. >> and that's where we begin tonight, the economy. harsh winter weather severely hampered growth in the early part of the year that was in the event that eye-popping number showing the economy contracted nearly 3% in the first quarter. but then slowly the economy seems to be finding its footing again. so does that mean we're on track for stronger growth in the second half? steve liesman takes a look. >> here is what to watch for in the economy in the second half. the best guess is that the economy and jobs will both strengthen. is not so much because of any positives, but the lack of negative ones. most economists see 2014 as a year where the headwinds that have held back growth are easing up. the political high jinks that hobbled the economy last year like the fight to the death over the budget resulting in the government shutdown seems to have been resolved at least for now. job growth hurt by a severe winter look to be picking up. europe seems to be clawing its way back, at least no longer negative. the big challenge we've been mai

economy. well it's certainly relevant it's certainly been relevant to the bond market i mean you can look at the equity markets in the bond markets as having radically diverged again this isn't the first time since the recession that they've done so but certainly they're not seeing from the same hymnal the bond market reacted very very strongly to that data you saw fields in the ten year drop almost you know twelve thirteen basis points. and that clearly signaled a trend for for bonds the equity markets have responded differently and are basically being driven by what i regard as a very very sharp bear market rally. now i want to ask you do you think that the fed's ultra easy monetary policy is justified and why or why not we only have thirty seconds as i give you how the fed's follow the fed's policy certainly was justified when they when they started it but at this point i think the fed realized certainly by. late summer of two thousand and thirteen that q.e. was actually creating more probl

economy.have a lot of issues to deal with and i look forward to your testimony today chair yellen. yellen. thank you. >> thank you senator craop. i would like to remind my colleagues that the record will be opened for the next ten days of additional statements and other materials. i was now like to welcome the chair janet yellen back to the committee. she is serving her first term as ththe board board of governors e federal reserve system. the doctor yellen serves as the vice chair of the board fo boarr three years. she has also previously served as the chair of the council of economic advisers and president and ceo of the federal reserve debt of san francisco. please begin your testimony. >> thank you. charan johnson, ranking member crapo, and members of the committee i am pleased to present the federal reserve semiannual monetary policy report to the congress. and my remarks today i will discuss the current economic situation and outlook before turning to monetary policy. i welcome clued wit

economy. as the u.s.gradually over the course rest of this year and 2015 we expect that will have some beneficial effect on mexico. brazil, is not particularly leveraged into the u.s. economy at all. at the margin that is another modest setback in terms of growth in brazil. adam: jeff stennis from ubs. thanks for joining us. >> thank you. cheryl: a city with a rich cigar-making history may soon lose its last 104-year-old factory. we've got that story coming up next. adam: plus, if a new concept for military drones is any guide, future battlefields may look a lot like scenes from the transformers movies. we have details when we go off the desk. ♪ ♪ hey there! starting your search for the right used car? i am, but i don't want one that's had a bunch of owners. well, our team's on the lookout for one-owner cars. (peck, peck, peck) found a great car... low mileage... one-owner... it takes years to learn woodpecker. now there's a whole new way to shop for used cars. it's perfect! start your search at the new c

economy? and if these reserves enter the economy too quickly, what is your assessment of the impact on inflation if they come in too quickly? and what, if anything, will the federal reserve do to stop this inflation? >> the reason the reserves are so high, we're creating them when we purchase longer-term assets. we've been involved in a program of purchasining longer-term mortgage-backed securities to provide financial conditions appropriate to stimulate the economy. and that creates those reserves. in the agagregataggregate -- no economy recovers and we come closer to our goals of maximum employment, it will be appropriate for the fed to tighten monetary policy to avoid inflation picking up to undesirable levels. and we can do that with a balance sheet that's as large as we have, with reserves at these high levels. and we've been discussing the exact procedures to use to normalize policy. we've had a number of discuss n discussio discussions. we will move to raise short-term interest rates wh

