that's what the president is trying to do for the economy. he's urging health care reform to slow the growth rate of spending and provide all americans with secure health insurance coverage. we're working with congress to pass financial regulatory reform so we never again walk as close to the edge of a cliff as we did last september. and we're committed to comprehensive education to combat climate change. in short, we are urging serious medicine for serious economic problems. if we can accomplish these important changes, we will not only come through the current crisis, we will emerge even stronger and healthier than before. thank you. [applause] >> we have questions. the first question we have is, in light of your commints on the economic stimulus bill s. there anything the administration would have done differently if they realized how deep the problems would have bnch in drafting the legislation? is there anying you would have changed in how that bill was formulated? >> i think one of the things i tried to describe, and i think we tried to

the economy will get worse. the fact that the stock market has rallied tells me the numbers that we do not want this. the market tells us that we do not want healthcare reform and we are feign as we are right now. brenda: what does in mean for the economy, eric? >> i think the economy is on one trajectory the stock market the other. the economy is telling us we are not that great and we probably can't afford this. we have new hampshire town hall meeting president obama gets a question from a 14-year-old daughter of a supporter. then we have montana where they end up giving him a standing ovation. versus what you see right now, the people standing up saying hey, slow down. let's fiend out what is in the pill. let's find out how much is the cost. what they are showing us is vastly different from what the american people want. by doing so, we are finding out more. >> i'm shocked and dismayed eric. brenda: politicians often stage these on both sides of the aisle, pat. does this mean something for the economy that pr

economy? >>> as secretary of state clinton meets with the first woman president of liberia, we look at the women's movement in that west african country. a force so strong, it drove a dictator from power. >>> and we continue our look at the impact of climate change on remote lands. traveling to cambodia to meet the monks out to save a forest one tree at a time. >>> good evening, i'm martin savidge. we are going to start here tonight with a subject that has a lot of people here and throughout the world increasingly concerned as we heard towards fall that. subject is the h1n1 swine flu virus, which according to the world health organization has killed just under 1,500 people worldwide. right now it's spreading through india with its vast and densely packed population, to use the words of "the new york times." it has been confirmed in 67 american troops at 6 bases in iraq, to cite just a couple of examples. it's a complicated health issue and tonight's lead focus, we thought it would be helpful t

turning to the economy, 44% of those polls say president obama's policies have made the economy better. just over half say they made the economy worse. some optimism, 58% of americans believe economic conditions will be good one year from now, 40% say they will be poor. >>> the obama administration has said the economy is improving, but deutsche bank is predicting by trouble in the housing market. cnn's christine romans is here to explain. how does this affect everybody? >> we know in the economy, many people think the free fall is over. but this shows you the house is still a very big question mark. this report shows the number of homes that it expects will be under water, the number of homeowners under water on their mortgage by the time there is a recovery. right now they say there are

is a sharing economy, dell computers is a commercial economy. but what i wanted this book to suggest is that we recognize the hybrid that's developing between the two. increasingly, we see businesses, commercial economies, that are trying to leverage sharing economies to produce value for them, and sometimes the other way around. sometimes you see sharing economies that are trying to leverage commercial economies to create stability for the sharing economies. now the first is more familiar. let me give you some examples. think about flicker. flicker is an on-line photo sharing site. it developed an enormously powerful community of people who wanted to share their photographs, to make their photographs available for others and to share the knowledge about how to produce great photographs. well, this site of course existed initially as simply a relationship between people trying to share. that was a sharing economy, but with yahoo! bought it, yahoo! wanted to leverage that sharing activity into value for yahoo!, and indeed, it did. it's one of yah

