it didn't go flooding into the economy.t got held in closets somewhere if it's not being issued or written into being, will it make a difference? >> the question is will it make a difference on the positive side and the negative side. the critics are worried that the expansion would lead to run away inflation. that's hardly been the case. inflation if anything is trending lower and below the fed's target which has been a source of concern for the central bank and gave them a little bit of pause about today's decision. in terms of what mark was sayi saying, if the money is going to be there, and where is it going to go? they've been adding stimulus to the economy ever since the crisis started. this is the first time that they've taken a step back from adding stimulus. that's the significant of the even event. this is an attempt of the feds to communicate their message more clearly as market predicted. the rates may rise only a little bit. as you remember in may and june when bernanke even broached the idea of tapering of bon

now the financialization of the economy is really an asset based economy dependent on bubbles to fuel growth that's kind of what we have learned through all this is that what we have here right now in the us well i think that yes the answer is yes what we've done we had a. crash a crisis. we didn't make any really fundamental reforms to the way that we organized the economy pay income distribution all those important things so instead we've been falling back to things we used fiscal policy to stabilize the economy and stop the slump from continuing that's the period two thousand and nine to two thousand and ten two thousand and eleven and on top of that we then had been with the easy money policy which is really about inflating asset prices that's the name of the game to try and blow back in the bubble and they've partially succeeded but it's pretty hard to when the bubble has a big hole in it somewhere because people know what happened they know that this is not quite credible they have to really blow hard and i don't believe it's sustainable well i want to bring up japan and i know

an economy that thomas quite honestly, everyone would recognize as too much unemployment as an economy where people continue to struggle. it is economy where we will continue to see where the growth will be. we are continuing to see real estate wars just like we had in the old days now that is confined to cities and a certain areas of the country. we are now starting to see private equity firms who i think are very good. that is a shocker to me, having owned a few rentals in the past. dr. yellen, i kind of look at these factors and i wish i could going on with other items. what am i missing here? i see asset bubbles. you're going to bring the asset balance sheet down from $4 trillion to zero even if you said over the next four years we would bring it down from from $ 4 trillion to $0. >> with respect to real estate, you mentioned real estate markets and we are seeing, as you mentioned, private investors come in to invest often in the all cash in certain markets in the country. is this evidence of an asset bubble? if you look at the markets where that's occurring, it's some of the harde

it's not the obama economy, it's the obstruction economy. at what point will you find something you can work with this president on. it seems to me people are just waiting him out. >> there are bipartisan things that republicans and democrats agree and one is the pipeline. the president looked me in the eye and said by january 1st i'll make a decision and you will know what it is. republicans and democrats overwhelmingly support this. he has done nothing. republicans and democrats agree with repealing the health -- the tax on medical devices. republicans and democrats agree on sanctions against iran. these are being blocked from votes in the united states senate. but what we're seeing are additional regulations coming out of this president that are making it harder and more expensive for the private sector to put people to work which is why the polling shows -- >> so what's wrong with america is president obama, is that right, senator cardin? >> and every opportunity you've had, the republicans have had, they've tried to block this administr

was the modern economy desirable? modern economy seal the sustained rise of material benefits including rising productivity and wages. decrease in disease, decreasing poverty, increasing inclusion. in the risk factory's workers had at least escape to the bond. the more radical impact of the new economy is was not material. they change the very near to -- nature of life and work when it took root. there were experiential rewards from working on new problems, gathering in sites, in that inning and creating novel things, testing them in the work place and trying them out in the marketplace and there were existential rewards of self discovery and personal growth from journeying into the unknown. the adventuress and exploratory spirit of the modern economy is emerging in the 20th century city's was reflected also in the arts of the period. of course this transformation depended on the development of institutions that enabled dynamism including various legal rights, laws governing corporations and financial institutions. to

it's difficult in our economy, it's difficult in their economy. they are obviously concerned about the pace at which change happens and managing it. but trying to stop it would be very damaging to their economy and i think they know that. i can't tell you that at the end of this year, we'll be able to say they made the move we open hoped they would make. we are going to engage with them to keep pressing forward and making the case. i believe that is welcome. when i was in china just a few weeks ago, it was important for the president to meet with me. we had an exchange that was our second exchange in the time i've been secretary. and when i meet with my counter part, we talk about the tough issues. they don't tell us to stay out of their business. they want to learn from our economic experience. i think our continuing to bring focus to these issues is something that helps them to make progress. i approach it in a very clear headed way. intentions are critical and important. but it's results in the end matter. >> one of the pressures that might be

