captioning sponsored bwpbt >> the recsion is very likely over at this point. >> paul:he fed chairman's declation sends stocks higher. but ben bernanke saywe shouldn't expe a robust recove. >>usie: today marks one year since the lehman broer's bankruptcy. so how's wall street doing n? we get some answers in tonight's "lesss from lehman." >>aul: investors put best buy shares on sale tod. the stock opped 5% as the electronics retailerosted a biggerhan expected drop in profits. >> susiemore people are staying unemployed longeand that's lving many americans with hard choice pay the mortgage or pay for alth care covera. >> paul: i'm paukangas.

>> susie: and i'm susigharib. this is "nightly biness report" for tuday, september 15 "nightly business report" is made possib by: this program was made possib by contributns to your pbs station from viewers like yo thank you. >> susie: go evening, everyo. ben bernanke declared todathat the cession is "very likely over." but e fed chief cautioned that the u.s. economy still ivery weak and manamericans will continue to ruggle to find jo. speaking at a conference i

washington, bernanke explaed that technical indicatorshow e recession has ended, but grth will return slowly. darren gersh reports. >> reporter: the rovery ben bernanke is looking for ll be a moderatene. the fechairman is expecting growth of around 2to 3% next year and he says thamath is not goodor the unemployed. >> the athmetic is that unless the economy grows signifantly faster than its longer term owth rate, it will be latively slow in creating jo over and abovehose needed to empl people coming into the labor force and therefore th unemployment rate woultend to come down quitslowly. >> reporter: one yeaafter the nearollapse of the financial syst, bernanke pointed to sis of stability today. but the debate ovethe failure of lman brothers and the root cause of the crisis ntinues. bernan stressed that financial failures were a obal enomenon. as for lehman,e says the fed did not have the autrity to save theirm. >> theompany's available collateral fell well short o the amount nded to secure a

feral reserve loan of sufficient size to meet it funding needs. >> reporter: that argument does not make sense to so analysts including economist mart bail who wondered why lehman's failure was followedy a dramic rescue of insurance giant a.i.g. >> so i think that was jt a mistake. itouldn't have been easy to save lehman but i thk it probably cou and should have en done. >> reporter: the fed argues a.i.g. hadetter collateral than lehman. but former fedtaffer vince reinhart says the crucial decision wasctually made when thfed bailed out bear stearns, a move that sent atrong signal to t market. >> knowi the government's playbook, speculators only h to pick out the xt weakest antelo in the herd. they sold the equiti short and bought the dt, precipitating the next instament of the cris. >>eporter: while economists gerally credit the federal reserve with rcuing the united states and mh of the world from a second great pression, manyawmakers on capitol hill are not so generous. the record of the lastew years

has convinced them ging the federal rerve more power to police the finanal system, as the obama adnistration is commending, is not a good idea. darren gersh"nightly business report", washington. >>usie: it's been exactly a year sin the lehman brothers filed for bankrupt setting off nancial panic around the globe. but how muchas changed? is wl street still broken? as we continueur special series "lessons from lehn" erika miller looks at whattill nes to be done to make sure a silar crisis doesn't happen again. >> repter: it has been a year of fear. lehman bther's collapse triggered a globalarket meltdownnd ushered in unpredented government intervention in the economy. yet year later, not a single w has been passed to help prevt another crisis. noted onomist henry kaufman believes wall street is stil broken. yes, in a broader sense it broken. because, generly speaking, finaial institutions are not rely lending or investing at risk.

