and the federal reserve's big move. andhatoong fiscal cliff, we'll have an update on that tomorrow. >> susie: investors were on fed-watch, tom, and it was very interesting watching the blue chip dow average as ben bernanke was giving his press conference. the dow got as high at 80 points, and the more he talked about the fiscal cliff and other issues facing the economy, it went down, down, down, closing down three points. >> tom: any of the enthusiasm that came out when the federal reserve announced it was going to continue to buy bonds slowly deflated throughout the afternoon, the longer the chairman tended to speak. there was less enthusiasm abo what the federal rerve is doing. maybe less concern about why the federal reserve is doing it. let's go ahead and take a look at our "market focus." the major stock indices couldn't hold on to their midday gains as the federal reserve's efforts to stimulate the economy couldn't keep buyers enthusiastic. volume was moderate-- 693 million shares on the nasdaq. under 1.8 billion

do you regret participating with the federal reserve to buy bear stearns in two thousand names. of the federal reserve because we were asked to by the us a favor to finance some of the no no we did them a favor and we look at this one exactly right we were asked to do it we did it to great risk to our souls. first obviously the government backed this transaction whether it and it asked j.p. morgan to do it or not so it wasn't j.p. morgan participating with with the fed why did everybody last laugh when we asked that question well you know i think look i think he deserves credit for that point by all published accounts who are not involved in that but the new york fed has

look at what the federal reserve did with unemployment rate.

by the way that's according to the wall street journal now we don't know such color from the federal reserve and its manipulation of rates but that is no points against we'll talk to a former v.p. of public affairs at the federal reserve bank of cleveland about what is lost in fed speak plus the treasury department announced it plans to sell its entire stake in g.m. within fifteen months according to the new york times a reminder of the bailouts in two thousand and eight of course but instead of government bailouts how about innovating out of a slowdown earth changing your business model we'll talk to the c.e.o. of car to go north america about dialers adventure in car sharing and from new revenue to no revenue c.b.s. reports instagram is looking for ways to generate some revenue through ads but it will not pimp out its users in ads it backtracked after unleashing a whole bunch of hoopla yesterday after a change to its terms we'll talk about it let's get to today's capital account. so in addition to the one point five billion dollars settlement and guilty plea to a charge of fraud from its j

i do think, you know, the traditional power ors of the federal reserve -- powers of the federal reserve have been exhausted. they may have one or two little things left in their tool box, but nothing dramatic. so here we are, we have to rely on other policy measures, have to rely on the return of the so-called animal spirit sometime to get the economy going again. but we are in a situation, we have been in, since the 1930s of a great financial expansion in the late 1920s and here in the early part of this century and great bust in the stock market, now in the housing market. it happened in ya -- japan where they had a bust both in the stock market and the housing market, and they still haven't recovered fully. and we've got europe, and they've got their own excesses. and the real lesson here is not so much inflation at the moment, but how did we ever let these excesses of housing here, housing in spain, housing elsewhere, in ireland, in this japan earlier -- in japan earlier, remember those days when you used to talk about the property around the imperial palace in tokyo, and a few hund

alan blinder, former federal reserve official.ert gray shows us how to uncork real profits here. david: find out what utility executives are telling the white house and senators about the impact of dividend tax hikes on their industry and your dividends. ♪ with my friends, we'll do almost anything. out for drinks, eats. i have very well fitting dentures. i like to eat a lot of fruits. love them all. the seal i get with the super poligrip free keeps the seeds from getting up underneath. even well-fitting dentures let in food particles. super poligrip is zinc free. with just a few dabs, it's clinically proven to seal out more food particles so you're mo comfortable and confidt while you eat. a lot of things going on in my life and the last thing i want to be thinking about is my dentures. [ charlie ] try zinc free super poligrip. e. david: utility ceos are meeting with the senate and white house officials today to discuss the impact of rising tax rates on their industry. i'm joined by two of those executives. nick aikens, ceo and pr

the federal reserve ramping up the action to stimulate the economy.ond buying in the new year. tracy: the fed says the rates will stay low. the predictions on the economy are out. ashley: fed chairman ben bernanke addressing the press in about 15 minutes. what will he say about the fiscal cliff and so much more? it is all headed. tracy: it'll be interesting with the market when we hear some of the questions. ashley: there will be a lot of questions for him to answer, for sure. tracy: and what if people leave? going down to washington, peter barnes with breaking news. >> that is right. we have the latest economic projections right now from the federal reserve and they are very slight changes from the previous forecast in september. let's run through them starting with the gdp forecast, the fed is now projecting gdp for the year 2012 on th on the year wild up with 2013 around 2.7% growth and growth getting a bump reliably in 2014 and 2015. the unemployment rate sees it slightly better compared to september projections. now these unemployment ending up 1

