ptioning sponsored by wpbt >> as americans save more d chinese are able to spd more, we can put growth on aore sustainae foundation because just as china has befited from substantial investnt and profitable exports, china n also be an enoous market for amican goods. >> paul: wh that, president obama kick off two-days of strategic econic talks with thchinese. he says our relationship wl shape the 21stentury. >> suzanne: up, upnd away. the dow s tacked on almost 40% since march. but withhe economy still in ression, many on wall street are wondering if stockhave gone too faroo fast. paul: from the failure of lehman brothers to t demise of bear sarns.

congress wts to know how, and why, the financial crisis happened. we talk to a member of t new financial cris inquiry commison, former u.s. senator bob graham. >> suzne: then, verizon dials up weak results. the telecom ant posts a big op in profits. d ramps up layoffs, now cutting 8,000 jobs thiyear. >> paul: i'm paukangas. >> suzan: and i'm suzanne pratt. susie gharib is off tonit. this is "night business reportfor monday, july 27th. "nightly business port" is madpossible by:

this pgram was made possible by contributions to ur pbs statiofrom viewers like you. thank you. >> suzanne: goodvening everyone. cooperation, not cfrontation. that how president obama sees the future of u., china relation e president spoke as the two countries began twdays of talks onconomic and security issues. both nations are upbt about global gwth, pointing to signs the world is moving towa recovery. as darren gersh repos, the question ihow to keep the world's largest onomies headed in the se direction. >> reporter: it was inese

state councilor dabinguo who mmed up the self-interest th brings the u.s. and cha together in masse meetings like ts. >> ( transled ): we are in the same big boat, that s been hit by fierce wi and huge waves. >> reporter:s massive economies, both cotries are critical to the emerging gbal recovery, and both countes also have comm interests and prlems. to see why, alyou have to do is walk acrosshe street from this meeting to the s. treasury. the u.s. gernmrt is selling a record $115 billion in debt is week. the chinese, of cour, are the biggest lders of that debt, their stake topping morehan $800 billion economist uri dadushays that means cha doesn't want to see ther too much inflation or t little growth inhe u.s. >> so look at cha as now being a significant stakeholdein how the u.s. enomy performs. >> reporter: the u. too has a propetary interest in china, whh is on its way to becoming

the largest onomy in the world, ands already one of the largest markets for u.s. exports. most recent figures show t u.s. tra deficit with china down 18%. with china shiftinfrom export- led growth to growth ahome, treasury secretaryimothy geithner wan to see the trend continue. >>hina's success in shifting structure of economyill be huge contribion to bringing about more rapid globarecovery >> reporter: but china has fueled the shift witlarge increases in bank lendin a trend thatorries some obrvers, says the u.s. chinbusiness council's john frisbie. >> so the s. will have its own questions abouchina's exit strategyrom that to avoid inflation down the rd, just as china is going to bealking about our n exit strategy to avoid inflation here down th road. >> reporter: this meeting is billed as a dialog and it is high level: by iluding secretary of state hlary

clinton, t obama team is sialing the breadth of issues china and the u.s.ace. but the very sizof the meeting and the size othe two nations underscos the difficulty of makinguick changes. >> thimakes it very important that this dialue continues and at the united states be in a position to nudge cha in the righdirection as it emerges as the leading econic power of the st century. >> rorter: one issue where progress is slow, but thneed increasinglyrgent is climate ange. the two countries have deep economic diffences there that may be harder to resolve tha the usual disaeements over currcies and trade. darren gersh, "nigly business repo", washington. >> suzannetoday marks the third raight up day for the dow with a modest 15-poi gain. but the blue cp average has been on a tear surng about 40% sincits march low, while the s&p 500 is up 45% in t same time frame as scott gurvey repos, those gains e starting to make some investors quite nervou reporter: is it the real thing or just a headake.

what the doubters call suckers rally? that is the big monequestion facing iestors watching a market which exploded on the upside in july. stephen wood orussell investmes says he hasn't seen a major econic change. but he has seen a big swg in market psychogy. >> about a year ana half ago, end ofwo thousand and seven, you had a market priced r absolute perfeion. coming into the fit quarter of two thousand nine you had a market priced for mageddon. what's you've seen is a reversion to somethingn between. and i think it's an expectatns game now in th its not nearly bad as feared. estimas have come down and expectations are so low at companies are ginning to beat. >> reporte analysts say many professional money managers, afraid of being left behind, have fueled the rebound. mike ryan of u wealth managementays there's a lot of cash ailable to sustain the rally, at let in the near te. >> on thmargin we're starting to see that the news hasecome incrementay better. you're sing less concerns about system wide failure an more issues about hoquickly

this recovery wi gain traction and where will it ga its footing firs so to me i think the conversation has staed to sht now away from the depth of the recession and now towas how robust this recoveryrocess will be. >> reporter:any economists a looking for the s. to exit recessioby the fourth quarter with europe following ne year. but for the market ral to be sustained, the exper say there st be evidence the recovery can be sustained witut life support om the government. and consumers must bre out their walletagain, so corpate profits can come from sales, rather than ct cuts. >> i think going into 2010e're going to go om expectations, st cutting situation, into those rms that are rategically positioned, stro balancsheets, great cash position, they don't have a t of debt and th can take market are away from their competitors and acally drive sales. so i think going forward its probablyoing to be a little tougher because its been a relief rally since mch. >> rorter: the experts warn there are still major sks to the system d it would only take a few b earnings repor to bring the maet rally to a screeching halt.

