>> the only way we could have saved lehman would have been breaking the law, and i'm not sure i'm willing to accept those consequences. >> susie: fed chairman ben berannke says the fed had to let lehman brothers fail to avoid an economic disaster. >> tom: two years after the collapse of lehman, will things be different in the next financial crisis? you're watching "nightly business report" for thursday, september 2. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> tom: good evening, and thanks for joining us. ben bernanke said today it's a myth that lehman brothers could have been saved, perhaps preventing the financial crisis. susie, the fed chairman also says he's partly to blame for creating that myth. >> susie: tom, bernanke was the star witness on capitol hill today, answering questions from the financial crisis inquiry commission. the committee was commissioned by congress to figure out why lehman failed, and to answer the bigger question of what caused the financial crisis. >> tom: bernanke's testimony was a look at the lessons learned

from the crisis and a look at how to prevent another one in the future. darren gersh reports. >> reporter: speaking to the financial crisis inquiry commission, federal reserve chairman ben bernanke admitted he thought lehman brothers was not merely facing a cash crunch when it failed. he thought the firm was very likely insolvent, a fancy way of saying it couldn't pay its debts. but in 2008, bernanke chose not to share that thought with congress. >> it was a judgment at that moment, with the system in tremendous stress and with other financial institutions under threat of run or panic, that making that statement might have even reduced confidence further and led to further pressure. that being said, i regret not being more straightforward there. >> reporter: today, the fed chairman said he knew lehman's failure would have catastrophic consequences, but he also argued the fed couldn't take the enormous losses needed to save the firm.

and unlike a.i.g., lehman had no other assets to back a big loan. >> it was with great reluctance and sadness that i conceded there was no other option. there was never any discussion that says "here's how we can save lehman, should we do it or not?" we never had a discussion like that. the discussion was, "there is no way." >> reporter: the fed chairman also clarified another famous statement, when he said the sub- prime mortgage crisis would be contained. >> what i did not recognize... was the extent to which the system had flaws and weaknesses in it that were going to amplify the initial shock from sub-prime and make it a much bigger crisis. >> reporter: asked about the future, both bernanke and f.d.i.c. chairman sheila bair told commissioners the new financial reform law would prohibit future bailouts,

unless... >> the statute very specifically prohibits any kind of open- institution assistance. so if it happens, it's going to have to be congress doing it, because the regulators simply have no authority to do bailouts anymore. and we think that's a good thing. >> reporter: so in a future crisis, the last call big banks make when they get in trouble will likely be to key members of congress, asking for a late night legislative miracle. darren gersh, "nightly business report," washington. >> here are the stories in tonight's n.b.r. newswheel. stocks finished the day with a slight gain ahead of tomorrow's employment report. the dow rose 50 points, the nasdaq added 23 points and the s&p 500 up nearly 10 points. volume was light, falling below one billion on the big board and fewer than two billion on the nasdaq. the number of people filing first-time claims for jobless benefits fell for the second straight week, down by 6,000 to a seasonally adjusted 472,000. consumers took advantage of

back-to-school sales and tax- free holidays last month. the result was better-than- expected sales gains for some retailers. department stores like macy's, kohl's and j.c. penney beat estimates. but, a mixed bag for teen retailers and discount stores. aeropostale had weak results and missed target estimates. tom will have more on the retailers coming up in tonight's "market focus." there's been another oil rig explosion in the gulf of mexico. 13 workers were forced overboard, all of them were rescued. and the fire on the mariner energy platform has been put out. the company says no oil or gas was spilled. >> susie: still ahead, does age matter when you're a c.e.o.? we'll look at why experienced leaders like warren buffett are still in demand. >> tom: the bidding battle for 3par, the maker of cloud- computing equipment, is over. hewlett-packard won the deal with a $33-a-share, $2.4 billion offer.

