>> susie: the international monetary fund offers a gloomy forecast for global growth, and it comes just as the u.s. federal rerve cks off a o- day policy meeting. it's "nightly business report" for tuesday, september 20. 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. thank you. captioning sponsored by wpbt >> susie: good evening,

everyone. tom hudson will be along later in the program. it's one day to go before the federal reserve reveals what more it can do for the economy. policymakers kicked off an important meeting today, and investors are hoping it will conclude with more stimulus for the economy. >> while the central bank would not confirm the contents. lawmakers, including house speaker john boehner and senate minority leader mitch mcconnell expressed reservations about further stimulus. it said anymore efforts by the fed could exacerbate current problems or further harm the u.s. economy. mien meanwhile, stocks retreated after european officials said they won't make a decision on more money for greece until october. the dow added 7.5 points after rallying almost 150 points; the nasdaq fell 22, the s&p lost two. all these uncertainties have mutual fund investors running scared.

over the past five months, they've pulled more money out of u.s. stock funds than they did in the months after lehman brothers collapsed. erika miller reports. >> reporter: it's one thing for investors to say they're nervous about the u.s. stock market; it's quite another when they dump their u.s. stock mutual funds. over the past four months, investors have yanked $75 billion out of domestic equity funds. that's more than they did in the months after lehman brothers collapsed in 2008. s&p's todd rosenbluth blames worries about the stock market and global economy. >> people have short memories, but they still remember the 2008 environment, where a lot of money was lost by staying too long in u.s.-based mutual funds. and they don't want to get caught up in that again. >> reporter: but there may be more to the story. trim tabs' leon merochnik believes much of the selling is inevitable as baby boomers prepare for retirement. >> since march of '09, the dow

jones has gone up more than 75%. that huge appreciation has a lot of investors saying, "let me realize my gains at the moment." and because they're getting closer to retirement, "let's back off that equity allocation, let's go more into bonds." >> reporter: but not all the money is going into bonds or cash. surprisingly, some of the proceeds are also going into small-cap mutual funds. not only are they one of the riskiest sectors of the market, they are lagging large caps in performance this year. >> investors still are gravitating toward what worked in the past. so, when they are looking at their financial statements and fund reports, they are seeing track records based on 2009 and 2010, and they're not really focused on what's happening in the marketplace now and what the go-forward aspect is now. >> reporter: but there's an even bigger shocker. at the same time money is coming out of u.s. stock mutual funds, it has been going into large-cap exchange traded funds.

>> equity e.t.f.s have actually got an inflow of nearly $4 billion in assets from april 2011 to where we stand today. so it's just a change in preference for the type of investments that people want to do. >> reporter: among the big advantages e.t.f.s have over mutual funds are lower cost structure and the ability to buy and sell throughout the day. investors may be nervous, but most mutual fund experts don't think they're bailing out of the u.s. stock mutual funds for good. the thinking is investors will come rushing back, once it's clear the u.s. market is recovering. erika miller, "nightly business report," new york. >> susie: joining us now to talk more about the markets, the fed, and what needs to be done to fix the economy, paul reilly. he's c.e.o. of raymond james, the brokerage and investment firm. >> nice to have you on the programme. thank you, susie, good to be here. >> susie: what's your take on what happened in the markets today? >> i think the markets are nervous.

the market has been reacting to fear. fear of the economy. fear of policy and fear of where the government policies are heading. so when that happens, people get liquid, and they move into cash and they wait and see. and that's what you're seeing really in the markets today. >> susie: as we reported, many investors are worried about what's going on in greece. let's say the worst case scenario. greece does default. what does that mean for u.s. markets? >> it's the ripple effect. greece isn't a big part of the european economy. the fear is if greece goes down, a lot of its paper is being held by other european banks. they become ill liquid. and it could affect the u.s. financial system. but a lot of investmentors don't realize there's a big difference in the financial system today in the u.s. versus europe. in '09 after the crisis, the u.s. and the banks are very

