tv Nightly Business Report PBS September 25, 2009 6:30pm-7:00pm EDT
>> paul: psident obama declares the g-20 mmit a success. that as global leaders agree to keep stimulus meases in place until onomic recovery firmly takes hold. >> we need a price which aows the vestor to invest and the producer to oduce. and we believe $75, and if y nt a range, between $70 and 0. susie: this man's words move oil prices arod the globe. coming u my exclusive inteiew with saudi oil minister ali al-imi.
>> paul: then,ed governor kevin warsh upse the apple rt with a surprising viewpoint. he saywhen the time's right, rates could move aggreively higher. >> susie: all at glitters is gold, and that's how tonig's "market monito likes it. he's sll bullish on the precious metal. he's mark leibovitchief invement strategist at vrtrader.com. >>aul: i'm paul kangas. >> susieand i'm susie gharib. this is "night business reportfor friday, september 25. "nightly business port" is madpossible by: thank you.
captioningponsored by wpbt >> susiegood evening, everyone. world leers have wrapped up eir meeting in pittsburgh wi a pledge to sustain thr economictimulus programs until a durable recovery is sered. thg-20 leaders warned, as econic recovery takes hold, a sense of normalcy shld not lead to colacency. but as dren gersh reports, critics say the leaderrecord on fincial regulatory reform does not match their rhetori >> reporter: the preside decled the g20 summit he hosted a scess, saying it had id the groundwork for long- term prosperity. >> todaywe took bold and concerd action to insure that prosperity, anto forge a new framewk for strong, suainable and balanced growth. reporter: g20 leaders also agreed to clamp downn pay packages for bankers, enrsing rules to tie compensation to longerm performance.
ey also pledged to eliminate bsidies for fossil fuels tha contbute to greenhouse gas emissions. they also agreed to reew g20 member nation's fiscal, monery and ade policies to see if they are csistent with sustnable global growth. the worls rich nations tried this kd of peer review three years o, without much success in bringing down theassive trade decit in the united states, and the correspondg trade surpluses china and german still, tim adams, a form assistant treasury sretary for international affas, says counies pay more attention to each oth than they do to econists or international financial institutions. >> so, i think peer essure matters, and if we say wre going too something, then our friendaround the table should hold us accountable. >> reporter: b critics like economist simon joson are disappointed leade failed to tackle the tough isss of financial gulatory reform. >> in tes of what they could have done in ptsburgh, reasonably and realistical toda- setting up a framework, a detailed a specific framework to manage the faile
of major multi-national nks is a complete reasonable request- - and they completely dropd the ball on th. >> reporter: t real test for many g20 leaders will me when they return home and havto deliver the reforms th have promised. the oba administration is ready facing a tough time tting its financial regulato overhaul throughongress. darren gersh, "nhtly business rert," washington. >> susie: bizarrdevelopments day on what's next for interest rates. a feral reserve official said the central bank may raise res aggressily when the time mes. kevin warsh pressed his inions in today's "wall stre urnal," and then repeated th in a speech this afternoon the commentsonfused investors. just a few days ago,ed policymakers said rates wod stay low. so what's going on? suzanne pratt got some answe. reporter: the federal reser governor's op-ed in today' "walstreet journal" was a potential ha grenade for finaial markets. and just hrs after lobbing it, author kevin war echoed much of its content at a eech in chicago. >> if policymake insist on waiting until thlevel of real
activity has plainlynd substantially turned to normal, and the econy has obviously retued to self- sustaini trend growth, they ll almost certainly have waited too long. >> reporter: war had many on wall seet scratching tir heads. that's mostly cause it was a 180-degree turn fromhat the fed id wednesday after its meeting on intert rates. licymakers said economic conditio are likely to warrant exceptionay low rates for an extended period. whis warsh publicly contradictg his boss, fed airman ben bernanke? economt chris low says no one really knows, so iestors should take the comments aface value. >> it oks like a senior offial at the fed sending this message, that evenhough it's not nessary right now, the rkets should prepare at some point for a faly aggressive titening. reporter: economist bob brusca says dissension at e d is normal; the way warsh i
publicizing is not. >> ion't know if he has litical aspirations. i don't know if he just wantto draw some atteion to himself. maybe he's thinking of makg some headlines and pnts about inpendence so he can go and do something else. and thisertainly does elevate his name. up until now, he's beea pretty quiet governor. >>eporter: as for the future of ierest rates, economists say expect them to remn low. today's developments, hover, suggest there could be aot more debate aboujust how long they'll st that way. zanne pratt, "nightly busine report,"ew york. >> paul: those warsh comment puzzled wall street th morning. stocks headelower as an unexpected declinen august durable goods and a smaller- than-expecd rise in new home sales had investors doubtinghe recovery's proects. stockstair-stepped their way lower as the dowosted a 58-point mid-day loss withhe nasdaq off 20 ints. the sell-offas cushioned a bit
by a bigger-than-expected se in late-septemr consumer sentimt. but the market sll ended broadly wer. thdow industrial average closed off2.25 at 9,665.19. for the week, the dow rosenly once for a net losof 155.01 points the nasdaq dpped 16.69 to 2,090.92 tod. it rostwice and fell three times this week for an orall loss of 41.94. the p 500 fell 6.40 to 1,044.38 tay, and for the week overall, off 23.92 point in the bond market, the n-year te climbed 16/32 to 102 18/3 putting the yid at 3.32%.
