>> ihink it did accompli what it need to acmplish. the compan has said and analts have said for the past few yea that this is company that had too ch capacity it needed to close plants, it need to cut the number of employeeit had, it needed to pare the numberf brands that it had it needed to cut its legacy costs and it also neededo reduce the number of unprofitsable dealerships it has in the united ates. and it did tha in bankruptcy. but as you kw, you cannot cost cut your way to profitabity. so the challenge for g. m. gng forward is to sel vehicles, and that what it nds to do to survi. >> susie: so i'm interviewing chs henderson tomorrow, the c.e.o. of genera motors, as you know what do you thinis the next big test for hendeon? >> ihink e test f then der on andg. m.is product. and nay need to sell product. and it not just selling product, it's conncing nsumers that they hav qualy products. one of the things that has dogged g. m. forheast 20 or 30 ars is tha they don't have good quality pducts. backn the late 70s, early 80s, there wer

>> well, ihink we have t do -- what we have to don this environment is youave to trade. that'something i've saidfor the last couple of years. we're in an eironment now where i ink the top d of the market is 1000 and the bottom end could be 5,000 on the dow and i think or the nex several years what we're goi to dis basicly trade within that -- within that -- those o numbers. >> paul:k, so and outnd when you have a ni profit, take . th's it. it's as simple that? >> exactly >> paul: all rig. in februar you gave -- actuallyou gave us three possible scenariosor stks. howare those played -- howhave those played out? >> ialked about an l-pattern which didn't --hat dn't work out, in fact, wee 900oints on theow abovehere now. >> paul:h-huh. >> wwent down to 6,600 on the dow. i looked for the s&p too down to 650. th's what we did. weounsed smartlyrom there. my outlook right now, certainly the dow cod move upo say the 10,0, 10,50 level and&p up to say 1,100 but in the bigger picture,his is a tding environment. one must trade this market, trade is market. to buy in pe won't work any

>>>> ihink she's kept it open and kept it on the tatable by sayingng amm l leing politics," i mean s she had a few c choic words criticizingolitics on frfray but she did n say ee was leavaving. she did n notsay sheasasoing to --hehe would neverer be a future candidate, s she wld ner seek higher office. she was out of the game for goodod. as we know on saturday s was tweeting a a wrwritgg submississ forfafabook talking about h how wee e l in thisistogether, we need tooforce pgrgres togethehe in thisscountry, you neveve n n aaitle before yrr name too something. th is all about ccoury. join me, se e said. soso think she madade it clear that s s w wan to remain inn t gagamen the futurere.

>> ihink history will be his punishment. i'm not suggesting he should be sent to the hague. >> charlie: but a much bigger issue. >> yes. charlie: and finly the judgment of henry kissinger without legacy, his most influence on history where in the end be china? >> that was nixon. the opening for chi was very much nixon. he was the engineer i thin the -- kissinger's rol was with t russiansand pushing the door open and established rust. >> charlie: d the ide of datonte. and the relationship with dubrenin. that's interesting. >> charlie: e long-time soviet ambassador. >> and they talked together as if they're old school chums li ll buckley and me wherehe conversations th the british ambaador is frigid. >> charlie: why is that? >> because the relations have not very good. it was not one of his great successes and ted heath didn likeeasur america or americans was unhelpful to you during the yom kiur war. >> crlie: sir aliair horne a savage w of peace, this kissinger, 19, the crucial ye. >> charlie: we closehis evening takingote of

ere are thr plans in the house ihink right now. one knows how they're going to pay for it and obama is not doneery good job in splai how he is going to pay fort. the cgression budget office which is nonrtisan saidook, this is unsustainable at the current level. $550 billion unfunded mandate came out of the ways and mns committee, which is charl wrangle's committee. they're yet to say how they are going t pay for thi hi approval rate bngs have dropped actually for the fst time under 50%. this is not bingell. of course he wants to rush i through. >> the hse bill is paid for. e reason it's taking longe is if president has said woeot gn a bill that is not paid for. >> bonnie: melinda. >> ithe fear is that we'll have less choice in health care, ihink most amecans feel they n't have many choices now. o of the choices is y pay for it or you go bankrt. what i findnteresting in this, is that it's noteally a right-left split over rorm. 's, in talking to peopl i think it's aplit between people who have had serious illnesses and people who hav

ihink they'll still doo okay. with grain prices ingo down, it should d he t tm on t main side. a stock ver,ubub tuday's, raised s guidian. in youour ewew, there any valuu out thther >> based o on what i'm seeing, w are seeing p pplple trade down. t t much in the higher-enend ststrants, going where t the cacan takethe entirirefamily. so i think t tholalace are stayayin fairly sy. >>patty, i it' kakare doou alsoike atltltri versus philip morris? i meme the international sidide of phillip mriri altria, it's a good plplay but thininththe internatatiol l de philip morris has s mo sex and viololen t t it right no >> pay, greato o ha you with usus. >> i love thth sex and violence. >> wet got important, s, violenencewhwhats this show comimingto? >>>> o c comon. i'm telling you. >> se vlence and dividenen yield. >> oh, that makes it o oka >>> a right.. upupnext,,ouou aeded, we ansnsw. eaearlr we receiveve a fastt sssse from kim that t keked karen, do you ththinnonois the me to get back i kakan n wi awer that question for kim in new york. ♪ look at this man n ♪ so blessesewiwith inspir♪

