and that pushes treasury yields to fresh lows. >> tom: but yields are even lower on "tips," those treasury inflation-protected securities. should they be in your portfolio? you're watching "nightly business report" for monday, august 16. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> susie: good evening everyone. more jitters in the financial markets today about the outlook for the global economy. tom, investors stayed away from stocks and poured money into bonds-- what they consider a safe haven. >> tom: as a result, susie, the yield on the ten-year treasury fell to its lowest level since march of 2009. falling rates are a sign of a weak economy. the yield on the ten-year is just below 2.60%. to put that in perspective, it was 4% earlier this year when many experts were more optimistic about the u.s. economy. >> susie: meanwhile, something very unusual is happening in the market for treasury inflation

he started in the treasury in 1988 and served under five secretary of the treasury's including an important step and as undersecretary. he has served at the international monetary fund for two years and held an important post with one of the linchpins of our financial institutions as president and ceo of the federal reserve bank of new york where he was a voting member of the open market committee and one of the key figures in the diet effort made to combat the financial crisis we have been through the past couple of years. the main reason he is here today is that on january 26, 2009, he became the 75th secretary of the treasury and i am delighted to invite him to the podium today. [applause] >> thanks to both of you. i agree to much of what each of you said including use of the word valiant. [laughter] i want to compliment both of you on what you do. you are engaged in this noble upper to raise the quality of economic policy and give people better analysis and idea spread that is important. it will not deliver on its own better judgment by the country's leaders but we raise the probability

it reads draft treasury draft p.d.f. again the committee read this as something that i've drafted and sent to mr. covey to solve one united's specific problem. but what it clearly shows is that this, if everybody remembers as the sky was falling in 2008, the treasury department came out with a three-page bill that requested about $750 billion to buy troubled assets. this was that bill. it wasn't something drafted by our office. it wasn't drafted on behalf of kevin covey or one united it. wasn't even drafted on behalf of the national bankers association. it was a widely available draft of a treasury department bill. and finally let me get to the question of appearance because there's a question that's been raised a lot. also in the graves case they said "the standards committee found that no relevant house rule or other standard of conduct prohibits the creation of an appearance of conflict of interest." the committee also in their s.a.v. or any other documents do not identify a house rule or other standard of conduct tha

bonds and that should help keep interest rates low on treasurys which, in turn, will push down rates on mortgages and corporate loans. the fed hopes that that will increase borrowing and help the economy grow. the fed's move, though, spooked the markets, perhaps signaling the economy is in worse shape than investors thought. the dow with its worst three-day drop since early july. the marks fell again on friday and general motors posted first-quarter profits of $1.3 billion, the best quarterly performance since 2004. the company announced ceo ed whitaker will be stepping down on september 1st to be replaced by dan akerson. gm is expected to announce the terms of the initial public offering soon. it downgrade its outlook on the economy and also said it would not shrink its balance sheet, but is the market misinterpreting what the fed did and said. joining me now is michelle degirard, rbs senior economist and jim paulson, chief investment strategist. welcome to you both. michelle, i'll start with you if i could, the fed made a decision to reinvest its holdings back into treasurys. can y

waters allegedly called treasury secretary hank paulson to set up a meeting between top treasury officials and one united bank, her husband was a former board member and large investor in that bank. not long after the meeting, the bank received $12 million in government bailout money, money that has not been repaid.

came to the treasury from the new york fed he has been in government positions based with the federal reserve the treasury department to some some sort of system like that for his entire career so he's had plenty of opportunities to be involved in policy making and he was actually a key player in watching over banks watching over regulatory policy from two thousand and two when the whole housing bubble started until two thousand and seven when it began to. apart and he was a key player in all the build decisions of the bush administration in two thousand and eight so we have this person who just like chairman bernanke he has been a part of the regulatory system for the last decade has been a part of the absolute a regulatory failure is now saying actually everything is good we're on the road to recovery he doesn't exactly have this tracker that i necessarily trust and here's my question i want to get back to bernanke you but i want to ask why do we trust these guys if they have been in regulatory positions all of this time and they didn't predict the financial crisis that we saw they

