>> paul: ben bnanke says the economy coulstart growing soon, t the recovery could be slow because so many aricans don't have jobs. we get some analysis on e bernanke olook from former fed bank president robert mcte. >> susie: existingome sales surge as buyerpick up bargains and take advange of the first me buyer tax credit. the news caps a volatile weeon wall strt, and sends stocks to fresh highs for the year >> paul: tonight'smarket nitor" guest sees dow 10,000 by the e of the year. he's mark skousen,ditor of orecasts and strategies." >> susie: alers are expecting a rushn this last weekend for cashor clunkers deals, but what happens next with clunks clai and future sales. >>aul: i'm paul kangas. >> susie: and i'm sie gharib. this i"nightly business report" for friday, august 2

"nigly business report" is made possible by: this progr was made possible by contributions to yourbs station fr viewers like you. thank you. captiong sponsored by wpbt >> sus: good evening, eryone. bebernanke said today the proscts for economic growth in the u.s. aear to be "good," and those comments trigger a stock market rly. speaking at a conferencen jackson le, wyoming, the fedel reserve chairman gave a more upbeat forecast comred to the fes statement last week after a central bank poly meing.

but bernan also warned of ritical challenges". specifically, bernan said financial firms fa "significant losse" businesses and nsumers are experiencing difficulty in tting credit, the economic recovery wille "relatively slow," a he expecta gradual recovery in unemployment. bernanke defended the acons tan by the fed during the financial cris, saying they avted an "imminent collapse" of the financial stem. joining us n with more analys, robert mcteer, former prident of the federal reserve bank of daas and currently distinguished fellow athe national center for policy analysis. nice to see yoon the program agn. >> thank you, susie, good to be with you. >> susie: is ben bernanke right about the economic outlook? >> well, i hope so. and probay. i ink there's a go chance we'll get positive g.p. number for the current quarter,

primarily, though,ecause of inventory rebounds and thcash for clunrs. i'm not real confident that tha can be sustaid. i think the consumeras real headwinds that hs facing, and if he's going to be doing any saving ithe future, consumption'going to be weak r? time. so if we start a recovery, i think 's going to be a weak recovery, and it cld be a false srt. >> susieare you saying that you do t agree with bernanke's assessment that the u.s. economy is comin out of the recession? >> i think is-- it's aut to emerge. whether it's goingo emerge stngly enough fort to be sustainable is-- what i worry abou >> susie: well, lot of the anothehere, because you were talkinabout the consumer, has to do withnemployment, and, you know, people wt to know wh is hiring going to begin in a big way. today, bernanke says that tre will be a gradualecline in the employment rate.

what does that mean? >> well, i think, younow, the employment rate is 4. i still suspec it's going to go above 10. and th losses in employmen have improve but by historical standards they're still pret large. i think we're in for a fewore nths of clining employment and that's going tmake the conser-- declining eloyment, rising unemploymen >> susie: i waed toake sure i understood that. go ahead. so you expect a f more months of that. yeah, i think the unemployment rate benefitted la month from a lot ofpeople droppi out of the labor force. as this start to pick up, they'll get bacin the lor force anstart looking, and they'll be counted as unemployment. so the unemployment rate, i thk, is going torise, at let to 10%. >> susie: you tald a momt ago abou consumption and that

consumption just isn't there. wenow when people don't have jobs or when they' worried about losingheir jobs they're not gointo spend money and the same thi goes with businesses being caious during thisime of uncertainty. what do u think it's going to take t boost consumption? do you thinke need another stimulus package well, i dot think we're very good at stimulus pacges. maybe we should get thchinese to lend us their stimulus packe. i think thers going to be imulus in the economy, but i wouldn't have another formal stimulus package. that one was much too unfocused, scatter shot, and just really it probably did some good, but i'm not sure it did enough good to justify the cos i think theeds' actions and th money supp, along wh the treasu's expansion of borrowing will prode some. fiscalnd monetary stimulus. we d't need a special proam, i n't think. >>usie: what else can be done to give a boost of growth?