i happen to have been involved in one of the federal reserve bank boards. you get information there about business, particularly unemployment, that nobody else has. and what he is saying is this economy is still very weak, and he is going >>> issue four. forget marijuana. think heroin. golden brown. heroin consumption is rising and worse. it's among high school students in the suburbs. in maryland, 4.2% of high school students report trying heroin. says a 2011 statewide survey. this percentage has almost doubled in the past five years. in maryland this year 205 heroin related overdose deaths occurred during the first seven months. a former addicts says this about dealers. instead of waiting for the suburban kids to come into the cities the dealers have gone out to the suburbs. it just blows away these parents in the middle-class communities, the last drug inis unquote. okay, the u.s. war on drugs, that war was first declared by president richard nixon in 1971 with great public approval. since then, $1 trillion have been spent. that's according to "breaking

wants to give the federal reserve a piece of your mind? what f you had the ear of paul volcker or questions on how he solved stagflation in the 80s. we will tell you how you can spend a day fly fishing with him and tell him what you really think. david: the best federal reserve president in my lifetime. while many fear failing to fix our debt crisis could lead to a severe economic slowdown, there is one area where they may actually benefit if we go off the cliff. quite a contrarian argument. you will hear from a car expert coming up. [ malennouncer ] th is amy. amy likes to invest in the market. she also likes to ride h bike. shknows the potential for making or losi money can pop up anytime. that's why she trades with the leader in mobi trading. so e's always ready to takection, no matter how wily... or weird... or wonderfully the rket's behaving... wch isn't rocket sciee. it's just common sense. from td ameritrade. you know how painful heartburn can be. for fast, long lasting relief, use doctor recommended gaviscon®. only gaviscon® forms

gary, your take on yesterday's federal reserve meeting, this idea that we are targeting everything to the unemployment rate, and by the way, 6.5%? i mean, where does that number come from? >> yeah. that i don't know where that number comes from, but i do know it's a significant improvement from where we're at. >> exactly. >> that's an historic move, tying fed policy to a very specific number and making it public. i think today you're seeing the markets digest that. they are not quite sure what to do with that, it's unprecedented. >> does it dictate how you allocate capital? >> i think it's going to dictate how traders trade their portfolios as they watch the inemployed rate. it's going to make that unemployment rate number announcement, you know, every time it comes out a huge announcement. >> even though fed chairman bernanke was very careful to say it's only a guidepost and that doesn't mean it's a trigger to raising rates. >> once you say it, you come out with a specific number? >> they waved the red flag there. >> yeah. so you're going to see, you know, confidence in bonds until m

right exactly and within the federal reserve there's a tremendous sensitivity to how policy is communicated i think it would be fair to say that for the for the fed communication is considered as important as the policy itself it's what determines whether or not policy will be effective i think that's where we start to see some of the struggles in that these these are ph d. economists and professional bankers and people whose natural tendencies may not be to communicate in the most transparent mode know that's that the fed is actually very aware of that and it's very sensitive and has a tremendous effort underway to try to be more transparent but as you and i have discussed separately sometimes it takes interesting forms and doesn't always achieve what they're seeking to achieve absolutely and in terms of said speak and its value what is it because i have to imagine that there is a perceived value to this odd use of language that prevents information in such a way that is really unclear like what the substance is it obscures the meaning you can't really tell what they're saying what is the

what kind of relevant conversations about central banking or federal reserve policies or disagreements of federal reserve policies are not being heard or are not getting through that maybe are in other countries that you and i was thinking about before the show you say canada these conversations are going on well if there is i think an active discussion in canada even to a certain extent in the u.k. and i think you know here in the u.s. i think part of the issue is. for many years we those who might be looking to who have legitimate criticisms of existing policy who start talking about commodity based currency. buckets or you know any kind of anything that scene is is going back to the way things were or something that's highly unconventional there's an element that. we don't even want to engage in a legitimate debate on these kinds of topics that kind of gets thrown out with the less credible critics of the fed the conspiracy theorists and all that and i think it's a shame really because i think there is scope we have a we have probably a better policy with sharper discussions and deb

