>> paul: $100 billn-- that's wh regulators say bank failures will costver the next few ars. but the headf the fdic, sheila bair, has come up with a solution. she wants banks to prepay $45 billion in iurance premiums. >> susie: another kemeasure of the housinmarket is showing improvement with pces marking monthly gains. what does it mean for th housing recovery we'll get some answers from noted economist. >> the dand will go wild in twto three years. so holon to your horses, everybod real estate is coming up, there's nooubt about it.

>> paul: this south florida homebuilder thinks hpy days will soobe here again. he'll ll you why. >> susie: then, 's all about revenue en it comes to eaings. while cost cuts lped companies ke their numbers during the recession, wall stre's now lookinfor revenue growth. >> pau i'm paul kangas. >> susie: and i'm susie ghar. this i"nightly business report" for tuesday, septemb 29. "nightly business rert" is made ssible by: this programs made possible by contributions to yourbs station from vwers like you. thank u. caioning sponsored by wpbt

>> sie: good evening, everyone. prepay us $45 billio that was t message today from the government agencthat insures e nation's bank deposits, the federal deposi insurance corporion. the fdic wantsember banks to pay their deposit insuranc priums for the next three years ahd of schedule. as stephanie dhue explains, e agency's depit insurance fund is scramblinto come up with ca to cope with a string of bank failures. >> repter: as of tomorrow, the fdic's deposit iurance fund will be official in the red. the agency' has shelled ou%25 billion to p for 95 bank failures just sie january. so today, itboard took an unusl step, asking banks to pay $45 billioin fees up front. it's money thawould have paid over three years. fdic chairman sheila bair sa the industry should suort the fund. >> i dthink that the american

people wld prefer to see an end to policies th look to the federal balance eet as a remedy tevery problem. that is pecially true of this industryhat has the resources deal with these problems. >> reporter: the banking industry likeshe prepayment id over other options, like a special fee. the americanankers sociation's john chessen says today's moves a wash on bank lance sheets. >> it's going to have less impactn the banks and less impact on their communitie reporter: and banking consultant bert ely ys the prepayments should make it easier for banks to rais capital. it takes a lot of uncertain out of what bank earngs are going to be going forward th regard to deposit surance assessmes. >> reporter: but there is a t of uncertainty in the instry-- more than 400 banks e now on e fdic's troubled list, and the agency expts to spend $100 billion on bank failuresn the next few yrs. analyst an laperriere thinks that's a lowball number. >> think the fdic is going to increase their estimated lses, and this short-term meure of having the banksay their fees up front probably not going

to hold us over through th cyclof bank failures. and i ink, ultimately, the fdic igoing to have to go to treasury a ask for a loan. >> reporte while the agency does have a ha trillion dollar line of crit at the treasury, bair says e doesn't think e'll need it. and in any case, she says, americs bank deposits are 100% safe, no matter what. stephanie dhue"nightly business report," shington. >> paul: a med picture on the economy today,ith consumer nfidence tumbling despite a continuingebound in home pres. ths&p case shiller home price index rose jusover 1.5% from june to july, its thirstraight month-to-month rise. still, yr over year, prices are down3%. but as home pres rose, consumeronfidence fell. the conference board sayits seember reading dipped to 53.1 this month on contued worries abouunemployment. that's down from august, and lower an expected. >> susie: joing us with more analysis about the ecomy, bruce kasman, chief economisat

j.p. morgan. hi, uce. >> hi susie. >> sie: we continue to get conflicting data about e onomy, and people want to know, is t economy nooing better or is it still in trouble? >> i think it's pretty clear that the economyas begun to grow. it lookss to like we' have increased at a 3 to 4% pace thisuarter. that's aretty strong pace. coming off adeep recession. but i think we have to realize that we're tting growth off a very narrow base, we're getting some hp from mafacturers having cut back too far, similar to buiers and we have me incentives the auto a housing iustry. and we're not yet on a fully sustainable growthace. in addition we're coming off of such big lows in terms of the cession, terms of h high unemployment is, how serious credit problemare going to b that we're goi continue to have bad news here on a nber of fronts, eve than as we see theconomy growing. >> susie: l me pick un me of those points. the housg data, are home