we go to the treasury department. you have correspondence from the deputy assistant secretary for public affairs. this was at the time when the news article started to come out. they tried to figure out when they got money and whether they had benefited. the wall street journal was told by a federal regulator, a state regulator, and barney frank that one united qualified for the december investment under section one of 3.6. -- 103.6. slide. the slide. this dates back to the current administration. the previous administration. in a response to questions, they wanted to say, this happened in the previous administration. parked funds are awarded under two conditions. if the institution is the qualification defined in the statutes. tarp is insulated by outside influence. to come down here, you notice that this 7 e-mail -- this is an e-mail responding to questions, right? did the meeting in september related to the tse losses play any role in the decision by treasury to provide one united $12 billion in cp funds on decembe

that's the perfect time to own treasuries.ou know uncle sam will always make his interest payments, and as prices deflate, you'll be paid in dollars that are rising in value. the problem is, as bond prices have risen, yields have fallen. the 10- year treasury now yields less than 2.8%. at these levels, risk enters the equation. you see, when yields are this low, bond prices become even more sensitive than usual to movements in interest rates. if rates just go back up to where they were in april-- 4%-- the price of your 10-year bond will drop about 9%. in other words, hedge your bets. hold some stocks and some cash, even though they haven't done as well as bonds, and stocks in particular have risks of their own. yes, deflation is a danger. but before you go whole hog into any investment, you always have to have an answer to the question, "what if i'm wrong?" i'm eric schurenberg. >> suzanne: that's "nightly business report" for wednesday, august 11. i'm suzanne pratt. good night everyone, and goodnight to you too, tom. >> tom:

this conversation was going on between committee staff and the treasury apartment -- treasury department. on december 22, this is an update. this is something that i want to communicate again parted this is september 23, michael grant, the president of the national bankers association communicating with the president-elect on a language they would like to see on nba proposal on the context taof tarp more communication. this was a reflection of language that was worked on in the national bankers association. here on september 24, you see the nba proposal. it shows there was a cooperative effort going on to figure out how to solve the challenges of minority-owned depository institutions. this piece shows that at this time the independent community bankers association began to get engaged in this issue saying that 22% of the respondents g holds gse preferred stock. there were up to 40 institutions that could possibly be impacted by a section1036. let's talk about what the assistance that has been identified by the committee on my behalf. we have two e-mails sent to a barney frank staffer sa

if they do there, then a 10-year treasury at 2% is not good. if they don't go there, and we have a deflationary episode, then it could go lower. and ask me the odds on that, i'd say i'm juggling balls like the rest of the marketplace. we don't know, but we're watching closely. >> reporter: bill gross, thank you for your time. >> you're welcome. >> susie: tonight's value as we talked about, and the buzz word down here was potash. >> absolutely. fertilizing some gains finally for the first time in several sessions. let's take a look at tonight's "market focus." >> tom: there was >> tom: after five sessions of selling, more merger interest may have brought back some stock buyers. the biggest buyout talk came in basic materials, helping make that sector the best performing of the day. australian mining company b.h.p. billiton has offered almost $39 billion to buy canadian fertilizer maker potash. b.h.p. offers $130 per share, which potash called grossly inadequate. the potash c.e.o. told the "wall street journal" b.h.p. has to pay "big boy prices."

we go to the treasury department. you have correspondence from the deputy assistant secretary for public affairs. this was at the time when the news article started to come out. they tried to figure out when they got money and whether they had benefited. the wall street journal was told by a federal regulator, a state regulator, and barney frank that one united qualified for the december investment under section one of 3.6. -- 103.6. slide. the slide. this dates back to the current administration. it shows an e-mail trail back to the previous administration. in a response to questions, they wanted to say, this happened in the previous administration. parked funds are awarded under two conditions. if the institution is the qualification defined in the statutes. tarp is insulated by outside influence. to come down here, you notice that this 7 e-mail -- this is an e-mail responding to questions, right? did the meeting in september related to the tse losses play any role in the decision by treasury to provide one united $

