it, reforming some of the institutions. >> for sure, and then i would privatize fannie mae and freddie mac i would have a targeted program to be encouraging first time -- first-time homeownership -- >> if we privatize fannie and freddie, they can do exactly what wall street did with their special securities they privatized; is that when your singing? >> given -- given the size and systemic risk like it or not, we need a system eckert regulator. we simply do. >> you mean you want fannie and freddie privatized, but with a very stiff systemic risk regulator? >> for sure, for sure. yes. >> when you're doing is where the money flows. he won the wealthy institutions to be making more money off mortgage securitization than they are now. isn't that the only difference? >> i don't -- congressman, i don't see it that way. i think it makes -- i think it makes a difference. also, i could not have the kind of implicit guarantees that were everybody knew that fannie and freddie -- >> you think if we have a private institution the size of 5.6 stockley in dollars but there's not an implicit statement the

. >> 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

fhfa continues to classify fannie mae and freddie mac as critical supervisory concerns.e significant risk they would be unable to fulfill their missions we place them into conservatorship last september. since then, the treasury department has purchased $86 billion in their senior preferred stock. >> enterprises short-term financial outlook remains for. which will result in additional requests for preferred stock investment from the treasury department. however, both enterprises have stress tests their capital shortfalls and expect treasury commitment to fund up to $200 billion in each-- and capital for each of them to be sufficient. the senior preferred stock purchase agreements have given investors the confidence there is an effective guarantee of gses obligations. in addition the combined financial support of the treasury department and the federal reserve of over three-quarters of a trillion dollars to date for housing gse debt heaven sure they remain liquid. because of this support both enterprises have been able to maintain a critically important presence in the se

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

it was about fannie mae and freddie mac.he single biggest factor in the increase in the deficit was the war in iraq. much more than the economic recovery bill. what we have is a continued excess military spending. there are other areas that i wanted to cut back. as far as fannie mae and freddie mac, -- these are things that cause the deficit. in 2003, i said i did not think they were in crisis. i didn't think there was a crisis in lehman brothers or others. i invite you to read a book of john mccain adviser. it was in the wall street journal a week ago. the bush administration decided that their way to help low income people was to greatly increase mortgages for lower income people. i saw it -- i thought that was a mistake. we could build rental housing for them. we will give up the paper to show you the quotes. in 2005, i joined an effort by the republican chairman of the financial services committee to pass a bill to regulate fannie mae and freddie mac. the republicans in the house passed the bill. >> [inaudible] >> are yo

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 a

. >>> 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

they are far lower than freddie mac and fannie mae at 2.8%, 3.7%.those levels are even lower than the prime market at 4.7%, the home market at 7.2%. although fannie mae and freddie mac have a combined 56% share in the mortgages outstanding, they account for 22% of serious delinquency. on the other hand, those private-label securities i mentioned earlier, which are 13% of the total mortgages, account for 42% of serious delinquency. as these high levels of delinquencies trigger downgrades in the aaa private-label securities, presented significant challenge for investors, fannie mae and freddie mac and the federal home loan banks were big investors in these securities. currently, 65% of the value of private-label securities in the federal home list, federal home loan banks system have been downgraded to-watch. this compares to 20% at year end. the combined fannie mae and freddie mac private-label securities portfolio, about $167 billion, are much worse, with 84% currently downgraded. as you can see, 68% are junk below investment grade. unlike the banks

glenn: freddie mac doesn't do ballet. that's true.he other job he has is that he gets a job with wasserman pearl, a major wall street deal company, and he gets in their chicago office, and he makes $16 million in less than 2 years. glenn: in two years? >> yes. glenn: $16 million is ma he makes. >> on top of the quarter million taxpayers gave him for freddie mac. he was there when they were cooking the books. he was there when they were cooking the books. glenn: how did he make the $16 million? >> basically on one large deal, a big deal he got it on was he was advising s.b.c. which later grew into the new at&t. glenn: ok, s.b.c. >> right. glenn: here is what is interesting about the s.b.c. thing is the guy who helped make this deal took a loss, did he not? >> yes. they had to sell because they bought another phone company, ameritech. they had to get rid of a company called security link t was a billion and a half dollar investment. he sold to a group headed by a bess bethesda group led by mr. acre, the chairman and sold to a group led

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 d

. >>> 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

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 by the firm that he ran program may have been kept from him in part mortgages, mortgage related products by far became the largest engine of growth it was the largest -- largest

to help fannie mae and freddie mac.s 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 different bill. the chair