question the economy is strengthening.too much emphasis on any one month of dobbs growth. we now have five months in a low -- in a row. the first time we have done that since the late 1990's. the economy is strengthening. twice the pace it was. we have a lot of challenges. i agree very much with many of those you have been talking about. it is why we have a lot more to do. we do have an economy that is really strengthening. is the economy strong enough to absorb the impact of the fed stepping back, tightening, and eventually raising interest rates? i will not comment on the fed policy, but i think overall, the economy continues to be in a good position. talk about our fiscal policy, last year, we created a lot of challenges, congress did, with the shutdown and the debt limit. that is all in better shape this year. that is one of the reasons we are poised to see continued strengthening in the economy. >> ok. let's talk about what is to be with the economy. republicans say democrats have done practically nothing the to reall

not bad for the obama economy. today president obama said the economy is doing good, but it could be better if republicans would reach across the aisle and just do their jobs. >> we just got the jobs report today showing that we've now seen the fastest job growth in the united states in the first half of the year since 1999, given where we started back in 2008 we have made enormous strides thanks to the incredible hard work of the american people and the american businesses that have been out there competing, getting smarter. we could be making even stronger progress. we could be growing even more jobs if those of us here in washington were focused on them, focused on you, the american people rather than focused on politics. >> a very modest president standing up today talking about the economy. president obama doesn't say anything about him or his agenda and he only talked about american workers and american businesses. president obama deserves credit. he has brought our economy back from the brink of collapse. th

economy. and the fact -- in the face of these mixed signals, how cautiously will the fed proceed as it considers any larger scale asset purchases? chairman johnson, there are mixed signals concerning the economy. gdp growth isly, reported by the bureau of economic analysis to have declined at almost 3% an annual rate in the first quarter. that said, many indicators concerning the economy, indicators of spending and production, are substantially more positive than that. as i noted, the labor market throughout that period has also continued to improve and it -- at a somewhat faster rate that we had seen previously. indicators of consumer sentiment and a business and optimism also seemed to be positive. so my reading at the present decline ist the gdp largely due to factors i would judge to be transitory, and i do think it -- negative numbers substantially understate the momentum in the economy. but of course, this is something we will need to watch carefully and are doing so. nevertheless, my ov

and i saw that things like the sharing economy, creative economy, the maker economy, all these things people were pointing to, like pointing to a frog, a tree, a bird, things change, and the common thread was purpose. people's quest for purpose. and one of the biggest indicators was around the millenial generation and as you look at -- i don't know if you remember psych 101, the hierarchy of needs. it's a triangle. and basically is our base needs, like the ability to have a place to sleep that's safe. ability to have food. our major concerns and then you start focusing on a higher and higher order of magnitude needs and if you look at the evolution of our hacking off our evolution it lined up nice by with what is going on. each different economy addresses each of the layers, and as you look at the millenial generation, they define the next level, this next level of self-actualization around purpose, and if you talk to most millenials-especially those in innovation and professionals, they're not scared of where their bed will be tonight. they're not scared of where their next miami wil

economy. we have a lot of issues to deal with and i look forward to your testimony today, chair yellen. thank you. >> thank you, senator crapo. to reserve time for questions, opening statements will be limited to the chair and ranking member. i would like to remind my colleagues that the record will be open for the next seven days for additional statements and other materials. i would now like to welcome chair janet yellen back to the committee. dr. yellen is serving her first term as chair of the board of governors of the federal reserve system. prior to holding this position, dr. yellen served as vice-chair of the board for over 30 years. she has also previously served as chair of the council of economic advisors and president and ceo of the federal reserve bank of san francisco. chair yellen, it's good to see you once again. please begin your testimony. >> thank you. chairman johnson, ranking member crapo, and members of the committee, i'm pleased to present the federal reserve's semiannual

economy no longer dominates the global economy like it did after world war two when dollars ation was solidified but if mr persaud is correct that the market will continue to react this way then won't transition necessarily be dramatic and if mr persaud is correct we'll transition from magic thoughts comments concerning. your favorite jim rickards and one of my favorite he thinks it's going to be dramatic as well he took the other side i remember when you were asking the question about you know what would you think about what jim rickards had to say i think almost the opposite i mean the way that i listen to what they have to say i feel like they're saying pretty much the same thing that the u.s. economy or the global car is dependent upon the u.s. dollar but i feel like it's the transition that is the difference between the two that is. thinks that this is a stable equilibrium and records things like the person who's asking the question that it's not a stable equilibrium issue would be a sudden break up so i think it's a possibility different sides of the same point right now another

