fed chairman ben bernanke is set to deliver a fresh report today before congress. on wednesday, bernanke will go before the senate banking market. in an op-ed piece in the wall street journal, he says the huge amounts of money that the fed has pumped into the system will not undercut its ability to raise interest rates when the time is right. he says it's like an easy policy will be needed for some time, but as the economy recovery takes hold, the fed will need to tighten monetary policy to prevent, quote, an inflation problem down the road. joining us now is christian blaabjerg, market strategy at saxo bank, and steven davesys, the ceo at chaplain wealth management. we're having a bit of a round table of sorts. gentlemen, i'm not sure if you got a chance to read better bernanke's piece in the wall street journal, but he essentially says, we're going to need to keep interest rates very low and we understand the risks of spurring more inflation here. but we have an exit strategy. a lot of banks are keeping their reserves at the federal reserve right now. what we'll d

. >> ben bernanke says that the policies have helped to prop up the economy. the conflict in the congo could be supplying parts for the phone in your pocket. welcome to bbc news. guerrillas made a good, former fighters bringing order to kurdistan. a woman desperately hunts for her valuable shoe. the world health organization is now calling swine flu the fastest moving pandemic ever. the death toll stands at more than 700 worldwide. that is a jump of 60% from a few weeks ago. britain is a months the state's best prepared for the -- is amongst the country's best prepared for the pandemic. >> here in china, the authorities have taken tough measures to stop the spread of swine flu. they are not taking any chances health officials -- they are not taking chances. how officials screen people before they get off of the flight. if you are found wit vz swine flu, you are placed in quarantine. these people have been spending weeks in confinement. shoots around you. >> in the past, china was criticized for spreading its sars virus to the rest of the world. it is worried

, they don't want the market's tab and tax dollars to back every are market in the country. >> ben bernanke is coming back, and so is john carney, steve moore and rick santelli. we're going to dive into some more controversial quotes, and is bernanke now in the driver's seat to be reappointed come this january? we are "the kudlow report." i don't know. you've got to give him some credit. look at this global stock market rally. look at this summer rally here in the state. something seems to be working. so i want to stay on the optimistic side. we'll be right back. (announcer) take your time to find the right time with cialis for daily use... a clinically proven, low-dose tablet for erectile dysfunction you take every day so you can be ready anytime the moment is right. tell your doctor about your medical condition and all medications and ask if you're healthy enough for sexual activity. don't take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. don't drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed

but i also don't remember ben bernanke ever talking about that possibility with me. >> it's interesting that both you and mr. bernanke can't remember. let me just read something here that really concerns me. first of all, they expected a $9 billion liability, and a few days later, they found out it wasn't $9 billion, but $12 billion. and so they were very concerned that they weren't going to be able to swallow all of that, and that's why they said they wanted to change this, and use the mac provision. and you didn't want to make that public. you didn't want to make any of this public. why not? >> well, let me say to you that that is not a fact. the only -- this came up in connection with ken lewis asking me for a letter from treasury. and what i said to him about a letter from treasury is i said, ken, we do not have any kind of a specific agreement here. we haven't decided on the size of the program, the dollar amount, we haven't decided on how many assets. and so if i gave a letter, all i would be saying is what i've already said publicly, which is that b of a is systematically importa

ben bernanke would just give me king dollar, i could get really bullish. know what, free market catholici capitalism this is best path to prosperity. "cnbc reports" with my pal dennis kneale. >> hello. thank you very much. "cnbc reports" right now. >> tonight on "cnbc reports." charge! the bull run rolls on. the dow scoring late gains finishing the day up 67 points. nasdaq up ten straight days. key earnings, new numbers and new reason for optimism. we have you covered. something is lurking out there that could take the market down like a great shark on a slow and wounded sea. new tax, health care, increased spending. tonight, why he -- >> what i have to remind people of is that doing nothing doesn't mean you just keep what you have. doing nothing means that you're going to lose what you have. >> reporter: sounds so similar to her. >> we cannot go on the way we have been going. >> reporter: why dennis thinks ben bernanke saved his job today. this is "cnbc reports" and it all starts right now. >> good evening. i'm dennis kneale. sell-off? what sell-off, scot

the head of the american central bank, ben bernanke, says the u.s.conomy is improving, but unemployment is set to rise further. the former guerrilla force in kurdistan fought the iraqi army during the reign of saddam hussein, but now it is changing roles. >> they used to be rebels. but today, they are one of the most organized forces in iraq. they are the kurdish peshmaiga, if which means, those who face death. >> the soldiers used to be a guerrilla fighters and now they have come down out of the mountains and where the iraqi before. >> this force has been protecting the kurdish since 1991, at the very important part of the new iraqi security forces. >> these checkpoints are being controlled by the kurdish. >> this man used to be a rebel. he spent most of his youth fighting in the mountains. today, he is in the peshmaiga force. >> i consider myself a soldier of the iraqi federal army in the kurdistan regional government, but we have a dream to become an independent nationç >> in recet months, the iraqi army deployed a battalion to the disputed city