prices doing better becae of ndamental improvementsr becae of those tax credits fr the government for first-time home buyers? there's probably a little of both. and there'srobably also an issue herehat there were less foreclosed homes sold i e spring, which is showing in the number. but do think we're getting close to abottom in home pric and we do think there is pnty of reason t think it's fundamentals are supporti stabilition in housing here. >> sus: how areamerican businesses doing, you've been reporting about increased mergerctivity, we see that e dow is getting cser to th 10,000 level. are these signs of real good news for companies, or is it just superficial? >> i think the real od news we've be seeing is in corporate. they've done an extremely good job maintaining costs thrgh the downturn. they're seei improvement in their export picture, foreign demand is picking up. and compans are now making profit evebefore the recession isver. what's important now is to see will thatrends leads not to

expaion but a puback from retrenchment that's what we'rlooking for on the labor market da and it's a prole we hope three, six months down the road will start to turn t ti towards job creation. >> susie:ruce, i nt to get your take on the fdic'sall day for bankso prepay their premiums. do youhink that cld put a squeeze on the banks so that it will be more diffilt for them to le to businesses and to consumers and keep the credit marke flowing? >> i think the fdi charges a modest impact. but i think we should put it in bader context. there's going to be price that will haveo be paidor continued cred losses for the dama that's been done to the onomy on the fiscal side. banks are going to p part of it, n only in ts but also in higrapital requireme. and think we are gng to have a credit mket that is gog to be affected byhis foa long time come. >>usie: how are y seeing -- everybody has beeworried over thipast year about moneflowing through the creditarkets. what kinof shape are the credit markets in rit now?

>> well, the credit markets are still fragile, ty're improved. and i think the drug on growth is substantially les there's also good news and bad in that with the levels of housing and activity consume durable demand s lowhe system didn't need to generate thatuch cred to get us to grow again. but the healing is slow, it's in the rht direction, but i uld not expect or characterize cdit markets as having come close t normalizing at thistage. >> susie: where do you stand on all this talk of a possibility of aouble dip in the recessionn the onomy, do you believein that? >> no, i don't think so. i think we're goi to gatr momeum here, because i think with the initi lift to growth we' going to get some very powerful and positive feedback loops working. we're seeg some oft ready in the provement taking place in the financial maets. thone which i thinks critical to sein the next few mont is what we just mentioned, businessepull away from retrenchment, not onlydoes that add torowth but it helps labor income. and graduated well, it's not going be a straight line,

confidence pic up and that lifts consum spending as wellas business spending. >> sus: confidence has a lot to with wt's going on in the jomarket. we get themployment report on friday. is anythingoing to come out of that employment port that will boost confidence? >> wl, i think we should be seeing less cutbacks on the part of businesses. if wre rightt's notn less job cuts, but it's also a continued stabilizatioin the work week, which is helpful for income. unfortunatelwe do think unemplment is continuing to rise. we're looking f a 9.8% unemoyment raton friday. >> sus: okay, that's not od. but thank you for cing on the program and giving us your views on the economy. >> thank you. susie: my guest, bruce kasman, chiefconomist at j. p.organ. >> pl: on wall street, that rise in july home prices prompted small openi gains, but stks didn't close that way. e market slumped after that unexpect drop in september consumer confidee was reported. by1:00 a.m., the dow was off 42 pointwith the nasdaq down 11 points.

stocks remained lock in lower ground to the close as iestors worried the decline in csumer confidence might be signalin troublin the economic covery. the major erages all ended wer. the dow industrial average closed down 47.16 at 9,7.20. e nasdaq dropped 6.70 to 2,124.04. the s&p 500 lost 2.37 to 1,060.61. in t bond market, the ten-year note fel4/32 to 102 25/32, tting the yield at 3.29%. >> susie: a majosetback for supporters of a blic option for health care reform. today, the sate finance committee shot down two

