captioning sponsored by wpbt >> paul: over 6 million jobs gone in the recession and the latest forecasts show there's more job loss to come. so how long until those americans get back to work. we get some answers. >> susie: the treasury's been working overtime preparing mounds of new debt for auction, $75-billion worth of treasuries hit the market next week. a look at what that means for interest rates. >> paul: tonight's "street critique" guest says the technicals aren't looking so hot for tech stocks. he's todd harrison founder and c.e.o. of minyanville. >> susie: cisco systems' latest results beat expectations

despite a third straight quarter of falling sales. our guest tonight, chairman and ceo john chambers says the tech slump may have reached a tipping point. >> paul: i'm paul kangas. >> susie: and i'm susie gharib. this is "nightly business report" for wednesday, august 5. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. thank you. 7//& >> susie: good evening, everyone. the big question about the economic recovery is when will

american businesses start hiring again? more than 6.5 million people have lost jobs since the recession began. on friday, the labor department reports on unemployment for july. and today payroll processor adp said the nation's businesses cut 371,000 jobs last month the 18th straight month of declines. as darren gersh reports, it's going to take a lot longer than 18 months to get things back to normal. >> reporter: the great recession has torn through the american workforce at an alarming rate. 6.5 million jobs lost so far. but economist heidi shierholz says the pain goes even deeper. >> over those 18 months of the recession, we should have added 2.3 million jobs to keep up with population growth. so when you sum those two together, 2.3 million we should have added, plus the 6.5 million we lost, we're 8.8 million jobs in the hole. and we are still digging. >> reporter: by the end of the year, shierholz figures the

economy will be short ten million jobs. and the united states won't see robust job growth until the end of next year. >> and that's when people in the real economy will start to feel like, okay, we've entered recovery. >> reporter: so when will we recover the jobs we've lost? just do the math. the private adp forecast shows the u.s. economy lost 371,000 jobs last month. to keep up with population growth, economists figure the u.s. needs to create 130,000 jobs a month. in a recovery, the u.s. should create something like 300,000 to 400,000 a month, enough to begin reducing unemployment significantly. that means the country won't recover the jobs lost to this recession until somewhere around the year 2014 at the earliest. economist dean baker says it won't be easy to replace the jobs lost because the recession has slammed housing and auto manufacturing, two sectors that usually drive the recovery in hiring.

>> in the case of residential construction, we have enormous over-capacity. it's very difficult to imagine any significant increase in employment in that sector for years to come. in the case of autos, we can see increased demand, we probably will see increased demand, but a lot of that demand is going to be for foreign cars right now. >> reporter: of course, the economy will eventually create enough jobs to make up for those lost in the great recession. but those jobs may also be in different industries and many of the specific jobs that went away, may never come back. darren gersh, "nightly business report", washington. >> paul: sellers took command on wall street from the start as nervous investors took profits amid a mix of good and bad reports on the economy. an hour into trading, the dow was off 90 points with the nasdaq down 20 points. the selling was linked to a cautious outlook from procter & gamble, sizable job losses in that adp jobs forecast and a contraction of activity in the service sector. but an unexpected rise in factory orders helped cushion the selloff and cut the market's

losses by the final bell. >> susie: the government's hefty appetite for capital was whetted today as the treasury announced plans to auction a record $75 billion in notes and bonds next week. bond prices fell on the news

while yield on the benchmark 10- year rose to 3.75%. suzanne pratt explains what soaring sales of u.s. treasuries could mean for you and the interest rates you pay. >> reporter: on a hot summer day you might easily argue there's no such thing as too much ice cream. when it comes to treasury debt however, too much is never good no matter what the weather. the u.s. will be flooding the bond market with a wave of treasuries in the coming months the likes of which we've never seen. the issuance of debt goes to fund our federal budget deficit projected at about $1.5 trillion this fiscal year, the biggest ever. treasury market strategist gary pollack says remember the mortgage purchases, bank bailouts and fed liquidity programs. we have to pay for all of them. >> in order to stimulate the economy, they created programs to create economic activity. in order to finance these programs, the government must go into the bond market and borrow money from the public. >> reporter: how much money? barclays capital estimates the

treasury will sell more than $2 trillion in debt this year, more than double last year. and, like any other marketplace, the bond market reacts to supply and demand. overwhelming supply without enough demand, means bond prices will fall. and yields, which move in the opposite direction, will go up. miller tabak's dan greenhaus says higher bond yields, particularly on the benchmark 10-year note, will a have ripple effect throughout the economy. >> as that interest rate moves upwards it puts upward pressure on everything from mortgage rates to the amount it costs you to borrow from your bank, and it arguably one of the most important things you should be aware of. >> reporter: worries about too much supply have already nearly doubled the yield on the 10-year this year. but, bond market strategist michael pond says there's also a good side to the bad story on higher rates. >> we could also see an increase in demand from individuals as savings rate rise. that money could go into treasuries if yields go significantly higher.

