two findings are very relevant for the role of the federal reserve. first, i do not know of any single clear example in which the federal reservected in advance to head off a crisis or a series of banking and financial failures. we a know of several where it failed to act in advance. congress members should ask themselves this question. can you expect the federal reserve or anyone else of systemic regulators to close fannie and freddie after congress has stated that it declined to act. what kind of conflict is that going to be posed and how is that going to be resolved? second, in it's 96-year history the federal reserve has never nounced a lender of last resort. it's discussed internally the content of such a policy several times but it rarely announced what it would do. and the announcements that it made as in 1987 were limited to the circumstces of that time. announcing and following the policy from the financial institutions to the fed's expected action it is might reduce pressures on congress to aid failing entities. following the rule in a crisi

>> the boards of directors of the reserve bank i think of the reserves banks have served a valuable function in the federal -- >> well, sir, in germany in before world war world war i they had what manyeople thought was a good government. but your voting power and control depending on how rich you were. you could argue that was aood government that made good decision. i'm not asking if it's good government. what'm asking is it consistent with what we celebrated on the fourth of july to have such governmental power in t hands of those elected on the basis of one bank one vote? >> i think congress from 1913 on has considered it consistent with it's authorities and how it wied to carry them out. >> that's before we gave you the additional power. >> while i'd be a lot more generous, we have a little bit of time that we are operating in. the gentleman from delaware, mr. castle >> thank you, mr. chairman. >> you are recognized for five minutes. >> thank you, sir. i'm concerned about conflicts. as you deal with the 13-3 bailouts, whatever you want to call them and as you deal with monetary picy and

the federal reserve is becoming a little more optimstic about the economy.. although it did not say anything about actually being in a recovery.. in fact.. "...economic activity is leveling out." "...likely to remain weak for a time..." the fomc committee said it appears that economic activity is leveling out... but it's still likely to remain weak for a time... perhaps until later this year. in the meantime the federal reserve said it will continue buying longer term government bonds until the end of october... it's the first time they've mentioned a specific ending date for that program. the fed is now in the process of buying 300 billion dollars in treasury securities... in an effort to keep overall market interest rates low... and to help improve the credit markets. that program has been under fire since it was announced... back in march - and yeilds went up anyways.. from 3 to almost 4% today. the fed also kept short term interest rates close to zero as expected and those rates will likely remain low for an extended period. later in the show we'll talk m

it seems to me that since the financial crisis erupted, the federal reserve under mr. bernanke's leadership has acted boldly, creatively, and effectively. and done really quite a heroic job in stabing off a near meltdown which we all saw and in steering us toward safety and now the prospects for recovery both on the financial side and in the macro economy. so i think he's earned the reappointment and i think the president made a wise decision and i think the majority the very -- the vast majority in the financial community agree. >> amar what, about that? would it have been a smart move to take the leader of arguably the most important institution in the world out of his job and an uncertain period for the global economy. >> let me address each of these points. he's done nothing different than what greenspan would have done. he's done nothing different from what the heads of central banks all over the world have done. they have loosened the monetary spigot and anybody would have done that. capturing the confidence of the financial community is fine but the financial co

thank you. >> lehrer: the chairman of the federal reserve had hopeful words on the u.s.conomy today. ben bernanke said the country was starting to emerge from recession, and that aggressive intervention by the government was working. jeffrey brown has our lead story report. >> reporter: the fed chairman gave his optimistic assessment at an annual federal reserve symposium held in the high mountain country of jackson hole, wyoming. >> reporter: mr. bernanke said, in part: he did temper that enthusiasm with a note of caution, saying problems persist in both the credit and job markets. but stock markets jumped on bernanke's remarks, the dow gained nearly 156 points, to 9506. the nasdaq was up 31, ending the day just under 2021. for the week the dow was up 2%; the nasdaq, 1.8%. data from the housing market provided an added boost. the national association of realtors said sales of existing homes were up for the fourth consecutive month. july sales were up 7.2 % from june, the largest monthly gain in a decade. low prices and interest rates, and generous federal tax credits co