economy and what the remainder of twenty fourteen looks like and in today's big deal edward harris and i are discussing the latest g.d.p. numbers you won't want to miss a moment so let's get to it. our lead story today global economic fallout from the latest sanctions against russia now tuesday if the u.s. and e.u. expanded sanctions against russia to punish moscow's adamant stance on ukraine for the west the big question now is whether these latest sanctions will make president putin more cooperative or just prompt him to dig his heels in even harder so what do these latest sanctions include and who suffers the most well that year's new measures target russia's banks oil industry and military and they're designed to slowly suffocate the russian economy however the measures could increase financial pressure on europe's already sluggish economy and deny certain technology that much of the continent just relies on now british petroleum said that the new sanctions would have an adverse impact on business b.p. is the biggest foreign investor in russia and with an almost twenty percent stak

economies are driven by one thing demand and the principal component the thing that makes up demand is wages. instead the financial times noted that the bank of international settlements is calling for policymakers to halt the steady rise of debt burdens around the world and embark on reforms to boost productivity this echoes the old reaganomics line that increased productivity equals a growing economy make more thing. but productivity has been rising steadily in the united states since the one nine hundred thirty s. since the early eighty's it has become uncoupled from wages effect of green line there which have remained flat or fallen so even as individual companies become more productive and thus more profitable producing more goods with lower costs and less labor the economy has been stagnant at least for everybody except the billionaires because there's little demand for those goods and that's because that simple econ one hundred one maxim which dates always back to adam smith that demand is what drives economies and wages are the principal driver of demand. the majority of americ

economy; plus, could brooklyn hipsters help save the middle class? the challenges to brokering a cease-fire with hamas; efforts to bring new technology to neo-natal care in vietnam; and, the story of a burglary that uncovered f.b.i. surveillance efforts. >> ifill: it's a tricky time to be in charge of the nation's central bank. the federal reserve is winding down an unprecedented and potentially risky bond buying strategy designed to set the economy back on course. but every sign that the nation's prospects have finally turned the corner are offset by mitigating economic numbers. that was the backdrop for the fed chair's semi-annual trip to capitol hill today. >> although the economy continues to improve, the recovery is not yet complete. >> ifill: after just five months on the job, federal reserve chairwoman janet yellen was measured in her semi-annual assessment. >> important progress has been made in restoring the economy to health and in strengthening the financial system. yet too many americans remain unemployed, inflation remains below our long

economy and the overall investment climate right now. model doesn't everything look great i mean you just mentioned everything looks horrible in europe and everything must be so fabulous in the u.s. it's just nobody feels that how fabulous it is maybe part of it is because a lot of that was inventory build up but clearly some indicators are looking better the other number that came out by the way today was inflation core p.c. inflation was up and if you put that into context inflation is moving up the fed today holding rates steady doesn't that mean that real interest rates interest rates often flake dropping so we have this hawkish federal reserve because everything is looking so great yet interest rates actually formally and so to me that suggest maybe not everything is so great and when we finally going to raise rates well i think we're still going to be in negative territory meaning after inflation that means financial repression in the u.s. is going to continue if a long time the key difference is that here we have made to believe t

economy has to be isolated completely it's close to possible to isolate the russian economy completely from all markets for all financial markets for war all that just to call routes to acknowledge resources etc so all these sanctions will only go half way in europe. and in cuba. of russia and a big country with the the economy russia will definitely retaliate so these sanctions will be two way to a and russia will find ways to be for our european union and at some point if i'm from the states i want to move on to tax evasion because i did mention this week there's been some new measures are we know this but i will fight against the anything that politicians as rational process seems to agree on they say is. the most anxious more rules and regulations that sometimes means the more breaking off do you think that because there are going to be more hurdles that people will be more inclined to jump over those hurdles and find loopholes to get rid of that money elsewhere to copy a secret even the face of it's impossible in russia i would not be honest and frank with you from that is that ru

