>> susie: stocks retreat from two-year highs as fed leaders and foreign countries debate the central bank's plan to pump billions into the financial system. >> tom: we talk about the fed's move and g20 concerns with the c.e.o. of the world's biggest bond fund, pimco's mohamed el- erian. you're watching "nightly business report" for monday, november 8. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

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>> susie: good evening everyone. u.s. economic policy came under fire today. tom, in a rare move, fed policymakers openly debated the central bank's recent decision to buy billions of dollars of government bonds. also, world finance leaders questioned u.s. efforts to encourage economic growth. >> tom: susie, a lot of second guessing ahead of the g20 meeting on wednesday in south korea. that meeting brings together the leaders of the 20 biggest economies in the world. president obama got a taste of what to expect as german and chinese officials criticized u.s. currency, trade and monetary policy. >> susie: so, is the u.s. on the right path or not? joining us now, mohamed el- erian, c.e.o. of pimco, the world's largest bond fund. mohammed, nice to see you again. >> thank you, susie. >> susie: now you've been critical of the fed's plan

to buy these billions of dollars of government bonds. what your biggest criticism? >> i think three issues, susie. first they are using a very blunt instrument. secondly, they are moving on their own. no other u.s. agency is moving with them. and thirdly, the rest of the world is very anxious and therefore the rest of the world could end up doing something that yun mines what the fed is trying to do. so put all that together, and what you get is anxiety everywhere. not only within with the u.s. but also globally. >> susie: and we did get a sense of some of that anxiety today. the world seems to be watching us and they're watching our economic and monetary policy and as we just reported a number of foreign officials criticizing u.s. policy. are those criticisms justified? >> yes and no. yes in the sense that we where facing structural problems. and structural problems require structural solutions. and what the fed is doing in

qe 2 is simply injecting more liquidity trying to overcome the problems with liquidity. and we know that structural problems are not solved by liquidity. no because the alternative may be worse so the alternative of the fed doing nothing at all could actually be worse. i think the fed is stuck in what i call the fourth best. it can't get to the first best and therefore it is doing something but it knows that what it is doing has not only benefit bus it has costs and risks. >> susie: all right. and you talk about all this liquidity. and that was one of the criticisms that was coming out today from a number of foreign officials that we don't need all of this money out in the world markets. this could create financial intable-- instability for the global economy. are we alienating our trading partners? is there a risk of a trade war here? >> with the risk of a currency war. there is a rising that other countries will not accept the consequences of all this

liquidity. >> susie: but isn't a currency war and trade war sort of the same thing? >> with its's the step towards a trade war. so hopefully we can preempt a currency war so that we don't end up in a trade war. and the reason is that this liquid sit to the going to be absorbed domestically. it's going to flow out of the u.s. in the form of capital flows to other countries and to commodities. and other countries will likely witness that. >> susie: so bring it back to the people at home watching all of this. what does all of this mean and what does all of it mean for american consumers? >> in the short term, financial market does very well because you've got someone with a printing press who has decided to buy instruments. so in the short term virtually everything goes up. in the longer term its, the jury is still out as to whether this will result in higher jobs and higher income. so i would enjoy the short term but i wouldn't necessarily extrapolate it into meaning that we are

turning the corner in terms of job creation and high growth. >> susie: do what are you telling investors here, pimco has been saying recently that the bull market for bonds is over. we've got the federal reserve buying bonds. i mean what is your advice? >> we are saying that bonds are now fairly valued. they reflect the economy. they reflect the fact that the fed is buying bonds. look for what we call safe spread. which means high quality companies which means going outside the united states where there are good opportunities. and be careful. don't overextend yourself because there is a possibility that all this liquidity will not ult in higher growth. will not result in higher job creation. >> susie: well w and that's a question i wanted to ask you. we have unemployment rates still painfully high. we have economic growth which is painfully weak with. so what is your outlook for the economy? what kind of shape are we

in? >> i think that we are in what we call the new normal. president obama said it again yesterday in terms of unfortunately an outlook for sluggish growth, stubbornly high unemployment. now that is not what should happen. that is what is likely to happen if we don't get a change in the policy scenario. so unless we see other agencies joining the fed in trying to address a structural issues, we are unfortunately looking at a period of slow growth and high unemployment. >> susie: all right, complicated issue. thank you so much for coming on the program and giving us your version of them. >> thank you, susie. >> susie: we've been speaking with mohammed el-erian, c.e.o. of pi m.c. o. >> tom: here are the stories in tonight's n.b.r. newswheel: concerns about the fed's stimulus plan pressured stocks a little. the dow fell 37 points, but the nasdaq rose a point and the s&p 500 was down two.

