this is "nightly business report" with tyler mathisen. brought to you in part by -- >> thestreet.com. i want interactive tools. our dividend stock adviser guides and helps generate income during a period of low interest rates. we are thestreet.com. a new offensive. the president vows to fix the problems that have plagued the rollout of his landmark health care law. but can it be fixed fast enough and do the insurers have more at risk that once thought? record penalty. jpmorgan reaches a tentative $13 billion deal to settle allegations related to the financial crisis. but what about criminal charges? and will the government go after other banks next? deep in the heart of texas. a small town is quickly becoming one of the largest oil and gas-producing areas in the

world. but could the energy boom end in a bust? all that and more tonight on "nightly business report" for monday, october 21st. good evening, everyone. president obama saying today it's going to get fixed. he spoke out for the first time about the botched rollout of his administration's online health insurance exchanges that started three weeks ago. surrounding himself at the who us with people who have successfully signed up for the new health care plans the president vowed to get the glitches repaired. it's a big fixer-upper. thousands of americans are still unable to sign up for a new insurance plan because of lost information, long waits and error messages. so can the problems be fixed? and will enough americans be able to sign up for the new plan? bertha coombs joins us now with more. bertha, first time that the president's saying this is a mess. >> really, it is. it's a very big shift in tone from what we've heard the last couple of weeks. president obama defended his signature health plan in the rose garden today, saying almost 20 million people have logged on

to healthcare.gov. hundreds of thousands have been able to register to try to shop for their insurance. but for the first time he called the troubled launch unacceptable and said the administration is ramping up its efforts to get it fixed. >> reporter: president obama leading a new offensive from the white house, trying to assure americans his administration is focused on fixing the technology problems that have plagued the federal health insurance website healthcare.gov. >> there's no sugar-coating it. the website has been too slow. people have been getting stuck during the application process, and i think it's fair to say that nobody is more frustrated by that than i am precisely because the product is good. >> reporter: the president said a team of experts has been called in to lead a so-called tech surge to speed up a fix and that he is now demanding action. >> nobody's madder than me about the fact that the website isn't working as well as it should

which means it's going to get fixed. >> reporter: while the administration says the team includes outside tech experts, it did not offer any names or a timetable for a fix. >> one of the problems with the obama administration launching this has been their lack of transparency. so we don't know exactly how bad it is. we don't know how long it's going to take to fix. >> reporter: one former government technology contractor says it could take time for the tech surge teams to pinpoint a solution. >> the government's probably been given some initial answers by the contractors and those having lived through some of these situations those are probably hypotheses. and as they go through and test those hypotheses, some are proving right and they're getting some issues resolved and some are proving wrong. and the question is now is how wrong are they? what else is there to learn? >> and how quickly can they fix it? another concession of sorts this afternoon, health and human services secretary kathleen sebelius may be headed to capitol hill after originally saying she would not be able to testify before the house at a

hearing on thursday due to scheduling conflicts, her staff now says they are working on a mutually agreeable time for her to appear. >> so you talk a lot about these tech experts coming in but they don't know how fast they can do it. they don't know what the deadline's going to be. there is this march 31st deadline that you have to be signed up or you get penalized. that could come up very soon. >> it's actually before that if we actually talk about the time line. if you want to be covered by january 1st, you need to sign up by early december. so a lot of folks who have been looking at this say they really need to get these problems in order to get online enrollment rolling quickly. they have to be fixed by around thanksgiving time so really be able to handle that surge. and you will actually be penalized, although this will likely get pushed back but you actually need to sign up to allow time for your plan to be in effect by sometime in mid-february, actually or you get penalized because if you're not covered for three consecutive months, that's when you have to pay a penalty for

