those people who wanted to take fannie mae and freddie mac down a pair i thought that fannie mae and reddie mac ever so powerful that they would never have been taken down and, on the other hand, whenever those who thought they were so apparent of then they would be the cash cow for ever more affordable housing and what it's hearing and it is never house of cards. that collapse for the very model that was the directive which was that a growth stock model. we can get this capital for the market place and give them propose what ever it takes. i think everybody was applied to the reality behind that. it was worrying party is over symbols and i think i'm missing that yes and they were not the was to permit the private market securities but they created that market place in many ways by finding the aaa of that early on and made in that market go and then everybody else. so i think that if the debate have been honest and 1995i had a conversation with alan greenspan about huge portfolios and the impact that they have and he was very concerned about the federal home loan banks but not at all

. >> susie: the regulator in charge of fannie mae and freddie mac considers the future of the mortgage giants. we hear from the federal housing finance authority's james lockhart. >> paul: while retailers have been promoting "back to school" sales for over a month, the buying bonanza hasn't materialized. the latest retail reports show consumers are still holding tight to their wallets. microsoft says "windows 7" is ready to go. how does it compare with the competition and is it worth the upgrade. our tech guru has a preview. i'm paul kangas. >> susie: and i'm susie gharib. this is "nightly business report" for thursday, august 6. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. thank you. >> susie: good evening, everyone. a more upbeat projection on the job market from two wall street powerhouses. goldman sachs and deutsche bank sharply revised their forecasts on the number of jobs lost american businesses cut in july, a day before the government releases its report. deutsche bank now expects 150,0

. >> in a few minutes we will bring you a house oversight hearing on fannie mae and freddie mac. under government control in 2008 in the wake of the collapsing housing market. witnesses will include officials from the federal housing finance agency, which is in charge of regulating fannie mae and freddie mac. first though some background on the status of housing related legislation in congress from a capitol hill reporter. >> dawn kopecki a bloomberg news, why is congress continuing to hold hearings about flame eight and freddie mac? >> the mortgage company right now have taken more than $85 billion in federal aid, and congress is trying to figure out what to do with them. they said whatever they do, do with any entry they are going to look like they look like today. they're going to restructure them. they could remake them as a public utility. there are a number of options on the table they are considering. >> does it appear that lawmakers are interested in writing legislation to address some of these issues? and if so can you give us some specifics about what might the legislat

ones that need fannie mae and freddie mac guidelines. fannie mae and freddie mac would lose billions of toxic assets. they back 40 percent of all u.s. home loans together. marion barry is under the spotlight again, or questions he outspent his colleagues on contracts. and ex-girlfriend filed and then dropped stalking charges. pete once hired thhe once hired. >> because he hired her, it includes an investigation on council spending on outside contracts. >> [unintelligible] >> he once said donna whites by to --brighthaupt was qualified. there was an email record that said he would try to support her financially if he could not get a contract. there's a report ithat he spent $252,000. he has very few documents to show what the city got for its money. a spokesperson for him since the email between him and donna josie was closely supervising his work. he wrote "i was greatly disturbed by our meeting on tuesday it because your project is behind schedule. oded tells her she should follow instructions without long debates. keeper cell phone on an

. >> it would not be a good thing to create a government version of a at fannie mae and fannie mac. sean: if they cover the means of servicing pricing and supply, they decide which services that you want, they are controlling it in another way so it is still destroying the public auction. >> they're still not answering the questions, can i keep my doctor. >> continuing to go forward with this, this will get chalked uch. they're trying to destroy the insurance companies. >> they spent three days arguing amongst themselves whether or not the president supports it public option. last week i said to have a fact problem, this we have a communications problem. sean: this was a campaign that had incredible discipline but they don't have the same discipline in the white house. >> they are very sophisticated communicators and i think what happened is that they floated this trial balloon and it popped and then they said they did not. let me tell you, if you are at the white house and you're trying to tell everyone that there is nothing new here, something is new. sean: what are we to make abo

