ptioning sponsored by wpbt >> paul: more bullish ne on housing. new home sales sur on steep price cuts a the first time bur tax credit, but economists say it wiltake years before we see a full real tate recovery. >> jeff: sheila ir and the f.d.i.c. are making itasier for private equity fms to buy up failed banks. we get analysis onhe late day decision and wt it means for the banking industry. >> paul: the bgain hunter rerns. street critique gut patrick o'ha of briefing.com tells us why kraft foods has landedn his bargain basement rad. >> jeff: then,emembering the liberal lion weook at how the late senator ted kennedy shaped hlth care

form and what happens to tho forts now. >> pau i'm paul kangas. >> jeff: and i'm jf yastine. susie gharib is onssignment. thiss "nightly business report" for wednesday,ugust 26. "nightly business repo" is made poible by: this pgram was made possible by contributions to ur pbs station from viewe like you. thank you. >> jeff: good evening, eryone.

a much bigger increase tha forecast. sas of new homes jumped 9.6% in july. could be the housing market is turning? scott gurvey repts. >> reporter: it was the foth straight month of increased new homeales and although this is a number with a wide marn of error, it did encouragthose who see a bottom in housg. beth ann bovino of standd and poor'sotes there has also been increased bung of distressed properties and existg homes. >> those homeowners were actually free to move and actuly buy something elwhere. you're starting to see it ickle through. will it coinue through next year? we, we do expect that is something that igoing to see some... sically get some stabily and continue through next year,lthough we're not expecting any kindf blockbuster sales rough this ar or the next. it's just somethinthat we'll slowly climb out of at hole. >> reporter: stos in the home constructionector began llying in early july. but maury harris of u.b. warns there wille a shakeout among the compans in the group. >> you're going to have a t

more conceration among the top five of sisellers in the market. its partly because of credit conditionsnd the small builders not beingble to get the financing. so when you talk abo what's going to happen tohe homebuders and their fortunes, th should outperform overall me sales because they're goi to get a bigger maet share. >> reporter: but how b a market will they share? some of the current buyings a result of government's fst time buyers x credit, which expires cember 1. before the housing bube burst, mo hgages weren the non-prime edit category. assuming thakind of lending isas history, the newormal for housing will be much ler than the two milln starts seen in the year before e sector collapsed. >> while it does look like housing arts, the numbers that were out a lite while ago, were also starng to show signs of stabiling, and that would be a good gn for home builders it dsn't look like we're going really see anything near wh would be considerean average

rate of say about 1.6 millio for hoing starts, until prably 2011. >> reporter: home prices are expected to continueo decline into next ye, but recent data indicates the rate of cline is decreasing. scott rvey, "nightly business report," new york. >> jf: tomorrow we'll see quarrly results from luxury home builder toll brothersnd talk wh chairman and c.e.o. bert toll. >> paul: wall street staed on a narrowly mixed notbut buyers soon took controon that solid risen new home sales and a 4.9% jump in july durablgoods ders. by 11:00 a.m. the dow poste a 21 point gain th the nasdaq up 4 points. ock fell into modestly lower ground durg mid-session as investors owed caution after a stng of six straight winning sessions forhe dow. opmism that tomorrow's second quarr g.d.p. revision would showtrength helped stocks closwith miniscule gains. the dow jones end up 4.23 at 9543.52. the nasdaq added .20 to 20243.

the s&p 500 edgeup .12 to 1028.12. in theond market, the 10 year note edged up 1/32 to 1019/32 puttg the yield at 3.43%. >> jeff: it just got lot easier f private-equity firms to buy failed bas. thf.d.i.c. voted this afternoon to lower t proposed minimucapital requirement for those ivate investors to 10% of the faid bank's assets. e f.d.i.c. proposed higher capital tios last month, drawing howls of prost from the private-equity comnity. joininus now for more about the decision is alex pollocka

resident felw at the american enterprisenstitute. the fdic has alady brokered two sales banks dea this year, two posive equity firms. will today'secisionspen those floogates. >> i don't know about ood gates but it ems to me it's a sensible decisn that th made to back off from their 15% requirement to 10 so y could get more interest on private equity. the bank failures of course we know are mounting andook li there could be quite a few ing forward. so you want to have as many pools of capital as a terested be able come in and take a serious look atinvesting in the new recapitalized ban that will go forward. >> jeff: i counted more than failed banks just this year alone on the fdic website. >>t's 81 this year--date. >> jeff: , okay. >> if we look back the le