someone here says the federal reserve's unprecedented action to keep the economy on track won't make a lick of a difference in avoiding the fiscal cliff. the debate on the fed, the cliff and the economy coming up and represent schakowski says raising the eligibility age for medicare is a non-starter. we'll talk about it and dan niles, ahead of the curve? saw facebook's mess comin before the ipo. now he's ready to unload his top picks onnies giving us his ideas for the new year. second half of the show. you can't afford to miss that one. you're watching cleshl on cnbc, first in business worldwide. >>> welcome back. between the federal reserve and the fiscal cliff it's a mess if you're trying to position yourself with 2013 with so much influence by ben bernanke. what happens between the president and john boehner in an hour >> narrator: what are the pros expecting in 2013? dan greenhouse is with me and also the chief economist with ihs global insight joins me. good to have you on the program, gentlemen. thanks so much for joining us. >> thank you. >> thanks, maria. >> dap, you think th

their monetary policy is pegged to what the federal reserve does.ut they have an inflation issue and their economy is tied to china. so if you buy something like ewh, the hong kong etf, all those stocks are priced in hong kong dollars. if the hong kong dollar is repegged, the ewh will go up as much as the repegging. >> what does that mean for the u.s. market? where are you on the u.s. market right now? >> you know, i think right now, probably to the end of year, if we can get some kind of movement on this fiscal cliff, you have a real potential for a pop, 3%, 4%, 5%. unfortunately, as i look to 2013, i'm looking at u.s. austerity. so the question is how much is that going to be, and if it's a lot and the rest of the world can't pick up the slack, then we've got problems. if it's just a little, in china and europe, can actually come out of what they've been in, then we might be okay. >> but there's nothing wrong with buying global markets. >> no wrong at all. and it's easy these days. >> it's fairly inexpensive these days. >> it's inexpensive. europe

we're getting optimism about the federal reserve.ther will do something to stimulate the economy they weren't have a two day policy meeting. a lot of controversy when the u.s. company bailed out aig. they sell the remaining sales for over 7 billion. the u.s. government at one time on a 92% stake in aig. many thought the u.s. government would lose a lot of money on this deal. the u.s. government makes 22.7 billion and aig is now out of government hands. rumors percolating bad investors are buying up shares of hewlett-packard. their shares were up 2 1/2% yesterday and up 3 1/4% in trading. they continued to slide down the $529.22. >> port of oakland maritime director james klein steps down as a newly released audit shows nearly two under thousand dollars in questionable expenses from missouri's meals to a tiffany silver key ring to a u2 concert. in internal audit of 2011 expenses were already under way in october when news broke about the ports executive director, all our big demand and kwan spent nearly $4,500 at the he is a strip clu

look at what the federal reserve did with unemployment rate. it did lower that as well. remember that a key reason why the federal reserve announced today, it'll be doing another $45 billion in quantitative easing bringing the total to $85 billion a month. can you see a quarter point from it in 2012. 20 in 2013. and on ward towards 2015, but just look at that. 80 basis points off the unemployment according to the fed's forecast. that suggests you get very little bang for your qe buck there, brian. i think that is something worjs discussing. they will spend, if they do, $85 billion a month. trillion this year in quantitative easing. over the course of the next couple of years, bringing the unemployment down by 80 bases points in total. >> i don't want to step on mandy's toes, because i would probably crush her feet. but i want it jump in quickly on this. two quick questions. i'm getting this on twitter. how long do we have to be below 6.5%. is it little rattly one month payroll report? if we don't get there, if we don't get there, could we have these rates literally forev

is there a role for the federal reserve in this fiscal cliff back and forth?>> there really isn't a direct role they can play. this is fiscal policy. the fed does not make miss call policy t makes monetary policy. i think chairman bernanke and others have been very clear to stay out of the battle that has to be resolved by the congress and administration. look, i think at the end of reach some sort of an accord to avert the most draconian aspects of the fiscal cliff. maybe the 11th, 12, 12th or 13th hour but i think they will reach that because i think they recognize that the consequence its of not doing so are so severe. >> but let's face t that even if there is a deal we're talking about an economy that is going to have to deal with people having higher taxes and dealing with spending cuts. what are you projecting for what are you projecting qlu ha, for economic growth and unemployment. >> sure. i think the economy going to be facing some fiscal drag from the federal side but if it is phased in slowly, it's not really use ter and abrupt i think it can handle