just 74,000 jobs added to the economy. the unemployment rate dropped to 6.7% because twice as many people, including college graduates, simply gave up looking for work. the labor forwork -- the retiret of millions of baby boomers is also shrinking the labor force. the average retirement age is now just under 60 with the oldest boomers retiring early because of the sluggish job market. some of the folks who are leaving the labor force due to the retirement, would have stayed in had the labor market been stronger. >> more than 8.7 million jobs have been lost between january 2008 and february 2010. since then, the government says there's been an increase in more than 7.5 million jobs. the economy is closing the jobs gap, but more than five years after the recession we're still playing catch up. i'm hampton pearson in washington. >> there are jobs out there, but sometimes they may not be the kinds of jobs people want. take manufacturing. the name alone conjures up assembly lines and in some cases these jobs do pay more, but it

economy and other advanced economies. economists have spent a lot of time trying to understand what's responsible for widening inequality, and many of the underlying factors are things outside of the federal reserve's ability to address. >> do you believe your policies have added to the problem? >> i believe that the oils we've -- the policies we've undertaken have been meant to generate a robust recovery. i would like to see the u.s. economy and the job market recovering more rapidly than they are, but i believe our oils have helped -- policies have helped. and i think as we saw during the 1990s when we still had trends toward widening inequality, we did have real wage gains, and we did have a reduction in inequality when we had an exceptionally strong and getting ever stronger job market. so faster growth in the united states is going to help, a stronger job market, and, you know, when the economy recovers, we're going to see firms be more willing to undertake training. when they can't find workers, they're going to be

advanced western economy economies. originate as credit in the banking system. it is far from being a commodity it is actually a system built on a social construct. if you like on social relationships based on trust. and as such it can be created if you like out of thin air so these two very divergent views of what money is have informed economics but the dominant view is that money is like a commodity like gold or silver or copper and as such it's in limited supply you have to build up savings before you can you can spend under that basically under those theories was under the case he and theory came to an understanding of money which is actually goes back to jordan or. back to you know sixteen ninety four when the bank of england was founded as a banking system can create credit which can in turn initiate economic activity which can generate income to repay the debt and if that system is stable in equitably in such a speak then the creation of credit is entirely a good thing for economic activity if it's allowed to be wasted or gambled on speculative activitie

and global economy. she remains concerned about the global recovery in an even and subdued and about the slowing of emerging economies. she said the risk of heightened volatility in financial markets creates new challenges in the emerging markets economy. in the u.s. she is urging the approveshareholders to the increase of imf lending capacity and allow more say in developing countries. clearly for the iron lady of the global economy, the challenges are far from over. matters,bout these please join me in giving a warm national press club welcome to managing director of the imf, christine lagarde. [applause] >> i had to stand up at the time when my immediate predecessor would sit down and clearly i failed. afternoon and thank you very much for having me with you. i would like to thank the national press club and forcially the president inviting me to this prestigious venue and presenting the outline of what i want to talk to about now. let me begin by wishing you all a happy new year. i guess it is still

advanced western economy economies. originate as credit in the banking system. it is far from being a commodity it is actually a system built on a social construct. if you like and social relationships based on trust. and as such it can be created if you like out of thin air so these two very divergent views of what money is have informed economics but the dominant view is that money is like a commodity like gold or silver or copper and as such it's in limited supply you have to build up savings before you can you can spend under that basically under those theories was under the keynesian theory came to an understanding of money which is actually goes back to jordan law. back to you know sixteen ninety four when the bank of england was founded as a banking system can create credit which can in turn initiate economic activity which can generate income to repay the debt and if that system is stable in equitably and searches speak then the creation of credit is entirely a good thing for economic activity if it's allowed to be wasted or gambled on speculative activi

we need to distinguish between the economy and the markets. i agree with his view on the economy. when i look at europe, i feel reasonably comfortable their on the right path. my bigger concern is asia. i don't like the rhetoric of asia and japan. that could slow the global economy. >> this is the time of year when a lot of people think about what their plan is going to be. your advise would be keep investing in stocks, but look overseas for other markets? >> people should make sure they diversify internationally. americans have less than 25% of their equity exposure is in foreign markets. particularly when the u.s. has such a good year, people need to take a look at make sure they have enough money outside of the united states. >> thank you very much. >>> up next, we're "on the money." do book clubs go together like dollars and cents? and later, mother nature packs a punch. how businesses and travellers can survive approximathe winter. it's only just begun. ♪ [ man ] adventure, it means taking chances. it means trying something new. [ woman ] just, that uncertainty of what's to c

