>> paul: the fed holds interest rates near zero and sees light at the end of the recession's tunnel. economist michelle girard and market strategist mike holland join us to discuss the central bank's latest policy statement. >> suzanne: overhauling the nation's financial rule book it's something barney frank wants to keep on the front burner. the influential lawmaker says he wants a bill on the house floor by november. >> paul: google's c.e.o. says get ready for a spending spree as the internet goliath gears up to buy a company a month to expand its business. >> taking the stairs, not taking the elevator. getting up and moving around. we take walks at lunchtime where we might just go to a restaurant and sit down. >> suzanne: boosting employee health and wellness, it's at the heart of an innovative program to lower employer health care costs. >> paul: i'm paul kangas. >> suzanne: and i'm suzanne pratt. susie gharib is on assignment. this is "nightly business report" for wednesday, september 23. "nightly business report" is made possible by:

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>> suzanne: good evening everyone. the federal reserve is upbeat about the economy but policymakers today kept interest rates at historically low levels again. at the close of its 2-day meeting, the fed said "economic activity has picked up". but it went on to say that activity is likely to remain weak for sometime. on inflation policymakers don't seem worried. on rates, look for those to stay low for an extended period. the fed also stretched the timetable for its debt buying programs, including mortgage backed securities. it will now remain in that market through march of next year. joining us now to help read today's fed tea-leaves is michelle girard, senoir economist at rbs and mike holland of holland and company. welcome to the program. >> good to be here, thanks. >> what is your assessment of the fed's state today?

it seems to be the most optimistic that they've been about the economy in some time. do you agree with it? >> yes and yes. i think in both instances it's been several meetings, several months since we've heard this kind of optimistic, i don't want to overstate it, there's still good reference in there to the horrible jobs picture and so on, but things are getting grudgingly better, and i think that's a fair assessment as i talk to businesses and retailers, things have at the least leveled off and are beginning to move up a little bit. >> so why didn't the stock market rally or why do we see the selloff that we saw, do you think? >> stock market on a day-to-day hour to hour minute to minute basis is sometimes totally irrationale and some people say often irrational. in the last half-hour there was a big program that some people come in, there was nothing in the federal reserve

statement in, the open market statement that had anything to do with people being discomforted. this is what the market wanted to hear, there was in surprise. >> what about the take on inflation? i think some people may have been surprised to see that there is absolutely no reference, they removed the talk about commodity prices that have been moving higher and clearly they don't seem, aat least too worried about inflation. do you agree with that? >> i think they are always worried. i think their worry now includes the possibility that we would have something that is anathema and that's declining prices which we had in the 30s. if we get declining prices that's a recipe for economic nightmare. they don't want that. we do have a huge amount of excess capacity in plant and equipment and also in the labor force. now we have things around the world not getting a lot better, with the exception of asia. i think you and i spoke

earlier, i was in china last week, they've got strong economic activity and a little bit of inflation in the air is what they're talking about. having said that, the u.s. federal reserve is not in any way worried about inflation right now. they're worried about jobs, i think jobs is number one, in terms of concerns right now. >> what does the market think in terms of when the fed is going to start to raise rates? is it connected to what happens on the job front? i've heard people say that until the unemployment rate peaks we're not going to see a hike in rates. do you agree with that, and is that the perception in the market right now? >> i think the way you described it is exactly where wall street and the economists are. they think the middle of next year at the earliest for the fed to raise rates. some people are saying not until the end of next year. but i don't think any of those mean anything in terms of what you describe, it's all up to the jobs picture. until jobs turn around, i think the federal reserve will be lott to do anything to encourage people not to hire people.

i think they want jobs created, get this economy going. >> i want to touch for a minute on this morning backed securities question. it's a little technical. but for people at home, is it too late if they haven't already to refinance in terms of getting the best rate that you possibly could because of today's news? >> i don't think so, suzanne. i think what the federal reserve is saying is they're going to be around a little longer to try to make the transition to their getting out of this business, and as you say it's inside baseball, but to get out of this business i don't think it's necessarily something that is going to cause mortgage rates to jump up. i think there's enough slack in the system right now that these low rates should be around for a while. >> getting back to the stock market for a second, are you making any changes in terms of your portfolio because of today's fed news? >> no. as i said earlier, i think the federal reserve said exactly what people hoped they would say, what they had prepared

people for, for them to say. and i think that's very important, what bernanke has done since this crisis began. he and the federal reserve, i'm in the camp of they've done a lot of good things. made a couple of mistakes, but overall have done some heroic things, they have not surprised the market and they didn't do that today. they did not surprise the market today. >> very good thoughts. thank you so much for joining us this evening, mike. >> okay, suzanne, sorry to miss michelle. >> my guest, mike holland. >> paul: wall street started the day in a cautious mood as investors waited on the fed. the dow posted a 20 point loss with the nasdaq off 2 points by late morning. then stocks slowly recovered as hopes grew that the news from the fed would be good and when it was, the dow jumped to a 60 point gain. but market bears sold into the strength.

