captioning sponsed by wpbt >> paul: senate fince chairman max baucusnveils his plan to fix the health care system. the co: $856 billion. e white house calls it a building block, but reblicans pan the mease saying it would put neburdens on famils and small businesses. susie: a big positive for american consumers tonig: ination is under control as consum prices edged up only slhtly last month. we look at why low inflations keto the recovery. >> paul: paularson, equities sttegist at morningstar joins us for tonight "street critue." he says when it comes totocks ere aren't as many bargains today as the were a couple of monthsgo, but he's still a buyer. >> we're goi to trace back the

major thads that led to the collapse of the amican financial system, at brought us to e precipice. >> susie: meethe man investating the whys behind the financial crisis. we talwith phil angelides as we continuour special series "lessons from lean." >> paul: i'm paul kangas. >> susieand i'm susie gharib. this i"nightly business report" for wednesday, septeer 16. "nightly business report" is made possib by: this program was me possible by contributions to your pbs ation from viewers like you. thank you.

>> sus: good evening everyone. finally it'sere: the "gang of six" unveiletoday its long- awaited health care ll. this $856 billion prosal from three democrats and thre republicans onhe senate finance committee calls r insurance coverageor all americans. it ds not include a public health insurance optn. t despite the group effort a months of negotiations, e bill has no rublican support. stephanie dh reports. reporter: senator baucus called his heah care reform plan a good beginnin the propos would ruire most individus to buy health insunce or pay a fine. insurers would not bable to deny or canceloverage for sick people. >> is a common sense bill that can pass theenate. >> repter: the proposal has subsidies folower income americans to pay for covage. while there no mandate on employers to pvide coverage, mpanies with more than 50

works fined up to $400 per employee if they don't provi surance. baucus says it's just onof the compromises in his plan. >> on the one hande want employers... we want emplors to keep providing coverage f employee on the other hand, it's... w t to make sure that insuranc is not too onerous for eloyees and the emoyer does not too ealy drop coverage. >> reporter: to help pay f the planthere would be a 35% tax on firms offering high cost health insurance. it would ao raise $93 billion from hlth-care related businees, including $40 billion from the medical dice indury. that indtry is fighting the tax. jeffrey binder, the e.o. of biomet, whicspecializes in orthoped devices says the tax is a jobiller. >> we expect that is particular fee wouldipe out abt 20% of all the profitabilitin the medical devise industry and there's

absolutelyo way that that won't effect employment. >> reporter: goldman sachs licy analyst alec phillips says making changeto the plan is triy, as lawmakers each have theirwn ideas. >> those different memrs of congress a want different thgs and so far they haven't found the recipe for aill that works from a policy perspeive and get 60 votes in the sena. >> repter: the baucus plan doesn't include a -called public optn, instead it proposes non-profico-ops to keep thensurance companies in check. some demrats say the co-ops don't go f enough, and the congressiol budget office today said they ll do very little to save money. stephanie dhue, "nigly business repor" washington. >> paul: good newsor the nation's weak economand consumers. retail pris barely budged in august suggestininflation remains in check. the consumer pricendex ticked up just ur-tenths of a percent la month. but when you take out th volale food and energy groups, re prices rose just one-tent of a percent. scotgurvey looks at y

keeping inflatiotame is good for the economy anthe fed. reporter: the fed sets netary policy to meet three gos: maximize employment, abilize prices, and moderate long term interestates. it is often impossible to doll three athe same time, which is why wall street iselieved to find that prices are stae and inflation not on the nr term horizon. economist dean mi of barclays catal says that good news means it's "stea as she goes" for the fed. >> right now the fed's t priority is, is trying to wer the ra of unemployment. tryi to prevent deflationary pressures from developin we thinkhey will be successful on both frts. evtually, the fed will start to become more concern about inflation. but ght now the fed is really focused on fostering gwth. >> rorter: if you're an investor, low interest rat are good because they redu the cost of trading. if you're in the mket for a home, w interest rates mean lower mortga costs, and other stuff you buy on cret.

but for most of us, healy economic growth mes companies adding to payrolls a that has yet to occur. still, eveon that front, economist jonathan bile of credit suisse, saythere are signthe low inflation-- low interest re environment is having a positive fect. >> we've sn a stabilization in labor inco in the last two employme reports. prior to tha you had ten straight declines this labor income measure which comnes private jobs a hours and wages. so tre's more than just the jobs and wag to talk about. anthe hours are a powerful foe and what we're seeing right now ishat we're seeing companies increase tir hours bunot yet increase the... the head count. >> reporter:t its last meeting, the fed's open mark committee sa it expects to ld interest rates at exceptionally low levelsor an exteed period of time. th week's reports on inflation imply it will reat that message when it mes next week. scott gurvey, "nigly business repo," new york.