sct gurvey, "nightly business report", new york. >> pl: a bigger than expected jump in new home sal didn't put walltreet in rally mode this morning. instd investors focused on guarded outlooks fm aetna and honeell. by 11:00 a.m. thdow was off 45 points andhe nasdaq down 15. the modest selloff connued as the market csolidated its rent gains. but light volume and posive breadth attrted late buying d the markets had a slightly higher close.

>> paul: last night deral reservchairman ben bernanke went where no fed ief has gone before. straight to the people. it came in aown hall meeting in kansas city hosteby the pbs program "theewshour with jim hrer". bernanke took questions on evything from the fed's ndling of the financial cris to exaly what his agency does. and some of the questions we blunt. a small siness owner asked why the fed rescuebig banks while ort-changing small companies rnanke responded saying he t was disgusted byhe bailouts. >> let me ju emphasize that thing made me more frustrate more angry, thanaving to intervene,articularly in a couple of cases whe taking wild bets forced tse companies closto bankruptcy. there's nothing that made me angrier than havinto do that. y did we do it?

because if that companhad collapsed in the middlof a crisis it cod have brought evything down. >> pl: you can see more of bernanke's comments on t newsur on pbs tonight, tomoow night, and wednesday night. alsothe fed is taking a closer look at how the finaial crisis is affting americans. it's doing a new svey of consumer fances. thlast one was done two years ago just as the mogage crisis was bbling to the surface. >> suzanne: the fed not the only oneooking into the nancial crisis. congress has ao set up a nancial crisis inquiry commission to inveigate the root cses. former senator and florida governor bob grahais one of its ten members anhe joins me now. senator,elcome to the program. thank you very much, sanne. i appriate joining you in my home town with my friend ul. >> suzanne nice to have you here. let me start withust an explainer. the comssion has been set up to examine manydifferentreas of theinancial crises. now, do you view this as a fact

finding mission or wil there actually be recoendations that come out of it. >>oth. we are directed by t congress to do a thorough emination of theauses of th current finaial crises much like t ficora coission di in the 1930's a then to make recommendationse as ficora which lead t the securities an exchange question. >> sanne: that's my next question. a lot of peopl are drawing parallels between is commission and the ficora commison and out of that came some very signicant financial rerm. now do you tnk it's fair to draw those kin of parallels, is that the right thing to do. it's certainly a challenging standard for our mmission because the pikora commission which wasctually a committee of the united states senate did such an outstanding job of analysis and then preription.

we are goi into this, ten member republicans and democrats withthe goal of having report, wch will do a thorgh analysis of what has happened because the americ people have be severel damageby the expeence ofthe lastear. d what can we contribute to avoiding a repetion. >> suzanne: now, by the time yourommission makests rulings or gives s report, it will be the endf nextear, if m not mistaken, corct, the end of 2010. december of 2010 is our final date to rert. >> suzanne: orrect. do you bieve it's goingto by then already be business as usual on wall street? i mean, isn't it going to be so of a bit late to be makg these recommendations? >> no. we d't wt to be a commission thatelays the process of dealing with current problems. welookorward to assisting the congress and the treasurynd the whitehouse a they

collectively me decisions. whate want to do is build a record of what has happened to the american economy and then make recomndations in addition to those that may hav already been put intolace to avoid repetition. >> suzanne: it may be cousing i think to some of our viewers to be examinin the system that failed whi at t same time're currently tryi to rewrite the res. how do u s those two ocesses working sort of sid by side. >> i thinkt's a little bit like a position. the firs thing the positn trie to do is liste to your comments, test -- take laboratory samples a then diagnose what your problem is. once that's determined, then you move to the queion of remmendation. so o job is going to be t look at what has haened, to build a historical record, to try to understand wt that record says in tms of the

future and make recommendations as the pikora commison did that has served the nation very ve well. >> suzanne i would be remiss if i didn' ask you what types of reforms that you would like to see see comeut of the financl crises we've all been living through in the last few ars. >> i will aner your queion bui will say i hope all the members going intohisrocess with amuch of an ope mind as possible becauset's going to be vy important at we ach a consensus if th recommendationof the commissionre going to be helpful. i would say one thing. i'm interested in oking ats there were some cntries which avoided this crises, countries like australia andew zealand and to a largextent canada. what did they do tha we an much western europe didn't do,hich contribud to o problem and their hing gten through thissituation

relatively unscath. >> suzanne: sator we have to leave i there. good lk with your endeavor. >> thank you very ch. >> suzan: my guest this ening former senator bob graham. >> suzannecash for clunkers roed to life today with lots of americansoping uncle sam ll put them in the drivers seat. the vernment program gives yers up to $4,500 to trade their old models for me fuel efficient rs and trucks. buyers arelready flooding showrooms analmost 16,000 deals want to take part. the program'website cars.gov has also been buswith million and a half hits so far. cash for cluers ends november

