we talked with elizabeth warren, the woman appointed by congress to keep an eye on the $787 billion plan. >> very impressed. very impressed. i -- you know, i'd almost trade in my bmw for this thing here. >> susie: that's what general motor's ceo fritz henderson was hoping for as g.m. gathered with consumers for a test drive of the new cars in stock. >> paul: stocks stumble. dick bovay says they're trading on fumes, not reality. >> susie: it may be 100 degrees in the shade in some parts of the country but the nation's retailers are thinking sweaters and coats for christmas. they're busy thinking of new ways to ring up sales this holiday season. >> paul: i'm paul kangas. >> susie: i'm susie gharib. this is nightly business report for use it, august 11th. this program was made possible by contributions to your pbs station from viewers like you. thank you. 7//& captioning sponsored by wpbt >> susie: hazardous to the economy's health. that was the warning today from the congressional watchdog monitoring the government's bailout of the nation's banks. according to a report from the congression

oversite elizabeth warren joins us. >>> a prescription for a health care cure.oday's guest host, not just a senate majority leader but a doctor as well. senator bill frist is here with his opinion on health care reform. >>> the fed begins a two-day meeting. big news, the national federation of independent business, its read on the state of small business and its ability to weather the financial storm. as the second hour of "squawk" begins right now. >>> good tuesday morning. welcome back to "squawk" on cnbc. i'm carl quintanilla along with joe kernen and becky quick. futures today better than fair value. we've been in a tight range as we begin the federal reserve meeting. speaking of, which some of the stories we're following, the fed starts a two-day policy meeting today. central bank widely expected to leave key target lending rate near zero but market watchers will look for signals on the fed's other programs. the congressional oversight panel says toxic assets may need more support. the oversight panel's chair, elizabeth warren, is going to join us this morn

you had elizabeth warren on yesterday, sort of an economic dip we're going through. that they think the recession is a bathtub shaped recession. it's a long, slow slide and we're about the middle, halfway a through the bathtub and we'll start coming up the other side of the drain maybe in a year, a year and a half from now and i don't think there's any commonality among all of these economists and politicians who talk about the economy. i also think most of the politicians we hear on this program and in panels before congress are basically economic el illiterates who know no more than i do and i'm an economic illitera illiterate. >> thank you. the scottish government is considering an early prison release of a former libyan agent convicted in the 1988 lockerbie bombing. an attorney says the 5-year-old has terminal prostate cancer and the release would come on compassionate grounds. >> and, by the way, chris was just asking me in my ear whether this story enrages me. this guy obviously was working for gadhafi. we have struck a deal with gadhafi over the past couple of

elizabeth warren the anti-bank chairman for the congressional oversight panel for the congressional t.a.r.pbailout. people believe goldman now has a free insurance policy in essence from the government. then she adds, whether they do or not is less important than the fact that many in the market believe they do. that means at some level goldman is playing with the american taxpayers future. man, susan, goldman is playing with clients money. they're not playing with the taxpayers' future, are they. >> that's exactly right. when they do well and get bonus, they pay taxes and they reinvest and stimulate the economy, so to the point of your previous segment, when people make money, companies are successful, that's good for all of us, that helps our economy and a huge boon to anybody looking at the bottom line. we should all be rejoicing at this point goldman was able to pump more money into the system. >> those bonuses people get so upset about, they don't understand all year long the biggest fat cats at the firm work for only 10% of their total pay. at the end of the year, after the firm reali

there's a new warning from elizabeth warren, head of the group overseeing how t.a.r.p.ing spent. plus, "washington post" business column list steven pearlstein and the longest tease in the history of television. a look at stories politico is working on this morning. this is my verizon small business specialist, tom. now, i know the catering business but when i walked in here i wasn't sure what i needed. i'm not sure what i need. tom showed me how to use mifi to get my whole team working online, on location. i was like, "woah". woah ! only verizon wireless has small business specialists in every store to help you do business better. you're like my secret ingredient. come in today and connect up to five devices on one 3g connection. now only $99.99 gathering dust, as pollen floats through the air. but with the strength of zyrtec ® , the fastest, 24-hour allergy relief, i promise noto wait as long to go for our ride. with zyrtec ® i can love the air ™ . rrd d ouromise noto wait as long to go for our ride. naing onon ud r. weotototatatininci on us cars for everybody anont c

. >> elizabeth warren, the head of the congressional oversight panel, says that the troubled assets are substantial danger to the financial system. we spoke earlier this morning about what was going on with the program. remember, it was supposed to act like a vacuum cleaner, of sorts, with toxic assets sitting on the books of the bank's, they were supposed to be scooped up and taken off of the balance sheets so that they could be operating as healthy banks. that was not what happened. t.a.r.p. money became direct cash infusions. many of those toxic assets are still sitting on the bank's books. how many? she said she did not know, that she did not have enough detail to know exactly what kind of situation we were in, but she put it in the range of $600 billion to 1.5 trillion dollars of these assets on the books of the banks. if that is the case, what does it mean? she said that banks will need to raise more capital. the stress test that was also related to t.a.r.p., they also look at the 19 largest banks in our country. professor warren says that we need to be concerned about these small

is this elizabeth warren's congressional oversight panel? >> yes. basically what we're talking about is the $700 billion t.a.r.p. money, and as you know, much of the money has been used to boost bank balance sheets to free up money for lending. but some banks still have a lot of toxic assets as we know. so, according to this independent oversight panel, if the economy gets worse, defaults are going to rise. troubled assets are obviously going to be worth less and some banks could possibly even go out of business. tony? >> mo. but the government did stress tests on on many banks, so why is this still happening? >> the problem is the watchdog group sense that the stress tests did actually work. however, they were only performed on 19 of the large banks that were actually tested. so, there are a lot of smaller banks that didn't get tested. so, the concern now centers around those smaller banks. they tend to hold a greater portion of commercial real estate loans. so, delinquency rates on commercial loans have doubled in the past year. we may not see tha

as elizabeth warren aptly stated in describing the need of emergencies like this quote it is impossibleuy a toaster that has a one in five chance of bursting into flames and burn down your house, but it is possible to refinance an existing help with the mortgage that has the same one in five chance of putting a family out on the street. and the mortgage won't even carry a disclosure of that fact to the homeowner, and quote. unfortunately, many people in my district who were preyed upon by so many unscrupulous companies, people know this all too well. the well-known and tragic case of one of my constituents, at the polk, is a shocking example of a financial product that not only cause someone to almost be homeless, but caused someone to attempt to take their own life. at the age of 86, ms. polk was given a new 30 year mortgage on a house she already owned. and for an amount greater than the value of her house. let me say that again. at the age of 86, ms. polk was given a new 30 year mortgage on a house she already owned, and for an amount greater than the value of her house. less than fo