captioning sponsored by wpbt >> paul: your nk deposits are fe. that's the wd from sheila ba. but the headf the fdic says e fund protecting those deposits has dropped srply, hit with almost $4 billion in losses. >> susie: up and down wall street, folks are ndering why so many nks are failing when the economy is improving. coming up, a look at the disconnect between bk health and the covery. >> paul: call it the bmosche effect. a.g. shares surge 27% on hopes new ceo robert benmosche can turn around the troubled insurer. >> sie: then, we talk with robert tol c.e.o. of toll others. thluxury home builder's loss widens in its latestuarter.

but heays orders are starting to pick up. >> paul: i'm pl kangas. >> sus: and i'm susie gharib. this is "nightly busins report" for thsday, august 27. "nightly business report" is made possibley:

this program was madpossible by ctributions to your pbs station fromiewers like you. thank you. 7//& >> susie: good evening everye. there are now more tha400 american ban on the government's so-calledproblem list". that's theiggest number in 15 years. t don't worry, your money is still safe. the federal deposit insunce corporation id today the fund that insures your money can still cover any loes. that fund is shrking: down 20%. as darren geh reports many anysts are ccerned taxpayers could eventuly be called on r yet another baout. >> reporte even though its deposit insurance fund i dwindling, cirman sheila bair says the f.d.i.c. can managets way through the finaial crisis. >> a decline in the fu balance do not diminish our ability to protect insured desitors.

e f.d.i.c. was created specifically for times sh as these. our sources are strong, your insured deposits are se. >> reporte of the $42 billion in the deposit insurance fd, the f.d.i.c. expects $32 blion will be used forosses regulatorslready see coming. that leaves a ttle more than 0 billion to cover the unexpected. and wi 416 banks on the f.d.i.c.'s problem list holdg assets of $300 blion, there is plty of room for unexpected. >> they' going to need more money. >> reporter: doug elliott studies the financl crisis for the ookings institution. needed, the fdic can borrow fr the treasury to shore up it's depositnsurance fund, but elliott thinksaxpayers won't ha to any losses. >> my best gue is that taxpayerwon't have to put up anything. that the preums they can charge to the bas over the next, say ten years, can cov this crisis. but we don't know. >> reporter: jameshessen, chief ecomist, for the

american banrs association says ban are doing their part to help the fdic. they are already ping higher premiums for deposit insuran and the industry set ade $67 billion the second quarter to cover their growing loanosses. >> it's a matt of trying to be udent having income a little le because they want to have the resources set aside handle the loan loss they expect in ch a deep recession. >> reporter: but thamay not be enough the f.d.i.c. says it ilikely to hike posit insunce premiums on nks yet again. while bank profits are ring, georgetown biness professor phillip swagel says charging banks tohore up the f.d.i.c. comes with a price. >>very time you do that, of course, you're draing the lifeblood t of the banking system. you're taking the capital th banks need to make loans a you are using it to plenish the fdicund. now that's aropriate. this funis there to backstop the banks and banks shoulde payi for it, but there's a balance. >> reporter: cirman sheila

bair says she hano plans at this time to tap the f.i.c.'s half arillion dollar credit line at the u.s. treasury. but bair also ded she never sa never. darren gersh, "nightly busins report", washiton. >> many of the enomic reports wee seeing show signsf improvement. so if the onomy is doing better, why e the banks still in trouble? scott gurvey explains, it's matter of timing >> reporter: it ll take months before t green shoots appearing in the ecomy show up at youneighborhood bank. that's because the j loss comes firs then the missed rtgage payments, then the foreclosures. and with home foreclosuresomes trouble for tailers and others dependent on consumer spendi. morningstar nk analyst jamie ters, says that's why banks are just beginningo feel the pain fm commercial mortgage failures. >> you have alst half a year betwn the time when the first mortge payment was missed to the ba's probably charging off

the loan. and so what you have is ha a year and sometes on commercial credit it's almost as ng as two ars of lagging charge-offs the banks are having so the combition of that the ct that these problems have just been accumulating throughout the recessions that some banks havjust reached thatreaking point right now. they just can't take anyore loses. reporter: on top of that, some banks may have ouble paying special assessmen arged by the fdic to make whe insured depositors of failed banks. analysts say forome banks, the w fees may be the difference between making andosing money. date, investors have been buying big banstocks since the housing market showed signs stabilizing earlr this summer. experts say there are baains to be founamong the stocks of small banks. but you must dyour homework to find out how strontheir balance sheets areefore you invest >> the bigger players we're talking about,ank of america,

