to make russians chuckle? >> from all of us here at "bbc world news

>> i think the way we're going to bring unemployment down in the united states is to grow exports. >> tom: how to deliver a fix for the u.s. economy and more jobs with scott davis, the c.e.o. of u.p.s. >> susie: and leaders from germany and france wrap up an emergency conference call with one message: greece will remain part of the european union. it's "nightly business report" for wednesday, september 14. 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 >> susie: good evening everyone. another greek crisis averted for now. the leaders of france and germany said today they are committed to keeping greece in the eurozone. and tom, greece's prime minister vowed to implement austerity measures so that country's economy stabilizes. >> tom: susie, the decisions were handled in a conference call between the leaders of germany, france and greece. that call was the focus of trading today after two major french banks had their credit ratings downgraded. moody's investor's service cut its rating on societe generale and credit agricole. the move came over concerns about the financial health of those firms. >> susie: but once germany and france announced they're backing greece, stocks turned positive. by the close, the dow jumped nearly 141 points, the nasdaq

rose 40 and the s&p added almost 16. so what exactly is going on in europe? here's an update. it's been a year and a half since europe's sovereign debt crisis began making headlines around the world. in that time, the situation has gone from bad to worse. greece, portugal and ireland are currently on financial life support. italy and spain are ailing. only france and germany are healthy, but they are burdened with responsibility for their neighbors. there have been many attempts to fix greece's financial problems, including austerity measures that led to riots. increasingly, investors are convinced greece will not be able to fix its public finances. interest rates on the country's debt are over 20%. the fear is that a greek default will destablize other financially weak countries in the eurozone. no doubt the crisis is the biggest challenge for europe since it began using the euro 12

years ago. and without a quick solution, economies around the world will pay a steep price. joining us now with more analysis, simon johnson. he's professor of economics at m.i.t. and formerly the chief economist at the international monetary fund. nice to have you back with us. >> thanks for having me. >> susie: let's begin by asking how serious is this situation in europe? and is it still possible that greece could declare bankruptcy? >> the situation is very serious, and greece is going through a version of bankruptcy, the version for countries when they have a debt. and the creditors will probably end up with no more than 33 cents on the dollar, that's a pretty big default. >> susie: what would it take to stablize the european situation? and are the europeans moving in the right direction? >> the europeans on some days move in the right direction, other days they back away.

today was a relatively good day. but there are serious problems that have to be sorted out in terms of how much germany is willing to pay, how much fiscal austerity countries like italy are willing to do and whether countries like greece are getting enough debt restructure to get them back on a sustainable growth path. none of this has been resolved decisively yet. >> susie: you have an op ed piece coming out in the "new york times" tomorrow where you say it's time to be honest, it's time for some brutal truth telling. the implication being that the europeans are still hoping for the best and that they are in denial. tell us more of what your thoughts are on that. what are the risks to that kind of thinking? >> well, the risks are obviously that the situation gets out of control. it's amazingly reached the point where greece is in trouble, ireland is this trouble, portugal also had a loan from the inf and the damage continues to spread, so italy has been under pressure and that pressure may well return. the europeans have not faced the fundamental design problems of the euro zone, many of these are fixable, but

not if you're in denial. if you're in denial, you say oh no, this is just a market aberration. you're not going to get the hard political and economic work that needs to be done. >> susie: as you look at the landscape in europe and greece, italy and spain and so forth, what's the risk factor for the u.s. economy and the global economy? >> that's a great question. as far as we can see in terms of capital flows or other things we could measure, the risks are fairly small. the big issue obviously is confidence, that spreads across financial markets sometimes very rapidly. and there's also potential nontransparency through credit default swaps, the way that people ensure against default buys in a country like greece or italy. we don't know exactly who has what kind of net exposure to those contracts. that's a black box, and i don't think the regulators know either. that's a real danger, if we had more transparent markets, more disclosure, we wouldn't be so concerned about that.

but right now we have to be concerned. >> susie: let's talk a little about the u.s. economy. recession or no recession, where are you in that debate? >> i'm hoping that it's not a recession. i think we can still skirt it depending on the situation in europe. but depending also on domestic policy. the fight we had over the debt ceiling in august obviously did a lot of damage to consumer confidence. and the private sector is just not convinced that it's worth hiring people again so, we don't get jobs back, we don't get incomes back. i think we're going to have slow growth for a while, i really hope we can stay out of recession. >> susie: president obama was on the road lobbying for his jobs and tax proposal. do you think his proposals will reboot the economy and get hiring going again? >> i think that these will be small steps in the right direction. you have to sich wait any package like that today, any stimulation, in the context of a medium term deficit control and deficit reduction.