where is tha growth going to come fm? is itjust going to be normal market forces? >> yeah. see, the problem is the nsumer for ma years did not have to save because the consumer thought of his sing 401(k)s and his rising home values as saving, and that's gone away and turn the other way. now th consumereally does need to save, but if he does, it's b for the economy. it's a paradox. the more they try to save t more they weake the economy, and make saving more difficult. so that's why i think it will be slugsh. >> susie: bernanke's speech toy sounded a lot le a job audition. you think that president obama wl reconfirm the fed chairman for another term? >> yeah. i do think that mrbernanke would ve given the same speech en if his term wasn't cing up.

hover, i think he's done magnificent job. he's bn innovativend creative. there was no rule book for what we've had, and he had to make it up as he went along and i think he did a fabulous job. he deserves to be reappointed. d i think he probably will b >> susie: all right, well, thank you so much foroming on the program. very interested in what yohad to say aut the economy. ank you so much. thank you. >> susie myguesttonight robert mcteer of theational center for policy analis and former president ofhe federal serve bank ofdallas. >> paul: the fed chief opmism combined with good news on hsing to send stocks to their highest vels this year. but as erika milr reports, economic optimism isn't the ly reas many on wall street are in a buying mood. >> reporter: wd prints... bright onge... and plaids. intereing clothing picks are probly what come to mind when you hear the term "short interest." it's also a widelyatched

measurof market psychology. over theast few weeks, short interest has declinesharply, suggesting more bears are ing scared away. that's just one of many reass strategistike ryan thinks stocks will he higher. >> oiously, the more short interest there i the more cash there is on the sidelines, t more support for the market there . as the markecontinues to grind gher, you continue to see shorts getting squeezeout. >> reporter: the mket has surged more than 50%ince the march 9 lows, so nearly eryone agrees thereould be a pullback ofoughly 5% to 10% percent coming. but many stregists, including milton ezrati, think t long- term trends higher. >> i tnk the bias is going to be up. and the reason i say thais because we at rd abbett believe that t economy is turning to at leasa modest recovery and ashat becomes apparent, the market will haven upward bias. >> repter: for economic optimism, look no rther than today's existing home sas report, which showed aecord 7% jump last month. the ho is the housing crisis which sparked the ression may finally be easin growing investor optimisis ing reflected in the "vix"-- the market's volatily index.

it's down sharply from lt octor, the height of the financial crisis. but many prowarn wild swings could soon be ba. september d october have notorious reputations as t worst nths for wall street. last september, lehmanrothers filed for bankptcy. and e market crashes of 1929 and 19 both came in october. that's why oppenheimer michael schwartzecommends instors consider options straties to protect thr portfolios. >> in is environment, where there could be a pottial correction or volatile ns comingut, it would be wise to buy index pu on the s&p 500 to protecyour portfolio. >> reporte if he's right and there is trouble ahe, it's fe to assume shorts will be back in fashion onall street. erika miller, "nightly busins report," new yk. >>aul: stocks on wall street rallied for thfourth straight y. the session started withn early bot oneports european

economies arrecovering. byoon, the dow was up 143 points and the nasdaup 28 points. the fed chairman comments and that solid 7.2rise in july existing home sas kept the rally gog strong through the afternoon, and stos ended near the day's best lels. the doindustrial average osed up 155.91 at 9,505.96. this week, it fellnly once for an orall gain of 184.56 points. the naaq advanced 31.68 to 2,020.90 today. it ao lost only once this ek, and gained 35.38 points overall. e s&p 500 rose 18.76o 1,026.13 tod, and for the weekadded 22.04 points. in t bond market, the ten-year note losin1 6/32 to 100 15/32, tting the yield at 3.57%.

