banks under fire again. why some are questioning whether the world's largest financial institutions are artificially inflating the price of everything, from beer cans to cars, to airplanes. how satisfy is your pension. detroit season the the only

employer who made big promises to current and former employees. >> how to not outlive your money. how much can you safely pull from your savings each year. and does the 4% rule still work? we have all that and more on nightly business report for monday july 22nd. good evening, everyone, and welcome. nearly 1/3 of all the s&p 500 companies report their quarterly profits and losses this week including the dow. shareholders are forgiven if they feel like they've eaten a soggy french fry. mcdonald's saw profits rise 4% over the past three months. that was well short of analyst's expectations and the company warned of a tough year ahead.

mcdonald's shares the biggest decline in the dow today falling 2.5% today. investors are waiting to see more results out of this week's batch of earnings. the s&p 500 index closed at a fresh all time high. the dow rose 2 points, the nasdaq up and the s&p 500 up to 1695. in the commodity markets, gold was glittering. the precious metal chalked up its one day gain many nor than a year. it jumped more than $43 an ounce to 1336. gasoline prices, aaa says average prices at the pump up 12 cents. increased summer demand and

unrest in the middle east all combine for the sudden spike. aaa says higher prices will be here in the coming weeks. >> existing home sales fell more than 1% in the month of june. the median home price rose to $214,000 that's up 13% year over year. the sector has been on fire on wall street, it hasn't been everywhere on main streak. what some see as a great divide in house iing. >> david and heather little john built their oregon home in 2005. >> we're under water because our timing is outstanding. >> the value of their home was cut in half by the housing crisis. as their family grows, so too does their knees for more space. they're now adding extra principle to their monthly

mortgage payment. >> we're doing what we can. >> think thought about walking away. >> that's not an option for us. >> the stocks of the nation's big home builders sore, up over 200% from their bottom in the spring of 2009. even with housing starts below normal levels, wall street is booming for builders. >> i think i'm in nirvana. >> buying a home is the best investment any individual can make but about 10 million underwater borrowers, and millions more don't have that option. and every day, david little john a financial planner watches wall street beaming all the way from oregon. >> i have a bit of animosity toward the way the situation was handled at times. i think that the taxpayer bailed out a lot of these banks, i'm a taxpayer. in many respects i honored my

contract the entire time through, and i look at it and go, wait a second, why am i left with my nose against the glass? why don't i get the puppy. >> it's not just underwater b e borrow borrowers, it's first time home buyers. today there are just 29% first time home buyers. tight lending is keeping many of them on the sidelines. >> some of the very same banks that have profited so handsomely have also made tens of millions by warehousing physical commodities, like aluminum and copper, some industry critics charge that some of the firms routinely engage in shell game style maneuvers that line the banks pockets and boost costs for soda drinkers. >> bottlenecks of a different kind pushing up the price of a cold one these days, or at least the cost of keeping it cold. a long held belief among some

industries. bank controlled warehouses intentionally delay aluminum deliveries pushing prices higher even as demand is declined. they points to a steady increase since 2009, when banks began buying the warehouses. managing director of harbor aluminum intelligence, premium on the metal that's well above its historic average of 2.5 to 6 cents a pound. >> that premium was trading two weeks ago at a record high of 13 cents per pound. >> the beer institute estimates this costs firms everything from anewly numb for beer cans. at the heart of the issue, detroit's metro international. an aluminum warehouse controlled by goldman sachs. it holds the equivalent of a quarter of the north american demand for the metal. only offloads or distributes a

required minimum of 3,000 tons a day, no more, no less, whatever the demand. goldman's profits from this practice, two ways. first from the extended rents paid to store the metal. and second by the best made on aluminum futures by its trading arm. only 5% of aluminum used in production of consumer goods is warehoused. but given the amount of metal held by metro international. the concerns about higher prices catching regulators eye. the federal reserve publicly acknowledging aen ongoing review to see if commodity activities are complimentary and permissible for bank holding companys. while the cftc launched an investigation into warehouse practices. >> all of this setting a stage for tuesday's setting hearing on whether or not they should control commodities related businesses. for nightly business report, mary thompson. >> san jose california at the