the primary reserve was the second 2001 do it. there was no backstop or insurance program the way with bank a lot of ordinary investors threatening to pull their money out a run on these things. if we have to guarantee them the way we do banks, we have to come up with reasonable reserve requirements as we do with banks. if we want to start to classify financial institutions according to the kinds of loans they make and reserves gwen loin that basis, i'm open to that the notion these guys have no reserve requirement but the treasury backs up their deposits just like the bank, puts the banks at incredible disadvantage and grossley unfair. >> we're almost out of time. 15 seconds, why don't the money market funds set up insurance funds? they could do it voluntarily. why not? >> no need to. they manage their portfolio very short and maintain net asset value. >> i have to leave it there. you're both great. peter and tony. catch me tomorrow morning on "the call" with amanda drury. welcome to the now network. right now five coworkers are

we can't expect the federal reserve to again rescue us from ourselves. we are one that we need to fix things and it is up to us as a society to fix those things that we, the markets don't drivehe economy off the side of the iff again. thank you very much. [applause] so, there are l of people and i think mike id people should use the mic for the cameras and i think it would be fair, we should remember that questions and with it? and try to keep them short. [laughter] we mightear the speeches afterwards but let's not subject everybody. >> i was like to ask you your sense of what bernanke and the vet think about how this will unwind over theext five or ten years? because the classic response to access that its inflation, which was that they wanted or they don't want given the amount of stimulus from the fed and the unbelievable stimulus from the congress may well lead us to that at which point we have a vote caressed response to that of which point we swing back and forth and we have the baby boomers retiring and that will crush government financing to medi

but a the reserve is so remote and so primitive it has no emergency phone or car.dical facilities not even a nurse. the bolivian government has only vague laws but it believes kit no longer to afford what is happening here. we met with david kopp in la paz. he is a biologist with bolivia's ministry of the environment. how dangerous is this? to take a jaguarfor a walk, he asks, it is very dangerous. it can get you killed. >> he'll sprint at like four -- >> none of the animals can be returned to the wild so the theory here is give them as much freedom as humanly possible. >> those are huge though. >> yeah, as you can see, that's what he wants. >> the big cats get taken on walks on a leash four or five hours a day. we plan to keep our distance from rupi, but when rupi showed an interest it seemed unwise to refuse. >> just be calm. >> wow. abrasive. >> yeah, like sand paper. >> yeah, i don't think i have ever been licked by a jaguar before. >> you haven't? >> no. that's all you can have though, okay? >>overseeing it all antezana, o inti wari yassi. >> some people think

obama has re-nominated bernanke for another term as chairman of the federal reserve. we have been bold or deliberate as the circumstances demanded, but our objective remains constant - to restore a more stable financial environment in which opportunity can again flourish and which americans' hard work and creativity can achieve their proper reward. now it's up to the senate to re-confirm bernanke. he has come under some criticism for acting both too quickly...and some say too slowly during the credit crunch. he's also taken heat for not doing enough to curtail bad lending practices during the house bubble. since taking over from alan greenspan in february of 2006, the federal reserve's balance sheet as more than doubled as bernanke has tried several strategies to keep the financial system operating. we have to go back and look at the historical situation that bernanke found himself in a year or so ago and pumping up the balance sheet this way was actually a wonderful thing. in may, 2007, bernanke said - quote - we see no serious broader spillover to banks or thift ins

it is about the federal reserve bridge all holding company. thank you project -- and how to be rapid answer any question. >> i will ask the clerk to put a clock on for six minutes per member. i have two questions that i want to raise with you. and now will turn to senator shelby. we have had commissions and think tanks and regulators presence, and you'll remember sitting behind as with both parties recommending consolidation of federal banking supervision. vilsack in this chair for a number of years and declared it to be the most bizarre and tangled regulatory system in the world. the former fdic chairman caught dead outmoded and archaic. in the wake of the last thrift crisis, the clinton administration to urge congress to consolidate the federal banking regulators into a single provincial regulator. we have seen chairs of this committee and other as already years in the wake of previous crises called for consolidation. and yet we did not act acted as crises. we sat back and basically left the system that we had in tact. as a result, we have h

the federal reserve already plays a part of this role. but the absence of a comparable supervisor for large securities and insurance firms prove to be an enormous problem. the proposal would fill this gap by extending the federal reserve holding company regulations to such firms which we believe would be inappropriate. however, one aspect of the proposal goes much too far, which is to grant broad new authority to the federal reserve to override the primary banking supervisor on standards, examination, and enforcement applicable to the bank. such override power would fundamentally undermine the authority and accountability of the banking supervisor. we also support the proposal to effectively merge dot if into the occ with the phase-out of the federal thrift charter. by written testimony in the till to the question for additional banking agency consolidation, my first -- by first establishing the federal reserve or the fdic is the single agency responsible for regulating state-chartered banks. second, establishing a single provincial surre