over human rights, political issue and ihink they're acceuating the positive because right w with the economy being so uncertain and china such a bieconomic engine. about foreign exchange rrency djustments and so on and trade issues so they're acceuating the positiv in meetings this week. and putting on he back burner some of the more troubling issu. >> and what arthe troubling issues? >> the troubling isues are, disputes over jt how each side is going to play its currency and its reserves and economic policies and domest stimuluses. but this relationip will go well. frankl iran, israel, tse are important but chronic and somewhat low-gde policies. the u.s./china relationship is going toe the defining feature of international politics in the next several decas. it has to go we because the consequences of it gng bdly are horriblfor everybody. will go well. >> so e president said it, thatt would define the ctry. >> and here was being more rrect. >> gide rose and susan shera, thank you bothor joining us. >>hank you. >>> finally tonig he i no stranger to performing, though he himself m not

now, whatkrugman says, ihink there's somhing tot, right. we're not reforming at theime th we are callg back on some of these things but keep inmind what happened after the great depression. the securities acts ware reign in 13 and 1934. great depression starts t of th crash 1929. so that's fouro five years after e occurrence. the's something to be sd for taking a little bit of timeand making an lightened decision with a bit of hindsight because i think we saw in sarbanes-oxle in 2002 a quick rush for companies to report infortion and thinkthe resultf that habeen pretty ne. >> charlie: hey should wait and they should thinkarefully about at they're going to do. they shouldn't have a sense of urgency about rerm. >> there shod be an urgency t i don't thi we shod necessary have acomplete plan in placeess than a year sin the lehman blow up. but there is no doubt in my mind that there needs to be major reform and ion't think anyo -- >> charlie: hat would that major reform entail? >> well, the capital risks taken by banks. this actuallyis a hidden

i ihink they're gogogg to be two very separate things. i think theree wi b b an vevestation by the departrtntnt of children anand filil service as to how thesechildren have bebeen treated in e e pat,t, an whatat havthth beenexposed to?? we don't know, are thesee children meme-sooled? arare ey no-schooleded? he has vevedround a t.t. th're very nadad. wewe d't't knownynythg aboutt these children, a a nowhhr whwhol biology is bein discussd in the mmiaia. are they b bei exexsesed that? >> let's hopope they're in sor sa cocoonelatively speaking asas bt they can beett this cuenent time inheir livives. talk about thehe "today show"" exclclusivthth we g got om jermaine jackson w who said tha they took the chchdrdren to see their fatheher'ss bodyy after h dieded listen to what he sa. >> the therapist thoughghththatt was imimporttto let em see their father so thhey c can get every andundererstd.d. >> so they w we e tan ino see their father after h had passed? >>>> y.. yes. >> that's a hard thing kids. >> yes. but now they're finine and i k n it's t

and ihink that's what ultimately overrides everything.ember the time, thriller, bad," it doesn't matter, theist goes on and on. i was listening to his mus last night. i was playing his music all day long during e fourth of july because his music is t greatest ever. and that's what we'll choose to rememb him more so than anythi else. it doesn't mn that youorget erything else, b what he will be remembered for most more than anything will be his music, no question. as well as his humanitari rts. >> what abthe sharpton sound bite, his contribution today? speang to e kids? >> it was profound, but at the same time, first of al everybodwodn't agree with whathe said. but it was more than appropriate for him toay that because he was directing it at michael jacksochildren. anwh he was saying, listen, your father may have been strange to everydy else, but he was notstrange. the circumstances were trange. what he saying those kids were, this is how we want you to rember your dad. and becae he was directing that messageto miael jackn's children as opp

so ihink the iranians have a lot to b concned about from iraq's side. and,f course, the iranians are very much worried aboutheir own internal proems. rose: i assu we've communicat to them to stopt, aren't we? >> i think the iranians are very we aware of our concerns about this malevolent influence. >> rose: my... i assumeeneral petraeus told em, actually. op it. >> i don'tant to confirm any individual dcussions, but i ca assure you the iranians ve beenade well are of our concerns. yoknow.... >> ros what are the nsequences if they don stop? >> well, i mean, you know, the ir wants aetter relionship withs, with the world, there are a few thingsthey've got to do, starting with the nuclear program. but so they've got to, i think pl a morroductive role in ir. you know iran and iraq need to have a good regulationship in the long r but it' got to b based on mutual rpect. and those us whoive in the green zone occasionallyget ese 107 millimeter rocts coming in. in som cases coming rit into where we live, and they're all made in iran, weould sort of like tsee the

ihink what bothers people is not informing congress of wat they'reoing. they cepted tha, theeed for that. bu the increasing ide- you ca hear a little bit of this in senator feinste's omments coming into this segnt-- that congress is co-managi our intelligence agencies. i think ere is a feeling certainly at the c.i. that that ijust wrong. anthat it is increasingly a probleif you feel that you're working n for the present but to tryto keep members of congress coortable >> ifill: wt's the distinction beeen -managing and oversight? >> well, that's good estion. the ci.a. is an executive a of the preside and operates to do things that, b their nature, need to be hidden. in some cases they need to be denied if you ca do it oply you do itthrough anothe agency. we often forget that the c.i.a. exists really to systematically viote the laws ofther countries. >> ifill: but no our own aws. >> but no our own laws but i do think that on question as we think about the stakes... theistakes that the c.a. made a the they tellabout thisr that, an abiding question f me is do