heart of silicon valley, has a lot of worries these days, $20 million in pension reforms for city workers approved by voters just last queer, have now found their way into a courtroom. current city workers are fighting to block the measures, and keeping san jose from taking more of their paychecks to pay for future pension costs. the city of control filed for bankruptcy last week. municipal workers are fighting to keep their pensions in tact. retirees claim their pensions are protected by michigan's constitution. a look at how firefighters are battling to keep what they thought was theirs. on the streets of detroit, firefighters staged informational pickets, trying to save their city pensions. >> we are not numbers, we are people that sacrifice our lives. we may not come home one day, to look at us as a spreadsheet is

to me unamerican. >> the real battle, though, is in the courts. this county judge in michigan has ruled the bankruptcy violates a provision in the state con sti dugs protecting pensions. but the bankruptcy is filed in federal court, and the judge in that case declared today that the feds have jurisdiction. over objections from the city pension funds. rhodes set a hearing in the case for wednesday morning. the beginning of a process that could take years. far more complex for a city that for even the biggest corporate bankruptcy. >> they need to continue to exist before the population for its constituents. in this case, that's going to make it difficult, because you have stakeholders. >> including those picketing firefighters, who insist there's a basic principle at stake, not to mention their financial well being. >> absolutely i'm nervous. >> my family is nervous, we will survive, we will do what we have to do to survive, i think that

we have been promised something, and this country is based on good faith and promise. if you get rid of unions and pensions, what do we have? we have corporate privatization and control. that's not america. >> michigan's governor says the retirees should have a voice in the bankruptcy process, and formalizing that will be one of the first orders of business in court. the unions say the time for negotiation was before the bankruptcy. maybe to head it off in the first place. for nightly business report, i'm scott cohn in detroit. >> how safe is your pension? karen friedman is the executive vice president at the pension rights center. welcome, good to have you with us. on a scale of 1 to 10, how safe are america's pensions and are municipal pensions any more dangerous or less safe than corporate pensions? >> i'd say it depends. it's hard to give a scale. there are definitely some issues. let me start by saying, we think

it's absolutely outrageous, that detroit followed for bankruptcy in order to get rid of their pension obligations. that is a broken promise to workers and retirees. having said that, if you're in a company pension, it's a little different than a government pension. if you're in a company pension and let's say your company goes bankrupt. your pension would be backed by a federal insurance program called the pension benefit guarantee corporation. in most situations, especially for retirees, your benefits will be insured and you don't have to worry too much. you're in a state pension, let me say, there are a few myths around state plans. most state plans are well funded. i just want to say that, there are a few bad apples, most of those bad apples are because state legislators made a decision not to adequately fund those plans. also, most state laws and municipal laws prohibit pensions

from being cut. from that perspective, people have less worry. but because of detroit, there are some -- dangerous things going on. >> let's get back to detroit, i was struck by that last gentleman in the package who was saying that, you know, america's all about good faith, that's just the american way. is that going to play out in the fight in detroit to get pension money? how do you think it's going to work out in the end? >> this is what i think. i think the fight is just beginning, you know, workers and retirees are going to be on the ground fighting this 37 and i think that the -- the last measure should be retiree cuts. every other alternative should be explored before there are any retiree cuts, i think this is going to go on for a long while. we hope that this issue in detroit is going to be resolved favorably for workers and retirees, we think it sets an extremely dangerous precedent and we hope this does not spread