they are the federal reserve. glenn: that last story about your computer coming up in just a little while. the federal reserve is made up of unelected bankers. they determine the country's monetary policy and hold the future of this country right in their hands. now people across the country are crawling for transparency in the fed. a lot of people are saying, why don't we abolish the fed? ron paul's bill to audit the fed now has almost 300 cosponsors. if everybody saw the video of democratic congressman alan g. ayson grilling the fed chair, ben bernanke, it might even be more than 75%. >> on page 26, which consists of your balance sheet, and one of the entries on the balance sheet is under "assets" central bank liquidity swaps, which shows an increase from the end of 2007 from $24 billion to $553 billion and change at the end of 2008. what is that? >> those are swaps that were done with foreign central banks. many foreign banks are short dollars, and so they come into our markets looking for dollars to drive up i

the federal reserve has spend a trillion dollars to prop up the mortgage market this year. experts say bernanke plots an exit strategy from all the credit-support programs the mortgage market may be the hardest to leave. darren gersh reports. >> reporter: here's the housing pop quiz. if the federal research stopped buying mortgage-backed securities right now, how much higher would mortgage rates be? a, a little higher. b, a lot higher. or c, so high i don't really want to find out. the correct answer, says mortgage expert guy, is c. >> it's guest mating but at least probably a full percent higher than they are now. nobody really knows. the fed jumped into the market when there was concern there weren't going to be enough investors in there. so, we don't know what it's like and nobody really wants to try it. >> reporter: the fed has already bought more than one trillion dollars in mortgage- backed securities this year. virtually all of the new housing debt issued in 2009. he says the fed will need to keep buying mortgage debt well into next year when the central bank may beg

so she took a chance and she thought she would park here in this reserved area. by doing that, she was risking the possibility of tow but she got a little something else. she has four gd bu mt on but on monday --thayd tt someon called and the judge had deflated my tire. >> reporter: she spoke to us by phone and said she was told that charles county circuit court robert nally, seen here, deflated one of her tires because she was parin is seot outside the cour>> >> w it to work. and ar p wdked on tehe s sidtre like i do.mall do. nd i went in the bld ca init d grdsit came down to let me know that i ed edne to get m -edy- teak care of cauarud bec jsege jllnay was about to let the air out of my tire. >> reporter: by the time jean got to her car, it was too late. she had one flat tire. a guard, who supposedly caught he judge doingt cis hlelt i on his cell tn'ieldel b itve. en a wenten out and saw that my tire was at, i mean, i a not because of the fact that the air was out of my tire. it was because of who did it. >> reporter: jean was illegally parked in a reserved sp

and it's time we got rid of the federal reserve. the entire institution should be canned. >> you really need to get in touch with your feelings here, michael. >> i'm trying. i really try. >> mark, what do you say, are you one of those guys that say get rid of the fed, go back to the cave? >> alan greenspan was all for a gold standard or at least behaving like you're on a gold standard. why is it so heretical to think this way? >> it's just too much of a change. it's not possible fors us to get become to a gold standard if you're a gold standard, not in a modern economy with the innovation and the growth that we have in our economy today. it's just not very reasonable to get back there. certainly the fed has to balance its mission between trying to promotion price stability and trying to keep order in the broader economy and i think that's what gets missed in a lot of this debate is the fed is one of the stabilizing mechanisms we have in our economy. >> oh, no, oh, god. >> you're not going vot confidence to engage in all sorts of bus

the federal reserve has experience. the have done a bad job of this over the years but historically, they have the capacity and knowledge and so forth to do this. we know about the fed. you are asking me to create something that is altogether new and it may not function well at all to handle the issue of systemic risk and very important issues. why should i take a leap of faith in something here creating a whole new entity that may include the fed is going to have a problem of spreading out their responsibility in such a way that you never figure out who is running the shop in the sense systemic risk will be suffering despite you've given it an ice cream and hired a bunch of people it will not make the kind of decisions we need to have it a single regulator with experience that has to do the job. why is that not a bad idea? >> i think copiously we disagree. we think the council with real teeth and rulemaking authority needs to have some authorities. it would be highly effective morsel in monitoring for systemic risk in