and plus, remember fannie mae and freddie mac? meet their cousin jenny, the latest subprime mortgage lender and possible bailout considered e-candidate. gearing up for the 2010 sen have yo yous-- census. the journal editorial report starts right now. welcome to the journal editorial report, i'm paul gigot. claims fast and furious that the democrat health care reform plan, what critics are calling death panels for seniors and children with birth defects. sarah palin got in on the act recently writing on her facebook page, saying the american i know and love is not one where my parents or my baby with down's syndrome will have to stand in front of a death panel so his bureaucrats can decide based on a subjective judgment of their level of productivity in society whether they are worthy of health care. what they said this week. >> the rumor circulating around lately is this idea that somehow the house of representatives voted for death panels that will basically pull the plug on grandma because we've decided that we don't-- it's too

on fannie mae and freddie mac, i will be glad to respond to that. e bailout of fannie mae and freddie mac, we passed legislation in 2007 in the house that george bush asked us to pass when the democrats became the majority. [inaudible] the request -- excuse me, i just thought request probably from some devoted for and twice to talk about something other than george bush. i understand that coming from bush supporters. but it's impossible to understand where we are without looking at the context. what is the like? somebody said i was lying? what's the like. what was the lie i told -- what was the lie i told? [inaudible] >> why didn't you read the bill he voted for? >> which bill? >> the park built. >> i did read the part bill. -- the tarp bill. >> i did read the tarp bill. i am struck by the top level of discussion of people who cannot disagree rationally. let me say this. there are some contradictory -- somebody asked me to talk about fannie mae and freddie mac. do you want me to talk about it? here is what happened. i was a supporter of their efforts

shares of aig, fannie mae, freddie mac choser higher by more than 36%.estors betting on these names for a rude awakening? joining us, paul miller of fbr capital. i believe that you were in this camp where you also think that these stocks are headed for zero, correct? >> i am not an aig fan. fannie and freddie, a 50 cent price target. theish on is they're into the government by over $100 billion. charge-offs continue to rise. nonperforming assets can't to get very high. there's no value here. a lot of this was caused by the aig stock situation where the stocks off and fire, everybody's looking for them to do the same thng. you're not going to see reverse stocks. the government doesn't need it, doesn't want a lot of value here, the government knows there's no value here. the only reason why the government is they don't want to put the debt on the government's balance sheet. >> if the government knows the stocks are worth zero, why doesn't the s.e.c. warn people like they did for gm? they're saying the government knows they're worth nothing, not doing anyth

of the federal housing finance agency gave a progress report thursday on his oversight of fannie mae, freddie macand 12 other federal home loan banks. the agency was created a year ago in the wake of the government's financial rescue of fannie mae and freddie mac. this is just under an hour and a half. >> welcome. thank you all for being here. i am the chief operating officer and senior deputy director of the finance agency. a year ago this morning, president bush signed the housing and economic recovery act of 2008 which among other things traded housing federal finance agency and in signing that law if both establish the agency and required that the issue some reports, one year later, which is today. one of the things we will be doing today is describing the release of several of these required reports. i would like to begin by introducing to all of you the director of the federal housing finance agency, jim lockhart. director lockhart has had a long, distinguished career in the federal service, serving his country, and in the private sector. and navy veteran, he is also serving in multiple adm

fannie mae and freddie mac, f fannie shot up more than 40%. speculators are betting the government won't close or dismantle them. >>> we'll see how today's troubles in china affect wall street. their markets plummeted as much as 5.5% on fears the chinese economy is recovering too slowly. >>> an updated report on consumer confidence will be sure to be out as well as new homes sold. >>> president obama expected to announce he's nominating ben bernanke to a second term as federal reserve chairman. bernanke is expected to be with the president when that announcement is made. >>> auto dealers have stacks of paperwork for the cash for clunkers program. the department's website crashed. the government extended the deadline for paperwork today but warned it could be extended furthe because its website still was having some problems. >>> finally, factory workers in france are stripping down to save their jobs. at least that's their hope anyway. more than 200 will bare it all in hopes of selling enough of these calendars to send the whole crew to their

the government is waging a reorganization of fannie mae and freddie mac. -- the government is weighing a reorganization of fannie mae and freddie mac. no decision has been made to go with the good bank, bad bank issue. that is your business news. live at bloomberg headquarters in new york, i am linda bell. doug and alison, back to you. >> thank you very much for that. 72 degrees. the news continues. >> as the virginia race for governor heats up, one candidate is scheduled to get some presidential support. >> hundreds of documents are released and the show marion barry for outspends his colleagues on the council when it comes to outside contacts. >> live in the weather center, we are watching some showers >> live in the weather center, we are watching some showers pursue the every head. every bite. every gallon. every shoe. every book. every cereal. well, maybe not every cereal. but every stem. every stitch. every tune. every toy. pretty much everything you buy can help your savings account grow because keep the change from bank of america rounds up every debit card purchase to the next

