well let's turn now to the federal reserve just today federal reserve chairman ben bernanke and now another round of quantitative easing to help the sluggish u.s. economy take a look we had to say. fortunately the form c. decided today on new actions electing to expand its purchases of securities and extend its forward guidance regarding the federal funds rate the committee will closely monitor incoming information on economic and financial developments in coming months and if we do not see substantial improvement in the outlook for the labor market we will continue the n.b.s. purchase program undertake additional asset purchases and employ our policy tools as appropriate until we do. interesting wall to help us figure out what he just said and what it all means joining me now is the host of capital account right here in our two lauren lyster i am nice to be on your show. ok so you know i think when a lot of people look at the federal reserve they don't understand that it's actually a private bank so when ben bernanke is talking about this quantitative easing you know to stimulate the econo

convincing talk from ben bernanke today that the federal reserve is ready to act to boost the economy. >> susie: i'm susie gharib. investors around the globe welcome the fed chairman's speech with a spirited rally. >> tom: planes, trains and automobiles. 33 million americans are heading out for the holiday. the travel outlook for labor day and beyond. >> susie: that and more tonight on n.b.r.! >> susie: ben bernanke made a strong case today that the u.s. economy needs more stimulus and he's ready to give it another dose to boost growth. his message was clear and delivered with conviction. investors around the world had been waiting eagerly to hear the fed chairman's speech in jackson hole wyoming and stocks in the u.s. rallied in reaction. here are the highlights: bernanke said even though the economy has benefited from fed policies over the past few years. the outlook is still quote "far from satisfactory." he described the high unemployment rate a grave concern. he believes the fed should continue using non-traditional policies to spur growth. and bernanke concluded by saying the fe

and that puts more pressure on the federal reserve to act when it meets next week. >> susie: i'm susie gharib. intel warns about chip sales and analysts blame it on the shift to tablet computing. >> tom: he's "n.b.r.'s" longest running market monitor guest and he's been in the bull camp for three years. tonight investech's james stack tells us why he's pulling in his horns. >> susie: that and more tonight on "n.b.r."! >> tom: hiring stalled in august. expectations were for robust job growth last month. but, susie, when the numbers were added up, they fell way short. >> susie: tom, today's disappointing jobs report is fueling speculation the federal reserve will have to step in to further stimulate the economy. here's a closer look at the job numbers: businesses added only 96,000 new jobs to payrolls last month: economists were expecting 125,00 meanwhile, the unemployment rate slipped to 8.1%: down from 8.3% in july. >> susie: but, that decline is not what it seems. we have two reports looking at the labor market and the political reaction to today's job numbers. we begin with erika mil

what trars have been watching is what happens here at the federal reserve. and, this week is no different, more watching and waiting for more stimulus. it is widely anticipated fed policymakers will decide once again to step in and try help the economy. >> we're expecting another round of quantitative easing, q.e.3., they'll probably buy mainly u.s. treasury securities. at the same time, they'll probably extend the language on when they expect to be hiking rates from 2014 to 2015. but, even if the market gets more assistance from the fedn thursday, traders say don't expect a big rally in stocks. >> it is probably factored into the market. but a lot will depend on what form another easing will take. in other words what will be the methodology, how it will impact the bond market. >> reporter: there is of course also the chance policymakers will postpone any more monetary easing until later this year. that's when the threat of economic damage from the so- called fiscal cliff is more imminent. such a delay would no doubt disappoint wall street, and might result

according to the federal reserve, credit fell 1.5%, to $2.7 trillion. a drop in credit card debt was behind most of the decrease. other i.o.u.'s like student and car loans were up. trading volume totaled 613 million shares on the big board. just under 1.6 billion on the nasdaq. the technology sector saw the biggest drop falling 1.3%. financials were down 0.9%. the industrial sector fell 0.7%. behind the tech sector weakness, apple. when it experiences selling pressure like it did today, it's noticeable on the nasdaq and s&p 500. shares fell 2.6%, while they are coming off an all-time high hit on friday, the selling comes ahead of this week's expected introduction of the iphone 5. semiconductor maker intel continues the sell-off that began on friday when it cut its financial outlook. shares fell another 3.8% today on heavy volume. this is its lowest price since mid-december. b.p. is raising more money to help pay for the costs of its deep-water oil spill in the gulf of mexico two years ago. it has a deal to sell several of its offshore oil fields in the

patience pays-- stocks soar as ben bernanke and the federal reserve launch a new round of stimulus to boost the economy. but will that strategy, known as q.e.-3, work? we ask former fed governor randall kroszner. that and more tonight on nbr! the federal reserve announced today a bold plan to spend billions of dollars to buy bonds to rev up the u.s. economy and create more jobs. on wall street, investors applauded the move and stocks surged. as policymakers wrapped up a two-day meeting, they said they took this action because, without it, economic growth might not be strong enough to create jobs. but the fed's latest round of quantitative easing, what everyone calls q.e.-3, is different this time. the fed will buy mortgage backed securities rather than u.s. treasuries. it will buy $40 billion per month. more importantly, the d said the buying is open-ended-- it promised to keep buying until the job market "improves substantially." and the fed pledged to keep interest rates "exceptionally low" through 2015. stocks rallied right after the fed announcethnt. the dow jumped 206 points, the