i think they don't just go off the reservation. if they are going do something, it is because station chiefs say it is okay. the ddl, deputy director of operations. head of all -- would say that it is okay. they don't just do this. so i think what's important here is to sort of roll up the chain of command and figure out who said that it was okay to do what. now, if it was made clear from somebody at justice department that you can threaten people's families, that you can threaten to rape their mothers, that you can threaten to kill their children, by the way, i am a four of four daughters, contemplate that. if there is somebody that said that you don't just prosecute people at the bottom of the heap but walk your way up the chain and go after somebody. anybody who actually said that was okay. if the vice president was sitting in his office someplace saying oh, yeah, if you need to threaten their children, that would be fine. you know what? maybe somebody needs to talk to the vice president. >> that's exactly right. we saw this wit

the federal reserve delivers an upbeat assessment of the u.s. economy. >>> escape plan. a pennsylvania shoplifter gives a store employee an eye full of mace. >>> and president obama ards the nation's highest civilian honor to 16 distinguished the nation's highest civilian honor to 16 distinguished recipients. captions paid for by nbc-universal television >>> hello and good morning. i'm christina brownment today we begin with leveling out. those were the welcomed words that spoke volumes to both wall street and main street wednesday when federal reserve chairman ben bernanke declared the u.s. economy is finally on the mend. nbc's michelle franzen has the story. >> reporter: the federal reserve left interest rates unchanged wednesday. a sign that central bank believes the u.s. economic activity is leveling out. key factors the recession may have hit bottom include median home prices up 4% last quarter, a surge in the stock market, and growing stability in the financial sectors. the committee says it expects inflation will remain subdued, but the optimism is guarded. the fe

they've increased the scale of their balance sheet -- or their liquid reserves.hink provisioning hasn't peaked for them. they're still going to have a number of more quarters of write-offs, but they'll be able to handle that. they'll have the liquidity to handle that. and i think the housing market, we're seeing evidence of that improving. and so the psychology is getting better. and the assets in their areas were never overvalued like in florida and california to the same extent. although they do have business in florida that people have been concerned with. but i think all that's in the past. >> okay. so fifth third is one of your three picks for the short and the long term. let me get your take on where we're headed, though, broadly speaking. you said you don't think the market is choppy right here, even though we saw this 40% rally, and you don't necessarily worry about the banking sector. we're approaching the september, october time frame, when typically we have seen sell-offs instead of upset in the markets. are you expecting any disruption going into the

yes, you really are watching vacationers racing to reserve lounge chairs for a day of panic. this is a war with roots that can be traced back to may 8, 1845, and britain the victor was exhausted by war. west germany, the vanquished, rose again, phoenix like, terminator like. in the 1960's with the advent of cheap vacation packages to sunny spain, the two sides met again. they met poolside, battle recommenced over the seemingly inon yous you -- inon you louse lounge chair. >> they were reserving territories in the lounge chairs. >> and now look closely. they aren't all germans claiming territory. trust me, there are brits there too. the brits are fighting back. inspired by decades of germans bashing movies like "where eagles dare", egged on by the comedians taking jibes at the humorless germans. >> have you noticed it has pictures on it? >> the brits are on the lounge chair counter offensive. >> this is an anthropological development. what happened is that we have learnt from the germans. >> these days, brits will reserve their morning lounge chairs before they stumble into be

requirements effectively draining reserves and money from the xhicheconomy. that caused a recovery turning into another recession during the terrible 1930s. do you think bernanke is focused on that. he is a great depression historian. do you think that will slow him down towards any snugging up or withdrawal of money in reserves? >> i think that knowing the fed can easily make a big mistake is going to have him proceed with caution and working with markets by communicating with them on exactly what his intentions are. i would bet market rates are going to rise in advance of when the fed actually raises rates. that the fed and the market are going to work together to try and find an exit strategy that stops repeat of what we saw in the '30s. i think that's their goal. i think the communication between the bernanke fed and market has been slechblt i would e -- been excellent and i would expect it to continue. >> do you agree. >> i don't think it's very impressive. the facts ared had the fed been doing its job, i don't think we're having this discussion today. t