>> susie: new york's attney general suoenaed five members of bank of america's board o directors today, parof a probe into the bank's rchase of rrill lynch. at issue: whether b. of lied to shaholders about bonuses paid to merrilexecs, just before the two companies mged. the five dirtors subpoenaed we reportedly on the audit commite at the time of the merrill de. no commentrom bank of america. on monday, a federal judge rejected the bank's 3 million settlement with the s.e.c. or the matter and ordered a tri. >> paul: it was upup and away from the sta on wall street day as investors welcomed th tame news on inftion. a stroer than expected 8/10 percenrise in august industrial production gave stocks additional rength. so by no, the dow posted a 77 int gain. the rge fed upon itself thanks tohort covering and buyers fearful of missing morgains. and with that, stos ended at their best levels ofhe year.

the dow jones gained 1080 at 9791.71. the nasdaq jumped 30.51 to 2133.15. the p 500 gained 16.13 to 1068.76. in theond market, the 10 year note fell 8/32 to 108/32 putting the yid at 3.47%. >> susie: it is not an anniversary to celebte. one year agooday, the government stepped ito bail out a.i.g. the insurance gianwas on the verge collapse after lehman brotrs went bankrupt. congss appointed a financial isis inquiry commission to find out what happed. as we contin our special

series, "lessonsrom lehman," darren gersh spo with phil angelides,he man leading that commission. darr began by asking where angelides planto start examining e implosion that brought down wall stre. thesto start the inquy. have you got a leading cause you're goi to start loong ? >> well, we're going look at some oious starters. we're gointo loo at, for example, the rules of the credit rating agencies. in thisrocess. we're going to look at what happenedn the mortgage market om the creation of these exotic packageso the fraud

that hpened at theround vel. we're gog to look at what regulators did o did not do as our nancial system transformednd its risks grew exponentlly. but the one ing i want to say is i thk we have a very important role her because everyone has tir theor about what happened everyone has their ideologil proach to what's the best way to fix this system. buwhat the american financial system i like is a patient who hasad a nea death experience, a massive heartattack. and what we are about is undertaking the diagnosis, the ll medicalxam that hopelly will give the public policy makers andeople in th mketplace aood historical accounting based on facts of what led to the meltdown. >> rorter: through are you too lay in that? beuse a lot of people already are their diagnis. they say look it's ry clear, fannie mae, freddie mac,the government created this probleovernment regulation made it worse.

the other sideeople y it'she market, these gs were out of control, they clearly need me regulation. sounds like people already kn why the patientalmost e. >> wel the proponent have given ideology are pting eir they'reious out there. but here'shat i think the country need. aftethis period of excess, the magnitude of what's happened her has, will require thate do serious self examination. there's a lo of peopl who want to usehis for the ideological purposes, there's a lot of peopl who want to blow by what happed and go back to at they were dng. it will serve thecountry well if we have a though unbiased historical accounting. so i don'tthink wre too late at all. >> reporter: youe charged by congressith looking at pk firms that failed. how deeply willou look at the decisions that mr. bernke made,the fear chairman, dr. geithner de who is now the treasury secretary, look at their decisis, because people i've talked to say wre not clear exactly what happenewith bear stearns and at the

options re discussed or were on the table. how eply will you loo at their decision ming? >> we will do a deep dive re. we are not going to conduct a star chamber preeding, this n't going to be a circstance us,. the goal is to do the dee dive, the fact finding, and including at the tail end of this implosion, whe the financial system ion i knees, what were the actions taken in that crews bell of crisis. -- crucible of csis. people are asked are we going to embarrass people, that's not our puose. but facts a when they a, facts rn out to be embarrassing, there was upid behavior or criminal behavior, at will come out in the course of th. but this selfxamination, thisccountability that's this responsility is a fundamental step to reforing the trust of the american people and our finanal systems. >> rorter: missing in this seems to be a discussionf the iividuals iolved. when i tal to peoplen wall reet, some of them say, look,

it was venality, people in positions of sponsibility whwere acting against the intest of sharehders and were acting to line their own pockets. are yogoing to call indivials up, are you going to look at the cpensation ructures, are you going to na names in that sense? >> as i said, i don't think we woulserve our mission well if a we did was name names. >> will it be partf it? >> it ha to be par of it. th isn't a the ret cal exercise. aig, where we' now put as taxpayers more than a hdred billion into tha instituti, we gotta look at what that institutio did,nd what individualwithin that individuals thin that institution d. so this isn't gng to be a story of they. it will be story of hard fact, chronolog, history. some of it i thi will be very griing. >> rorter: phil angelides ank you for your time. >> thank you

>>usie: bud is back on the big board. thiconic american beer made its return here at the new yk stock exchange, st 10 months after ing bought by belgium's inbev in a $52illion deal. erican depository receipts of ab inbev began tradi today under the ticker symbol "b." the world's largest ewer by revenuestressed today's move is a seconda listing. and paul, while itecently annoced plans for an office in new york cy, the company says itheadquarters will remain in belgium. >>aul: susie, bud shares rose 70 cents to $46.95 let's see what else was bring on wall street as we take look

at our stocks in the news tonight.