citioup, jp morgan, they've raised a lot of capital the markets in order to shorup their balance eets. your localommunity bank doesn't have that opportuny. as a result, ty're still playing with theame amount of capil they had at the beginning and they'rtaking the same te of loses as thbig banks but th don't have the capital,ew capital, to absorb the loses. >> reporter: the sll banks now showg up on the f.d.i.c.'s trouble list are ao often new bank they were founded duri the housing bubble, takingn risky investnts in a bid to get established quickly. scott gurvey, "night business report new york. >> susie: richmond feral reserve bank president jefey lack says the u.s. economy appears to be stabilizg. and he sees ination more likelyo rise than fall. lacker's comments ca after news this rning that second arter g.d.p. fell 1% a small than expecteslide. speakingo a business group in virginia, lack said while many industries andowns remain distssed he sees the economy headedor better times. lacker also weighed on a judge's ruling monda ordering

the fed to disclose e borrowers usinits emergency leing program. he saihe's not sure what good it would do. the fed has argued theelease of names wld hurt the indidual firms. >> paul: aftereven consecutive sessions of gas, wall street's blue chips were target by profit takers the early going day. better than excted readings on new weekly jobless claims an second quarter gdp wer overrien by investor concerns that stocks haveecome overpriced at 11:00 a.mthe dow was off 75 points and the nasdaq down 2 points. a very successful 7-ye-t-note auctn helped the market bounce back this afternoon end with modestains.

>> susie: onof the nation's biggest homebuildersaid today it's seeing signof stabilization the housing mark. tollrothers is optimistic even though it reported auarterly loss bigger than a year ago. excluding charges toll lost $2.93 in its fiscal third quarter the luxury home builder also hlid orders in theurnt quarter are up 26% from ye ago levels. a short whe ago i talked with c.e.o. robert toll and ask him when he expects the mpany to return tprofitability. it could be in a couple of quarters. or ls. or it could take longe depending on the market

demand. right now demand has been creasing pretty strony. and that would dicate that we should in pretty good shape? the nottoo distant future. t if i say more than that, my cfand general counsel will kl me. so i'll have to let it go at at. >> mr. toll, you sa today that you're seeing gns thathe housingmarket is stabilizing. can you elaborate on the trends that you're seeing. >> about six months ago we woulsee the averageuyer about 8 to 10 times and prably the onl questi that was bei asked was can y giveme a few more dollarsn incentives. can you knock five or $10,000 more off therice of ts home. otherwise, don't think i'll bable to buy. whereas now we see the client buying after five or six visits andeing concerned after e first couple to establish the price with can i get the garden roo can i get -- can i put an add-on f a musk om.

can i ve a mother-in-law suite develod in nnection with the home. we're now back to primary interest of the home itself as opped to being concerned onlyith the price. >>ow you also mentioned today that y're seeing people are realizinghat this is a buyer's market is that transting in a new ders and actual contracts? mean what is, c you expect for toll brhers this fl? >> where i seet in the fall is onl to extrapolate as wld you san say if things continue than t demand will continueo increase. but it seems toeshough we're more lely to be going up in termof demand anup in terms of ice than we are to be ing down. and i think the public is starting to sense that. >> so are contract cancellations less of a problem no for tol brothers? >> oh, very mh s our canceltion rate now is down to about 8.5%.

a rmalized rate is about 7%. so wee almost back t the normalized rate thate've enjod since 86 as opposed to t last four years when the cancellatio rate went up as hig as -- m not exactly certa but it was something le 25% >> now y mentioned on e analyst conferen call today that you're seeing pickup in demand for highnd luxury homes. what about prices on th gh-end. are theylso holding u e've increased prices, i believe onbout 40% of our communities in the last month, month and a half. so they're not only holding up,hey're going up which is very welcome sign because tt was a rarity over the past four years til about the last fouror fi months. >> now we'veeard from som economists that ther are chances for a double dip

recession. how are you adjusting your business plans for tha possibility? >> wl, wre not adjusting oubusiness plans for that possibilit 're not adjustin our businesslans for the recovery or for the you recovery. we're anxious to buy la but we are anxus to buy it on a criteria, on a basis that us the criteria of what ests today, not what will exist with inflation and ho price. and ination and demand. so iwe continue to use the threshold of our current experience, we feel comfortable in acquiring land but we're not yet wiing to make an assumption that things are going to get betr when it comes to actually puttin out the money for land acquisition. >>ll right. well wll check iwith you again in the nt couple of nths. thank you much for coming on therogram tonig. >> youe welcome. it my pleasure. thanks.

>> paul:hile home sales appear to be picking up mortgagrates are too. rates on conventiol home loans head higher last month with borrowers paying on erage 5.31% on a 30-year loan. e data from the federal housing financing agcy covers loans to $417,000. 15-yr fixed rate loans averaged 4.89% last month. >> paul: an upbeat outok from dellomputer late today, despite 23% drop in second quarter earnings. dellarned 24-cents a share in the quarter, beatingnalysts estimateby a penny.