the federal reserve is in desperate need of competition. if they had a little competition instead of only statutory constraint maybe they wouldn't be debasing the dollar as they have been. >> isn't that the key point? they want to provide competition to what the federal reserve is producing. and of course, the federal reserve and the treasury and the comptroller of the currency and all the rest of those guys, they don't want that competition. because the money that the fed is printing is lousy, soft, unreliable money. >> that's exactly right. they have a couple of problem. the first problem is article 1 section 10 of the constitution gives the right. the second problem the american public is catching on to what this monetary debasement is doing. who is it helping? obviously not the middle class. i suppose it's helping the moneyed class. but that can't be our policy. it may be helping the federal government finance all these transfer payments. we need to have really a larger discussion about the underlying prince of our monetary system. the

what we could hear tomorrow as federal reserve policymakers wrap up their two-day meeting. >> tom: ever wonder what goes into making those cardboard store displays? tonight, we look at how one box company is using them to reinvent itself. >> susie: that and more tonight on nbr! >> tom: an agreement to ease the fiscal cliff may not be wrapped up and waiting under your tree for christmas. senate majority leader harry reid said today it would be hard to get an agreement finished by the holiday, blaming the delay on republicans. not surprisingly, republicans say the president hasn't gotten serious about the talks. plenty of outside groups are offering up suggestions. and as darren gersh reports, they include warren buffett and some other big names in finance. >> reporter: there was some public movement in the fiscal cliff standoff today. instead of holding dueling press conferences, republicans and democrats traded barbs on the house floor. >> where are the president's spending cuts? the longer the white house slow- walks this process, the closer our economy gets to the fiscal cliff. >> rep

so the federal reserve wants us to know that it will be vigilant when inflation reaches the measure of two and a half percent but it is a truism of our financial lives that the thing you want to measure somehow disappears when you try to measure it for example the remeasured rate of inflation was very manageable seemingly in two thousand and six and seven the thing that was inflating was the thing as it turned out that would guide our collective economic destinies for the next five years namely house prices. the powers that be simply didn't notice. inflation is a fine term who's to say that inflation at the checkout counter is the real pearl what happens if the federal reserve driving people to so-called risk assets over eggs that putting and creates another bubble in stocks bonds commodities farmland gold what have you. the fed will have some measure of responsibility you know or well i was waiting for the ask chairman bernanke you mr mr chairman do you want people to buy stocks you want them to buy special of great corporate if when the prices of these things collapses will you be wr

. >> repoer: against that backdrop, the federal reserve is trying to do all it can to help the economy. the central bank is widely expected to announce an extension of its bond buying program when it meets next week. erika miller, "n.b.r.," new york. >> tom: with the fiscal cliff about three weeks away, washington hasn't made much progress to avoid it. that was the assessment from one of those directly involved: house speaker john boehner. the top republican today accused president obama of, "slow walking", the economy to the edge of the cliff. he repeated his call for the president to send congress a plan that can pass both houses of congress. tax rates are the major sticking point. the president wants to raise them for america's highest earners, house republicans strongly oppose: >> instead of reforming the tax code and cutting spending, the president wants to raise tax rates. but even if the president got the tax rate hike that he wanted, understand that we would continue to see trillion dollar deficits for as far as the eye can see. washington's got a spending problem, not a revenu

if you have a question about the federal reserve you're probably a crank. you might need some sort of psychology evaluation. because of the most financial crisis it's harder to make the arkment. people are sane are asking question about the federal reserve. what is this? does it do? what i'm suggesting is the fed is not the institution that when we respondent usely have the business sickle that have no explanation, the fed comes to the rescue and so.s the problem. the fed typical intense fies the program what we need to do is roll back the fed as well. the conventional wisdom surrounding the fed is dead

at this point i don't think that's going to happen. >> susie: how do you think the federal reserve is going to read in today's jobs report. they're meeting on tuesday as you know. do you think it's going to trigger any new response from the fed? >> well, as you know the fed's on high alert. they've got their foot to the accelerator. they're using open ended buying bonds and they're going to up the ante i think at the next meeting in the coming week. operation twist ends and they're going to start rolling that into this quantitative even process. so a lot of bond purchases. i think they're going to continue to do that until unemployment is moving definitively lower and is much lower than it is today. and most importantly, they're going to wait and see how these things go in washington. they're very nervous that policy makers aren't going to get this right. so as long as washington's bitter i think they're going to be in high alert. >> susie: thanks a lot mark, great talking about you. we've been speaking with mark zandi, analytic. >> tom: still ahead, slow job growth doesn't discourage

the federal reserve chairman ben bernanke -- yesterday --