captioning sponsored bwpbt >> paul: the job pictures getting less bad, according to two top walltreet firms. weet the white house's take on the tion's job market a day beforehe release of the govement's employment report. comingp, our interview with ristina romer, president obama's top onomic advisor. >> there will have to a very clear dividing line, clear, between the government role and the private ctors role. >> susie: thregulator in charge of fannie mae and fddie mac consers the future of the mogage giants. we hear from t federal housing finance authority's mes lockrt. >> pau while retailers have been promoting "back to hool" sales for ov a month, the buying bonanzaasn't materializ. the latest retail repos show consumers are still lding tight to their wallets. microsoft ys "windows 7" is ready to go. how does it compare with t competition and is iworth the upgre. our tech gu has a preview.

i'm paul kangas. >>usie: and i'm susie gharib. this i"nightly business report" for thursday, august. "nightly business rert" is made ssible by: this program was me possible byontributions to your pbs

station from viewe like you. thank u. >> susie: good eveni, everyone more upbeat projection on th jomarket from two wall street powerhouse goldman sachand deutsche bank sharply vised their forecasts on the number of joblost american businesses cut july, a day before the goverent releases its rept. deutsche bk now expects 150,000 jobs were st last month. goman is expecting 250,000. over the past ght months, the labor departmentas been reporting monthly job loes of more than half a milli. is could be welcome news for the obama adminiration, but white hoe economischristina romer sayst is still not enough. >> we do know we areoing to lose jobs almo surely tomorr. that's hundreds of thousandss,

you know, what the mart expectatiois. so the impornt thing to say is, 250,00is a terrible number. so what we're ally looking for is that wonderful y when it actually turns positiv susie: we'll have more on where christina romer thks the economy might crea new jobs later in the program. paul: despite deep discount the starof back-to-school season started with a ud last month. discounterlike ross, t.j. maxx mall stores fared muchorse, where a dole-digit sales skid continued at macy' j.c. penney d abercrombie and fitch. but the news wasn't all ba among the reta winners: discounters like ross, t.j. xx and marshall, which posted sales gains that beat analts' estimate a major coern now is that a new see of frugality is taking hold and parents areocusing on basic necessities li school supplies. so analysts anticipate this puback in spending may extend in to the christmashopping season. >> paul: those disappoting tail sales put wall street o the defense as did profit

tang in the financial, tech ancommodity sectors. an hr into trading, the dow was off 40 points th the nasdaq down 18 pois. the market recered over half its early lossess investors digested a bter than expected reading on weekly jobls claims. but stocks fell shorof a positive closen investor caution ahead of tomrow's employment report. e dow dropped 24.71 to 9,256.26. e nasdaq fell 19.89 to 1,973.16. the p 500 lost 5.64 to 997.08. in the bond market, the year note gaid 3/32 to 94 29/32 putting e yield at 3.75%.

>> susie: what suld be done about fannie mae andreddie mac? that's a questiobeing hotly debated in washington. according to report today in the "washingtopost," the obama ministration is considering variety of optionso overhaul the two mortgageiants. the treasuryepartment has commitd $400 billion to keep nnie and freddie afloat. until policymakers fure out what to do nt. sthanie dhue has more. >> reporter:ith $400 billion taayer dollars guaranteeing the de of fannie mae and freddie c, some experts think throwi toxic assets into a bad bank could help fix the rtgage giants. jas lockhart directs the federahousing finance agency, whh oversees the mortgage firms. he ss that scenario would ensure their debt obligaons are honored. >> they will be protected d there will be quidity in the sendary market, then we can decidehat we want fannie and freddito look like in the

future. >> reporter: there a three key optis. one: a full nationalization the firms. two:urn over to the private sector. and three: rcreating them once ain as government sponsored enties. lockhart, who's soon tleave the agen, favors option three, but ys it's not an easy job. >> if it's done, it has to b done properly,nd we didn't do it properly. obviously, in the pa, there will have be a very clear dividing line, clearlybetween the government's role anthe private sector's re, there will also have to be a very clear division wt their missn is and we have to be clear that thedon't have a mission th causes them to take too muchisk. >> reporter: whater the final choice, obrvers predict a major political battle. broongs fellow doug elliott sa home prices and mortgages matter to middle class arica and mar financial institutions. >> there are fundament econic interests here, which means you argoing to have a lot people lining up to support a largmortgage effort with as much government suidy as possie, implicit or explicit. >> reporter: one question is

what will happ to common shares of fannie mae andreddie mac, which currely trade on the new rk stock exchange. >> as we come out of coervatorship, they'll be a desion made, and it could be that they havebsolutely no valu >> reporter: as policymars grapple wi the future of the mortgage giants, the job will helped or hindered by how t companies toc assets are perform. the admistration says it will veil plans for the morage giants in february stephanie dhue"nightly business report," waington. >> paul: oil trars who make false or misleadg statements will be finea million dollars a day. that's the bottom ne of a new rule issued day by the federal trade commission. the agency says it's crackin down on practicethat can drive up prices at the pump. the american petroleum ititute slammed the ruling sing the w fines are 100-times higher than the current re of $11,000. today's decision comes as ice fluctuations in the oimarkets have raised quesons about manipution. the new rule goes into efft in nomber.