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

berkshire hathaway, freddie mac. you know last week we spent a little bit of time on fannie mae's numbers, which were not good. freddie mac, a bit of a different story, worth mentioning. 79.9% of the company owned by the u.s. government. there's a look at what is an option on the company in terms of that stub of equity. as for the results, freddie mac reported the first profit in two years. that is right. and it was up last week, of course, like freddie, fannie, aig, cip, a number of short squeezes there. there's freddie, first profit in two years. it earned -- well, it actually lost -- if you take it out before it had to pay the government the interest, it made money. otherwise, it lost 11 cents. that's still way better than what people expected. look what it lost a year ago. net nrk was $768 million, compared to a loss of what's called a $10 billion a year ago. revenue, $7.74 billion. virtually no revenue a year ago. all of the write downs that took place, they take hits on revenue. now, freddie is paying interest

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 m

the study we are sending to congress today is fannie mae and freddie mac single-family guaranteed fees in 2007 and 2008. internet for congress asked us to do an annual study analysis of the guaranteed fees that fannie and freddie charge to protect buyers of the mortgage securities that are issued with their names on them. and they asked us in particular to look at the revenues and costs associated with the guarantees, factors considered in setting the fees, the level of fees and changes from the previous year, product and risk breakdowns, and differences in fees between the major loan originators and smaller institutions. in a nutshell, what we found is that fannie and freddie charge higher fees in 2008 than in 2007. that they charged more for mortgages that have higher risk characteristics, but that the increase in fees associated with those higher risk mortgages did not fully account for all of the expected costs that they anticipated using their models. and finally, that larger lenders, the major loan originators in the country paid smaller fees than smaller institutions paid. our f

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

freddie mac, our compliance agent, will be cducting second look reviews, auditing mples of mortgage loa applications for modification that hadeendenied. >> reporter: governme officials advise borrowers to seek free counselg to aid foreclosure rescue scams, and to t to help them negiate with banks. as for the hoyles, they are temporarily movinin with relativesntil they can afford the deosit on rental housing. >>this is pledge week. >> ifill: thiss pledge week on public televisn. we're tang a short break now >>> goodvening, and thank you for watchi "the newshour with jim lehrer." i'm paul anthony wh patrice pascual in the weta udios where "the newshour" is produced. are taking arief intermissi during the newshour this eveng to invite you to become aontributor to weta. individual supports are the backbone of th organization. always haveeen. your suppo provides weta with the ability to produce pgrams like this one. plse consider making a financial contribution to ta, and lp keep the newshour in your daily program schedule. >> hello, lehrer. lesi viewers like u have found the newshourereneta

you are talking about fannie mae and freddie mac. what proportion of sub-prime loans the date by?i 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 in

what about freddie mac, aren't they zipping along today?> the reason i didn't include it, it flies under the radar, not meaningful index, up a buck a share. >> government owned. better earnings from freddie mac, i don't know if we believe the numbers because they manipulated them in the past. let's look at the numbers. good for housing, housing story, cash flow better, part of the rising tide. >> it is. >> part of the new bull market. >> clunkers go up in a bull market that's what happens. >> definitely disproportionately weighted super performance with discretionary names and financials. >> these are real stocks. talking about penny stocks moved 100%, they have gone up, gannett, office depot, these are real stocks. >> big time. that's why i mentioned just the financials alone, some of the big companies bank of america, hartford, capital one, real companies with big business doing business again. >> i wonder if you take profits and run. >> rising tide. >> thanks so much. >> you had to throw that out there at the end. power lines coming up a

freddie mac said the average fixed rate mortgage is 5.1%, up two basis points. they had a 36 million dollar fine against the pitchman and he was in violation of a prior order of misleading advertising and felt the fine was inappropriate. that's the news now. i'm julia boorsten. >> you are looking live with the stock exchange with two hours left in the trading day. the dow is back in the black staging a triple-digit turn around. the stock of the day up 25%. we will have the mystery times in for erin burnett. here's what the street is talking about at this hour. clunker nomices. it worked for cars and is it a proposed program doomed to fail? it's the dinosaur of dot-comes. should craig's list get with the program? is it time for an obama beer program? should he keep bud light from costing more? all that and a look at why the spiraling deficit could be a good thing, but first to the turn around on the street. the dow trying to make it 8-8. rick san teley is here and scott is at the nasdaq. we were down 80 points and look at aig. well over 100 million shares. hard t

