i think it's very hard to look at that sysm and say that it did anying close to an adequate jobf what it was suosed to do. i think its a hard case to make that forcement will be as effective as it needs be in thfuture if you leave it where it has been. >> paul: that's why the treary secretary says we ne a new single regulator forhings like mortgages and credit cards. but he's runni into a host of position. >> suzne: getting the engines of economic growth cranking again. coming up, we take a looat what the recery will look like when it finally takes she. >> pl: tonight's "market monitor" guest ss investors beware, we're definitely in a bear market rally. 's frank cochrane, president of investment ting consultants. >> suzanne: th, the recession

is wilting flower saleas ericans pull back on everything from major purcses to incidenta. and that's pruning gwth for the flal industry, here and abroad. >> paul: i'm pl kangas. >> suzanne: and i'm zanne pratt. susie gharib is off tonit. this is "night business report" for fridayjuly 24. "nightly busess report" made possible by: this program was made possib by contributns to your pbs station from viewers like u. thank yo captioning sponsored by bt >> suzanne: go evening, everyo.

protectingmericans from another sub-prime mortga mess or credit ca abuses are major goalof the obama administration plans for financl regulatory reform. and the whe house wants to give tt job to a new agency, one with strong enfoement and ruleaking powers. day, it sent treasury cretary timothy geithner to capitol hillo sell lawmakers on a new consumer financial protection agency. but geithneran into opposition from manof the people he works with every day. darr gersh explains. >> reporter: today'searing was as mh about power politics as regulatory reform, a facnoted with some amusement the man who caed the hearing, house financial servic committee chairm barney frank. frank opened by marveling the complaints he is heang from the tion's assorted financial regulators. >>hey can argue that taking the wers away from them may not make sense, cause the powers that ll be taken away from them are very good shape because they he rarely been us. >> reporter: whi is why barney frank and the obama

administration want to p the power to protect consume into a new gulator, the consumer financial protection ancy. the go is to make sure products like abusive suprime mortgages never again threen the system or consums with disaster. the obama administraon wants too further, requiring nancial institutions to offe simpler, so-call "plain vanilla" mortgages and other financial produc as an option toonsumers. that requirement has raise concern ong many lawmakers, cluding texas republican ran neugeber. in otherords, "this is kind of thoptimum credit card, this is the optimum mortgage, thiss the optimum car loan,"nd to me, i don't see that athe role of the feral government. reporter: neither does he, insisted treasury secretar timothy geithner >> innation in products-- that's verimportant to us. this is one of the great strengths in our syste we just let it g a little too far away from any bac sense of gravit weeed to bring that balance

back a little bit. >> reporter: but every regator inown is shooting at some aspect of the new agency, calling it powers too broad or its structure o insular. testifying lat, federal reservchairman ben bernke, f.d.i.c. cef sheila bair and others we all asked whether they would take backome of the powers the ainistration wants to take from them and gi to the new agen. as fra predicted, they all agreed. >> yes. >> reporter: thaunited opposition is one reon treasury sectary geithner wants to movby the end of the year on regulatory reform. bankers, brokers andven regulators allave reasons to rest change. the adminiration fears reform will only t harder if it slips into next year. darren gersh, "nightly biness repo," washington, d.c. >> suzanne: stronger tn expected cporate earnings have helped undern stocks this week and push the dow or 9,000. while so economists believe a stabilized profit picture suggestshe recession is coming to an end, others are not ye convced. in fact, there is growing concern about a doubleip

recession,lso known as "w- shap" recovery. as we continue our "viving the economy" coverage, scott gvey takes a look at w some experts actuly "spell" recovery. >> repter: tonight's story is brought to youy the letter ", or maybe "l". perhaps a "w". how abt "u"? we're not sure because when u ask anconomist to forecast the shape of the recovery,ou could get any one of thoseetters as an ansr. we aeady know that the front part of the shape isike a "v," and it is t pretty. the qution is, where do we go from here? joe mcalden is bullish. he says the bottom is now ana sharp uptu is about to begin. >> i'm in the "v" ca. i thk that we definitely are making in glal g.d.p. a sharp bottom, a shaped bottom in the second quarter. and threason for that is a maive easing of monetary policy, e heavy stimulus in japan, and the natural coue of