economy is beginning to recover. as suzanne pratt reports the decision was unanimous. >> reporter: the super low interest rates americans have been enjoying are likely to stay with us for a while longer. wrapping up its policy meeting, the federal reserve left the benchmark short-term rate close to zero percent, saying economic conditions warrant it. economist steve ricchuito says the fed is not telegraphing when it will raise rates, but he has his own guess. >> our personal bet is that we won't see any real movement on rates until we get to the second or third quarter of next year, and that's contingent on the economy really finding its feet and starting to be able to move sustainably forward. >> reporter: in assessing the economy, the fed said activity is leveling out, but likely to remain weak for a time. it also acknowledged financial market conditions have improved in recent weeks. policymakers also opted to slow the pace of purchases of long- term treasuries, extending the emergency rescue program by one month

we continue to be very dissatisfied with the way the economy is. historically, increased hiring typically lags increases in output, so it's going to take time before you see it in the unemployment, in the employment staats ibs and we've got to keep pushing. >> i want to return to jobs in just a moment. the question is, when there's recovery in the economy -- one economist this week who's been rather skeptical all asays it's going to feel like a lot like a recession. housing prices down 17% from a year ago. here's the headline in "the new york times" today -- prolonged aid to unemployed is running out. is the administration to this point going to have to extend those unemployment benefits? it's already been extended to a historical level. will there have to be an extension? >> well eel work with congress to make sure that unemployment insurance continues to perform its basic function of protecting the unemployed. that was an important element in the recovery and reinvestment program. it's helped people who have become unemployed and also helped the

or developed economies where the asian economies would grow faster and then the market would, you know, start getting more interested. it's happened rather quickly. this year itself asian markets have grown quite a lot. what that meant is they've gone from deep valuation to fair value now. i think one of the questions, maybe, is the first half has been so strong. what does the second half deliver? i don't think the second half can repeat what we got in the first half, but i still see a healthy environment investing in asia >> and emerging markets. i think valuations are reasonable. so you could get another 10%. the confidence is there but it's not to the point where people are happily investing. they're watching data points carefully on the economics side and also on the earnings side. so far, so good. you should expect some more positive data points on the economic side. on earnings, it's trickier. because of the reason i mentioned earlier, which is that some of the earnings have come from cost cutting. you need to see top line growth now. >> ashish, thank you for that and thank you i

>> the economy. >> the economy. how is the obama administration doing on the economy. oh, that's the biggest news of the morning. an a plus. >> a teaser. >> no question, a "b." it's about the american people and the middle class and main street. and until they can recover. not just the banks, not just the corporations. it's middle class american. >> all right, a "b" and an incomplete. and you'll have a chance to grade the commander in chief. go online and do it yourself and stick around. "state of the union" will return after the break. to stay on top of my game after 50, i switched to a complete multivitamin with more. only one a day men's 50+ advantage... has gingko for memory and concentration. plus support for heart health. that's a great call. one a day men's. it's the chevy open house. and now, with the cash for clunkers program, a great deal gets even better. let us recycle your older vehicle, and you could qualify for an additional $3500 or $4500 cash back... on top of all other offers.. on a new, more fuel efficient chevy. your chevy dealer has more eligible m

recovering as it shifts from an export economy to a consumer-led economy. pepsi co, maker of soft drinks and potato chips and gatorade is trying to get a piece of those consumers as the country shifts back into high gear. recently i spoke with pepsi co's ceo indra nooyi on her company's growth abroad. >> china say country where the opportunities are huge but china also has a lot of issues and it's critically important that companies that come into china work with the chinese government to make sure they are making a positive impact on society. and you can see the excite. whether it's beijing or shanghai. you see the excitement in every part of china. so i'm very, very optimistic about the prospects of china. and let me add, maria, china has declared that the gdp growth rate is about 6.5% or 6.8%. the way i look at it is the differential gdp growth rate between china and the western world is about nine points because the western world's declining about 2 to 3 points. so to have an economy with over a billion people industrializing, growing gdp at a 9-point d