1st or whever the billion dollars set aside to coverhe program runs out. paul? >> paul: suzanne, ngress hasn't ruled out givinthe green light another auto rebate down the road. let's take a look at our scks in the news night.

and those are the stocks ithe news tonightsuzanne. >> suzanne: paul, thursdayarks medicare 44th birthday. as the nation tacks health care reform, many ve suggested usinmedicare as a cost-saving model.

so this week, wee looking at the program, the progress it madeand the challenges it still faces. first, here's a quick urse on the basi of medicare. medicare ithe federal health insurance program for people5 and older. the progracovers about 45 milln americans including peopleounger than 65 with permanent disabiliti. medire was originally set up to provide hospital d medical insurae. but no prescription drug coverage. today, the progr has four parts. parts "a" and " are medicare's spital and medical insurance part "c" is the dicare advantage ogram. an option leing people sign up for private health insurance plans that prode medicare benets. part "d" ithe voluntary prcription drug benefit signed into law in 2003.er thisear, medicare costs are expected to total most half a trillion dollars or out 13% of the feral budget.

en if you're not on medicare there's good chance you're paying for it. 41% ofts funding comes from payroll taxes. thatoney is put into a trust fund that pays for benits. but medica spending now exeds revenues. d the trust fund is projecte to dry up in eig years. the medicare math won'get easier. the number of ople on medicare expected to balloon to 79 million by 2030,s baby boomers ag tomorrow, we'll talk health re reform with mecare's former administrator, dtor mark mcclella >> paul: also tomorr, fighting foreclures. the tion's big mortgage firms head to the white hoe for a pow-wow loan modifications. >> suzanne: say goodbye toaked short sellinforever. e sec today made permanent a temporary ru banning the pracce. short seing is where investors bet against a stock, borwing shares to se, then buying them when the price falls.

naked short llers never borrow the shares in the first plac the temporary bawas put in place last fl at the height of the stock market's turmoil. paul: say hello to a new he of british bank oyd's. he'sin bischoff former chairman of citigroup. bischoff has a challen ahead of him. lloyd's banking group lost billions of poun on risky loans that forced e british governmento step in with a ge rescue package. bischoffakes over on september 15.

>>uzanne: here's a look at what's happening tomorw. tonight's commentatosays when it comes to healthre reform has to be done rig. he's mark zandi chieeconomist at moo's economy.com. >> health care reform ifone right will ba boon to our ecomy. if done wrong, reform will ban economic albatss. the right kindf health care rerm must do two things. first, it must be credly paid for. insuring the uninsureds very importan but this will be expensive d it can not be covered by sply wringing out cost savings elsewheren the health carsystem.

there ju aren't enough savings to be had year in and ye out. second, healthare reform must lower the growth ifuture health carcosts. this is critical to reining long-term defici. far and away the most significant reason w the government's debt loadhreatens to balloon out of contl is that hlth care costs are growing ice as fast as overall inflation. thbest way to accomplish both things is to scaleack the tax exclusion on employer proved healthare insurance for those with very expensive heth care plans. this will rae lots of money to pay for the uninsured and it will ao force higher income households to more carully shop for the care. with circumspe shoppers, heal care providers will be forced to be more judious in their pricg. unfortunatelthis isn't the diction policymakers seem headed. other potentiasolutions being debated either rely on accounting gimckry to pay for thuninsured and/or do nothing abt slowing the growth in long-term health care sts. unless theebate soon changes, this is a refo not worth doing.

this is mark zandi. >> paul: recping today's market actn stocks turn potive late in the day. the dow gains 15 points. and the nasdaq adds most two points. to learn me about the stories in tonight's broadcast, toatch our streaming deo anto take part in our dailblog, go to "night business port" on pbs.org. you can also email uat nbr at pbs.or >>uzanne: that's "nightly business report" for monday, july 27. i'm suzanne pratt goodnight, everyone. and good night to yotoo, paul. >> pau and you as well, suzanne. i'm paulangas wishing alof you the best of good buys. "nightly business port" is madeossible by:

is program was made possible by contributio to your pbs ation from viewers like you. thank you. captioning sponsor by wpbt captioned by media access group at wg access.wgbh.g

jack eardley made his ling fifty feet off the gund. it was fun. was different. you're halfway scared, but atte jack was literally linkingpeopl. when i fst started, i s just supplying power forthe. annow it's so much more. the flow of powereally is the flow of formation. and publ tv is one of the best urces. it gives you a chancto learn something that you nev known before. it makes a better-educat public. guys like me laid the oundwork, and we want see it put to good use that's why jack included h public television statn in his will. consid joining the community people who want public