economy-- in the world? who knows. >> rose: i can tell you what the president of the united states said at west point, there is no recorded history that suggests a country that loses its economy-- economic vibrancy will continue to have the political power that it has exercised in the world. >> well, i think that's true, and i think we have to recognize that as the emerging markets become a bigger force in the global economy, we can't do everything we could politically do before, even everything we could do military before. china, india, brazil and other emerging markets will assert themselves much more. >> rose: what raises the important question-- if that is the reality what ought to be the strategy on the part of the united states, just to take one example. over the next 25 years. if that's the reality, what is the smart thing to do over the next 25 years? >> well, first, we have to make sure our economy is in good shape. so we've got to deal with our debt problems. we've got to deal with our infrastructure problems. we've got to make sure our economy is growing as much as we can and that our unemployment

growth came from the united states economy and the american services sector. volumes from the stock market in germany are relatively low at the moment, only a few investors are driving the market. that means that the trend can change quickly again. >> will stay in frankfurt for a closer look at wednesday's closing numbers. the dax index closed at 6331 points. the euro stocks 50 climbed by 0.25%. in new york, new data from the services sector, keeping traders on their toes. the dow did manage to close higher a few minutes ago at 10,680 points. euro is trading at a value of $1.3160. germany's major corporate players have posted strong quarterly results in this earnings season. one of the best performances has come from [unintelligible] >> the world has seen its fair share of natural disasters this year. that has meant more work for disaster analysts, as well as increased costs for their employers. all the same, the company did not have to worry, because its overall numbers for the first half of the year were very good. the week euro bolstered foreign earnings an

. >> counterfeitting badly undermines the united states economy. it robs americans of jobs. it stifles innovation. and it promotes crime. >> reporter: the investigation began in december, 2007, when inspectors at the port of oakland interpreted what they call a -- enter septembered what they call a suspicious shipping container bound for a fisherman's wharf store. that led to a two year undercover operation in which agents raided eight different wharf store and arrested 10 store owners and clerks. this store is next to one of the alleged counterfeit outlets. he said it hurt the walk in business. >> a lot of times they ask me if the mids is the real thing. if it's real canon, real sony. i have to prove myself. >> reporter: federal officials say 11 people, including two illegal immigrants, have been indicted on multiple counts of conspiracy, smuggling, and trafficking of counterfeit goods. permanents on those charges range as -- penalties range as high as 20 years in prison. in san francisco, david stevenson. >>> most auto makers today reported an increase in u.s. sales prompt

word is coming up more and more when we talk about the united states economy i'm not talking about depression i'm not even talking double dip recession it could be either one of those i'm talking about deflation some economists have been saying for a while that the u.s. could be headed for a deflationary period very similar to japan's lost decade as it was known when economic expansion ground to a total halt now even establishment economists are sounding the alarm here to talk about it is gregory white of the business insider gregg now as you point out we now have the st louis fed president saying the u.s. may be headed to a deflationary period now prior to this others have warned about it but we haven't really heard this from you know an official at the fed so whose fault is this and why are people just now getting it. it's not really the fault of anyone i mean this is what happens when you have home prices decline to the degree that they have and that carries over to the rest of the economy that's that's what happens in deflation and you have to think of it this way it's just a bubble defla

and they've stopped before they ended up distorting the real economy, unlike the case of the united states where we not just allowed our property and credit markets to form bubbles but we allowed those bubbles to infect the real side of our economy. we're going to be paying a price for that as the japanese are for years and years to come. >> rose: what did they do in china about this... the tension between on the one hand growth and on the other hand climate change and pollution and all those things that they are aware of are approaching a dangerous level? >> charlie, i mean, they have made the choice for growth for one simple reason: growth to them is the antidote to social instability and they've got a massive reservoir of surplus labor that they need to continue to absorb to keep this society together. but in opting for growth, they've gone for the quantity dimension of the growth experience rather than the quality dimension and now, as jim just pointed out, the environmental issues, the excess resource consumption has reached unsustainable levels and they've got to focus much more on t

. >> charlie: people are more worried about the united states economy than they are about the europeanconomies? >> well, it's the latest news. so people thought the u.s. was out of the woods, at least the typical wall street economist, and they said europe was headed down the drain. now, europe seems to have put the plug on that. our data is getting a little worse. i wouldn't necessarily say people are more worried about the u.s., but they've turned their worries to the u.s. they thought we were fine. now they're not so sure. >> charlie: what are your worst worries? what are your greatest fears about the american economy today? >> i don't disagree with anything ken said but the one thing, i'm sure he agrees with me if we don't fix our k-12 education system, everything else doesn't matter. we have to find a way to better educate our kids so we can compete with the rest of the world, if we are going to live in an economy that is increasingly based on selling our brains and not our muscle, then we have to spend more time investing in our brains. i'm heartened by what's happened in the las

