captning sponsored by wpbt >> susie: the fed'reputation has been tarnished so sa a key report on reforming financia regulation. it co-author, william donaldson, ss a systemic risk gulator is needed now and it ouldn't be the federal reserve. >> they were buying corpse when they thought they were buying a bab >> jeff: he's talking abt scams touting moy making opportunities in the worless shares oold g.m. mingp, an investor alert. >> susie: tonight's stet critique guest says wal-ma's not e only retailer cashing in on the recession. he'satrick o'hare, chief market analy at briefing.com. >> jeff: then, ilooks like moreeople are paying their credit cards on me. americ express and capital one both report delinquencieare wn. the newselped stocks surge as the dow addeover 250 points. >> susie: i'm susie ghib. >> jeff: and i'meff yastine. paul kangas is off tight.

this is "nightlyusiness reportfor wednesday, july 15. "nightly business port" is madpossible by: this progr was made possible by contrutions to your pbs station from viewers like yo thk you. >> susie: good ening everyone.

>>eff: no alikely hood of support over the near rm. end quote. that means no ney toelp the sh-strappefirm. cit is evaating alternativ and one of thenation' largest small business lenders serving thousands of firms and s been on the verge of bkruptcy for days. >> susie: harsh criticism todaof president obama's plan to ke the federal reserve the uper regutor" of the u.s. financial system. an institutional iestors group led by two fmer heads of the securities and exchang commission says th won't work. ey say the central bank shou not get the job of pventing systemic risk in the finanal syem. that tk is the centerpiece of the president's plan t restructurhow banks and other firms are regulateto prevent another financial llapse. >> susie: arthur levitt an willm donaldson's criticism of the d was blunt. their report compileby the vestors' working group said:

instead, they are recommenng the creation of an indendent oversight board to monit risk managent. thato-called "systemic risk oversight board" wld be appoind by the president and approvedy congress with no affiliation to government agencies the task force ialso recommending hedge fds and private equity firms be quired to regter with the s.e.c. and be subject to oversigh over the count derivatives, like cret default swaps, ould trade on regulated changes and be subject to stri government regulation. and congress shod create a new ency to regulate consumer nancial products including mortgas. >> susie: i sat down with william donaldsoearlier today and askehim why he's opposed to the fedaking on the job of "systemic risk regulator."

>> we feel that the basically the federalreserve hasgot its has full in terms of monety policy and felt iependent group that is not coming out of anyo one of they existing agencies, independe group with greattrength in terms of the commissions and board membe and are partularly strong staff wi themandate and the authority to anywhere they want, it is a way of really tting at theystemic risk problem. >> sus: you're proposing th oversideoard and treasury secretary geithner sd you can't put out a fire with coittee. >> the kinof editing we're talking about here is a sma group that by aintment and the

people apointed have different dimensions of experience and a strong chaman >> susie: and said hedge funds and prate equity fund b registered with efcc. bernie madf's funds were regiered and also cheat thousands of investors so why would this work. >> he didn't register. the thg regisred was a different business so this oer business that was sh a fraud was not registered, nobody knew about it. it only seems logical tt if funds are put together whether you call them hed funds or atever the should be some thority that that's right to go in and lookt the procedure with that fundand look a things such as how theyrice their securities, wh conicts interest they ve, etcetera, etcetera. >> sus: i'm sure you heard it

sa thate rlly don't need new regulation and structure we need sma regulators to enforce the rules we already have. what are your thouts on that? >> tre are anumber of res and regulations w don't have. a whe derivative ea that has gotten usn trouble and no ersight froms and i think cleawe need affective regulatorsand clearly we need need people w are trained and again this is aroblem and a challenge and oppounity to bring peoplento the regulatory agenes that artrained and know what they'r talking aut and eager to work throug that agency >> susie: what'sour analysis of the oba reform lan? is it the right sotion to reform thesystem? we say that it's very good

start. a od start but wre ting things a little further and also counseling that the who systemic partof this and some conflicts of interest that are going require more study and we should not move too swiftly. >> susieso what's the one te ay message you would the oba administration ttake from your report? >> iope they take a goodhard look at me of the areas we've pointed out and take and see if th want to add to tir prosal >> susie: i guess wha it comes do to is whatnvestors care about and willhe refos ultimately spot risks in e future and will they be able to prevent aernie madoff situation from happeni ain. what are your thohts on that? >> the's always going to bin aociety as big as our and a global and financia investment

