he is an independent. xdcaller: going back to whatç u first showed -- moody's bond rating, ifç youelieve in that why you put that in the situation you are in? so, the democrats and republicans -- having solid footing. people have to believe in those things. how are they going to get the american public to even think they can go by a performance rating to put their ira's a 41 k in. as far as what the president said yesterday about discretionary spending, there are some many ways they can straighten it out but they cannot even come up with a health care bill to get it straight -- they are not working for the american people. host: san antonio, texas, john on the republican line. caller: how are you doing today? host: very well, thanks for your

moody's said they may downgrade debt. it gots a little wonky.ngrade it, it means we'll pay more to have china finance our borrowing. they hald $1 trillion. >> neil: if it happens. if it happens. >> if it happens. say it doesn't happen and interest rates stay low, in 2009 we paid $283 billion just on interest to the debt we owe the world. this year is expected to be in excess of $500 billion. if we keep going the way we're going and down get downgraded and keep spending, it's like whatever. >> neil: people forget that. doesn't nothing doesn't mean the costs get cheaper. >> with the token freeze talking about the $17 or $20 billion freeze on spending, the non-defense discretionary spending is a drop in the bucket. >> neil: even if you curb the deficit a little bit year in and year out, whatever spending is piling on the debt. >> the clock keeps ticking. the debt clock you put upkeeps going but at a lower rate if you cut back. we still keep on adding to the debt. estimate is $21 trillion ten years down. it becomes more and more expensive. >> neil:

moody's came out saying that the u.s. budget is all well and good but the deficit is huge and the united states could even lose its aaa credit rating. now, it's unlikely to happen, but how significant is it that they're coming out and saying that? >> well, i think it's stating the obvious to the other people. the emperor has got no clothes on that front. sovereign debt has been rising. morgan mckinley came out with data earlier last week and had that total debt across the u.s. economy now measured at 300% of gdp. by the way, the same number in the united kingdom, 400% of gdp. that's public debt as well as private sector debt. all of that has to get repaid sooner or later. by the way, within all of those numbers, bank leverage is pretty much back to average. so guess where the burden is going to fall? it's going to fall on the public sector, both in the united states and the united kingdom. it's going to fall in the household sector in those two territories, as well. so no surprise that those downgrades across the united s

moody's warned u.s. operating. -- rating. made it to the front page of "the washington times" this morning. in their lead, they put it this way. inside open "the financial times" is a story by japan thatç gillette is put on the table. grim outlook for japanese bonds. they had a lost decade there. in the news analysis, here is what they say in the paper. we put some issues on the table. let's get to your comments. political parties and the deficit. the first call is from virginia, keep on the democrats' line. ç-- keith. your comments, please. caller: i would like to say the democrats will gain trust and already have. the fact the republicans co- sponsors decided to reject the previous bill shows an unwillingness that they really care to reduce the debt. i would just like to say that the midterms will look pretty good for the democrats because the people will know they are here to serve the american people and reduce the deficit. host: thanks for your call. texarkana, texas, joe is next. he is an independent. xdcaller: going b

now a look at traffic. >>> punchy and moody, i'm glad i'm in a separate studio. >> come on over. weaving here. >> yeah, it will be fun. >> we're hungered down. we've got the fridge going the only thing missing is an easy backache. inbound pennsylvania avenue, blocking the right lane at branch avenue. rolling down to hill, that's where we got the stalled car. eye net southeast. florida avenue, north of new york avenue, an incident. follow police direction. and dry pavement right now. looking good south on 270. local explains the main lain towards the split. that's a check of traffic. >>> he i the chairman of the prince william board of county supervisors and he joins us to talk about the index in school's funding in prince william county. mr.stewart, good morning. >> good morning. >>> let's talk about snow first. that's top story. and i'm sure the people in your area are concerned about it as well. what are the preparations in prince william county? >> i'm looking forward to it. as an old minnesota boy, i enjoy a good snowstorm. and the kids are old enough to shovel. but yeah, we'