liquid. most banks have more cash than they want. the investors are more cash heavy than they've ever been, and corporate balance sheets are rich. in europe they did not reequiify or deleverage, so there's a bigger risk. and i think what has to happen in europe, is the government of europe is going to have to come together with a u.s. type plan to ensure the liquidity of the banks if there is a failure, and to let the banking system recover and reequiify. >> susie: now, investors are hoping that the federal reserve will come up with some new plan to revive the economy. what do you want to hear from policy makers? >> i think everyone thinks if we can tweak the short term market, tell fix the economy, and honestly, i'm a free market believer. in terms of prices, and intervening, i think the fed did appropriately. but holding interest rates to zero, i don't think gets the economy going. people are say figure we keep

long term rates near zero, investors will stop wanting zero returns to invest. that's not the issue. investmentors are afraid of the markets. and what they need is confidence in the markets, and i think that's more of a federal government issue, not a federal reserve issue. >> susie: so what would you like to see happen so that tell fix the economy, at least revive it? >> l i think what people want is certainty and a path. and a whole debate over the deficit was really disheartening to investors, and frankly to people who have been proud of this country. we're in a crisis, and there's been a failure to react to it. we have one side saying we can't increase taxes. another side saying we can't cut costs. and the truth is both. we need to cut costs. we've overspenlt. we have entitle programs that aren't self-funding. we have a government that could be leaner. on the other side, we have to close some of the gap in revenue.

and it's going to mean higher taxes. and you know, we can say we're going to reform the tax system, but to say over the longer term we need higher tax rates with lower costs, in order to close the deficit. and people want provinces, and i think thaeng they have that today. i wanted to pick up on that. a lot of people are saying the biggest issue is the lack of confidence, and the leadership. >> susie: from what you know of the deficit kutding program would that restore confidence? >> i think what people want to see a long term term solution. it doesn't mean you have to increase taxes today or do big cuts today. but they'd like to see over a 3, 5 and 10 year period a path to cut the deficit and fix the budget. there has to be a plan on the

table. today people are saying we're not getting anywhere. >> no one is going to confidence. why should i risk money in the equity market when i could lose it, and the markets are ruled by fear, and not return. they're getting zero return on their cash today. >> susie: all right. it has been a pleasure talking with you. i wish we could talk more. thank you so much for coming on the program. >> all right. thanks, susie. >> susie: and we've been speaky with paul reilly, ceo of raymond james. >> are you ready for some football?! >> susie: still ahead in tonight's "beyond the scoreboard": country music legend hank williams, jr., talks about his connection with monday night football. the international monetary fund says the world economy has reached a dangerous new phase. the crisis manager revised down its global economic outlook for 2012, urging policymakers to move quickly and aggressively to ease their financial troubles. washington bureau chief darren gersh takes a look at this

gloomy forecast. >> reporter: put away that bikini; time to get out the parka! a chilly economic front is moving slowly across the continental united states. the forecasters at the imf are now calling for grey skies lasting well into the fall and all the way through 2012. say good-bye to that spring forecast of a toasty outlook with highs hitting 2.7%. we're looking at a frosty 1.8% growth rate next year. >> tight bank lending, the legacy of the housing boom, high leverage for many households all turn out to be putting stronger brakes on the recovery than we had anticipated. >> reporter: but take a look at europe! a dangerous pattern won't let up. tornadoes over financial centers, widespread debt causing fiscal flooding across italy, standard and poor's today downgrading this entire country as storm clouds intensify. experts at the imf forecast center are urging local

officials to move more quickly and finally take this rough weather seriously. >> europe must get its act together. it is, indeed, a major source of worry, so you can see us as, indeed, issuing a call to arms. >> reporter: meanwhile, over in greece, no let up in hurricane euro. emergency experts are warning greeks to stay in the euro-zone. >> it's a problem that is imminently manageable if the right actions are taken. >> reporter: checking in with the emerging markets, finally some sunlight on this map! just a minor slowing, but still a pleasant 6% growth on average. back at home, we're looking at a stable but cloudy economic pattern until we can move that high pressure system of uncertainty off. imf forecasters are hoping a jet stream of support blowing from washington will be enough to keep the storm clouds away. but be sure to bring your umbrel. the global economic weather forecast changes fast. darren gersh, "nightly business report," washington.