every one of those months you're not covered. >> i tried to sign up again today. i got farther. i, quote enrolled but i could not go and shop for plans. i'm going to keep trying here. the president eloquently expressed his frustration, even his anger. he did not express an apology, however, to people who are similarly angry to him. as he is. and no one has paid with their job yet. will soone? will secretary sebelius be forced to resign? >> that's the $2.7 trillion question, how much we spend on health care. and there's certainly people even on the obama team who are saying that somebody needs to be held accountable. robert gibbs among them, somebody needs to lose their job over this. >> bertha coombs, thank you. i'll let you know if i go et to sign on and shop. while the troubled websites are run by the government, the coverage itself is sold by private insurers. stocks have been rising on the prospect of potentially millions of new and profitable customers. but if people can't sign up or

if only the sickest do the profit and loss sumsassumptions may be seriously flawed. joining us is a.j. rice, analyst at ubs. a.j. welcome. what do insurers fear the most and who is among the most risk? >> i think what they do fear is exactly what you're talking about, that this ends up being a program where the people that have a lot of preexisting conditions that haven't been able to get insurance sign up, and those that are healthy relatively speaking stay on the sidelines, and you don't have a balanced pool. the people that are the leaders in putting these plans out there right now tend to be the blue cross plans. many of those are quasi nonprofits but well point among the publicly traded companies, it is one of the leaders on the exchange, and the 14 markets where they have a blue cross banner they're out there aggressively offering product because historically the individual market and the small group market have been their strength. and that's the type of person

that's ending up on these exchanges. >> so a.j. if people get so frustrated, they just give up and don't sign up what's at stake besides for the insurers for the hospitals and also for consumers who are part of the program and may be stuck with higher prices possibly? what's at stake here? >> yes. so, you know from an investment perspective, we actually are a little more favorable toward hospitals across the board because they've been the safety net for the last 25 years since the medicaid/medicare programs were implemented. they take on the insurance -- uninsured and do not get compensated. even if we just get the relatively sick people with preexisting conditions signing up, those are the ones that have historically shown up at the hospital and not had the ability to pay. so an hca, a universal health services, we think that's a little bit more of a cautious way to play this. we do believe that for the insurers, it's going to be tough until we get clarity as to whether they'll be able to fix

these glitches and whether people will be able to sign up sort of in the time frame you said. we think they need to have it pretty much fixed by mid-november because that's when the bulk of the signups will probably come between then and year end. >> i guess one of the real selling points of the affordable care act was that it was going to make coverage available to the very people that you're talking about those with preexisting conditions. one of the things that has stood out to me is how few companies relatively are competing in some states like connecticut where as i understand it there are only three plans to choose from on that state's exchange home of aetna, and number two, why some of the biggest companies in health care insurance like aetna, like unitedhealth like cigna, seem to be tiptoeing in here timidly. why? >> right. that's exactly what they're afraid of. they're afraid that we're going to see a great divergence in the types of people signing up and that the underwriting risk associated with those pools could be difficult. so they've chosen to focus on

the markets where they have very strong presence. a lot of leverage to drive price concessions with hospitals and doctors. and so you're seeing those companies which happen to be the ones we're recommending be much more selective as to where they're going and what exchanges they're participating on. so i think, again, that's sort of a cautious way to play this. >> all right. a.j., thank you very much for being with us. and helping us out there. a. jrchlts a.j. rice is health care facilities analyst at ubs. on wall street today, it wasn't much but it was just enough to chalk up another record-breaking session for the s&p 500. the major indexes were little changed after a mix of third quarter earnings reports and disappointing housing data. we'll have more on that a little later in the program. the dow lost 7 points. the nasdaq rose 5. the s&p edged up a fraction. the nation's biggest bank jpmorgan chase has tentatively agreed to a $13 billion government with the u.s. government for misleading investors and mortgage agencies about the safety of mortgage-backed securities it sold ahead of the financial