the business cycle. >> reporter: b the fact that consumers ha cut back on ending leads david wyss of standard a poor's to forecast sluggishrowth near-term, with a pick-uin the second half of next year. that puts him inhe u-shape category, but heorries about being an "l". >> an shaped recovery bothers us. that's sort of whahappened in japain the 1990s. they went downn that recession and they never reay saw a recovery. that'something that could happen thitime. i don't think it will, becau i think 've got enough strength in the u.s. economy to do tter than that. but in my ways, we look a lot like japan looked in thearly '90s. >> reporter: new yor university'soriel roubini worriegovernment debt and higher energprices will stifle a covery, producing the dreaded double-dip recessi. that makesim a "w". mark zandif moody'seconomyom is also a "u," but he doesn' see us enterinthe upward leg until 2011. if you find all thisonfusing, you are not alone. mcalden says part of the problem is how you phre the

question. >> ihink some of the debate that's out there abo what letter is apopriate may circle ound what we're talking abou i thk industrial production is gointo have a v-type bottom. i think corporate profits e going to turn around shaly and g.d.p. will pick up. jo will lag-- they usually do in an economic recery. if you measure by jo, it will a long drawn-out process. >> reporter: so,l", "u", "w" or "v"-- sometimes, forecaing the onomy is like playing scrabble. scott gurvey"nightly business report," new york. how did that " get in here? >> paul: profit-takers tk command on wall reet at the outset in the wake of yesterday's big rally. the techaden nasdaq was rdest hit due to disappointi results from microso and amazon.com thursday. 30 minutes into tradg, the dow posted a 61-pot deficit and the nasdaqas off 36 points.

whilmany better-than-expected earnings from blue chipselped that sector turn positive is afternoon, theest the techs cod do was trim their losses, so thearket closed mixed. the dow industrial averagended with a gain 23.95 at 9,093.24. this week it fell onlynce for a net vance of 349.30 points. the nasdaq fell 7.64 t1,965.96 today, breaking a 12-sessi ning streak. itlso fell only once this week and gained 79.35 pois overall. the s&p 500 rose.97 to 979.26 toy, and for the week, up 38.88 points. in the bond maet, the ten-year note rose 2/32 to 95 21/32, putting the yid at 3.66%.

>> paul: california finallhas a budget-- the state assemy voting this afternooon a plan to clo a $26 billion budget shortfall. the state nate approved the measure this morning aer an all-night bargaining ssion. governor schwarzenger is expected to signhe bill into law monday. the package coains over $15 billion in cuts to serces, and billions in eative accounting asures. the budget crisis forced california to start ying its billwith i.o.u.s earlier this month. >> suzan: the tour de france may be in fullwing, but today, president obama ben a different ki of competition. the administrationnnounced its "race the top" program for u.s. schls, which will have schools vying for near $5 billion in smulus money. thpresident challenged educators to raise acamic

standards and improve acher quality. schools that meethe benchmarks for success ll qualify for ai mr. obamsays the program will improve theducation system, something he says is esstial to rebuilding the onomy. >> not every state wl win and not every school district ll happy with the results. but america's chilen, america's economy, and ameca itse will be better for it. >> suzanne: the educion department wilstart accepting applications for the stimulu funding this fal officials expecthe first round of aid to gout early next ye.