revenues were down fm last year, but alsoeat the street. ming in at $12.8 billion. c.e.o. micel dell says the c. maker has slashed operati costs d is readyor a turnaround ii.t. spending. heees sales in the second half of the year ming in far stroer than the first half. >> susie: boeing doesn't eect any more flit delays when it comes to getting the 787 dreamliner off theround. the plane is n expected to ke its first flight by the e of this ar with the first delivery slatefor e fourth quarr of next year. producon problems have forced boeing to vise its schedul5 times. the dreamlin's initial flight was originally set for the fl of 2007. bong has high hopes for the plane. it'sxpected to save about 20% on fuel and carbon essions. boeing has solabout 800 dreamliners and pects to build ten a month by late 20. >> paul:usie, boeing shares jumpedour dollars evenr 8%

to clo at $51.82. now let's ta a look at some ocks in the news tonight. h5z4h5z-54zz--z4h5j5j5u65-[4z4-

and those are the stoc in the news tonht, susie. >> susie: accused ponzschemer allen stford was taken to a texas hospital. he's being treated for an irregular heart beatnd a high pulse. but the chief nancial officer stanford financial group

of stanford financl group did appe in court today. james das pleaded guilty in connection witthat alleged ponzscheme. he n faces up to 30 years in prison for conspiracy d fraud. before bei arrested, stanford implied that davis was responsible for the frd. th men and other executives the now-defunct anford financial group araccused of advising clients to y $7 billion in bogus certifites of deposi then creating false records to inflate t firm's assets. >> paul: toya is pulling the plug oa plant it once shared with general motors. the tomaker announced today that iin march it will shut downroduction at the new united motor manufacturing facility. the fremont california plant employees 4700 worrs. it's toyota's only pla where workers are emplees of the united auto workers ion. in jun general motors cut its operational ties there as pa of its restructung. >> susie: meanile, ford seems be firing on all cylinders. the aumaker said today it's adding shifts at two plas to beef up production for theest of the year.

rd is also on track to post s first monthly, year-over- year sales irease for f-seri trucks in august it would be the fit time in almosthree years that has happen helped along by the government's cash for clunrs program. >>aul: tomorrow our friday market monitor guest ijohn dorfman, chaman of thundersto capital. susie: are americans gettin a fair deal fromheir cell phone oviders? that's a question the feral mmunications commission hope to answer as it launches forl inquies into the wireless industry. e investigation will focus o whether carriers are cpetitive and innovative enough to kp prices low foronsumers. thcommission also is looking into whether exclusity agreements between carers and handset kers should be allowed like at&t and apple's i-one. >> paul: if you've ever answed the phonand a pre-recorded robo-call was on the otheend, you know h frustrating they can be. now, those autated calls are

cong to an end. the federal trade commissi sa telemarketers are banned from making those lls as of septemr 1. the exception? en telemarketers get written permission from coumers. >> susie: here's a look at what's happening tomrow:

>> susie: goldman sachis taking ht for giving trading tips to its biggest customs. tonight's two ways tplay looks at whether this is the proverbial mo hill of which mountains are made. re's kevin depew of minyanville and minyanvills kevin depew. >> oncagain people are furious at goldman sachs, thisime about the fi's practice of holding weekly meetings wher tring tips are shared with some of its biggest clnts. these tips usually involve expectations for sho-term moves in scks. and, you'detter sit down for this, sometimes, tse stock tips are different from th official ratingsn the stocks. naturally, gdmans smaller clients are upset by ts; the appearance ithat the firm is saving the top she research for its big clients and givi everyone else thcheap stuff. >> okay, outrage at goman sachs, what se is new. but these shorterm-trading ids are not contrary to longer-term stock opinio issued by the rm, and so they're not ing anything wron

think abt it like this. you go to vegas and spend t thousand bks gambling, you're gonna get a free room. spend a hundred bus, well, good lucwith that. don't get me wrong, there ar plenty of reass to be outraged goldman sachs. art with the ten billion the got from the government rit before reporting tir richest quartey profit in history. just don'tlame them for doing what all binesses do, providinextra services to their best clients. c theluchip ind rose t 37 points while the ndaq added ree points. to lea to learn more about the ories in tonight broadcast, to watch our streaming video and toake part in our ily blog, go to ightly business report" on pbs.org. u can also email us at nbr@pbs.org. >>usie: and finally there were 10 million victi of identity theflast year. the naon's chief banker was one of them.

ben bernanke andis wife were victs of an elaborate identity-fud ring that stole more than million from people around the country. the crime ring was madup of pickpocket mail thieves and purse snatchers. one ofhem, allegedly stole mrs. bernanke's purse. a few days later, someone caed checks on thbernanke family nk account. because the nk had been alerted out the theft, no money was withdrawn. so paul, if the's a lesson here, it's that ev the powerful canall victim to soisticated thieves. >> good thought, vergood thought. >> susie: that'snightly businesseport" for thursday, august 27. i'm sie gharib goodnit everyone. and od night to you paul. >> paul: goodnight susie i'm paul kangas shing all of you e best of good buys. "nightly busins report" is de possible by:

this program was made possle by contribions to your pbs ation from viewers like you. thank you. caioning sponsored by wpbt captioned by dia access group at wgbh access.wgbh.org no