>> suzanne: reports that efforts to reform the financial regulatory system are dead are premature. so says barney frank. the chairman of the house finance committee today waded into the fray to get that legislation written and onto the house floor by november. as stephanie dhue reports, everyone agrees an overhaul's needed but no one agrees on how it should be done. >> reporter: right now there are a handful of regulators overseeing the financial system.

but none has the power to dismantle financial institutions like a.i.g., bank of america and citigroup, if they were about to fail. house financial services committee chairman barney frank says that needs to change. >> we will be providing a mechanism for putting non-bank financial institutions out of everybody's misery. >> reporter: the administration wants to give that authority to the federal reserve. but there's no consensus that's the right way to go. while the fed had the power to regulate mortgages, it didn't do it, until it was too late. and many doubt giving the fed more power now would prevent a future crisis. but treasury secretary timothy geithner says someone needs to be in charge. >> if you give that responsibility to a bunch of people, then you can't hold them accountable for performance. >> reporter: there is also disagreement about creating a consumer financial protection agency. republican jeb hensarling says that approach is heavy handed and could extend to retailers who provide credit, like walmart, target, and macy's.

>> we see something that is very broad, very draconian. >> reporter: but geithner says the goal is to keep potential problems from slipping through regulatory cracks. >> if you are in the business of providing financial credit, and that is your business and your competing with banks and thrifts that are doing that, there should be a common basic set of standards and protections. >> reporter: but frank says not all firms selling financial products will be subject to the oversight of a new watchdog agency, including car dealers and 401(k) providers. and if you're looking for plain vanilla products, those won't be required either. stephanie dhue, "nightly business report", washington.

>> paul: join us tomorrow night in primetime as we take part in the "pbs special report: health care reform". n.b.r. joins other pbs news and public affairs programs for this 90-minute, in-depth look at reforming the nation's 2-1/2 trillion dollar health care system. as part of that our series "bill of health" has been looking at the challenges employers face in providing care to employees. tonight, jeff yastine reports on one program, making great strides in cutting corporate health care costs. >> reporter: workers at the american diabetes association go about their daily routines the same as everyone else. but look closely. you can see these. pedometers. attached to their belts. the hi-tech devices measure and record how far an employee walks each day. digital health monitoring stations like this - are at the core of virgin healthmiles one of entrepreneur richard branson's companies.

it's an example of new thinking. when it comes to lowering health insurance costs, instead of managing the cost of an employee getting sick, focus on improving their health, which might keep them out of the hospital in the first place. for those employees that are trying to be responsible with their behavior and take personal responsibility in their health. so a lot of our clients are implementing it as of day one and they get a return on investment the day they implement it because they're sharing that portion of the cost of the program. those people who don't participate, their health insurance is a little more than those people who do. >> reporter: here's one way to think about this new approach. if you have a car, you buy auto insurance, if you have no accidents or speeding tickets, you get a 'good driver' discount. you're considered a 'good risk.' suppose companies could get a discount on health plans, if its workforce, as a whole, had a better 'health risk?' the towers perrin research firm

calls these companies "high performers," and found they saved an average of $1,200 per worker annually. employees at these health- focused firms paid $324 less than counterparts elsewhere. but david guilmette of towers perrin says it takes a long-term corporate focus to see those savings. >> there are probably a half dozen serious conditions that drive the majority of healthcare spending. and most of those conditions can be impacted by behavioral changes. in fact almost 50% of healthcare costs can be impacted by changes in individual behaviors. whether it's exercise, eating right, knowing your numbers cholestorol levels, blood pressure, done consistently across a large population of people can really have a positive impact over time. >> reporter: of course, you can encourage employees to go to the gym. even buy them a gym membership. that doesn't mean they'll use it. but insurance discounts, cash

rewards and competitive spirit, can help. american diabetes association employee chad whittaker says he lost 30 pounds, thanks in part to the big-carrot-little stick approach of virgin healthmiles. >> i think its great because it keeps you in the mood to get up and get moving. all of us. we try to exercise, but are there some nights where you just don't want to do it. but if you're in the middle of a walk challenge, that means you've got to get up and do it. so it really pushes you. >> reporter: so, as congress considers its choices, so does the nation's private sector. at stake: the cost of health plans, a healthier workforce, profits for shareholders and solving a decades old problem: how to contain the rising cost of healthcare, and the insurance that pays for it. jeff yastine "nightly business report" miami. >> paul: now let's take a look at some stocks in the news tonight.