. >> i don't know howou're going to come out othat case, because ihink, fundamentally, judge, you'reble, afterll these years of ing a judge, to john cnyn of texas, said >> reporter: anotherepublican, john cnyn of texas, said sotomayor has sounded far mo left--center in her speeches than during the hearis. >> so, jge, what should i tell my constituen who are watching these hearings and sayg to thselves, "in berkeley and other places around the coury, she sayone thing, but at these hearings, you are sang something which sounds contradicty, if not diameically opposed, to some of the things you've id in speeches aroundthe country"? i would tell them to look a my decisio for 17 years and note that, in ery one of them, i have done what i s that i so firmly believe in-- i pve my fidelityo the law, the fact that i do not pmit personal views, sympathies oprejudices to influence the outcome cas. i would as them to look at the speees completely, to read what their coext was, and to understand the backound of ose issues that are being discussed. >> thankou for that, for your answer, judge. you k

>>>> ihink they are trying to o embarrasass e e reme, not only exrnally. rrrrtly the iranian governrnme has taken a serious s acack e externallyly. they a are n t ting to embarrass iran any more inin fntnt othe inteteatatiol community. now it's aboutut conncncg the religigious tataishment that whwh t theovernment is doing is wrong. d trying to exploit didisision thth a areithin the government already. there are e ma s senr clerics in iriranho believe in the ththcracy, who believe in n th system, but don't agage e wi the way the gogovemements handling it.. these are e peop w w live in places and they don't t li w wha iran has becomome. they can quint this c comninity to act and to sasay th i inot what we signeded up r r en we wanted a theocraracy tt t uld be inspired by y devi l l, not a mililita s sta that is teterving, crushing civilian protests. >>>> in hehewords, watch the rerelious establishment to t t exexntnt wcan for a sign of success? >>bsolutely. it doesn't matter sosoucuch at ananceitaly and the united states says at this s stag ththerwiwillrobab

>> ihink he did something remaable with his human gure. hetarted, based on -- he couldn't exist without pick coulso and others, he built on their presenceent. but heook their innovation one step furth. >> itrought art to a ne place. >> charlie: wen to pis in 27 was knocked out by picasso, even thoughit was not spectacular -- >> it was smaller.very playful e amoeba-like gures on the beach, oning cabin doors with keys. you see that openi of the door in his later art. but that kind o playful surrealism was somhing that captivated baconnd persuaded him that he wanted to be a painter, that ry much dominated his imageryor the next 15 years or so. >> charlie this exhibition, at the tate, how is it different? when you bring it to an american audience do u change? we did. forwo reasons. e large exhibitio lasting over a year, enders are reluctant to give up their wk for enre year. there's an automatic changing everhe guard fr one venueo the next but i saw the possibility here of ronstituting some ofis portant, pivot alex hi picks, in 12953 in new yo

he could hav at one point, when i drive through harlem a i see men on the streetorner ihink to myself therefore but the graceof god go i. and soust in thatimple statement acknowledg the power that high rates of joblessness in our communitiesave on the destiny ofhe people onhe street corners. talked wh passion about the school systems and how they're failing kids across this country, tk about passion with thjustice system andtalked withassion about the needor healthre and you got sense that w really do have somody to form a civil rights lawyer, rmer communi organizer as esident. and that's what peopl needed to he because these are tough times and what gives themhope is when they feel like the esident gets it and is going to fight for them. >> charl: here's the lea com, "the new yo times" put the pictureere and basically said he encouraged pents to teach their children that your deiny is in your hands and don't you fort that. >> rig. now 20% of the speech. if you read u today,hey actually talked abou his speech in equalies. at was their subhead. >> chaie: he's the lead paraaph of the ne

. >> ihink you're all underestate hlary. i can't imagine anyone sencing hillarylinton.e just bke her elbow, undergoing physical therapy fiv times a day. that's taking some time, giv her a little slack. >> bonnie: but in theina brown article she was desibed as a policy wonk o doesn't reallyant to be doing the frt line stuff. she' more comfoable with no makeup on and jns o her airpne reading policy papers than she iseing out front. shouldn'the have expected this knowing the administration she was going into? it'so secret, as i lik to put it, he's a rock star a a solo artist. he's not a team player. >> first offe need hillar clinton's leadership now on an inteational basis in terms of where our countrytands. we need her to b out tre. i mean we can argue her politics but she'srilliant at what she does, she's the bestnd she needs be there. i have to agree with tara on one point though. and thiis rare. i think in hillary's poll numbers have gone up and up and iad lunch with girriends three mohs ago. you nigh th event she was -- knew that eventually she was going to take too m

so, ihink his policies aren' woing, and i don't know that they he their eye on the ball.s to f the economy. thus far, they have not goen a od grade. >> karen, you want to respond to that? i mean, you know the republican argument, o, made byhe hou minority whip, ericcantor, that this admistration promised jobs immediately. true? >> yeah. ll, here's -- omisedhat we would th create andave obs. but i in we have to ke a st back and look at the full economic picture that we had when president obama came in ofce. the economy ino loner in free first of a fall and there was a three-pt process. first, stilize the banks. we've done that. second, deal wit t housing market and the houng cris. we've started to dothat. then it's let's look at the onomy, pass the stimulus package, a packat some criticize not being enough, some said too much but probably just about right. we're seeing the rate of jobs lost is slowing. e of the reass obviousl we have to talk about reforming our health care systems we know it's krip blg american businesses so on't deal with that problem it's going to contin