and i think what we're seeing in the economy now is the inherent resilience of the american economy and the american people and while those -- while those numbers are encouraging, what we ought to be doing is pursuing the broad-based prescription for recovery and stimulating this economy which has always worked, which is fiscal discipline in washington, d.c. and tax relief for working families, small businesses and family farms. >> let's look at the stimulus bill which you voted against. the democratic national committee, as you know, is running a radio ad in indiana in which they note that the stimulus package is funding public works projects across the state and in your home district. let's listen. >> these projects are creating and saving jobs and boosting our economy. so when you see that sign that says this project funded by the american recovery and reinvestment act, you can say no thanks to mike pence. >> congressman, no thanks to mike pence. >> well, let me say indiana's lost 20,000 jobs since the so-called stimulus bill was passed. >> but nobody -- excuse me. nobody said that t

entrepreneurs like these are the most powerful force in the economy. they drive change and they'll relentless push their businesses to innovate and connect. as we look to the future, they'll be there ahead of us, lights on, showing us the way forward. this is just the beginning of the reinvention of business. and while we're sure we don't know all the answers, we do know one thing for certain, we want to help. come see what the beginning looks like at openforum.com you can get amazing tv, internet and phone for just $79.99 a month for six months. that's like getting all three incredible fios services for the price of two. call the verizon center for customers with disabilities at 800-974-6006 tty/v today. this is fios. this is big. >>> here's the weekly foray into the odd, unusual and just plain strange. tonight another tribute to the late king of pop. this one from south korean synchronized swimmers. check them out. there they are. dancing under water. to "billie jean." >> is this real? >> yeah. not only do they dance, they captions paid for by nbc-un

there are signs that the economy is turning around and probably faster than most developed economies at the moment. but it's too late for the ldp, and they're tarnished of the mismanagement by the past 20 years. people are fed up with it. and i think the first time really in a long time, they have a credible choice, as well. of course, you have to remember, the economy was terrible many times in the 1990s, but the opposition was so shambolic, they will be kept on winning. >> if the opposition democratic party wins, how much power do they truly have on make real reform? >> well, they have power probably in the sense that they're going to be there for the best part of four years, so you can't just ignore them and hope they're going to go away. which was the case when those temporarily a change of government in 1993. exactly how much of the change they'll be able to push through the bureaucrats i think is a very different question because they're very entrenched and these new politicians don't understand the system. so i think it's questionable whether they'll have as much impact as the

economy today.en bernanke said the country was starting to emerge from recession, and that aggressive intervention by the government was working. jeffrey brown has our lead story report. >> reporter: the fed chairman gave his optimistic assessment at an annual federal reserve symposium held in the high mountain country of jackson hole, wyoming. >> reporter: mr. bernanke said, in part: he did temper that enthusiasm with a note of caution, saying problems persist in both the credit and job markets. but stock markets jumped on bernanke's remarks, the dow gained nearly 156 points, to 9506. the nasdaq was up 31, ending the day just under 2021. for the week the dow was up 2%; the nasdaq, 1.8%. data from the housing market provided an added boost. the national association of realtors said sales of existing homes were up for the fourth consecutive month. july sales were up 7.2 % from june, the largest monthly gain in a decade. low prices and interest rates, and generous federal tax credits contributed to th

that's how we fold the economy back from the brink. that's why we're turning this economy around. i am convinced that we can see a light at the end of the tunnel, but now we're going to have to move forward with confidence and conviction to reach the promise of a new day. thank you very much. >> you've been watching president obama live in the rose garden at the white house talking about a somewhat unexpected report. unemployment rate dipped a tenth of a percent to 9.4% last month. that's the first drop in more than a year. i want to bring in david gregory, moderator of "meet the press" as well as our chief white house correspondent, chuck todd, on duty on the north lawn of the white house. david, i'll start with you. it's interesting, the president came out, that's not a tone of doing any kind of a jig. this was an unexpected report, but you can see he's really walking that line, where they want to talk up the good news that there is in the economy, but they also want to manage expectations, because there's tough times ahead. >> there are, but this is still psychology, this is ar