. >>> and when we come back, overhauling fannie mae and freddie mac. the idea would be to give them a clean slate in the wake of the mortgage meltdown. >>> and the former congressman caught with cash in his freezer. william jefferson pays the price for selling his office. hi, may i help you? lots of discounts on car insurance. can i get in on that? are you a safe driver? yes. discount! do you own a home? are you going to buy online? yes! discount! isn't getting discounts great? yes! yeah, i got carried away. helping you save money -- now, that's progressive. call or click today. was about 30 seconds after i woke up. still not smoking! seven days. nicorette takes just enough of the ege off the need. i still want to light up, bu i don't have to. (announcer) .you can do it. nicorette can help. good. ( laughs ) ( gasps ) do you hear thatsound?, they're popping! - really?! listen. - ( laughs ) ahhhhh... mmm. where'd the sound go? even when they've stoped popping, is it in your tummy? they haven't stopped working. now, every box of kellogg's® rie krispies0 c

. >>> and wh we come back, overuling fannie mae and freddie mac. the idea would be to give them a clean slate in the wake of mortgage mtdown. >>> and the former congressman caught with cash in his freezer. william jefferson pays the p >>> stocks are rising overseas this morning after wall street took a breather from its summer rally. tokyo's nikkei average jumped 1.3% today. hong kong's hang seng is higher. in london, the ftse opened higher. wall street starts the day with the dow at 9280, after slipping 39 points yesterday. the nasdaq fell 18 points to close at 1993. >>> the obama administration is considering one of the biggest overhauls to the housing finance system since the great depression. the president's top economic advisers are meeting today to determine the future of fannie mae and freddie mac. one proposal would strip the companies of their bad debts. >>> president obama has announced a major investment in clean energy technology for cars. he unveiled $2.4 billion in grants from the stimulus package to use to create advanced batteries a

aig, fannie mae, freddie mac also on the rise. we'll discuss whether there is still an appetite for these risky stocks. this is "the call." we are cnbc. >> stocks trading negative to find better than expected results on both gdp and jobless claims. and the fdic reporting the number of problem banks rose sharply in the second quarter. home builders also lower, after toll brothers reported a widening second quarter loss. right now, the s&p is also to the down side. and the nasdaq is not doing too much better, an over 1% drop for the s&p 500. and the nasdaq is only getting 1995, below 2000, a drop of 1.5%. we have hampton pearson in washtd, bob pisani with the market reaction. but hampton, let's begin with you. >> well, first, here at the fdic, its second quarter banking profile tells us that by the end of june, its list of so-called problem banks was at a 15-year high, some 416 institutions with combined assets of just under $300 billion. fdi-insured banks had a $3.7 billion aggregate net loss in the second quarter, two out of three

the focus but they're things that was trying to do to combat the necessary for example, fannie mae and freddie mac to the economic crisis this is what we were hearing but it is not true. fannie mae and freddie mac did many things but if you read the book i think i tried to explain that there was in fact, the absence from the market bridges that allowed wall street to move and and cause some problems that we're still suffering from rather from their irresponsibility from offering subprime mortgages was tried to gain back the market share that they lost to wall street i do point* the finger squarely at wall street and i do think wall street there are many culprits common many, many culprits but wall street is chief among them and their lack of leadership among so many of the firm's and a lack of understanding of the risk that was being taken on buy so many of the firm's again i focus on maryland very tough but very smart man who ran the firm with an iron fist but ultimately was forced to resign in october 2007. he is an interesting story but it was not even close frankly the risk that was undertaken

. >>> the white house is considering splitting up fannie mae and freddie mac. this deal would place the company's billions in so-called toxic assets into a new federal corporation, leaving them with a clean slate. the proposal is said to be in the early stage. >>> brand new developments in the summer long saga of marion barry. >> this time is hundreds of pages of e-mails about the work his former girlfriend was doing for his office. matt brock has more on this. good morning. >> follow me on this. we know marion barry was arrested back on july 4, accused of stalking his ex-girlfriend. those charges have been dropped. he hired his ex-girlfriend to work on a contract. now this morning his office spent $225,000 on outside contracts over two years. that compared to his next competitor on the council, kwame brown, who spent about $45,000 during the same time. he spent more money. that is under a lot of scrutiny, as is this e-mail between him and his girlfriend. marion barry has said his former girlfriend donna watts- brighthaupt was well qualified for the contract hi

