king also serves as a director for the federal reserve bank of richmond. mr. king, welcome to the program. mr. kingwelcome to the program. >> thank you. i'm glad to be be with you. >> suzanne: so today's fed action, how does it help the economy, do you think? >> well, i think there is not an immediate, direct impact because the freeing up the cash flows being reinvested in treasury bills doesn't directly and immediately impact it very much. it does prevent a restrictive move. it keeps the money back out in the economy. i think maybe more importantly what it will do is, i think, increase consumer and business confidence. i think people are uncertain in terms of where the economy is going. i think the fact that the fed steps up and shares very positively that it is concerned, that it does stand ready and is, in fact, willing to take action to continue to be supportive is very important. so while it is not a major technical change, i think it could be a pretty significant psychological change. >> suzanne: do you agree with the central bank's downgraded assessment

just one day after the federal reserve confirmed an economic slowdown, wall street today reacted in a big way. >> suzanne: tom, stocks sold off sharply. the dow lost 265 points, the nasdaq was off 68 and the s&p 500 lost 31 points. volume also picked up, with over a billion shares trading hands on the big board and 2.3 billion moving on the nasdaq. >> tom: the fed's assessment of slowing growth reminds some investors of japan 20 years ago. that's when growth stalled following a deep recession. scott gurvey looks at whether we're headed down the same road. >> reporter: it is called japan's lost decade-- the decade of the 1990's when the japanese economy did not grow. the stagnation followed a severe recession, the result of a bursting real estate bubble. the similarities to america's current condition are striking. but economist jerry webman of oppenheimer funds says there are significant differences. >> we're a major commodity producer, unlike japan. our population is growing; it's not shrinking. we've been more active than japan on both... particularly on the monetary policy side, we

washington post" and tom hudson of "nightly business report" look at today's drop and at the federal reserve's acknowledgement that the recovery has slowed. >> lehrer: then, newshour political editor david chalian translates the results of yesterday's primaries and other political news. >> ifill: tom bearden reports on what became of the oil that was scooped and skimmed out of the gulf of mexico. >> this is just one of a whole series of sites all across the gulf coast where contractors are trying to clean up the mess left behind by the b.p. oil spill. >> lehrer: united nations emergency official john holmes updates the flooding disaster in pakistan that has affected at least 14 million people. >> ifill: spencer michels' reports on cyber conflict continue. tonight, a conversation with former cia and national security agency director michael hayden. >> we've created this new domain, this new space called cyber and frankly, it's lawless. there are no natural technical >> lehrer: and paul solman explores the connection between greek food and the country's economic problems. that's all ahead on ton

and that raises the bar on a speech today by the chairman of the federal reserve. ben bernanke has some explaining >> well, >> well, i wish i could say it was going to be right around the corner. but i think this is going to be a very unique and painful recovery. >> reporter: in a major address today, analysts say the head of the federal reserve needs to boost confidence in the stalled economy, as new signs show a weakening housing market, as wall street opens with a dow below 10,000 for the first time in two months. and as the top republican in the house is calling for the president to fire his entire economic team. >> listen, this cannot continue. you know, i've had enough. >> reporter: a new unemployment report thursday showed the first decline in jobless claims in a month. but investors focused on the big picture, driving the dow down 74 points over fears of a sputtering economy the white house is at pains to explain. >> the president is doing everything that we think is appropriate to continue moving the economy in the right direction. >> reporter: still, the

because you are one of our federal reserve experts. as we reported on the program benzodiazepine ang is going to give a critical speech tomorrow. i was just wondering what are you expecting from that. do you think he's going to inspire confidence that he can fix the economy? >> i expect that the expectations susie are too high. as tom said at the beginning of the program this is a very highly anticipated speech by the markets. i think that benn bernanke has enormous pressure to do something he probably can't do and that is provide a magic bullet tomorrow in his speech. i think if anything he's probably being given an unfair test here because if he says something that the markets don't like they could do down a lot but if he doesn't say something with the magic bullet, they could still go down a lot. >> susie: very good insights, thank so much for your thoughts about china and also about the fed. >> thank you. >> susie: and by the way, mike, any disclosures to make on the china fund? >> i own it. i own shares and have for a long time. >

