captioning sponsored by wpbt >> this is n.b.r. >> tom: good evening. i'm tom hudson. citigroup c.e.o., vikram pandit, calls it quits. from pandit's legacy to challenges facing citi's new boss, the resignation is one of the biggest surprises on wall street this year. >> susie: i'm susie gharib. two tech titans report better- than-expected earnings-- intel and i.b.m.-- but both stocks fall in after-hours trading. we run down the numbers. >> tom: also, student loan servicers get an "f" from regulators complaining school loans are handled a lot like the subprime mortgage market. >> susie: that and more tonight on "n.b.r." >> tom: citigroup c.e.o. vikram pandit abruptly stepped down today in a management shakeup that stunned both investors and employees. he will be replaced by longtime

citi executive michael corbat. he most recently headed the bank's middle eastern and european division. pandit not only gave up his c.e.o. position, but he also quit the board of directors. the news comes in the heart of earnings season for financial firms and just one day after citi reported stronger than expected earnings. shares of citi climbed 1.6%, closing at their highest price since march. suzanne pratt takes a closer look at pandit's tumultuous tenure. >> reporter: the citi management shakeup had many people on wall street scratching their heads today about the timing. not only is the big bank finally regaining its footing, but there were no hints about the boardroom shuffle during vikram pandit's conference call yesterday on earnings. but 24 hours later, citi's new c.e.o. michael corbat and citi chairman michael o'neill hosted a call of their own and explained what happened.

so to be clear, today's changes do not reflect any desire to alter this strategic direction of city. >> o'neill and pandit have reportedly clashed on >> reporter: o'neill and pandit have reportedly clashed on theryfrveing om pandit's compensation to the bank'sin future. neil barofksy, the government's former special inspector for tarp and author of the book "bailout," said pandit's departure was overdue. >> i don't know whether he was forced out, encouraged to leave, or he found the current atmosphere to be too hostile to stay. but it doesn't surprise me, and there's nothing surprising and it probably was his time to go. and it probably was his time to go two, three or four years ago. >> reporter: pandit has been with citi since december 2007, inheriting a banking monster on the brink of failure. he steered it through the

financial crisis, repeatedly asking the government for bailout money. >> he had perception problems in washington really from the very beginning. and it's hard to think of anyone else who had a major regulator like sheila bair at the f.d.i.c. publicly calling for his ouster as all these bailouts were happening. >> reporter: pandit has spent the last few years selling off cumbersome assets, trying to shrink the bank and make it profitable again. while he has made some headway, citi's stock remains stuck. it has lost 90% of its value with pandit in the corner office. no doubt citi still has a major hangover from the financial crisis. the question is, will the cure be quicker with a new leader at the top? suzanne pratt, "n.b.r.," new york. >> susie: our next guest has been a harsh critic of citi and has been calling for the resignation vikram pandit for several years. he is chris whalen, investment banker at tangent capital partners, where he focuses on

financial services companies. >> so, what do you think of, chris, of this michael corbett. is he the right person to run city? what do you think? >> i think he is. during an analyst call, mr. o'neill said they had a process to select a new c.e.o., and this fellow is quite solid. i never met him, but he has great credentials. and i'm glad they have picked someone inside who is an operator. it has been more than 20 years, since we had a real operator, a banker, to run citi. >> sandy wild, the former chairman and builder, architect of citi, also gave an endorsement of the new c.e.o. today, calling him a great manager, a good leader, and you also know that sandy wild recently said that it is time to split up the big banks, that they've gotten

just too big. do you think there will be a change in the strategic plan? >> no, i don't think so. it is somewhat gratuitous for mr. wild on picking an excellent candidate because he didn't do that. both chuck prince and bicram pandit are holders. he has experience restructuring the bank, and i think it is a really positive development. >> on that conference call that we just reported by the citi's chairman, michael o'neill, who said there is no other shoe to drop. michael corbett said he is going to follow on the foundation that was set by bikram pandit. is it going to be business as usual or are they going to do things differently? >> they autos hav almost have to things differently because they sold smith barney ne, and they sold the insurance business. what they have left is the

core bank, and citi holdings, which are the assets they want to get rid of. that includes consumer and capital lending, and the commercial market, which is much smaller than it used to be, and there are other components in the mix. my hope is this new c.e.o. and its team focus on what they have, avoid a lot of the noise going forward, and maybe coax investors back into the stock. because it has been a very difficult story. >> what about the stock? it was up sharply today. would you buy citi at $30 a share? >> yes. >> is this is turnaround story? >> no. i think it is a speculative story for the simple reason it hasn't been rewarding investors for the risk. you need a big dividend, and a bit more stability in the stock before you can recommend it to retail investor, compared to jp