>> susie: thers a lot of buzz about the release of "window " some mrosoft customers were able to doload preview copies of the software ant's new operating syem today. retail custors will have to wait until october. how good is it and will "7" microsoft's lucky mber. here's our tech guru scott gurvey with some ansrs. reporter: is "windows 7" a hit a miss? that is the multbillion dollar question. i've been testing rious pre- rease versions since thetart of the year and ll say, hit. there are new features and aew look. the images are sofr, smoother.

the interface ides you along. hover er a minimized program, a preview appears, snap the mouse, t screen is restored. right click and you get contexmenu of things you can do. even macintosh fans mighbe impressed. gadgets can livenywhere in the screen. a libraries folderakes a little getting used tout is effectivin combining your work, ev if it is stored on different computers in a network. but e biggest news is under the vers, "windows seven" is moretable, faster and smaller than vista. it ran well on mold laptop, which couldn't hane vista. pcg.com's lance ulanoff agrees wi my review and notes this time, miosoft has played down e hype. >> basicly they're saying this an operating system that works. it gets the job done. it's going to be learn. it's goi to work on the hardware thayou currently have. you won't necessary have to upgrade to run it. i think they'rgoing to right the windows sh with this opating system.

>> reporter: so the verdt: if u're buying a new computer, s, get "windows 7." in fact, that's the be way to do it. if you are already running vista, yes. the upgrade is virtuly painless and you will pleased you did it. stl running xp, now it gets teresting. the swer is, maybe. a lot people, including a lot of companies, ipped vist if you notnly skipped vista, buare also still running an xp ercomputer, you really do want to consider getting a new p.c. you can try to urade your xp box. t it isn't easy. you can only do a clean inall, which mes you have to reinstall all your proams and transfer your fileand settin. i doubt many indiduals users will go thugh this tedious and trky process. and i'm not sure mancorporate customers will either. indows 7" is worthy, but mos people may wait until is time to buy a new p.c. to finout why. scott gurvey, "nightlyusiness report,"ew york. >> susie: twitter is uand running again aftea major

service inrruption this morning. the micro-blogng site fell victim to hacker attack. in what's caed a "denial of servic" thhackers allegedly disrupted the site by ensting millions of computers to acss it simultaneously experts consider thitype of cyber attacko be relatively unsophisticated. twitter currently has more tn 30 million users-- that'up fromess than two million over a year ago. >> paul: susie, users ofocial networkingiant "facebook" also hasome problems this morning. but things were back to rmal by the afterno. now let's ke a look at our ocks in the news tonight.

>> susie: more now of r interviewith christina romer, the presidens chief economist. today,he defended the obama administration's smulus package, sayg it's saved half a million jo. given thhefty price of the recovery plan,ashington bureau chief darren gersh askedomer whether such a big packageas producing the number ojobs she expected >> it's also a numr that is reflect in a lot of the prate forecasters getting the same kd of number. you knot i very much,e knew this washe plan that would ramp up that had bigg affects as we go forward. and that is certaiy what i talked about this mning is some of the reass it would ramp up. so you know, we are very much on tracfor gting the money out a fast as, you know, as posble. but obviously tre are a lot of pple suffering. so the more we can do, the ster we can do it, the happier certnly i will be. >> givenhere we are nown this half a million figure do you still thi the

recory package wil end up sang or creating 300 llion jobs. >> iis still a very go estimate it was bad on a very sound methodology a so i do absolutely anticite that will be the se. you know, again, that was always as of the end of 2010 quarter 4. so thatcaptures this ea that t affect does rp up, increase. you know, we know, for example, the compositionf the stulus is changing. we had a lot of the tax ts, the state fiscal relieve earlit turns muchore into governmt investments. and those tend to have bigger effect on js. >> two sectorshat usually show lot of job groh coming out of recession are constructionnd autos. but many economists believe those o sectors wot create a lot of jobshis time. what do you think? >> you know, they will rtainly be expanding. the cash for clunkers program, forxample,as been a tremendous success and we do see proction schedules, for examp, ramping up for the auto industry for thehird quter. t i take, which is true from your question is we are going to b looking to oth