>> susie: thnation's largest dealer group is pullinout of the cash f clunkers program tonight. autonation says it has solover 10,000 vehles with clunker bates. the $3 bilon government ogram is set to end monday, but what happens after casfor clunkers is scrapped? stephanie dhue gets some answers. >> reporter: cash for clunke is creted with putting 750,000 new cars on the road in e last month. jerrsanders came to pohanka hoa today to see if he could ill cash in. >>e were definitely trying to take advantage of the cafor clunkedeal, and once we found t it was near the end, made more pressing to come and see

if we coulfind something. >> reporter: ientories are low as consumers he snapped up vehies. pohanka automotive group's 1 dealerships ve sold about 800 cars under t program. geoff hanka says it really helped get sales rolling. it's given people permissio to come shop for car again. car sales haveeen down about 35% since la year and the indust has pretty much been on its knees. we were looking for a sh in the arm, a this has been a very successl program. >> reporter: but it hasn been withernment has beenate, tov gen slow to press the clunker rebates. at's left dealers on the hoo pohanka is owemore than $3 milon. >> cash flow is importt to us, and we were very concerned wh the gornment about being promptly paid. we were sured by the government we uld be paid. inact, it's in the law we must be paid withinen days of submitng the claim, and we have claims th are now a month old and haven't en touched or loed at yet. >> reporter: while the ch for clunrs program officially ends at 8:00 p.m.n monday, that's

the deadli for dealers to have all of their papwork in to get pa. as a result,any dealers have already stopd the program or e only doing select deals. consum groups are worried about dealers prsuring customers to come up witextra cash in case clunker dls are rejected. lena pons ofublic citizen says consumers needo know that's ilgal. >> if ultimately theransaction is rejectewith something hang to do with the paperwork submitted incorrectly, that ss isupposed to be sustained by the dealer. >> reporte while the program provided a boost for t industry, somenalysts worry it came at the exnse of sales downhe roa with inventoryow and pent up mand depleted, sales are expected to beeak for the rest the year. stephanie dhue"nightly businesseport," washington.

>> susie: some encraging news todaabout the u.s. job tuation. 17 states, or rougy a third of the nation, shed decreases in unemplment last month. ven stes showed no change, but the other 26 swed increasi unemployment. thatncludes california, nevada, rhode island, an georgia. they reached their hhest level of joblessss since the record- keeping began 33ears ago. unemployment imichigan dropped

slightlyo 15% from 15.2%, but still has the highest joble rate in the country. >> pau monday, with six unemployed pple for every avaible job nationwide, we look at w to stand out from the crowd. >> susie: harley davson is uring sites in four states a it shops for a new homfor its main motorcycle plant. it's currely located in york, pennsylvania. the mpany is looking at spots tennessee, indiana, kentuck and missouri. back in may, hary said the york plant had t much pacity, and that it waed to either revamp the plant, wch employs 2,300 workers, o relote. >> paul: former u.b.s. banker will spend more than three yrs in prison, despite actg as an informt for the u.s. gornment. bradley birkenfeld w key in helping the i.r.s. g the names 4,500 american u.b.s. clien who y have cheated on their taxes. but he also admitted hping u.s. clients hide assets.

today, he was sentenced to0 mont behind bars, almost a year more than prosecurs recoended. >> susie: here's look at what's hapning next week: our friday "marketonitor" gut is john dorfman, chairman of thunderstorm catal. on the economic candar:

tuesday, the s&p ce shiller home price index for june released, and nsumer confidenceor august; wednesday, the july rerts on durable goods and new home sales; thursday, it's wkly jobless claims and first look at second quarter g.d.p.; fray, personal income for july and august consumer sentimen >> paul: my guest rket monitor this week is mark skousen, editor of e market letter "forecasts and strategies. welcome back to "nhtly businesseport," mark. weome, glad to be with you, paul. >>aul: you maid some vergood called on yo last visit with in early march. u predicted the stock marke was booming out, and the economy and employment would continue t weaken. all were right on e money. i mpliment you. grt call. >> it's ry unusual to be able to pick e bottom. they say you can never pick the bottom of the market, but i lucked out on this one. >> well, where do you see the market and the econo heading no >> well, my prediction is rather startlg, or at least i was

