>>aul: presint obama's takingis prescription for health care refo directly to the people, with a primeime news conferee. toping his agenda, fding the cost cuts need to pay for the trillion dollar overhaul. >>uzanne: speaking of doctors, this man h been known as doctoroom, predictor of the financial crisisnd mortgage meltwn. tonight, we ask ecomics professor nouriel roubi where the econy is headed next. paul: what do gas masks and the credit crisis ve in common? coming u we introduce you to a new jersey compa that knows the swer. >> suzne: tonight's "street critique" guest says hd rather be in this mket than sitting the sidelines. he's david garrityprincipal at g.v. research. >> paul: i'm paul kangas >>uzanne: and i'm suzanne pratt. sue gharib is off tonight. this is nightly busine report for wedneay, july 22.

"nightly business report is made possle by: v this pgram was made possible by contributions to yo pbs stion from viewers like you. thank you. >> suzanne: good ening everyone. president obama wi tell the nation tonight thahealth care refo is central to repairing the economy. if it fails, the psident warns ur insurance premiums and ou of pocket costs ll skyrocket. health care reform is boggg down in congre, and tonight's ne conference is part of an

effort to get it bacon track. but as darren geh reports, the keunanswered question is still how to control sts. reporter: with negotiations over heah care reform in intensive care, house mocrats like xier becerra stressed the need to cut costs in aystem everyone aees is inefficient. >> in a two and a lf trillion doll system, you should be ableo find the savings you need to pay for any refo.er do agree on where h inre experts do agree on where to fina chunk of thoseavings. starting with medicarewhere more eicient delivery of servic could save more roughly $120 billion a year. reducing the empyer tax centive to offer health insurance, some $250 billi a ar, would also save money by forcing businesseso seek out more efficient health plans, hospitals and docts to treat their ployees. there is jusone problem with saving money in health ce says the herita foundations stuart butler. >> somebody has to makthe decision. mebody has to stop certain things from happenin

and either the governmt is going to do at or the market going to do that. it's got to be one or the her. each of them requirehanges, very profound chans, in the way inhich we organize health care. the oblem in cgress is they don't want to make those decisions. >> reporter: und prodding from e obama administration, drug makers and hospitalsave voluntred to trim $235 billion from their part of theealth care pie. sounds like a lot, b that's less than 1% of spendi over the xt decade. wh is needed, wilensky says, is a fundamental chae in medical. that means doctors wking in teams acss specialties, paid not per visit or procedurebut by the bundlto treat a patiens disease. >> it's a lot changes and it'such tougher than saying we have 7,000 cod we pay physicians uer medicare and we're gog to take them down by

5% or 10% or $10 aoss the board. that's the kind of tng congress thinkabout when they nt to save money. reporter: if health care reform is to succeedcongress may needo come up with some new ideas and fast. as the by boomers age, they are requiring more medicalare. ananalysts agree the country can't wait another dade or two to addss rising health care costs. daen gersh, "nightly business report", washingto >> suzanne: joininme now with his oughts on healthcare and the economy is nouriel roubini. he ithe economics professor at nyu's stern school obusiness, who focasted the housing bubble, way before everye else. profsor roubini, welcome back to nightly business port. >> pleasurbeing with you night. >> suzannei want to start with healthare. at do you think if there is health care reform and we see something in the nr future, it's likely too to economic covery in this country. >> we need univsal health care but in a way that contrs the

fiscal costs. the new bill the cost at a trillion in a half over the next two years. one is to ma sure the government wks with companies direct and reducing the cost of medicineand the systemives incentive to ctors with too manyest and proceres because they're id on that and control and chae that syem. >> suzanne: so what is yo forecast for theecovery right now. i've been hearing par growth what does that ean? >> first of all, in my view the receion is going to ctinue through the end ofhe year it's not over yet and the potential growth re for the u.s. economy is threeercent i expect the grow rate for the onomy will be anemic on one trend andone percent for the next two years. you have u.s. consumers are shped out and spending le and they're not goi to consume very much. you' financial system is

severely damaged andredit growth is going toe limit and you have the relieve rathing of the puic ctor with a large budget deficit and increase in blic debt wl crowd out the economic recove of the private sector. i don'see a lot of economic growth aheadf us. >> suzan: are you worried about a double-dip recsion? yeah, the risks by the en of the next year if it remains large arou one and a half trillion and if t feds keep prinngoney to increase interest res expect inflation is go to go up and if it were to gop mortgage rates will go up and barrowing coughs fo barrowi and affect recovery so tre's a recognitn being of a double-dip recession. >> suzan: is there a percentage you'd be willg to t it at? >> it will dependn the decisionmade about exit