i think those hurt the economy. higher interest ralts, and we pay for a lot of that that we're talking about. i think all economists agree interest rates are as low as they go. the third is higher inflation. they dampen the normal recovery process. >> you think we're looking a bit better than we are now and maybe a year? >> normally we have 5% or 6% growth out of a recession. i think we're looking at 2%. >> your biggest concern is the five years out. you think we're not going to be a whole lot better off? >> look, when you're talking about $10 trillion of new borrows, that's like putting a milestone around the neck of the economy. >> i think we'll be berlt off in six months and a year. it's not until then that it will get easier to look for a job than now. the unemployment is still going to be very tough. i worry about the longer term, because coming out of this, the credit bubbles collapse, taxes seem like they have to go up aloy. how are we going to react to that? we're going to live in a very different world goin

economy. >>> escape plan. a pennsylvania shoplifter gives a store employee an eye full of mace. >>> and president obama ards the nation's highest civilian honor to 16 distinguished the nation's highest civilian honor to 16 distinguished recipients. captions paid for by nbc-universal television >>> hello and good morning. i'm christina brownment today we begin with leveling out. those were the welcomed words that spoke volumes to both wall street and main street wednesday when federal reserve chairman ben bernanke declared the u.s. economy is finally on the mend. nbc's michelle franzen has the story. >> reporter: the federal reserve left interest rates unchanged wednesday. a sign that central bank believes the u.s. economic activity is leveling out. key factors the recession may have hit bottom include median home prices up 4% last quarter, a surge in the stock market, and growing stability in the financial sectors. the committee says it expects inflation will remain subdued, but the optimism is guarded. the fe

the german economy.seeing is huge capacity at this stage, so even if exports are performing somewhat better, we don't see a big investment coming up, you know, in the near future, so it's going to be a long process until this recovery is going to be sustained. and that's what we're trying to caution everybody not to believe too early that we're already on a sustained -- >> axle, thanks so much for joining us. axle weber, president of the bank. thank you. >> that is it for "the call" today. >> mandy, it's been a pleasure this week. i'm on vacation next week, so i'll see everyone in a week's time. i'm trish regan. "power lunch" is up next. >> have a good time, trish. some people buy a car based on the deal they get. others by the car of their dreams. during the lexus golden opportunity sales event, you can do both. special lease offers now available on the 2009 is 250. but i've still got room for the internet. with my new netbook from at&t. with its built-in 3g network, it's fast and small, so it goes plac

the bric four was actually once expected to reshape the global economy. but in today's extraordinary climate, that seems like wishful thinking in better times. this is the growth expected from china; while in neighbouring india, the economic fundamentals are also strong. but brazil has stumbled with no clear growth expected until 2010; and as for russia - over reliant on high commodity prices it now risks the spectre of high inflation and high unemployment. and the bric fault lines don't only concern numbers. for its members are fierce competitors and serious mistrust abounds - which is a barrier to enhancing trade and economic cooperation. >>zweig: well the chinese don't trust the indians at all. the indians don't trust the chinese. the 1962 border war seared, forever seared, the brains of indian policy makers. brazilian businessmen complain, over the last couple of years that china came - hu jintao the leader of china visited - promised all kinds of money, left - and then everybody said, where's the money? >>reporter: it's one of those strange historica

everybody obviously wants the economy to go into -- to believe the economy is in recovery as quick as possible. wall street, the administration are trying to sell the theory of green sprouts because they hope the animal spirits will lift all this up and we'll start spending. the problem is the united states, we're spending beyond its means. and the savings rate was zero. the fact is that means we're going to have to increase our savings rate to bring it into a more sustainable level. and then the economy is going to be weak. >> thavngs, professor, we've got to go, but i love talking about animal spirits in the economy. >>> you may not have heard of these politicians, but they could hold the key to health care reform and a lot more. john king's american dispatch when "state of the union" returns. from sprint. its revolutionary web os allows multiple applications to run at the same time. - ( thunder and rain ) - millions are using the simply everything plan. - each is saving $1200 over an at&t iphone plan. - ( cash register dings ) together that's billions of dollars. enough to open a d