several months ago, or back in march. i'm predicting a dow 10,000 by the end the ar. we're at 9400, so it looks like we have a possibility of tt happening. with the ecomy, i'm bullish. i think theconomy is recoveng but it's going to be a ver gradual process. there's lot of proble in our onomy that we're still sufferg from, from the nancial crisis. it's going to takes quite a while to get o of it. so i'm predictin a positive g.d.p. for the firs quarter in january of 2010, but i think the stock market is a better place to be. >> paul: how much bett will it be? >> you say 10,0-- >> 10,000 on the dow is a positive number for. the ye, so i think that's a od thing to seeonsidering all e trouble that we've gone through. >> paul: nonflation this wk. the prucer price index show

actually negative will inflation be a problem an time soon? >> no, i don't think it wille a problesoon. commodity ices are rising very shary. i mean, one of m stock picks was freeport and copper prices are back up to almost a pound. so there is se flkz coming back into the system but don't see is happening at the consumer level yet. >> pau okay, during your march visit, you recommendhree securities. let's see how theye done since early march. barnes & noble has done very well. a little up over3%. are you ill with it or would you buy more here? >> i think it'sime toell and move on, but it looks prett good athis point. maybe a stop order would be way to go. >> paul: there's the freeport copper and gold up92%. i suppose you've taken some money off e table there? >> yeah, we're sling that as well, or using a stop order. copper produceare very high. i don't see a lot of profit

pontial left in that one. >> paul: and thethird pick that u had was theold shares,he spied or the big board. and that was a safe heaviun, up 1.5%. not bad. >> yeah, it's up,nd i would recommend holdg it just as a defensive meure. >> paul: howbout some new commendation, mark? >> well, i have three ne recommendations forour ewers, paul. the rst recommendation-- in fact all of them are income ornted. i'mecommending anna lee catal management, the symbo is n.l.y. this i reit,paying 14%. they can pay 14% becse it's a bit of a leveraged position. but they invest in sidential, adjustable rate mortgages but they use oy those guaranteed bthe government, like jenie mae. >> paul: we have less than a minute. >> my other two recommendatis are hong kong, the hong kong index.

it's a e.t.f.. the syml is e.w.h. and i think they'll ta advantage of the asian bm. 4% dividend. and my fal remmendation is an oil, a canadian o and g trust,rf is t symb. yielding about 9% or 10%. and i thinthat we'll take advantage of theeconomic revery and we'll see higher oil prices. >> paul: very good. do you personally ownany of the secuties mentioned here or have other disclosureo make, mark? >> i believe i ownhe hong kong index, b that's the only one. >>aul: i'm aafraid we're goi to have leave it ther but i want to thank yofor being with us once agn. >> all rht, we'll see you next time >> my gues, mark skousen of the "forecasts and strategies. >> susie: and finally tonit, have you ever wanted to have your own index? well, now y be your chance. we're learni tonight that dow jones is shopping s stock market inding business around to potential buys, and that

could lead to a naming of the iconic "dow jones instrial average." news corbought dow jones in 2007 for $5.7 billion,ut it has written do nearly $3 billion of e dow unit's value this yr alone. pa, "the wall street journal" sa goldman sachs is brokering a potential salewhich could also take the form of so sort of joint vture. >> susie: th's "nightly busiss report" for friday, august 21. i'm susie gharib. good night, everyone, anhave a great weekd. you, too, paul >> paul: and you as we, susie. i'm paul kanga wishing all of u the best of good buys. "nightly business repo" is made posble by:

this program was made possib by contributns to your pbs station from viewersike you. thank you. ptioning sponsored by wpbt captned by media cess group at wgbh access.wgbh.org we are pbs. >> we are p.