captioning sponsored bwpbt >> pl: 39 days down, one to go. general tors says it will leave bankruptcy protectio tomorrow. tonight, a look at the new, leaner g.m. >> t biggest risk right now is doing nothing becausthe current economicituation is such that we can fix the economy without fixing healthcare. >> susie: we talk heth care reform wh kathleen sebelius, secretary of health and hun services. >> paul: from discounters to shops at the mall,he nation's retaers can't seem to shake the recession. its a end likely to continue as more and more consume tighten belts. and get down to thbusiness of savi. >> susie: e of uncle sam's ggest investments took a big hit today. shares of a.i.g. plunged, afr one analyst sa there's a good ance those shares are virtually worthless. >> paul: i'm paul kaas. >> susie: and i'm sie gharib. this is "nightly busines report" for thuray, july 9.

ightly business report" is made possible b this program was me possible byontributions to your pbs station from viewers like yo thank you. 7//&

>> susie: goodvening, everyone the coast is clear foreneral motors to get out bankruptcy, tomoow morning. g.m.'s stint in chapte11 was a record: st 39 days, much icker than expected. the autoker is still working tonight on finaling details to sell most of its assetto a new company. that new and improveg.m will be leaner and greener and it biggest sharehder will be the s. government. diane eastabrook has more on the road ahead r the new g.m. >> reporter: a mh smaller and hopelly nimble general motors eers its way into an increasingly cpetitive global to market. gone are lgard brands hummer, saab, saturn, and pontia more than 2200 employees. 1,0 dealers and more than a dozen plants. what remains are the cheolet, cadillac, buick, andmc brands.

re than 68,000 employees and 4,100 dealers. but deite the streamlining, g.m. has accomplished in bankruptcy, global iight auto analysrebecca lindland says the company is not out of e woods yet. they've been in the hospita and they aren't ing to just spri back to health. there has to be a measure of patienceo we do want to see continuing steady progress the patient needs to start feeling better eve day. >>eporter: while both the u.s. economy and economs around the worlare still sputtering. last month the company'sales were off morthan 30% compared to the same period a year ag liland says plunging home values and risinunemployment are keepinmany consumers from showrooms. she ubts the economy will make a u-turn anytime soon, makg a quick covery for g.m. tremely difficult. they have to get the consum back into the shrooms and they ha to get new consumers into the showroom, the same time

preserving existing cuomers which is really going to b tough because the are a lot of people who own g.m. product now that are kind of offend that they took goverent money and they went into bkruptcy and theyay not buy another general motors product. >> the flisigh is isow that the government and taxpayers own a huge chunk of general tors, they might want to show pridef owr-and buy g. m.products. >> that's very intereing. does g. m. have a product that ople want and ist still peging the mpany's future to that chevy volt? >> ty actually do have some interesting products andn fact rebecca was telling me today th she right now i test driving the ne chevy camaro and absolutely loves it. they also, chevy is also coming out wit the equinox. buick is comg out with the lacros. those have all tten very go marks from analys who

had a chance look at em. as fars the chevy volt goes, g. m. has said allalong that it still plans to bring that vehicle out, tt's the plugn, late next year, and as far as inow those plans haveot changed. >> susie: but let' just say that people n't buyhose rs and sales don't pick up. does g. m. have to go back to the government and as for more money? >> a week or so ago president obama sa that's it, it wasn't going t be giving g. m. any more money. buof coursthis is a huge company, it still has huge influence on our economy, and if it's stil struggling in 12 to 18 months, who knows, the governmentay change it mind >> susie: does, go g. m., do you thin rush out of bankruptcy, odid it do everything it needed too? >> ihink it did accompli what it need to acmplish. the compan has said and analts have said for the past few yea that this is company that had too ch capacity it needed to close plants, it need to cut the number of

employeeit had, it needed to pare the numberf brands that it had it needed to cut its legacy costs and it also neededo reduce the number of unprofitsable dealerships it has in the united ates. and it did tha in bankruptcy. but as you kw, you cannot cost cut your way to profitabity. so the challenge for g. m. gng forward is to sel vehicles, and that what it nds to do to survi. >> susie: so i'm interviewing chs henderson tomorrow, the c.e.o. of genera motors, as you know what do you thinis the next big test for hendeon? >> ihink e test f then der on andg. m.is product. and nay need to sell product. and it not just selling product, it's conncing nsumers that they hav qualy products. one of the things that has dogged g. m. forheast 20 or 30 ars is tha they don't have good quality pducts. backn the late 70s, early 80s, there were some quality issues with lot of th vehicles they were producing. actuly, in the pastfive or six years th've been turning

out some really goo products. the problem is theytill have that quali reputation. they've not overcomehat with kurms, and that is something they really need sell to the american publi >> sus: sounds like a lot of work to done. thank you so much,iane. diane estabok joining us from chicago. >> paul: wall stet opened narrowly mixed with the do losing 13 pointshile the nasdaq pted a six point gain early on. stocks began to firm up as investors welced news weekly jobless claimsropped a much laer than expected 52,000. adding tthe firmness, a report that china's ao sales were up arply. by 2:30 the dow was up 40 ints and nasdaq u16 points. light volume on the ray made it vulnerable to a selloff trimming the gains