2005 i joined an effort to fight the republican mancommitte to help the in may and freddie mac. -- to help fannie. the point is that is a fact. i was in the minority from 1995 until 2006. in 2005 i did not like it in the end because of what they did to rental housing. we were also trying to restrict subprime mortgage lending. we tried to pass a bill to do it. republicans got into a fight. they control the whole congress so how could it be it my fault if no bill passed from 1995 to 2006? in 2007 i became the chairman of the committee. several months after i became chairman of the committee we passed a bill to regulate fannie mae and freddie mac' because it included a special provision for the-income housing. the senate did not pass it until 2008. those are the facts. i did not think it was a it problem until bush increase of prime mortgage lending. what do you think i just said is inaccurate? let me summarize if t and you cn react. in 2003 i did not think they had a crisis. in 2004 are projected it when bush increased subprime lending. the republicans in the senate defeated the bill, wanted a diff

half of them are owned by fannie mae and freddie mac. sent march 2009, fannie mae and freddie mac have refinanced over 2 million loads. 56000 of them are through the harp program. multifamily has become a very important challenge. the enterprises are working to stabilize the mortgage by keeping multifamily mortgage market by keeping it liquid, supporting affordable renting housing, and ensuring consistent credit principles. as of march 2009, the enterprise combinable by family portfolios has grown to $340 billion. and their market share is growing rapidly, up from 34% in 2006 to 84% last year. we are reminded daily of the economy has had a very real effect on families, as job losses, and a plummeting home values have put enormous pressure on people and caused millions to lose their homes. that is why i'm so proud of the work of fannie mae, freddie mac, fhfa, and the servicers have done on implementing making home affordable. president obama has stated that the enterprises will continue to play a key role in helping the mortgage market rec

for example, that fannie mae and freddie mac caused the economic crisis or caused the credit crisis. visited something that is been bandied about certainly in political circles. and it is really not a big fannie mae and freddie mac at many wrong things but ultimately, if you read the book, i think i try and explain that it was in fact their absence from the market for mortgages that allow wall street to move in and overlake ao many of the problems that we currently are still suffering from. rather than their irresponsibility in terms of offering subprime mortgages and the like. what fannie and freddie did was try to gain back market share that they ultimately had lost to wall street. as you can judge from the title, of course, i dewpoint the finger squarely at wall street in a lot of ways. i do think wall street, there are many culprits. mini mini culprit, but wall street is i think chief amongst them. a lack of leadship amongst so many of the firms and their leaders. a lack of understanding of the risk that was being taken on by so many of these firms. again, as i said, i focus on me

everyone else had to do it as well what you were freddie mac, fannie mae or the lender on the corner. >> it is a slippery slope, isn't it? >> i think we are starting to see, as eric brought up the point, the government is getting involved in a lot of things. healthcare, pay. where does it end? as soon as this monday or tuesday when it comes out the pay czar is gone? no, they will find something else for him to do and tobaccoy's point, toby talked about it is not a janitor. but the highend people are making is who generates the economy so they deserve every dollar they get. >> if there was a suit czar i think you would be doing well because you are looking stylish. brenda: i was going to let pat talk but toby took his time. you will get more time next segment. >> that never happens. brenda: all right, guys. he is back but someone here says if you bet on michael vick's comeback you will be a loser. the real comeback ready to the real comeback ready to return big to help raise awareness for the men and women who have suffered traumatic injuries in the war on terror. they need our help. t

you are talking about fannie mae and freddie mac. what proportion of sub-prime loans the date by? wrote it down. in 2006 they created this crisis. what proportion did they buy and wall street didn't i? >> in terms of what fannie mae ended up geron team, it was-- sub-prime mortgages in what they call alt-a mortgages ended up, you don't look adjust their numbers. exceeded $8 trillion. wall street wrote this stuff and fannie mae guaranteed it. however, again, this couldn't have happened if the federal reserve hadn't done what it did to create that excess liquidity. >> just let you know fannie mae bought 20% of sub-prime mortgages. >> they bought them, however those are mortgages i think that they kept on their books. they kept this stuff-- >> mr. madrick is badger in my witness. [laughter] >> mr. moore, mr. forbes is not even sweating so sit down. [laughter] >> quickly, quickly steve, mr. forbes, the federal reserve has lowered interest rates before. the late 1990's we had a boom, the early 90's. if i could, still had the memory i had ten years ago, i could find a couple of other inc