that was apparently too rich for dell, 3par's other suitor. it dropped out bidding. but dell already has business ties with another firm in the cloud-computing sector, e.m.c. analyst benjamin woo expects those two companies to forge a closer working relationship in the wake of dell's failure to buy 3par. >> 3par was the last of the independent companies that wouldn't require a very massive acquisition-- not to say that wouldn't be the case-- but i think what they need to do is extend their relationship with e.m.c. further than they have right now, sustain their existing customers, and maintain their business. >> tom: analysts say the challenge for h.p., currently without a c.e.o., is to move quickly to integrate 3par without losing key employees. and dell's interest in 3par has heightened speculation around other data firms that may be ripe for a buyout. we'll have more in "market focus" coming up. >> susie: as we mentioned earlier, the clock is ticking to the release of the important

employment report tomorrow. people are eager to know how many jobs were created, or lost, in august. does the unemployment rate move up or down? but many economists will also be taking a close look at one sector in particular, temporary help. erika miller explains why. >> reporter: while many people are enjoying summer vacation, stephanie ross is actively searching for work. ross is currently temping through an agency called clarity, hoping to eventually land a permanent job. for now, she's happy to have income coming in after her previous employer closed shop six months ago. >> it was a bit of a shock to my system, i won't lie, but certainly coming into temp work kind of helped me pick myself up by the bootstraps in what otherwise could have been a very depressing situation. >> reporter: she's not the only one relying on temp work these days. moira donahue -- managing partner at clarity-- says business is booming. >> over the past nine months, we've been 50% up from where we were last year in terms of

openings and fills. so, we think that our clients are getting ready to hire more and more. >> economists have long watched temporary worker hiring for clues about the direction of the labor market. that's because firms often hire temps before making a commitment to permanent positions. temporary workers make up roughly 2% of the u.s. workforce. but, the sector has created more than one out of every four new jobs this year. many economists were surprised to see a small drop in temp hiring in july after nine straight monthly gains. conrad de quadros says the august reading, which comes out tomorrow, will help put july's drop in perspective. >> it's going to be important see whether that sort of represents a topping out of in the growth rate in temporary employment-- because the data are obviously volatile from month to month. or whether it actually suggests we are going to see a reduction in temporary help. >> reporter: he is forecasting a gain of up to 25,000 temporary positions. but even if there's another drop, it doesn't necessarily mean trouble for the economy. >> i don't think it's enough on

its own to raise the risk of a double-dip recession. i mean, obviously it would be something that is concerning. i think it would probably be more consistent with a further slowing in the pace of recovery. >> reporter: and there may be other offsetting factors in tomorrow's report, like an increase in the average hours in the work week. working longer hours is an option many temps would love to have. >> i hope that the position does go full time, but if it doesn't, i can come back to clarity and hopefully they'll be available to help me find another great position. erika miller, "nightly business report," new york. >> suswe continue our focus on jobs on labor day. with the markets closed, we'll have a special report, "help wanted?" we'll look at what can be done to spur hiring. and, if you're unemployed, we'll give you some tips on how to jump start your job hunt.

>> susie: remember the flash crash in may, when the dow plunged a thousand points? still no specific answers on why it happened, but reuters says regulators are focusing on a trading practice called quote stuffing. that's when traders repeatedly place-- and then immediately cancel-- orders to manipulate stock prices. another possibility is a strategy known as sub-penny pricing. that's where orders are priced in increments smaller than a penny. investigators want to know if those practices triggered the dramatic drop in the dow. >> susie: well, today no drama on wall street. seems a little quiet.

everybody waiting for that important jobs report tomorrow morning. >> tom: absolutely. very important look at certainly the last summer months of employment and clearly could spell the direction for september after labor day, the hold day. let's get you upkate-- updated on tonight's "market focus" >> tom: retailers led the way ahead of tomorrow's employment report. nordstrom sales jumped, and so did its stock price-- up 8%. it was the sector-leading stock. j.c. penney also saw better- than-forecast sales. it rallied 3%. and macy's was up more than 2% thanks to a better august. teen retailers were more mixed. abercrombie & fitch essentially matched expectations for august, and its stock dropped almost 4%, the sector's biggest drop. american eagle outfitters had disappointing results, but stuck with its financial guidance and rallied. the buckle added more than 7%

after sales dropped, but only half as much as feared. pier one rallied almost 17% on heavy volume. sales rebounded and the company says earnings will be better than estimates two others. harry winston diamonds rocketed 19%. it owns its namesake jewelry stores, but also diamond mines. it reported its first profit in a year and a half. movado group, though, missed estimates. shares fell 5%. it is a deal for burger king. confirming rumors we brought to you last night, it will be bought by private equity firm 3g capital management. shareholders will get $24 per share. the total price tag is about $4 billion, which includes debt. the company has until october 12 to find a bigger price if it can. the market doesn't anticipate one though, shares closed at $23.59, below the buyout price. the stock is up more than 40% in the past two sessions.