ben bernanke accused of being anything but gentle ben with bank of america.here is a probe to figure out whether the fed abused its power during the takeover of merrill lynch. scott garrett from new jersey was one of those lawmakers, he joins me now. welcome to the program. >> i like that tony soprano reference. stuart: well, you are from new jersey, and so am i. but i've got a sustain petition that you don't like ben bernanke and you don't want the fed to be the ultra regulator, as is the proposal. so you're coming up with an investigation to see exactly what ben bernanke did with b of a and merrill lynch and maybe stop the fed from being the uba regulator, as is the proposal. am i going too far? >> well, i like some of your points. do i like or not like ben bernanke? i like the man. i respect the tough position that he's in. as a matter of fact, just moments ago he was here speaking to a small group of us here on a whole bunch of these issues. but you're absolutely right on the aspect of i have real concerns about throwing a whool new slew of areas of autho

that was chairman ben bernanke's message for congress today, saying the fed intends to keep interest rates low and credit easy for quote an extended period. bernanke said it's the right policy, even though the economy is showing quote tentative signs of stabilization. the chairman also reassured investors the central bank has an exit strategy ready to go once it's time to reverse its easy money policy. darren gersh explains. >> reporter: always cautious, the federal reserve is checking out the exits in case of an inflation emergency. a jump in prices would require the fed to unwind the $600 billion it has pumped into the economy. but chairman ben bernanke made it clear he and his colleagues are not expecting to put an exit strategy into action for "an extended period of time." vince reinhart is a former senior staffer at the fed. he says the central bank won't raise interest rates or tighten credit until it believes a durable economic recovery is under way. >> they don't have that evidence yet, and they are trying to send a signal to push back against market participants who are expe

we're going to have ben bernanke back on the hill today. he gave a fairly good performance defending the hill yesterday. we saw yields move down on the back of that. right now we've got the ten-year bund at 3.35%. the ten-year note here in the states had moved lower, as well. this hour, it's trading at about 3.48%. taking a look at gold, we saw a bit of a move to the upside as south african producers averted a strike coming to wage agreements there with workers this morning. we're moving down just a skosh, off 1.85. candice lash is joining us to talk about it this morning. dedia barovsky. welcome to both of you this morning. thanks for joining us. we see in the standard & poors 500, moved towards real resistance levels. can we move forward? can we see this earnings enthusiasm push us higher? >> well, thank you. if you will, the economic cycle in the united states for sure, sentiment has improved and for households and we expect a rebound. so there is good news in the pipeline for the u.s. economy. and to some extent, we will see a rebound i

central bank ben bernanke told congress that the economy should start picking up this year but then added the downside that unemployment currently at 9.5% of the workforce would inkeys. from new york, here is our business correspondent gregwood. >> the federal reserve has cut short some interest ates to record lows and pumped hundreds of billions into the banking system to counter effect the economic downturn. >> i present the semiannual monetary report to the congress. >> giving the report to congress, ben bernanke said these policies have helped to assert the collapse of the global financial system and would continue for some time. >> the u.s. economy contract contracted sharply. more recently, the pace of decline appearto have slowed significantly and final demand and production have shown tentative signs of stabilization. the labor market, however, has continued to weaken. consumer price inflation, which fell to low levels late last year remain subdued in the first six months of 2009. >> however, as economic recovery takes hold, there is a danger that the sheer amounts of money in the

what do you think of these markets and what do you think of ben bernanke today? do you think he gets reappointed. >> i think he gets reappointed. the only thing he that sand op-ed piece is he thinks the fed exit will be smooth and timely. he's a smart guy. he clearly stated today he has four or five ways to take out excess liquidity, $800 billion in reserves. he has a plan and not afraid to leave the bunch bowl maybe a couple minutes longer than he should and under such skrcrutin won't make the mistakes greenspan did and didn't say anything different other than the smooth and timely part. >> one clear message, he will not be raising interest rates too soon. we may not see it until 2011. that could be good for the stock market if he holds to that, true? >> those are interesting and important, huge institutions, endowment funds, pension plans, dramatically underowned large cap quality u.s. individual investors own the least amount of common stocks they owned as a percentage of their net worth going back the last 15 to 25 years. what you've got, you've got what you'