>>aul: tonight's "street critique" est thinks the markets ve priced in a "v" shaped rovery. he's paularson, equities rategist at morningstar and editorf "morningstar stock investor."

paul, welcome back tn.b.r. >> thanks for havi me again. >> pau if the markets are looking for v recovery, at happens if that lette changes? >> well, if the letter cnges to something like a w, ande get an economy that doesn't recover immediately an sort of recovers in fits and starts i think tt stocks lo like they're mildly overvalued today. itoes indeed look le the maet is expecting the v-shaped recovery, given the prices tt are out there at the ment. >> paul: well, the market has come aong way in a short time. what do you think of the current fundamenta? >> well, right now w are indeed recovering, but whether or not w are going to get v or not, i think is really the 64,000 dolla questionight now. things look etty good right now, bu are they going to be staine i'm not so sure. >> paul: you likehat morningtar causes wide moat

stocks grif us so recmendations wide moat stocks. >> sure. one compy with a wide econic moathat i like is apollo group. is is a compa that the university o phoenix, a for-profit education cpany, exceptiolly high returnson invest capital, a lot of free cash flow and right n it's acompany that is benefiting from theecession, wi high umployment and under ployment there are a lot of adults who are abouted in going back to schoo and grading theirkis. thiss a company that's acally growing while the rest of e economy is contractin >> paul: we just have a mite. how aboutanother choice? >> sure. another pun, paychex, a payrollrocessing company, a company very entrench with companies around the country. also as employment rebounce and interest rat rebound, think ink company is goin

to get a pretty strg tail win in terms earning >> paul: okay. yx is the symbo and e more, quickly. >> sure, johnson and johnson i think ght now that the market is painting the entire health care stor with a very broa brush. but i think that volumes are going go up if we get mor people hed and this one is a top flight cpany that's tradinon the cheap in our view. >> paul: okay. j and j on the big board. pa, do you own any of the stocksentioned or have other disclosure to make? >> aolutely, the cook is eating the cooki here, i own all three of the stocks i mentioned. >> paul: okay, vergood. i want to thank you for sharg your views with us once again. >> thank you. >> paul: my guest, pl larson of morningst. >> susie: morrow, depression versus recession. minyanville's kevin depew oks at both sideof what's happening th the economy. >> susie: k.b. home is sing a turnaroundn the housing sector. today, the cpany announced plans to rese construction in e suburbs of washington d.c.

after a two-year hiatu and, t firm will re-start sales in five communits. the nation's fifth large home buder plans to build smaller, mo affordable units to compete with lower-priced foreclosur. >> paul: first te home buyers have been caing in on those low-priced foreclosures and hefty tax crit. now the present's economic team is studyinghether to exnd that credit. it's worth up $8,000 dollars on the purchase of a first he, d is set to expire november 30. the measurwas part of the present's massive stimulus program.

>> susie: here's a looat what's hapning tomorrow. weekly jobless claims and aust housing startsre released. in the money fe tonight, the safety of safe haven investments. here's jas zweig, personal finance columnist at "the wa street journal." >> could the pursuit of safe t investors in danger? in august alone, taxablend municil bond funds took in $45 billion in n investments, the grtest inflow in at least a most of the investors pourin money into bond funds e

probablyn hot pursuit of safety. bonds are traditionay the safe haven for investors who cann wistand the rough ride on the stormy seas of thetock market. but ny of those who are baeling into bond funds today may not fully understand wha could go wrong tomorro u.s. treasury bonds e consideredhe worlds safest invement because almost no one inks the american government would er default on its debt. but at very low risk does not mean there is no risk in vernment bonds. after this latt bond-buying nge, there's very little roo left f error. the ten-year u.s. easury bond yields only about 4% in interest income. that'so higher than the long- term pace of inflati in the u.s. and well bew the average historal interest rate. when rates rise-- and trt me, at some point theyurely will-- the maet value of existing bonds willall. many bond nds could easily lose 10% or re. if you want inco with safety, consider a shorterm bond index

fund, which should provide elds higher than cash at low risk than longer-tm bonds. just don't fl yourself into thinking thauncle sam guarantees immunity for investors. m jason zweig. >> susie: that'snightly businesseport" for wednesday, september 16. i'm susie gharib. goodnight everyo, and good night you, paul. >> paul: goodnight, susie. i'm paul kangas wishg all of you the st of good buys. "nightly business rert" is made psible by:

this program was made ssible byontributions to your pbs statiofrom viewers like you. thank you. ptioning sponsored by wpbt captioned by media accessroup at wgbh cess.wgbh.org