>> well, the fed is clearly willing to stand by the economy. they show that they're committed, and they're not satisfied with the unemployment rate, and how slow the economy has been growing. and they have a very accommodateive stance already, and also what stad out to me today was that i think they've become realistic by lowering their growth estimates for next year. we think it's going to be a challenge to reach the new lower growth estimates that they put forth today. >> susie: that's exactly the point. fed chairman bernanke also said today that monetary policy is less effective now than it has been in the past. so they are limited by how much they can do. looking at that forecast, unemployment is still in relatively higher over the next few years. so what can the fed do to create more jobs or to create an economic environment that businesses will hire more? >> well, i think you mentioned the key point, it's about creating an environment where uncertainty goes down, so people feel that they can go forward with decisions, especially decisions

and he said all of want to do is have full investigations of the fed. so the book is primarily on the investigations to which i have assisted. i was with henry the last day he was in his office before he left, and he actually wrote a letter here that they should hire me, along with milton friedman. spent if you could walk us through one of those investigations. >> i would like to mention a few people would be interested in. first of all when you see federal reserve people jan. but the federal reserve is the most powerful peacetime bureaucracy in the united states. it controlled the money supply. it regulates all the major banks, and it appropriates money for foreign governments without permission of the congress, since 1962. and so i would just like to mention some of the things people can read about in the book and you may be interested in them. first is the chapter called the 17 year life. 1976, arthur burns decided that because of loss that within being passed, and because the suits against the fed, he would tell the world that they would no longer h

well i don't agree that the fed has really saved our general economy and i have and what the fed did was use the notion of we need to protect unemployment we need to protect inflation all these sort of things that the fed maintains it's supposed to do as a way to really create these emergency lending institutions and not have a whole lot of flak which they had none of when they were doing so so so basically all they were doing was saving the financial institutions and rather than allowing the ones that were too risky to fail rather than dissecting and breaking up the banks and segmenting their risk and letting it fail and keeping the parts that dealt with consumers intact or perhaps even subsidized on through the f.d.i.c and maybe if it needed emergency facilities at the time just for that component which was far far smaller than all of the risk that the federal timidly lent into the banking system at that time and still does we still have right now you talk about europe the fed right now is pushing the e.c.b. to do the same thing to basically print money to lend to banking instituti

but he also says the fed can't fix the economy alone. it needs what he called "complementary" initiatives from others, including congress. >> susie: dudley plays a key role on the fed's committee on interest rates, and he is second only to chairman ben bernanke in wielding power over policy. he got the job nearly two years ago in the middle of the worst financial crisis in decades. his colleagues today are divided on what the fed should do next-- take action now or wait to see if the recovery stalls further. i began my interview with dudley by asking him how the economy is doing. >> things are getting a little bit better. second half of the year growth is definitely stronger than the first half. we've seen a little bit of pick up in employment growth but not what we want. unemployment rate is still too high but the outlook is definitely better than it was. the other thing we can note the is inflation rate pickup offed up at the first of year is now turning down. it's not great but better than it was in the first half. >> susie: but the f

now speaking with the issue to really paint the fed and question the fed.owever, i think this is an important role for the fed to play. people may not like it. it is, sometimes people say we want to see people get what they deserve. if they get what they deserve, then we're also going to get the, you know, the backlash of that. because we trade with europe. if europe falls apart it affects the united states economy. >> hard to remember a day in 2008 only a few years ago when the tarp amount, the $800 billion was considered the largest amount of money ever proposed in human history. now it's lunch money when you realize that the federal actually spent $7 trillion and i think it did what it had to do. it saved our economy. tarp also was the rightful thing to do. the government recovered almost all of it. but these are still staggering, the sums -- the main criticism of the fed is that it was done in secret. i think that is an issue that the congress is going to have to address in the future. >> bret: next up, the 2012 campaign. ♪ the weather outside is fright

cannot print dollars they can print euro's but for them to get dollars they have to go to the fed so they have the swap line so interesting from the feds point of view they're looking more and more like a hedge fund they've got longer maturity the u.s. government obligations they've got more euro denominated obligations they're doing it with more and more leverage so the fed is in a very risky position probably technically insolvent at this point in the fed is insolvent sure how can that be in selling clothes and where they have sixty million of campus or sixty billion of capital and about three trillion of assets that are legacy assets if you took the intermediate sector and just mark from to market and the mortgages they've got pierced turns out that if you mark this. off the market you know we don't know for sure if they're nontransparent there's a good chance that the world says would be greater than sixty billion dollars which would wipe out their capital now they're not going to say that and i'm going to put it on the balance sheet because if you market the market i think that'