squawkbox tomorrow morning at 8:00, an exclusive interview with am f m former citi ceo salli. >>> is ben bernanke listening to dr. copper and other market indicators and other goofy statistics zack karabell referred to. we'll talk to republican senator jim bunning, who has a big beef with bernanke and can president obama make the sale on obama care in the prime conference tonight? we'll see. >>> we have a special debate. robert rice versus john stossel on the disastrous obama care and obama's phony claim he rescued the economy and the fight between free market capitalism and socialism. this debate over obama care is a piv pivotal moment in american history. trust me, i have seen these things before. we are "the kudlow report" and we are coming right back. taking its rightful place in a long line of amazing performance machines. this is the new e-coupe. this is mercedes-benz. you must be looking for motorcycle insurance. you're good. thanks. so is our bike insurance. all the coverage you need at a great price. hold on, cowboy. cool. i'm not done -- for less than a dollar a month, you also get 24/7

ben bernanke is the big headline. to be heading to capitol hill tomorrow for a semi-annual monetary meeting. that's it it your global stock watch. christine? >> that will be very important. coming up next on "worldwide exchange," this earning season has seen the good, the bad and the ugly. verch investors seem to be focused solely on the good. stay tuned for the strategy panel after the break. welcome to the now network. currently, thousands of people are enjoying the new palm pre with its revolutionary web os. they're running multiple live applications at the same time. - ( thunder and rain ) - 3 million are using the simply everything plan. each is saving $1200 - over an at&t iphone plan. - ( cash register dings ) together that's over $3 billion. - enough to open a dunkin' donuts in space. - -lkie-talkie sounds ) from america's most dependable 3g network. bringing you the first and only wireless 4g network. get the palm pre from sprint. only on the now network. deaf, hard of hearing and people with speech disabiliti

ben bernanke's war on the great panic. tonight he'll tell us what bernanke was up to this week. >> that's right, gwen. the poor guy went to the hill three times, once in the senate and once before the house. he had a very consistent message. things are getting a little better and i deserve some of the credit. and barney frank told him no one got elected with a bumper sticker saying, you could have been worse. he said, you really do need to change the regulatory -- financial regulatory apparatus so we don't go through this again. and i'm 100% behind tim geithner, the treasury secretary and his plan, except for the things i don't want to do. he said to congress emphatically he hates this bill ron paul is pushing that has the surprising support of 2/3 of the house that would give the government the accountability office the right to audit the feds' monetary policy, their interest rate decisions and basically said if you do that the fed will lose its independence and we'll have inflation. he was very strong on that. and he sai

we should start with health care or ben bernanke. we have the representative. let me start with you. for the first time in a long time. ben bernanke spoke outside the scope of what he normally does which is monetary policy and chide congress on fiscal policy and spending too much money. did you hear that? >> of course that's a corollary to monetary policy, but on that question, you can reflect back to what his message was. the message was we are succeeding in coming out of the depths of the recession and that things are looking good. they are not fully recovered, but on a positive path now. he anticipates by the end of the year or early next year, we will start recoveringing with a slow recovery of unemployment. >> how serious is the proposal and bill that has a lot of sponsors when it comes to giving the ago audit power over the fed's monetary power? >> it's serious as a bipartisan piece of legislation. i don't know the number. last time i saw it was around 220 members that signed ochl they proposed the democrats and republicans because they are responding to

ben bernanke will be talking about recent financial developments. today we will be getting earnings reports including word from the lockheed martin. after the close, we will be hearing from apple anwe will see if applications helpede fnehoan iphone fans from defecting to the palm pre smart phone. yahoo! will be reporting quarterly results. they have revamped their home page. you can see what is happening on a popular spaces like facebook and twitter. and that is business news. i am reporting for abc 7 news. >> ok, thank you very much. 6:36. when we continue, will the health-care plan mean better quality plan -- care? some say the answer could be in new polling data. those numbers straight from mike allen coming up in minutes. and a vote on sonia sotomayor is supposed to happen there are moments in time when the pathswe take do determine our future. today we are communicating with each other as never before - and that requires a seamless network that is constantly growing better, smarter, and more secure. that's why our scientists and engineers in ou