strategiesrom the massive monetary easing and fiscal easing. it wl be difficult because if you reduce t fiscal stimulus too much too sn and raising tax and cut spending the economy will tip in the receion. if you wait to lg and the deficit remains too lge the rket will worry about ring inflion and deficits and you'llave recession again so the timing and the sequencing and when to do it will be a very difficulpolicy proposition. >> suzanne: if you'r economi projections e correct and i have to point out they're below consensus would seem the stk market may have gottenay ahd of itselft the current levels do you agree wi tt? >> yes. the stoc prices arejustified because they're void of th risk of a near depressiothat's the race be risk ithe first quarter and if the economy is going to be weaker and profitson't recover as fast and you have

weaknesses in theest of the world, eure, japan i thi there will be down-sized risk from the stockarket with this points on. >> sanne: what are you oking for your money erseas or u.s. equiys to do the best. >> my mind is sti in cash becausi think there's ris on equities credit and commoditie i think the downside istoo many risky assets it's betteto wait for a mow robustrecovery. >> suzanne: wh would you expe the stronger sig to be. what you look r? >> well, we have to look wheer the will be stablization of e job market and unfortunately i see unemploynt rateell above ten peent in year and close to eleven percent at the peak next ye and there's massive weakss because of consumers being hit byhe housg wealth and falling labor come and rising dt and

that's why i'm some how bearish about the revery i expectit to occur anytimeoon and that will be a netive for the marks. >> suzanne: ve interesting thghts from you. thk you very much for joing us. >> pleasurbeing with you. >> suzanne: my gut this eving profsor nouriel bini. paul: wall street went from strong open to aixed finish as instors focused on the continuing flood of corpate earnings. the dow opened wita 31 point advancwhile the nasdaq was up 11 points. t after a week of gains prof takers ved in and by noon the blue chip dow was negative territy. the techs managed to holon giving the nasdaq s 11th straight ssion to the upside. but the dow slumped to a clong loss of 34.68 8881.26. ts

>> suzanne: small sinesses are stilreeling from the credit crisis. the national small busins association id today nearly 40of its members can't get the financing they need run their compans. that's up from a thirdt the end of lasyear. as we continue our "revivinghe economy" coverage, sco gurvey shows us how one sll business is facing itown credit challees. >> 60-ye-old and family owned ames in hamburg new jers does things witrubber. makes gas masks for the arm copying machine llers for xerox. it coats thensides of engines for the f-35 jet fight. it's working oa prosthetic devi.

in t last 15 mths the $25 million company haseen sales grow0% and now employs nearly 200 people. if you'rlooking for green shoots, ames seems a likely candidate. the compy is adding to its payroll and it wts to expand its products and irease production the problem with the cdit markets in tir current state, is getting the financing. while am has been doing business with the sa local bank for 40 years, that bank is now partf a much bigger nking giant. and ames c.e.o. charles berts says that ant likes doing business with bigger fir, rather than smaller one like s. >> certainly they're looki at eir risk profile and what ar they willing to ke on. and u know, maybe as a small business, we don't fithat profile ce and neatly and its being, y know, looked as from is this now an aet based lending sk as opposed to a traditnal lending opportunity. >> reporter: the mket for asset bad lending is virtually frozen. as it's biggest pler, c.i.t. group, is struggling to stay afat.

few banks are rushing relieve the credit crunch r hundreds of thousands of all businesses. one exception is new york sed sterling banrp. e.o. louis cappelli says his company sees oppornity. >> we would take custors on from anybody, any other institution, not necessari from c.i.t.. and, our appetite for dierent businessess very wide. we do manufacturers, distributors, importers, professional firms, and sour scope is rather deep. >> reporr: the small business administration repts some thawing in the market for los it backs. but issuers ofredit cards, ofn used by small businesses to carry shorterm expenses, are raisininterest rates and cutting credit lines. ames.e.o. roberts says it is important the bankerappreciate how all businesses impact the economy. >>hese lending institutions need to unrstand and help us to achve and continue this employme and growth stream that we're on, becauset the

end of the day we're going t help accelerate the tuaround of the crent economic doldrums that we're in. >> reporter: robts says ames would like help in the fm of easier credit, but is no looking for a haout. scott gurvey, "nightly busess report", hamrg, new jersey. >> suzanne: when it mes to regulati "too big to fail" financial firms the oba administrati wants to share e load. the treasury today sencongress a proposed bill lling for a council of rulators to address systemic rk in the financial industry. the finaial services oversight counciwould include an alphabet soup of regulors including the heads of the

treasury, the federareserve, the s.e., the f.d.i.c., the c.f.t.c. and the feder housing finance ency. now let's ke a look at our ocks in the news tonight. 15