crisis. that would be the largest fine ever paid by a single bank to settle civil charges, yet doesn't even resolve a possible criminal case. kate kelly has more on the proposed settlement what it means for jpmorgan and ceo jamie dimon and other banks. >> reporter: the landmark $13 billion settlement that jpmorgan is hammering out would resolve a good deal of the outstanding legal issues around past mortgage securities that have been weighing on the bank. among other things it would seal off probes by the justice department and new york state and perhaps create some good will with taxpayers by establishing a multibillion-dollar fund for consumer relief. it could also set an unnervingly high bar for other banks. bank of america which has already paid tens of billions of dollars to settle an array of mortgage investigations in recent years is also under a probe by the doj and has not yet settled. citigroup which recently settled with fannie mae and freddie mac over questionable mortgages

albeit for lower sums, is also still under a cloud. in an interview outside his office today, jpmorgan chief jamie dimon said he's working to put the mortgage litigation behind him. >> when i woke up this morning, people coming in bright-eyed and bushy-tailed. >> and they're not happy to see us. >> 260 people around the world doing a great to be our clients. we're doing a great job. we're trying to get our product behind us. >> reporter: in the end even the $13 billion won't wipe jpmorgan's slate entirely clean given that criminal charges could still be forthcoming. i'm kate kelly in new york. how could the jpmorgan fine impact the housing market? coming up a little later in the program, we'll examine whether the penalty along with the proposed new mortgage rules could make it more difficult for homebuyers to get a home loan. meanwhile, where does jpmorgan's $13 billion settlement with the justice department rank among the biggest corporate fines ever paid? take a look here. bp was fined $4.5 billion for

the 2010 oil spill in the gulf of mexico. bank of america paid $8.5 billion in 2011 for selling risky mortgages that later went bad. jpmorgan and 12 other banks agreed to pay the federal reserve and others more than $9 billion earlier this year over abusive foreclosure practices. last year five of the nation's biggest banks including jpmorgan agreed to pay $25 billion in penalties in a separate abusive for closure case. and the biggest ever, the 1998 deal with the five biggest tobacco makers, $246 billion over 25 years. meantime, the banking industry just released the results of a test on its trading systems in the event of a big cyber attack. an exercise dubbed quantum dawn 2. very hollywood. wall street regulators say the results show a resilient market but one that must remain vigilant against a constant barrage of online attacks aimed to shut down the banking and

stock trading systems. last friday six-hour test included participants from big banks, major stock exchanges, utilities, the u.s. treasury, the fbi and the others. still ahead on the program, the not-so-shiny golden arches mcdonald's posting four straight quarters of disappointing earnings, and its outlook isn't much better. what can the company do to turn things around? first let's take a look at how the international markets closed today. mcdonald's today rose 5% for the latest quarter with shootly lower sales offsetting a sharp drop-off in asia. the fourth straight quarter of disappointing earnings along

with a weak outlook for the current period sent shares lower today and raising concerns about mickey d's growth. dominic chu has more on what the world's largest burger chain is cooking up to turn things around. >> reporter: investors can't be lovin' it. it's still the undisputed champ when it comes to burgers and fast food with about seven times the worldwide sales of wendy's and burger king combined. so the problem isn't volume. it's growth. sales of mcdonald's open at least 13 months were up less than 1% in the third quarter. just short of what analysts were expecting. >> it is about innovation. for mcdonald's and trying to find that home run-type product and so far they just haven't been able to they'll it down. regardless of all the advertising and the new products they're trying to put out. nothing seems to be grabbing the traffic and driving it through the doors. >> reporter: globally sales are dragging. they can't raise prices in europe, and revenues were down in japan and in china where mcdonald's has stopped opening new restaurants. yet in a struggling economy,