and people on capitol hill are nowhere near having that kind of deal. so just spending money or cutting taxes without a medium term agreement on how you're going to stablize debt levels and also bring them down, that's not a good idea. >> susie: right. tough decisions and a long standing debate. thank you so much, simon, for giving us your thoughts, we appreciate it. we've been speaking with simon johnson, professor of economics at m.i.t.. >> tom: retail sales were flat last month as consumers spent less on autos, clothing and furniture. excluding cars, the commerce department says overall retail sales were up only 0.1%. and wholesale prices are not moving up. a separate report from the labor department shows producer price inflation was also unchanged last month, held down by a drop in energy costs.

if you want to know about the u.s. economy, it pays to watch u.p.s. the firm delivers almost two million packages a day worldwide, so it has its pulse on business and consumer demand worldwide. with some help from joe montana today, u.p.s. introduced a new program called "u.p.s. my choice" to avoid missed deliveries. and for a fee, recipients can reroute a package and get a two- hour delivery window. erika miller was there and spoke with c.e.o. scott davis. she began by asking his view of the economy. >> i think that in a slow growth economy i think all of us were disappointed in the first six months of this year, people thought we'd see probably 3% gdp growth. we saw, as you know, four tenths the first quarter, 1% the second quarter. so it's been disappointing. i think the second half of the year started off similar to what we saw. so i think we're going to see growth. i don't see is up thing over into a second recession, but i certainly see slow growth for the foreseeable future. >> reporter: how does that change your hiring plans? >> our hiring plans are almost done daily. we have the technology that we know what packages are coming in the night before. and so we'll adjust the work force daily.

the number of drivers and the number of packages. so for us obviously we move about 6 or 7% of the gdp every da in our trucks and planes so, if the economy is slower, the hiring is slower. >> reporter: are you seeing anything in asia or europe that makes you more or less confident? >> obviously if you read the newspapers you're concerned about europe with the sovereign debt issues. our business has done pretty good in europe, we've been growing strong, doing strong volume and good and bad economies so, so far so good. every year i look at europe and say it's going to be weaker this year, but we're not seeing that. asia, still wouldn't see the fastest growth in the world. china is still strong, maybe not as strong as a year ago. the air cargo has been a little slow the first half of the year. >> reporter: what do you think lawmakers and the white house could do to jump start growth? >> i think as a businessman, we have millions of small business customers throughout the world, and the u.s. particularly. i think they need certainty on

policy. so i think we need to give people a runway of four or five years. this is a policy, whether it's energy policy, health care policy, tax policy, we need to have four or five years with, that then you're able to make investments. if you only see a one year at a time policy it's hard to hire people, it's hard to make big capital investments. so i'd like to see more certainty out of washington in the longer term. >> reporter: how does this new u. p. s. my choice initiative affect your bottom line? >> i think it's going to be a generator of revenue. we deliver to 100 million homes every year. more and more online shopping goes every year. consumers get frustrated when they don't get that first delivery to their house. if it has to be shipped a second time or hired third time, it frustrating. so if we can get the package to their house on the first delivery, it's going to be a game changer. >> reporter: mr. davis, thank you very much for joining us today.

>> i enjoyed it, thank you. >> susie: a key government report released today spreads the blame for the massive oil spill in the gulf of mexico, but most of it goes to b.p. the main cause of the blowout was the failure of a cement barrier in the drilling apparatus, according to the report. the cement job was done by halliburton, but the report states that b.p., as the designated operator, was "ultimately responsible" for safe operations on the rig. the blowout at the deepwater horizon rig killed 11 people and led to the worst offshore oil spill in u.s. history. almost five million barrels of oil spilled into the ocean.