>> i think the ds purely o at basis ihink was correct. c. i. t. does not present a systemic risk to t financial system. you're going to have some hurting retailersand one should reay question whether this was the time in the ecomic cycle to make this stand, if you wil, on the o bi to fail and systemic rk doctnes, because you wil ve economic pacts that will be negative. >> susie: thk you for coming on the programnd sharing your tughts with us,we apeciate it. >> tha you. susie: my guest tonht, moshe onbuch, bank analyst at credisuisse. >> paul:avish executive pay packages left investors happy as the financial crisis unfoed. now the obama administtion wants to beef up sharehold input. the treasury sent congress legiation today that would let sharehders vote on executive pay. the votes uldn't be binding and they wouldn't pua dollar limits osalaries. t, the new rules would give compensation comttees more independence avoidg conflicts of intert with management. >> susie: google says it second-quarter earngs jumped 19% despite slowing ad ses. excluding i

and ihink she can paycheck a convinng argument on that case. >> eugene robinson. as the committ continues on their lunch brk, we'll be back afte very brief mesges with bruce fine, richard wolff ris sloan, senat itehouse from rhode island stay with us as we coinue with "andrea mitchell reports," our special coverage othe con fir nation hearing of sonia sotomayor only on msnb in thesese martsts i'm glad i rned to fidelity for an annuity with h araraned income for lifife. that's's rhtht, guaranteed i iomome r life. my annuity frorom filili means my r retememenincome is safe. itit'suauaraeed, no matatr r wh happens. if guaranteed d inco f f life sounundsooood you, do what t i d d -- let fidelitytye e yo guide. call fidelity atat... for details about guaranteed income e folilife people notice devotion to family pele notice my love f for animama. my smile. myassion for teaching. my cool car. people notice i'm a good ieie and a good listener.. people notice thatat i'm a good boss. opleotice my love of natuture. people notice i n fix anything. (announcer) thankso miracle-

constitution and th peoplere innocent until pron guilty and ihink that the family and the organizersfy recognize what'seen in the tabloids ove the lasmany years, and th know the questis that have been raised, anthey brought it up in a very small, brief, sule way, and they med on. th didn't ignoreit, but they really made this a tribute to his life we're watching as the motorcade has left the staples center now, we are told it is, in fact, headed to the family home in encino. geor lewis is sding by there. george, what's the scene? >> wel chris, a bit of a crowd has gun to gther here in antipation that e fily will return here to the jackson family compound. they left here shortly bere 8: this morning onheir way to frest lawn for the private memorial service before the public service at the staples ceer, and the question is, i guess, is the ente family coming back here to the home or are some of them going to peel off and go to the berly wilshire hot in beverly hills for e recepti that is planned there for about800 people we're not sure of th. we're not sreat everodis coming back here, bu

>> ihink that they're both important to have good relations with botheaders of russia. that gs without ying. presidentutin or former president putin, now prime minister, is consired by many still behe majortring puller, if i could put itthat way in russia. t i's also important to focus on some of the substantiative sues that the president is dealg with. so far today, we've hadigh or nineaj announments of various activities goinon, incoming a new commission to ersee u.s./russian leaders, which lead the strategic nuclear talks, whi have now moved ead toward a go. very importantn noroliferation and missile defense and other things. pure, personal relatiohips alone don't count foruch if you don't have the sstantive backup to follow along. >> in addition to the substae of this ummit, there ems be a lot of symbolism. i was really struck by the ct that the president has michee obama with him and the children. ey came offthe plane. e was at his side when they did the wreath laying at the to of the unknown soldier there, which is such a important ment because of the world r ii m

ihink the tur around is, you know. >> charlie: i realize nobody likes to be to be pinned down. you have expectaon on the part of the admintration on a certain owth level. is that changing? th comes out of wall street a different sort of the pjection gdp. >> ihink the sort of conconveniences -- >> charlie: what's the for cast -- >> for nextear, no. for 2010, they're stillalking aboutheopeful forecasts e 1% or 1.2. the pessimiic forecasts are 7/10ths of a point. it will be a while. >> chaie: i've had peop come to this program and they exessed two ideas. paul kruggen. we need another stimus don't we. >>ign me up. everybody touched by noble laurte. he was agreat econost of the great depression. he formulated mise theory based on dression and saidconomic theory tells you there can't be unemployment. nouch thinas involuntary unemployment. he developed a theoryhat explained . >> chlie: that was to inve or stimulate the econo in order to deal with it. >> under certain conditio, such we're inow, such as we were in in the 1930's. monetary polic alone, lowing inrest rates, raising money s

for me ihink of myself as humble eineer. who has -- finanal enginr. i'm awar of a technology of risk magement. i'm so aware of a technology of social sciences. psychogy, sociology,e mentioned neurosciee. i am trying to think like an gineer to put these things together to make something that works. i think it's not just me, i think thi is the new paradigm. >>harlie: the new paradigm is... >> t quote thaler and others they have book called "nud" and in that bo they talk abt choice arctecture. but the ea is to design financial and econom contracts arnd people. knowing the way they behave. and dging them in airection that works. that managesheir risks and manages their -- tha becomes part of a funconing economy. i mentio sunsteinow part of thebama administrion, i take it as very inspiring that i see peopleike this involved at the highest level of our government. i think that this is new. this is like the n dl. we are thinking at aetter level, a more enlightened vel out how to ange our economic policies. i think it's a process, we haven't hed the end of th