the model of the circular economy is a forest.hen you die in a forest you get disassembled and reborn. the way it works, you are built out of molecular lago, amino acids are like lego, you can join them, take it apart and build something new. the resolution is dimming tieing the materials. -- digitising the materialsful we are learning to put code into the construction of materials. ha it means is you can disassemble technological materials and reassemble them. so trash is analogue means you smoosh stuff around. people on the panel are doing great to resmoosh it around. the real science and research behind the fab lab is dim tieing fabry ration to code the construction of materials, so rather than recycle you unbuild and reasell ble. >> i follow that and agree with example. >> please. >> we heard we need to design products for the circular economy. waste is valuable. products are made out of individual materials. all the materials are valuable. so think of a product as a whole list of xants and as a knk components and as a -- comp

economy no longer dominates the global economy like it did after world war two when dollars ation was solidified but if mr persaud is correct that the market will continue to react this way then won't transition necessarily be dramatic and if mr persaud is correct we'll transition from magic thoughts comments concerning. your favorite jim rickards and one of my favorite he thinks it's going to be traumatic as well he took the other side i remember when you were asking the question about you know what you think about what jim rickards had to say i think almost the opposite i mean the way that i listen to what they have to say i feel like they are saying pretty much the same thing that the u.s. economy or the global car is dependent upon the u.s. dollar but i feel like it's the transition that is the difference between the two that is. thinks that this is a stable equilibrium and rickards thinks like the person who's asking the question that it's not a stable equilibrium there should be a sudden break up so i think it's a possibility different sides of the same coin wrote now another hi

economy isall, the starting to be a two track economy. people who are in the petroleum right now, natural gas, any kind of engineering job, those kids are coming out of school, starting in six figures. chemicalal pay for a engineer graduating this year was just shy of 100,000 a year to start. those kinds of good jobs are happening everywhere. if you have the right skills. but the problem is many of the jobs that have been created tend to be in hospitality, leisure, restaurant work, that kind of thing. two-tiered economy happening where we have skilled workers who are very much in demand and getting good quick -- good wages, and a lot of job growth in service jobs that do not pay much. average people can provide middle-class wages, those are still tough. recovery is as the concerned, is there still a y factor? -- why factor? a series of factors on why the economy is recovering? guest: that is more of an economic argument, sort of a political argument. president obama was saying congress needs to do something construction,way bridges, those

when the economy is strong. you run budget deficits when your economy is weak and budget surpluses when it is strong. that is why i do not think we need to balance the budget every year. it is a nice, elegant thing to be able to understand that we pay for everything that we spend every year. but for the federal government, it makes sense to even out over a business cycle, which is usually 10 years. most economists and policy experts on both sides of the aisle would say that what the u.s. government should shoot for is a balance budget over the business cycle. the economy is weak, and in that surplus when you are taking in more, you pay down some of your principal and bring the debt down a little bit. is, the u.s. debt is going to be growing whenever we have deficits. and it is growing most of the time, but not necessarily troubling. what is troubling is when it is growing faster than the economy. this is not even a high standard here. it is not come i owe, you have to -- it is not, o, you have to pay more than y

economy it's. just three years ago the european union or spending several hundred billion if you're also in the public procurement underestimation. over. trying to sort through sometimes fifty percent of the money spent on corruption. well now every word snowden's n.s.a. revelations that the u.s. government is sucking up your data whether or not you're a suspect but now it turns out that certain functions on apple mobile devices might be monitoring your personal data as well what should we think of this well i want to get carle denninger is take on privacy issues and mobile computing as well as understand where he sees the direction of the u.s. economy heading then a girl is a libertarian blogger at the market ticker and author of the book leverage about the two thousand and eight financial crisis i first started our conversation by asking carl about apple's deal with i.b.m. which i. i.b.m. will provide customer service in the corporate arena for apple and i asked carl what apple and i.b.m. get out