look, the economy is the economy. and right now employers have leverage. tomorrow employees will have leverage. it is always thus. david: economic common sense from the publisher of forbes. forget suing your boss. we have the stocks that will pay you even if your boss won't. the money-making names are next. david: we are back with the stocks that are sure to pay even if your boss won't. you are going to france? >> i figure obama is trying to turn our economy that the french economy so why not go with a france stock. >> it is french. second, it sounds lying telecom stock with a high dividend. you have to hope the french government bails you out. it has taken a hit. david: you have a tough stock that makes stuff. makes metal products. >> worthington makes metal productsment 3% dividend, not great but good. recovery play. i would say insiders have been boog helps. >> expensive on a cash flow. 1.5% return on investment. i think it has too much exposure to commercial construction which is still slow. david: auto parts retailer. >> auto zone. it has a 24% return

if iere the president, i would say my job, number one, is the economy, the economy, the economy. when you change message and you start to try to integrate melting care into this message, people get a little bit confused. and they haven't found the right language for it. chris: we were in a different recession period in the early 1990's. pennsylvania, being for health care was a way for saying you are solid with people with unemployment. >> that was presession and the fall of lehman brothers -- that was prerecession and the fall of lehman brothers. talking about the unsnoord -- chris: middle age people worried about their jobs and about portability, they won't have health care if they lose their job, that used to be a selling point for reform. >> right. chris: what happened? >> this isn't the argument they have been making. and it's actually the seam mistake that the clintons made. the obama administration has never made this argument about what's in it for the average person. chris: i don't understand y they're so slow on this. >> they've talked for months now about controlling c

what does it mean for the economy.ready heard fiscal bankruptcy will damage the credibility of fed policy. that is the other link in this evening's program, what's it all mean for investors? (announcer) we understand. you need to save money. ♪ well i was shopping for ♪ which one's me - a cool convertible or an suv? ♪ ♪ too bad i didn't know my credit was whack ♪ ♪ 'cause now i'm driving off the lot in a used sub-compact. ♪ ♪ f-r-e-e, that spells free credit report dot com, baby. ♪ ♪ saw their ads on my tv ♪ thought about going but was too lazy ♪ ♪ now instead of looking fly and rollin' phat ♪ ♪ my legs are sticking to the vinyl ♪ ♪ and my posse's getting laughed at. ♪ ♪ f-r-e-e, that spells free- credit report dot com, baby. ♪ >>> it looks like fiscal bankruptcy and washington just reached all new highs, look at the right hand corner of your screen, the national debt clock there. it goes and it is ticking 11.7 trillion. it keeps ticking even here while we're sitting here having our program. the white house says they ex

economy to carry. and we see a similar situation in many other economies.xon economies are probably the worst. but it's a similar situation to what we saw happen in japan from 1989, 1990. i don't really see any reason why it should be any different now. >> i would agree. >> i would like to get ipin's take on this. he said he cited something from bernanke back in 2002. but we're in a different world now, right? >> it's going to be a different period since we see interest rates kicking upwards. irng the fed is going to see meaningful signs of inflation before they start to reign in liquidity in that sense. and any sign of interest rates and tightening in that way would we think send too much through the economy and that's not something they're going to want to risk at this stage. however, it will allow consumers to essentially inflate their -- their debts will be smaller burdens in relative terms. and we know the fixed income is deflationary in times and a little bit of inflation we think will be embraced and then tightening will follow. >> i can see the argu

we need to restructure our economy. in order to have capital better allocated a lot of businesses need to fail. many companies bailed out propped up should have failed. instead, we're diverting other resources from other sectors of the economy that need to expand to generate a lasting recovery. we're delaying the pain, turn this recession into a depression, making the same mistakes of hoover and roosevel roosevelt. >> quickly a rebuttal from the bulls side. if there wasn't a bailout, would we be in far worse shape than now? i agree. that was a scary time. when lehman brothers failed, suddenly the world came to an end as far as the financial markets are concerned. i think it could have spiraled much worse. i have to agreen the regular operating of capitalist economy, you have to let capitals die, but that was a time we needed to save them. >> i want to get to two issues quickly. will start with paul on this one. there was an op-ed in the "new york times" by paul krugman, the economist saying deficits are actually a good