is that something the federal reserve would do or there should be some sort of council that would meet on a regular basis. how would that coordination occur in your mind, at least. >> well, i mentioned there are probably two aspects of that coordination. one is within our own boundaries in the united states and for u.s. financial institutions. but i also think that that we need to coordinate globally since our markets and institutions are global as well. as far as the u.s. is concerned, you know, we have a multiplicity of regulators and even in the sweeping proposal from the treasury or in other regulatory proposals i haven't heard any move to -- you know, to consolidate them all into one and as i indicated, it's not clear to me that doing so would produce a better outcome. so the coordination would have to take place among the various regulators tt we have. however, we reshaped them so that information doesn't slip through the cracks so that we don't miss the activities of institutions who are regulated by one group or one regulator but who are engaged in activities that are properly

contingent loss reserve. for example, when colonial bank failed two weeks ago, there was no reduction in the fund because the estimated loss had already been reserved for. we review the adequacy of the contingent loss reserve every quarter, and make adjustments as warranted. as illtrated i this chart, we have been shifting large sums to the contingent loss reserve as the failure projections have grown. total reserves are now over $42 billion to our total reserve should be distinguished from the cash resources that are too protect the positive. as the last chart shows, our liquidity to protect depositors in future to includenly the $22 billion of cash and treasury securies held by the dif as of june 30 but also the ability of our up to $500 billion from treasury department. to sum up, a dline in a fund balance does not diminish our ability to protect insured depositors. th fdic was created specifically for times such as these. our resources are strong. your insured deposits are safe. and again, no incher depos

he hahelped to achieve, and tt is why i am appointing him to another term as chairman of thfederal reserve. >> susieit will be take two for ben bernanke. we talk about his reapintment anwhat's next for the central bank. our gues, former fed governor urence meyer and fed watcher david jones. >> paul: what's anothe2- trillion? the white hoe revises its ten- year deficit forecast to %9 trillion. but servicing all that debt ll be a costly prosition. >> susie: a new repo shows that conmers are feeling more confident about theconomy. and that could mean more on wallets. but analts say american tailers are still adjusting a "new normal". >> paul:'m paul kangas. >> susie: and i'm sue gharib. this is "nightlyusiness report" r tuesday, august 25. "nightly business rert" "night business report" is made possible by: this program was made ssible by conibutions to your pbs station from viewers le you. thank u. >> susie: goodvening, everyone president obamgave ben bernanke vote of confidence today, ninating him to a second term as cirman of the fedel reserve. speang from martha's vineyard, where he is va

ahead of hump days market action is one of those days where it's all about the federal reserve. no big surprise that the federal reserve is due to make its announcement regarding interest rates, rather the concern is about exactly what is its assessment of the economy. well tom, we'll also be watching earnings from the nation's major retailers over the next few days. we're talking macy's, wal-mart, coles, j.c. penney's. we certainly know that consumers, people for the most part are still reluctant to spend that extra cash and these earnings reports from retailers could give us a good glimpse into how consumers are holding up. and we see it early discounting already for the important back-to-school season as we look into the third and fourth quarter. all these retailers are already making plans about the holidays. and we'll have to hear exactly what they're expecting for the end of the year. the troubled asset relief program...otherwise known as "tarp"...is troubled itself, according to a congressional oversight panel. despite its name, none of the $700 billion allocated to it ha

and i certainly reserve the right or governor doyle reserves the right to recall them if needed. but i think from a unity of command, unity of effort point of view, the best thing to do unless and until the federal government needs to take command for the emergency being so drastic, so severe in which case we'd all get behind the president, i think the best thing is to stick with both state and federal guidance which is lowest level up and from that perspective we wouldn't be talking -- probably wouldn't be talking lots of federal troops. we'd be talking about a company of engineers, or a small capability that could easily fit into our joyce headquarters in our case in wisconsin or another state's joint force headquarters and we would then provide those forces to the state coordinating officer which is lined up perfectly under the stafford act. >> i'm going to ask staff and i'm going to ask any of you to look at what happens here at the inauguration. the state to state, the guard to guard does not present a separation of powers problem. it's state to state and we lend across stat

meltzer and doctor rivlin, who had a longtime association with the federal reserve. their recommendation was that the federal reserve should get out of supervising entities and concentrate on the issue of the monetary policy, and perhaps other issues. my question -- i will let you answer last, the governor could i think you have an opinion on this. but to the other panelists, if the federal reserve, following this advice by two very knowledgeable and experienced people, does not perform as the supervisor for a large holding companies, who would or should? do we have to create another entity? what is a general knowledge about that? >> that is right. the fed is the holding company supervisor for the vast majority, not all, but the very largest institutions. i think he would decree a new agency to do it. -- i think you would have to create a new agency to do it. >> you can put the holding company supervisor and bank supervisor in the same entity. i think, frankly, for smaller institutions, a lot of institutions, were the only subsidiary of the company is the bank, there