wendy's/arby's has rallied on the burger king buyout. rumors have circulated on and off for months about a possible buyout of wendy's. car rental company dollar thrifty continues to see more dollars put on the table in the two-way battle to buy it. avis budget upped its offer to just above that of hertz. the avis offer totals $1.35 billion in cash and stock. based upon tonight's closing prices, it values dollar thrifty at $47.40 per share. hertz has offered about $1.1 billion in cash and stock, giving dollar shareholders $41 per share. all three stocks were high, but the two wanting to do the buying, avis and hertz, outperformed the target of their affections, dollar thrifty. mariner energy was very active after an energy rig exploded in the gulf, which we reported earlier. mariner is being bought by apache for just over $23 per share. it closed just below that price today on more than 2times average volume.

the fight between h.p. and dell for 3par may be over, but speculation over what may be the next data deal continues. this trio has been running hot since the bidding for 3par began two and a half weeks ago. compellent was up another 18.5%, its highest price since march. commvault is at a new all-time high. isilon systems is at prices last seen three and a half years ago. finally, orexigen therapeutics is one of three companies developing new obesity drugs. it has a new drug partnership with japanese drug company takeda. shares jumped more than 18%. the firm goes before an f.d.a. advisory panel in december with its treatment. arena pharmaceuticals faces the same panel in september. it already has teamed with a japanese partner. shares saw some buying today. vivus' treatment was rejected by the panel in july, but it has no partner. that stock was up almost 11%. and that is tonight's "market focus."

>> tom: while the job market may be weak, a record number of older americans are working. last month, more than 28 million americans 55 years old and over had jobs. this goes for c.e.o.'s too. warren buffett just turned 80, and continues running berkshire hathaway. the average age of people who sit on a fortune 500 corporate board of directors is 63.5, according to the corporate library. bob damon is president of north america for executive recruiting firm korn ferry. bob, welcome to nightly

business report. >> tom, thank you very much. good to be here. >> tom: so are older c.e.o.s more in demand these days? >> yeah, tom, we've seen a market increase in the demand for what we like to call seasoned c.e.o.s. in fact, there's a kind of a saying in the boardroom today that 60 is the new 50. >> tom: fair enough. and three factors have been driving this, according to your research. the complexity of the business, things are just very complicated out there. business is getting done at an accelerated speed and so much more risk. so what does a seasoned c.e.o. bring that perhaps new leadership and new ideas doesn't? >> yeah, well, the complexity of business is due to two things. one is the, you know, the rapid globalization that all companies are experiencing. and second reason is that the competition is getting much smarter. so seasoned c.e.o.s have tended to deal with those issues a lot more and

therefore are capable of migrating pretty complicated seas. on the factor of speed, having been there a lot and seen and done and known what's right and wrong, you know, they can rely on their experiences to make decisions that are right in a quicker amount of time. >> tom: when it comes to managing risk some critics will say some those older c.e.o.s have been in office so long, they heap the risk on to the system that we've been dealing with over the past couple of years. >> that's a good point. i think the counter to that, tom s that what boards are looking for is a tenure where there has been a history of success in that tenure. because what most psychologists know is that the best predictor of future success is the past success. so what boards are trying to do is reduce the risk by looking at a long successful track record. >> tom: let's look at c.e.o.s that may fit this profile. howard schultz at starbuck,

55 years old on the younger side of that 60 is the new 50, i suppose. he has run starbucks twice and is also a founder. on the upper head is sumner redstone at viacom, 58 years old. he's also been in control of this media giant. what do these two gentleman bring to their companies respectively for the value of shareholders that may be younger leaders wouldn't? >> well, i think in the case of founder/owner c.e.o.s, tom what you find is that in general they have been, you know, an integral part of the product innovation function of their companies. they've basically created something from nothing. whereas c.e.o.s who are nonfounders tend to be professional managers. therefore are not quite as integral to the company and therefore are more expendable. >> but doesn't that go to the criticism that it's difficult for founders to walk away and hand over the rings and we've seen this with starbucks, with schultz coming back. we know the story with steve

jobs at apple about really being forced out and coming bang and seeing apple flourish under his second tenure. >> yeah, it is difficult for founders to give up the rings, but i think what we are finding is the successful ones like a steve jobs, like a howard schultz, what they've been able to do is that they've been a constant state of learning. so they have a voracious appetite to learn and they are also good listeners. so they are able to kind of incorporate the new environment with the old environment and get the best of both worlds to lead these companies through tough times. >> final 20 second, bob. the short coming of this long ef sit that the next generation of leaders may be kept out of the corner office for so long that by the time they get the ability to be there, they don't have the experience that boards want. >> that's correct. and i think that the big risk with long-tenured c.e.o.s is that that next generation gets very impact-- impatient. and so boards must be attuned to that.