trading volume started the week with under a billion shares moving on the nyse and less than two billion moving on the nasdaq. there's no evidence that any company put money before safety in b.p.'s gulf oil disaster, so says the president's lead spill investigator. instead, design and cementing issues found during drilling were common throughout the industry. chrysler group posted an $84 million third quarter loss, but says its turnaround is gaining traction. the bailed-out auto maker also boosted its outlook for next year and expects to turn an operating profit then. still ahead, we go beyond the scoreboard for a look at the business of sports. tonight, our new feature tackles nascar revenues and arrogant athletes. >> susie: as the foreclosure crisis continues, banks and mortgage servicers are modifying more troubled home loans than

uncle sam but comparing industry and government loan modifications isn't apples to apples. as stephanie dhue explains, not all mortgage modifications are created equal. >> reporter: a year and half ago, an injury took carole howell off the job, cutting her family's income in half. she fell behind on the mortgage and to avoid foreclosure sought help from the government's housing affordable mortgage program, known as hamp. >> i felt relief, i thought, when we left the library that night, you know, "this is okay, it's going to be okay, because there's a program out there that's going to help us." >> reporter: but she was rejected because her mortgage had been packaged and sold to investors. iane chipollone is an attorney and a director of the sustainable homeownership project for civil justice. she says many clients who could be helped by hamp are not.

>> they are denied, oftentimes with either inconsistent reasons for the denial, or not a sufficient explanation of the denial, but then told "oh, by the way, maybe we can review you for our own in-house or proprietary loan modification." >> reporter: proprietary loan modifications are done by loan servicers and don't have to follow hamp guidelines. under a hamp mod, a borrower's monthly payment can be no more than 31% of income, and there are no upfront fees or payments by contrast, an industry mod has no limit on the amount of income a borrower can spend on the payment. and they often require penalties, late fees and missed payments be paid upfront. that can result in even higher payments than before the loan was modified. that's the case in about a third of all industry mods. faith schwartz is with the mortgage industry's hopenow alliance. she says industry modifications are less rigid than hamp. >> they have flexibility and

that's what you need when someone's only other alternative is foreclosure, especially if a borrower wants to stay in their home. >> reporter: in howell's case, after she made seven months of reduced payments under a trial modification, the lenders demanded $7,800 before making it permanent. howell still has to pay that money, and doesn't understand why the investors in her loan would want to foreclose with home prices falling. >> you're better off taking our money and letting us stay in our home, and i understand they're a business so it can't be personal for them, but for us it was personal, it's heartbreaking. >> reporter: howell hopes to complete her modification trial by year's end and keep her home. stephanie dhue, "nightly business report," pasadena, maryland.

>> susie: the smart phone wars are heating up, and the battle ground is big. over 58 million americans own them. the newest entrant into the race? microsoft. it's windows 7 phone hits store shelves today. so, can it top the iphone? and can it out-do the droid? our tech guru scott gurvey takes the latest microsoft phone for a test drive. >> reporter: it is hard to believe microsoft released its first smart phone nearly 10 years ago. before the apple iphone. before the google android. and about the same time as rim's blackberry. hard to believe because microsoft has never been seen as a major player in phones.