>> susie: some major banks wl soon be saying "no" to the state of california's i.o.u. bank of america anwells fargo are ong the firms that will op accepting the notes tomorrow. the statbegan issuing i.o.u. warrants to creditors lasteek after it cldn't close a $2billion budget gap. e i.o.u.s pay 3.75% if held until october 2. california cgressman brad

sherman is uing banks to acpt them, saying now's not the time to point fiers. >> sacrameo has made some mistakes, but it was in effort to provide perhaps mo educion, more health care for or people than the state cou afford, big banks made aistake tryingo provide more luxury jets for theirxecutives then they could afford, i don't tnk we shoulhave the banks lecturing sacrento. >>ie: the securities and exchange commission is eected to decide ose i.o.u.s should be treated as a form o municipal debt. that makes tm subject to an-fraud and other ovisions of securit blog. >> paul: one milli. that's the numr of americans whve caught the h1n1 virus since the flu swept thcountry in april with infectiontill spreading, the government is aggressive working to get avaccine out to thpublic. the admistration also hosted a summit today at the natial initutes of health to be sure americans are ready foa potential flpandemic this fa. health anduman services

seetary katherine sebelius is ging the states and the publico stay vigilant and the feds are launching flu.gov, website with tips and information on theirus. >> susie: sebelius and t obama administraon are also pressuring congrs to come up with healthce reform bills bere the august recess. earlietoday i talked with sebelius about that. my first questn: despite all e cost cutting concessions fromospitals insurance companies, and drug firmis that real refo? >> well i uld say that cost reductions are a piece of it but what wre tying to cost ductions is a higher quality system. what we know is whetheits in hospitals or too often in doctors offices or it heal clinics around t country that some aricans get very high quality health care and me do not. weave a very erratic distribution system in termsf quality. we kw that there are systems inarious parts of this country

that are much high quality day in a day out at a much lower cost so wee trying to not only reduce cos but tie reduced sts to higher quality. >> susie: seetary sebelius, most americans are in far of health care verage for everyo. but they're no happy with they finout how much it's going to cosand how will impact your own care. so h are you going to sell the obama plan to the american public? well, ihink americans who have coverage right w know th they're a day, a month, ayear away from losing that coverageecause it's unaffordable or they can lose their jo or tir family can have an existing held condition and locked out of the mark. so no one is safe. ose who are unhered nee access to the system. the who are hered are within precarious ste of losing that health coverage. th corehensive reform is out everybody, it's also about anging from the siness care that weave to llness care and a truly healthier erica. >> susie: can you reay pay

for national heah care without some kind ofax increase? >> i think right now ngress is coming to the table with payment plans. the president putn the table for congress to nsider about $660 billion worth of savings, money thate're spending right now the current system thacan be rirected. and then about $330 million in revenue raise. and his prefed approachs to look at the itemized deductns, take that back cap the to itemiz deductions to 28%, back to t days that weere when ronald reagan was esident, it would affect t top 1 or% of american it would raise the additional money a that combation would pay for the health plan. but the esident has made it clear, we're not gng toadd the defici this is goi to be paid r. >> susie:that's exactly the point, thene thing that worried the ecomists that i talked to is that budgeting for this health ca plan is over a 10-year horizon. but what about the next ten years, they're nvous about the long-termiscal problems,

especially since we've alrdy wracked some hugeeficits to solve this current financial crisis that 're in. >> well, again, i thinkhen you hear people use the term a trillion dolrs, first of all, that's penng over a 1year peod of time, so spending for a health plan is likely to be in t category of a hured million dollars a year that'step one. secondly, over 2/3 of that money isn the curre system, we're not taing about new mone and we also think that a lot ofhe implementation of health technology to ler medical errors andake people althier and the implementation of llness and prevention sategy will save llions of dollars ase go forward,nd they are not scored by congre. we've got somedditional saves on the horizon if we ca truly achieve comprehensive refo. >> susie: whato you seeas e biggest obstacle to getting the health ce bill rough congress?

>> well, i think it's getting a bill through the house and the senate they're approaching itn slightl dierent fashions. i'mncouraged by the number of cmon ground issu that are emerging, how to address the unhered population with the ne health exchange marketplac the fact that smallusiness owners need to be protected and encouragedto t into the marketplace, buildi on the buildi blocks o the current empler based plan and strenhening that. how we move forward with prevention a wellness care. so there are a lot of common themes around hering all americans and lowering costs for everyone. >> susie: wt if heal care reform is done wrong? what are the risks of that? >> well, i don't know what kind of done wrong means. i thinkhat the biggest risk right now is doingothing. becausehe curre economic situion is such tt we can't fix e econo without fixing health re. we can't fix theeconomy without lowing costs and ving a higher qlity care at a ler cost for all