economies.s done a lot of stimulus they've done themselves and there's some concerns about whether that can be sustainable or not. >> professor mishkin, it's jason. i was wanted to just switch gears for a second and talk about the fed's potential exit strategy. obviously, at the peak the fed tripled the size of its balance sheet. now the fed has the ability to pay interest on reserves. i was wondering if you could just talk about that and how significant you believe that is as you look to the other side of the fed trying to extricate itself from all the liquidity is generously provided. >> yes. i think this payment of interest on reserves is a very critical element in that it allows the foed tighten monetary policy when it needs to. because it can just raise the interest rates it's paid on reserves and that, in effect, will tighten monetary policy and allow open market operations to bite appropriately. there's been a lot of talk and a lot of concern about that the fed is going to have difficulty

the organic economy is self correcting. interesting, brian, on this point, i just got attacked by bruce bartlett who used to be a conservative says i was looking for better growth a year or two ago. >> you're assuming. >> saying i'm shilling for obama now, i think the economy will recover. joe, last question, the passing of ted kennedy, may he rest in peace, lord knows, does this change your expectations about big regulating high tax and high spend health care takeover by the government? >> no. it will be used as sort of club to try to force this to happen with a new name called kennedy health care reform and it will be a very expensive distorted program that adds to that deficit number. >> they will try to do that but they changed the rules in massachusetts. they need another election. they won't have the votes in time. i think this lowers the odds of it. >> that's good. gentlemen, you covered great ground. i really appreciate it, joe and brian, two of the best of the best. coming up, the whole foods health care thaw conti

let's strengthen the economy. pressure off the deficit and then let's go after health care. now it's easy for me to say, but i think if obama had another chance, perhaps he would do it that way. there is still time for him, incidentally, to have a plan. i wouldn't give up on the public option. if the house says they're going to do it, they'll dot it, they've got the numbers to do it. they may be able to shape it and contour it in a way that it's not as offensive as it appears to be to some people. his biggest problem, i think, and if anybody can solve it, he can, because he has got this magnificent mind and the he w l willeloquence. when you say pup public option, the other side says -- you have to ease that myth. you have to remind people that medicare is socialized medicine. medicaid is socialized medicine. the road that eisenhower we built our socialized roads, public schools are socialized. the ships that are taking us to the moon are not by boeing, they are by the government, so they are socialized. because t

economy. bernke's current term at the fed ends in january. his nonation still needs to be confirmed by congress. but today, the fed chairn promised to coinue work to reste stability in the economy and the markets. >> we ve been bold or deliberates circumstances demanded but our objecti remains constant, restore a more sble financial and economic environment in whh opportunity can again flouri and in which americanshard work and cativity can receive their proper rewards >> susie: joininus now with moren bernanke, laurence meye former fed governor and now vice chaman, macroeconomic advisers and david jones, c.o. of d.m.j. advirs and author of "unlocking theecrets of the fe. test. good evening. >>arry, let me begin with you. you support the bnanke renomination. tell us why. >> yes, unquestionably. the fit issue you have to decide on, whether y thi he deserv to be reappointed. th's a question of how good a job 's done as chairman. i believe he's done an exceptional job dung extraordary tim. he's been aggressive and creave. and put in place a set