to any other cities. >> what kind of homework can i do to find out whether my pension, whether it's a state, municipal one or corporate one. what kind of homework can i do? who can i ask, what do i ask to find out whether mine is safe? >> that's a really good question. in the corporate sector, if you have a company pension plan. the plan is required to give you a statement every year telling you how well funded the plan is. that's a place to start, look at it, if you have questions, go to an independent actuary. one of the math wlizs who helps people in this situation. in the state, i would say start with your state legs legislature. most are doing very well. go to them and tell them, this pension is so important to me, i don't wan the cut, i want to know that you are funding it, that's the first place you should start. >> karen, thank you very much. karen friedman of the pension rights center. still ahead often the

program. netflix shares have sored almost 200% over the past year, we'll tell you why they were under pressure late today. first, let's take a look at how the international markets closed today. a troubling and still developing story at a six flags amusement park in arlington texas. an investigation has been launched over the death of a woman who fell from a 14 story roller coaster on friday. jackie deangelis has our story. >> reporter: 14 stories high, the texas giant is a main attraction at six flags arlington park. friday evening, a tragic

accident left a woman dead after she fell from the ride. accidents like this raise many concerns over safety at theme parks, the international association of amusement parks and attractions says the likelihood of being seriously injured on a ride is one in 24 million. >> to be seriously injured at a theme park is uncommon based on the raw numbers of people who visit parks. >> in the meantime, six flags went ahead with a scheduled earnings report this morning. >> we join today with heavy hearts. one of our guests died last weekend at our park in arlington texas. >> now, analysts are looking forward. concerned about the chilling effect that an accident like this could have on attendance for six flags and other theme park operators. >> we don't see much of an impact from this going-forward? >> six flags says it's not seen

a significant impact in attendance over the weekend from this accident. but warns that sometimes there could be a lag. >> i think there will be a drop in attendance. >> i hate roller coasters, i don't let my kids go on them any more. >> some people may have a second thought about going to these facilities. >> we did adjust our numbers for the third quarter slightly. we're expecting 6% growth for the quarter. we think it's more like 5% now, that's cautious, potential impact and spillover for the next six months. >> a spokeswoman responded saying, we are committed to determining the cause of this tragic accident and will utilize every resource throughout this process. >> the police have ruled out foul play and criminality. six flags will continue the investigation. texas is one of the 21 states that has no agency to oversee amusement park accidents. will more regulation be imposed on parks?

>> from a media and marketing perspective, they're going to have to spend money to remind folks that these rides are safe. >> for nightly business report, i'm jackie deangelis. we begin market focus tonight with a late day report the company was cautious about its next quarter. lower by 1%, to 261.96. it fell further after hours. hasbro missed earnings expectations as the reason more boys are playing with electronics devices. the company also announced an agreement with disney to extend its merchandising right to marvel characters. that may lift the stock, which closed up more than 3% to 46.87. shares of yahoo fell sharply today, after hedge fund manager dan lowe disclosed plans to sell

shares in his company. he'll resign from yahoo! 's board of directors. the stock finished the day down more than 4%. and google is taking a stake in the taiwanese micro chipmaker that makes the chips used in its google glass device. the investment send shares up high max technology. google closed up one and a half%, to $910.70. a tricky calculation, how much should you withdraw from your savings each year in retirement? we'll put the time honored 4% rule to the test as we kick off our week long series, how to not outlive your money. first, let's look at commodities, treasuries and currencies.

no matter how your investments are doing, the possibility of outliving your savings. make sure retirees have enough money, some financial organization noisers say their next egg should last a lifetime as long as they withdraw no more than 4% a year. some say the 4% rule could put your retirement at risk. >> it may seem like a very safe bet. withdraw no more than 4% from your retirement savings each year, you'll have enough money to last the rest of your life. not so fast. >> i don't think the 4% rule is as feasible today as it was in the past. the reason for that is because

the market returns haven't been as consistent as we've seen in the past. >> the 4% rule was calculated back in the 1990s, based on a portfolio with a mix of 60% large cap stocks and 40% intermediate term government bonds. times have changed. with historically low bond yield and a volatile stock market, the 4% rule may no longer be as safe. >> getting a handle on cashflow and retirement is more important than any rule financial advisers say. knowing what you'll be spending is the best way to determine what you'll need to withdraw. >> financial advisers say it is possible for retirees to take out 4% a year from savings and have the money last. as long as the mix of assets is well diversified. >> you have to look at interest rates and bond rates you can draw upon, where am i getting my income from my equities, and at that point you have to look at dividend paying stocks to grab that equity yield.

