through next year. >> susie: when it comes to finding a new leader for bank of america, experts say restoring trust is key. coming up: a look at the challenges facing whoever is b. of a.'s next boss. >> paul: so much for those cash for clunkers gains. the latest auto sales are out, and the nation's car maker's continue to struggle. we talk sales and outlook with g.m.'s head of market analysis. >> a year ago, we had 27,000 people registered in our system. last time i checked, it was around 60,000. this woman runs a federally funded jobs program. tonight, a day in the life of a florida employment office. i'm paul kangas. this is "nightly business report" for thursday, october 1. "nightly business report" is made possible by:

this program was made possible by contributions to your pbs station from viewers like you. thank you. >> susie: good evening, everyone. a sharp sell-off in stocks on

this first day of october as investors got the jitters about the nation's job picture and the economic recovery. the dow tumbled 203 points and the nasdaq fell almost 65 on worries about tomorrow's release of the september employment report. and in washington, ben bernanke offered no comfort. testifying on capitol hill today, the federal reserve chairman told lawmakers that even if the economy grew at a pace of 3%, that would not be enough to bring down the unemployment rate. darren gersh reports. >> reporter: it is the kind of concern you can expect to hear more often from members of congress. the federal reserve's own forecast calls for unemployment of 9% next year. new jersey's leonard lance asked fed chairman ben bernanke whether more could be done to put americans back to work. >> i can't imagine the american people will consider the country to be in recovery if the unemployment rate is at roughly 9%. >> reporter: the fed chairman was not encouraging. >> i don't have any magic bullets to offer. if i did, i would have offered

them by now. one way to mitigate the long- term damage is to try to make sure that those who are out of work for an extended period, don't lose attachment to the labor force and that they do get opportunities to improve their skills and remain employable. >> reporter: with short term interest rates near zero and a balance sheet north of $2 trillion, many economists agree the fed has done all it can do. but vince reinhart, a former senior fed staffer, thinks his old employer could go a bit further. >> if the federal reserve kept the foot on the monetary accelerator at least for a time, then they could provide some more support to spending. >> reporter: reinhart says the fed has two options: delay its now-famous exit plans for a while, or buy more long-term bonds to drive interest rates lower. that might support economic activity, boosting hiring, of course, it might also spook investors who are worried about inflation. to calm those fears, reinhart says the fed could set a clear goal of keeping inflation low. >> that would probably help

anchor longer term inflation expectations. >> reporter: other analysts say any solutions will have to come from congress. economics writer robert kuttner says he is talking to the obama administration about more support for state and local governments; hundreds of billions of dollars in additional stimulus spending; and a tax credit for new job creation. kuttner thinks the administration should aim to bring unemployment down to 8% next year and 6% or 7% in 2011. >> that would be acceptable. i think anything else than that- - anything worse than that is wasting human lives, wasting economic resources, and the government can do better, the government ought to do better. >> reporter: the politics may be clearer than the economics. there's bipartisan agreement that high unemployment tends to make voters very unhappy with people in office. darren gersh, "nightly business report," washington. >> susie: and investors are very unhappy with bank of america. the stock fell 4% today on concerns about who will head b. of a. now that kenneth lewis is

stepping down. that leadership vacuum is just one of many hurdles confronting the banking giant. erika miller explains. >> reporter: no matter who sits in the corner office of bank of america, the challenges loom large. n.y.u. professor karen brenner says the biggest one is restoring trust with employees, customers, investors, regulators, basically everyone. >> that will clearly be the key objective of anybody coming on board. and given the distrust that surrounded these events of the past year, i think that's going to be clearly paramount. without it, it is going to be hard to maximize the value of the firm. >> reporter: having a new c.e.o., and several new board members may also make is more difficult for the bank to execute its business strategy. add to that, internal turmoil stemming from the ongoing integration of merrill lynch and countrywide financial. still, analyst stuart plesser says those mergers will ultimately prove to be good strategic moves. >> the acquisitions are paying

off. merrill is certainly adding to the bottom line in a significant way. and countrywide, although it has some legal issues, we can certainly see the market shares that bank of america is gaining in the mortgage market because of it. >> reporter: and for all the flak ken lewis has taken, the bank's legal problems don't end with his departure. it still faces probes by new york state attorney general andrew cuomo, congress, and regulators over whether lewis misled investors about merrill's losses and bonuses. on top of that, the bank has yet to pay back the money it owes uncle sam as part of the tarp program. that said, plesser still think the stock is a good buy. >> reporter: he thinks the stock will get a big lift as soon as bank of america starts paying

back it's $45 billion dollars in tarp funds. he thinks that could happen by the end of the year. erika miller, "nightly business report," new york. >> paul: wall street was hit with a sharp sell-off today, as investors feared a larger than expected jump in weekly jobless benefit claims foreshadowed weakness in tomorrow's release of the september employment report. a weaker than expected reading on manufacturing added to worries that the economic recovery was stalling. so two hours into trading the dow was off 154 points and the nasdaq down 52 points. the selling continued right through to the close. the dow jones tumbled 203.00 points to 9,509.28. the nasdaq plunged 64.94 to 2,057.48. the s&p 500 lost 27.23 to 1,029.85. in the bond market, the 10 year