what is the consequence to the economy. >> our economy is built on the middle class. it's egal tarian economy, we are going in the same direction, moving up, and it's - our economy flourishes when we all do well. if we leave the middle class behind we won't have the same american economies as we have in the past. ultimately, if this begins to affect the political process, this will become self-reinforcing, and i think that will be a problem for higher income households. the economy can't grow without everyone participating in it. >> you are good at explaining things in simply terms. explain the taper. the fed is pulling back by $10 billion is month. the signs are that the economy chugs along, they'll pull back more. what is the consequence u.d. >> interest rates will rise. there are rising long-term rates. if you go back a year ago. you get a 30-year fix. they are rising. what the fed is doing is trying to manage the increase in long-term interest rates consistent with an improvement in the job market. >> this is a tricky balance. it's part of the tapering process. th

what is real about this economy?hen you look at the gdp growth of 3%, is that not real. >> that's not real. what the economy is doing is plugging along a trend of just below it's underlying potential, which is 2.25 to 2.5%. that's where it is. no better and no worse. trend gdp is very good. when you have a 6% employment gap, the difference between potential and current output. if you add a quarter of a point above potential on any given quarter, it will take you 12 years to get out of a 6% decline, or output environment. that's the problem that the economy is facing. it's not generating enough upside momentum to fill in the gap, pull people on the sidelines in the labour market back into the labour market and find jobs to give them employment and allow them to earn wages, to push the economy to where it needs to go. >> is it different today. if you go to the streets of new york and ask 10 people how the economy is going. you'll getdifferent answers. if those people are prosperous, good debt, make good money, they'll

i look at whether this speaks well of the economy? normally in a rising rate environment, that is good news if the economy, banks benefit in this environment. and everyone else too. do you buy that? >> i do. i do. i think -- on one hand rates are rising because they have been close to zeeo for so very long. history long, now fed is talking about stepping back, and rates are rising. neil: are you surprised that bank stocks did not take more of a hit? >> it was surprising. but. you know the fed used as their rational the fact that economy is getting better. i think people are buying that. people believe that the economy is getting better, people are seeing, employment is improving. people are borrowing because they are finding jobs. it is not great. but theerate of improvement. >> i don't think that rate environment has much impact, i have talk with jamie dimon of morgan stanley in the past. neil: well la dee da. >> he said they make money in every environment, on the margin on the loan. neil: he pay its back to the government. >> then

economy. this is one of the best fiscal tools we have available to create additional jobs and as i indicated if these benefits lapse and go away 200,000 jobs are lost at a time where every member of this body went to create more jobs for america. o we can't do that.te. but we have to start today of this procedure to vote. of the families that have weathered through the toughest part of the of the recession t in 2008, 2009, 2010, they were better off one year ago maximum unemployment benefits, the 73 weeks plus state benefits is 26 that is 99. that is about two years. are they got through some of the hardest part of this w recession and shows they are goodgh workers, they were struggling and working when unemployment was much higher. now they need help. i believe we have to give them that. we should be working together so when there are new plant openings there was a lot more jobs. you could see that 1600 jobs and 1800 applicants the my colleagues said they cannot do this because they need the

economy is that interest rates are too low they have to go up and the economy has to restructure in response to that but right now we have this phony economy that we just borrow and spend we're not saving and we're not producing all of our resources are misallocated because of the fed now fixing that is going to be painful we're going to have to allow a restructuring and interest rates have to go up but the reason the fed will not let interest rates go up is because they don't want any of that short term pain even if it means a lot of long term gain and of course the most pain is going to be felt at the federal government because when interest rates go up you're going to have to have massive spending cuts coming out of the federal government they may even have to restructure the bed where they admit that they can't pay but the federal reserve is trying to prevent the government from having to do that and so they keep interest rates at zero regardless of how much damage it is doing long term to the u.s. economy right now and then there's a lot of banks with a lot of bad debt on their books an