80's, i'm not talking about savings and loans, i'm tking about commcial banks. the were eight years in a row at which more than hundr commeral banks failed. jeff: with that in mind does the fdic really have a choice on this. they hav to bring in these deeper pkets from somebody who has the cash and at thi point it seems like it's only the private eqty funds that have those deep rerves. >> well th certainly have to look for sources ofcapital and this is on of them. sohat's why i think this is a reasonable step f them to take. >> jeff: you know, for a bank to buy a failed bk, it only takes 5% as a mimum capital reirement. why doest the fdic just bring in allheay down to pody so private equity funds a the banks are comting on an equal lel. >> as i understd it, it's for a bank to buy one. i think it' a strong argument that it would be better to ve one set of rules that's nsistently applied to everybody. there w one ve against the prosal today by the acting

director of the office of thri supervisio and as i understand it from e press, s reason was he tught there should be one set of res and erybody should he the same set of rules plied to the th's pretty strong argunt, i'd say. >> jeff: doouhink the fdic will evtually go all the y to that level? >> i d't know thesethings are all about negottions subject a lot of uncertainty when we're in these pressud financial siations. so that's anybody's gss, i'd y. >> jeff: how do the fdic make sure it is not brokering these deals on too cheap a basis. we saw indy m at thestart of the ye. theyere the first of this year to get bght by a private equity or a sers of private equity firms, a groupf them. and i've seome criticism after th of some who say perhaps indy mac wasbrokered or sold too cheap by the ic.

>> that's a problem and worry you have you're a receir whose taken or the bk and now seing it, that later so somebody going to say you sold too cheap and somebody made a pile of money becae you gave them too good a deal. that certainly happened in the early 1990's when youhad the rtc, ifyou remember that liquidating thrifts and selling them prty cheap. and some people made enormous amounts of money buying tngs eap. so you g to woy about that financiay but also politilly. on the other han if the are few buyers, the pres are gng to bcheap. ifthere are lots of buyers dying to buy, th prices wouldn't be so cheap. that's the nature of a market, and this is aort of specialized market in taking er the ongoing assets of iled financial institutions. >> jeff: we'll ha to see how the reaction of the private equity mmunity to this test

change in decisio by the fdi al, appreciate you comg on the progra >> thanks, great to be wh you. >> jeff: our guest alex paul awkof the enterprise >> paul: the nation is mourng the passing of one of thmost influential senators in r history. reesenting massachusetts for close half a century, ted kennedy help re-write the nation's laws bankruptcy, immigrion, and education. but as darren gersreports, kennedy's passion and most likely legacy ll be health care reform. >> reporter: for millions falies senator ted kennedy is one of the reasons their children have health insurce. health policy expert chris jennings worked with kenne, as the senator pursued his li- long dreamf extending care to every american. is was senator kennedy's, on of his big legacies, rig? >> yesthis is thsigning of the children's health surance legislation. >> reporter: senator knedy's passion for health care rerm and hilegislative prowess have been sorely mied this year. now,s has often been the case

with the knedys, jennings thinks the senator's deathill inspirmany of his colleagues in congress to act. >> unfortunate, it sometimes tas this moment of them leaving us, departg us, if you will, to reay focus on the fact tt they had a point, that ere really was an issue wort addressing and is long overdue thate addressed it. >>eporter: to be sure, kennedy was coroversial. republicans delightein mpaigning against the libera li of the senate but that reputation also ge kennedy the out to cut birtisan deals on health care that sometimes disappoted core demoatic constituents. mark mcclellan, a heal care policy adviser to presidts clinton and sh, says that kind of pragmatism badly needed now. >> if ere is a model from what senator kennedy has do, i think it's that we can fd a bipartisan way to solve thes problems and addss them. >> reporter: kennedy'segacy extendfar beyond health care. nick allard, a clo kennedy

adviser, says some 300 mor pieces of gislation carry the senas name. >> i recall, f example, providing relief from e bankrupt laws for small mily farms. always keeping his eye o for the littleuy. >> reporter: kendy's friends e still hoping for one more ctory. a bipartisan health ca reform coveri all americans and signed into law by t man kennedy endors for president. >> i think the currentealth care debate is ithe president's hands righnow, but i wouldn't be surprid if therwas some divine interventi from the senator. he's probably stting to lobby already from up the.

jeff: the final ka-ching is in for casfor clunkers. the transportationepartment released the finalumbers today, showi the popular program ng up almost 700,000 vehicle sales. the tal value of rebates was $2.8 billion dolla, just under the ogram's $3 billion dollar budget. transportion secretary ray laho says the program's winners re u.s. consumers and woers. but they weren't thenly ones. toyota red in more than 19% of l clunker sales, fwe ne l rage general motors, fo and honda. now that the proam is over, car dealers are waiting to g paid. their deadline for submittin paperwk was last night. paul? >> paul: 2,000 workersre processing thosepplications, buthe government hasn't said yewhen checks will be mailed. now let's take a look at our stocks in the news tonight.