climbed 1-2/32 to 103-24/32 putting the yield at 3.18%. >> susie: call it a cash for clunkers hangover. the nation's big automakers saw sales tumble in september, a month after the government's wildly popular program spurred a buying spree. sales at both general motors and chrysler plunged more than 40%. at ford the sales decline was smaller: down just 5%. toyota's sales fell 16%. one bright spot: hyundai. the south korean automaker's sales surged 27%, thanks to heavy incentives. >> susie: meanwhile, general motors hopes updated models like the buick lacrosse, and new marketing campaigns, will help jumpstart sales.

diane eastabrook talked to michael digiovanni-- g.m.'s executive director of market analysis-- about september sales. he says despite the disappointing number, there is some good news. >> we had a tough year over year comparison, but i think the good news for us is our market share in september this year is going to run about 21% we estimate, which is tied for the highest month we've had all year. so that was a very positive story for us. >> reporter: one of the things that you mentioned in your press release was that inventories were low. they were down because of people going into showrooms for cash for clunkers. what are dealer inventories like right now? >> well, we're at about 424,000 units which is up from about 379,000 units at the end of august. we're trying to rebuild our inventories. as you've said, they've gotten pretty low and you're right. i think the constrained inventories probably hurt the industry's sales by 30,000 to 40,000 units. probably hurt us about 12,000

units, if we would have had more mid and small compact cars and crossovers available in the month of september. >> reporter: you just a couple of weeks ago announced this new 60-day money back guarantee for consumers who buy a vehicle and if they decide they don't like it, they can take it back to the dealer. i know it's very early, but can you tell yet... us that program gaining traction with consumers? >> well, this program is something that you've got to stick with for a long time. it's intended to build long-term opinion and consideration of your brands and you know from third party experts like edmunds.com, who tracks this regularly. so it's not our data, it's a third party source. they've shown that consideration for our brands and our products has gone up appreciably from about 10% to about 12% in the middle of the year to around 14% now. so this is definitely a combination of "may the best car win" advertising, as well as the fact that our products are

getting better and better and you know, the new camaro, the and i think people are seeing that general motors is now on new solid ground and, you know, it's about our products getting better, not about all that we've been through in the last year in terms of bankruptcy and rumors of bankruptcy. i think we're putting that behind us and that's a very positive thing. >> reporter: i know that cadillac has done fairly well but one of the complaints that i've heard from caddy dealers is that you kind of pulled back a year ago on leasing and they think their sales would be much better if you would return to leasing and be more generous with your leasing program again. any change of that happening any time soon? >> yeah, that's absolutely accurate. we basically got down to almost zero percent leasing with all of our sales. we're easing back in to it. we're running probably around 5% or 6% of our sales are leasing-- most of that in cadillac. so we are getting back into that. we are going to do it on a selective basis for our luxury brands primarily.

we don't want to go overboard like we did in the past, because when you do too much leasing, those vehicles come back off auction and they cannibalize new car sales and hurt residual values for all manufacturers. so we want to maintain again like we're doing with inventories-- the right balance. >> reporter: mr. digiovanni, thanks so much for joining us. >> susie: n.b.c. universal could soon have a new owner. published reports say cable giant comcast is considering buying a controlling interest in general electric's n.b.c. universal. the deal would also merge the creative assets of the two companies to form a new venture.

comcast would take a 51% stake, and g.e. would own the rest. reports say negotiations are in the early stages. no comments from either company. the benefit for g.e.: raising cash. it needs the money to cushion the blow of rising loan defaults at its g.e. capital unit. paul? >> paul: susie, the upside for comcast: bigger ownership of the t.v. shows and movies it distributes to cable subscribers. both companies were among today's most actives. we'll see them as we take a look at our stocks in the news tonight.

and those are the stocks tonight. >> susie: ben bernanke's

comments today on the jobs picture are troubling for the nation's 15 million unemployed. for many of them, the loss of a job isn't just tough on the pocketbook, it's tough on the soul. some wind up at the nation's network of federally-funded one- stop career centers, looking for work and in some cases hope. and as jeff yastine reports, they don't always find it. >> reporter: this is one place that almost never lacks for customers. every morning at 8:00 a.m., there's a line of people waiting to get in. they're here checking online job databases, and hoping to find something-- anything-- that will start earning them a regular paycheck again. in south florida, this federally-funded, one-stop career center is called "workforce one." the same federal program has different names in different states: "workforce new york," "michigan works." but no matter the location or the name, the goal is the same: help people help themselves to find a job. people like alfonso urcuyo.