morgan. if you had to choose between the two, you would put them in morgan. >> do you have any disclosures to make, chris? do you own any of these bank stocks? >> no, i don't. i am a banker, but i don't have any personal holdings or any other management. >> great to have you on the show. chris whalen. >> he is author of "bull by the horns," about her front-row experience during the credit crash. she is back with us from our washington, d.c. bureau. sheila, you were and continue to be critical of pandit's leadership. >> over the past five years, the performance is down over 90%. the shareholders voted against his pay package last april. the board did what i think they needed to do. the performance was lacking. the shareholders have lost confidence. they needed to open a new chapter, and i think that is exactly what they did and they should be commended for doing that. >> i want to ask you about

the board of directors. citi has 12 members, and 10 have joined since the credit crisis. lots of experience on that board. are you surprised that pandit has lasted as long as he did. he did go through the entire credit crisis. >> right. well, he did. and i was, you know -- i don't know what the internal deliberations of the board were on that. mike o'neill -- i think he has been the new chairman for about six months, and i think he needed to -- even though he worked with bikram and mike corbett, and other members of the executive team as a board member, he had not had the role of chairman until recently. so i think he needed to have some time to make some decisions about what direction he wanted citi to go, and what he wanted to see in terms of the qualifications of the executive leadership. >> let me ask you about financial leadership in the broader scoab. scope. of the five big banks, two have replaced their leaders. are today's financial

leaders better equipped to deal with the problems we have seen over the past few years? >> i wish i could say they were, but i don't have the confidence that is the case. banks have more capital, there is leverage in the banking system. that's a very good thing. liquidity is a little more stable, but a lot is because they're funding with insured deposits. they're funding with government-backed liabilities, so that is a source of concern. i think these institutions are enormously complex. and jamie dimond is generally viewed as the best of the large banks. he missed london whale. wells fargo consistently delivers is good share value, and even though they are pretty large, they have a straightforward business model. i think complexity is a real problem. i think this is something that the regulators and the management and the boards need to come to grips with. because at the end of the day, the large universal

banks aren't delivering that good of a shareholder value. even at chase, their returns would legend with a wells or u.s. bank corps. >> sheila bair along with us, author of "bull by the horns." >> susie: as technology changes, so, too, does the workplace. still ahead, how freelancers and online assignments are changing the job market. >> tom: well, outside of that big citibank news, wall street got a series of strong earnings from bellwether companies like johnson and johnson, and positive news from homebuilders. the u.s. homebuilder's confidence index rose to its stheeligev lce highest level since 2006, and that helped send wall street on its biggest rally in a month. the dow is up 126, the nasdaq gained 37, and the s&p is up 15. >> susie: shares of both intel and i.b.m. were lower in after- hours trading after their latest quarterly results. both companies are bellwethers in the technology industry, and

what they said late today could help set the stage others. ruben ramirez reports. >> reporter: while analysts saw intel's results, both companies see their future in a different kind of cloud. intel makes the chips that power the cloud-computing servers that i.b.m. makes, services, and, in some cases, leases to corporations. intel earned 58 cents a share in its latest quarter. that's nine cents ahead of expectations. on the sales side, they made $13.5 billion. that was ahead of lowered expectations. one drag: the shifting marketplace from p.c.s to mobile devices. >> intel is getting killed tablets. because people are buying tablets.

they're making concerted efforts. it doesn't make chips for tablets. >> reporter: both intel and i.b.m. are seeing firsthand the effects of the global economic slowdown as firms trim i.t. budgets or hold off on spending. i.b.m. posted profits of $3.62 a share, a penny above expectations. revenue fell to just under $25 billion, slightly softer than forecasts. >> what's happening with i.b.m. is europe. a lot of demand generally speaking from corporations buying servers, buying software, buying services is a slowdown. couple that with the currency effect. when the dollar is strong against other foreign currencies like the euro, you begin to see some headwinds. >> reporter: while many are hoping the launch of windows 8 later this month will launch a product upgrade cycle at the nation's businesses, most i.t. managers make the switch a year or so later in hopes the kinks will be worked out. ruben ramirez, "n.b.r.," new york.