of the fed revealed in two thousand and eight in that one year the fed basically wrote checks for sixteen trillion dollars to u.s. banks to large u.s. corporations to some very very wealthy individuals in the united states to foreign banks we're talking with student loans here about one trillion and and and that was sixteen trillion to deal with the housing crisis first of all by sixteen trillion that's a mind boggling amount of money i mean congress was was squabbling in fighting over eight hundred billion dollars seven hundred change less than one trillion it with tarp why the sixteen trillion and and you know what consequence did that have and and what if that money instead of being given to the banks toure's had been used to simply as f.d.r. did with the homeowners with bad mortgages had simply been given to homeowners to say ok we're going to refire home. yeah well that's what they should have done but actually that sixteen trillion isn't as shocking as it sounds i mean they did not give it to the banks they all they did was give them overnight loans in other words they lent it and t

the feds speak turmoil in europe. where the economy may go next. >>> the internet music service pandora. how they plan to drive profit and listen to the sweet sounds of success. the wall street journal report begins right now. >> this is america's number one financial news program, the wall street journal report, now, maria bartiromo. >> and i'll be back with all of that and a lot more in just a moment, but first let's check in with sue herrera for some of the headlines this week. sue, over to you. >> thanks, maria. here's what's making news as we head into a new week on wall street. the economy created 80,000 jobs in the month of october, a little less than what economists had predicted. that is the fewest in four months but it is still nudging the unemployment rate down just slightly, to 9%. the report had some positive signs including an upward revision in the number of jobs created in august and september. the labor department now saying 102,000 more jobs were added than first thought. as usual, it was a roller co

but we did at the newshour talk to fed officials today. they say the extent to which this was hidden was secret is being overstated here to some extent. they're saying that they made weekly reports about the amount of lending and then ultimately the information came out after the dodd-frank bill was passed into law. >> they did disclose the information in aggregate form. meaning that you just got a lump. this particular program, for instance, lent this week, this amount of money. what we didn't know before very recently was that a bank like morgan stanley took $107 billion in one day or that bank of america or citigroup were borrowing on a single day at their peak almost $100 billion. so all that is now public. that's because bloomberg and bloomberg news sued the federal reserve to get this money. to get the data on the money. we wouldn't have known this without it. and the fed and the biggest banks together defended the lawsuit right up to the supreme court. >> warner: one of the other arguments one hears in defense of the fed is it's bee

the fed sharply cut its forecast for growth this year. in june it projected 2.8%. its new forecast is more than a full point lower. and it cut the outlook for next year, too, from 3.5% growth to a much slower 2.7, which economists say is not enough to spur significant job growth. >> in short, while we still expect that economic activity and the market conditions will improve gradually over time, the pace of progress is likely to be frustratingly slow. >> reporter: that's especially true with the unemployment rate. thousands lined up in coconut creek, florida, today for a chance at 800 new jobs at a casino there. after earlier predicting that the jobless rate would fall to 8% next year, the fed now expects it will remain above 8.5% through the end of 2012. but bernanke says the federal reserve isn't out of ammunition. >> we've already taken quite a bit of action, but we're prepared to do more and we have the tools to do more if that's appropriate. >> reporter: this is the third straight time the fed has cut its outlook for the economy, and bernanke acknowledged he'd

the fed is on the case. >> should the fed to do more? we have the european situation and the question of weak growth in the u.s. as well. there has been some talk if they have been too aggressive or not aggressive enough. >> that has the dual mandate. the real role of the central bank is low and steady inflation and to be a lender of last resort. the fed has performed well in those tasks. it has politicized itself more than i would think wise by getting involved in regulatory debate. >> larry, do you think it has been too aggressive? >> i'm at a loss. i understand about political pressure. until the last 12 months, it has always been from the populace left. people want easy money. the fed does not give easy money. there is a fight between the political process and to the fed. that is a common theme. we understand it. what we are living through is inexplicable to me. it is a serious attack on the fed for the access -- access provision of liquidity. if you think it's too easy to get loans, and you think it is doing damage to the economy, t

some folks are fed up with the whole wait, of course.hey are crowding emergency shelters and firehouse just to get basic supplies like god and water. >> very little supply, you know. we are running out. kind of got to use what we can find. >> cooking out on the grill, outside a lot of ham burgers and hot dogs. easy stuff. stay warm inside a lot of blankets. >> shepard: others lining up to buy generators if they can find a store who has one. treating more than 100 people for carbon monoxide in the state of connect alone. the use up all of their snow days before we even hit winter. well, the fallout continues have a government program that lost track of weapons that turned up at the scene of a u.s. border agent's murder. now, a massive raids has found more of those weapons in the wrong hands. fox was there when the bust went down. if you are looking to escape from the cops, you might want to try stealing a sports car. because, as this guy in utah recently learned, front end lords don't go very fast. [ horn honks ] hey, it's sandra -- from