with the federal reserve. but the only thing worse than an independent fed chairman making these decisions would be a republican party chairman and a democratic party chairman making these decisions. we've made it outside of congress to keep partisanship out of it, to try to do the best economic things, instead of the best political thing. but this is what's happened on our watch. the fed has tripled the size of its balance sheet. first it was loans to banks represented here by gray. then it turned to liquidity in other credit markets, demonstrated by this blue. and then it turned to mortgage-backed securities. and long-term american debt. now, what does that mean? that means that the fed decided that no one wanted to buy mortgage-backed securities in this country. in the collapse of fannie mae and freddie mac, that uncertainty took over the marketplace and it began to slow and in fact began to bind up as those mortgage-backed securities either began to fail or ceased to move so they began to buy in record num

stocks move up following the federal reserve's announcement.s all this work and do the actions by the fed really matter? that is the big question. charles payne is here. >> i'm here to break the tie between gerri willis and lou dobbs. i'm leaning with gerri willis on this okay. listen, i've been pounding people own stocks, buy stocks, buy stocks. people making a ton of money that's the way you counteract this. talk about the tsunami of money and what has worked. obviously the stock market. the s&p was 896 when it all started. now it 1498. mortgage rates were high, now they're sub stacksly lower, typically at all-time lows. that stuff has worked. what hasn't worked? by the way the what are the fed's main two gigs? inflation, they tweak the cpi. i don't even believe that. talk about the tsunami of money. unemployment rate. 8.1. nine million people dropped out of the labor force since this kicked in. gas prices from 2 clin $14 to $3.84. median home price from 199,000 now, 187,000. only thing i can see it helped out banks. it hasn't helped stocks.

before the markets learn if the federal reserve has any new ammo for the u.s. economy on thursday, tomorrow, a german court will rule if a european bailout fund squares with that country's constitution. it's seen as a key test for europe's strategy to deal with its debt troubles. ahead of the ruling, the dow industrial average hit its highest intra-day level since 2007. the dow gained 69, the nasdaq bumped up half a point, while the s&p gained about four. still ahead, it's more than just the cookies. how the girl scouts are working on financial literacy, one badge at a time. now, from badges of distinction to black marks. more companies than usual have been issuing earnings warnings at this point in the third quarter. today, shares of british fashion house burberry fell more than 20% after warning full-year profits will be disappointing. as erika miller explains, we've heard from several well-known firms warning about the global slowdown. >> reporter: burberry's profit warning is not just a negative sign for luxury goods makers; it's part of a bigger trend sugg

federal reserve has stepped in again the try to stimulate the economy. the central bankers will get more money circulating through a tool called kwa eed kwau eed qu. >> the employment situation remains a grave concern. while the economy appears to be on a path to moderate recovery, it isn't growing fast enough to make significant progress reducing the unemployment rate. >> the federal reserve announced it after a meeting. bernanke says members wants to see sustained improvement. >> the idea is to help the economy again to grow quickly enough to generate new jobs. >> committee members plan to keep interest rates low until mid 2015. the federal reserve has done this twice before over the past few years. we followed those events as our economic correspondent in our washington bureau. we've been hearing a lot of debate. why did the fed go answer read. >> it's all about jobs, jobs, jobs. the numbers released last weeks shows that the u.s. unemployment rate is hovering around 8%. it's around 6% in august 2008. lehman brothers declared bankruptcy the next month

federal reserve was established in the 1913.erson was gold democrat, carter glass, the great legislator from virginia. the design of the federal reserve system was to support the gold standard. and that is in fact what was the case from the very, very beginning. so the founding of the federal reserve system was qoins dent with the gold -- coincident with the gold standard and was only meant to create a slightly more lasting currency. david: since this recent financial crisis began back in 2008, the federal reserve has gone on a money printing spree here in the united states, printing anywhere from 2.4 trillion to $2.7 trillion in order to buy up bonds, including a lot of government debt directly. they say, hey look, so far we don't have inflation so there is no harm in it. to what you say? >> 2% inflation as opposed to a greater level of inflation, there is such a panic in europe that everybody was racing out of the europe into the dollar. holding dollars the fed created instead of spending them same in the united states. becaus

was rescued by the federal reserve. the tarp program spent billions bailing out banks, and the federal deposit insurance corporation helped save citigroup. sheila bair was among those making the decisions. she was the chairman of the fdic and has written about the financial crisis in a new book, "bull by the horns. " she join us tonight from the nasdaq. sheila, congratulations on the book. quite a read to relive those days and months four years ago. after all the billions of dollars spent and the millions of homes foreclosed on, you wrote, i wonder if we overreacted. you say the generosity of the response troubles you, why? >> the generosity of the banks. we clearly needed to do something. weeshtd have done more to get the homeowners restructured and clean up the banks balance sheet, by making them clean up the losss and clean up the balance sheets, especially sick ones like citigroup. so some areas we didn't do enough, in banks we were lavish in the aim of mony and support we gave them. >> tom: do you regret that? >> w