i think the economy is moving. we've just got to get the republicans out of the way so we can get things moving along. let's talk about giving the american people a raise. amy, over 80% of the american people support giving the american people a raise. $10.10 an hour. are you supportive of that initiative? and if so, what will you do to help the president get this initiative under way? >> well, this is the thing, donna, we're playing political small ball here. why don't we focus on the big issue? and that is putting people back to work. getting the economy going. i disagree with you that the economy's doing good on all these jobs. they're part-time jobs. obama care is the biggest job killer. here you're trying to increase the minimum wage. we're talking about minimums here. why don't we talk about the american dream and opportunity and, you know, put forth some policies that washington, everybody can get behind and businesses will have confidence in washington again and they'll invest in their companies and they'll

those economies are showing signs of slowing down. the market reaction began on thursday following reports of a contraction in china's manufacturing output. that report combined with existing fears around the rising interest rates spread to markets in europe. on friday hong kong's index fell 1.25%. and german's dax fell. the wave across the atlantic and led to the market plunge here in new york. what is going on with investors can be best be described as the fight to safety. the fears are being compounded by moves of the federal reserve. fed officials will meet to consider another draw down of stimulus spending. sparking higher interest rates and stronger u.s. dollar on world currency markets. that has been hurting some countries amid-political problems. turkey and ukraine further accelerating the fears of a global slow down. the money is moving instead to traditional safe havens like u.s. treasuries and that has left many wondering if the stock market is headed for a downward correction, something analysts have feared after last year

economy in crisis dot org i think it is the web site has you know which is kind of a conservative web site very very concerned about this i mean this is this is this is the issue. that is going to unite the tea party and the progressive caucus. i think it will to some extent and it should and the fact of the matter is that honest players on the right and the left and i have to be clear with you i'm i'm not necessarily suggesting that every tea party group being meets the honest players standard but honest players on the right and the left have legitimate questions about a free trade regimen that has been proven on so many measures to not work the fact of the matter is we're now twenty years into an experiment with multilateral retraining agreements like nafta. like a host of other afters as well as the permanent normalization of trade relations with china and instead of using the prosperity that was promised when each of these trade agreements was put into a fact we have seen an absolute crisis as regards our our trade deficit we've also seen the physical reality of a bad trade approa

difficult in our economy, difficult in their economy. they are obviously concerned about the pace at which change happens and managing it. they are trying to stop it, would be very damaging to china's economy. and i think they know that. i can't tell you that at the end of this year we will be able to say they made the move we hoped they would make. i can tell you we're going to engage them on a consistent basis to keep pressing forward, making the case, and i believe that's welcome. when i was in china just a few weeks ago, it was important for the president to meet with us, to meet with me. we had an exchange that, our second exchange in the time i've been secretary, and when i meet with my counterparts, the vice premier, we talk about the tough issues. they don't tell is to stay out of their business. they want to learn from our economic experience. i think our continued to bring focus to these issues is something that helps them to make progress. but i approach it with a very clearheaded way. intentions are critical and they are impo

in the global economy. the global recovery being uneven and subdued and about the flowing of emerging market economies, the main engine of global growth in the last several years. she said the risk of heightened volatility in financial markets may create new challenges to the emerging market economies and further slow their growth. in the u.s. she is urging the fund's largest shareholder to fill a pledge made three years ago to approve the increase of the imf capacity and allow more states in developing countries including china. clearly for the iron lady of the global economy the challenges are far from over. to hear about these matters today please join me in giving a warm national press club welcome for managing director of the imf [applause] >> thank you so much. [speaking in native tongue] as you can tell, do as i am told . at the time when my predecessor would sit down, and clearly have failed. good afternoon and thank you for having me with you. but like to thank the national press club and especiall

what's real about this economy? you look at the gdp growth of 3%, and that's not real. >> the economy is plugging along at a trend of just under its potential, which is one quarter to 2 and a half percent. and that's no better or worse. trend gp is good, but unfortunately, when you have a 6% unemployment gap, way is the difference been potential and current output, if you're one quarter of a potential any given quarter, it's going to take you 12 years to get out of a 6% decline or output gap environment. and that's what the economy is facing. it's not generating enough upside momentum to fill that gap and pull people on the sidelines of the labor market back to the labor market and find jobs to give them to push this economy really to where it needs to go. >> is it different today though? you go out on the streets of new york and ask ten people. if they're prosperous, low debt and making money, and they own a house or apartment or have money in the stock market, they will tell you this is one of the finest economies