. >> i think what the fed does is buy a little more time, and it seems to be what everyone is in the game of doing lately is buying more time, so it's a net positive for the global economy, but it's not going to be a game changer. >> reporter: central bank efforts to help stabilize the bank system are likely to continue. the european central bank widely expected to cut interest rates next week, and there's growing expectation the fed could announce a plan to buy more mortgage-backed securities at its dec. 13 meeting. erika miller, "nightly business report," new york. >> tom: nick colas is the chief market strategist at convergex group. particularly the european action, nick, does it a dress the underlying problem of european government debt? >> it doesn't really. what it does is put a band aid over the near-term problem making sure the banks open every day for business, but it doesn't address the longer term impacts of the fiscal imbalances in it little or greece that still have to be resolved. >> tom: so if it does not help those governments pay their bills, help explain the big sto

did the fed approve of that? is that an acceptable leverage ratio, particularly since the financial crisis? >> certainly. the new york federal reserve bank approved m.f. global to be a primary tealer, i believe it was in february of this year. at that time, the company met the criteria set forth in terms of management, financial condition, capacity and so on to qualify to be a primary dealer. we have set those standards in a way that would allow smaller firms to participate in the primary dealer market. but i would like to emphasize that -- a couple of points, first, we are not the regulators of m.f. global. that's done by the s.e.c. and cftc, so we do not have ongoing insight to developments within the company. and secondly, again, the -- making them a primary dealer did not in any way constitute a seal of approval in fact, the new york feds' website contains a statement pretty much to that effect. so they were primary dealer, we stopped trading with them before they failed. we suffered no losses or other conseq

they've benefield the feds cannot promise they'll be home in time for thanks -- been told the feds cannot promise they'll be home in time for thanksgiving. the impression is that the feds are casting a rather large net trying to get people in and their stories to the roar and under oath rather quickly -- stories on the record and under oath rather quickly. >>> another question, where were president obama's daughters when the shots were fired? the president and first lady were away, but the secret service refuses to say where sasha and malia were. >>> in montgomery county three people in the hospital with carbon monoxide poisoning because of a faulty furnace in an aspen hill apartment complex. two victims are in critical condition. the third is in serious condition. the victims on the ground floor, no one else in the complex affected. >>> to college park where two men pulled a knife on a university of maryland student near a dorm last night. the suspects were caught on surveillance video walking around campus. the crime happened near cecil hall. a short time later there was a text alert fr

months for insider trading so we'll talk about why meanwhile some federal reserve policymakers said the fed should consider doing more that's according to the minutes from the federal reserve meeting that just came out here in washington today but is the best already doing q e three and just not telling us about it well that's what famed investor jim rogers thinks so tell us why and as technocrats need to hatch the euro zone's future protests on. the streets and investors dumping the show more people may be betting on its belly or we'll tell you why and we'll get to the capital account. all right well as we predicted and talked about on the show yesterday the super committee did in fact fail to do its job meanwhile the president bailed to captivate a crowd at a speech that he gave selling his jobs bill today at least he failed with the contingency of occupy protesters who interrupted actually have a florida school. so you can see for various reasons leaders are failing to enact economic policies out the same time are they failing to enforce laws against those who are breaking the economy i

all the world's problems and the rich just keep getting richer if their technocrats patrons of the fed weren't so powerful i'll tell you why wall street hopes we never figure this one out. to the best of the rest of the news the effort to put wisconsin governor scott walker on a recall ballot is more than half complete we're going to groups leading the way and i had wisconsin and the recall walker committee more than two hundred seventy thousand signatures of already been collected in the badger state mean organizers are halfway to collecting the five hundred forty thousand signatures necessary to trigger a recall election several polls in wisconsin revealed growing majority support in the recall effort a poll from wisconsin public radio showing those in favor of recalling walker up nine points since the spring to fifty eight percent for the latest on what's happening on the ground was constant scott walker recall campaign i'm joined by john nichols washington correspondent for the nation magazine john welcome it's good to be with you john thank you john you write about how under scott

>> no, this is the way the fed has done business.ful that i was able to join with congressman ron paul to get this exposed. the fed deliberately held those loans in secret because they said, if we tell people who's get these loans, they won't have confidence in these institutions anymore. but because i joined with ron paul and got the audit, the fed bill passed, we can finally find out what happened to all this money and who got it. and frankly when i look down the list, i see all sorts of names i don't recognize. dex dexia, a bank in belgium, got over $100 million of our money. i don't understand that. but the fed pushed it out to anybody who seemed to need it. >> who is dexia? they're people in belgium who got $100 million of our money. >> right. >> this is absolutely absurd. but let me tell you when you hear your outrage on dexia and others that got this money pushed out by the fed, i'm sure the republicans would be outraged, but look at where they're taken their anger. look at who they're talking about. >> corporations are people