that may change with windows mobile 7. we've been testing a windows phone made by samsung and comparing it with an iphone and a droid. it has a slick feel, a beautiful bright touch screen and unique tiled interface. the tiles convey information, like how many messages are waiting. touch the "people" tile, and you'll find your contacts and facebook friends in one place. but, strangely, no twitter. email sets up easily, especially for exchange server mailboxes. that's a big selling point for business. you can edit and share microsoft office documents, but you can't cut and paste. the phone has a great camera and a decent web browser. but it does not support flash or html5, which will limit video in this release. voice quality is on par with other smartphones, but i don't know why they can't get the sound as good as it was on the old dumb phones. the zune-like music player is great, but you can't add ringtones. so how does windows mobile compare? on interface design and voice quality, it is a worthy challenger to the iphone and

android. on service providers, it suffers from apple-itis. like the iphone, you can only get a windows mobile on at&t. the android, with multiple providers, scores here. we could only test a few applications, because that's all there are. with a three-year head start, the iphone has 300,000 apps. there are 100,000 for android phones. analyst jin yin of standard & poor's says for microsoft to have a hit, it must get developers to make windows mobile apps fast. >> given the fact they are so far behind, not only in terms of developer but also in terms of market share, i thinks its going to be an uphill battle. >> reporter: there are reports microsoft will spend half billion dollars to market windows mobile phones. it is a big push the company says is critical to its future. scott gurvey, "nightly business report," new york. >> so tom looking at the markets today stock investors a little bit cautious but no caution in the gold markets. gold hitting a new high 1400

and change. >> helen: yeah, the gold bulls certainly continue to buy it after the federal reserve decision last week you spoke about with mohammed. lots of questions about the strength of the dollar or weakness of the dollar ahead of the g-20 trade meetings coming up later on this week. so let's get everybody updated in tonight's market focus. >> tom: the stock rally from last week took a breather today, with the major indices making small moves. the s&p 500 spent the entire day in negative territory, but remains just off its most recent high. here are the last 26 months for the s&p 500. even with today's fractional loss, the index continues around a level not seen since lehman brothers collapsed in september 2008. fueling the rally? the information technology and consumer discretionary sectors. each of them have put in double- digit returns in the past two years. the laggards are utility and financial stocks. those sectors have yet to break

out to new post-recession highs. merger talk today online. amazon.com picked up some baby supplies with its buy-out of the company that runs diapers.com. it's a $500 million cash deal, plus about $45 million in debt. amazon gets diapers.com and sister site soap.com. analysts say the deal highlights how consumers are buying more bulk items online. amazon investors like the deal, pushing a-m-z-n shares up a fraction, but enough to hit a new all-time high. amazon wasn't the only online giant talking deal. a.o.l. reportedly is looking at its strategic options. this talk fueled today's almost 5% rise, a-o-l stock is close to a six-month high. according to the "wall street journal," a.o.l. has hired financial advisors to explore different scenarios. one of those may include yahoo. that stock added 1%, but on about half its average daily trading volume. a.o.l. and yahoo have had merger

discussions in the past. we mentioned the gulf oil disaster commission earlier. b.p. has suggested the disaster began with the well's cement failing, a point rejected by halliburton, the company that did the cement job. haiburton shares rallied almost 5% on strong volume. it thinks the problem began someplace else. rig owner transocean was up 5%. it says b.p. and halliburton are responsible. meantime, anadarko stock fell 4%. it owns part of the blown-out well. as part owner, one worry may be how much liability anadarko may face. irish drug maker warner chilcott makes hormone therapy and dermatology medicines. thanks to disappointing revenue and a cut to its top-line

outlook, shares fell hard. the stock lost almost 14% on strong volume. this is a new 52-week low. despite its lower-than-expected revenue, it actually raised its profit forecast thanks to lower costs. and after the close, priceline.com blew away estimates. the value of all the different types of travel booked through its websites was up 47%. during the regular session, priceline stock marked time, awaiting those results. after the close, the stock shot up 6% to over $400. if it holds tomorrow, that would be a ten-year high. and that's tonight's market focus.