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

freddie mac hit 25 cents in september. now it is 1.69 after reporting the first profitable quarter in two years. fannie mae also rose as much as 50% to a dollar a share. >>> big banks are making money hand over fist on fees. when you bounce a check the industry will collect $38.5 billion in overdraft fees this year. the average fee is up to $26 this year and larger banks are 5. ehe $3 r chnkking r account to id yeci an overline line of credit and you will draw on those funds if your checking goes to zero and you won't bounce a check. remember to repay from your new deposits in to your checking account. no more bounced check fees. >> please, they are high, aren't they? >> yes. >>> time to check on maryland's weather. we go to kim martucci. >> good morning. every morning at this time at 6:08 we focus on maryland's weather. virginia you are coming up in the next 20 minutes. so let's get started. the satellite-radar loop. thunderstorms are held at bay but western maryland will be the first to see the storms fire up probably by

i'm talking aig, fannie mae, and freddie mac. look at these numbers, these percentage increases up here. over 50%, 30%, 30%. what's going on? the volume has been huge all day. there's a lot of speculation. there's some speculation around aig might be preparing a detect swap with the u.s. government, might lighten their interest expense, but there's no confirmation of that. others note we had a great bond auction, that may have helped freddie mac as well. at any rate, stheekz haven't seen this kind of action in a long time. i'm particularly watching the volume there. financials also strong again. remember citigroup, it's got big volume today because they're being rebalanced on the s&p 500. we saw that on the russell here. that's important. jpmorgan's up nicely here. here's somet

. >> susie: james lockhartthe former head the agency that pervised fannie mae and freddie mac, is now a rnaround speciali. he is joining wloss and company,he new york firm known for restructurings a buyouts. until o weeks ago, lockhart oversaw fannie and fredd as they emerged from acunting andals and guided them as th became gernment-chartered companies. paul: the food and drug administration is launing its center f tobacco products. today,he agency announced that doctor lawrence deytonill head that newivision. he was thehief public health officer for veterans affairs deyton's departmt will monitor tobacco advertisinand promotions and fus on stopping the illegal ses of cigarettesnd other tobacco oducts to kids. euu >> susie: in the money file tonighsome thoughts on osting the nation's savings rate. re's jason zweig, personal finance columnist athe "wall street jrnal." if the economy is to recove saving will haveo become easier. the personal sing rate has offially risen to around 5% after hovering close tzero for years. but, accding to the federal reserve, only 57% of amerin families s

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.

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

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

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

it should also create jobs e advisors with ill discuss mortgage finance giant manny mae and freddy mac. they are considering a overhaul to support the market. according to the washington post, plan under consideration would strip the many cans of bad debates placing them in government-backed institutions. >>> a big hotel company is going public. hyatt is hoping to raise more than 1 billion in a initial public offering t will use the money to buy propertiesed aing to 400 hotels and resorts. >>> coming up, going from fired to hired. turning a pink slip into a dream job. that's on gma. that's the money scope report. >>> >>> we have a wake up window. we want want to do a tour on doppler radar. we have some wet weather. it is wet everywhere. we had rain of some sort over the past few hours. pushing and winds are and new heading. we have rain around the beltway. we talked about easton and a inch and a quarter. wondering about they have some rough weather after a great start to the week. it will be lingering through the day. heavy rain this afternoon in the form of storms south and east. and

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 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

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

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

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

. >> 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

>> 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 targeti 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 a

the government has spent about $85 billion to keep both fannie mae and sibling, freddie mac, in business. >>> rupert murdoch says it is time to stop giving away the news online. the chairman of newscorp says his company will start charging for access to its newspaper websites, including "the wall street journal," within the next year. experts say the company could end up losing money, by driving readers away. >>> in today's "usa today" tech reportthe first iphone application to make turn-by-turn directions. "usa today's" ed baig took it for a ride. and said there were lots of potholes. >> i had issues with the sound. sometimes the voice didn't kick in at all. sometimes the directions came a little bit too late. overall the routing was inper size. but the biggest problem is that you can't have the ap running when the phone rings. overall, right now, i'm going to take a pass. >> and you can read ed's full review on usatoday.com. >>> and you can get the latest siness news anytime on our website. the address is abcnews.com. >>> and when we come back, e florida teen who had a run-in with a hu

. >> 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

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