much better shape going into this sort of no-growth environment or low-growth environment than it was last time. >> my thanks to brian moynihan. up next on the "wall street journal report," what do these market ups and downs mean to the stability of your portfolio? the ceo of charles schwab is with us. vesting more than $1.5 trillion of your money, he will weigh in. later, what the economy means for the job prospects for young americans. how fewer openings may be creating a startup generation. ih comes with a story built-in. it's how our rough ideas become "you did that yourself?"

so when we can save more on the projects that let us fix, make, and do more... that just makes the stories even better. more saving. more doing. that's the power of the home depot. add some style to your sink, with this moen banbury faucet for the new lower price of $79.

with all the mayhem in the markets, what is an investor to do, and what could happen next?

here with some answers is walt bettinger. he is president and ceo of charles schwab. walt, it's wonderful to have you on the program. thanks for joining us. >> maria, thanks pour the invitation. >>. >> so most investors can't help but feel a little nervous with all of the wild swings we've had in the markets. what are you hearing from clients? is it time to sit tight or do something different with your portfolio? what is if you're happy with your asset allocation right here? >> well, the last few days have certainly been a roller coaster. and they haven't been the type of roller coaster that we all enjoyed when we were young and stood in line for. in all seriousness, the last few days and the challenges that they have brought to our clients have been real. we're talking about real people and their money and their hard-earned dollars that they have built up over time. i think for the vast majority of our clients, though, the volatility has created an opportunity to talk, to have a conversation, to engage about their portfolio. and for those clients who have a strategy and have put together

an investment program that they're following, they've actually felt fairly comfortable during these days. those individuals without, it's been difficult. >> so what are you seeing in terms of selling? i mean, there was some -- there was some debate about whether or not retail investors were actually part of the selling that we saw or if it was institutional or not. are you seeing clients today get out of their funds? >> well, actually what we're seeing is two different approaches by the investors that we serve. and if you break them into the two camps, the one camp is investors who have a lot of experience. usually 25 years or more. maybe they lived through the 1987 crash. and also investors who are getting professional advice, whether it be directly from us at schwab or from the thousands of investment advisers that we serve. that camp is feeling okay. they recognize volatility in the market. they recognize that it creates opportunities.

on the other hand, there is a population of investors who don't have as much experience, maybe trying to do it entirely on their own. and among those investors we have seen a little bit morsel i more selling. >> how would you say this compares to 2008? of course when the world was in a different place, lehman brothers declaring bankruptcy. are you seeing the same kind of volume of redemptions from equities you did then, and the same kind of fear? or is this different? >> i think this is clearly very different than 2008. 2008 felt like a very, very unique time. there was uncertainty as to who was going to be in business from one day to the next there was uncertainty on the part of investors as to what the next days would bring. i think what we have seen this week has just been a period of intense volatility as opposed to fundamental questions about the future of our financial systems.

now that's not to say that they haven't been active. we had a day earlier this week where we processed over a million trades, a rather remarkable number. for the most part investors are looking at this volatility with understanding and with the realization that this is not 2008 all over again. >> how do you protect your portfolio in moments like this in terms of volatility? what should investors know? >> well, it's difficult to make the decision how to protect it now. what we would like is for the vast majority of our clients and those who work closely with us do this, we would like them to have structured an investment strategy long before volatile times like this so that when you get into days like we've seen during this week, you've got to recognize you have a long-term approach. you're not going to jump and make rational and emotional decisions. now that's easier said than done. think of it this way. for every one warren buffett, there is tens of millions of people maybe like myself that

don't necessarily have a steel spine. but if you set a strategy in place and you're following it for the long-term, you can let periods like this wash on past and still feel confident. >> you know, it's really interesting. this week we had some good data on insiders. and apparently insider buying is up. executives at s&p 500 companies buying their own company's stock at a greater rate than any time since the depth of the financial crisis. what do you think that tells you? >> well, you would like to think that those on the inside know best about the future prospect of their companies. now there is always some examples that you can show otherwise. but in general, i think when insiders are buying with the information that they have, that that's a good sign for investors for the long-term. i don't think it's a call for any short-term movement. but for the long-term, probably a positive. >> all right. we will leave it there. walt, good to have you on the program. we so appreciate your time today. >> maria, it's great to be here. thanks for inviting me. >> we'll see you soon. walt bettinger is ceo of charles schwab, joining us today.