>> paul: tonight's "street critique" guest says it's been a great rally but eventually that shoe is going to drop. he's todd harrison founder and c.e.o. of minyanville. todd, welcome back to n.b.r. >> great to be back, paul. >> paul: what did you make of the fed statement today? looks like policy makers are seeing signs of recovery. are you positive? >> i think we've seen a smoothy before with them, i think they'll be accommodating as long as possible and they are trying to squeeze the public back into risky assets. and they've done that in large part. but the proverbial saying on

wall street is the first move after a fed announcement is a false move, you saw a gurve up and took off at the end of the day. >> paul: stocks are near their highs of the year, as / long-time trader what are you seeing in the market? >> what i'm seeing is risk being shuttled back and forth between the public and private sector, a lot of secondaries now as companies take advantage of higher stock prices. and much like energy, risk isn't created or destroyed, it simply changes form. and i think that's largely what we're seeing and it warns a bit of caution on the part of investors. >> paul: you were bearish on technology when you joined us last month. but those stocks have continued to move higher. do you still see trouble in the teck sector? >> the technology sector is a bang for the buck play for portfolio managers. but to be clear, that last trade was just that, it was a trade, a defined risk setup. once that triggered, i was out of the trade and i'm trading from the short side now, but

it's very defined risk management. pause cut your loss and let your profits run, in other words, right? >> that's the way to trade them. >> paul: okay. you're an experienced trader, that's for sure. any particular stocks you do like at these levels? >> i'm cautious at these levels and i don't want to be a broken record, but i will say the one thing that concerns me is the uniformity and the opinion that we're going to continue higher. for certain credit markets are pointing in that direction, but from pundits to politicians to hedge fund managers across the board there's uniformity in the believe that we're going to continue higher, and i think every time everyone is on one side of the boat you gotta be careful. i'd proceed with caution. >> paul: so caution is your by word for the moment, correct? >> it is, but you respect the up side. i just, opportunities are made up easier than losses. >> paul: and it can change from day-to-day. todd, i want to thank you for

joining us again. >> as always, my pleasure, paul. >> paul: my guest, todd harrison founder of minyanville and author of the e-book "memoirs of a minyan." >> suzanne: tomorrow, aetna chairman and c.e.o. ron williams tells us why he thinks fixing the health care delivery system is the key to reform. >> suzanne: friday october 2, will be the last payout for shareholder's of the money market mutual fund that broke the buck a year ago. investors in the reserve primary fund will split $1 billion. after that, the fund will hold $3-1/2 billion which could eventually go to shareholders. the primary fund had $64 billion under management before it lost billions in the collapse of lehman brothers. >> paul: the russians are coming, to the n.b.a. russia's richest man is buying a controlling stake in the new jersey nets basketball team. mikhail prokhorov's is also taking over the development of a new arena for the nets in brooklyn.

he's paying $200-million for 80% of the team and making funding commitments for the atlantic yards project. he'll be the first non-north american n.b.a. owner. >> suzanne: in the "money file" tonight, cutting your health care costs. here's personal finance journalist terri cullen.

>> the average cost of a family health-insurance policy has jumped to nearly $13,500 a year, according to the latest survey by the kaiser family foundation. worse, workers who get help paying for health insurance from their employers are paying much higher premiums, averaging about $3,500 out-of-pocket each year that's double the amount they were paying just 10 years ago. and these days more insurers are monitoring, and in some cases penalizing, individuals with higher premiums for unhealthy habits such as smoking or lack of exercise. so what can you do to combat rising costs? despite the jump in premiums, there are some ways to keep costs low. if your health-insurance provider gives you the option, consider raising your deductible, the amount you pay before insurance kicks in. the higher your deductible, the lower your premiums. to protect yourself from a whack to the pocketbook, consider setting up a health-savings account with your bank or insurance provider. with an h.s.a., you make tax- deductible contributions up to $3,000 for singles and up to $5,950 for a family in 2009. but check with your insurer first, to make sure the plan you

choose qualifies for an h.s.a. next, check your credit history for errors that may be keeping your score low. believe it or not, insurers have found that people who live fast and loose with their credit often do the same with their health, so they charge them more. finally, if you've ever needed a kick in the pants to live a healthier lifestyle, this is it quitting smoking and participating in employer- sponsored wellness programs can help you live a longer life, and shave your health-care costs as well as your waistline. i'm terri cullen. paw terry has more tips on the nbr blog. you'll fine that, streaming video and more at "nightly business report" on pbs.org. you can also email us at nbr@pbs.org. >> paul: recapping today's market action, stocks lose their early gains, despite the fed's optimism. the dow lost 81 points and the nasdaq fell almost 15 points. that's "nightly business report" for wednesday, september 23.

i'm suzanne pratt. goodnight, everyone. and good night to you, paul. >> paul: goodnight suzanne. i'm paul kangas wishing all of you the best of good buys. "nightly business report" is made possible by:

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