world the are going to be people coming up with schemes and sforth and some will be prty devious i'm sur so can you say that a madoff kind of thinwould never happen again withroper regulaon, ion't think you can say that. the be you can do is to dress the caus of this situatio whichhe ngressional committee taking this on is goi to do and the to do the best you can. >> susiepleasure talking to you. thanyou. >> thanks. >>eff: while the investors' working group made recommendations med at preventi another financial crisis, congre today named a panel investigate the crisis. formeralifornia state easurer phil angelides will lead the t member bi-partisan group. congress called fothe probe into the worsteltdown since the greadepression earlier this year. the panel willave just over a year to get the bottom of things. it has to repo back to congre by december 15 of next year.

>> susie: former treury secretary nry paulson is defendg his actions during the financial cris. tomorrow he will testi on capitol hill about bank america's contversial quisition of merrill lynch. paulson releas today his prepared remarks, sayi bank of america had no legal bis to x the merrill deal and doing so would have shown a quot "colossal lack of judgment." paulson alsoays it was appropriate for him to wn b.o.a's c.e. ken lewis that e bank's management could be ousted, it rejected the merrill purchase. >> jeff: investors viewed day as a colossal buying opportunity, after intel better-than-expected rests last night. the dow opened nearly 10points higher at the bell. inl shares leapt 8%, giving thdow a 180 point gain by noontime. adding to the bullishns, credit card isers like american eress say they're now seeing fewer defaults and delinquencies. that helped the finaials and added more fuel to tay's rocket re higher.

the dow rose 256.72 pointso close at 8,616.21. e nasdaq added 63 points to 1,862.90 the s&p 500 gained6.84 points 932.68. in the bond rket, the 10 year note fell 1-4/32o 96 putting the yield at 3.61%. >> susie: shes of the old general moto lost half their lue today as regulators lift a trading ban the penny stock. tradinwas halted friday after some invtors confused the new g.m. tt emerged from bankruptcyith the old g.m. stock that remai tangled up in court. toe clear: the new g.m. isn't publly traded now and most of the companis owned by the u.s. government but what about those o g.m.

shares? as darren gersh explai they're still virtually wohless. >> reporter: it was stunng ne. last fday, a reborn general moto peeled out of bankruptcy fasooner than anyone thought. and shares in g.m. jumd on the news. the ly problem is, there are nohares in this new g.m. they were buying a corpse when they thout they were buying a baby. >> reporter: fince professor james angel sa many would-be inveors thought they were bung the new, post-bankruptcy g.m., wh, in fact, they were buying g.m.'s cast o parts-- the assets that arstill languiing in bankruptcy court and mit be stuck there for years. >> many of the online news wes basically said "neral motors, gmgmq today emerd from bankruptcy. soany people thought, ah ha! i cabuy stock in the new company now, butt wasn't the new company they were bung. it was the corpse the old coany. >>eporter: when g.m. went bankrupt, its d stock got a new ading symbol-- gmgmq. that confused somenvestors so

relators have given the old company a new name-- mots liquidation company. the financial instry regulatory authoty's john gannon wantsveryone to know buying stock in motors liquidatioor any bankrupt company usually means you ar buying a lemon. >> people who thin if they buy >> reporter: regators did not haltrading in the old g.m.'s sharesntil just after 2:00 p.m. lt friday-- too late professor angesays. but nnon says securities law required tm to wait for the kind ounusual trading that to place on friday. >> pple who think, if they buy the old stock, wn the company emerges from bankruptc they are all of a sudden gog to make a big return, arerong. what is probably going thappen is the stock igoing to get canceled. their vestment will be rthless and there is probabl going to be new stk issued, but they're not gog to have rticipation in that new company.

>> reporter: theew g.m. plans tossue new shares next year. shar in motors liquidation now cost about amuch as a wspaper. anregulators warn the stock will probably worth nothing the time the bankruptcy cou finishes its wk. rren gersh, "nightly busines rert," washington. jeff: municipal debt issuer could soon have dot their i's and cross thr t's in public. the s.e.c.ants the nearly $3 illion muni market to have t same disclosure rules as publicly traded coanies. the agcy wants states and counties to be up-front abou things like bankptcies so instors can make better decisions. and it wants thoseisclosures qukly-- within 10 days. right now, muni debt issrs ha some gray area to work with disclosingn what's called a quote, "tily manner"

>> jeff:ow let's take a look at some stocks in the ne tonight.