>> reporter: the b concern is thatystemic risk still exists. thers still no watchdog making sure a single firm can't tple the system. e obama administration wants the federal reserve to te on that role. some in congresshink that responsibility should beiven to a councilf regulators. but kaufman says what we rlly need is an iernational supervory body. >> t members of various key vernments should be on anoth supervisory bod that looks at risk taking in the glol sense among major financial institutions. and then, age to uniformed supervision, regulatio and constraints. >> reporter: and there's sti the probm of how to prevent another large scale ba failure like lehn. prident obama has proposed creating a new resolutn authority to wind wn failing firms an orderly manner. mike oxley, a former conessman and co-author of the sarbanes/oxley act, likes th idea. >> if inact entities are too

big to fail and i ink we have to recognize at let under the current siation there are some th are, how do we resolve those issu when they get in troubl and so, i think some of thos- all of those-- think will ultimately be in legislaon passedy congress and i'm all for it. >>eporter: excessive risk taking by nks exacerbated the financial crisis. that's w many people, including instment strategist nick sargen, think t governme should put stricter limits on leverage. >> the banks and iestment banks wi not like it. but, we can't allow e system to takus to the brink where we were. so, i do believe that, i general, the rulesill have to have ls leverage than in the past. >> reporter: "lessoney than in the st" is something many on ll street expect to see in their paychecks. investors and taxpers are calling for new rerictions on compsation. but some wld like to see financial firms be giv a chance to make chaes on their own. if the companies don't

address the compensation iss soon tthe satisfaction of the areholders, not the press, n the coress- but to the areholders. then they're goi to get more govement intervention. >> reporter: but even suppters of financial reforms war there will never be a surefire wayo avt another major banking meltdown. >> i don't think y can precde crises, i think that what we cannotllow is have a crisis of the order d maitude of the last one. is one was beyond anything w ever expected. >> reporter: with the onyear anniversary lehman's bankruptcy, fing wall street isetting a lot of attention. but mostxperts think financial reform will take a backst to healthcare rorm. ashe markets continue to stabilize, experts say tre's less urgency for change. erika ller, "nightly business report", new york. >> paul: retl sales got a boosin august thanks to back to school shpers and the government's cash r clunkers progra the commerce deparent says retail sales jumped mo than

2.5% in august. department storeand clothing retailerboth saw 2% gains. ev if you factor out auto sales, it was still a od month with the rest of the retl sector up 1%. that's more thanouble what economts expected. wa street opened narrowly mixed ashose strong retail mbers were offset by a bigge than expected jump in ination at the whosale level. august producer pres rose 1.7%. then numous stock upgrades by analysts gave the market firm undertone th the dow up 40 ints at mid-day. the ray gathered momentum as those positive bernanke mments made the rnds. and stoc ended near the day's highs.

>> susie: morenalysis now on the anniversy of the lehman llapse and how that event changed wall street. joining us nowobert albertson, chiestrategist at saler o'neill. hi, robert. >> hi. >> susie. >> susie: i don't know you saw the ver of the economist this week, but says, wall street one year on, what's changed. howould you answer that question? >> wl, it's anged quite a lot. a lot of the logical reforms are alrey falling in place, suchas compensatn head more towds long-term in shares. levege is down a t. i don't ce what anyone says.

there are adjuncts to wall street that are in the been addresd by are still problematic, that would include the rating agencies and the mortgage origitors, both of which ne to be broughunder the rulatory tent. but in the end, wal street isn'broken, it sure is ngerouslyiminished. and we have to remember wall street is a critical component of credit creation, much bigger be th banking system, in fact. >> susie: as you know, president obama, congress, the public, theydon't want to go rough another one of the financial crises and they want to do something toprevent at. so there calling for new rule new regulations. can wall street and by that i mean the big financial firms, banks an investment banks me up with a new structure, a new safe grd before congress ds? >> well, i n't know. i don't nt to go through it again either, no one does. but e truth is you have to step back an understand what used it in the first place, where did the disease begin

and don't want to diminis the role of wall street the d, but thi was something thatook 20 years of declining savingnd ten years of annflux of unprecedented foreign liquidity. we had a tsami, no one seemedo see it. i think thetreet now recognizes it. i think the res will change. i don't understandeally why we want to completelyrevamp the regulatory systemnd the rule we need to add se rules, but the rules weren the problem. we dn't center strong rulers, people who ecuted properly. and the poster child for that, in a different way but very on russ tall, was madoff. that was highly ansparent for long time, that came under the auspices of finnra, whicmost peep may n know, and the e. c., and the are internal regulatory structure line of reporting execution issues, there's no law that can be passed tt is