competitors like chipotle have been growing. mcdonald's has tried coffee healthier options like salads and promotions like of all things chicken wings. short term they've helped to mask shrinking sales of burgers and fries, but many wonder if mcdonald's has spread itself too thin. >> mcdonald's is mcdonald's. i don't think it's healthy. >> sometimes i buy the healthy stuff like the salads and sometimes the wrap. not too often. >> reporter: all those options make it tougher to meet the industry standards for fast, as in fast food. >> it has been a little bit slower. >> i think their service is still pretty good. every time i come through a drive-through, the service is pretty quick. >> reporter: in a little more than a year since he took over ceo don thompson has shaken up the menu. but four quarters of disappointing results means it's only getting hotter in the kitchen. for "nightly business report," i'm dominic chu. netflix soars after the

closing bell, and that is where we begin. third quarter profit more than quadrupling as the subscription video company added 1.3 million customers in the u.s. the biggest segment of its business. netflix also issuing a rosy outlook for the current quarter as it continues to focus on developing original content. the stock up 6% in the regular session to $354.99 and it soared. look at that spike after hours to an all-time high, continuing its run as one of the best performing stocks so far this year. and vf corporation the owner of north face and timberland, reported better than expected earnings and maintained its full-year forecast even as other retailers brace for a tough holiday season. the apparel maker benefited from strong sales of its outdoor and higher margin action brands and also announced a four-for-one stock split. shares rose more than 3% to $211.23. strong overseas performance helped boost hasbro's bottom

line. the number two u.s. toymaker beat profit and revenue estimates despite weakness in the u.s. it said it plans to roll out new games to increase holiday sales. hasbro shares up 5% to $49.72. halliburton is yet another oil service provider that beat wall street estimates. the company benefiting from strong performance in international markets such as russia, saudi arabia and angola. but revenue came just shy of expectations, sending the stock down 3.5% to $50.66. a shot in the arm for shares of radio shack. the company reportedly securing new financing from ge capital ahead of the holiday season. the funds will help free up cash and be used to finance the electronic chain's overhaul. the stock popped 7% to $3.52. at&t is leasing and selling the rights to 9700 wireless towers to crown castle international for almost $5 billion. at&t's goal is to jebgenerate cash

to upgrade its cell phone network. the move sent up shares almost 2% to $35.22. crown castle fell about the same amount to $74.66. and over in the oil patch, the price of crude closed below $100 a barrel today. that's the first time in nearly four months. oil ended the day at $99.22 a barrel while u.s. crude supplies jumped to a much higher than expected 4 million barrels last week. well one reason why oil prices have been inching lower lately is the boom in domestic oil as the u.s. becomes the world's largest energy producer. and one of this country's biggest oil and natural gas fields can be found in a state that prides itself on doing everything big. texas. brian sullivan joins us now from midland just above the permeon shale field that is feeling an economic boom in the lone star state. >> reporter: tyler, good evening. it's really incredible here. we are pretty much sitting on

top of 50 billion barrels of recoverable oil, making this one of the largest oil fields in the entire world. and you know tyler, we can read about it. we can hear about it. but in order to really understand what's happening here, you've got to see it for yourself. so we hopped on a plane and we came out here to west texas to see what this permeon midland boom was all about. >> reporter: two things seem to go on forever in midland, texas. the skyline and the number of oil wells. midland is right at the center of the energy boom that's coming from what's known as the permeon basin. and in an area known for high school football, the topic of drilling is never far from conversation. midland native shawn holcomb played for the new england patriots. he now works as a land man in the oil industry. figuring out who gets paid for the oil riches under the earth. >> they come to me and they say, hey, who do i need to pay? you can own the land, not necessarily do you own the

minerals. >> reporter: the industry is booming so is the town. midland now has one of the highest per capita incomes of any city in america, and people are coming from all over to get in on it. the job market is so tight fast food workers could make $12 to even $15 an hour to start and even get a signing bonus. the town's population is soaring, and hotels and housing are popping up almost as fast as oil wells. paul green left a high-paying job at a big drilling company to go off on his own. listen to what he's paying his employees. >> my highest paid employee last month, his salary was $4800 for the month. i paid him $1,000 for his truck allowance, and i paid him $31,000 for his day rate that he was on location. >> reporter: and it's not just green's employees that are doing well. shareholders of companies like pioneer natural resources have also seen their wealth increase. some fear the boom could end in a bust like it has before when they were using this type of drilling equipment. but others say no. this time is different.