>> susie: more details out today about the new four-year contract between general motors and the united auto workers union. the agreement is expected to add or keep 6,400 jobs in the u.s. most of those are expected to be lower-wage positions. most workers won't get annual pay raises, but they will get at least $12,000 in bonuses, profit-sharing, and other payments over the life of the contract. workers are expected to finish voting on the deal next week.

investors flip-flopped between hopes that the fed will take steps to stimulate the economy, and fears that european officials may not be able to prevent a greek default. so most of the major stock averages moved from green to red in today's trading. let's take a look in tonight's "market focus." despite the volatile trading today, there were some stocks sting decent gains. home depot led the dow 30, rising 1.3%. intel and american express were close behind. travelers group was also a dow standout. goldman sachs boosted its rating on the property and casualty insurance giant to "buy" from "sell". it thinks travelers is attractive, thanks to improved pricing power and limited risk exposure to volatile equity markets. the utilities sector accounted for a lot of today's strength. the sector has been in high demand, outperforming all the

major groups as investors search for dividends. quarter to date, the group is up in contrast, materials stocks are down almost 14% on quarter. speaking of materials, molycorp, the rare earth minerals supplier took a big hit today. the stock tumbled over $11 or 21%. j.p. morgan analysts cut the stock from "buy" to "hold" on concerns over falling demand and pricing for those minerals. share volume soared seven-fold on the sell-off. netflix continues caught up in a storm of selling. it tumbled another 10% on disappointment over its new pricing model. for the second day running, netflix shares were the worst performer in the s&p 500 index. as for the best in the s&p 500, carnival shares held that distinction for most of the day, rising 5% on strong earnings to a two-month high. the world's largest cruise ship operator, carnival posted third quarter earnings of $1.71 per

share. revenues topped $5 billion. it also says advanced bookings through next summer are keeping growth prospects afloat. speaking of earnings, after the bell, oracle posting better than expected first quarter results. earnings weighed in at 48 cents per share, two cents above analysts estimates. revenues came in better than expected, just above $8 billion. those oracle numbers pushed the stock up about 1% after hours, and could help set the tone of trading tomorrow. and that's tonight's "market focus." what makes for financial influence, and who has the power to move markets? that's the subject of a story in the latest issue of "bloomberg markets" magazine that's on newsstands now. tom hudson recently spoke with robert dieterich. he's a senior editor at "bloomberg markets" magazine. he began by asking what makes someone influential within the world of finance. >> it's people who move

markets. it's people who help form economic debate. it's people who create very profitable companies. it's people who create profitable hedge funds. you know, we have a lot of definite ways of measuring it and dividing it up to categories so that we could put together a list of 50. and one of those list of 50 is relatively new to the global world of finance. christine legar, a long time french treasury finance minister, and now the directedor of the international monitor fund taking over at a time of huge upheaval around the world. what is director of the imf? >> what you need to watch for with her is her urge to really sort of push european leaders to get out in front of the sovereign debt problem is going to come to fruition. she needs to get out in fronted on this. >> and j.p. morgan ceo jamie > dimond has served him and the

shareholders well during the financial crisis. how due keep that going while still growing in the age of uncertainty? >> that's a big challenge for him. and really what we notice about him right now is the sort of pinnacle of power at the moment he's in a position where he's at a conference in june down in atlanta at a banker conference. and ben bnanke is speaking. and q and a people are asking light question of bernanke. and he comes out and says vu study or considered what happens when the regulations you're developing come into force? he has the guts to do that. and he's the only person positioned to do that. see if he can hang on to that position. >> and you identified ray dalio. we heads up the $110 billion hedge fund, bridgewater. what sets him apart other than the size of the assets? >> it's a record for one thing. he's got a 20 year record with only one year where he wasn't up for the year. even this year in the

turbulent markets when we checked in with him in august he was 24% up for the year in his main fund. he's an innovator and really created a process that is ground breaking. >> tom: and finally martin feld stein. >> and 2011, why marlty today? >> well, for fourlt years, he's been a deficit hawk for 40 years. and concerned about forming policy, and studying the effects of government spending as an academic in the reagan white house, and studying the effects of the government budget and the downside of that. some of these issue that is come to the fore, and marty feldman is right in the thick of it. it's a conservative reagan and considers himself a core republican.