advanced western economy economies. originate as credit in the banking system. it is far from being a commodity it is actually a system built on a social construct. if you like on social relationships based on trust. and as such it can be created if you like out of thin air so these two very divergent views of what money is have informed economics but the dominant view is that money is like a commodity like gold or silver or copper and as such it's in limited supply you have to build up savings before you can you can spend under that basically under those theories was under the keynesian theory and came to an understanding of money which is actually goes back to jordan or. back to you know sixteen ninety four when the bank of england was founded as a banking system can create credit which can in turn initiate economic activity which can generate income to repay the debt and if that system is stable in search of speak then the creation of credit is entirely a good thing for economic activity if it's allowed to be wasted or gambled on speculative activities then t

china's economy is now slowing. the sector is contracting. they showed the economy slowing.is not necessarily the worst thing in the world. china's growth has been unsustainable. it has been too focused on credit. the government has switched into a model that is less reliant on credit and investment. in the long term that should be sustainable. this is exactly what china needs. if expectations that china will go 7.5 to 80%. know, and a lot of people had expecting chinese slowdown. perhaps it is another reminder. this does come in the broader context of the underlying current. also concerns about emerging- remainability to healthy. >> exactly. i think when tapering was first announced last month in the markets to get in their stride, that was maybe a surprise. they're all coming around to the idea that this is happening. of being another 10 billion of this effort. this is going to carry on through the year. every meeting that has this year. it will taper. stop factoring that into prices. unless it happens, there'll naturally be periods of high risk aversion. it will be the ec

economy boost in the japanese ago so basically if you take money out of the u.s. there's a very small multiplier effect but if you keep it in the country use it to buy things like local produce at a grocery store there's a much larger multiplier effect that multiplier effect explains why the government spending five dollars in new food stamp benefits produces an additional nine dollars in economic activity. food is almost all local and according to moody's analytics explains why every one dollar of unemployment benefits creates a dollar fifty five in economic activity. democrats know about the power of the multiplier effect and understand that by increasing government spending and giving money to people in the form of programs like food stamps and unemployment insurance you're actually helping to boost the economy because those people will go out and spend some of not all that money they're actually creating them in there the job creators and this is something that's been tried and tested even republican lawmakers after world war two when he had a recession presid

so i would expect the russian economy actually to do worse and when you talk about the russian economy what are we talking about really i mean the bulk of it is oil gas natural resources so if that's doing well on a global scale then russia will do well but the remainder of the economy i mean production is down i think russia has not reached really the point it needs to be productivity but that's going to give the party is for more reform i mean it's a political issue is what it's all face it i mean there are challenges here president putin came out at the end of last year in december and said look we have our own domestic problems before it was more external issues now he's saying we have to deal with them domestically john. yeah well i don't share the general sentiment that russian economy was particularly bad last year we had one hundred percent growth and no budget deficit deficit there and to state is not indebted full employment compare with what's going on in the european union so i think that people and i missed the point thing is that russia has reached a new story level of de

it hurts our economy and workers. it >> can you give us the an example of what's a reasonable pay-for? >> senator schumer suggested some of these tax provisions that actually not only deprive the government of revenue, but also help deploy jobs overseas when we need jobs here. but there are a whole list of tax loopholes, and other things we could consider. i want to foreclose discussions. i think at this point, particularly, having secured a very positive bipartisan vote, getting us on to the measure, that we want to go forward in good faith and good spirit. and not include, exclude, etc., but just simply say we are willing to listen. as senator schumer cautioned, we have to have something that makes sense for the economy, makes sense for the people. and something that we can generally support. i hope my republican colleagues approach it the same way. anyone else? >> surprised by the vote today? >> it was in the balance until the very last moment. i was hopeful, but i guess being irish i'm always expecting the worst.