government treasury bonds also the u.s. government does buying all the u.s. government treasury bonds to keep interest rates below one half a percent as a way to perpetuate this enormous pyramid scheme a ponzi scheme that's now met its ultimate match for some asian or the new bank on wall street that's eating everybody's lunch including milton friedman he speak of these very low interest rates and that brings me to the fact that banks are just basically coining money because they're borrowing from us the taxpayer at less than one percent and then loaning it back to us the taxpayer at three four five percent city bonuses jumped twenty five percent to ten billion pounds this is in the city bonuses are up twenty five percent but i really think this is kind of a distraction where the fight to the big debate becomes about how much bonus they should collect not how much time they should be doing in jail yeah they as we had. said recently they need a jail out not a bailout correct and these bonuses of course are fabricated they're not earning money they don't earn i

this is 45 minutes. >> we're pleased to have secretary of the treasury tim geithner. [applause] in the audience, we have the president of nyu, john sexton. [applause] faculty, students, alumni, and members of the new york city business community representing the partnership for new york city. we also have journalists from all for 40 different news outlets. secretary died here, you need no introduction, especially in new york where you were president of the federal reserve bank of new york from 2003-2009. like all americans, we at the stern school are extremely grateful to you and the entire team at treasury for the leadership you have provided in rebuilding the road to ensure prosperity at home and abroad. thank you. before we begin, let me remind you that after his remarks, secretary gunnar will take questions and with that, to is my great pleasure to welcome to the podium, secretary of the treasury tim geithner. [applause] >> thank you, peter henry and john sexton. i had breakfast with the mayor and he said york is strong. he said because we have a great mayor. [lau

so where do you go for better yields than treasuries? look at this e.t.f. the ishares investment greg corporate bond fund, that's a near five-year high for this e.t.f., and all of the treasury-based e.t.f.s notched against as well. boeing received more bad news. a leaving company cancelled 25 planes. cancellation now outnumber new dreamliner numbers for the year. boeing shares fell sharply early on and then rallied with the rest of the market. as media companies go, the "washington post" didn't do too badly in the earnings department. these results exclude the sale of "newsweek". second quarter profits more than quadrupled, but revenue games from the broadcasting and kaplan education units helped, but look at the stock chart, down 7.5%. investors very worried about the kaplan unit that was cited by federal investigators looking into recruitment and student loan application issues with the career colleges. as you can see, it hasn't been a good week for kaplan's competitors. on thursday, career education says it is see less interest from potential new student

. >> reporter: if the economy doesn't pick up speed, bernanke said the fed is prepared to buy up treasury bills. that would drive down interest rates for businesses that want to borrow and mortgage rates for home buyers. zandi believes the fed will be forced to do this and that the 30-year fixed, now around 4.5% could fall as low as 4%. erica? >> hill: which could be great news if you can get the mortgage. anthony, thanks. in washington, followers of conservative talk show host glenn beck are gathering on the mall for tomorrow's rally. beck himself was there today for a run through for what is billed as the "restoring honor" rally at the lincoln memorial, the site of martin luther king's "i have a dream" speech. beck has predicted 100,000

treasury bills. scott gurvey explains the move. the fed is on a roll, or at least that is the policy. with main street in a gloomy mood, the central bank announced today it will roll over its portfolio of securities. that will keep its balance sheet at record levels, but it will prevent the tightening impact shrinking the portfolio would have on the economy. that doesn't hurt. but economist bob brusca says it doesn't help, either. >> this is a milquetoast policy. it's hard to disagree with it. it's not clearly bad, it's not clearly good. it's just sort of in the middle. it takes a half step towards doing something for the economy at a time when maybe they can only take three quarters of a step at best. >> reporter: today's closely analyzed statement also removed previous wording noting that foreign economies were weak, and significantly changed the wording on the american economy. in june, the recovery was said to be "proceeding." now, the fed says it has "slowed in recent months." that is not news for anyone who has been looking f