so that they put in plans to grow these people through an apprenticeship that may be longer than they are accustomed too so they won't leave to get that c.e.o.s gig and another company. >> all things that clearly long-term shareholders pay attention to. we appreciate the insights into the boardroom here bob. our guests there evening, bob damon, president north america for korn/ferry international. >> susie: if you've been paying more for your health care premiums, you're not alone. employers have been shifting health care costs to workers, according to a study released today. for family coverage, employees pay an yearly average of nearly $4,000. that's up almost $500 from last year. companies contribute about $9,800, down $87. the survey was done by the kaiser family foundation and the health research and educational trust. they say with so many people out of work, employees have little power to demand a better deal. >> tom: here's what we're watching for tomorrow.

our friday "market monitor" is chuck carlson, c.e.o. of horizon investment services. the august employment report is released. economists expect the economy lost 110,000 jobs last month. also, getting off the fast track. more executives are re- evaluating their role in the corporate world and going to work for non-profits. >> susie: now playing on amazon.com, cheaper television programs. the online retailer today slashed prices on downloading some popular shows to match the prices apple set yesterday for shows on its new t.v. service. the going rate now is $0.99, down a full dollar from yesterday. amazon, apple, google, microsoft and sony are all in a race to get t.v. shows and movies into the nation's living rooms. >> tom: speaking of apple, the latest competitor for its popular ipad will hit stores in two weeks. the galaxy tab is made by samsung. it has a seven-inch screen, which is smaller than the ipad, and uses google's android

software. the rollout starts in europe, at prices higher than apple's. several other tablet computers are in the works, from toshiba, nokia, hewlett-packard, and dell. euu >> susie: in tonight's "of mutual interest," exchange- traded notes.

here with a brief explainer of what they are, and the pros and cons of investing in them, is john waggoner, mutual fund columnist at u.s.a. today. >> the four most dangerous words in investing are "this time it's different." the three most dangerous words are "new and exciting." so today, we're going to talk about exchange-traded notes, or e.t.n.'s. they're new and exciting. an exchange-traded note, like its cousin, the exchange-traded fund, typically follows an index, such as the s&p 500 or the trade-weighted dollar. and e.t.n.'s, like e.t.f.'s, are traded on stock exchanges, with their own tickers. you'll see e.t.n.'s listed among mutual funds in the newspaper. an e.t.n., however, is actually an obligation of a bank or other issuer. essentially, it's an agreement to pay an amount equal to the performance of an index, less expenses, when the e.t.n. matures. for example, consider the ipath coffee e.t.n., which trades under the ticker j-o. it tracks the dow jones-u.b.s. coffee sub-index, and it's up a steaming 26% this year. the advantage of an e.t.n.? because it's basically an agreement between you and the issuer, it doesn't pay out capital gains and dividend

distributions. you can create e.t.n.'s that follow just about any index you can think of, from the s&p 500 to, well, a coffee index. and e.t.n.'s will vary very little from the index it tracks. index funds can't. the disadvantage? ultimately, you own an unsecured obligation to the issuer. the companies that issue e.t.n.'s are typically very large banks, which are extremely safe unless something very bad happens. and even if the bank doesn't collapse, a large problem with it could affect an e.t.n.'s share price. the market for e.t.n.'s is small, which can also be a problem. and while an e.t.n. can be a good investment, your best bet is probably an e.t.f. or a garden-variety index fund. they're not new or exciting, but that's o.k. i'm john waggoner. >> susie: and finally tonight, here's your chance to enjoy the latest in junk foods-- carrots yes, carrots. but not just any carrots, baby carrots. the farmers who grow them are starting a marketing campaign to make the crunchy orange snacks more popular. right now, baby carrots are a billion-dollar industry. the hope is to double that in two or three years.

so, watch for television ads, billboards, even baby carrot vending machines. and tom, the tag line on the effort will be "eat 'em like junk food." >> well, good luck trying to make carrots cool here. that is nightly business report on this thursday, september 2nd, thanks for join ug us, i'm tom hudson. have a great night, you too, susie. >> susie: good night, everyone, thanks for watching. we hope to see allful you again right here tomorrow night. >> nightly business report "nightly business report" is made possible by:

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