. >>> federal reserve chairman ben bernanke returns to the hot seat std before comments before congress tuesday getting lukewarm reception on wall stre street. we're joined by louisa bojesen from the london headquarters of cnbc. good morning, louisa. >> hi, christina. let's not forget a lot of what he said had been published in a wall street article before. maybe that's also part of the reason the markets didn't react more. he reiterated his outlook for the u.s. economy. it's improvinmproving, he said. most market participants focused on earnings, though. fall a little bit of late buying. dow closing just shy of 1%. nasdaq up for 10 straight days in a row. longest streak in 12 years. stcks to watch today include morgan stanley, qualcomm, ebay. apple's quarterly profits had better than expected earnings. they sold 7 times as many iphones as they did a year ago. 13% rise in laptop unit sales, a 10% drop in desktop sales. caterpillar, 66% fall in second quarter profits. they're still cautioning on demand, though, for the near feature. starbucks profits much better than expected as they beg

larry, back to you. >>> all right, coming up, fed chief ben bernanke has a message and he is taking it public broadcasting. discuss what motivated, another bernanke television interview. you know, melissa, no good deed goes unpunished. >> a great job. fantastic. >>> the earning central round up and how to ring up profit in the tell come sector. two top analysts with their tope stocks are straight ahead, right here on "the call." 31 are streaming a sales conference from the road. eight are wearing bathrobes. two... less. - 154 people are tracking shipments on a train. - ( train whistles ) 33 are im'ing on a ferry. and 1300 are secretly checking email... - on a vacation. - hmm? ( groans ) that's happening now. america's most dependable 3g network. bringing you the first and only wireless 4g network. sprint. the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com. bringing you the first and only wireless 4g network. sprint. the now network. you have questions. who can give you the financial advice you need? where will you find the stability an

meanwhile, federal reserve chairman ben bernanke giving his second day of testimony today on capitol hill. today it was before the senate committee on banking, housing, and urban affairs. cnbc's steve liesman now with the highlights there. steve? >> thanks, maria. fed chairman ben bernanke found himself defending the central bank's duties and its independence for a second straight day on the hill. a key issue, a proposal by the obama administration to strip away the fed's job of protecting consumers in financial matters and giving that job to an independent agency. bernanke today acknowledging that the fed dawdled early in the decade on consumer issues and he suggested dramatic changes could be in order if the fed is going to keep the job. >> suggestions i would make, one would be to put consumer protection in the federal reserve act along with full employment and price stability as a major goal of the fed. a second steph could be to require the chairman to come before you or another committee, at least once a year, present a report in the same way that we do for monetary policy on o

he did mention ben bernanke. the fed chairman defendants his actions on the financial crisis, saying he did not want to be the person who presided over the second great depression. bernanke making those comments after answering questions in a town hall forum this past sunday. bernanke tried to alloy concerns that the fed has too much power, saying he's answerable to the american people. bernanke said the fed is doing all it can at this point to turn the economy around. he's confident the u.s. will be back to strong growth within a few years. >> shares of pearson trading at the top of the ftse. education, publishing business. it expects subscriptions to withstand further economic pressure but did not see an upturn in advertising any time soon. >> china's first ipo in a year skyrocketed in china. sichuan expressway trading was suspended for the second time. analysts say investors were drawn in by the strong prospects and the low price. china state construction engineering widely expected to kick off this tuesday. a

and merrill lynch and the financial system. >> reporter: last month, fed chairman ben bernanke told the committee the government did nothing inappropriate to intimidate bank of america executives. today, paulson went further saying he was never told by the fed to threaten lewis. congressman dan burton wasn't convinced. >> if you came away from those phone calls, somebody must have said, "hey! we can't let them do this!" and i would suggest that it might have been mr. bernake. >> what i would say to you. i do not know whether someone in the conversations or calls expressly said it, or if my understanding came from just the tone and the forcefulness. >> you know, you're a very smart man, and i don't think anybody's buying what you're saying right now. >> reporter: other lawmakers lashed out at paulson for his lack of transparency in bailing out wall street-- whether it was by financing the bank of america deal, or selling the tarp to congress. representative stephen lynch says he thinks lawmakers have been misled. >> if you had come up here with mr. bernanke and said, "i got a plan, i wan

ben bernanke is montaging that debt.t groet is growing at an 8% annual rate year over year yet bank lending is almost flat year over year. all of our money creation is going to service our debt. >> we're trying to reflat? >> we are reflating. look at the price of oil and gold. we are reflating. >> mike, hold on. hold on. the fed is buying $300 billion worth of treasuries. the treasury is issuing some trillion dollars or more this year or next -- >> 1.84 trillion, plus the rollovers. >> bernanke has argued he's only, first of all, buying a portion of the treasure ris out there. second, he's argued is that he's only restoring the traditional amount of treasuries on the fed's books. where do you get the word mon y monetizing from? >> not zimbabwe. >> i don't get the comparison to monetizing debt. >> any fer reserve prints money, and buys the mortgage-backed security, they're monday net tidsing the debt, whether they do a purchase agreement or coupon pass. that's monetizing the debt. >> you can monetize mortgage debt because