however, the federal reserve has a tremendous amount of power. the government tried to address it during financial reform. it is run by -- it's staffed up by the banking system itself. it is a bank. it's a central bank. when it comes to any institution, any entity with the ability to more or less dump cash on the system, to loan to whoever, to do a number of different issues that i think folks have never seen before, there's been a lot of skepticism about the fed. certainly the last 10 to 15 years it's come to be an issue where people wonder, what exactly is this institution doing? it's very secret tif. it's not an -- secretive. it's not one that's open. we have something like bernanke was able to kind of use the authority never been seen before. it fires up folks that believe there should be more information out there, that believe that the federal reserve, for anything that it's done, has done much more in the telling tif category of things. i think -- negative category of things. that was touched upon during this debate. host: you may remember

businesses afraid to hire, workers afraid to spend, and interest rates at historic lows, what can the federal reserve do to get the u.s. economy moving again? >> suzanne: we look at what's left in the fed's arsenal, and whether it will pull the trigger at tomorrow's policy meeting. you're watching "nightly business report" for monday, august 9. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> tom: good evening, and thanks for joining us. susie gharib is off tonight; i'm joined by suzanne pratt. stocks posted modest gains today, but trading volume was light. in fact, this will most likely be one of the lowest volume days of the year. tom, traders said they didn't want to buy or sell until they see what the federal reserve does tomorrow. that's when policymakers will meet to review the state of the economy. >> tom: with few new jobs being created and credit still tight, scott gurvey reports there are many o

number and seemed to be assured by the federal reserve chief's comments. still, the indices lost ground this week. the dow closed back above 10,000. still, it lost 0.6% this week. it's down three weeks in a row. the nasdaq saw more volatility, slipping 1.2% over the past five sessions. and the s&p 500? it fell 0.7%, its third consecutive weekly loss. investors ignored some disappointing intel news. it cut its quarterly revenue target. computer sales are less than it expected. just last quarter, intel reported record revenue. here's today's trade of intel. trading was halted twice, once when it announced the lower outlook-- that's the flat line on the left side of the chart-- then again when shares hit the circuit breaker-- the violent swings just after it re-opened. trading is halted if a stock moves more than 10% in five minutes. the trades that triggered the breaker were eventually canceled. here's the past 12 months of intel. today's rally comes after the stock hit a new 52-week low shares up 1%. intel has put a spotlight on security software with its b

it is unable the federal reserve to sell more? . therefore, enabling companies to go out there and issue debt at lower yields. this is good on one and. host: as you talk about the economy. caller: i do not want to diminish the discomfort and agony of unemployment at 10%. it is intolerable. you did get it with a little bit of perspective at the united states economy but you realize that all gains that we have made in the last 10 years have not disappeared. the stock-market has not done particularly well. the individual citizens and you are looking for jobs is greater than any time in the world. this is merely a correction. it is caused by too much spending. thank you. allied to hear your comments. guest: it is hard to put that in perspective. people have been so used to a modicum of prosperity. housing prices have gone up. stock markets have gone up. there is a promise of 15% a year. that is not happening. there is a record amount of wealth. people are not feeling anything but healthy. it can amplify the fear out there. it is importa

to a speech from fed chief ben bernanke for clues on just how bad the economy is and what the federal reserve plans to do about it. despite news that foreclosures and delinquencies dipped last quarter, the latest data shows a huge jump in new foreclosures in july. round two of the bidding war between tech titans dell and hewlett-packard saw dell raise its bid for data storage maker 3 par to $1.6 billion. hp quickly shot back upping its offer to $1.8 billion after the bell. >>> another recall for toyota. it's 13th this year. more than a million corollas and matrixes are being called back for a computer glitch that could cause them to stall on the road. meanwhile, johnson & johnson has racked up its 11th recall this year, this time for two hip replacement products. >>> the faa has proposed a record $24 million fine against american airlines for maintenance violations that led to thousands of flight cancellations back in 2008. the airline is planning to appeal. >>> the "wall street journal" is reporting boeing is about to push back its delivery date for the dream liner 787, again. delays could p

new week on wall street, investors watched and listened closely on friday to a major speech by federal reserve chairman ben bernanke on the state of the economy. mr. bernanke said that the feds' open market economiy is prepared to provide more monetary stimulus if necessary if the economy deters rates significantly from mere but he questioned whether the benefits of more stimulus outweigh the costs. the economy grew at a much slower pace this spring than previously estimated. the commerce department revised its estimate of the gross dopesque product for the second quarter. it showed the economy expanded at an annualized rate of 1.6% between april and june. that's down from an initial expectation of 2.4%. but that is still not as bad as some economists were looking for. the markets fell to their lowest level in seven weeks on tuesday. closed below 10,000 on thursday for the first time since july 6th. but the dow rebounded on friday. more signs of a slowing economy especially in the housing market. two important indicators showed big declines this week. existing home sales fell more than 27% to