here's the scoop on what this means for all americans including ice cream lovers. with so much debt sloshing around, experts say we're heading for higher interest rates. and they'll probably stick around. suzanne pratt, "nightly business report", new york. >> paul: now, let's take a look at some stocks in the news tonight.

and those are the stocks in the news tonight, susie. >> susie: paul, the fallout continues to mount over big wall street paydays. now regulators want to know more about bonuses paid to goldman sachs' employees.

in a filing with the securities and exchange commission today, the firm says it's cooperating. goldman also said its board has gotten letters from shareholders, demanding it investigate compensation and consider reforming how employees are paid. the government also wants information about goldman's use of credit derivatives. those risky derivative contracts caused lehman brothers to collapse and almost took down a.i.g. >> paul: tonight's "street critique" guest says the tech market's at a critical point.

he's todd harrison, founder and ceo of minyanville.com. todd welcome back to nbr. >> it's great to be here, paul, thank you. >> paul: you're a veteran trader. what are you seeing that has you so kerned about the tech. stock? >> well, as a trader i'm more concerned, i'm less concerned with the destination we arrive at, versus the path we take to get there. so i'm looking for risk reward constantly in the marketplace. and i think that we're at a juncture right now for the technology sector that is critical. it is a confluence of technical levels that i'm looking at, the down trend lines for 2007 and also the point that the tech. market broke from in this past support as future resistance in the marketplace, these two lines are crossing precisely where we are now, which happens to coincide with the 50% retradesman of the entire technology decline from the top of 2007. so i'm looking at this level as a critical inflection point.

i'm short technology stocks. if they can pop through to the up side i'm giving myself about 2%, in which case i'll cut bait, but until proven otherwise i'm short technology here for a trade. >> paul: so you're looking at it a carefully every day, i should imagine. >> i'm staring at it a you day, yes, that's basically what i do. >> paul: okay. what about the broader market? we've gone through some major milestones. are we due for a pullback there? >> that's consistent with what we talked about last time. i do still believe that we're going to see a w formation, and i thought 950, 950ish on the s&p would have been the middle peak. i was wrong in that. but i still think that we're going through a process right now where after the government effectively bought the cancer and sold the car crash, or put off the crisis, we're going through a recovery period. and it's tough to run a marathon with cancer. so i think it's going to be a

prolonged process. i'm in no way on board the v shaped recovery up up and away. i think we need to learn from our mistakes, least we risk repeating them. >> paul: what do you make of the potential ban on flash orders used by high frequency traders? >> i think the last thing this market needs and the social mood needs and just like ecology needs right now is another black box or opaque financial instrument right now. i think the more transparency the better. i think there will be a long trail, so to speak, with regard to high frequency trading and just who benefited, and i think that jeff all right now the specter of competitive disadvantage for the public is on the margin, very negative. >> paul: so for the public, be very careful of what you're doing in the way of trading? >> i think that the more transparency in the market, i think trust and truth are commodities going forward. >> paul: very interesting, and thanks very much for joining us again, todd. >> thank you, paul. >> paul: my guest,ed to

harrison. >> susie: tomorrow, a first look at "windows 7" the latest version of microsoft's iconic operating system. >> susie: the obama administration says it won't be a back seat driver when it comes to running general motors and chrysler. auto task force advisor ron bloom says the government will not use its stake in the automakers to make social policy. in fact, bloom says the administration wants to sell its stake in g.m. and chrysler as soon as possible. but he predicts chrysler won't go public until 2011, at the earliest. >> paul: for the first time ever, the securities and exchange commission is enforcing rules to limit naked short selling. that's where an investor sells stock that has not yet been borrowed. two traders and their firms have agreed to settle the charges that they violated rules without admitting or denying guilt. hazan capital will pay $3 million. tjm proprietary trading will pay half a million dollars.