the trick is whether he can get a hearing from fellow republicans and his ideas on tax policy at the moment are getting a better hear for example democrats. >> tom: his ideas have been there for 40 years, but the politics have changed significantly. >> moving on beyond that, >> tom: our guest is rob deiterich with bloomberg market magazine. >> susie: here's what we're watching for tomorrow: as we mentioned, federal reserve officials release their interest rate decision. we'll also see the august reports for existing home sales and weekly mortgage applications. hilary kramer is tomorrow's "street critique" guest. she says it's time to sell apple shar, ev though the stock is at an all-time high. u.s. trade officials are bringing a case against china. it involves u.s. poultry products, including chicken exports. trade representative ron kirk says chinese tariffs are costing american poultry producers nearly a billion dollars a year. the u.s. has complained to the

world trade organization that china has not complied with trade rules since imposing the fees a year ago. the u.s. now has at least six cases against china at the wto. a former attorney with the securities and exchange commission could find himself on the wrong side of the law. the agency said david becker had a criminal conflict of interest when he handled legal matters surrounding the case against bernard madoff for the s.e.c. here's why-- he helped the s.e.c. decide if money should be taken back from madoff investors who withdrew more than they'd invested. but becker had received an inheritance from his mother that included madoff funds. becker may face charges with the justice department.

media in 2011-- it's all about cutting out the middleman. harry lin explains. he's executive-in-residence at idea-lab, a technology incubator in pasadena, california. >> one of my favorite $10 words in the tech industry is "disintermediation." basically, it means cutting out the middleman. the internet is a massive driver of disintermediation, especially in media industries. lets talk about tv and books. back in the pre-youtube days, if you had creative talents suited for television, you'd, well, try to get a job in television. you'd pitch your project to a network or studio, or you'd go to auditions and try to land a role or an agent.

today, though, there's the phenomenon of the youtube star, a self-made talent creating his or her own videos and directly reaching millions of viewers. some of these 20-somethings make six figures off their ad revenue. very few of them are pitching themselves to the traditional television industry. "who needs the intermediary," they figure, "taking a cut and stifling my creative freedom?!" in book publishing, the rapidly growing viability of amazon.com's kindle electronic bookstore may help accelerate the disintermediation of the traditional book publishing industry. mid-list authors, in particular, are finding they can get to market much faster with a self- published e-book and forge a direct relationship with their readers. e-books also remove a lot of overhead, thereby allowing at least the sliver of a profit margin. media disruptions happen in fits and spurts, not smoothly and linearly, but they're happening with certainty. as the internet gets faster and increasingly mobile-- think tablets and smart phones-- a lot

of what you watch and what you read may have very little to do with television and books. i'm harry lin. >> susie: 26 million people tuned into the first two monday night football games on espn. that's great news for the cable channel, as it recently spent $15 billion to keep the monday night franchise through 2021. it's also good news for the man who's become synonymous with those games, hank williams, jr. it's the country music legend's 23rd season singing the intro to monday night football. in tonight's beyond the scoreboard, rick horrow recently caught up with williams and began by asking how he got the job. >> brother, you won't believe what happened on the phone call. how would you like to introduce monday night football to 20 million people 17 times a rear and they're using your song? >> get out of here. >> he wasn't dreaming. >> he was serious.

>> how many more years are you going to be the voice of monday night football? >> i don't know. maybe forever. i can't believe they kept me around this long. when abc and mickey mouse parted, i'm the only one left. i'm the only one of the old crew. everybody else is gone. i guess they were sitting around and said we better keep him. i like that. i don't know. >> so five time entertainer of the year. you've won four emmys, and most of your current fame comes from being the voice of monday night football. how does that make you feel? >> i've been very, very surprised and awed, and you know, the little kids him -- you know, when you walk in with some guy that is a household name in the nfl, and that kid looks at you -- you're the man from monday night. let me tell you something,

folks, those other awards don't mean anything. when that kids says, you're the man from monday night football -- that's the biest there is. >> susie: and that was rick carl with >> susie: that was rick horrow with country music star hank williams, jr. and that's "nightly business report" for tuesday, september 20. 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 is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org

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