the other thing is, my issue has to do with the federal reserve. because i never paid attention to that, how banking truly works. but i find it rather disturbing because when you look at the history of the federal reserve and how they managed the money in this country, what you can see over almost the last 100 years is the cycle of cost and boom and bust are getting bigger, more destructive, the american consumer and society is ultimately paying a price by less wages, flat wages. there is less prosperity. i truly believe that this country is still at the beginning stages of a depression. and the only people, the only people that have benefited from this so far are the private bankers that pull the string behind the closed doors because there is absolutely nothing federal about the federal reserve and there are no reserves, either, you know? host: let me jump in and get a response from our guests. thank you for your call. guest: a very valid criticism. there is almost a neo-classical argument that there. a lot of this goes back to the time of alexan

the other thing is, my issue has to do with the federal reserve. because i never paid attention to that, how banking truly works. but i find it rather disturbing because when you look at the history of the federal reserve and how they managed the money in this country, what you can see over almost the last 100 years is the cycle of cost and boom and bust are getting bigger, more destructive, the american consumer and society is ultimately paying a price by less wages, flat wages. there is less prosperity. i truly believe that this country is still at the beginning stages of a depression. and the onlyeople, the only people that have benefited from this so far are the private bankers that pull the string behind the closed doors because there is absolutely nothing federal about the federal reserve and there are no reserves, either, you know? host: let me jump in and get a response from our guests. thank you for your call. guest: a very valid criticism. there is almost a neo-classical argument that there. a lot of this goes back to the time of alexande

did a deal where they put on the federal reserve balance sheet trillions of dollars of bad debt turns out bad debt is even worse than they thought and there's another many more trillion on the banks' balance sheet so we're going to talk about another down leg of the real estate market china by the way their stress test assume a sixty percent markdown and real estate they're doing real stress tests but the u.s. and the u.k. these european banks are not doing real stress tests another huge downlink for real estate which means as you point out another huge extortion ery confronted with congress for another ten to fifteen trillion in money to bail out these guys but the i.m.f. and then this hedge fund in the u.k. are saying it's the biggest danger is however the u.s. housing market and we. warned about this for quite a while too because remember it was the subprime mortgage crisis that happened first and those were the very bottom of the mortgage lending ranks and the next leg is the old a it's called these are you know also liar loans but they're from the upper middle class alleged

well federal reserve officials have suddenly change their tune whereas in june they felt that the recovery was moving along gradually this week they've admitted. that they've announced that they'll keep interest rates low and use the proceeds from their huge mortgage bond portfolio to buy long term government debt but why this sudden turnaround should we be worried about a double that well joining me from our new york studio to discuss it is gregory white from the business insider greg thanks so much for joining us ok i have to ask you question because constantly we hear you know the obama administration and they'll come out and comment on jobs reports and on the economy and nobody really listens but when the federal reserve makes a statement do you think people listen. it's clear that markets listens today i mean it took them a couple days twenty four hours to get it to sink in but with the amount of all the indices around the world went down today and specifically in the u.s. we saw the nasdaq off nearly three percent five hundred and some really down markets are well aware and investors

go prices are rising on wednesday after a recent news from the us federal reserve it plans to reinvest principal payments on its mortgage holdings into long term treasury securities gold futures for december delivered traded at one dollar twenty and in electronic trading on the comics in new york earlier price is as much as point eight percent of the dollar climbed against a basket of six currencies gold prices have gained twenty seven percent in the past twelve months a record in the middle of july. two other stories roussel has filed a claim against into ross through the london court of international arbitration the companies are rowing over control of norilsk nickel sol says the outcome of normal june board elections breaks the two thousand and eight agreement between its interests not to take control of no risk and to maintain equal board representation the elections so roussel get three board seats into getting for both to sell and either also have a twenty five percent stake in the company. and severstal has put most of its north american steel making assets up for sale its us br

the prospect of more easing by the federal reserve helped soften the blow of this morning's employment numbers. the dow bottomed out, down 160 points, and climbed nearly all the way back by the close. for the week, the dow fell in three out of the last five sessions for an overall advance of 1.8%. the same story on the nasdaq. this week's overall gain, 1.5%, more than made up for last week's drop. of course, the late session burst, lifting the s&p 500 weekly gain to 1.8%. as for the best and worst sectors this week, health care was probably the one reliable place to be in this week's market while financials saw the smallest of gains. and if you think there is a bond bubble now, that bubble is going to get just a little larger. golden sacks sees the yield on the 10-year note dropping 2%. so where do you go for better yields than treasuries? look at this e.t.f. the ishares investment greg corporate bond fund, that's a near five-year high for this e.t.f., and all of the treasury-based e.t.f.s notched against as well. boeing received more bad news. a leaving company cancelled 25 planes. ca