. >> i first want to ask you about the moody's downgrade which came out this week because they emphasized a couple of pointis that think are on the minds of investors overall. first of all, they cite lower margins because of rising scrap prices. also, they say that you could use some of your $2.2 billion in cash and short-term investments to fund your operations this year. what can you tell us about these two things in terms of margins and the use of your cash? >> well, with respect to margins, there's no doubt that rising raw material prices have been an issue, but we've been raising our steel prices. there's always a time lag in between the two, and it uppicly, historically as raw material prices rise, so does the demand for steel and so does finished steel pricing. so we're at the beginning stages of this. we're in a rough economy. it's not a pretty picture out there, but we do have some segments that are doing better than others. the stuff -- the steel is going into automotive appliances, energy fields, and that is picking up and we're looking at sheet and plate doing pretty good, but

the latest warning came this week from moody's reacting to the president's budget.oody issued a report saying, quote, unless further measures are taken to reduce the budget deficit further or the economy rebounds more vigorously, the federal financial picture presented in president obama's february 1 budget will put pressure on a.a.a. government bond ratings. this comes on the heal of the news from spain, dubai and greece seeing their credit rating reduced. it will make it difficult to borrow money and lead to a situation where the dollar is no longer the primary international reserve curnssi. if that were to happen, prices including oil, would go up. the "washington post" featured a piece by alan sloan, senior editor at large who focused on a report from the congressional budget office that showed for the first time in 25 years social security has taken less in taxes than it is spending in benefits. he writes, and i quote, instead of helping to finance the rest of the government, our nation's biggest social programs need help from the treasury to keep benefit check

moody's, the big bond rating agency has issued a report saying u.s.deficits threaten the country's aaa bond rating, the president's budget plan as just a small step in the right direction. is the administration taking that assessment seriously of that whole possible downgrade in the country's bond rating? and what if anything with the president do beyond what he's already announced to try to address the situation? >> well the president did indeed moody's to tell him there's a long-term fiscal problems in the country. that's why his budget has ways to which we can cut the deficit in the mid to the long term but in this short-term take care of some of the problems that we've got in this economic crisis, putting americans back to work helping banks get more loans out to small businesses so they can create more jobs and things like that. the president is very concerned about the fiscal stance of this country and is going to work to make sure we are continuing on the deficit. >> but moody's specifically says the president's plan does not do enough at this

moody's forecasts 1.9 million homeowners will lose their homes this year. we're also told that the crisis is behind us. only problem, that's 200,000 more homes that are lost, you know, people are like gee, i wondered what happened. here is the key. then last year, in other words, it's projected to get worse. if you get away with keeping fannie and freddie off of your books so nobody sees it, wouldn't you if you were a politician? i'm just wondering how much of that infinity we're all going to wind up forking over. i panic if we didn't have the president who was telling us the truth, the straight truth every single day. >> one year later it's largely thanks to recovery act, the second depression is not going to happen. >> glenn: i'm glad to hear. that i feel so much better now. how about you? >> two arizona parks closed today. first round in a series of closures. the plan to privatize them next. p >> glenn: american state parks are in trouble like the rest of the country. in arizona alone, 13 state parks are shutting down by june. two closed just lath ni

you know, moody's says the u.s. government debt could be downgraded in future years and a whole slate of tax site proposals beginning with bank tax and multicorporate tax hikes and a failure to end tacks. all of this stuff, they will not extend the bush tax cuts. all these things are penalizing exactly the people who are most likely to invest in economic growth and recovery, and that, too, is an ongoing cause of the 700-point stock market. cisco's john chambers is very optimistic. we'll play his later. business investment is rapidly recovering. chain store sales picked up more than 3% from a year ago. those are all very positive signs. of course, jobs are still a big problem. jobless claims have been edging higher in recent weeks, and tomorrow's jobs report will not likely show much improvement in unemployment if at all. businesses large and small seem afraid to hire with various tax cost increased threats coming out of washington almost on a daily basis. so question. is there a train wreck coming in 2011 as my frie

and the problem that we have right now york you saw moody's yesterday, come out with a report where they said, the aaa rating on treasuries is called into question, unless we do something about these unsustainable deficits going into the future. you don't see that as part of the budget -- part of the president's plan. as a matter of fact, it xo compounds the problem and see in outyears 5% of gdp, numbers 5%, and basically it takes 3% to get into the eu, right? so we are in excess of the standards to get into the eu, even in the out years on the deficit. we're not tackling the problem. >> are you willing to cut medicare, then? >> what we should be looking at doing is, across the board, figuring out ways that we bring this budget into balance. and we should not have a budget ten years out without it being closer to balance or without a glide path which reduces this deficit. so the alternative budgets that the republicans are putting up, eventually leads to elimination of the deficits. and that's the dialogue we need to have with the president. he's going to be out of office, let's say, it'