. >> counterfeiting badly undermines the united states' economy. it robs americans of jobs, it stifles innovation, and it promotes crime. >> reporter: the raids took place here in souvenir shops in the fishermen's wharf area on beach, taylor and jefferson streets, ten arrested, one is a fugitive. they are all facing smuggling, counterfeiting and conspiracy charges. >> during the investigation, i seized 200 of these counterfeit bags. they are ordinarily sold at $200. >> reporter: renee rivera visiting from new mexico has the same bag but a real one. >> usually you can tell by the hardware. if you look closely, you can tell. >> reporter: but do consumers know selling fakes is against the law and buying them is a cream as well? >> i'd rather know i'm getting a good quality handbag and pay the price for it. >> reporter: 11 people indicted for smuggling fakes into the u.s. from china may have to pay the price if convicted of the crime. and if convicted, the suspects could spend up to 20 years in prison. live in oakland, cheryl hurd, nbc bay area news. >

. >> counterfeiting badly undermines the united states economy. it robs americans of jobs.t stifles innovation and it promotes crime. >> now, this was the culmination of a two year undercover operation where agents raided eight different wharf stores and arrested 11 people. they are facing charges of conspiracy, smuggling and trafficking of counterfeit goods, the penalties can be as high as 20 years in prison. >> we have learned the 11-year- old california boy who died during a recent football practice had a rare and undiagnosed heart condition. andrew jacob lamb per was from garden valley. he was taking part in the first practice of the year for his pop warner team. his family said he told his coach that he wasn't feeling well. then a few seconds later he passed out. his father was one of the coaches on the field. >> and they lost his heartbeat. they brought him back and then they lost it and they brought him back about three different times. >> an autopsy revealed he had a heart condition that caused his heart muscle to thicken. it is a condition that would not normally b

united states. >>> japan's economy grew at an annualized rate of 0.4% in real terms during the second quarter. this is sharply lower than the 4.4% in first quarter. it also lags behind china's economic output for the same period. the cabinet office announced on monday that gross domestic product in the april to june quarter grew by 0.1%. this translates into an annualized rate of 0.4%. while the economy has posted growth for the past three quarters, figures for this latest quarter show that the pace of economic recovery in japan is slowing. second quarter exports were up 5.9%. on the domestic side, personal consumption was flat. public investment fell 3.4%. and private investment in housing also fell 1.3%. japan's nominal gdp for the quarter was about $1.288 trillion against china's 1.337 trillion. japan's exports are still larger than china's by $55 billion. but with its fast pace of growth, china is expected to overtake japan this year as the world's second largest economy. >>> a japanese immigrant held hostage by anti-government rebels in colombia has been freed after a military operation.

so by the way is the german economy german economies and the french economy there are less financial and the u.k. and the united states so it is quite possible that when we look at national economies as rodney was doing that the u.s. has really damaged its own people in its own state in a very serious sense but secondly also in brazil to take an example that is much admired there is enormous inequality in china central committee of the communist party i am an honorary advisor to the national academy of planners etc so i get involved in china. they have to clear that inequality is one of the big issues there and last year there were nineteen thousand revolts in china it was not the norm rich middle classes you know so we are dealing with a system that is producing enormous inequality and i would agree with one point that was made with a rush aim which is the failure of national governments in governing finance but also in governing the larger market effects that this kind of capitalism brings all right you know whether. you go to you i mean this was financial ization of economies is this something that the developed co

. >> counterfeiting badly undermines the united states economy. it robs americans of jobs. it stifles innovation. it promotes crime. >> this was all the culmination of an undercover operation. agents arrested 11 people. the suspects face charges of conspiracy, smuggling and trafficking. those come with penalties that could send them to 0 years in police -- 20 years in prison. >>> coming up, we'll tell you why the feds are taking a special interest now in marijuana growing operation. >>> and a peek at the new temporary transbay terminal. ♪ welcome to ultimate rewards from chase. no blackouts, no restrictions on airfare and hotels, no limits to what you can get with ultimate rewards. no wonder it's called ultimate. available on chase credit, debit, and business cards. chase what matters. >>> welcome back. oakland's plan to allow large scale medical marijuana farms is attracting the attention of federal authorities. the dea asked the city if the ordinance on the city's website is a draft or a final version. the agents also asked for details and a time line for the plan. mariju