federal reserve's latest decision. >> and they're still concerned. they reflect that in the meeting. the u.s. federal reserve is taking new steps to stimulate the economy in the u.s. in response to signs the recovery is running out of steam. in the policy statement, the fed said that it plans to buy a small amount of long-term government bonds in an attempt to drive yields lower. that could eventually result in lower intest rates on long- term housing and corporate loans. thereby helping consumers and businesses. it had announced the move at the end of a one-day meeting and left key interest rates unchanged at near 0%. the fed believes economic growth will be more modest than eaeaier forecast. german telecommunications giant, deutsche telekom, is buying back some of its shares, investing 400 million years until the end of this year in an effort to boost its share price. so far, the stock has brought relatively poor returns, and the company chairman felt it was high time to compensate frustrated shareholders. the buyback is part of a promised dividend

federal reserve has vowed to step in with additional measures if necessary. >> federal reserve chairmanben bernanke did not let the figures dampen his spirits at the meeting of the world's central bankererin jackson hole. he remains convinced the u.s. economy is recovering. but he stressed the fed will take any necessary steps to prevent a slide back into recession. after a drawn-out and steep fall in output, the u.s. economy began picking up again in mid 2009, but early this year the recovery lost steam. annual gdp growth stands at 1.6%. that is because federal stimulus programs introduced during the global financial crisis are coming to an end. widespread unemployment and problems on the real-estate market e ao keepi the brakes on growth. >> britain's economy grew at its fastest pace in nine years in the second quarter. the office for national statistics said gdp grew 1.2%, topping the preliminary estimate. output was especially strong, reporting its strongest growth in 28 years. britain's economic recovery accelerated sharply in the first half, but economists warn a weakening global

the federal reserve's interest rate-setting panel meets under pressure to bolster the now flat recovery. in carefully chosen words, the group is expected to downgrade its former optimism on the health of the economy while keeping interest rates at historic lows. yesterday researchers from the san francisco regional fed were uncharacteristically blunt with their language, warning a double dip recession is possible. >>> volume was the lightest of the year yesterday, but there were still winners and losers. mcdonald's shares hit an all-time high after the company reported its stronger than expected july sales, thanks to new summer drinks. >>> hewlett-packard was the biggest drag on the dow tumbling 8% after chief executive mark hurd's resignation late friday. shares had already dropped 10% in after-hours trade friday night. >>> research in motion boosted the nasdaq up 3.5% on news the company was working out blackberry concerns with saudi arabia. >>> elsewhere, mortgage giant freddie mac needs another $1.8 billion in taxpayer aid, bringing its government bailout total over two years to mor

the federal reserve has no money. the federal reserve issues money through the auspices of the treasury. it prints money. it distributes the money. it requires the taxation on the money to be remanded to the federal reserve, which it was not their money to begin with. what is this sideshow all about anyway? and when will the end be put to it? thank you. guest: let me briefly tried to explain something. every textbook in economics, whether written by conservative, moderate, or liberal economists teaches how the federal reserve and the treasury work. the federal reserve can put money into the economy when it decides to buy u.s. treasury bonds, u.s. treasury securities, and the federal reserve authorized many years ago by congress, but has the power to in effect print money in order to make those purchases in government bonds to put into the economy when the economy needs to be stimulated. it does just the reverse when the economy is in a boom and there is too much spending and it needs to be -- every economist -- every

the federal reserve and the treasury department in a sense. ere is no doubt that the federal funds rate, that is the rate produced by the federal reserve, can be fixed at what the fed wants it to be but which the government has no control over is long-term interest rates and long-term interest rates are what make the economy move. and if this budget problem eventually merges to the point where it begins to become very toxic, it will be reflected in rising long-term interest rates, rising mortgage rates, lower housing. at the moment there is no sign of that because the financial system is broke and you cannot have inflation if the financial system is not working. >> mayor bloomberg, let me talk about the tax cut debate gripping washington right now. political stupidity u.s. style is the headline. can a nation remain a superpower if politics are stupid? start with taxes, he writes. in every other serious democracy, conservative political parties feel an obligation to match tax policies with spending plans. david cameron, the new conser conservati