>> tom: if you get a social security check, you can look for a tiny increase next year. thanks to low inflation, the cost of living adjustment comes to 1.7%. for the average social security recipient, that means an additional $21 a month. it's one of its smallest increases since uncle sam started making the annual adjustments in 1975. >> susie: many student loan borrowers are facing some of the same troubles that have plagued mortgage borrowers in past years. that's what the consumer financial protection bureau said in its annual report on student loans that came out today. it outlined many of the problems

borrowers face when they try to negotiate with their private student loan servicers. sylvia hall has more. >> reporter: college may be the gateway to success, but with high unemployment and low wages, paying for it can be a difficult balancing act. >> many borrowers feel that, you know, in this tough economy today, their student loan debt is like walking on a tightrope. and one little surprise can put them into freefall. >> reporter: the c.f.p.b. released a report today that shows student borrowers are finding plenty of those surprises. the agency has received nearly 2,900 complaints about private student loans over the past few months. the vast majority of those cameó from people who got the runaround from their student loan servicers. they include reluctance to refinance, conflicting information and general confusion on the terms of a loan. the report isn't meant to reflect the overall student loan market, but advocacy groups say they're seeing similar complaints. >> we're hearing problems like

inability to get someone on the phone, to figure out a payment problem, or, you know, someone who is sick and they can't figure out a way to get their lender to give them a little bit of a reprieve as they're trying to fight an illness. >> reporter: they also reflect the issues that have plagued the mortgage servicing market for years. and some of the rigid and confusing practices could be a drag on the economy. >> and the higher the interest rate you're paying, that could mean that you're not able to save money for retirement; that could mean that you're not able to save for a down payment on a home or to start a small business. and so, those student loan issues can have a broader effect on the whole economy. >> reporter: the report urges congress and the treasury department to look to mortgage reforms for solutions, including expanded options for refinancing private student loans. >> a refinancing option would allow them to potentially find a lower interest rate than what they originally signed onto, especially in today's environment with much lower interest rates.

now, there are problems here, and one problem is that there is not much of a market for this. >> reporter: the problem appears to be pretty contained. the vast majority of the complaints singled out one of just seven student loan servicers. sylvia hall, "n.b.r.," washington. >> tom: amazon is hanging out its virtual help wanted sign. it plans to add 50,000 seasonal positions this holiday season. now, add those jobs to holiday hires already announcedy retailers like wal-mart, target, macy's and toys 'r us, and you've got promises to addnc nearly half a million temporary positions this year.

still, though, employment experts note the american job market is far from pre-recession levels when it comes to holiday hiring. >> susie: microsoft is hoping its new "surface" tablet will be on many wish lists this holiday season. the company said today prices would start at $499 for the 32- gigabyte model. it started taking pre-orders today for delivery on october 26. the surface is the same price as the ipad, but it's one inch bigger than its rival. just as the surface makes its debut, apple sent out media invitations today for its next product debut. and tom, experts are betting it's for an ipad mini. the invite says, "we've got a little more to show you." >> tom: susie, that was enough to jumpstart apple shares. they're up $15, or 2.3%, to $649.61 a share. let's get going with tonight's

"market focus." s.u.tocks saw steady buying interest throughout the day. the s&p 500 gains began early and gained ground as the day wore on, with the index finishing higher by 1%.s. volume totaled 639 million on the big board, over 1.7 billion shares on the nasdaq. the materials sector helped push the market up, rising 2.4%. before the intel and i.b.m. results ruben reported earlier in the program, the technology sector was up 1.6%. energy was up 1.5%. some of the recent weakness in but steel and chemical makers were rallying today. cliffs natural resources jumped 7.1% to a one-month high. cliffs mines the coal used to make steel. shares have been trending lower since february as steel and coal prices have dropped with chinese demand falling. dow chemical has been trending lower since april. today, shares poed 5.6%.