>> at first, i didn't think it would be this long, but the way the economy is it's really bad. >> reporter: urcuyo has come here nearly every day, for a year and a half. that's when he was laid off from his last job, a contract position with the state of florida. with a 9.5% unemployment rate in the fort lauderdale area, there's a lot of competition for work. >> they have all these companies put their advertisements for openings, you know? and you keep sending them and sending them, and half the time they don't even respond. >> reporter: as the folks who work here will tell you these are busy times. blue collar. white collar. from professions in once highly sought-after occupations, to people from the construction, tourism, and telemarketing industries that once formed the backbone of the south florida economy.

workforce one's kelly allen knows the numbers. >> busy is putting it mildly. a year ago, we had 27,000 people registered in our system. last time i checked, it was around 60,000. so there's been a huge increase in the number of people coming in, which is, of course, in line with what we're seeing with the unemployment rate. hanna karobkina is familiar with that statistic. she's an economist. >> i'm optimistic, real optimistic. ( laughs ) >> reporter: an economist who's the logistics firm she works for is going out of business. >> i'm trying to create a lot of resumes, and send them to different employers so they can get acquainted with me, get information about me. i have a doctorate in economics. i have seven years in business analysis, so probably somebody will be interested. >> reporter: staying positive is a tougher proposition for others, like barbara kaufman.

she recently lost her telemarketing job and would like to retrain, perhaps as a paralegal. but six weeks and counting without a job is six weeks too long. >> being unemployed is not fun. waiting for the checks. the unreliability of the checks. the low amounts, i mean... oh yeah, very difficult. >> reporter: staffers see the faces of the jobless every day-- worried, anxious, the sheer fatigue of looking for a job. a daily reminder to staffers like workforce one's sheila thomas. >> there's a lot of people who need help-- keeps you in the now, keeps you grateful. >> reporter: for those without jobs, the days are long. many come here to apply for training to learn new jobs. career counseling. and upgrades to their job hunting skills. and every now and again, all that hard work, and a little luck, pays off. >> let's just say i was thrilled, and my wife was thrilled about it, too. >> reporter: remember alfonso

urcuyo? he got a job as a customer service rep, ending his 18-month ordeal. >> they all say, "a year and a half, oh my gosh, are you kidding? how can you do it," they said. and i've been trucking around. ( laughs ) >> reporter: and it paid off. >> and it paid off. >> reporter: the kind of news a lot more people are hoping to hear. >> you're full of good news this week, aren't ya? >> oh, man, i love it when it's good news. >> reporter: jeff yastine, "nightly business report," davie, florida. >> paul: tomorrow, our friday market monitor guest is michael hasenstab, portfolio manager of the templeton global bond fund. >> susie: one of bernard madoff's biggest investors is being asked to return billions of dollars to victims of that ponzi scheme. former new york lawyer jeffery picower may have to give back $7 billion he made investing with madoff. the trustee recovering madoff's

assets wants that money returned to people who were scammed. picower says that claim has no merit. >> paul: if you're thinking about buying a house or refinancing your mortgage-- now could be the time. mortgage rates fell below 5% last week with the 30-year fixed rate at 4.94%. the average rate on 15-year home loans dropped to 4.36. that's the lowest the 15-year rate has been, since freddie mac began tracking the numbers in 1991.

>> susie: the nation's banks are being asked to pre-pay billions in insurance premiums. tonight's "two ways to play" asks the question: what's in it for the banks? here's kevin depew of minyanville and minyanville's kevin depew with some answers. >> the f.d.i.c., this week, said it is planning to raise $45 billion to help stave off a cash crunch as it deals with troubled banks. so far, nearly 100 banks have been taken over by the f.d.i.c. this year. how are they going to do this? by asking banks to prepay three years' worth of insurance fees. what's in it for banks? well, for one thing, it means they'd no longer have to set aside money to cover potential losses on fdic-backed securities. the result would be that some banks' capital cushion would increase almost overnight.

remember, the f.d.i.c., which is ultimately more important to main street than wall street, is suffering from a temporary liquidity crisis, not reckless insolvency. >> well, that's a nice, glossy take on things but it ignores the bizarre circular nature of what's happening. the banks in this case are being asked to purchase an asset-- f.d.i.c. insurance-- and then being told they don't have to put aside capital to cover a potential loss on that asset, because it's guaranteed by the government. what's the difference between asking banks to prepay $45 billion in insurance or to make $45 billion in bad loans? nothing. so put all the jargon aside and recognize this for what it is, an admission that the financial system may be awash in liquidity, but it's dangerously short of capital. >> paul: recapping today's market action: stocks tumble as investors worry about tomorrow's employment report. the dow dropped 203 points, and the nasdaq fell almost 65 points. to learn more about the stories in tonight's broadcast, to watch our streaming video and to take part in our daily blog, go to

"nightly business report" on pbs.org. you can also email us at nbr@pbs.org. >> susie: that's "nightly business report" for thursday, october 1. i'm susie gharib. goodnight, everyone and good night to you, paul. >> paul: goodnight, susie. i'm paul kangas wishing all of you the best of good buys. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt captioned by

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