suzanne: with consumers cutting back on ending, some of life's little luxuries e going by the wayde, and that's wilting the tion's flower business all along t supply chain. fromtreet vendors to flowe imrters, jeff yastine has more on aindustry still waiting for a recovery to oom. >> jeff: inside each of thes boxes is a bunch oflowers-- roses, carnations, chrysanthemumsfrom colombia, ecuador, a other latin ameran countries. roughly 80% of all the freshutnd

states ps through the miami wahouses of continental flowers and 70 other imporrs here. but there don't seem to be a of those "greeshoots" coming upn this industry. upstairs, continental's les team is ferishly working the ones, selling pallets of flowers to a nwork of wholesale distributors aund the country. founr and president bill fernanz says this past year has been the rghest his firm haever been through. >> we've bn in business since 1974, so we've bn through five recessions; this is definite the hardest one. >> jeff: fernandez says peop are still dering flowers for spial occasions and holidays. but industry waters like christine boldt of the associatn of floral importers oflorida say americans are ordering fewer flowers, or choosing less-expensive varieties. >> we're not a necesty-- you don't eaflowers. therefore,t's a secondary rchase. we offer flowers f every

occasion, but it's not sething that first in mind for people to buy. >>eff: after decades of annual double-digit growth,mports of rose bouquets d other varieties are do more than 20% in the past two years. the lack of sales d bank credit is also pruning t number of whesalers that importers like ferndez can sell to. >> so the banking crisisas hurt everybody, direct or indirectly. many wholesale frists, they need lines of edit for their operations and ty're having a ha time finding it. we've had a few customers is year clo down because of that. they decided to ju give up. >> jeff: flower growerin combia are also giving up-- so many, say importers, that ices could bound sharply when demand in the united states picks up again. until at happens, continental flowers' fernandezays he's hanging tough, trimmg costs but not yroll. he's buying time f his busiss, until the economy begins to bloom and americs

start buying flowers aga. jeff yastine, "nightly busess report," mmi. >> paul: monday, l the talks begin. treasury secrery geithner welcomes the chinese f a new round of enomic talks. >> suzanne: prices at e pump are moving higher, despite a build-up in galine supplies. iple-a says the national average stands just shy $2.50 a gallon. but with supplies rising forhe past s weeks, analysts say the average cost should be fling. still, today price is a steep discount to la summer, when drivers were paying $4 a galn in many states >> paul: micsoft is moving to sele european anti-trust charges by oering to let users choose from multiple w browsers wn the next version of windows ships this ll. e european commission welcom the move, sang it could solve e pending anti-trust case. in januarythose regulators charged microsoft withrushing the competition by bundlg its ternet explorer web browser wi its windows operating system. euquu@

suzanne: here's a look at what's happening next ek: our friday "mark monitor" guest is robt stovall, naging director and strategi at wood asset magement. on the enomic calendar: nday, june new home sales; esday, the case-shiller home

price index fomay, and the conference board's jy consumer confidce index; wednesday, we'llee june orders for durable goods d the fed's beigbook; thursday, weekly jobless clas; and frid, it's the first look at second-quarter gross mestic product,nd the second quarter's employment cosindex. >> pl: my guest market monitor this weeis frank cochrane, president of iestment timing consultants, a financial advisory firm based in bloomfield hls, michigan. frank, welcome bacto "nightly buness report." >>reat to be here, paul, thank you. >>aul: is the stock mket's sharp run-off justified by recent signs of onomic recovery, the green shutes they call them? >> short-term, paul, i would say "n i'm somewhat negativfor the outlook fo the next few wes sohe market is discounting much stronger earnings. the earnings that came out we so low, i thin a snail could have jumped over them, the ba in that sense. the credit will comeack.

the consumers will start spending i reay don't see that t there. i think sically the market came out there year arod 9,000. that's why we are ght now. >> paul: are you tling your clients to ride the rally, nonetheless, or take profits? >> well, ihink we have t do -- what we have to don this environment is youave to trade. that'something i've saidfor the last couple of years. we're in an eironment now where i ink the top d of the market is 1000 and the bottom end could be 5,000 on the dow and i think or the nex several years what we're goi to dis basicly trade within that -- within that -- those o numbers. >> paul:k, so and outnd when you have a ni profit, take . th's it. it's as simple that? >> exactly >> paul: all rig. in februar you gave -- actuallyou gave us three possible scenariosor stks. howare those played -- howhave those played out? >> ialked about an l-pattern which didn't --hat dn't work out, in fact, wee 900oints on theow abovehere now. >> paul:h-huh.