. >> ihink most needs will be met. i think thermay be a transiti period. there may be a periothe counities banks will need to get up to speed with theinds of lending-- that very specialized lending at they do i ink we can do that. >> reporter:all street doesn't seem too worried abouthe impact of a c.i.t. banuptcy on the financial markets. in fact, n.y. economics professor larry whitsays this is the way capitalism is supposed to funcon. >>t's clear that c.i.t. made serious errs in their investment decisions and somebody br the consequenc. do not think they are so important for the financl ctor economy that the neral taxpayer ought tbe bearing the consequences. >> reporte but it won't just be.i.t.'s creditors and clnts who suffer from the company's coapse. c.i. is a major corporate suorter of the arts ranking in e top 10 in new york city. erika miller, "nightly busess report," nework. >> paul:all street got off to a sl start but ended with a late day rally. not much change in the ely going as t broader market shrugged offhe looming failure of c.i. group and

ihink is very signicant that en during a diffilt time of recession, people want to loo forward. lo cbon jobs will be a huge part of the future. we will give great deal more certainty tohe world about whate intendto do. >> concret agrments only achied here because president obama, unlike george w.ush, is no longer dragging feet on climate change. the next challenge is to go beyond the g8 and other major nations on brd. the g8 summit in central ital bbc news. >> and as she mentned, president jintao left th summit early to return to china, where the government says western province of njiang is under control. >> thousands of paramilitar troops arred. there was nothing subtle about thr deployment. th won the locals tknow they have a ri to and that china is ck in control -- they nted the cals to know that they ve arrived. >> people he do not even dare to ep o of their homes. what we c do now is to be on our guard, and even if i wanto go out and doome exercise, i feel scared. >>china's president hu jintao arise back ibeijing. -- arrived in being, saying it was a series that he left th

ihink early detecti is the st important thing we c talk about.oer always when hear about a vy quick death if there had been at earlie formation that this person had abouthemselves if it would've made a dierence. in my ce, it was very important. tavis: y have friends, certainly people in your circ, who had aess to yo who wa you again going public about your breast cancer because it might harm your ceer? >> yes, i did. at lot people. the names i cann tell you, but some of th arewalking around as timeombs themselves. they realize they have cancer, but what their decion was, particully the women who said this me, is that the industry has a very high stdard of ma believe connect to women -coected to women. is important you doot have the stigma of anythg that i not healthy or maybe it nattractive. i tught about that for ahile and iaid that isnot going to work for me. i was fortunate enough to have people around me to a forced m to come to my own conclusn, whh was to share it. tav: you sa down in at chairnd met jessica for the first te and you said how

>> ihink thisally is for al but it wasn't en tested yet. it hasn'teen tested by continued high unemployment which we're ing to have. it hasn't been tesd by a nancial problem that maybe don't have a as successful a solution maybe sothing that comes out of the european bankingystem where there are many pblems. >>uzanne: i kw you're a glob strategist. which economi are lily to come out ofecession first and what are thenvestment implications of that story. . >> i think it's verylear that number one out is noasia asia. japan is kind of sluggish he. the rest of asia l by china is alreadyoming out. china had 8% o 7.9% g.d. growth reported just a few days ago. thehinese government says they're ing to keep up the veryeavy stimulus spending that they've been ing. then i thinke'rectually seco behind non-japan asia because we areoing ever so much to promote growth here. europe, i thk, and japan i think, lag behin they're doing less. and they're much slower to correc t problem of rising labor costs. that is painful herehen we make the cuts, but it posit

and ihink earnings expectations are just t optimistic and the euphoria about ban stocks comes about simply because the tasury and the federal reserve have designed to set of ste to prop up the bking system. it's an artificia prop, we're ill not fully healthy yet and investors will sell them offn the otr side. >> speakf those bank stocks there is a lot of eageess this week about nks reporting eir earnings, today a prominent alyst upgraded golan sachs ock so a l of people are thinkg that the coast is cle for the financials. what are you saying on that? >>ell, our upgrade w on a short-rm basis because, indeed, en the federal reserv uses qntitative easing to get 0% wereate, when the treasur, fdicnd feral reserve provide bas guarantees for losses. en they change the accounting rules so ey don't ve to take loes on mark to market,ou can create any earnis power you want. but for long-term call that the banks are going to have much les leverage thanthey had before. they are going to be more highly rulated than they were bore. when tre raitt --nterest rate goes to their natal level, they run natura

>> it wll but ihink what mo seriou it will show to getin the parliament, a conservative lock to rk th ahmadejad is going to be difficult. beuse these conservatives, ragmatic consertives, will not go along with ahdinejad's decision, his choice of minters. it's going to cause fragmeation in the politial elite. >> so far as thesebuses that allegedly he been cnducted by the governmenn these isoners, why would conservaves who obviously favor the crackdown be bothed thenby the tactics? >>well, you have to rember, o of the candidates running against ahmadinejad was a conservave. and it's a relative of oneof his advisers that was killed the other day. and he'd been demons against the rging of their elction. so you obviously had denstrati demonstratn, people who support the conservives. of crse the majorityeople in the demonstrations wer the eformers. which ere must have been conservatives theretoo. >> and wh do you make of th aouncement that 20 of these detainees are now goingto be putn trial? >> well, this is an old tact of the regime, which is that you get people to come t television to con

so ihink the fancial institution, especially the big instment houses tha may see a recurrence in mergers and acisition, inial public ferings and have no me competition from lehmann brothers and bear sterns and wachovia. theyill do very, very wl. i think the other sector that mighbenefit as w eventuay come out othis recessionill technology because technology cabe very nimble. it's about efficiencie it not expensive the way f a company is it might be to bu new plants and equipmes to try to have financing and the technology companieshemselves don'have to go to a nk and borrow ithe same way, let's say, a utilit has to. >> paul: so the ch stocks not cash intensive in other words. >> absolutely. so that's a nice aa to go for. and i ally think it important to be careful of the energy sector, energy serves, and even health care, whera lot of myxpert friends are saying-- , "oh, that is where youeeto be." >> pl: very good. hilary tnks for joining us again. >> paul, thank you so much. >> paul: my guest hilarykramer of gentech research. >> suzan: tomorrow, the doctor is out on a use call. we profile