>> tom: the major stock indices put up a third straight session of gains, but they closed off their best levels of the day. let's take a look at tonight's "market focus." flat retail sales and wholesale inflation in august didn't inspire buying interest this morning, but as confidence grew over europe, we saw stock prices climb. the dow put in another triple- digit range today, hitting its lowest level just below 10:30 eastern time. but we saw steady buying until 20 minutes before the close, when the index gave back some of its gain. still, the dow ended with better than a 1% gain. the gains came across sectors.

the industrials, consumer discretionary and technology sectors put in the best performances today, up at least 1.6% each. home depot led the charge for the dow, up almost 3%. this is home depot's highest price this month. over the past year, shares are up more than 11%. dow component general electric continues bouncing up from a 52- week low hit on monday. the stock tacked on another 2.5% today. the company announced more than $1 billion in orders for new turbines that run on natural gas, generating electricity. that's 30% ahead of last year's pace. aerospace company textron is another that has been bouncing off its recent low. shares jumped more than 6% as volume more than doubled. this company makes cessna airplanes and bell helicopters. it cut its earnings outlook thanks to refinancing its debt.

cablevision was the best stock in the s&p 500 today, up 7%. the company has a deal to put some time warner cable channels like c.n.n. on iphones, ipads and laptop computers. time warner was up a more modest 1.6%. sirius x.m. radio is consistently one of the most actively traded stocks, in part due to its low price and the almost four billion shares outstanding. the stock was up almost 7% today on heavy volume. customers can expect higher prices in january, leading to today's rally. september has a nasty reputation for stocks, and investors are investing accordingly. in the first week in september, the investment company institute found more than $7 billion dollars poured into mutual funds, but two-thirds of that money went into bond funds.

we have seen the yield on the 10-year note creep back above two percent as prices have dropped a little this week. still, rates are historically low. and that's tonight's "market focus." >> susie: president obama said today small businesses that are owed money under government contracts will get that money faster. speaking in north carolina, the president says the new bill would help create more jobs for the middle class. it would also help veterans who finish their military duties and are looking for work. nearly a quarter of young american veterans-- those under age 30-- are unemployed. anna olson reports. >> veteran unemployment's a huge problem. >> reporter: tom tarantino led two platoons in combat, and commanded a company of 400 people. he says he was highly skilled when he left the military, and was shocked when prospective employers asked if he could handle managing a team of 30. >> it took all my self control to just stay straight faced, because it just shows people don't understand.

>> reporter: tarantino found a job with the iraq and afghanistian veterans of america, but many vets haven't been as lucky. the unemployment rate for iraq and afghanistan vets is 12.4%, and for vets ages 20 to 24, about 21% are out of work. >> we know that they're ready, they're fit, they're able to provide the sort of work these companies and agencies need. >> reporter: mark walker is with the american legion, which provides job fairs and training for veterans. he says many employers have a hard time seeing how military skills fit into the workforce. >> so how does that guy who's in the infantry fit into management, fit into i.t., fit into a specific skill set? >> reporter: walker also says soldiers may not have the same professional connections or education as other people their age, and that's hurting them in the job hunt. another problem is that while many vets are skilled medics or truck drivers, the civilian workforce requires certification to perform those jobs at home. tom tarantino says that just doesn't make sense. >> if you drove an 18-wheeler

while getting shot at and blown up in iraq, you pretty much can drive an 18-wheeler across the midwest. i'm just saying. >> reporter: with so many out of work, president obama recently proposed a new tax credit to incentivize businesses to hire veterans. >> you fought for us, and now we're fighting for you. >> reporter: lawmakers in both the house and senate are also considering legislation to improve vocational education. tarantino says that legislation will give veterans the training they need to adapt to the civilian workforce. >> let's hope that cooler heads prevail, and that the willingness to help our women and men in uniform trumps politics, and that we can actually get something done in 2011 for veterans. >> reporter: but if congress doesn't act, veterans advocates worry an entire generation of skilled workers could find themselves unemployed. anna olson, "nightly business report," washington. >> tom: hellmann's mayonnaise, dove soap and a dividend. that's on the shopping list for tonight's "street critique guest."