the government is weighing a reorganization of fannie mae and freddie mac. they may put it in a government supported corporation. no decision has been made yet on whether to go through with the good bank-bad bank option. stock futures are pretty quiet indicating a slightly higher open. the government july jobs report comes out tomorrow. that is business news. reporting for wbal-tv. >> see you back here at 6:15. if you are in the market for new technology, now may be the best time to buy. >> the computer section at best buy was busy this afternoon. people checking at the latest laptops. this year as the budgets are shrinking, so are their computers. >> we have some low-priced laptops. >> computers with a whole new name and price tag call them the netbooks. >> they are an expensive, small and light and can do everything that the notebook computers can do. >> they do not come with eight cd or dvd player. times are tough. the good things about electronics, the longer you wait, the more you get for your money. >> the memory is three times faster than what i have

choosing our statistics, aren't we. >> i believe in diversity. >> you were talking about fannie mae and freddie mac. a what proportion of subprime loans did they buy? i wrote it down. in 2006, they created this crisis. what proportion did they buy and wall street didn't buy? >> in terms of what fannie mae ended up guaranteeing, subprime mortgages and what they call a mortgages ended up, you don't look at just their numbers, actually, ceded a trillion dollars. now, wall street wrote this stuff and fannie mae guaranteed it. however, again, this couldn't have happened if the federal reserve hadn't done what they did to create that excess liquidity. >> fannie mae bought 20% of subprime mortgages. >> they bought them. however, those were mortgages that i think they kept on their books. they started to drink the cool aid too and keep this stuff, because they thought it was a way of enhancing their profit. >> mr. madrick is badgering my witness. >> mr. forbes, mr. moore isn't even sweating, so sit down. >> quickly. quickly. steve, mr. forbes, the federal reserve has lowered interest rates drastically befo

. >> susie: james lockha, the former heaof the agency that supervised fannie mae and freddie mac, is now turnaround speciast. he is joining ross and compan the new york firm known for restructuringsnd buyouts. untitwo weeks ago, lockhart oversaw fannie and freie as they emerged from counting scandals and guided them as ey becameovernment-chartered companies. >> paul: the food and drug administration is laching its centeror tobacco products. toda the agency announced that doctor lawrence deyt will head that n division. he was t chief public health officer for veterans affai, deyton's deparent will monitor tobacco advertisg and promotions andocus on stopping the illegalales of cigarett and other tobacco products to kids. euu >> susie: in the money fil tonight so thoughts on boosng the nation's savings rate. here jason zweig, personal finance columnist at thewall street journ." >> ithe economy is to recover, saving will have to come easier. the personal savinrate has official risen to around 5% after hovering close to ze for years. but, accordi to the federal serve, only 57% of american

fannie and freddie mac were seized by the government last september. fannie has received about $34 billion in aid so far. meantime, aig reports second quarter results before the opening bell today. analysts say progress on efforts to sell or spin off assets and the insurer's ability to retain or attract customers will determine whether the quarter is considered a relative success. citigroup may give control of its commodities business to andrew hall. that's the energy trader who made headlines for demanding a $100 million payday. citi could spin off the unit into a partnership run by hall, giving the bank a smaller share of the profits. other options include winding down the business, but that idea could back fire since fibro is very profitable. the times says citi tried to sell the unit berkshire hathaway, but talks went nowhere. citi shares are up about 4%. ross. >> and investors with royal bank of scotland today investors shared a cautious outlook in the and posted a loss in the fist half of the year. the bank has warned the results will be poor for