>> jeff: tight's street critique gst says it's still too early to get excitedbout an economic recovery. he's patrick o'hare,hief market analy at briefing.com where he writes e bargain hunting comn. pat weome back to n.b.r. >> h jeff,hank you. >> jeff: fir give us your sense of the mket today, the dow up 50-plus. >> earer in the week the s&p was down and we tnk it got

angst out of the way so what he we witnessed was a reef trade because earnin are coming in bets than feared and the market's appease with his send quarter repor and the guidance is sen percent below the year ago perio intel is still not operating ia normal environment ands ty a bit daunting to us given we' 18 months into the recession so we wouldn't get carried away with what we'reeeing so far. >> >> so be patient. you still haveto wait around a bit. >> given t run we've h off the march, yes, we would agree with that. >> jeff: you write the baain huntincolumn for brfing.com. at's your comments on howou defi a bargain. >> to stt from from a top-down prespective and looking the broade economy and based on where we think the economy is heading breakingown to

industry gups and one of the value-oriented metrics is the ice to earnings growth ratio thpe divided by the gwth rate. >> jeff: what's yourhought here as far as iyou had to pick one bgain what wouldit be? >> given the top-down view and e outlook that isn't quite as rosy as the maet's ading on wednesday's tradinsuggest it shou be we look at the dolr tree stores the syol is rtr has done well with in the cession period and the unemployment rate eected to hit double digits over the next future here we think it will ing to benefit from the tre-down effect because the consumer has limited wage growth. >> jf: the stock has had a tremendousun in recent months and over the past year or so. do y think there's still room for the ock to go fther givetime f theains to dige? >> sure. it's probably going to move with

the ebb and flow of the market so whe you t a go up y nged on favorable prospects and the stocks likely to uer perform whe that view changes stock because has d a good run ll probably sele done but give enwhere we think the economy is headede like the prospes for the long rm vestors. >> i saw the ceo selling a big chunk of stock. >> it's prudent to take se money off th table ande're comfortae with that happening right now. >> jeff: and at, any disclosures make regarding dollar tree? >> no, i do not own stock at this time. >> jef pat, thank you for cong back on to the program. >> thank you, jeff. >>eff: our guest, pat o'hare, briefing dot com. >> sus: tomorrow, we'll see if

investors go ga- for google's latest earnings. we'll analyze the numbs and e outlook. >> susie: a former cdit suisse broker turned fugitive h been captured. julianzolov was picked up in spain today, aer going missing in june. tomorrow, a hearg is set to determine what iact the capture will have on his upcoming trial. it's seto begin next week. tzolov is arged with fraud and conspiracy f buying auction rate securities when h clients thought they were purcsing federally-backed student lns. >> jeff: coxommunications is sending the travel channeln a trip to a neowner. reuters is reporting an ction for thcable channel is expected tbegin in the next few days. poible bidders include scripps tworks interactive and time waer. the travel channels valued at up to a billion dollar cobought it in 2007.

>> sus: here's a look at wh's happening tomorrow: wely jobless claims are out and the natial association of home builds releases its july survey. also, quarterly results fr harley-davson, i.b.m., j.p. rgan, marriott and nokia. >> susie: al tomorrow, wal- rt will unveil a new ratings system, but this one isn't f movies or music. instead, it's designed to lp shoppers evaluatthe social and

environmental impact of e products they purchase. but the suainability ratings won't be in place for a ile. first,al-mart will send questionnaires tthousands of its suliers asking about water used and carbon-oxide issions created in the makin of their pducts. the effort will be rolled t in steps over t next five years and wal-mart hopes oth retailers will get on bod. >> jf: recapping today's market action:hares rally on improved outlook from the federal reserve and inl's outlook. thdow gained 257 points. and the nasdaq gaid 63. and to lea more about the stories inonight's broadcast, to wch our streaming video and take part in our daily blog go to "nightly biness report" on pbs.org. you can also email us at nbr@pbs.org. >> jf: that's "nightly business report" for wednesd, july 15. i'm jeff yastine. goodnight everyone a good night toou, susie. >> susie: goodnight, jeff. i'm susie gharib hope to see all of you agai tomorrow evening ightly business report" is

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