>> paul: tonight's seet critique guest says oreos en't the only reason he les kraft. it's got a tasty dividend,oo. he's patrick o'hare,hief market strategisat iefing.com and author of the site's barga hunting column. paick, welcome back to n.b.r. >>i paul, thank you, nice to be back with you. >> paul: why has kraf stock

landed in ur bargain hunting radar? >>ell, what we've dean in the broademarket rally of course is not the most exciting stock pickut wehink it's theight stockick at this junctur b our belief is the easy money from that march ral has been made so we're urging the condivorces to start looking t a nameike kraft wch oers a nice dividend yield and in this case crash yield is 4.1% leads all the peersn its group. >> pl: do you he a target price and time frame for kraft stock? >>e think kraft uld move into the m 30's over the 12-18 months. the company just completed a five-year restructing program that has taken out a lot of costs and we ink there's good room here for main expansion potentia as those marginsmprove over time here it's going increase profitability and raise the dividends and buy bk shares. for the patit minded inveor

we think there's potenti here. >> paul: now you saw simar thes at jm smucr when you commended it in may. let's look athat chart. it's up 4 sie then. have to congratula you on that and some of your othe recent calls. for instance in mid july you likediscount retailerollar three and to this ry day wh very strong earnings, the stock is up almost 14% from the time of yourrecommendation. on march 25th you said the spieders were the best to play the recovery and you're right on. u still like these securities as long-rm investments. >> sure, i think the are all still attractive as long term investments. i shoulput e caveat they had tremendous ru at a pace that's not sustained. we would urg investors to tak them off the tab. they're no going to contie like we've see in the past several months. >> paul: all right. but do you feel that we are in bull market or is it still o of these rallies in a bear

market that a lot of people still think. >> we're in the camp and it's cyclical bull market with a secular bear market. the easy money'seen made here on this rally. we're not optimistic on the economic recoverys the stock market would likeor us to -- gd to hear your ideas. thanks for bng with us. >> tha you,aul. >> pl: my guest patrick o'hare of brieng.com. >> jeff: tomrow, the wireless industry goes under the microsocope as regators look into competition, innovationnd

billinpractices. >> jeff:assachusetts' top serities regulator is taking a closer look at therading tips that goldman sachsives its top ients. those tips come from weey meetin of the firm's research analysts and are then ssed along to tders and top clients. regulators are concerned the practice favs some clients over other massacsetts today confirmed it has subpoenaed goldmanor details. the firm has until sepmber 7 to respond. >> pl: carl icahn is betting ontlantic city's tropicana cano. today, new jersey gaming regulators clearedhe way for him and a group of lenders, take over thtropicana. icahn ll own about 41% of the casino when it emerges fm chapte11. the billioire is no stranger to thitype of deal. in 200 he bought the sands hotel in atlantic ty and later so it for a huge profit.

>> jef here's a look at what's happening tomorrow. we'll seweekly jobless claims and a first look at cond quarter g.d.p. so, quarterly results from de, h&r block, and toll brothers. in the mon file, some smart things to do with your money now. here's jonathan pond, authorf "safe money in tgh times." >> the great receson has taken its toll on our money and ou psyches.

here are five smart d feel good things to do with your money this year. pay extra incipal first. pay extra princil on your mortgage, cred cards, and otheloans. paying off principalives you a guaranteed return equivale to the los interest rate. second, home irovement contraors are eager to work for yoduring this dour economy. but make sure you can ford the improvements and make re they enhancthe value of your home more than they enhanceour ego. a third art thing to do with your moneybuy big ticket items moneis to purchase big-ticket ems that you need. manufacturers and retailers e hurting, so prices a declining. in short, th is a good time to buy expensive stf, but only if you really nd the stuff. idea numr four is to continue your education. one of the best instments you can make is to obtain more

edation and training in your chosenine of work. maintaining top-notcskills is doub important amidst what is likely to be a weak employnt climate for several yes to come. he kids and grandkids start filly, helping younger generation family memberfund retirement pns, like i.r.a.s, is one of the best ws to show them the iortance of saving for rerement. eveninors can contribute to i.r.a.s they have job income. i'm jonathan pond. >> paul: recapng today's market actio good news from jeff: and finally tonight, calirnia's latest attempt to raise money, the state is hoing a two-day garage sale this weekend. a warehouse inacramento is housing thousands of surus or confiscated item ranging from jewelry and mputers, to coat racks and cars some of the vehicl have been autographed governor arnold schwarzenegg. other items are beg sold on aigslist and ebay.

those listings are aimedt attracng shoppers outside california. all togetherthe state hopes to make a million a a half dollars to help ease itsudget crch. >> jeff: tt's "nightly business report" forednesday, agust 26. i'm ff yastine. odnight everyone, and good night to you, paul >> pl: goodnight, jeff. i'paul kangas wishing all of you the st of good buys. si p byblos:e repo" is de possible by: this program was made poible

this program was made ssible by contributions to your pbs station from viewe like you. thank you. captioni sponsored by wpbt captioneby mea access group at wgbh access.wgbh.org c