>> depending on your age and risk tolerance. a 4% withdrawal rate is a good guideline for gauging whether you'll have enough money in retirement. also consider taxes and inflation. >> with inflation and taxes, that investor who wants to draw 4% has to be able to make at least 7% on average to be able to net net net get that 4% in their pocket. that can be challenging at times, i find that a lot of folks are just not invested appropriately to be able to address that type of need. >> many preretirees also simply need to save more. in the end, how much money you put in may be the biggest factor in determining how much you can take out. for nightly business report, i'm sharon emerson. >> for more on how much to withdraw during retirement, we're joined by kerry. financial adviser with united capital wealth management. thanks for joining us. let me just begin by asking you,

where do you stand on this 4% rule. does it still work or doesn't it? >> i believe that the 4% rule is a valid point, but there is no one size fits all for financial planning. clientses need to know more importantly, what they save, what they spend, how much they are going to leave to their heirs, when they're going to retire and what their risk tolerance is. >> if it's not 4%, carrie, it has to be an individual calculation based on some of the things you just mentioned there, like how much you saved, how much you're going to spend. and i would think, significantly how much money you're going to have coming in from other security or retirement ocial annuities. >> absolutely, it all factors in. you have your buckets of money, taxable money and nontaxable money.

you have to take it the most tax efficient way, you want to take it from your buckets that are tax deferred last. and you want to take it from your taxable first. >> this is complicated. and you know, it used to be so easy, when you retired, you worked 30, 40 years and you got a pension, and you lived on in the golden years. most people are not good at saving and figuring out these buckets. so what is your advice. >> my advice, i truly believe that everybody needs a financial plan, and they should at least seek somebody's guidance who's going to put them on track, if they are young. the sooner they start, the better. if you start in your 30s or 40s, it's a great time to start, 50s and 60s is okay, as long as you're willing to work and get the numbers and see where they wind up and be realistic with your goals and see where you actually, if you can actually do what you want to do. somebody who's 50 years old and

wants to retire at 60, and they have 500,000 and spend 100,000 a year, it's not going to happen. >> i want to come back to something you just touched on, that is, when it comes time to start withdrawing money from my cluster of savings, which assets do i want to tap? first, which ones last. i think i heard you say, save do i want to sell my stocks first, my bonds first, what? >> you really want to do it the most tax efficient way. it depends on your portfolio where you are in the cycle when you retire. you could have a bunch of games built up in your bonds or your stocks. either way you want to take it out the most tax efficient way, make sure you have long term capital gains, make sure you have the lowest amount and do a spread over time with the most tax advantage way to pull from

each account. >> the thing about taking it out in a spread, no lump sum payments, right? >> no, no. when you take a retirement -- when you retire from your company, you get a rollover, which is going to go directly into your ira account, which is a nontaxable event. then when you withdraw on it, you get taxed at 100%. you want to withdraw that money last, since it's 100% taxable. all your other money is taxed, you only get taxed on the gains. >> thank you. financial adviser with united capital wealth management. >> if your plan is to work longer to avoid outliving your savings, we'll show you how to do it on your terms. >> as long as you're there, we want to hear from you on which stocks would you like our market monitor guests to discuss this friday. go to our website, click on the

link, and don't forget to tell us where you're from. that's nightly business report for tonight. thanks for joining us. >> congratulations to will and kate. i'm tyler mathisen, we'll see you back here today.

welcome to "newsline." it's tuesday, july 23rd. i'm catherine kobayashi in tokyo. the operator of the damaged fufushima daiichi has admitted that radioactive water has been leaking into the ocean. and a senior