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. >> sanne: 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. >> reporte which is why barney frank and the obam

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.

>>uzanne: with consumers cutting back on spding, some of life's little luxuries ar going by the waysi, and that's wilting the naon's flower business all along theupply chain. from seet vendors to flower impoers, jeff yastine has more on an dustry still waiting for a recovery to blm. jeff: inside each of these boxes is a bunch of owers-- roses, carnations, chrysanthemums, om colombia, ecuador, andther latin americ countries. ughly 80% of all the fresh-c

flowersold in the united states pasthrough the miami wareuses of continental flowers and 70 other importe here. but there don't seem to any of those "een shoots" coming up in this industry. upstairs, continentas sales team ifeverishly working the phones, selling pallets of flowers to network of wholesale distributo around the couny. under and president bill feandez says this past year has been t roughest his firm has ever been through. >> we' been in business since 1974, so we' been through five recessions; this is defitely the hardest one. jeff: fernandez says people are still orring flowers for specl occasions and holidays. but industry watchs like christine boldt of the associatioof floral importers of frida say americans are ordering fewer flowers, or oosing less-expensive varieties. >> we're not a necessi-- you don't eat owers. therefore, is a secondary puhase. we offer flowers forvery

occasion, but it's not somhing that'sirst in mind for people to buy. >> jf: after decades of annual double-digit growth, iorts of rose bouquets another varieties are downore than 20% the past two years. the lack of sales anbank credit is also pruning the number of wholalers that importers like fernaez can sell to. >> so the banking crisis h hurt everybody, directlyr indirectly. many wholesale flosts, they need lines of crit for their operations and there having a hardime finding it. we've had a few customers th year closeown because of that. they decided to justive up. >> jeff: flower growers coloia are also giving up-- so many, say importers, that pres could reund sharply when mand in the united states picks up again. until th happens, continental flowers' fernandez ss he's hanging tough, trimmincosts but not paoll. he's buying time foris busine, until the economy begins to bloom and american start buying flowers again

jeff yastine, "nightly busins report," mia. >> paul: monday, lethe talks begin. treasury secreta geithner welcomes the chinese for new round of ecomic talks. >> suzanne: prices at thpump e moving higher, despite a build-up in gasone supplies. trle-a says the national average stands just shy of2.50 a gallon. t with supplies rising for t past sixeeks, analysts say the average cost should be falng. still, tay's price is a steep discount tlast summer, when drivers were paying $4 aallon in many stes. >> paul:icrosoft is moving to settle european anti-trust charges offering to let users choose from multip web browse when the next version of windows ships ts fall. the european commission weomed the movesaying it could solve the pending anti-trust cas in janry, those regulators charged microsoft th crushing the competition by bdling its internet explorer web browr with its windows operating system. euquu@

>> suzanne: here's a look what's happening nt week: our friday "rket monitor" guest isobert stovall, managing director and stragist at wood assemanagement. on t economic calendar: monday, june new home sale tuesday, the case-shiller me

price indefor may, and the conference board july consumer coidence index; wednesday, wll see june orders for durable gos and the fed's ige book; thursday, weekly joblesslaims; and iday, it's the first look at second-quarter grs domestic prodt, and the second quarter's employmentost index. paul: my guest market monit thiseek is frank cochrane, president investment timing consultants, a financi advisory firm based in bloomfie hills, michigan. frank, welcomeack to "nightly business report." >> great to be here, paul, tnk you. >> paul: is the stock market's sharp runff justified by recent signs of economic recovery, the green shutes as they call them? >> short-term, pau i would say "no" i'm somewhat negive for e outlookforthe next few weeks or so the market is discounting much stronger earnings. the earnings that came o were so low, i ink a snail could have jumped over them, thbar in that sens the credit will come back.

the consumers will start spenng. ieally don't see tt out there. i think basically the market came out there yearround 9,0. that's why we e right now. >> paul: are you telling your clients to ride e rally, nonetheless,r take profits? >> well, think we have to do -- what we have tdo in this environment isou have to trade. th's something i've sai for the las couple of yea. we're in an environment now wheri think the top end of the market is 14,000 and the bottom end could be 5,000 on the dow and i think over theext several years what we'reoing do is bically trade within that -- within tha -- the two numbers. >> pl: ok, so in and out and when you have aice profit, take it. that's it. it's as simple as that? >> exaly. >> paul: allight. in febary, you gave -- actuly you gave us three possible scenarios for stocks. how are those played -- how have those played out? i talked about an l-patte which didn'-- that didn't work out, in factwe're 900 points onhe dow above there now. >> paul: uh-huh.

we went down to 6,600 on the dow. i looked for the s&p to go down to 650. that's what we did. we bounsed smartly from there. my outlook right n, certainly the docould move up to say the ,000, 1500 level and s&p up to s 1,100ut in the bigger picte, this is a trading environment. one must trade this market tre this market. to buyn hope won't work anymore my opinion. >> paul: you gave our viewers two buy recommendationsast bruary of a bearish nature. let'see howhey've done. we'll puthem up here. pro shares, ultrahort obviousl haven't fared well. down 34%. and the -- yore not still holding these, i asse? >> we tre in and out of tho thgs. and as y can see from the chart, shortly after i recommended, they we up about 50%. that's what we've got todo with these things you cannot hd onto them. you must tra them. ey are two betaetf's.

th's what they're for. >> paul: y're saying buy and hold is dead basically? >> absolely -- yes, i am. again, we're unwinding5 years from '82 of -you know, too ch leverage. >>aul: uh-huh. >> too much spending. not enough saving. th'll take several years, many years, um, to take care of and theno i think you're going to see some very volatile mov, big upmoves and big down move over the coue of the next five yes or so. >> paul: fra, how abo some new recoendations? >> fir thing i would do depending on my te horizon is i would have a lotf cashere. i think on a short term especiallyf a person is lookinfor say a one to a couple-year time horon, i wod have at least an 80% cash position. if you must b a stock, i would buy at&t. good dividends, lots of cashn the bank, so tospeak, and that stock, you know,t looks lik it's ready to break out that a good, safe stock. >>aul: ok. >> a, um, the third thing i uld go with is t uso.

i thinkongererm -- . >> paul: etf, right? etf? >> thas correct. i think i would hold ontohis e. over the crse of the nex 18 months or so i think oil will head a lothigher, simply based on supply, n necessarily demand. >> paul: so the pricof uso is directly linked to the pce of oi >> that's correct. which i think er the course of the next 18 months is going a lot higher. >> paul: do you personally own the serities mentioned or hav dilosures to make, frank? >> i don't currtly own them. i trade them from 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 toay for it.

i can call m mom for 25 cents. >> you canse my cell phone. >> wcan get two bananas >>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 c we are pbs. >> are pbs.