americs. so doing nothing i think, is the biggest loomingbstacle onheorizon that peoe just back away from the table and say 're not goingto do anything at al and th a we need is this momentum to continu we nd a ll on the the president's desk in the fall,nd that's what he's asked for, and i think that's what we're gng toave. >> susie: hopefullye can t back to you and talk to you when that happens. seetary sebelius, thank you so much for you time. >> thank you,. >> susie:y. >> susie: the latest ses results from the natios retailers show jt how difficult is to turn shoprs, into spenders. many leadi chains reported a

op in same store sales last month. coumers are anxious about theijobs so they're putting more money into the bank o paying down debt and as erika milleexplains, that's csing a seismic shift in the enomy: >> reporter: before the recession, shopperdidn't hesitate tsatisfy cravings. nowadays, it all about saving >> y can't spend it if you don't have it. i'm not spending as mu. >> i'm thiing twice before i purchase items i don't actuay need. >> rorter: economists call it the biggest change iconsumer spendingince world war ii. consumers call it livi within their mes. >> n we're careful. wee on a tighter budget. food budget. house budget. wee on a much tighter budget. >> i look very closely twhat i can spend and you kn, there's a limiand that's it. >> reporr: the national sangs rate n stands at almost 7%, the higst in more than 1years. the rate w negative before the financial crisis.

economist david wyssays the party isver. i think we're at the beginning a significant chge. we've been goi through a riod of about 20 years now o declining savingrates. now i think we'rgoing to go into similar period of rising savings rates. as we get back to more nmal behavior. >> reporter:ut for all the be-tightening, there has not been much progress ireducing debt. last year, tot u.s. household bt peaked at $13.9 trillion. now it stands at13.8 trillion. some economists thk consumers will have pay off roughly a thirof that before the load becomes manageable. the process ofebt reduction is pected to be painful, and slow. some economists believe will take six teight years befo household balancsheets are healthagain. that has big impcations for the onomy. the obama ministration hopes investmentn green energy and healthcare will reace much of the loss in consumer spendin in a case, economist cary leahey says its importt to keep your eyon the long term.

>> we ve to save more and spend less. but unfortunely at this phase of the business cye, with the economy very weak, a the unemployment re poised to move abe 10%, what's good for us in the long run is very bad f us in thehort run. >> reporr: erika miller, ightly business report", new york. >> paul: now, let's ta a look at some ocks in the news night. u]uóñ]

and the are the stocks in the news tonight, susie. >> susie: paulif you're an investor in cerberus cital's main hedge fund, don't countn cashing out anime soon. ceerus says that because of the weak mkets it can't give clients their money back. but the firm says its reworking me of its terms and hopeinvestors will be able to leave gradually. the key problem: itsll-fated investnts in automaker chrysler and lender gmac. the firm says in the fute, it'll avoid ose kinds of hene-grabbing deals. >> paul: tomorrow, our fday market monit guest is robert drach, editor of the "drac weekly research port." 

>> susie: ponzi schemer rnie mado is not going to appeal his 150-year sentence. maff's lawyer did not give a reason for his cliens decision. madoff w sentenced last week for masterminding one of t biggest financiafrauds in u.s. hiory. he still doesn't knowhere he'll servhis time. the u. bureau of prisons will make that decision. >> pau for millions of people it wasn't a simple gamof tag. new york's aorney general plans to chargsocial networking web sittagged.com with iasion of privacy and deceptive marketing. the mpany is accused of luring new users by tling them a frnd has posted photos to share. there were no photos instead, tagged algedly raided users' priva accounts for eml addresses. taggedays it has temporarily stopped the practice. euquu@@

>> susie: here's a look what's happeningomorrow: volatity continued in oil today, as prices dropped below

$60 a barrel. the admistrations plan to clamp down o respect laters in the ergy market. tonight's two tonight's two ways to ay says that plans both good and d. here's kevin dew of minyanvilland minyanville's kevin depew. >> there an old saying on wall street, its not the pric its the volatili. which is true,specially when were talking about things like crude oil. high prices for oil depres consumer spendg, but even woe than high prices is volatility. over theast two years, oil has risen by $80 a barrel d fallen by me than a $100 a barrel before doubling to its crent level. such volatility, caused speculators, noteal demand, damas both consumers and producers. the answer is simple: crease government supervision of an restrictions on eculative tradinin oil. >> incredie. en after last years failed attempt to cb oil speculation, thbureaucrats are at it again, seeking to impose limitsr possibly outrit ban it. this kind of misguided popism sounds great: whwants to

defend aunch of greedy coodities traders? t the reality is that speculators serve an imptant function by increasing liqdity and making it easieror end users to hedge against hher, or in some ces, lower prices. becausthis has been tried countless times before, the consequences of inteention in commodities marketis easy to predict: a gernment guarantee of higher prices. >> susie: that's "ghtly business rort" for thursday, july 9. i'm susigharib goodnight eryone. and goodight to you paul. >> paul: goodnight susie. i'm paul kangas wishg all of you the st of good buys. "nightly biness report" is made possible by: this program was made possle by contribions to your pbs station from viewers like u. thank you.

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