are you mulling over the numbers out or the op-ed ben bernanke had in "the wall street journal"?ink bernanke took the element out of surprise for today's testimony in his memo written yesterday. the bottom line, rates will be held low for some time to come. i don't think he sees inflation as a problem we have to deal with right now. so essentially the main concern staying on the economy, keeping the economy -- i should say, getting the economy back on track. really dealing with, you know, inflation right now is the lesser of two evils. i think the market will continue to focus on earnings which have certainly been welcome with open arms thus far. one thing we'll be looking at is the retail sector. you know, that's something i think that could potentially derail this rally. i think that's going to be a very good real-time meteric. >> retails come at the end of earning season, after the very beginning parts of the season we've seen six days in a row of higher numbers for the markets. can those trends continue and where do you start to run into resistance, do you think? >> i think w

chairman ben bernanke in his testimony and earlier this week said he wants to keep it. so geithner was asked, well, what is bernanke's argument and geithner responded, well, it's what all agencies do. they're defending the traditional purgatives of their agency, essentially protecting turf. the background on this, by the way is that geithner used to be at the new york fed, used to work closely with bernanke at the fed, so here they are, a little bit of a war of words going on and maybe a little insulting there. >> and not just between geithner and bernanke, also includes sheila bair. this new agency, tim geithner says should write the rules and enforce. ben bernanke says, no, no, i should write the rules someone else can enforce them. sheila bair says someone else can write the rules, but i want to enforce them. >> and this shows how complicated doing financial reform is going to be in this country. not the different businesses and industries that are out there, but also inside government there is a fight that is complicating this. and not only democrats and republicans

. >>> federal reserve chairman ben bernanke is on something of a public relations campaign. explaining what the central bank does. at a town hall meeting last night he said he had to hold his nose over the bank bailout but argued it was necessary to avoid a major meltdown of the financial system. ben bernanke also said it's too early to judge the government stimulus package. >>> one of the largest hotel groups in the world is slashing prices on hundreds of rooms. starwood hotels which owns the sheraton, weston and other hotel brands cutting room rates up to 50% at more than half its properties the promotion is good through october 12th and could set off a price-cutting war among hotels. >>> a squad of guinea pigs took down harry potter. "g-force" zapped the boy wizard from the top spot taking in more than $32 million. the 3d movie is a mixture of live be ation and an -- live action and animation. >>> kids can soon take lessons in finance from warren buffet. a new animated series of webisodes will feature on aol starting this fall. kids will learn healthy financial habits. th

former presidential candidate, ron paul, sounds off on fed head ben bernanke. an exit strategy to stop inflation. do we believe him. >> the new california budget. read my lips, no new taxes, plus drill drill drill off the coast off santa barbara. and bonds love bernanke and the major index is bullish across the board. plus, we have market expert who thinks the dow is going to 14,000 in a couple years. house demps postpone the health care vote until after the august recess, maybe forever. health care stock soared today. do you think there's a connection? i do. "the kudlow report" begins right now. good evening, everyone. i'm larry kudlow. welcome back to "the kudlow report," where we believe free market capitalism is the best path to prosperity and that path should include king dollar and stable prices. i'm not sure if fed head ben bernanke is going to deliver those goods. he talks about an exit strategy to end zero interest rates but i'm not sure i will see it in my lifetime. as greenspan's right hand man and co-pilot. he stayed too easy in '04, 5 and 6, housing

. >> the obama administrationon cicidewhether to reappppoi ben bernan bernanke. wiwillt all come down politics? of course. thisis is "the ca."." > stocks gaining groundthth rnrnin getting boooost from bettererhahan expected qrterly resultlts. blbles claims coming in betetrr thanan pepect. retail werere wnwn sharply. ght now the d dow is slightly negative. dd turned positive justt a few minutes ago. ststil making ltle bit o o come back. what ishehe mood d li o on e floor thth rnrnin >> people arere weieighgg these rereta sales n numrsrs i don't knknow about y but i didn't't wantt to buy clothes f summer.. have had mirarae weather. you h had ununemoyoynt. 50500,0 people lost theirrob last month. naturally has anan effectonon w ththeyrereoing spd. i want totoalk with bertha. will arare some dodoin fairly w. therere differencee between the discounters and thth luluxu. >>>> s a story ofhihi lowow in retail. ththe gh end gu struggling momore at the h hig end it shows yo hw pricee senentitive folksks a.. erercrbie es notot discountnt and didwell. >> the teeee,, which us

ben bernanke's war on thegreat panic. tonight he'll tell uswhat bernanke ws up to this week. >> that's right, gen. the poor guy went to te hill three times, ce in the senate and ce before the house. he had a ve consstent meage. things are etting a little better and i eserve some of the credit. and arney frank to him no one got elected with abumper sticker sayin you could have been worse. he said, you real do need to hange the regulory -- financial regulatoryapparatus so wdon't go through this again. and i'm 100% behind ti ithner, the treasy secretary and h plan, except r the things i don' want to . he said to congress emphatically he htes this bill ron paul is pushing th has the surpsing support of 2/ of thehouse that would gi the government e accountaility office the right to audit te feds' monetary policy, their interest rate decisions and basicaly said if yodo that the fd will lose its independence a we'll have inflation. was very strong on that. and he said, as ou said, i've got an exit trategy in mind so you don't hav