now they say at moody's economy.com that a lot of that is going to be temporary. some of the business just time shifted. but not temporary for everyone. the plaza convenience store here in downtown montclair where they are open for business, but it has been very, very tough. and these days, these snow days are days that they will never get back. >> very bad. very bad. very bad. and not like -- i tell you yesterday i -- half the business. today a haven't started it. >> but others are trying to make the best of things and yet this really creates some issues that are on top of so many other issues for independent businesses. like at aunt jean's toys and treats where they are doing actually okay. they are going to try to sell some sleds to make up for the downturn in business with the snowstorm. but what they really could use is some credit. this is tough. the owner tells us that she'd like to hire some people but she needs to get a small business loan. >> my ultimate goal is to expand. right now i probably couldn't do it. i'm just hanging in here in regards to paying

i think the moody's investors folks who great credit around the world, it is the highest rating you can have, the gold standard. when you have a gold standard rating like that, people invest in you. it is a great confidence builder. if that notches down just to attract the same people you're going to have to raise interest rates. it keeps going down. your going to have to raise interest rates a lot more. this has happened in the past in countries like argentina and brazil and third-world countries who did not make a big deal of it until they defaulted on their debt and had to pay sky-high interest rates. they went belly up. i am not saying that would happen to the new states. but when a prestigious ratings firm is saying it could and very likely will if you don't change, that is a big deal. megyn: would this mean to the folks watching? >> reporter: the biggest lesson here is that if you argue with scott brown being sworn into the senate today and those voters sent a message, the tea party has sent a message, a town hall has sent a message. this isn't a right or left issues, conservative

and moody's services recognize canada's banks as the soundest. me quote -- "remarkable stability among the global trigger things to strong supervision and regulation." ths dotey part of the reason why canada took on the -cirnspfegatory rerm na h mntne a gd acve ste, msu guti. weo n cim tt o ste iserct. thla of a sgl surie relar ian oio he. ao bn lid igen th rulioorovnmt iurce tvellheerrmcef e ct ding tris owsethfftinef na'apoa. roh r20hamahi iseae ntorgth oponfimaregaty acceloll tsegd, bie t cadiystemenaloe twhishashldui tu wkn isre fit mtroteatna relaon sfieny stng, tovo t te crise eernc lt yr. ao lie tt sh tialysmshod b suec t iertial pr vi iorr tennc trspen a ruc rk t thglalcomy anhi ls wld eos ery ecomtoeeesri. inac, i ideat relaonsot areed i lie eonquencecod acal bwoeha bor th csi ifft a rewtali stutnsrebltoetn trrpoibraic th csethris,ha wod eyaveaed th wldavleneaer desn. atsharele bavr nengedn bau nationovnmtsil titeacto t coeqnces. at lieanenem, ulbe vy dgeus ecen. ppus obviouy theninci sto relaonusbe tkl a itus b aque. t son cad ao bies t

moody, the big agency issued a report that u.s. deficit threaten the triple a bond rating that the president budget plan is just a small step in the right direction. is the administration taking that assessment seriously about the possible bond rating? and what, if anything, would the president do beyond what he's already announced to address the situation? >> well, the president didn't immediate moody to tell him we had a cut. he's going to try to cut the deficit in the long and short but trying to take care of the some of the issues. putting americans back to work, helping banks hire. he's concerned about the state of the country, he's going to continue to work to make sure we're taking on the deficit. >> moody's specifically says the president plan does not have time to address the problem. is the president going to basically ignore that? >> the president doesn't disagree the plan doesn't do enough. we need a fiscal commission in place to get bipartisan support for some of the elements to bring down the deficit in the long term.