because new technologies are enabling us to drill wells more efficiently and smarter. and while things may eventually slow down, right now the only thing flowing faster than the oil and gas seems to be the money. and i goo sguys, what's more amazeing how widespread this is. 300 miles west of san antonio, texas. in fact, the average per capita income here is now higher than that of silicon valley. put that in your cowboy hat and smoke it, suzy. >> i wish i had a cowboy hat-bring one back for me. thanks so much brian sullivan from midland texas. read more about the energy boom in texas and its economic impact on our website, nbr.com. and coming up how the jpmorgan settlement could end up costing people hunting for a mortgage. but first, how composites and treasuries performed today.

a top federal reserve official thinks the government shutdown will delay the expected start of the fed's tapering of its stimulus program. with two more central meetings left this year one in october, the other in december, charles evans, the president of the chicago federal reserve bank expressed doubt that there could be any pullback that soon. and a bit of a setback for existing home sales in september. sales of previously occupied homes declined almost 2% last month. as rising mortgage rates and higher home prices appear to have kept some would-be buyers on the sidelines. median home prices in september rose more than 11.5% year over year. but that's the slowest annual gain in the past five months. well that tentative $13 billion settlement that jpmorgan chase reached with the federal

government includes some payback for burned investors, but the deal may also end up costing some investors and hurting would-be homebuyers, too. diana olick has our story. >> reporter: the potential $13 billion deal with jpmorgan may appease those who blame the banks for the financial crisis. but it will not help consumers get a mortgage. >> the biggest problem is you can't get a mortgage loan today unless you have super credit. and this is just going to make the banks be even more conservative. >> reporter: mortgage credit today is exceedingly tight. borrowers need high credit scores, large down payments and full documentation. credit is also more costly. last spring the government insurer of low down payment loans the fha raised its premiums and fees resulting in a 14% drop in new fha loans to buy a home between may and july. credit is so tight overall that 33% of homes purchased in september were paid for all in cash according to the realtors.

that share is usually less than 10%. this as new mortgage rules that could tighten credit even more go into effect the first of next year. couple those with the settlement and banks have plenty to fear. >> if they're going to go after you for helping the government out and taking over distressed institutions at a time of crisis, then why do you have any confidence that they're not going to go after you for some technical violations of the dozens of new rules that have come down? >> reporter: the $13 billion settlement reportedly includes $4 billion in consumer relief. sources close to the matter say details on that are still being hashed out. it would not include direct payments but could include debt forgiveness to borrowers, something the bank is already doing. >> i look at the $4 billion as just another -- a headline used. nothing really -- i don't think that's a big number. i don't think there's nothing there, basically. $4 billion soft dollars probably stuff they already did already.

>> reporter: the result will arguably make the banks motherre leery to lend and that does more harm than good. diana olick, "nightly business report." finally tonight, at least one for floridian looked like he was getting a jump on the holiday shopping season but he wasn't welcomed with open arms. a 6 foot long alligator showed up at the front doors of a walmart just outside orlando sunday morning causing the automatic doors to open and close before employees were able to lock them shut. local police were called in but the gator scurried away to some local woods. there were no be pros. look at him sort of sulking. >> i think he was going to the pirates of the caribbean ride at disney. look at him. >> walking pretty fast. >> he's pretty good. i like him. >> no shopping bags. >> no sir. that's "nightly business report" for us. for more on the stories we covered, head to our website, nbr.com. >> i'm tyler mathisen.

thanks for joining us tonight. we'll see you back here tomorrow. >> "nightly business report" has been brought to you by -- >> thestreet.com, interactive multimedia tools for an ever-changing financial world. our dividend stock adviser guides and helps generate income during a period of low interest rates. we are thestreet.com.

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