. >>> in today's business news -- fed chief ben bernanke will be on the hot seat today on capitol hill will face a grilling by lawmakers about taxpayer bailouts of pngs companies, government -- financial companies, government efforts for housing foreclosures and concerns that the fed steps to stimulate the economy could cause inflation. ben bernanke will deliver his speech in back-to-back sessions with lawmakers. >>> more bad news for the airline industry. for the eighth consecutive month the trade organization for u.s. airlines says passenger revenue fell 26% last month versus the same time last year. >>> and gas prices continue to fall according to the energy department. the average cost for a gallon of regular unleaded now $2.46. >>> crash tests are giving some 2009 two-door cars some pretty good grades when it comes to safety. the insurance institute for highway safety gives ford focus and volvo c30 top scores in front end, rear and side crash tests. top scores also went to two-door versions of the chevy cobalt and honda civic. >>> 5:14. if you wonder what to do with old electronic

on tuesday ben bernanke told a house panel a modest economic recovery is beginning to take root but keptectations in check. >> i want to be clear that we have a very long haul here because even though, if the economy begins to turn up in terms of production unemployment is going to stay high for quite a while. it's not going to feel like a really strong economy. >> reporter: the fed expects unemployment to peak at more than 10% later this year. >>> some of your favorite fashion magazines are going on a diet but not one they are happy about. the number of advertising pages in september issues is down as much as 50% for magazines such as "vogue" and glamour. the magazines are hopeful the declines are due to recession and not a permanent shift. >>> the watergate hotel failed to sell at suction. bidding on -- auction. bidding started at $20 million but no takers. the property is now back in the hands of the bank that holds the loan. >>> coming up on "good morning america" -- secrets to living longer. what one small town is doing to get fit and healthy. that's your "moneyscope report." i'm va

ben bernanke had much to do before congress today. he needed to provide some encouragement that an economic recovery is underway or on the way, and he he did say that some growth should occur later this year, though not enough to do much about the unemployment rate. at the same time, he insisted that once a recovery takes hold, a massive sum that the fed has been pumping into the economy, cash it has created, can be taken quickly to avoid inflation f anyone can pull off such a feat, it is bernanke. he pumped up the money supply when the dimensions of the banking is up problem came and this guy is decisive and fast. remember, it is the fed's traditional independence from the rest of the government and especially from congress that enables it to be decisive and fast. now, though, there is a new round of calls for greater oversight of the fed in the form of greater access to its books by congress. it sounds reasonable enough but it is unmistakably an effort to give politicians greater say in interest rate policy. some members of congress

from -- three minutes. >> chairman bernanke. >> we've been listening to opening statements in ben bernanke's testimony today on the hill. those statements will continue during this commercial break. we will be back when bernanke is beginning his speaking. stay with us. >>> california governor arnold schwarzenegger and the state's legislative leaders closing the budget shortfall. as she prepares for tonight's special report, sue herera joins us live from sacramento. what great timing, sue. >> well, you know what, rebecca? they are back from the brink i guess is the best way to put it. but whether or not this passes is another thing. they needed two-thirds of the majority of the legislators to do that and they hoped to vote on this on thursday. this is a budget that basically cuts broadly across all of the government's services. it hits public education, the elderly, welfare. everybody got cut, just some got cut less than others. some of the winners are the state parks and education perhaps eventually. there have been broad cuts in education in the past, the state has promised to repay those.

>> i would say two things, first of all, you are right, i don't remember ben bernanke ever suggestinghat -- >> you don't remember? you know mr. bernanke said theo same thing. he said he didn't remember. >> so you ask where i came away with that view. and i participated in a number of meetings and calls where chairman bernanke participated. there were lawyers from the fed, staff lawyers from the fed, people from treasury. and i came away sfr that with those discussions. >> if you came away w with that from those phone calls, someone must have suggested that you can't do this, and i would suggest that it must have been mr. bernanke. >> what i would say to you is i don't know whether someone in those conversations or calls expressly said it or if my understanding came from just the tone and the forcefulness. >> you know, you are a very smart man. i don't think anybody is buying what you are saying right now. you guys were on a phone call. there was a number of conversations and e-mails, and you are saying that you didn't get any suggestion from mr. bernanke that he wanted you to let them