up next on the "wall street journal report," how do to be ceo before age 30. start your own company. the rising number of entrepreneurs among the workforce's youngest members. and you can find

frustrated with the jobs market? why not create your own. with the slow pace of economic recovery, many new graduates and young job seekers are doing just that joining me now are scott gerber, founder of the young entrepreneur council, and jeremy johnson, co-founder and chief

marketing officer of 2tor.com. gentlemen, good to see you. thanks for joining us. i really appreciate it. the numbers are not good and i want to get your take on this. the july jobs report shows that 13.9% of 18 to 29-year-olds are unemployed. very, very tough situation. higher than the average national rate. double the rate of those over 30 years old. what is the state of the traditional jobs market right now and the challenges for young adults? >> i think you're looking at a construct that we were told work hard, get good grades, go to school and get a good job. now you have a lot of young people trying to fight their way into a system that frankly there is no positioning for. i think that's why we're talking about with pushing youth entrepreneur as a viable career path. it truly has become available because the traditional is closed with people sending many, many resumes, hoping it will be the way out. >> it's not so easy to do. a lot of people would like to start their own company. how do you do it? jeremy, you started a company that aids colleges and preparing online curriculums. you have raised more than $65

million in capital. how have you done that? what is difficult about being a entrepreneur in your 20s? >> first, it's important to remember that not all businesses, especially for young people require a huge amount of capital. in our situation, we had to go out and work with a number of really phenomenal venture firms to raise money in order to get it up and running because it required a lot of capital up-front. a and the process for that was putting together a plan and reaching out to people we thought would be great partner and asking nicely. >> scott, tell me about the multiplier fact. how jobs and how young entrepreneurs are creating lasting jobs. >> well, if you look at it right now, you know, getting back to what jeremy said, you can start a business relatively quickly. and because of the various different ways people want to be involved, if 2% of the market became 4% of job creation from young entrepreneurs you, have you small businesses that are quickly creating and developing because they're able to move leaner, meaner, and faster. i think if we created more

solutions that are going to help these younger businesses that produce faster results and better results that made more sense with federal regulations across the boards and faster ways to develop and accelerate them, we're going to see a lot of positive results in that space in job creation. >> who should come up with this? is it universities? >> starting in the k through 12 space we need to start pushing it very early and very young. i think from the government level we need to start figuring out things like the tax code. well need to work on things working with young invincibles on the hill to push a youth entrepreneurship education act. this is a moment where they need to invest in the youth. >> jeremy, you have more than 300 employees at 2tor.com. what kind of sales or experience is required? what makes a graduate an attractive candidate for your company? >> so we're hiring very aggressively right now. we'll probably double in size each year for the next couple of years. so we're hiring across a wide

variety of positions. but for us, we're looking at people with entrepreneurial skill sets. so even people though they may not have started a company, feel like entrepreneurs, are able to identify problems and solve them without necessarily having to be micromanaged. for young people it's incredibly important when we're looking at someone that they're able to start initiatives and run with them without a huge amount of direction. >> and part of this is not even a choice. folks can't get jobs and they're saying let me do what i love. >> we have to stop telling young people that they're the future and start convincing them that they're the present. >> a good analysis there. scott, jeremy, good to have you on the program. >> thank you for having us. >>. scott gerber, jeremy johnson joining us. up next, a look at the news this upcoming week that will have an impact on your money. as we take a break, a look at how the stock market ended the week.

for more on our guests and our show, check out the welcomes, wsjr.cnbc.com. and i hope you'll follow me on twitter. look for @maria bartiromo. now a look at the stories coming up in the week ahead that may move the marks and impact your money this coming week. we get second quarter earnings reports out from retailers. lowes, home depot, and target among others.

monday the president begins a bus tour of midwestern battleground states. how many units began construction with the latest housing starts data coming out. the price index will be out, tracking inflation on goods at the wholesale level. thursday a look at inflation at the consumer level with the cpi. what got to the checkout counter in terms of inflation. and then existing home sales for the month of july also out on thursday as well. that's the show for today. thank you so much for joining me. each week keep it right here where wall street meets main street. have a great week, everybody. i'll see you again next weekend.