and a whole lot of folks have got to get fed. but seven seats were made in under seven days, the first man was forgiven when he missed the hague, the branch was taken by a dove to a book that was built before a flood, if a rainbow sent out a sign, if someone was told to sacrifice his own son and told to hold up before he was done, then the fish and bread that i just said is all that i've got, is all that i need for me to get fed and for me to feed a whole lot of folks in need because they set me on fire. when they look back, i was chilling. i had to fight like 10 older brothers, and because i had this dream, so they sold me out to a band of bandits and one day was commanded to stop, drop, when i got this fish that i found while fishing around, under water with the daughter of the pharaoh, the child was chosen to force the pharaoh to free his folks from a foreign land, repair everywoman, prepare every man, prepare every child, all you've got is that right in your hand. all i've got is some fish and a few loaves of bread, and a who

feds approval in the fed was was an enabler and a colluder and part of this to move those securities of those there is into that and that's also right now they are looking at a really risky poor folio commingled with their deposit for a feller that makes them really bad right now but i'm sure if we take a look at any of the other banks that they're looking at doing the same sorts of things because they really do tons of copy each other bank of america tended to be worse simply because they got merrill lynch and its acquisition of merrill lynch was never transparent and never understood it was losing value even as the ink on the deal of the federal reserve treasury department and bank of america was drying so in that respect it is the riskiest most scary bank right now right now as you said nomi prins thanks so much for being on the show the problem is so much larger and has to do with this fifth down i was no mean print in l.a. . all right before we go a quick reality check because the fed today its cut support asked for economic growth and it's raised its forecast on unemployment bu

etc the easiest way to think about the fed has a printing press they can print dollars the e.c.b. european central bank has a printing press they can print your us well the i.m.f. has a printing press too they can print these s.-t. r.-a sort of special drawing rights it's world money it's not backed by anything it could be handed out and countries can actually counted as part of the reserves and use that to settle the balance of trade with each other and they could swap it for other currencies and use those to spend to invest so it's just another form of printing money it's completely unaccountable i mean who worked at the i.m.f. but the thing is the next time there's an acute phase of the financial crisis something like the lehman moment in two thousand and eight it's going to be bigger than the fed the fed took a balance sheet from eight hundred billion to three trillion to fight off the crisis in zero eight what are they going to do go to nine trillion that's not credible but what they will do is print these us three r's so those so i view the entire future of the international

now i think that there is an awareness in the white house and particularly at the treasury and the fed that this is a foreign policy issue number one for this administration the obama administration's political future basically hinges on the future of the e.u. is there an awareness in the public the wider public and is there in the fact of communication of this message i don't think so i couldn't agree with you more there in the sense that i don't feel like people understand exactly how bad it is but is that because the system itself and the way of the eurozone is organized is so hard for us to comprehend you know that there is no central treasury there which by the way seemed like a crazy idea in the past now it's going to be floated around but you have seventeen different governments all have to come up with their own decisions you know how do our lawmakers first start to understand that on their own and second try to communicate that to the u.s. i think you've hit the nail on the head and that's that the system is very complex in europe you have a council president a commission pres

single mandate to stop inflation so their most unlikely to stop printing money like the fed. and therefore, i think you're going to see had a collapse of the euro, which is the second largest currency in the world. and that will bring on a recession, even a depression in europe, which of course, will spread to the american banking system, both in loans, and in credit default swaps derivatives that they've underwritten and investors because of assets they've hold in investments over there and then of course, to bank liquidity in america. >> neil: john, i could turn that around and say what ails them could help them. there might be a flight to quality in our currency, anything dollar denominated, anything american and we would benefit by their misery or-- >> the benefit would be short-term. in other words, in a sinking ship those that go to the part that are not sinking just like the "titanic" those benefitted, but there's going to be a surge in the dollar as everyone flies out of the euro, but then people will question the currency paper, saying this isn't worth anything and t

to see what the fed had done.here is the thing. the issue right now is not so much what the fed is doing in u.s. policy but what's going on in europe. we had what we thought was an ironclad deal worked out last week and now we have heard that the greek prime minister yesterday decided he is going to take this to a rehn rehn dumb, which is why there is an emergency meeting today ahead of the g-20, overshadowed the g-20 entirely, this with sack core zi of france, merkel from germany and papa andre yo from greece takes place in an hour. i would love to be a fly on the the wall, i think there are curse words going on there. a lot of people are mad at what the greeks are doing now. >> i do want to caulk talk greece but let me bring you took charles evans who sit on the board of governors, broke ranks today in favor of stronger action to boost the economy, talking about our economy. what do we make of that? >> well, look, it is a board and they're -- it's not irregular for somebody on the federal reserve board to vote a