economy. "real money with ali velshi" is next. i'm david shuster. thanks for watching. . >> america's economy bounces back in a big way, growth and shaking off the rough start at beginning of the year. also america gears up to export crude oil for the first time in decades. i'll tell you that that means paying more when you fill up at the grass pump. and joining forces in a multi million dollar deal. i'll talk to a man who says that embodies everything that wrong in america. i'm ali velshi, and this is "real money." >> this is real money. tell me what's on your mind by tweeting me or hitting me up on facebook.com. the initial surface attack way from today's news that u.s.' gross domestic product grew at a healthy 4% annually. now this followed the dismal first three months of the year when the economy strange, a revised 2.1% solid spending by you the consumer in cars and other items help to drive the second quarter gain: >> the economy with the fastist half year growth in a decade. now this picture of an improv ing economy comes as the labor market

economy. one example would be that we see in surveys of households that their expectations about their future finances and growth in their real incomes are exceptionally depressed, and i think that's a factor that is depressing spending. we see in the housing market where we had some progress, were ut it now looks like it's stalled. a lack of credit availability for anyone who has anything other than a pristine credit rating, i think, remains a factor, and that's in many ways, in complicated ways, a legacy of what we have lived through. so i think there are, and fiscal policy has been a factor, in my view, holding back the recovery, and that's what monetary policy has had to counteract, and that's in part why we have needed such an accommodative monetary policy for so long. now, the economy is making progress. i do believe it's making progress, and eventually if we continue a day will come when i think it will be appropriate to begin to raise our target for the federal funds rate, but to the e

economy has to be isolated completely. it's close to impossible to isolate the russian economy completely for all markets for all financial markets for all the just to kill routes to acknowledge resources etc so all these sanctions will only go half way anyway. then in case of russia a big country with the big economy russia will definitely retaliate so these sanctions will be two way to where you and russia will find ways to be for our european union and at some point if i'm from the states i want to move on to tax evasion because i did mention this week there's been some new measures are we know this but i will fight against it is there a thing that politicians as rational processes seem so great on these days. and all sanctions more rules and regulations that sometimes means the more breaking off that do you think that because there are going to be more hurdles that people will be more inclined to jump over those how those and find loopholes to get rid of that money elsewhere to pop a secret i don't even if i say it's i

the money economy is the symbol economy, a symbol of products and services. cambridge first evidence that money is the driver of the economy and is the production of products and services that respond to the money so we reversed it put the cart before the horse. so they got up with the idea that if you put money in that can stimulate the economy. it will certainly stimulate activity but all it does is going to activities that normally would not happen like the oil boom in the last 10 years. the oil boom that we have in the 70s, the housing bubble that we had. we have a housing search in the 70s. it's not the catastrophe this time because the government wasn't quite as involved in it but it's like putting the virus and a computer. you get activity but it's false that to be. in 1980s you had energy go through depression, agriculture winter depression. commercial real estate went through a huge hit. we grew in the 80s and a lot of activities that thrived under false and funny money had to be liquidated in the 80s and he sought with housing today read who knows i

economy then anthony randolph gives us his take on the b.i.l.'s report and why he disagrees with economist paul krugman believes that policymakers are only looking to the short term and to the detriment of the future of the u.s. economy and professor michael hudson explains the relationship between the housing bubble and the practice of leveraging up a borrowing to buy then economist and author george magnus comes next he's looking at how china can transition from its massive double digit growth to a place of more sustainable development levels then you swap precise discusses the strange phenomenon of capital flows from the emerging markets to develop markets the other way around and rounding out our best of the week janet young we england talks about the importance of getting retailers to accept as a way to spread it use enjoy. not just jobs that i pay attention to i pay attention to what's going through our various sports here in the united states i pay very good attention to what's going on with tax revenues there are many things that i have l

economy still needs fed support. stay with us. ♪ >> fed chair he janet yellen delivered her semiannual testimony before the senate banking committee today. i am joined by a professor of global finance at brandeis university. the professor studied undergraduate economics with fed chair yellen and work at the federal reserve board of governors. welcome back to "bottom line." it is good to see you again. chair yellen told lawmakers continued monetary stimulus is needed because of what she called "significant slack in the labor market," am none inflation rate that is still below the fed's goal. can the economy stand on its own? >> i think there are a number of reasons why the federal reserve has moved to basically continue its bond buying program. they are looking at a labor market that still is not back to where it should be. they are looking at long-term unemployed that is higher than it has traditionally been. they are looking at wages that -- they are looking at the wages and say they are rising too fast. the fed is