it's been pretty gray and rather moody. i'm not sure what's happening there.anyway, the temperature there, 27 degrees celsius. singapore, on the other hand, is brighter and sunnier as usual, hot and humid. let's move over to tokyo and check in on the trading day there and check in with asuka kondo. >> thanks, chloe. the nikkei 225 fell 1%. the nikkei has learned that general electric aims to enter into a japanese smart street market by manufacturing smart power meters in japan jointly with fuji electric holdings. ge and fuji will likely establish a joint venture around october to develop smart meters for japanese power utilities. meanwhile, toyota motor fell 2% after opening up 2.2% on a relief rally following president akio toyoda's u.s. congressional testimony in which he apologized for the safety problems. but the mood soon soured after it was reported that three suppliers had been raided by the fbi as part of an investigation into anti-trust violations. market players are cautious on toyota stocks while awaiting february auto sales figures as the firm's re

there is a number of independent estimates in the congressional budget office, moody's, global so they are pretty much the same range somewhere in the order of 1.2 to 2 million might be a little high. 1.8 million jobs, probably closer to a percentage point added to and-a-half 3% of gdp or. that is a big deal. is not nearly enough and we are still looking at an unemployment rate that is almost 10% in projections are we are still even two years of looking at an unemployment rate averaging 03% and are now projected to get back to normal levels of unemployment until five years out which is why i would like to see much more stimulus but it is important to put this in context that we should've seen much more class february, but it did have a big impact and a positive impact. we would be much worse shape without a. host: you would like to see another stimulus just as big or bigger maybe? >> guest: to put this into some context of the look of our lost demand why are we in the situation? we have this housing bubble. we are building houses like crazy. we had a bubble and nonresidential real esta

we hear what moody's and other credit agencies are warning to us.can harm the economy in terms of interest rates, terms of jobs coming to the standards of living. the most prudent course of action would be to commit to a credible plan as quickly as possible and to phase them in gradually as the economy is recovering enough so that it can accommodate that. .. congresses should set a target for the ratio and not exceed a. we believe that prudent target with a whole dead 60% of gdp and then they should experiences good fortune and it would be wise to lower the target of further. it is said the 60% is a matter of days met but the committee has to balance the risk of choosing a higher target against the political difficulty involved of boeing were. of higher debt gdp ratio means running higher deficits. their arithmetic is made easy if the gdp rose 5% per year then arithmetically a 60% target says 30% or if we had 80 percent deficit consistent with that would be 4% of that gdp. as the target ratio is arrays government baja draws a higher proportion of do

mark zandi, the co-founder of moodies economy.com and former mccain economic advisor said, we're headed-- headed in the right direction, the recovery has begun. i think prospects are that job growth will continue and we'll have enough job growth to bring up unemployment and good things will happen, end quote. that's a republican economist. instead of working together to fix the economy, my republican colleagues have decided to try and use this recession for political gain. they've obstructed and opposed all efforts to jumpstart the economy, they voted against the recovery act which put millions of people to work and saved millions of jobs. they would have rather fired cops and firefighters and teachers. they would have denied new emerging industries the important money to hire more people. they voted against the jobs creation bill and except for one brave vote against the health care bill that according to the c.b.o. would reduce the deficit. instead they've dusted off the tired old stand bis. corporate tax cuts and privatization of social security and medicare. unfortunately they're st

there is a number of independent estimates in the congressional budget office, moody's, global so they are pretty much the same range somewhere in the order of 1.2 to 2 million might be a little high. 1.8 million jobs, probably closer to a percentage point added to and-a-half 3% of gdp or. that is a big deal. is not nearly enough and we are still looking at an unemployment rate that is almost 10% in projections are we are still even two years of looking at an unemployment rate averaging 03% and are now projected to get back to normal levels of unemployment until five years out which is why i would like to see much more stimulus but it is important to put this in context that we should've seen much more class february, but it did have a big impact and a positive impact. we would be much worse shape without a. host: you would like to see another stimulus just as big or bigger maybe? >> guest: to put this into some context of the look of our lost demand why are we in the situation? we have this housing bubble. we are building houses like crazy. we had a bubble and nonresidential real esta

one of wall street's top stock pickers on how he is playing a very moody arc. >> and tim ryan one ofthe most powerful voices for the securities industry striking back at washington right here on "squawk on the street." the market has cut its losses in half. we're now about 22 points to the downside. we'll be right back. i drove my first car from my parent's home in the north of england to my new job at the refinery in the south. i'll never forget. it used one tank of petrol and i had to refill it twice with oil. a new car today has 95% lower emissions than in 1970. exxonmobil is working to improve cars, liners of tires, plastics which are lighter and advanced hydrogen technologies that could increase fuel efficiency by up to 80%. >>> coverage recognizing the best institutional advice in the united states and canada. this year's winner is stu desmond, institutional sales officer with r.w. baird. basically go through and look at what people recommend and who makes the most money for their clients and stu, what would you say accounted for you winning in terms of making the most money fo