going to help usere. it's got to be betr regulation >> susie: what is the lution here? because american taxpayers don't wa to be put i a position again tt they're backed up againsthe wall sang look you've got to bail t, you fill in the blank, whetr it's financial firms, auto companiesr whatever. you're gng to have to bail em out because the whole financial system is at risk. what's the solution? >> well, solution number one is to get trust restoredn the system so it functions betwn as opposed to contactly berating it as th imary cause of everythin bad. solution number two would require recognition tt the support fo thisystem is not taxpayers n. the case ofthe banks, all the money given to the banks basically being returnedut of profit. there are a lot more banks that are maller banks that will hav problems. ose failure are ultimately going to be paid for the banking dustry so, the taxpayer is not on the hook in the fincial system in the

way a lot of people thi. and the thirdhing is we need to start addressing t broader pblems inste of being obsessed with the financial system as the prary issue. but right now everyone believes thapresident obama, you know, refers to it as quk kills andbloated bonuses. don't want to turn into quick fixes d bloated governnt. and i think there are all the obvis things that need to done are on thetable, including the compension issu leverage, all of that iseing accomished. and that should do it. the al issue is we need to be able the future tobe le to he the tsunamis better and to have the con rix and the authority to act on them and to slow them down and stop them. >> susie: at's a hard thg to d but want to go bk to something el president obama said yesterday he saithat heoesn't want the old ys that led to this crisis cant stand, he said, the old ws. do you think that wall stree

ce again the biginancial rms, are still ck to their old ys, are they still going out there doing risky ventures? or have they scaled back? >> tre's a balance. you have to take risk in order to generate any kind of growth. wall street is not back to its old ways, there'sno evidence of that whatsoever. what some people a cfused abt is that some of t firms remaining todayre highly profitable agai they don't recogzehat their leverage has bee cut in half and part the reason th're profitable is a huge amount ofapacity has bee taken out of wall street. that's n an indication of going back to the old ways at al most of th senior wall street c.e.o.s have alrdy addresse the compeation issue, square, honestly. and i disagreeith the prident's statement. >> susie: all ght unfortunately we can't continue t discussion, we'll have to ave it tre. you're going to have t come back. i would enjoy that. >> susie: thank you much.

>> susiemy guest tonight: robert albertson, chief strategist at sandler neill. >> paul: now, let's take a lk at some stocksn the news tonigh

and ose are the stocks in the news tonight, susie. >> susie: paul, an alarming w projection on cial security toght. the congressnal budget office now estimates the ogram's cash flowill be $11-billion in the

red next year and stay ithe red the yearfter that. at $10-billion number does n include interestaid on governmentonds in the trust fund. ill, it now looks like socia security is runng into financial chlenges far sooner than previously predicted. from sooner thanredicted to long than expected: it's takina lot longer for jobless americans to get bacto work these day last monthhe average length of unemployment was six month e labor department says that doublehat it was a year ago. and a growing nuer of americans arfacing even longer furloughs. as diane etabrook reports those workers are facing a double dilemmafinding jobs. and possib losing their health care benefits. >> reporter:here are 102 plans, so this tes a lot of due ligence. barbartomczak is navigating through a myriad ohealth care planon the internet. >> so, for emple at $201, i'm going to have a deductible o $5,000, a co-insance of 30%.