i want that in the united states here in phoenix to help us with the economy. that brings me to the third point and that is the notion of dynamic talent is a tricky concept in the united states. we don't know in modern economies what helps an economy continue to grow and to remain strong and to prosper as it inknow vates, particularly as the economy and the culture and the society becomes relatively well off. it is a known phenomena that it is hard for individuals who are relatively well off to take outsized risk and put everything on the line. back to my original story, if you think about the swimmers in the contest, in order for the united states to prosper, we need lots of swimmers who are willing to get in the water and swim and save nothing for the trip back because they are the type of person who will do whatever it takes, work as hard as is needed and get to the other side without saving energy to get back. and this shows up in what we now have as the crystal clear data in the last several years largely funded by the kaufman foundation out of kansas city

follow suit or be left behind so we talked about dead people and dead economies and here is more evidence of this in the united states and this economy that we're. created by the likes of alan greenspan and david stockman comcast to customer pay us zero dollars and zero cents or will cancel your service so this is from gizmodo dot com and they are recalling they they post a picture of this bill where customer of comcast this big giant telecoms group in america received a bill for zero cents and said either pay up now you always zero cents or we'll cut off your service this customer happened to call comcast and resolved it another customer of charter communication another company had the same exact situation happened to him but he just ignored it because he's like how do i pay zero cents right it must be a mistake and they know it you know they cut off his service because he failed to send in the zero cents and charge him twenty five dollars for cutting off the service well this goes back to a famous case a few years ago with america online famously kept charging a dead person for their monthly service and the family

gwen: back to the united states because president obama spent the week skipping across the united states. talking up the economy and talking down the republicans. most important he raised millions of dollars for his party, probably the most useful thing a president can do. >> remember our campaign slogan, yes, we can? their campaign slogan is no, we can't. pretty inspiring, huh? you know, you wake up in the morning and you hear no. that puts a little pep in your step. [laughter] gwen: he is never having a better time than attacking republican. their senate committee raised $4 million in july, less than the senate democrats. how are they raising and spending and why does it matter? jeanne? >> it's interesting because you could go back to 2004 and 2006 to see what the two parties are doing. you have the president helping out the establishment committees, which is the best thing, as you said, a president can do. and despite his unpopularity ratings generally with the public, he can still draw a pretty good crowd. helene was out there with him and he was making a lot of money. you look at the republicans, the repub

china passed japan in the second quarter to become the second largest economy behind the united states. the recognition comes from government figures that show japan's economy grew far less than forecasted. while this isn't the first time china has overtaken japan, it is the first time the country is expected to hold on to the number two spot for the rest of the year. >>> news of japan's stalled economic growth took a toll on exporters during today's trade helping to drive the nikkei nearly 1% lower. meanwhile the chinese market got a boost from banking stocks when the agriculture bank of chin secured the title of the world's biggest initial public offering with total proceeds of $22.1 billion. >>> back on the street. companies reporting earnings include home depot, target and walmart and tech bellwether hewlett-packard. >>> also on deck, we'll get the pulse of new home construction with new housing starts. and permits for future building. >>> new bank rules go into effect this week. no more costly overdraft fees unless customers opt in for coverage. the new rules also allow banks to d

they continue to focus on the united states and indeed, the economy there shows further signs of weakness. new data from the housing market underscores these fears that the world's largest economy may drop backnto a recession. because newhom sal are at their worst annual rate ever recorded. volkswagen, whatever shares with big losses because analysts see other times worsening for europe's largest car maker. they see the second half of the year not near as good as the first, and they see volume car makers in the year 2011 heading for stagnation. >> let's look at some of the numbers, and we start with the close in frankfurt. the dax index closed at 5900. 50 finishing lower also. across the atlantic, dow jones industrials are higher at 10,060, and the euro is trading at $1.2651. french cosmetics company l'oreal has been at the center of the attention this summer. profits are up. demand for mascara was reportedly very strong. the company said it is managing to cut costs, and sales of luxury items were also stronger. loral says it expects profit growth to continue in the second half. >> thanks