the company also has raised worries about slowing growth in china. other stocks hit by global%. growth worries reversed some recent losses. caterpillar was up 2.6%. united technologies rallied 1.9%. today, u-t-x announced it will sell its aerospace electric power systems business for $400 million to a french jet engine maker. health insurance company united healthcare did the equivalent of sneezing today, and shares fell. the stock was down 1.1%, making it the worst percentage performance in the dow jones industrial average. u-n-h is the dow's newest member, joining a month ago. earnings were stronger than expected, but the company waed its outlook for next year faces a "considerable challenge" to meet analysts' forecasts. meantime, johnson and johnson turned in stronger-than-expected earnings and slightly increased its year-end profit prediction. shares were up 1.4% on heavier than usual volume. the fastest sales growth came from medical devices, which is also its biggest division by revenue thanks to an acquisition this summer. two bank earnings to mention:

goldmaansas chd p.n.c. financial.s p.n.c.'s results came in below expectations, and the share price responded, falling 4% on heavier volume. goldman sachs saw investment banking, bond underwriting and it tsding business pick up but said political uncertainty is keeping customer activity low. shares fell 1%. we have more on the goldman sachs shares. it's online at www.nbr.com under the "blogs" tab-- technical analysis with michael kahn. murphy oil is the latest energy company to spin off its gasoline business. conoco and marathon have separated their refining businesses. t now murphy will split of its retail gasoline operations. pre dstheeocny will use the proo pay a special dividend and buy back shares. four of the five most actively traded exchange-traded products were up. the s&p volatility note fell by more than 3%. and that's tonight's "market focus."

>> tom: with the unemployment rate dropping last month, thousands of americans reported going back to work... for themselves.r, yea a quarter of this year, a quarter of a million people say they have created their job by becoming self-employed. just over 10% of the work that people say they've found year- to-date is thanks to creating their own opportunities. this week, we're looking at the freelance job market. gary swart is the c.e.o. of o- desk, an online marketplace for freelance work. he joins us from san francisco. gary, are these kind of self-employment gains sustainable, do you think? >> we do think, tom.

we're seeing a pretty significant growth. since 2009, we have seen the hours worked on our platform, about 26 million hours. it is like off-line work, but they're being done online. we think they're sustainable. >> tom: from an employee's perspective, i guess i should say a free lance pe perspective? >> they're telling us they're getting access to jobs they can't find in their local geography. first and foremost, it is finding the work and the freedom and the flexibility to work on the jobs of their choosing at the time they want, and, of course, at the rates of their choosing as well. really it is about freedom and boundless opportunities for these workers to get jobs they won't normally have access to. >> the downside, no possibility of medical benefits, no retirement, 401k, no paid vacation side. that's a real downside, though. >> well, you know, we

surveyed these workers and they came back and told us -- 87% of them said they prefer working this way. despite the fact they may have to forego some of the benefits you've mentioned, they prefer the freedom and the flexibility over the benefits. >> tom: i want to follow up on what you have found in terms of folks looking for work outside of where they live. that's one of the big benefits you're finding with your folks. your firm matches free-lancers with businesses. is there a marketplace? >> yes. we have about 500,000 businesses on o-desk, and these are companies trying to get work done. we have about 2.5 million contractors. the businesses are turning to remote talents or online talent because they can't find it locally. even with that said, there are shortages with some skills. >> tom: what kind of work, gary? we've got about 20 seconds left? >> technical work, web development, i.o.s.,

so iphone and apps are very important. and any job that can be done in front of the internet. >> tom: interesting stuff. a look at free-lancers tonight, and it is gary swart, the c.e.o. of o-desk. >> susie: nascar is in a league of its own when it comes to its prominent use of advertisements and sponsorships. but if the nba okays some new rules, basketball jerseys may have a similar look next year. here's sports analyst rick horrow with this week's "beyond the scoreboard." >> the n.b.a. likely will be the first of the big four u.s. professional sports leagues to put corporate logos on game jerseys. having already received support from the league's board of governors, and pending a vote from owners, sponsors will be able to buy ad space on jerseys beginning with the 2013 season. in the interim, team and league officials are working to determine who will be responsible for selling the sponsorships and how the revenue will be split. to maximize revenue, the n.b.a. could make patches part of a more comprehensive sponsorship package fis teams to sell.

the league experimented with patches during this year's n.b.a. finals, as the miami heat and oklahoma city thunder each wore a 2.5-inch-by-2.5-inch finals logo on their jerseys. using those games as a sample size, that patch of real estate collectively could generate $160 million from tv exposure over an entire season, according to sponsorship measurement firm joyce julius & associates. with the n.b.a. expecting a $100 million per year windfall from selling ad space on jerseys, it may be only a matter of time until other leagues do the same. >> tom: tonight is the second presidential debate. that's "nightly business report" for tuesday, october 16. good night, everyone. you, too, susie. >> susie: good night, tom. thanks for watching. we'll see you online at www.nbr- dot.com and back here tomorrow night. captioning sponsored by wpbt

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