sectors, rht. so if, for example, consums aren't going to be buying as much as they might ha in the past because they are goi to be savg more, will need oth things like our n exports or our business investment to come in and fill that gap. >> what two or three indicators are you gng to look to wards the end of the year to cide whether or n we need a second stimulus packa. >> the gold standard h got to be job cation. what we need teeen, you know, what h been the hallmark othis recession is just th tmendous job loss that is just so painful for thamerican peopleand just such a trady. so the solutely the thing we're ing to bewatching is is that shrinking it got to shrink before it turns positive. are we seeing the ki of progress that we anticipate that we needo have. >> on foreclosures a little bidifferent but there is some discussion that t administration mighte considering the idea of allowing people to stain their homesnd rent as opposed toetoreclosed and kicked out is that under discussionnd is that a idea tt might work?

>> you knowright now we are still working, ncentrate on getting the foclosure mitigation program that we ha working and under way. and wre very clees that wee seeing those ramping up to 20,000, 3000. that is ceainly a really importt thing because the mo of those we process the more people are getting their los dify. >> but is this ia of right to rentunder discussio >> you know, we are cotantly evaluating all of r program its and tryi to think if there is a way it could work better. so we're thinkg about lots of things. >> chrisna romer, chair of the president's councilf econic advisors, thank you. >>reat to be with you. >> paul: tomorw, our friday market monitor gue is richard einberg, president of steinberg global ass management. >> susie: o prominent exchanges said today that ey ll stop the controversial practice oflash orders. nasdaq o.m.x. group and ts global markets said today theyl stop using them on september flash ordersive big brokerage

firms a splisecond advantage on tding before rest of the market. earlier this week, t s.e.c. saidt's considering a ban on flash orders. >> paul:lastic shoe company crocs regained its fting late today. ares of the company jumped more than 30% late iafter hourtrading to about $5.50 a share whenhe company adjusted quartey results beat wall street estimes. also bolsterg shares, crocs' vow to return to profibility next year and a llish third quarter outlk. crocs' c.e.o. sa customers are responng well to new products.

>> susie: here a look at wh's happening tomorrow. the labor departmenteleases the july eloyment report. analysts expecto see that 320,000 jobs were lost. also, quarterly results from a.i.g. >> susie: from vs to ls tos, there's been lots ofalk about the shapof an economic recovery. tonight'two ways to play tas on recovery and re-sizing. here's kin depew of "minyanvilleand "minyanvle's" kevin depew. >>ur economy is in a severe economic downturn, andhile most recsionary shocks of this type have en followed by quick, v-shaped recovees, this one has beeno deep and painful that the majity of economists

aren't looking for anythinmore than a mild recove at best. and th's the problem. when ithe last time the majority of economis were correct? the thing is, we've beenere before. many times. yes, the economy is inad shape, but to say the entual recovery will weaker than usual is tmake the classic wall street stake of saying, this time is diffent. it's never different. >>t's true, i don't believe in a shaped recovery, and here's why. beyond the headwinds oprivate- sector de-leveraging, gh unemployment, d further deterioration in credit qualy still to ce. i thk there's a more profound test facing this country and that's the enormous resing of the erican economy. by resizing, i'm referri to the need to bring usconomic capaci down to a much lower lel of long-term domestic dema. choose just about any instry in arica and you will see too much capacity. our bt excesses enabled it and now our debt destruction wl require the elimination of i >> paul: recapping today's market action: investors sl on caution ead of tomorrow's employmenteport.

the dow dropped 24 points and the nasdaq lost almost0 ints. to learnore about the stories in tonight's badcast, to watch our streaminvideo and to take part in our daily og, go to "nightly busess report" on pbs.org. you caalso email us at r@pbs.org. >>usie: and finally tonight, a taxi driver in vermont is giving new meaning to the wo "fare." he let's passengers pay whever theyhink is "fair." not surisingly, the name of his cab company "recession ride." since the "pay what u want" seice began in june, driver eric hag says he hasn't been short-changed, and busineshas been good. he's even tan a c.d. from a musician apayment, and a $10 supermarket gift car paul, hagen spt the early part of his career on wl street and maybe that's wheree learned thers more than one way to do business >> i hope he learned on wa street not to acpt any coateral debt ligations.

>> that might be a little too sophisticed for a ti driv. >> sie: that's "nightly business repor for thursday, august 6. we want remind you this is the time of year your puic television station see your pport. >> paul: support that makes programsike "nightly business report" possible >> sus: thanks for joining us and don't rget to support your public television statio i'm susie gharib. goodnight, everye. you too, paul >> paul: goodnight, sie. i'm paulangas wishing all of you the st of good buys. "nightly business port" is madeossible by: thisrogram was made possible by contributions tyour pbs station from viewers like yo thanyou.

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