as one would expect, these have put pressure on long, lost reserves.these accelerate in the charging loans. total assets of $320 billion. we expect the adding to the contusions and failures. with that, we can take the questions. >> how much is the unlimited guarantee? >> that adds about another $700 billion. that's deeps that we are while we don't have precise numbers yet on the amount that the increase will cause, we have increased we are in the process of doing that right now based on this data. we are doing that in the near term. i don't have a number vzyyet. it is an accounting entry. it doesn't represent -- when we increase the tremendous loss reserve. the balance and the amount of alsos we expect over a year. >> what are you holding in addition to carbon the asset side? >> ok. sure. the other assets we have, about you receivership and recovered bank assets. >> [inaudible] >> no. the loss reserve in the future and what we expect to occur in the nature due to bank full you'res occurring in the future. the other assets represent as ets we have acqui

i read your 2005 federal reserve system purposes and function document.t actually does, for what it's worth a mistake that one of your responsibilities as maintaining the stability of the financial system and containing systemic risk that may arise in financial markets and providing financial services to depository institutions. so i think it is fair to say that in essence you sort of did have responsibility there, and i am wondering how harboring all of that at the federal reserve would not alter, if you will, be a bit. i think all of us understand today that we need to be more concerned about systemic risk. i am sure the fed does, too. and i say this with respect to the organization. but obviously with concerns. i am just wondering what would be different if in fact the fed was a system of regulator, the system of regulator? >> first off, senator, i don't think there are any proposals on the table that would really make the fed a systemic risk regulator in a sense to be able to swoop in anywhere and anytime saying we need to do something about this. the

only then could the rmb hope to join the reserve currency club. >>song: and right now, we're not there yet. still we need a lot of time to build up china's capital market, banking system and also the social security and the insurance system. >>reporter: as for a time frame, the jury is divided - optimists cite 15 years, the pessimists 40 ! >>: for now, china will pay for brazilian sulphur in dollars. nonetheless, neighboring governments, eventhe us, welcome measures, albeit modest, that allow greater international use of the rmb. but some asean traders still need convincing. >>: a slow transition of the rmb to a regional currency actually suits beijing - given both its huge exposure to dollar denominated assets and the recent g20 agreement to support a dollar-centred currency system. but the die is cast. china's timely goal is to free itself from today's hegemony of a foreign currency. >>abirached: it's a trade as old as time itself, and it doesn't just happen in someone else's country. human trafficking is all around us. the majority of victims w

so you almost need a federal reserve just as a defense against other federal reserves.s hard to imagine a system where there isn't a central bank operating in a major country like the united states, but japan and england and the e. u. and china all have central bankers operating. i think it would put us at tremendous competitive disadvantage. >> your colleague at nyu, albani, who wrote "praising your work," had a piece in the financial times getting a fair amount of attention. he is talking about higher prices and has this conclusion frchlt yesterday's financial times, the recovery is likely to be anemic and below trend in advanced economy and there is a big risk of a double-dip recession. your comment? >> guest: in the stearn school of business, he's been very right on this crisis for quite a while. and one of of the things that we're doing and again this comes back to noey free lunch, you have to pay the piper. a lot of the stimulus programs that are in effect, look at the cash for clunkers as an example. they're not causing new economic activity. at least not complet

the contingent loss reserve is what we expect to lose in the future. it is what we expect to incur in the way of bank losses due to bank failures in the future. when the other assets represent the essence of that we acquire from failures that have already occurred, -- represent the assets that we acquire from failures that have already occurred. >> you have $10.4 billion that you have collected and are ready to spend on fill the institutions. then you have another $32 billion that you are prepared to stand. >> no. $10.4 billion is the fund balance. you can consider that the net worth. it is the difference between the assets held in the fund verses the liabilities. that difference is $10.4 billion. you might think of it as the network of the fund. the assets, $64 billion, there are actual liabilities that we owe of $22 billion. we have established another liability of contingent loss reserves of 30 two billion dollars. that is expected loss amount. without that contingent loss reserve, the balance would be $42 billion. but we have established a reserve