>> tom: the business of sports is worth about three quarters of a trillion dollars. that puts the sport industries on par with annual revenues generated by transportation or manufacturing. fans and investors are both looking to score. so with that in mind tonight we begin a new look at the business of sports. >> you call it beyond the scoreboard with rick horrow c.e.o. of horrow sports ventures. welcome back. >> i'm excited about transmiting to the public the impact of sports, the products that we buy, the places we live, the people

we watch. it's all impacted not just on the field but clearly in this case the boardroom. >> tom: we'll begin with raiseway revenues in the thick of the nars car season, two publicly trade nascar track owners where nascar races are run, speedway motorsports and international speedway saw revenues drop. so is nascar lossing? >>. >> well, gentlemen, let's figure out how to start your engines. a 10% reduction in attendance in the bottom line, also up to 25% reduction in television ratings in certain races and companies like anheuser-busch busch having second thoughts about staying in from a corporate perspective so nascar has to do something. >> tom: clearly having a top line impact with those raceway owners. international raceway striking a deal with gei co owned by warren buffett's berkshire hathaway. is warren buying nascar at a bottom. >> the gei co is great but it symbolized nascar creativity. a five-year deal, seven

tracks, increases revenue. 155 million unique viewers and nascar by far and away is the most brand loyal of any sport corporate america loves nascar. >> tom: it is the number one spectator sport in america, no doubt about it. moving on, home court advantage or not for nike. basketball shoe business is big at nike. under armor the upstart going after it take a look at this pie chart. nike owns 95% of this u.s. basketball shoe market. under armour has introduced a new shoe in the past several weeks. stock at three year highs. what is the risk for underarmour. >> that is not even a sliver for thanksgiving dinner, that other. 0.14% market share for underarmour but they are doing stuff about it. they looked at getting into the college market. then they are dealinging with major league baseball for endorsements and now that famous basketball shoe they introduced. >> tom: we have a picture of it behind us here. but this is the third time around under armour has gone after at athletic shoe market. crosstraining failed to make a dent with rung. what is at risk. what does it have to do.

>> i tried to get into that shoe. it doesn't make me jump any higher but it is making nike jump higher because they are not standing still. they did a deal with with the nfl that starts in 2012. 25 million a year for their stuff to be involved with mike. so underarmour and nike together big time sneaker wars. >> tom: finally athletes and ar against sometime goes together. a firm called brand assets consulting find these three are among the most arrogant athletes perceived by fans, tiger woods, new york yankees and new miami heat but sponsors haven't been scared away, fans haven't been scared away. >> i will tell you something else about the heat it is not just those sports but nonsports all, halliburton, versace, harvard all arrogant brands you might say and the heat were bought for $32.5 million, november other $400 million. corporations still love it corporations are dealing with contracts that are shorter, they're smaller and easier to terminate. >> tom: it hasn't scared away the sponsors or the fans. rick we appreciate it. it is beyond the scoreboard with rick horrow.

>> susie: here's what we're watching for tomorrow: data on september wholesale inventories are out. we'll also talk with cigna c.e.o. david cordani about health care reform and what he expects from the newly-elected congress. and our "word on the street" is "retail." bob walberg from thestreet.com joins us to talk about likely winners this holiday season. >> susie: 18 months behind bars. that's the latest punishment in the biggest-ever hedge fund insider trading case. the sentence went to former atheros communications vice president ali hariri for his role in the case involving galleon group founder raj rajaratnam. hariri pleaded guilty back in march to securities fraud and conspiracy to commit insider trading. he's among 21 people charged, so far a dozen have pleaded guilty. rajaratnam goes on trial next year. >> tom: new rules for air cargo. today, homeland security banned all air shipments from somalia and yemen.

another change: toner and ink cartridges over 16 ounces are banned too. that's because that type of printer cartridges concealed bombs sent from yemen to the u.s. international mail packages heading to the u.s. will also face tougher screening. and they'll need to be certified as coming from an established postal shipper.

>> susie: when it comes to to holiday shopping, we all know about black friday and cyber monday. now, there's small business saturday. mark your calendars for november 27, the saturday after thanksgiving. small business saturday is part of an effort to help boost the economy and support local businesses. new york city mayor michael bloomberg joined american express c.e.o. kenneth chenault to announce the campaign today. with the big apple on board, susie, they're looking for other cities to participate. >> tom: that's "nightly business report" for monday, november 8. i'm tom hudson. good night everyone, and good night to you too, susie. >> susie: good night tom. i'm susie gharib. good night everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by:

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