then you have chairman ben bernanke and fdic boss sheila bair pushing back on the powers of that consumer financial protection agency and we have sheila bair at odds with fed chairman bernanke with the whole notion how do you manage systemic risk, bair and shapiro are very favorable of a systemic risk council with teeth opposed to the fed taking the lead. all that got exposed today. >> i can't figure out if this has any market impact at all. i ave concluded it doesn't. one thing i want to ask you, president obama in his news conference the other night for the first time unveiled an idea of financial penalties for bank whose take quote-unquote excessive risks, that could have impact. did that come up today. >> it was buried in the prepared testimony both in the fdic remark and to some degree, fed remark as well if they recast the notion of how do you deal with quote too big to fail, they want to build in some sort of penalty and up front fee structure to cushion the potential cost to taxpayer. >> i thought the biggest thing i heard reading the press report was ben bernanke telling people,

>> obviously barney frank really likes ben bernanke. secondly, when you think about the sponsors, i think there's -- glenn: wait. wait. are you saying that this is being held up because barney frank likes him, like, hey, pal, how are you doing? i'm going to do you a favor. or he likes the federal reserve? >> he likes the federal reserve and he likes ben bernanke, but i think when you look at the 300 sponsors, i think there's some politics going on there. a lot of them will cosponsor the bill, but they don't want this kind of power, because they like this right now. the federal reserve makes mistakes that we discuss a lot that causes recessions but now they can grandstand. they can say, ok, the federal reserve caused it. we are going to bring you before congress. we're going to grandstand in front of the media and bash the bernanke fed. the last thing they want, which is then vacating their constitutional role, which is to coin money and regulate the value, they don't want this kind of power. glenn: i don't want them to have the power ei

should it be ben bernanke. >> i think the federal reserve should do it. >> did ben bernanke do it? >> he could, but i think that's up to the president. he has to make that decision. >> thank you so much for joining us.. i know you are busy and have to get back to the hearings. elijah cummings. that does it for us. "street signs" will pick up the mantle and go to the hearings as well. see you tomorrow. >>> you can see henry paulson testifying and you heard them intrusion one of the men doing the questioning. elijah cummings. it's an amazing set of theater, questions asked again and again. he said he could lose his job and the government has a right to do that. we have people on stand by to an lice that and we will go right back in to listen. >> and this alignment of interest as you know he said if you didn't take the money, we would fire you and your board. that's a far cry from how you characterize it as a conflict of interest. the interest was what i said. we didn't want b of a to be simple. in terms of my communication i have been direct. i wouldn't use the word threat. i said wh

i have no confidence in ben bernanke. this is a gentleman that told you the subprime mortgage crisis was going to be contained. and it brought the entire financial industry to its knees. this is a gentleman that panicked and wanted to monetize the long end of the treasury curve because rates hit 3%. does anybody have any confidence in bernanke? i don't believe that for a second. >> michael, got to leave it there. >> he's worse than roubini. >> for ben bernanke's sake. let's see what was going on on the trading floor today as congress laid into hank paulson. many of us got a kick out of how worked up the lawmakers became in paulson's inability to speak into the mike correctly. >> if we give you a letter -- >> mr. paulson, please pull the mike closer to you. >> sorry. i had -- >> mr. chairman, will you ask the witness again to speak into the information. >> mr. paulson, clearly you're moving back and forth. is there enough slack in the mike? >> here we go. i got it. >> if you pull it back that direction. >> mr. paulson, we'

when fed chairman ben bernanke delivers his semi-annual testimony. my next guest just sat down with mr. bernanke today to talk about the state of the economy. he is senator richard shelby, ranking member of the senate banking committee. he joins me now with some insight into those talks. good to have you on the program, senator, thanks so much for joining us. >> thank you, maria. >> can you give us a since of what wen on in your meeting with ben bernanke today? >> well, we had a rather comprehensive talk about the world economy, our economy, our jobless prospects, the state of the banking community in this country, whether or not we will continue to lose jobs and so forth. and i didn't come out of the meeting feeling a lot -- euphoria. >> you left the meeting feeling euphoria, you said? >> no, not -- i didn't have euphoria. i was rather -- it was a rather sobering meeting. it was not anything that sprieds me. basically, the fed chairman, he thought that some of the financial markets, according to his words, had stabilized. but i got into the jobs. the