proposals for government- sponsored plans. the committee is in its seco we of considering amendments to health care reform bill, and thpublic option was arguab the most controversial idea to hit the cutting room floor. committee chairman maxaucus was one of the democratso vote no. not get the 60 votes nded to pass the sate. >> my first b is to get this bill aoss the finish line. there's a lot this bill that will reform the insunce market, there is aot in this bill that will control cts, and there is a lot ithis bill at will expand coverage to millions of american those thingsave to be my prrity. >> sus: but some democrats are vowing to keep the fight f a public option ive. senator charles schumer, wse amendmenwas rejected, told the finance committehe won't give up until theroposal passes the senate. >> paul: a watchdofor the securities and exchae commission hopes the agey can learn a less from the mess it

made of the bernarmadoff ponzi sche. so a new report out day has so advice for investigators. among the ideas: new ways to coect complaints and tips, and follow up onhem. that's something that dn't happen in the maff case. the agency's enforcement division is ready adopting some of those ideas, putng teams into place to he identify fraud. >> sie: it's getting to be that time of year again- earngs season. usually, when we reporon corporate eaings, we look at homuch money firms are expected to make. but thisime around, we have a

fferent take due to the recession. suzanne pratt explains, the rnings story now is straight out of hollywood. >> show me the money! showe the money! reporter: for corporate america, thiearnings season is alabout showing investors the money. after cost-cutti their way througthe last few quarters, experts say mpanies need to comehrough with at least some revenue growth. thson reuters' ashwani kaul says, even thoh the economy is improving, it y be too early for any real renue recovery. >> i thinkarnings will outpform. you knowwhether or not we're going to see that top ne growth tt the street is loing for is still up in the air. t, definitely, there's going to be bottom line improvemen. i think eaings will outperform analysts' exctations, but i think everyone is iting for that t line number. reporter: in the last few quarters, companies have don everything frotrimming headcount to slashg r&d to control sts. so, me firms have been able to chop-chop their way to profitability.

cording to thomson reuters, it's typical forbout 6% of s&p 500 names to show profits growing while revenue is shrinking. this year, however, 16of the s&p 500 have maned to trim so much fat thaearnings grow without the he of sales. despite that nifty accomplishment, perts say coorate america is running out of things to cut. invests are anxious to see some action on the revue side this reporting sean. miller tak strategist peter boockvar predicts only se companies can do i >> if you are exporter selling goods overseas, yo probably got aift because other erseas markets definitely improved. t the u.s.-centric businesse those busisses that are dependent the u.s. consumer, revenue growth is ch more difficulto come by. s0, i think it'soing to be a very bifurted market. >> rorter: earnings will drive stock prices in the cong weeks, b experts say only those companies that rlly show

inveors the money will be rewarded in the stock maet. suzanne pratt, "nightly busiss report," n york. $"$"

susie: today's report on improving home prices th we told youbout is welcome news to the nation's ho builders, particularly tse in foreclosure ravageareas like florid je yastine recently visited one of the natios largest private homeilders, g.l. homes. g.l.'s founder gavus an insider's ok at how the firm survived the housing bust, a whate's going through now.

>> jeff: this is a rarsight these da-- a subdivision being turn from paper plans into reality: new roads... new sidewalks... new homes. and it's where y're likely to run to itchko ezratti, founder and c.e.o. of ivately held g.l.omes. >> we havebviously survived this oiously disastrous cession for our building industry. >> jf: ezratti watched revenues at the homebuildedrop by5% last year, and the number of homes that went to closg fell by 40%. but don't feel sorry f him-- g.l. has continuedo build and ow through the worst real- tate downturn in a generatio >> we ha three segments that we build: fordable for family, luxury for family, a active adul the active adu people buy cash they did not geturt so much by theconomy, and prices are

down, so peoe are buying. >> jeff: we all ow the reasons toay "come on!" afr all, hundreds of billions have been lost in e real estate market, the stockarket. 401(k)s we turned into 201(k)s. o's buying? ezratti says many mile-class workers were prid out of his fami-oriented subdivisions. now,hose with secure jobs, like government position are taking advantage of the lor prices. and this subdivion, aimed at active retirees,old out when the first phase was fered for sale elier this year. >> many people who retired d not invest witmadoff, thank god, did n invest in exotic instruments. they bought t-bills, mi bonds, fixed income. anthose people are still here and they're cong. in this ar, we're selling 20, 30 p month, and in the winter, we'lsell even more. >> jeff: of course the big question everyone wants answed now is "has e real estate maet bottomed?" ezratti says he can't sure, but says his company has sold 750 homes already thisear, a