>> wwent down to 6,600 on the dow. i looked for the s&p too down to 650. th's what we did. weounsed smartlyrom there. my outlook right now, certainly the dow cod move upo say the 10,0, 10,50 level and&p up to say 1,100 but in the bigger picture,his is a tding environment. one must trade this market, trade is market. to buy in pe won't work anymore in m opinion. >> paul: you gave our viewers two buy recommendations las febrry of a bearish nature. let's see how theve done. we'll put th up here. pro shares, ultra sho obviously. hen't fared well. wn 34%. and the -- you're not still holding these, i assume? >> we trade and out of those things and as you c see from the chart, shortly aer i recommended, they were u about 50%. at's what we've got to do with these things. you cannot hold onto them. you must trade them. theyre two betaetf's.

that'shat they're for. >> paul: you'r saying buy and hold is dead basically? >> absolutel-- yes, i am. again, we're unwinding 25 years from '82 of -- yo know, too mucheverage. >> pau uh-huh. >> too much snding. not enough saving. that'ltake several years, many ars, um, to take care of and then so think you're going t see some ry volatile moves, big up mosand big down moves over the course the next five years so. paul: frank, how about some new recommentions? >> first tng i would do depending on my time horizon i would have a lot of cash her i think on short term, especially if person is looking fosay a one to a couple-year time horizon i would ve at least an % cash position. if you must buy a stock, i would buy at&t. good dividends, lots of cash in e bank,so to spk, and that stock, you know, it looks like it's ready to break out so that's aood, safetock. >> pau ok. >> and, , the third thing i

woulgo with is the uso. i think lon term . >> paul: etf,ight? etf? >> that's coect. i think iould hold onto this one. over the course the next 1 months or so ihink oilill he a lot hier, simply based on supply, not necsarily demand. >> paul: so the price of uso is rectly linked to the price o oil? that's correct. which i think overhe course of the next 1 months is going a lot higher. >> paul: doou personally own the securitientionedr have disclosus to make, frank? i don't currently own them. i trade thefrom timeo time >> paul: tnk you for being with us once agn. >> thankou very much, paul, great the to seeou. >> suzanne: the federal minim wage went 70 cents today to $7.25 an hour. the increase mea a raise for workers in 30 stat that have lower minimums, but so economists believe it could prolong the recessn. e concern is employers like

restaunts and retailers will nobe able to shoulder the extra cost and will beorced to t staff. the wage irease got us thinking--s there anything you can get in the b apple these days for two quarters and tw dimes? weent our summer interns to find out. >> what can we get for.70 cents in new york ci? do youhink we can get something in here? ing i don't think this igoing to wk. let's go try fd something else post cards all i have is 70 cents. any way i can gea doughnut? hi-5, thank you. if we put our mey together, we can get apring roll. >> sure, giv me 60 cents. >> the you go. one spring roll! hey. got to pay for it.

i can call my mom for 25 cents. >> you can use my cellhone. >> we can get twbananas. >>eat. >> the best day ever! >> sanne: special thanks to our jeffasino and q youn ha for at fact-finding mission. but seriously, pau- that 70- cent increase does add up. for minimum wage employees working a 40our week, it amounts to an annual bst of almost $1,500. paul: clear proof every pen comes. >> suzanne: that's nightly businesseport for friday, july 24. i'm suzanne pratt. good night, everyo, and have a great weend. you, too, paul! >> paul: and you as we, suzanne. i'm paul kangas, wisng all of you thbest of good buys. ightly business report" is made possible by

this program w made possible by contributions to your pbs station from viewe like you. thank yo captioning sponsored bwpbt caioned by mediaccess group at wgbh access.wgbh.org we are pbs. >> we are pbs.