our economy decline at a rate of 6.4%. there is no wonder why we were hemorrhaging jobs and that our people were discouraged about their status. they're still facing tough times. we still have much work to do. but today's report shows there is a decline of only 1%. one could say that's a 600% improvement. or one could say it's a 5% improvement. but it is an improvement. we see signs that 6.4% which was a 50-year record low. and the quarter just ended, as i said, the down to 1%. it shows that our economy is stabilizing. it also shows funds from the recovery act began to hit the economy. most economists believe that the full impact of the recovery act will be felt in the second half of the year. that is the third and fourth quarters. 1% decline was the second quarter. now, the stock market, and many of you heard me talk about how the stock market under bill clinton went up 226%. what does that mean? that means if somebody had $100,000 in a savings account, that they build up over 30 years, in a retirement account, that at th

china's economy has apparently bottomed out. according to a government think tank, the world' third largest economy will grow 8.5% in the third quarter, picking up from the second quarter's 7.9% pace.. the state center says growth in bank credit will normalize in the coming months and that any abrupt slowdown in lending will hurt the economy. this comes amid reports that china will soon tighten capital requirements at mainland banks. certainly did spook a lot of investorses outside china today. moving on, beginning talks of a possible integration of their air cargo operations, jal and nippon yusen will aim to complete the deal by end of april next year. according to media reports, the company which cooperates with jal in its air cargo business may be asked to provide capital for the deal. take a look at both shares. japan airlines flat, nippon yusen flat, mitsui and company down 1.3% on the nikkei. >> the decline in the services sector almost came to a halt in august. services pmi hits a 15-month high with a robust reading of 49

with the economy, i'm bullish. i think the economy is recovering, but it's going to be a very gradual process. there's a lot of problems in our economy that we're still suffering from, from the financial crisis. it's going to take us quite a while to get out of it. so i'm predicting a positive g.d.p. for the first quarter in january of 2010, but i think the stock market is a better place to be. >> paul: how much better will it be? >> you say 10,000-- >> 10,000 on the dow is a positive number for. the year, so i think that's a good thing to see considering all the trouble that we've gone through. >> paul: no inflation this week. the producer price index showed actually negative. will inflation be a problem any time soon? >> no, i don't think it will be a problem soon. commodity prices are rising very sharply. i mean, one of my stock picks was freeport, and copper prices are back up to almost $3 a pound. so there is some flkz coming back into the system. but i don't see is happening at the consumer level yet. >> paul

economy is on the path of recovery. but as scott gurvey reports, even the experts have lots of questions about the central bank's next move. >> reporter: fed watchers would like answers to three questions when the central bank concludes its august meeting on wednesday. first, they want to know abo plans to raise interest rates. second, they want to know if the fed thinks the economic recovery is real. and finally, they want to know if chairman ben bernanke will be re-appointed to a second four- year term. well, answers to two out of three isn't bad. first up, there isn't a snowball's chance in a very warm place that the fed funds rate will be raised from its zero to .25% range this month, or, according to jim o'sullivan of u.b.s., anytime soon. >> most likely they'll repeat the language, indicating that the funds rate's going to stay exceptionally low for an extended period. in addition, we would expect the wording to be a bit more optimistic sounding on the outlook for growth. this is consistent with the idea that the

sucks resources out there for exhaust the economy still further.tary stimulus but print more money and blow it again we have 40 see my that intensifies the problem and puts it offer a few more years and makes it more intense so we need the opposite and interestingly enough in american history we have an episode where that is what was done in 1920 and 1921 you may have heard me talk about this over and over and i have youtube on this very topic called what you have never heard of the great depression of 1920 and has 33,000 use it amazes me that the but this point* are so desperate that they will sit in front of their computers and watch tv for 45 minutes. that is wonderful people are listening. that is wonderful. what happened? we had a depression in which we had double-digit unemployment, unemployment skyrocket from four up at 12% production dropped dramatically what was done? between 1920 and 1922 the federal government's budget was cut in half so instead of the fiscal stimulus we had the opposite effect today we're told the worst thing you can do