good figure for the compan and instead cutting prices, the company has now starte raising prices on mes in some devepments. thisouse was priced at $2,000 at the start of the year; now, it's pric at 75,000. we used tprice once every uple of months. today, we pricdaily. >> jeff: ezratti is an optist. but puts his faith in numbers. few new homes are being but these days but he says thatays the groundwork f a bigger surge, when the u.s. economreturns to a fullecovery. >> basically, will reverse itlf. the supply/demd issue will be even harde meaning the demand will go wild in twto three years. so holon to your horses everybody, real este is coming back, thers no doubt about it. >> jeff: a sentimentany americans may not yet belie, but desperately hope will happen. jeff yastine, "nigly business port," boynton beach, florid >>aul: tomorrow marks the end of the thirduarter on wall stet. s&p's sam stovall joins us f a

reew and a preview of what's next. >>usie: at&t is working on a big infrastrture investment as it tries to keep up with consumer demand. e telecom giant will invest to $18 billion this yearn its wiless and broadband networks. that investmenincludes adding many as 3,000 high-tech workers over the next three months. it's all part of at's plan to bring whever content you like on telision or the desktop to your cell phone. >> paul: the first vaccines r thh1n1 virus were sent to the u.s.overnment today. sanofi aventis says the shment was sent out this mornin ahead of schedul the firm under contract to prove about 75 million doses of swine flu vaccine in th united stes. anotr 175 million doses will come froastra zeneca, glaxo smithkline, annovartis. @ñ@ñ@ñ@ñ@ñ@ñ@ñ@ñ@ñ@ñ@ñ@ñ@ñ@ñ@ñ@?

. >> susie: here a look at what's happening torrow: capitol hill, the house committee on oveight and govement reform looks at ways to reform credit ratgs agencies. alsothe final reading on second quarter g.d.p in tonht's "of mutual interest,"hy newer i't always better. here's john waggonermutual fund columnistt "u.s.a. today.

>> the leaveare turning, the geese are flyingouth, and visions of new mutual fundare dancinin fund companies' heads. mmm, youan almost smell investor money going up in smoke. the mutual fund industryffers nearly 800 funds, which invest in stocks, bondsfutures and money market securities. you can choose from abou5,000 ock funds alone. nertheless, the industry has been merrily creatg new funds. just lasfriday, for example, ishares launched threeew small-company exchangeraded funds. monday, exchange-traded fund that bets against thprice of oimade its debut. what's so bad out new funds? well, for one thing, ty have no record. with so many fds to choose from, whpick one that has no track record? for anher thing, they tend to be faddish, anthat's a bad thin fund companiesake their money by charging a fee ual to a percenta of the fund's assets. the gger the fund, the more money they make. not surprisingly, fu companies roll out new fundshat specialize in hot mark sects-- oil, for example-- or small-company stocks hot sectors get thmost money

from the investing public. but it takes a while to crte a new fund and get permissiofrom the government to sell ito the public. by the timthe fund makes its appearance, the homarket trend is srting to cool off. in the worst case, new fun just suck investors at the worst possible time. one exception the rule-- new funds th seasoned managers. evy once in a while, a great manager stris out on his own and starts new fund company. but most times, the bestse for a new fund proectus is to lighthe evening fire. >>aul: recapping today's rket action: stocks slip ter a disappointing repo on consumer confence. the dow dropped 47 pois and the nasd fell six points. to lea more about the stories in tonight'sroadcast, to watch our streaminvideo and to take part in r daily blog, go to "nightly business report" pbs.org. you can also email uat r@pbs.org. >>usie: that's "nightly business report" f tuesday, septemr 29. m susie gharib od night, everyone, and good night to you, paul >> paul: good nit, susie.

i'm paul kanga wishing all of you the st of good buys. "nightly business repo" is made posble by: this program wasade possible by contribions to your pbs statiofrom viewers like you. thank you. captioning snsored by wpbt captioned by media access gro at wgbh acce.wgbh.org

>> we are pbs. sturbed. i can't go back. hey. ye. [ laughs ]