plunging prices in stoc and housing already hing forced governmt bailouts of bear stearns, fannie mae and frede mact despite allhis, rising prices were still paramount the minds of mosfolks here. >> we were planning trip to ity with my wife so we decided we had to cut wn a bit so i le her home. ( laughter ) >> reporter: the mor here, from maroni to matrimony, suggest that oil & food price hikes and a rising budg deficit had folks more ooked about a decling dollar than alst anything else. in oland, california, gloom and doom economist john willms was so afid of the buckling buck. >> i bugold coins as a hedge against inflation. >> thesare called gold eagles. >> reporter: williams hadaken us to his local goldealer, charlie mmoser. a lot ofeople like him, lie? >> yeah, there's - quite lot of them actually, eecially the way, you knowthe economy's be going, and the dollars been dow and oils been up, and gold's been running craz >> reporter: what was gold a the time, per oue? >> right now gold is ven-fifty d ten cents. >> reporter: the pre had actually bn higher, but wiiams was unfazed. >> whether you buy

those were the obvious explanations but that's not entirely satisfying because freddie mac and fannie mae also had big moves to the up side as well. some people speculating some quad fund was covering the shorts. not entirely clear. let's talk about the rest of the financials that were strong today. jpmorgan up nicely on strong volume. again, back to where it was prelehman bankruptcy prices for them. citi was strong. i just showed you the rebalancing. they're still waiting here to rebalanc

it buying almost a the debt issued byhe government- controlled mortgag giants fannie mae and freddie mac. congress is good to overhaul the government-sponsod enterprises or g.e.s for short. at's a fact that is not lost onhe markets. >>t's going to be difficult for the fed to stop proding that liquidity f housing finance unl we and uil private investors understa thfuture of the g.s.e.s. >> reporter: the fed hasold some o its mortgage deb to invests but still carri half arillion dollars on i books. which prests a political problem. doug elliott studies the financial crisis forhe brkings institution. he expes anyone makingis orer living from housing will not be happy to see the fed leave the maet. and will make that clear to membs of congress. >> if sebody stops by and leaves you $100 on your doorstep eve week, you may not needhe money but you want theto keep doing it. reporter: one thing is certain. th federal resve won't be able to leave the housing market until investorsregain their faith in mortgagdebt. and that y still appears a long way away. darren gersh,ight lee business report,ashi

>> paul: what about these huge percentage gains in some of the fpblz, like citigroup, fannie mae, a.i.g., freddie mac is this speculation at its peak or what? >> the so-called headless horse man. those i do believe are overvalued, considering the delusion that has already considered and will consider with those stocks. if i'm going to be in financials i'd much rather be in the smaller ones. >> paul: so you'd stay clear of these? >> i really would. >> paul: now if the economy is recovering, will interest rates sooning heading higher? >> soon, i don't think so, but in a year or so, i think they probably will. the voracious demand that the government's gog have for raising money to finance these deficits may tend to push the interest rates higher. >> paul: back in march, you said the obama economic stimulus seemed to be working. how about now? >> i think it is helping. i think it's helping in two ways. it's helping financially to a degree, and i think it's helped psychologically. there's much less panic among the investing public. >> paul: you recommend four stocks to buy and one to sell short in march.

. >>> therere reports tonight that the government may be ready to split fannie mae and freddie mac. the "washington post" is reporting the obama administration is looking to overhaul the mortgage giants. one option is to split the companies. fannie and freddie's troubled assets would then be put into a new federally backed corporation. it could allow the companies to get back on track financing mortgages nationwide. >>> the gunman who started shooting inside a gym outside pittsburgh last night apparently was motivated by his failure to attract women. brian moore has the latest from the investigators. >> reporter: ts pennsylvania community is struggling to comprehend the deadly attack, directed at innocent victims. women, targeted simply because they were in an aerobics class that caught the eye of an em bittered gunman. >> seconds later you hear shooting and he's shooting all over the room. >> we don't know as we stand here what made him stop shooting. thank god he did. >> reporter: before taking his own life, gunman george sodini gave the police a window into his existed mine. an ex

fannie mae, freddie mac and citigroup doing fairly well. a 50% move up and fannie mae you see with the huge volume. 100 million shares on the exchanges. 20% of the volume at the new york stock exchange. regional bank have been real weak here. dick came out with a note saying he likes most of the market in financials except for regional banks. bernstein came out and downgraded saying it's less attractive because they moved to the upside. the big mover on the upside and the financials and the energy stocks and the coal stocks and jpmorgan upgraded. that's doing well up 2, 3, our fore%. the oil near $75 and seen energy stocks basically outperform the sectors with the financials. back to you. straight ahead, the market is hot and we will talk options strategies. what are the best plays in the dog days of summer. tips you need to know about coming up. >> here's what else is on the menu. >> i'm jim goldman in the silicon valley bureau. apple continues to hum along even as the business suffers. this company's flag ship 5th avenue store is doing lik