they have undermined our economy further with additional debt and crippled our economy with more government regulation and involvement in the market. all these things are negative. >> give me prozac here to the depression coming out of peter. >> recessions and depressions end. the point about the government assistance is appropriate. certainly, this is not yet a self sustaining recovery. >> it will end eventually, just not any time soon. >> i'm not so sure about that the notion we never quite see the recovery coming until it's well upon us. it's happened historically in the past. >> remember, very few people saw this recession coming even when we were in it. >> that's true. i think that will happen -- >> i think that almost proves his point. >> we're likely to miss the recovery until we're well into it. >> scott says go with companies with pricing powers. peter says he's not even in the u.s. market. what's your advice to investors right now. >> we're modestly long in the markets and don't agree we continue to wait on emerging markets, think the prospects are better there. >> even though eme

economy in the world. today in the 1980s and even in the 1990s we had the government at a fairly relatively stable or low level of the economy and the economy was the envy of the world. now this is a great leap forward. federal spending going up proportionally or 40% from 20% to 28% of the economy. the regulations they want to put in, cap and trade, substantially raising the costs of energy. raising taxes. that's going to be a real burden on job creation and higher standard of living. >> steve, come on now. more government spending did not create the financial crisis. in fact, less government. deregulation, looking the other way, the entrenchment in the ideology for the last 30 years that said government keep out of this because markets always work. >> between the early 1980s -- >> -- need supervision. they need guidance. >> from the early 1980s, we in the world had the greatest advance in terms of people advancing economically in human history. what brought about the crisis, the core was the federal reser

economy and global economy recover? two years ago, the answer would have been no. we've got an answer coming up in a moment. you're watching "squawk on the street." we're up 33. ♪ yes, you're lovely... ♪ what do you think? hey, why don't we use our points from chase sapphire and take a break? we can't. sure, we can. the points don't expire... ♪ there is nothing for me... ♪ there's no travel restrictions... we could leave tomorrow. we can't use them for a vacation. you can use the points for just about anything. i know... ♪ the way you look tonight ♪ chase what matters. get your new chase sapphire card at chase.com/sapphire. >>> welcome back. boepg and j&j up and down. big lot, in the meantime, also you can big. you heard matt nesto talking about this. 9% gain this morning and chico's and tata motors hitting one-year highs. very different story, mark. >> let's look at the markets and their internals. the dow up 37 points and the nasdaq up 5.25. where is the other one, s&p is up 3.3. internally, big board, almost 3:1 winners over losers. nasdaq, not so good. 12:10, 6

the gross domestic product, the broadest measure of the economy was released friday. it shows good news, the economy is still in contraction, shrank by 1% but slightly better than economists expectations. the market summer rally continued. stocks flattuwÑ earlier in the and rose on thursday on encouraging earnings and economic news. the dow and nasdaq and s&p 500 all closed at their highs for 2009. on friday, the markets were flat. it was a mixed earnings picture this week among the dow components. disney and verizon beat analysts expectations, while travelers, exxonmobil and chevron all fell short. two pieces of good housing news. the kay schiller housing index showed the first increase in single family home prices in nearly three years and the commerce department reported single family new home sales were up 11% in the month of june. housing inventory also fell. the long awaited search partnership between microsoft and yahoo was announced this week under the agreement, microsoft will provide the search technology for yahoo's website. the alliance could run up agains

we are not going to get 7% growth in the economy today.ood thing is we have two billion new consumers throughout the world than we had in the '80ss, because of china, brazil, et cetera. bernanke is the right guy. let's not confuse the two decades because we are a different world today. >> he was able to cut interest rates just because ronald reagan was cutting taxes? is that the difference here? >> he had evidence that inflation's back had been broken that the recession drained the expectation. he could take 2 1* 1% interest rate -- take the 11% interest rates and bring them down to 7. there was a 10% savings rate with the consumer ready to explode. two, we were underleveraged as an economy. we now have a zero percent savings rate. we have $1.20 debt for every dollar and baby boomers were 30 years younger then. we were about to have babies, spend money. >> don't remind us. >> now, we are on the other side of that. biggish. >> pat, are we going to see any kind of recovery as we did then under regan? >> we goin are going to see a recovery. i