pl: tonight's "street crique" guest is seeing strength in the tech secr. he's david garrity princip at g.v.a. reseah david welcome ck to n.b.r. >> thank youpaul. good evening. >> paul: before we g into technology what's your opinn on the marketnd the economyn general? >> othe market we're over ight eqties we thin the centrabanks are supportive and the equities wi be t class th out performs. divided opinion w strong the onomy will be and the market will continue to benefi >> paul: so you're bull at the mont. >> yes, si >> paul: we saw big technology names this week. how do you feel the sect is going verall. >> we're seeing strong eense controand though reven hasn't been as robust as analysts hope for as we start to see growth unfold such as windows 7 from microsoft

think there's nice lerage for investors to look foard to. >> paul:peaking of microsoft it posts results torrow. what are you expecting? >> we're looking for36 cents vers 46 cents a yr ago and the big story is the interduction of wdows second in the second half. >> paul: we're been hearingwith e gole-microsoft competitio how do you feel 's moving out? >> theompetition from google in 2010 is going to intensify with two operating systems google said they'll introde in the marke >> paul:nd tomorrow amazon reports results and tod it bought onlin zappos for $850 million. what's yr take on that deal. >> amazon has increas the number of products to their site anit will mak an interestin addition especially if we s nsumer incomes rise. >> paul: any oth particular names you like now and whyn the tech ector? >> certainly, e we spect to

tech names, crisco we think is well pitioned and we see them as atactively va you'd with smart phon and researc in motion posed to apple or palm provides a bette risk radeoff for investor ? csco t symbol on nasq and g ahead, david. >> yes, and then last but not least we think yahoo as we start to see a display recoverinin thsecond half of the year looks attractive and witregard to yahoo the m have a trs, with microsoft. >> paul: dyou own any of the stocks we menoned here? certainly. own microsoft as well a crisco in personally a in our portfoos. >> paul: tha you for sharing your insights, david. >> thank you, pau paul: my guest david jarrity of dva research. >> suzanne: tomorrowford c.e.o. alan laly joins us with an update on the automaker's turnaround.

>> suzan: it appears bailed out insurer aig learned a sson from its bon scandal. the firmithheld $2.5 million in bonuses to its senior managers last week aig reviewing bonus payments with washington's compention czar. march, aig sparked national outrage wh it paid $165 miion in retention bonuses. after taking $200 biion in governmentid. >> paul:hrysler is looking to clear its owrooms of 2009 models by doubling t government "cash for clunkers" incentive. the aumaker will offer up to $4500 in cash or zo percent nancing for six years to consumers who trade in theiras guzzlers for new vehicles. that's in addition to a fedel voucher worth up to $40 towards a fuelfficient car. "ch for clunkers" and the chrysler inntives start tomoow.

>> suzanne: here's a lk at what's happeng tomorrow: in themoney file" tonight some sneaky credicard practices to watch out for. here'sarriet johnson brackey personal financeolumnist at the "southlorida sun sentin."

you probably haven't notice but there's a major w law on the books at's designed to form credit cards. well, of course you han't noticed. because it hn't taken effect t. and that's the k reason why the edit card companies continue to ay their hijinks. and consumers continueo suffer. st of this new law wont touc the industry unt next february. but credit card compans are looking the calendar and slipping into place now so big penalties d a few things that wont be allowed if they wa until next year. such things as: -lowering credit limits. -significantly increing the minimum yments. -raising the credit ore required to t a card. d, in a punishing trend, som big issuers of fixed-ratcards have switcd to variable rates. the reformaw will force credit cards to actually tell tir customers befo a rate goes up. but,f its a variable rate

card, they can jusslip it in there,o notice required. net result: you'll never kno today what rate u'll be paying torrow. credit carcompanies seem to be doing their level besto show us t bad behaviors that we need to regulate o of existence. yes, reform is need. no not next february. congress needs to reite the rules fothem, again. i'm harriet hnson brackey. >> paul:ecapping today's rket action a split decision on wall street: the dow lost 34 poin. while the nasdaq logd its eleventh ssion to the upside gaining 10 points. learn more about the storie in tonight's brocast to watch our reaming video and to take part in our daily blog gto "nhtly business report" on pbs.org. u can also email us at n.b.r at pbs.org. >> suzanne: that's "nightl business report"or wednesday, ju 22. i'm suzanne att goodnight, eryone. and good nht to you, paul.

>> paul: goodnight sanne. i'm ul kangas wishing all of you the best of good buys. "nightly business report" made possiblby: thisrogram was made possible by contributions tyour pbs station from viewers likyou. thank yo

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