the united states has a credit rating, too, as a country, and that rating could be in big trouble, moody's investor service, they keep an eye on these things and they're out with a dire warning today, they say the united states of america risks losing its aaa credit rating unless the economy starts to show more robust growth. stu afort, this is the -- stuart, this is the kind of thing you look at in history books about the falls of different empires and you have to worry, is that where we're heading if our credit is not where it used to be worth in the world? >> look, we are still at this moment the gold standard. we are looked up to. we've got a aaa rating as a country. however, we're now proposing massive decifits for years to come. we've got to borrow that money. and the world's financial people are saying hold on a minute, you want to borrow an awful lot of money. we're not sure you can afford to pay us back. therefore, we want to get more interest out of you. so this is going to cost taxpayers a lot of money. essentially this is a hit to our financial reputation, it's going to doss us

we hear what moody's and other credit agencies are warning.xcessive debt can harm the economy in terms of interest rates, jobs, standard of living. the most prudent course of action would be to commit to a credible plan as quickly as possible, and to phase in gradually as the economy recovers to accommodate it. if we do not get our fiscal house in order, ultimately we will face a fiscal crisis -- a steady deterioration of our standard of living or an abrupt crisis brought on by an external action. nobody wants to see that happen. i think the committee for holding this hearing. ." >> welcome. we appreciate all the effort you have extended a helping us understand the alternatives to going forward. >> i think the committee for the opportunity to testify. it was organized by the national research council and the national academy of public administration, and i co-chaired the report with john palmer at syracuse university. i share admiration for the work of this committee and it is -- it is a privilege to be here. like a number of other reports, th

the united states and does so from a consumer perspective, now my ratings are a lot tougher than moody'sse of the leaders of woman in a bathroom bunny slippers who subscribes to value line who came to her office want to want to know where to put $7 million of her money that was sitting in a credit union. so when i give her an a or an effort, for a given that i've got to be sure that she's going to be okay, even if she is above the insured limit. i think the fed has created a terrible problem here. because i'm the one hand they have to regulate this entity as though it were in fact a bank holding company. but indeed is a monoline that has two-thirds of its liabilities and non-core funny. funding that could walk out the door to more because allied has put in place those terms. the customers can leave without penalty. so i think going forward the panel should really focus on what businesses this company and, what business is it going to be in prospectively, and how stable is that business? and i would be happy to answer questions. >> thank you, mr. whalen. mr. ward? >> thank you. i apprecia

our team is back, though, mark zandi of moody's economy, and former fed governor, larry meyer and bobf economist of itg, and steve santelli and steve liesman. talking about the crosswinds that will be flying across this number, the seasonality of january, the census workers that are going to start to get hired. some of the retail action that happens during the holidays. cnbc's hampton pearson joins us now from the labor department with the numbers for january. hampton? >> reporter: minus 29,000. the nonfarm labor fell by 20,000. the unemployment is 9.7%, average hourly earnings increased 2.0%. construction, minus 75,000, transportation, minus 19,000. job gains, temporary help, 52,000 up. retail trade up 44,000. november and december revisions, a net 5,000 additional jobs lost. the number of unemployed persons, 14.8 million, those out of work six months or longer increased now stands at 6.3 million. discouraged, over 1 million up from 734,000. we also had significant annual revisions from the bls in both the employment survey and the household survey. the real headline here? annual ben

mark zandi, the co-founder of moodies economy.com and former mccain economic advisor said, we're headed- headed in the right direction, the recovery has begun. i think prospects are that job growth will continue and we'll have enough job growth to bring up unemployment and good things will happen, end quote. that's a republican economist. instead of working together to fix the economy, my republican colleagues have decided to try and use this recession for political gain. they've obstructed and opposed all efforts to jumpstart the economy, they voted against the recovery act which put millions of people to work and saved millions of jobs. they would have rather fired cops and firefighters and teachers. they would have denied new emerging industries the important money to hire more people. they voted against the jobs creation bill and except for one brave vote against the health care bill that according to the c.b.o. would reduce the deficit. instead they've dusted off the tired old stand bis. corporate tax cuts and privatization of social security and medicare. unfortunately they're stu