it's hilary kramer, editor of gamechangerstocks.com. we could add vaseline and lipton tea. how defensive is this stock, considering the global economic environment here? >> this unilever company is ex streamly a great buy to have during a recession, because of their stable of brand, especially their more moderately priced like suave shampoo, dove soap, lipton. but it's also something else, a company that was able to grow sales by 7.1% through volume growth and parsing on prices along, and also is excellent at marketing, tom. that has, for example, ben and jerry's ice cream as one brand, but also owns slim fast. so i really love unilever for that. >> tom: both sectors with slim fast and ben and jerry's. also it a foreign company and

that leads to a question from viewer brad who writes, i enjoy hill rather's suggestions on international stocks with high dividends, but i fine it difficult to find out dividend withholding taxes from certain countries before investing. you've been talking about international telecommunications stocks, for instance that have a hefty dividend. how do you figure out this stacks information? >> well, first of all your tax professional will have this information. but at the same time, most of these countries have between 0% and 30% withholding of any dividend that's paid out. generally it's in the 15 to 25% median range. so i would still rather buy a company like telefonica, get a close to 10% dividend on this very undervalued company and then let's say have withholding of maybe 20% at dividend, pay again here, and then sometimes you may have some kind of tax credit depending on what kind of account you buy that stock in, and where that dividend goes.

so generally for me, a higher dividend, i'll pay the taxes if it means i'm going to make money on that stock. >> tom: okay, so noted. tim asked for an update from a pick of yours back in jum. he writes, back in july he purchased vrus, made about 40% after the split, i now own 2,000 shares. are there reasons to stay? it was july 6 you first mentioned it, the split adjusted 63, now it's over 77. do you still own it? >> well, i own the smallest percentage, i sold off about 90% of my portfolio, in and in our news letter i recommended that those that had bought sell the majority of their position, because we made so much money on it. but that being said, it's a very important company because of their results with their compound for hepatitis c. this is going to be a real blockbuster, looks like, has done well in 8-week, 12-week studies, moving onto the next level, and i recommend that those that have it that want to stay with it, fine,

absolutely. we just sold because there's so much value out there today. stocks that have been just decimated. >> tom: so you still have a small position in pharmese. how about unileaver? >> i do not unilever. >> tom: you can send us a note by twitter. more questions coming up next week of course with our guest, hilary kramer, of game changer stocks. >> susie: here's what we're watching for tomorrow: we'll see the weekly jobless claims, along with august reports on industrial production and consumer prices. research in motion is out with its quarterly earnings. also tomorrow, house speaker john boehner lays out his plan for jobs and the economy. we'll see how it stacks up against president obama's proposal. wal-mart launched an ambitious initiative today to help women all around the world. the giant retailer will double the money it spends with women- owned businesses here in the

u.s. and will also double the amount it pays international suppliers that are run by women. wal-mart plans to help train and educate nearly half a million women overseas and in the u.s. the announcement comes three months after the u.s. supreme court dismissed a gender bias case against wal-mart. >> tom: should the uncle sam invest taxpayer dollars in promising-- but risky-- startup firms? the issue was on full display today at a congressional hearing. house republicans say the obama administration's eagerness to deliver economic stimulus may have influenced a federal review of a loan to now-bankrupt solyndra. white house e-mails show the administration had concerns about the loan. the solar energy company received a $535 million government loan, only to land in bankruptcy court.

>> susie: more now on employment. many experts say the realistic solution for creating jobs and turning around the u.s. economy depends on small businesses. tonight's "money file" has ideas for helping small businesses grow. here's eric schurenberg, editor and director of content at inc.com. >> everyone here knows that small businesses are where most new jobs begin, so said president obama in his jobs speech to congress last thursday. if anything, he was understating the case. without startup firms, there would be no net job growth in the u.s. economy.

none. so obviously, the president would want to leave no stone unturned in helping entrepreneurs. so, it's kind of puzzling why he missed some obvious possibilities. for instance, why not invite foreign-born entrepreneurs to come here? the market for labor is global, so is the market for entrepreneurs. congress has one solution on the table already, the kerry lugar startup visa act, which would create special visas for company founders to come to the u.s. to start businesses. that's not taking jobs from americans; that's creating jobs for them. now, one problem with startups is that so many of them die young. the department of commerce has proposed a tax exclusion for small businesses for their first years of profits. that would help startups hang on to precious working capital when they need it most. finally, washington should help local governments compete for startups. right now, states and cities try to persuade existing businesses to relocate. nationally, this is a zero-sum game. collecting data that would help states and cities rate their

business friendliness would clear the way for startups to take root locally. and where that happens, jobs follow. i'm eric schurenberg. >> tom: that's "nightly business report" for wednesday, september 14. 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: this program was made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt

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