are calls for the fed to lower the interest rate it pays banks on their deposits, or to buy more treasury bonds on the open market. both moves should increase the amount of cash banks have available to lend; that could stimulate growth. but many economists believe lower bank rates would only have a small impact on lending, while more asset purchases would greatly inflate the fed's already bulging balance sheet. >> we believe that, if there is something to be done, the fed really wants the treasury to take the lead, so be it tax cuts or be it further stimulus spending, the fed is really hoping the u.s. treasury is going to step forward and do what needs to be done, if something needs to be done. >> reporter: tax cuts or more stimulus spending? both have their supporters and detractors, and in the current politically charged climate there is no agreement on what should be done next. scott gurvey, "nightly business report," new york. >> suzanne: here are the stories in tonight's n.b.r. newswheel: stocks rose ahead of tomorrow's fed meeting, the dow added 45 points, the nasdaq was up 17 and t

the treasury department said you cannot do that. they blocked lawyers from representing him for free, because they said they would be violating treasury department regulations, even if they did it for free. they had to studio, administration, and finally they were allowed to represent this man -- they had to sue the obama administration, and finally they were allowed to represent this man, a u.s. citizen. i started calling progressive democrats, people who, if bush was doing this, would have spoken out. no one would return a call. no one would do anything about it. dennis kucinich, if you read the bill that he introduced, saying that the united states should not be targeting people for assassination, is simply saying that he wants the country to respect the constitution. out of the hundreds of democrats that served in congress, do you know how many co-sponsored that legislation? 5. that shows the utter lack of character in the government right now, when you cannot even get democrats to stand up against the prosecution of a citizen w

you can tell from the shot it's kind of windy but always pretty wind on treasury yelled. >> it is. if you plan on moving there when that's developed where it's going to be windy all the time. you wonder what it will do for traffic on the bay bridge. interesting. >> worse? >> never became the airport like it was supposed to be. >> transit is an issue in that development. >> let's talk about this morning getting around. show you some of the clouds just in from sfo. flight arrival delays of nearly 45 minutes. check out sour flight tracker at abc7news.com. at the bottom of the front page. our next weather coming up in about ten minutes. let's talk temperatures under the cloud deck. san jose 61. mountain view at 59, san rafael 55. most of us mid to upper 50s and around los gatos 54. that's down in the valleys, up in the hills a little warmer, around 60, 61.

the yield on the ten-year treasury drops as investors pile into bonds. tonight's "market focus" looks at how close we are to a new record. >> tom: planning for better times was clearly on the minds at intel. the giant semiconductor company ponying up $7.7 billion in cash to buy mcafee, the big computer security firm. intel's offer was a 60% premium for mcafee shareholders. does it make sense? our scott gurvey reports. >> reporter: intel's deal for mcafee surprised both wall street and silicon valley. intel shareholders' reaction was negative, due to the large premium their company agreed to pay. but industry experts say the deal makes sense. mcafee makes a wide range of hardware and software products designed to secure and protect against cybercrime, and intel says its customers have been demanding help in securing their information systems. intel's bill kircos says, in working to meet those demands, the company found mcafee to be an ideal partner. >> we've been working with them quietly for the last 18 months or so on a silicon product, a secure silicon

and a three-month treasury widened to very historically wide levels in the upper left there. three, 3.5%, pushing 4% in the 1992 period. and that had a very positive effect on the net interest margin of fdic insured institutions. that's in the lower left, and it showed the margins went up above 4%. so you're earning a 4% spread on your business that really helps net income. the kicker in the lower right was finally the industry stopped shrinking its long, its asset portfolio and started growing its asset portfolio as we head into 1993, 1984. so if you have wide margins, growing to asset portfolio, you are adding net interest income to the bottom line. so that was a pretty rapid recovery, a good news story. let's look at the current situation and see what we might expect when forward. fit of all, we did see a bit of a bounce back in return average assets in the first quarter. i will have to caveat that and say part of that was driven by the fact thathe industry brought back onto its balance sheet about $219 billion in loans that were previously securitize, and that was due to