we have got all of these institutions from the tax deduction for housing, fannie mae, freddie mac, thefederal housing administration that are pumping money into what became a bubble. >> absolutely right. >> may i submit to you it was the government intervention in the housing -- not the free market system that caused this bubble in housing. >> i think that you are asking for a very simplistic answer and it's not that simplistic because here's what you had, a confluence of issues. you had something known as securitization, and that was caused a lot ids regulation in the housing business and you did have government prodding them along. he couldn't have a double without the free market, you couldn't have the bubble without government. >> do you agree that fannie mae and freddie mac played a central roles? >> one more question if i may. you are an expert on markets and i want to ask you this question, sir, and i want an honest answer, please. to you believe the united states government can run the car companies in america? >> no witold. >> thank you. i rest. [laughter] [applause] .. >> let

or it could be government sponsored enterprise like fannie mae and freddie mac where it has a lifelineto taxpayers. gets into all sort of trouble, bailed out and drags out the private sector competition because of government advantages. >> we seem to be coming to a little bit more clear cut debate. between do we get a continuation of private medical care in the united states or do we go the socialized medical system? do we spend $1 trillion or don't we spend $1 trillion? it seems to come down a funnel like that. it comes back to arriving like that due to forces in play. the so-called progressives want a public option. the strongest constituencies are the union and the head of the public employee union said two things democrats will be out of office in november if they don't enact the public option. i took it as implication that the unions might pull back some of the support if the democrats don't push it through. next september when they come back they'll be at the same watering hole arguing if there will be a federal insurance program that takes over insurance people have now. >> stil

the governor already spent about $85 million to keep fannie mae and freddie mac going openp >>> rupert murdoch wants to start charging for online newspapers. it could be a risky bet that drives away readers. >>> coming up for "good morning america," is it take fof your friends to get multiple flu shots? stay tuned. i'm jeremy hubbard. >>> all right. 6:23 money we're still waiting for images on the big water main break in manhattan. >> down in lower manhattan, evacuated because of the flooding. we're looking at conditions that might make you think about the pool. as we head into this weekend, check it out. 85, a gorgeous day. we may have clouds for a couple of hours midday. otherwise, two degree guarantee, still 60s. the chance of an evening or overnight thunder shower. that is the leading edge of the real hot edge. high temperatures should generally be in the middle 90s. this will be pushing that air conditioning unit. overnight lows staying in the lower 70s. we'll try to break that heat wave in the latter part of the week. >>> justin, as we look at the outer loop of liberty road, traf

and so they could become fannie mae's and freddie mac's of the future. >> yes. dr. meltzer. >> i like your emphasis on realism. >> i'm new here so i'm sure i'll get over it. >> try hard not to. the realism to me says what would the systemic risk regulator do with a tier 1 holding companies? in my opinion it would be fannie mae and freddie mac ripped large. >> that would be my concern. >> these are going to be banks or institutions that are going to have branches all over the country. every member will feel an obligation to say, we can't let that hapn in our district and in our districts. and so too big to fail will really become an even greater problem now. how can you limit the risks that bankers, some bankers are going to take? make them bear the risk. >> thank you very much, i yield back the balance of my time. >> the gentleman from alabama mr. bachus, is up for five minute >> thank you, mr. chairman. mr. meyer, you described the proposed changes as incremental to the federal reserve. >> right. >> reading the treasury proposal on what they say about it -- they sa

it's buying almost all the debt issued by the government- controlled mortgage giants fannie mae and freddie mac. congress is good to overhaul these government-sponsored enterprises or g.s.e.s for short. that's a fact that is not lost on the markets. >> it's going to be difficult for the fed to stop providing that liquidity for housing finance until we and until private investors understand the future of the g.s.e.s. >> reporter: the fed has sold some of its mortgage debt to investors but still carries half a trillion dollars on its books. which presents a political problem. doug elliott studies the financial crisis for the brookings institution. he expects anyone making his or her living from housing will not be happy to see the fed leave the market. and will make that clear to members of congress. >> if somebody stops by and leaves you $100 on your doorstep every week, you may not need the money but you want them to keep doing it. >> reporter: one thing is certain. the federal reserve won't be able to leave the housing market until investors regain their faith in mortgage debt. and that day st