. >> ihink the more interesting quarteis down the line in the urth quarter when the expectations arechar- offs will continue to ri but at a single digit pace. and if that doesn't occuthen the whole question of pital levels will likely ce to the fore-front again. >> reporter: also the mix this quarter, a one-me charge againsmany banks. imposed to shore up e insurance syst that covers all nks. scott gurv, "nightly business report", new york. >> paul: mday, strategist joe battipaglia gives us his forecast for stocks,ow that economicreen shoots appear to be drying up. susie: continental airlines is flying high in e "star alliancegroup. the transportation deptment today appred the move, which gis continental, united, us air and other carrie some immunity fm anti-trust law. that's critical,ecause the allian shares pricing, schedulingand other information among the rlines in the gro. oppones argued the decision uld stifle competition, and harm consumers withigher fares. >> pl: walgreen's is now 50, for 50. the drug storehain will open itfirst store in alaska this weekend giving it presence

obama anhis earlier trips, just the force of his personality, his charisma, his abilitto use wods ihink really created excitement overseas. russians are in a more orderly and resentf mood it and it ll take more than his charm they are in a me orne and sentful mood and it will take more than his charm to brk through it. we have to lten to their prblems. tavis:ell me what th process ought to be. tt assumes thatt can be done. let's say pgress can be made. >> i think it can be done. we g into the habit in the 1990's when russia was so wek after the fallf communism of thinking we real did not have to take their vews seriously. we did not. we just iored them. they said we're not happy about nato expansion. we said, so what? ey said we are nt happy about georgia and georgia's provocations, as they see them. we said basically, so what. we do not have that luxury anymore. if wnt russia as partner on issues like in and north korea, ther is no way toake progress witut having to listen to them. weave to takehen they say this is an important security concern for us, we he to listen d respond. tavis:

dd ihink onon panetta he himselelf pretty well by releasing this and tting this out.t.so we do need to know who o di what and when n an i i tnkhehe questionon i was it t theiia fault? or was it the people in the e white house who dederethe cia not to release the information? a a right. shshelalaims that thehe media's bugging g he a all the time a nt fair to her, but this picture on the front cover of time magazize looks pretty irir. she'scacaed the renegade,, iis sarah palin. she was so bothered by the media, she hadadtiti to pose fo ththatover story. john harwowoodi i dot know whatt you think, i nt to know whwh you thihink,, but it seems to m she's vivi this attentioion right now. and itt certainly i istt hurtin the republicanan >> she's absbsolelel loving it and going toove it to t the bank. if y youeearah palin,n, it is ain she cares a lot less about what she was hirededby the votes to do in alaskaka than she i is ababou taking her mily off the spotlight, and i i tnk it's fairly safe asumption thaha shshe'gogog to enjoyaking a lot more money in the pivivat sector tha

. >> again, ihink thehole notion oaffirmative acon has taken a bk seat because ofll the connotatis aboutfirmative action, i am glad to see it's back in the licon of the amecan workplace. but i do think we he to econcile as karen has said the issue of diversity. when you use rac as a consideration, are you depriving opportunits of others, and how do y make the two peacelly coexist. in the case inhich was decided, it really changed the standards, ofhair of eeoc, i had power astandard, which said if o group is disadvantaged by a standard, tn it's the burden of the employe t demonstte that tt burden is j related. what is job relat, believe me, back in the old ds you had wet nurses that were considered job relad qualifications. sperm donors, surrogate mhers, things that have to be gender specific, the griggs casead to do wh wheer the this a high school diploma. we looke to see whether 80% of a particular groupassed the test and whether less than 80% of another group didn't passhe test test. d if they didn't there w a presumption of timeeven. >> what you learn from th case is two things. numbe

>> ihink so. that doesn't mean giving away anything. anit's not a gesture of respt or anything else or ilding them up it's jus common nse that y talk to people with whom u have proble to try to dea with the problems rher than have the... your onl option some kind of force. >> rose: let me move to asia and china. what'sour sense ofhat china wants to do internationally beyond economics? >> that's a cplicated qution. i thinkf you go clear bk in the story of china, that is of communist china, the chinese started out i 1949 as kind of a hermit kingdom. and they believed awe tarky, we don't believe in anybody, we don' have pticular relations with anybody we'll justeal with ourselves. that was a case evenwith respect thsoviet uni until president nin went there an opened up, if you will with chin but it was openi up onlyn a very narrow sens that is,ealt only with the concn of the two parties abou the soviet attempting a hegeny in into th asian hemisphere. now, sensehen, the chinese have ened up gradually here and there. an most noticeab, for ex