>> moody's. >> and they can just determine whatever they want?rs. they don't care whether they like america, hate america, they don't care about obama. they care about the numbers. how much are we proposing to borrow from the rest of the world and from our own people? $1.6 trillion, too much. they're worried we can't repay it on time. and so down goes your reputation. this is all about -- not about dollars and cents of how much it's going to cost us. this is about our financial reputation. we're the gold standard and we might lose it. >> how does it affect the dollar? you said dollars and cents. does this have anything to do? >> yes, it does affect the dollar. it does. i mean, the dollar may go down in value because we're trying to borrow so much and we're pumping out a lot of dollars into the world. the real threat here is our reputation. our standing in the world. >> japan did this, didn't they get downgraded? >> no, not that -- no, not even close. >> california did it. >> excuse me. no. you're thinking of japan as the world's economic supermen

we hear what moody's and other credit agencies are warning.arm the economy in terms of interest rates and jobs and standard of living. the most prudent course of action would be to commit to a credible plan as quickly as possible and to phase in gradually. if we do not get our fiscal house in order, we know that we will face some sort of fiscal crisis either a steady deterioration of our standard of living or abrupt crisis. clearly, nobody wants to see that happen. i think the committee for holy this hearing. -- for holding this hearing. >> thank you for a really excellent testimony. dr. penner thank you for being here and we appreciate all the effort you have extended helping us understand the alternatives going forward. please proceed. >> thank you, mr. chairman. i would like to thank the committee for the opportunity to testify on this report. it was organized by the national research council and the national account -- academy of public opinion. i share the admiration of the work and it is a privilege to be here. like a number of other rep

jonathan moody at the american legislative exchange council and association of state legislators. and following up to the question of the sga. what would you say are the top two take-aways for the state legislators from the changes in the budget and with regards to increasing in school choice and other programs? >> so i would say that the take-aways are, you know, a clear -- a clear education that education is a priority for the president and for the administration. and a focus on rewarding success. and a focus -- looking for ways to provide additional flexibility at the state and local level with respect to how funds are used. we think that under the current fragmented structure, folks at the state and local level have dozens of programs that they have to keep track of. make sure they're in compliance with -- we have to be very focused on whether state and local actors are in compliance with federal requirements under each of the programs. so we think by streamlining, setting forth the new framework that focuses on key areas where the federal government can have the greatest leve

he is chief economist and do founder of moody's economy.com.ting services to businesses, governments and other institutions. mark's expertise includes macro, financial and regional economics. he conducts regular briefings on the economy, testify's frequently before congress and featured in the media. he received his p.h.d. at the university of pennsylvania, where he did his research with gerrard ads and lawrence klein. he received his undergraduate degree from the horton school of the university of pennsylvania. let's welcome did mark zaydi. >> thank you, governor. thanks n.g.a. for the opportunity to be here today. i am going to speak for three hours -- no. [laughter] 20 minutes sound ok? i'm going to make four points. point number one, the recession is over. recovery has begun. the best evidence of that is real g. -- g.d.p. grew at ançó analyzed -- analyzed rate of 4.9. a year ago when we were meeting, we were losing 750,000 jobs every month. those job losses have nearly abated. i think we have one more month of job loss to go in part because

recent warnings from moody's that the united states will have to begin addressing our debt in order tovoid downgrading our aaa bond rating means that we have to get serious about doing something about the latest deficit and debt projections. the president's new budget proposal estimates that the federal deficit for fiscal year 2010 will be roughly roughly $1.6 trillion, the largest in american history, and it projects that the deficits we will accumulate over the next decade will increase the u.s. national debt by $8.5 trillion. by the year 2020, our public debt will have surpassed surpassed $18 trillion and will make up an astounding 77% of gross domestic product. we all degree that this debt poses a major threat to america's future prosperity and we all agree that slashing debt should be a top national priority. how can we do it? well, there are four principal ways to reduce government debt. one, inflate the dollar. two, raise taxes. three, cut spending. and four, increase economic growth. let me briefly discuss each. first, inflation. inflation is tempting for governments looking to