. >>> ben bernanke testifies before congress on his outlook for the economy and fed policy. that should be a big factor. is it time for the fed chief to implement an exit strategy? that is coming up in today's "call of the wild" debate. but did you know you also get hotel price assurance? it's a one-two punch of savings -- pow! pow! lower hotel booking fees mean you get a lower total price. plus, if another orbitz customer then books the same hotel for less, we send you a check for the difference, automatically. >>> welcome back, everyone. looking at the big board. up 52 points. steadily gaining here, inch by inch, optimism about earnings, optimism about the cit news, bailout news and leading economic indicators and this morning very positive, all leading to a bit of a rally. dow, s & p and nasdaq up 7% last week. we want to know whether or not the summer rally is really going to continue here and if so, how are you going to make machine on it now? we have a bull and bear to discuss it. for the bulls, jeffrey fox, chief investor strategist of raymond james and for the bears,

ben bernanke says americans are now developing better money habits. increased savings and racking up less debt. he says those factors and tighter federal regulations will eventually make the economy stronger and less likely to face a similar crisis in the future. bernanke's comments came during a town hall meeting in kansas city, missouri. >>> so, we want to know, have you changed your spending and saving habits because of the recession? it's our blog question today. and post your comments at cnn.com/heidi, or give me a call. the hot line to heidi number is 877-742-5760. we'll put the comments on the air later in the show. >>> we are also keeping a close eye on the middle east where tensions are rising over iran's nuclear ambitions. israel suggesting it won't rule out a military strike. israel's defense minister said today his country is taking no option off the table. remark comes amid strong overtures from washington, as well. hillary clinton has implicitly urged israel to set aside thoughts of a preemptive strike and give u.s. policy time to work.

fed chairman ben bernanke is going to be back on capitol hill in a few hours.ill be day two of him talking. yesterday he was telling lawmakers that the interest rates will stay low this year but the jobless rate will stay high. money expert jennifer westhoven. you know, when does he think that the economy is really going to start turning around for the rest of us, you know? >> yeah. he thinks things are going to start improving in the next six months but he's not saying, okay, we're going to be back to normal by "x." they're just not in a position to do that. >> i wouldn't either. >> because of the global financial crisis. one of the reasons things are so slow, he said, because you're saving more. when all of us are saving, we're not spending it like crazy anymore and bernanke says, that's oklahoma. >> it creates problems in the macro economy because without super spending the economy doesn't grow as fast but i wouldn't advise families to worry about that. i think people need to get their balance sheets in order and bunt sheets in order. that's a positive that

ben bernanke says a recovery is in the works but on main street things will be bumpy for a while. >> green arrows on wall street seven straight days and counting. despite a reduction in revenues compared to prerecession levels, strong profits from a slew of corporate heavyweights and tech darlings like apple led traders on a buying spree, optimistic an economic recovery is under way. >> while main street may not be doing that well, unemployment rising, foreclosures going up, wall street is looking to where the economy will be in six months, they're seeing good news and it's pushing the market up now. >> reporter: but on capitol hill, a sobering prediction for a nation worried about jobs. >> i want to be clear that we have a very long haul here. even if the economy begins to turn up in terms of production, unemployment is going to stay high for quite a while. it's not going to feel like a really strong economy. >> reporter: the federal reserve chief said it means a continued wave of foreclosures. >> our assessment of foreclosures is that it's likely to peak in the second half of 2009,

. >> but in september of wa2008, u and ben bernanke said the problem here was the banks. >> but that program -- >> my question is, do you agree that if toxic assets were the problem, we haven't bought one toxic asset yet? in other words, the top program has not bet bought any toxic assets? why? >> banks have been able to raise capital with greater ease than i think anybody reasonably expected. many banks are selling a bunch of their assets and shrinking their balance sheets where they don't want to make a core business. but what it will do is help get those markets going again, because things in some ways have been better than people expected, you may see less use, less demand for those facilities than many thought. but let's go back to the fall. what congress authorized back in the fall was absolutely essential. there is no doubt it helped revert a catastrophic loss in our financial system. >> but it's fair to say the money was used for recapitalizing the banks, not buying the assets. in other words, a calculation was made to reduce the leverage. >> that was a decision made back in

we have a fed chairman, ben bernanke, what studied the great depression and he's doing a great job of flooding the system with money. i hear nathan saying, well, that's really dangerous. come on, man, we've avoided the great depression. he has made money available so companies can get financing. once you get that fire rocking, you don't need to throw more gasoline on it. that's what he's going to do. 1930 depression was still dropping like a rock. we hear dan da memico on our sh saying things are going up. in 1930, there wasn't any safety net. now we have social security, medicare, medicaid, unemployed insurers, food stamps. all of these soften the blow of any economic downturn. even though i believe we got the stimulus wrong, unlike our friends in china, and we got it wrong both in terms of quantity and quality, any stimulus is better than no stimulus. that was the state of things in 1930. don't forget, most of that money has yet to be spent, which is a plus in terms of the future being better than the present. look, the parallels between the market now and the market in '29 and '30