>> reporter: the jless human resourcemanager needs to buy health insance because the benefitshe's been getting through cobra end in a few weeks. while some options a affordable, tomczak ys they aren't as mprehensive as the $400 a month plan she's en getting througher previous empler. >> it appears thator single corage if i continue under the same plan options m going to be playing between $425 and 00 a month. >> reporter:s that cost prohitive for somebody like you? yes, at this time it is. >> reporter: as u.s. business continue to shed jobs, many displaced workers are findin their furloughstretching beyond a year, putng their health care corage at risk. cobra lets furloughed worker continue company-sponsor plans at the worker'expense, but onlyor 18 months. going without covera for a coup of months really shouldn't hurt somne's chances of getting health inrance through a neemployer, but ing uninsured beyond two months can cse problems. kan frost heads up the health

careutsourcing practice for benefits csultant hewitt asciates. e says employers can deny corage for up to a year if a new ployee has a pre-existing medical condition. >> if you had cancer they e undoubtedly gointo exclude that cancer covera for that one ye period. once you pass thateriod then you coulget treatment for unr the plan for that coverage. >> reporter: anthonyo sasso is a heal policy professor at the university of illinoishicago. he fearsf unemployment keeps risingmore workers will choose other necessities overealth insurance. >> you skip enoughortgage paymentsou lose the roof over your head. you can t cheaper food, but ultitely something has to give and health insurce could be one those things. >> reporter: lo sao says insured consumers ultimately drive up health careosts for everyone barbara tomczak knows th and says she'll get coverage regardless of the st.

>> you never know what is ing to hapn to you and if you're thout insurance you could lo everythi that you've worked for. >> reporter: dianeastabrook "night business report" palatine illinois. >> paul:omorrow, our street critique guest is paul larn, equities strategist aneditor of morningstar'stock invesr newsletter. >> sus: mcgraw-hill says it's keeping its options open wheit comes to the possible salef "businessweek"agazine. the compy has been meeting with would-be buyers since jy. but nothing has en decided yet. inrested buyers reportedly incle bloomberg, fast company and private equi firms warburg pincusplatinum equity, open gate capitalnd zelnick media. bids for the magazine re due today. >> paul: blockbuster pla to close nearly 1,000 vid stores or 20% oits current locations as it tries to reverse lses. thcuts were outlined today in filing with the securities a exchange commissn. blockbuster now plans to a morevd-rental kiosks going fr 500 to 10,000.

the video-rental cin is struggling with coetition from mailrder rivals like netflix. >> susie: here's a look at what's happening torrow. thconsumer price index for august is released witaugust industrialroduction. so tomorrow the weekly repor

on crude oil andasoline inventors. tonight's commentator sayshe panic's gone b little has chand. he'sllan sloan senior editor- at-large at fortune. >> reporr: we news media mbers love anniversaries. that's why y've heard so much about lehm brothers lately becae today marks a year since lehman filed for banuptcy. t let's do something different. instead of visitg the past and taing out what happened, let's visit the future a talk about what will happen as th result of thlehman collapse at almost destroyed the financial world. i'd like to be able tell you that by next september 15th, well have new ruleto avoid a lehmane-run. unfortunely, that wouldn't be true. e financial panic of a year ago is almost gone so is e pressure to change the rules that let lehman get soig witho little capital, get into such trouble, and fail so disastrously.

the trsury wants rules to force giant firms to add eugh capitato make big failures less liky and to get powers to let it close down troubl giants in an ordly way. but washington iconsumed with heth care these days. unless we ha another enormous failure, heaven foid, i can't see ngress adopting serious changes to avoid lehmatwo. meanwhile, of cose, people keep ling their jobs and their houses. but wall street kes doing what does best, looking out for its own interests. after ery disaster from third world ans to junk bonds to subprime mortgages to coercial real estate, the street sa, we've learned our lessonthings will be dierent next time. buthey never are. i'm allan sloan. that's "nightly business rept" for tuesday, stember 15. i'm sue gharib goodnigheveryone. and od night to you paul. goodnight susie. >> paul: i'm paul kangas wisng all of you theest of good buys

"night business report" is made possible by: is program was made possible by contributions to yo pbs ation from viewers like you. thank you. captioning snsored by wpbt captioned by media access gup at wgbh acss.wgbh.org