you did get it with a little bit of perspective at the united states economy but you realize that all gains that we have made in the last 10 years have not disappeared. the stock-market has not done particularly well. the individual citizens and you are looking for jobs is greater than any time in the world. this is merely a correction. it is caused by too much spending. thank you. allied to hear your comments. guest: it is hard to put that in perspective. people have been so used to a modicum of prosperity. housing prices have gone up. stock markets have gone up. there is a promise of 15% a year. that is not happening. there is a record amount of wealth. people are not feeling anything but healthy. it can amplify the fear out there. it is important to put it in perspective. use is up. unemployment looks more chronic than it has in recent years. it is largely a three-year phenomenon. the fear is that it becomes a slow burn promote you have economists talking about a new normal. it has become a cliche that we will have to get used to this better. we have been deluding ourselves for a c

was arguing with them i said that it would take the most developed or initial of the market economies united states they introduced brought in some places in alaska. to bring down the whole there prohibited to sell alcohol in there so i don't know exactly because of that raised by democracy markets in freedom in some way they're not afraid to enter this restriction to get the seven candidates you and in the united states did so you mean to say that indigenous people have similar problems i mean the russian for annoyance. and so there are a lot of come across as they have to fight of course and there's something to learn from each other history many things we can learn from them going and then they learn from us is of course so for example. for examples in a number of russians retransfer very few unfortunately unless there are laws similar to international laws. people's rights for example. peoples are represented by the locals or parliaments and governments they participate in decision making which considers theory a future when there are other things i can give you your mall as an example but the

there are lots of reasons that we want a clean energy bill and a clean energy economy in the united states as you know just like the rest of the world we're dealing with severe economic recession a lot of unemployment and we're looking for the growth industries of the twenty first century and just like china and europe we are trying to participate in what we think is the next. you know boom industry which is clean energy and there's been reasons that we wanted to move towards renewable energy sources that don't run out that give you domestic energy security we don't have the we don't pay or import. fossil fuels from parts of the world that are unfriendly and unstable. so we can save money there's really an economic case for this so climate change and especially the debate about the science can be a distraction to that because it's public health and economic and national security reasons that we're doing this in ited states and unfortunately we didn't use the resource that we had in the wealth that we had the last thirty years to get on that future so we're still playing catch up but in ter

there is further evidence that growth in the world's largest economy, the united states, is slowing sharply. the head of the federal reserve said that they stood ready to intervene. some are worried that the u.s. could slip back into recession. one of the worst affected states is rhode island. >> the crunch started with housing in the united states and it is not getting much better. america's top banker says that growth has been too slow. the labor market is sluggish and the labor market is vulnerable. >> these are fragile times. it looks as the at u.s. is slowing. if the u.s. lowe's, the u.k. will be behind it. -- slows, the u.k. will be behind it. >> rhode island, america's smallest date, one of the first to plunge into recession. the company's deputy director says they are in a good position for the housing market. she says that houses are not selling. >> the market is very flat. very few buyers out there. interest rates are great. prices are good. there is a lot of uncertainty about jobs. >> homes have been repossessed. around 60 in the small area. the problem behind this is unemploymen

quantitate tif easing, what is your assessment of this and what impact will this have on the economy of the united states? >> i think the u.s. fed has already shifted their policy from credit easing quantitate tif easing because in the past the fed has insisted that the size of the fed balance sheet was just the result of acquiring a securities from traveled markets and the size of the balance sheet itself didn't mean much. but i think earlier this month the fed made public that the size of fed balance sheet, that's a matter that is important and on top of it the composition of the balance sheet does matter. and i think that they decided to accumulate longer securities inclined that they try to keep lower interest rates lower. i think in this respect the u.s. policy may be more effective as compared to quantitate tif in the case of japan. >> what kind of experience was this for japan? >> yes. i think it was effective to stabilize markets. but not necessarily affected to stimulate the economy. this was, i think, a basic experience, a basic understanding of quantitate tif easing in the case of japan. i thi

shares suffered under the nervousness that exists at the moment about the growth of the economy in the united states, the main worry here at the moment. >> and let's take a look at some of the numbers. first of all, looking in frankfurt, where the dax closed at 6010, the euro is up. -- the u.s. stocks is up. -- the euro stoxx is up. moving on, the swiss bank ubs has had its share of image problems, first its huge losses in the market 2008 and then it costly political battle with authorities in the united states for helping wealthy americans evade taxes, but now, the bank is moving into the fast lane, announcing a major deal to sponsor formula one. they say the sponsorship will be part of a new global campaign. ubs has largely been associated with a golf tournament and cross-country skiing. a change of pace there, i think you could say. >> what and germany's main opposition leaders has announced he will take a six-week break from politics for political -- medical reasons. he says he is donating one of his kidneys to his wife. >> his wife has long suffered from kidney problems. her husband says her co