>>>> ihink h he does resign now. l lood like he haaa a pa than -- ss thanks to a fellow republican governor r saoror bu ere are now too many things ing on. ththpapares giving emem the $96,00000, first of all, it mam him lookhildish like he's being looked after b byis parents. eyeye going to haveax problem because e yoan't ge awaymomoy as a agift when y yore getting something ininreturn, which is the silencece. d the deetass of t family are just too m muc too susurve. >> t the evolution of t the sto too, i i igigi is kind of faal at this int, is itnot? has it nt become as disturbingng as the story itself?? it startedith a ltltle infidelity andnd apparentlyly q apology and thehe next thing w haveveaiaile interventions, another senator r vovolv, a tholic and christian g gro a and the m misess and husbabandiid anand isort of asasi-dnapping and theededex letterer a and then ththe inin n the date theeeext day ananywy. >> hey, t the muppetsts, the " e street" is going twawant royalties s omom y for your puppet tatat. l lood

i went o -- i created a march, ihink, in early 1960' before itas even official, e war in vietnam.-were already out again itefore it was official. >> we had advisors over there. and i thoht well, wehould get in this. i di look like a goofy hippie. i was in carel not plac ere you had a lotf marches. and some frien and iade some signs. from then o -- actually i w dubbed a communisthen i did my own demonstraon in high school because they were gng to haven air raid drill. and when the air raid dll happened, we were all suppod to go home andget in our sell lars. it was absolutely ridulous. i wentome and talked toy ther, was a fist st about how long it would -- physicist about how longt wou take a bo to palo ao. some kids were hing bomb parties. i stayed in school. and it wasascinating. theyidn't know what do with me. i talked to the priipal. explained why. ialked with the vice principal. i talked with the sretaries about what i was dng and w. the next day it wa in the paper, and the day aerhat, it was ira parents about thi comeie who was a danger to thr children in coom. and fromarly on

. >> ihink some of the debate that's out there abo what letter is apopriate may circle ound what we're talking abou i thk industrial production is gointo have a v-type bottom. i think corporate profits e going to turn around shaly and g.d.p. will pick up. jo will lag-- they usually do in an economic recery. if you measure by jo, it will a long drawn-out process. >> reporter: so,l", "u", "w" or "v"-- sometimes, forecaing the onomy is like playing scrabble. scott gurvey"nightly business report," new york. how did that " get in here? >> paul: profit-takers tk command on wall reet at the outset in the wake of yesterday's big rally. the techaden nasdaq was rdest hit due to disappointi results from microso and amazon.com thursday. 30 minutes into tradg, the dow posted a 61-pot deficit and the nasdaqas off 36 points. whilmany better-than-expected earnings from blue chipselped that sector turn positive is afternoon, theest the techs cod do was trim their losses, so thearket closed mixed. the dow industrial averagended with a gain 23.95 at 9,093.24. this week it fell onlynce for a net vance of

. >> ihink this is jumping the gun. i think it's n only jumping the gun, but it's probably something at's unnecessary. and if we think backo those thlling days when they put that big stimuluprogram togeth, let's remember how much they haled. t's remember all the junk th got it. and let's k ourselves, why do we think it would be a dierent this time? >> reporter: he points out tt so far, only 10% othe $787 billion stimulus package pasd in februy has hit the economy. what's more... brusca thinks the econy is not nearly as weak as most peopl believ >> i reallthink we're close to thend of recession. i thinwe are going to cap the rise in e unemployment by the end the year. i think we're gog to have job growth occurring beforthe end of the year. >> reporter: but oer economis-- like john albertine-- have a vastl different vi of the economy. >> think we are in a precarious sittion. i ink the economy is, in fact, is not onlnot getting better, but i thinit is deteriorating. we are not seeinthe banking sectorending. we are not seei

. >> ihink the furlough has alys been around. it'sust been known as the layofff blue collar workers, whent's white collar worke, then it tends be known as the rlough more directly. >> reporter: but because t government calculates ges on an hourly basi a furloughed worker is unlily to show up as receiving a wage c, even though hisr her annual compensati has clearly been trmed. ko says that means the impact of furloughs on coensation is being under-reported. i think it does not sw up inany of the wage calculations that we have >> reporte and the caulations we do have are already dropng. kobe compiles thb.n.a. wage end index which is signaling smaller wage hikes ithe next six months. in fact,maller than anything tracked by government compensationtatistics in more than 30 year >> i think it is posble it could a ways below 2%. so i think we haven't seen tt sort of slow down inages in a lo time. >> reporter: and the are signs employers intend to ep a lock on wes for somtime. tson wyatt found one in five employers sueyed plan to keep sa

>> ihink the right strategyeres to ideify these companies th that financial strength that i talked about. because the market clearly isuch more attrtive now at these lels than it was at the highs a year and a half ago. but you want to enterthose investments ov time because the market wl be bumpy inhe meantime. sotrong balance sheets, ability to pay the dividend dung recessions. and staying away from governnt involvement in their business is the right forma for building out yo portfolio. and i'm not going to discriminate between big ocks or small stocks or onsector or another cause this bear market that we are working through has leveled all these sects. and so you are given an opportunity to rebuild a portfoli into strength as opposed to weakness. >> you can give us any glimmeof when you see that the stock maet will pick for rl, that itill be a realally? >> well, we ve an estimat for earnings this year on the s&p 500, 50 to 55 dollars, nt year 6to 65 dollars in rough terms, thative fws the market a range between 750 and a thousand in rough terms. so we came close to the upper-end of that