economy it all starts right now. the brics are making some big news sunday two of these summit in brazil leaders from brazil russia india china and south africa have signed off on a new development bank according to leaders from the five brics nations the bank shall have an initial authorized capital of one hundred billion dollars with the initial subscribed capital at fifty billion shared equally among its founding members and one of the facts well here they are the new development bank will be located in shanghai the first chair of the board of governors will be from russia the first chair of the board of directors will be from brazil and the bank's first president will be from india while the african regional center will be in south africa now the brics also announced the signing of a treaty for the establishment of a reserve fund for member nations called the contingent reserve arrangement or c.r.a. with an initial and this will see. size of one hundred billion dollars emergency reserve fund will help developing

in a depressed economy can cause increases in the overall output but when you're the economy that is growing already what you do is you simply divert resources from one activity to another that doesn't increase your look at your short run economic benefits and stadiums tend to be a very very poor way to get long run economic development they don't tend to be very good neighbors they don't allow you to do other things in the economy this isn't like building an airport that you could use for the world cup but then also used for business afterwards these are stadiums that again in some cases will go almost completely on used and in other cases even the successful stadiums are only going to be used you know several dozen times a year that's not a very good return on investment. victor you recently wrote an article in a very good article i made out on five thirty eight that discusses some of the problems with the way that brazil actually spent its world cup money ultimately completing only half of the public works projects that had pledged to so you know if you can just touch on but can y

it's a booming economy. get your cell phones out.onight's question, do republicans have any credibility left on the economy? text a for yes and b for now. you can go to our blog at ed at msnbc.com. one more thing, use your imagination as i started to talk about fantasy football, fan at a size what it would sound like if mitt romney was the president of the united states right now. this is mitt's economy. it's a good thing we elected mitt in november of 2012. in fact, this mitt -- mitt is probably the best economic president we've ever had. i make the case that's what we would be hearing. for more, let me bring in two gentleman who know the economy, david johnson and dr. arthur laffer, great to have you with us tonight. >> thank you, ed, it's a pleasure. >> you bet. can the democrats officially say the obama economy is booming by the numbers? >> well, it's getting better. it's getting better ad, i think it would get better if the republicans would invest in the future of america putting money into basic research which government alway

economy, we get good data, bad data, disappointing data, what is your view on the economy here? >> i this i the economy is doing well. you know, almost every parameterer alook at i listen to the comments, you know, your bank roll is up. you have over $2 twl worth of deals announced. both of those indicate business confidence the purchasing manager indexs are headed higher, consumer confidence is improving, vehicle sales are strong. i think capital expenditures are going to improve. so i think a whole panoply of economic indicators that suggest to me that we're going to be headed towards a 3% growth. i don't think that's what we're going to have. i do agree with joe that the inequality problem is a problem, is serious. i also think that median family income hasn't risen, but i thil think the u.s. economy is going to do much better in the second half hasn't in the first. >> well, fascinating insights. thank you so much, byron, always a pleasure to have you with us. >> thank you for having me. >> byron dean, with blockstone partners. >>> where can you find value with the market nea

it is at the economy whether the economy is good or bad. we were with just talking about the affordability problems where housing never is that cheap, just lower than it was during the height of the bubble. it just hasn't caused enough growth with with things getting cheap enough that it would spur a real economic improvement. >> in today's new york times right after the numbers came out, one of their writers, wrote the labor market remains much weaker than the last time the unemployment rate stood at six point one with%. is the six is .1 with today? is. >> if we look like we lived in 2008, we would have had a lot higher labor force. so is we with have about seven more people working today. the 6.1% unemployment when we have about 7 million people compete hi out of the labor force isn't the same hay boar market. >> when you see a number like this. 2 1/2 million for the previous year. can we see in the coming months whether they are sure whether they could work. with we with will see them come in off the sidelines. >> that's one of the inter