let me say this -- there's some contradictory yells but somebody asked me to talk about fannie and freddie mac i will for a couple minutes. you want me to talk about it or do you want to just yell. thank you, sir. here's what happened with fannie mae and freddie mac. i was a supporter of their efforts to do affordable rental housing. under the bush administration, they began to increase -- they began to increase -- >> get out. get out. no. get out. >> ray, ray, i think -- i'd just ask the chairman -- i've asked the chairman to ignore the disruptions. my own view is this, frankly, and i felt this way all my political career. i used to tell this to people on the left. now i tell it to the people on the right. disruption never helps your cause. it makes it will like you're afraid to have rational discussion. [applause] >> you just drive people away. [applause] >> i'm not here -- this is the council on aging, not kindergarten. i don't expect anybody to be acting like a police officer. so you can boo, you can disrupt. we won't have much done. [inaudible] >> no, i'm going to finish -- we're here for

. >> well, it sounds a lot like fannie mae and freddie mac. to me. we know what ought to be done. >> chris: a separate agency but basically -- guaranteed and funded by the government. >> it would have government money in it and be guaranteed by the government and will be as i say, a kind of fannie mae and freddie mac. >> chris: you would be against that. >> no, that is not acceptable. >> chris: would you accept taxing high premium private insurance plans. >> i think that is going to be very controversial as well, let's talk about what we're going to talk about, you are asking me about what the democrats would like to do. >> chris: this is something the republicans are talk about, too. >> and they are talk about, other things, about losses against doctors in hospitals an innocent advising health programs like the safe way, targeting obesity and smoking and high cholesterol and high blood pressure and lack of exercise have been able to bend the cost curve. by incentivizing their employees to improve their behavior. chris, equalizing the tax code and an

>> well, it sounds a lot like fannie mae and freddie mac to me. we know what ought to be done. >> it's basically guaranteed by the government. >> it would have government money in it, would be guaranteed by the government. it would be kind of a fannie mae or freddie mac. >> you would be against that? >> no, that's not acceptable. >> would you accept taxing high premium private insurance plans? >> i think that's going to be very controversial as well. let's talk whabt we ought to do. you're asking me about the various things the democrats would like to do. >> those are things the republicans are talking about, too. >> talking about lot of other things, too, like talking about lawsuits against doctors and hospitals, incentivizing wellness programs like the safe way company did targeting obesity, high cholesterol, lack of exercise. they've actually been able to bend the cost curve by incentive incentivizing their employees to improve their behavior. chris, equalizing the tax code, so an individual who purchases health insurance gets the same benefit

. >> co-ops remind us all of freddie mac and fannie mae. so i have not seen a public option in my view leads the test of what would really not eventually lead to a government takeover. >> well, fannie mae and freddie mac, for anyone who knows, don't get thumbs up from businesses and analysts. you interviewed the president this past week about health care reform. he seemed unusually frustrated about his inability to connect with the american people in his message, why they should support this. >> in fact, he was very candid about this. and this is not something we're used to hearing from barack obama. he is where he is because of the power of his words. but he acknowledged pretty frankly that he thinks this debate is getting away from him. he's reading the poll numbers. he is worried about it. and he said, it is his greatest challenge of public life so far, is trying to figure out how he can connect on this. >> peter, have they lost -- has the administration already lost the advantage here, or are we just looking at this in the middle of an

its index shows prices on homes with mortgages guaranteed by fannie mae and freddie mac rose one half a percentage point from may to june. both groups say price gains are being driven by first-time buyers and bargain hunters snapping up foreclosures. >> susie: as paul mentioned, a new report from the conference board today shows that consumers looking ahead six months are much more confident about their own financial fortunes. that should be good news for retailers, because people concerned about their finances tend not spend. scott gurvey explains. >> reporter: when the economy hit the skids the retail sector fell off a cliff from which it has yet to recover. people without a job or afraid of losing one just don't spend. marie driscoll of standard and poor's says retailers have scrambled to adjust. >> in the last year we've watched retailers slow down their store expansion, reduce their inventory investment, skew their merchandise assortment. while they still have higher priced items available for their shoppers, they've skewed their assortment to lower price points. >> reporter: wal