>> susie: cisco's c.e.o. gave today an upbeat outlook for technology spending even though the tech titan reported a big drop in quarterly revenues and profits. the stock surged as much as 3% in after hours trading.

excluding charges cisco earned 31 cents a share in its fiscal fourth quarter, 2-cents ahead of analysts estimates. revenues fell 18% to $8.5 billion, but still in line with estimates. looking ahead cisco expects revenues to fall as much as 17% in the current quarter, even though orders are picking up. joining us now, cisco chairman and c.e.o. john chambers. hi, john. >> hey, good to see you again, please call me john if you will. >> susie: john, you sounded pretty positive and upbeat on the call with analysts this afternoon, you were talking about a tipping point for tech. spending and you said that orders are beginning to take on more of a normal pattern. so is this the beginning of an upturn in tech. spending? >> i think there's a good chance it is. during, one-quarter ago our orders for the first time began to level out. they were still down from the prior quarter 10% or so. during this last quarter i was

our normal quarter in terms of the -- it's very likely we'll look back two to three quarters from now and say this was the tipping point on the up turn. not the bottom. it's all right starting up. but i'd like to see the data for two more quarters before i would say that. >> susie: what are your customers and c.e.o.s telling you about how much they want to commit to tech. spending? how robust is the pickup so far? >> i think the pickup will be gradual. it will be leading customers by industry. but we saw the balance pricingly across four of our five theaters, the u.s., asia pacific, latin america, emerging markets. the only section that was more challenging was in europe, in europe see saw the sequential growth only up about 5%. in the rest of the world it was up double digits in every theater. so it was a good start, but it would be irresponsible to call it a definite tipping point

yet. but it's very positive. and we had a great quarter. >> susie: john, do you have a sense of overall tech. spending outside of cisco? what is your take on the mood or what you're hearing of tech. spending across the board over the next 12 months let's say? >> well, i think what you're seeing is customers beginning to take their foot off the brake and starting to spend gradually. the opinion of my peers is pretty diverse from various companies in terms of what they're seeing. i tend to be a little more optimistic based on the customers that i talk with, and part of it can be the network is playing a different role with text pending and it lays a role in everything from the data center to the homes. so at the same time we're not growing off of our traditional products, we're growing in areas like a flip camera into the home, all the way through security and adata center or new server technology. >> susie: many people, i'm sure you've heard this, are saying the recession is over and that the recovery has begun. is that what you're seeing?

>> well, i think it's too early to call it for sure. but if you watch what occurred going back a quarter ago, it felt like it leveled out. this quarter in terms of our trend from one-quarter to another was the first normal quarter we've seen. so if we see one to two more quarters of this, i think that data will not only be accurate, that's what we'll call it and it's very likely we will look back and say this was the tipping point on the up trend, not the bottom, but already turning up. >> susie: during this recession you've got a lot of jobs jobs, as have so many other american companies. do you see doing more job cuts or are you going to bin hiring? >> well, we're going to begin to hire as our business continues to grow. we did very little retruck touring or job layoffs through the last economic challenge, we've only done one broad rayoff in our history in 2001, i impacted 25% of our cisco family. this time it was relatively small, the 15 to 2,000 range

ask that was manyly through restructuring key organizations. i'm proud to be an american around the world and our goal is to grow our head count as our business grows. we sent in the call that we were through with restructuring hughs, and now our focus is -- >> susie: we just have 30 seconds. cisco has a big financial cushion, 33 billion in cash. >> it's actually 35 billion. you use that aggressively, about 6 billion of it is in the u.s., 29 billion outside the u.s.. we'll use it in everything from investments to financing capability, to acquisitions and you will see us do that over the next 12 to 18 months. >> susie: all right, john, we'll leave it there. thank you so much for coming on the program, a pleasure as always. >> my pleasure as well. >> susie: my guest tonight: john chambers, chairman and c.e.o. of cisco. >> paul: here's a look at what's happening tomorrow.

>> susie: that's "nightly business report" for wednesday, august 5. we want to remind you this is the time of year your public television station seeks your support. >> paul: support that makes programs like "nightly business report" possible. >> susie: thanks for joining us. and don't forget to support your public television station. i'm susie gharib. goodnight everyone. you too, paul. >> paul: goodnight susie. i'm paul kangas wishing all of you the best of good buys. "nightly business report" is made possible by:

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