is it the employment rate, is it reserves, what is it? >> you're asking me to solve the fed's mystery? are you kidding? being mysterious is being kind in this regard. listen. i agree with mr. blinder. i think that, you know, if i cosign a loan for wolfman to go represent an apartment, even though he is gainfully employed and after the third month of the twelve-month lease he hasn't tapped me or missed a payment, the fact my signature is still on that paper is all that counts and the fed's signature is still undersigning. these programs could be ramped up. i do not see the leveling off of the bloating situation that occurred in the balance sheet. to be the sign of an exit. >> that's a really important point. i don't think, larry, that the fed has been neutral in terms of the size of its balance sheet by choice. i can they haven been incapable to ramp up the talf program or other programs. i think the fed had an expectation, even a desire, to ramp up into the 2.5 to $3 trillion -- >> you see, they could. the question here is -- >> here's th

on the preferred, on the loans from the federal reserve bank of new york. if this was a normal company, they'd be paying their interest. that earnings number would look a lot different. >> that is incredible. >> and then you've got the funding here, series f preferred, they still have a lot available. important to point out. the $180 billion, they're only using $130 billion of government money. series e preferred at $41.6 billion.88 again, not paying dividends on that from what i understand. you do have to remember that. yes, they had a quarter in which they earned money. the basic insurance businesses are doing fine. they are also putting alaco and aia, their huge foreign subsidiaries in a separate spv. the government is going to own a part of that. with preferred, that will reduce the loan from the federal reserve bank of new york. at the end of the day, we're not paying interest on the incredible amounts of interest on the debt. what you need to look at is what aig will look like when it pays everybody back. that's the key here when we watch a stock with

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piece and tranquillity a rate days away you add nicaragua butterfly reserve come visit us. what you going to do when you get an e-mail like this? what do you do? i put it aside with all other incoming e-mail and thought that is fun. then a couple of days later i am booked added again and it was a pretty intriguing invitation. let me mention for the most part -- most important i was the nbc news correspondent and have written several books and they usually do with difficult social and political problems emigration, war, pestilence, m isery, awful stuff we cannot talk about now would it is in "the dangerous world of butterflies" it is what is and became my escape i looked it was so intriguing and showed it to my wife and she shoved me on an airplane and that is how i meant and jane and her husband jerry they were gracious host in the non but at the butterfly reserve and granada is the oldest european city in the americas it is a little crumbling now they call it something but it in short order they introduce me to a subculture and done ee in the book business their stuff goin

i read your 2005 federal reserve system purposes and function document.t actually does, for what it's worth a mistake that one of your responsibilities as maintaining the stability of the financial system and containing systemic risk that may arise in financial markets and providing financial services to depository institutions. so i think it is fair to say that in essence you sort of did have responsibility there, and i am wondering how harboring all of that at the federal reserve would not alter, if you will, be a bit. i think all of us understand today that we need to be more concerned about systemic risk. i am sure the fed does, too. and i say this with respect to the organization. but obviously with concerns. i am just wondering what would be different if in fact the fed was a system of regulator, the system of regulator? >> first off, senator, i don't think there are any proposals on the table that would really make the fed a systemic risk regulator in a sense to be able to swoop in anywhere and anytime saying we need to do something about this. the

the federal reserve chairman ben bernanke says the u.s. is nearly out of recession. two candidates claimed victory in afghanistan, but the election commission urges caution. very warm welcome to bbc news, broadcast to our viewers in pbs in america. coming up later for you -- can at security services protect the country? from the soviet union to the european union. we revisit the baltic states that joined hands for freedom 20 years ago. hello. it was outrageous. disgusting, according to a white house spoke of. highly objectionable according to president obama himself. the man convicted of the lockerbie pam am 103 bombing returned and stirs up strong emotions. abdelbaset ali al-megrahi was freed early from a scottish jail on compassionate grounds. they are denying the real reason was to smooth commercial relations with libya. we have more. >> outrage. a hero's welcome. >> the end of abdelbaset ali al- megrahi's journey, but only the beginning of the row would follow. the reception he received sparked an angry reaction in the united states. the white house said it was s

you may reserve it until after the prosecution rests their case. mr. moore is the co-author of the book the end of prosperity, and after the opening statements each attorney will call two witnesses who will be subject to cross-examination. then each side will make closing arguments. where is my jury? [laughter] where did they find this jury? [laughter] this is a jury of nobody's pierce. [laughter] did you pay to get in here? [laughter] let me give you a few instructions, ladies and gentlemen. you listen closely to the statements of the opening witnesses and at the end be required to determine whether a sufficient evidence beyond a reasonable doubt by mr. moore and his supply-side free possible. because that is your task even though you applauded for mr. stephen moore. [laughter] now i want you to know, jury, have a lot sympathy for capitalism. capitalism is dynamic, full of energy, it is critical to the prosperity of every nation since the industrial revolution. nobody wants to put capitalism under. capitalism is like an adolescent. it is proven that t