it boosted hopes for another round of easing from the federal reserve.nd the nasdaq rose a fraction. the dow gained more than 1.5% for the week. the nasdaq and the added more than 2%. reported at the top of the show from the economy has created 96,000 jobs last month. far fewer than 125,000 that analysts were predicting. unemployment fell from 8.1% to 8.3%. only because people threw up their hands. third-quarter revenue was cut because of a semiconductor. our next guest says the economy needs to be generating 200,000 net new jobs each and every month just to keep pace with population growth. she said part of the problem is the obama administration's notion that america's private sector employer is public enemy number one. joining us now is elaine chao, former secretary of labor under george bush. a distinguished fellow and elaine chao, it's wonderful to have you here. what a resume. thrilled to have you here tonight. lori: as you know, one of the most troubling problems is the labor participation rate. 368,000 people completely giving up. how do you turn

just want to put this in a global context as we often talk about the unintended consequences of federal reserve policy in the u.s. but liquidity can cause booms bust bubbles anywhere in the world and the u.s. dollar is the reserve currency so give us a sense of what the unintended consequences are globally. well in faraway hong kong real estate prices are through the roof because the hong kong monetary authority has has lashed the value of the hong kong dollar to the u.s. dollar so the hong kong monetary people simply take america's monetary policy as their own so they have zero interest rates and q.e. as far as the eye can see. but it seems not to be so appropriate for the prosperous city state now i guess special territory of hong kong. they are looking at a huge asset levitation in real estate now that is a consequence you'll find nowhere mentioned. in the federal open market committee meeting minutes but it is one of the reverberating waves that our money printing and set in motion worldwide aha you won't find that in the f o m c minutes but you'll find it here on capital count via jim gran

the federal reserve buys financial assets, not good and services.ltimately the federal reserve will normalize its balance sheet by selling these financial assets back into the market or by allowing them to mature. in the interim, the federal reserve's earnings from its holdings of securities are remitted to the treasury. in fact, the odds are strong that the fed's asset purchase programs both through their net interest earnings and by strengthening the overall economy, will help reduce rather than increase the federal deficit and debt. on the second concern, my colleagues and i are very much aware that holders of interest bearing assets such as certificates of deposit are receiving very low returns. but low interest rates also support the value of many other assets that americans own such as homes and businesses, large and small. indeed, in general, healthy investment returns could not be sustained in a weak economy. of course, it is difficult to save for retirement or other goals without the income from a job. thus, while low interest rates do impo

he's now the chairman of the federal reserve.at makes him the singlemost powerful economic policymaker in america, maybe even in the world. and today he made a game changing announcement. now, i have to start here by saying a word about the federal reserve and why it's so powerful. imagine, as i often do, that you got a choice of superpowers. you could be invisible, you could fly, you could be really strong, you could -- or, you could create unlimited amounts of money whenever you wanted. you might well choose the money one. the other ones are cool for a bit but they're not all that versatile and probably get you into a lot of trouble. the fed actually has that superpower. it can create as much money as it wants, real american dollars and don't need anybody's permission to do it. they don't need 60 votes in the senate. they just create the money. that makes them incredibly powerful. it's not like when the president says he wants to do something like the american jobs act that you have to ask, well, what does congress think? or wh

economy will get a big jolt of money from the federal reserve. announced today it will buy $40 billion worth of mortgage-backed securities each month, $40 billion worth of mortgage-backed securities each month. ali velshi joining us now from new york. what's the reaction to this? >> you got the dow? >> put it up. >> a nice big bump there. the stock market investors really like it. sugar high. the fed making more money available to the banks and making the bonds worth a lot of money and can't buy something with the bond. we'll give you cash, $40 billion a month. what do banks do with money? you theory lend it out to people for money and puts money in the economy. that's how it should work. right now, stock markets are liking it. the dow made up of 30 stocks and one is bank of america, citibank's a big gainer and seeing that. but that's one piece of the economy. as you know. those -- your investments and i.r.a. and 401(k) is working very well and mixed reviews of whether or not the fed should have done what it did by putting -- buying the bonds bac

i feel better because the federal reserve is inflating the stock market. >> it is an amphetamine and people will think better, and it may be marginal, but it is positive on net for barack obama. >> lift up the phone and call him up, did he? >> he didn't tell him to do it. >> a message. >> i think the president would have been very unwise to call the head of the federal reserve. that is an independent agency. >> they all say that. >> listen i tell jew so you send an emissary over there. >> when you find out for sure that conversation took place, call me. >> this is all hypothesis. in point of fact there is a political pay off, there would appear. not much of a downside,. >> i agree with that. but this is not going to have very much of an upside in six or eight weeks. the real issue is how bad is the economy today for how many people? and that is going to be laid at the doorstep of the president, like it or not. >> if you were president you lift up that phone and say hey ben, you thought of this? >> i would never do that. >> bernancke reads the papers, come on. >> you remember nixon? >