if the chinese economy were to slow sharply that would be a negative around the world for developed economies as well as for emerging markets. we happen to think that is extremely unlikely, and it doesn't signal a sharp slow down in china. i think that's what the markets have really started to worry about. and when that came through that encouraged the markets to start looking at the countries that have got weak fundamentals in such places as turkey, or the ukraine is all that new. it just took the chinese data to focus on that. >> in argentina, turkey and ukraine it's not a generalized matter. what should my viewers who gained 30% gains across the board do in this environment? >> we are certainly still telling investors that the u.s. market will go up over the course of 2014. it's just that i think having seen a 30% rally last year, that maybe we would use some sort of pause. so i think that what investors ought to do is probably wait it out, see if we're going to go down a little bit more in the near term. but to be honest i think would the u.s. economy like to do well this year, with the f

economy and u.k. citizens is never been easier thanks to low interest rates and absence of regulatory authorities well speaking of absence of regulatory authorities we're going to prove that the banks are robbed before you can even get to it off limits but blessed by the fed areas like electricity are generally off limits to banks because of the risks involved but with this june two thousand and ten letter the fed like j.p. morgan take an even bigger role selling electricity in california in the midwest saying the push would quote be reasonably expected to produce benefits to the public that outweigh any potential adverse effects three months later j.p. morgan traders began a scheme to manipulate electricity prices ultimately forcing consumers in those regions to pay more every time they flicked on a light switch or an air conditioner again if it's moral hazard turn into a meat and tazz or morally bankrupt bankers who are manipulating every single socket they can put their fingers in causing shortages

they could just run the whole economy. you see what the government has done with benefits and salaries and public employee workers. it's bankrupting government. let the private sector decide if there are abuse, lawsuits, and other things you can do. shareholders and the like. activist shareholders. get the government out of the way and let the economy prosper. >> rick, health benefits are a form of compensation. as we mentioned last time, incentives are at the heart of the free enterprise system. you can't take that away. >> it is a fair question to raise. i want to point o thing out so there is a perspective here. this rule has been in existence for 30 years for companies that self-insure under the arista law. they have been following this for a long time and nobody was screaming about it. beyond that, i have to be honest. i go back and forth on ts. i see steve's point. on the other hand we have seen a lot of things along the way where the companies didn't behave as they should and it led to the osha department, the safet

economy and for the fed. the experience has head to important changes at our institution including new monetary policy tools, enhanced policy communication, a substantial increase in the institutional focus on financial stability and macroprudential policy and increased transparency. we up speak of the principal reserve and other institutions as if they were -- federal reserve and other institutions as if they were autonomous actors. of course, they are not. the fed is made up of people working with an institutional culture and set of values. i'm very proud of my colleagues at the fed for the hard work and creativity that they have brought to bear in addressing the financial and economic crisis, and i think we and they have been well served by a culture that emphasizes objective, expert analysis, professionalism, dedication and independence from political influence. whatever the fed may have achieved in recent years reflects the everetts of many people -- efforts of many people who are committed to pursuing t

so i think you can you can you can say this is a great economy right now it's a great economy if you're rich and we're trying to get the wall street cranked up again and if you've got all your money in stocks it's beginning to show a little life it's not if you're an average person in this country ok bob how do you reflect upon that because i would i have to tend to agree with doug i mean i see a lot of public relations here i don't see a lot of really good policy for the average person i agree with a lot of what doug said i met my my only point really was comparing the economy today with the economy in two thousand and eight and i think probably we can agree it's improved relative to that i just like to pick up on an earlier point that doug made though which i also thought was quite important and significant especially insofar as historians can provide value by looking for trends and putting things in context which was the assassination of a u.s. citizen overseas really you might say the power to have life or death over there. citizens without without an open trial and i think that in

and for the global economy. yet she remains concerned about the global recovery being uneven and subdued and about the slowing of the emerging market economies the main engine of willful growth in the last several years. speaking in mali on january 9 she said the risk of volatility in the financial markets may create new challenges in emerging market economies and further slow growth. in the u.s. she is urging the fund's largest shareholders to fulfill a pledge made three years ago to approve the increase of the imf's lending capacity and allow developing countries including china. clearly for the iron lady of the global economy the challenges are far from over. to hear about these matters today least join me in getting a warm national press club welcome to managing director of the imf, christine lagarde. [applause] >> thank you so much. as you can tell i do as i'm told i thought i had to. >> about the time when the media clearly failed. good afternoon and thank you very much for having me with you. i would like