>> gentleman from texas reserves a point of order.d ask the members to pay attention to the speaker and recognized gentlelady for 5 minutes. >> thank you, mr. chairman. i am honored to offer an amendment that serves to unify us. despite the diverse perspectives represented among progressives like myself, moderates and blue dogs. our members have worked together to find innovative ways to save additional dollars in health care allowing us to address some of our differences and to restore the subsidies that we offer to middle-income families to make sure that premiums are more affordable for all working families. i'm proud of the way our unity package has come together, and i will attest to the fact that my colleagues and i have been negotiating around the clock quite literally to get to this point. over the past few weeks, our committee has seen movement followed by impasse followed by breakthrough followed by more impasse. mr. chairman, it is my hope -- >> committee will, please, come to order. >> mr. chairman, it is my hope that this

one is the fdic always takes sesi sesive excessive reserves.billion of unnecessary reserves, which is what carried the fund to negative territory. and then secondly the banks start kicking in money as they turn profitable, the fdic increases their premiums until that fund is restored. it only took three years between those two items. >> chris, premium increases on the bank. now the last time we spoke, you weren't all that optimistic about the economy. sheila bair is saying this a lagging indicator. we have a steep upward slope in treasury curve which should help banks. they borrow short of zero and no longer had a considerable net interest rate profit, et cetera, et cetera. but, regarding what bill isaac said, can banks take this sort of tax increase you all are describing? >> can they take it? sure. is it going to take them longer to get back to normal? it will be if they have to pay more to run the fund but obviously we can't let the fdic fund go bad. >> we can't let any deposits default. that's what you're saying. that's the bottom, bottom l

and rancher's reserve beef, guaranteed tender 100% of the time. at safeway, we now promise something new. something big. a commitment... to thousands of new everyday low prices. so you can get what you want. when you want it. at the price you need. today... and tomorrow. that's our promise. that's ingredients for life. safeway. >> get ready for a grudg match, battle of the beltways. nfl preseason gets underway for the redskins and raven is denied. they will face of in baltimore at 7:30 p.m.. can't believe it is already time for football. >> i know. it will be interesting to see. this afternoon is feeling pretty comfortable. pretty big import awards for the middle of summer in august. some are operating's. each day isolated storms possible of. but it had -- very birthday to my wife. i will give you a present right after the show. >> thank you for joining us.

federal reserve policymakers say the economy is on the mend. we get the lowdown on the fed's thinking with economist michele girard and market strategist michael farr. >> susie: $11.7 trillion and counting-- that's where the national debt now stands. but it could go higher if treasury secretary geithner has his way. >> paul: your blackberry will soon face new competition. microsoft and nokia team up to take on a business need. a smartphone that puts "office" in your pocket. >> susie: then, investors move into shares of toll brothers as the luxury home maker says a foundation is being laid for a turnaround. we'll explain in tonight's stocks in the news. >> paul: i'm paul kangas. >> susie: and i'm susie gharib. this is "nightly business report" for wednesday, august 12. "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. the federal reserve said today the economy is quote "leveling out," and stocks rallied on wall str

the president nominated ben bernanke to remain the chairman of the federal reserve. has gotten mostly positive remarks. >> the federal reserve, like other economic policymakers has been challenged by the unprecedented events of the past few years. we have a goal and deliberate circumstances demanded, but our objective remains constant. to restore a more stable, financial and economic environment in which opportunity can, again, flourish and in which americans' hard work and creativity can receive their proper rewards. >> the senate will need to confirm bernanke, of course, into a second four-year term and later stephanie elam will talk with us more about ben bernanke. that will come your way on the back half of this hour. >>> hall monitors take heart, we have encouraging news to share. just last hour we learned the u.s. home prices have gained some ground from the first quarter of the year to the second. the first quarterly increase in three years, in fact. adds to the optimism that the housing crisis may be easing, but we still have to give you this reality check. l