>> yeah, ihink so. i meantrategy is o things. first, you need the things, really. you ed a strategy, you need leadership and youeed resources. and you think that afghantan has suffed for all thr of those ings over thepast few years. first f, the war in iq enormously distractedot just ouattention but really our resources away from the war in afghanistan. ghanistan was by public admissionan economy of force mission. w, that's fine long as the enemy don't get a te. but the enemy hasbeen able to ta advantage ofur neglec of afghistan over the past five, six years. and they've used that to wage... we talk about this fighting season in afghanistan but that's a misnomer. e taliban is also conducting..i mean, they don't have a fiting season. they may have a sean where they shoot a us more often than other asons, but during the winter when there not shoing ats, they're me often than not puuing a silent war, a campaign ofear and intimidation in vulnerable communitie in afghanistan. we've done a terrible job protecting those communities. so we hav't had the resources to do it,

ihink she got hounded and that's a sad t tng for eryone, esespeciallyor people like bill krist krkristol. >> msnbc's richard wolffe reporting outli the w wte house departmentnt of thlaw. many t thanks asalways.s. >>> three weeks afafr a mamum of 40 pepeople ghered outstside the ed sulvan theater calli fordave lettermrman to be fired inrotest of a jok hehe tol ababout pa pane's eder daughterer, a joke somall it caused h him to flee in a new yk city cab for fear o of b bng photraphed in an incredle resusu of oging, we know letttterman' tenure on"late nigh will long outlive palinin's tenure as governor. lettererman rerning from a long ekend just as palalin was heading into permanentnt vacati. >> there a surprising annoue the over the weekend that the governor alaska, sarah h palin leaving g the offi. she's ststping dn, governor -- [ applause ] sothing i said? >> papalin's attorney, thos van kline, ansring in the affirmatate, telng cnn that letterman's jojos contributed to the governor's dedecision to st down. quot when people don't accept normal b bounds decency making jos like that about c

out so, ihink. >> now, immediatel >> rose: where is russia in its own sort of evolution an history and moment >> standing between eastand st with a ferocious struggle undeway within its political class abt which way it should and could go and in part that whathis summit is about,for the shes. >> so talk to me about the dision. is. >> the division is the russian litical class belves generally-- d i use the words that ofboth medvev and putin-that it has been repeatedly betraye and deceived by the united states sce the end of t soviet union. that leads a large sment of the russian political class dede that russiasnwanted the west. the west will never meet russia's nationalnterest or accommodate ruia, and that russiahas eagertrategic partners ithe east. the east means everywhere from iran tohina, possiy india and beyond. there is sll a small butno longer stron pro-western/pro-american facon in the politic ldership that hopes that won't happen. but in judgment, it all dependn whether or not a real reset comes abo. and i've sn nothingthat's happen so farn mosco this first day that suggests o

so ihink i oors - sort of- >> talk -- taed yourself ou of it in >> you'v definitely talkedme out of itavis: what's amazing o me, chris, is i think that becaus of resident way technology workstoday and because everody has a stry to tll and we eep seeing more stories told through the footage of everyd, ordinary people, i'm not sue thatthe documentary catego as we know it sn't going to blow up and expand in this country. >> beuse of reality television people thi they're on t peoplere now proposin to each other and reaking up publicly. you hear every argument in every resaurant 10 imes uder than it used to p. >> michae we're not arguing. >> n no, weve resolved hat. no, i think reality levision is onef those great objectio i morons -- oxymorons >> everybody he story to tll but not all stories ae worth watching. >>t's true. tavi it's easy to see that you guys ha been friends for so long. do you did, you finish each othes sentences and - >> we're all fairlypolite. t we get het up. >> oh, yu get het up. yoget a fire nder your belly. >> igot halfway up this morning. >it's interesting to me beca

ihink that we have stepd back fr the abyss. i think w putouthe fire. the analogy use sometimes is at we havehis beautil house and there was a fe. we came innd we had to hose it down. the fire is know out but what we've disvered is we need se new pointing, the roof's looking, the boiler's out, oh and by the w, 're way behind on our mortgage. and so you've go to make a series decisio aut witthe limited resources that you got okay,e have to p the mortgage down a little b, at's the equalent of our fcal probms with our debt. bute have to makeure the roof doesn' collapse. we've got to do som tuft pointing, all that stu will te time. so we're not o of the woo yet. and nobody's moremindful than i am of the ifficult -- difficult time that people are feeling right now. and all ican tell them is that the sts we are takin are degned to imrove the job prospts a the economicrospects of ode families, that's my whole orientatn, everything that we're dng right now is designed notonly to get throh this medica crisis buto set the stage for long-term economic groh in the

we needed the smulus pkage and welso need to keep them the moon eloration goings wel ihink we n find a y to do both. simply becaus e present of the united stas has not said he is going to do something with the moon walk -- moon's face exploration isot necessarily saying all along and amera will end the way we know and love it. >> are we going to get to mars? >>ook, evebody remembers where they were when kennedyas shot and when landed on t moon and would mu better remember the landing on th moon. i havebeen at one blaoff, and it w inedibly impressive. >> you witneed one. [laughter] >> were youthere? >> i was incredibly -- >> a couple of this show. it wasincredibly exciting and impressive but ieally can't figure out why we ould do it. >> washe great national moment. and i think the desire to recapture that, that sense of national purpose a missi, tting high standards and doi that is something all amecans are in for. >> thank you. last word. see you xt week. for a transcript, log onto insidewaington.tv. jim stavrakis is a proud veteran my j was aerial photography, d i'd go up on combat