is this a good economy or weak economy?for those in the top particularly say third of the distribution, you have doing pretty well, you are lifting your net worth. if you have any debt at all, it's a 30-year fixed mortgage, and you reify down and you are in pretty good shape. if you are in the bottom half, these are still very difficult times, so it's two americas, but i will say, i think we're now getting to a part in the business cycle, where we'll pay a lot more jobs and the benefits will be much lower. so not everyone is go to benefit but more will benefit in the future sthchl >> the fact that we have these two americas -- what you really need is most people in the middle with good incomes who are hopeful that their kids will have better incomes and can afford health care and a nice house. are we eroding the middle class? >> yes, in the long run, this is a big problem. the high income is doing well, but the jobs for middle income america, they are going to be tough to come by, because they are being driven out by techno

economy, where under prime minister david cameron the economy has really turned around and is starting to grow now. royal bank of scotland is one of the u.k.'s largest banks. it has a terrific franchise but has been beaten down as a result of the financial crisis. and the company is still working through some of its losses. and as the economy starts to improve, as the company works through its losses, we see that the earnings should start to grow. the valuation here is what really pulls us in at 80% of tangible book. and it looks like to us it's trading on about 5.5 times normalized earnings. so from the target price perspective, we think it should trade at about ten times. and that will take a few years to come in. but from 5 1/2 times earnings to 10 times earnings you just about double your money on that stock over the next few years. >> the second holding of yours you like very much is tesco, the u.k. retailer. there's a british theme here, david. >> there is a british theme. and i thought it was appropriate in an environment like this to highlight that there are parts of the the de

everything from now, a vibrant economy. the private sector that was non-existent, more now growing and we are seeing the middle class, you know, come up and grow very fast and take the center stage as it should be. >> what did you find the most intractable? what was the most difficult or the most serious burden to attracting foreign investment? >> one was capacity. capacity of institutions. >> that's why on the side of government investing in building capacity of institutions and building capacity. >> the one thing that overhangs many developing nations, not just rwanda has been the issue of corruption. >> good government and crating institutions to make sure rule of law happens and fairness happens. >> the progress is remarkable. people around the world point to rwanda as an example and point to you when you google your name, the term strongman comes up a lot. which happens in africa sometimes. you are an exmilitary man who has taken government that's happened in many countries. you are coming up to two therms now, 2017 an

it's important to the economy because growing economies are in a better position to create jobs.t will pay attention not just to earning numbers but how the companies are producing them. >> reporter: it pushed interest rates down and stock records high as investors chased higher returns. but as the stimulus tide reseeds, investors may have to be more discerning. >> investors will need to see a strong turn around particularly earnings to validate the gains we have seen in the market last year. >> reporter: street watchers expect total earnings to be up nearly 9.9% this year compared to 4.6% last year. how those earnings are generated, though, will be closely watched. since the recovery many firms have kept profits up by keeping costs down. this year sales growth will be key with revenues with the s&p expected to climb 725% compared to barely 1% for 2013. >> the expectation now is that as the economy ramps up to improve growth pace in 2014 and beyond, they'll give companies the top line revenue gains which will translate into double digit earnings growth. >> reporter: even if you'r

economy.he result according to morgan stanley is that china's totals public and private debt is more than 200% of gdp. unprecedented level for any developing country. while it used to take $1 of debt to produce $1 of gdp growth takes $4 to produce the same dollar of growth. businesses and local governments have piled on debt. the property boom has accelerated without serious policy changes relatively soon, this is a bubble that is going to burst. in addition, china faces other serious challenges. the average chinese person almost anywhere in the country now experiences serious air and water pollution. they are also increasingly outraged by corruption. the communist party pledged to take on these challenges and revamp its systems of promotion and party discipline to ensure that officials are less corrupt and more focused on ecological damage and not just growth. if in fact the new leaders of china do all of these things, they will face political resistance and backlash within the communist part

economy and it is certainly responsible provide a very vital policies of the economies. now, is not advice to the view at the expense of other countries. as i said, other countries have policy instruments. by providing this liquidity of two countries in trouble. brazil, mexico, singapore and south korea came to the u.s. forecast and that has calm conditions. i take this one step forward and say the way to reconcile the responsibilities would be for the fed to do what it needs to do for the u.s. economy. but for the rest of the u.s. government, to ensure other things can be done for economies. i come back with the best that congress can do now is in fact support the future of terror crises,, which it is true would come back to the u.s. the way to address that is to fund the imf and provide the resources to do with international crises. >> any other -- dr. lachman. >> let me comment on that. >> sorry. either one. >> you may want to explain to your constituents, whites in the interest of the united states for the united states to finance the ims. especially to france, which