we're working with the treasury department and local banking groups. president obama has proposed legislation that includes a $30 billion small-business lending fund, and a state small-business credit initiative. these are two parts of a small business job package the president hopes to sign into law. i have mentioned only some of the strategic initiatives we are employed to support the president's manufacturing agenda and initiative. we at the department continue to work to ensure the business environment both domestic and international are fair to u.s. manufacturers. thank you for the opportunity to justify it on the activities of the department. we undertake to enhance the competitiveness of u.s. manufacturing. >> roger kilmer? >> chairman brown, members of the committee, thank you for the opportunity to discuss the efforts of the housing and urban affairs committee, and how it supports american manufacturers. today would like to talk about a few of the services it offers. and the access to capital to support the growth. first i would like to give y

with the treasury yield 3% at this point.beginning with intel, this stock has caught wind of the selloff this week, below $20 a share. what makes you like technology as a dividend play, a surprisingly dividend play. >> semiconductors are our favorite area of the market. one very important reason for that is the very high percentage of u.s.-based semiconductors and their sales outside the u.s. in the case of intel, intel has 65% of its sales going to asia. and so we think in a world that's slowing down, asia is still likely to be the brightest spot. and so part of our portfolio we would like it to have a significant amount of asian exposure. >> tom: okay. just one minute left and two other picks we want to get to. give us 20 seconds on mcdonald's. just off of an all-time high, and clearly it has seen global growth. >> it has. it's a similar theme. it is a global footprint. the security is yielding over 3%. it's got a very strong balance sheet. it's got a good historic growth rate, and so, again, we think it's positioned -- wil

treasury bonds on fleeing stocks has a possible bubble ahead. some worry treasury prices have risen too high and investors could dump bonds as quickly as they bought them. on the slightest. could big deals provide a spark? campbell's soup is considering making a $2.3 billion bid for the biscuits-making operations for englanded united biscuits. sab miller, the second largest brewer is considering buying beer operation of foster's for almost $11 billion. >>> and finally, are you on top of the latest texting abbreviations? at&t's updated list includes wrud, meaning, what are you doing? omw, on my way. idk for i don't know. and my personal favorite, 143 which means i love you based on the letters in each word. 143, very sweet. >>> lou piniella, a says so long, a one-man band for the rockies and red hot robinson. plus the dog days of summer, butt indians certainly weren't dogging it against the tigers. your early morning sports headlines are straight ahead. >>> on this monday, we have unsettled weather on the east coast, but the heat still the bigget

the treasury bill now is, the yield is 2.6% on a ten-year treasury bill. >> let's talk about how bad, first of all. if, in the last five months, about 1.1 million people had not become so discouraged to have dropped out of the job market. the real unemployment rate, if they were still counted, would be 10.4%. too much use of the word nazi, too much use of the world herbert hoover, my friend. >> he's being exhumed. >> between 1929 when the stock market crashed and '32, the numbers doubled. he responded to the coming recession with a gusher of federal spending. it didn't do a lick of good. >> by the way, we can debate history. by 1932, 1933, the major issue on the table coming from andrew millen the secretary of the treasury, was balancing the budget. all we heard. >> in forbes field in pittsburgh, fdr pledged to balance it. >> yes, fdr was also a deficit hawk. >> i want to say i want to yield the balance of my time to the distinguished gentleman. no question that this economy is in terrible shape. jpmorgan just revised their figures for the next six months. growth will be less than 2%

treasury secretary timothy geithner delivered a pep talk today on the new rules to reform wall street and the banking system. speaking to business leaders at new york university, not far from wall street, geithner promised the reforms would not crimp innovation or competition, jeff. susie, the financial regulatory reforms were signed a few weeks ago by the president, and today geithner said the government will move quickly to put them in place and there won't be layers of red tape. >> susie: the treasury secretary also had a tip for wall street: >> don't wait for washington to draft every rule before you start changing how you do business. get out ahead of the process and out in front of your competitors. >> susie: also talking about the economy today, ben bernanke. echoing his testimony to congress last week. the federal reserve chairman told a legislative conference in south carolina he sees modest economic growth and a long and bumpy road to recovery. he thinks persistent weakness in the housing and labor markets and weighing down the economy. >> jeff: wall street didn't let those