>>usie: i'm just back from saudi arabia, ere i met with alal-naimi, the nation's oil minister. as the domant member of opec, he plays a crucial role in deciding what consumers an businesses pay for eney. this week, nai hosted 3,500 business leaders and hea of state for the opening of a multi-billion dollar univeity, the king aullah university of scnce and technology, or "kaust," for srt. naimi guided its developnt and is its chaman. i began our conversation by asng naimi how kaust will impact the saudi econo. >> you know, saudi arabia tay is highly pendent on one source of revenue. now we cannot coinue forever on this soce of income.
let us do our best diversify the onomy, indurialize, and move to a knowledge societ eventually. >>usie: what are you going fos on? what will be the bigge growth industry outside of oil ultimately? >> nber one is food. number twos water. number three, believe it or not, is energy and environment. these are ththree areas of focus. no why do i say energy? >> susie: let's talk a little bit about l. we've seen oil prices this year as low as $32 andot longgo as high as $7. what do you thinis the right price for oil? >> we believe thatround $75 is a fair price for the oil
producers, the consumer. why do i say 75? now,o produce some of the hydrocarbon sources requires a price which rewards the investors. some of these invements need a pre between $60 and $8 d that's why woe chose a fr ice of around $75. susie: some people would say $75 is not the optimal pre becausthe dollar iso weak, and so to compensate for at, the price should actlly be high. what do you say tothat? >> of course the is some uth to that. tually, in sai arabia it wodn't make any difference. >> susie: do you see price going below $70? if i knew that, i wouldn't here. i would be gambling in las
vegas. i can ll you one thing-- the price. uctuate, keep change. >> susie: will it make another run for a $140 level? do you see tt happening? >> athing is possible. we will do our best to avoid that. because idon't believe high prices are goo,or do low prices. we need a price which lows the investor to inst and the oducers to produce. we believe 75, and if you nt a range, between0 and 80. >>usie: as you know, the u.s. economy depends on csumer spending, and know worst biggest factors r consumers to snd is wha they pay for the price of gasoline. whatan you tell american pers of what they can expect to pay foras? pay less taxes. you know, if you took therice
of gallon of gasoline and loed at what ctributes to thatrice,t's probably 30%. worldwide you will find is raging 60 to 80%. the biest jump in the pri of gasoline is ally taxe >> susie: bu when gasoline prices notong agoumped from $2 a gallon to $4 that wasn't because of governmentaxes. that wasecause the actual price jped >> right. australian speculatin from playing arnd with the price of oil. >>usie: how do you do tt? >> by registration. and i believe ting to manage this specution isbeing discussed very loudly and
thoroughly in many organizations in many governments. institutions. yohave a rutation for trying to keep oil prices stable, but ther are other opec countries that areot committed to that. what do you s to them? >> w always t took reasonable and moderate, inverything we do, actually. if i am at anpec conference, we will ve, of course differences of opinion but eventually, moderati becomes the... subct of the da >> susie: a big question for everyone right now is the recessio over? what do you think? >> i wish i knew that. but because i'm an optimist, i believ- and based on what we
ve seen, the recovery of price and howt's reacting to gwth eye believ woe are-- we are on the ro to economi recover >> susie: wh signs are you seeing? >> i see it demand for energy i s it reflected in th price. so it's ere. and it's ppening. >> sus: you have an opec meeting coming u in december. do you see anything ing on in the markets that would call f a change in policy? >> right now i don't lieve so. i think will be as we are today. >> sie: yo >> susieyou can watch the entire interview with minist naimi onur web site, "nightly busine report" on pbs.org. an monday, we'll bring you my interview with the c.e.o.f saudi amco, the biggest oil company in the world.
thfirm plans to file for bankruptcy ptection, and will be sold to ares magement, which owns rival sta mattresses. simms hopes to reduce its debt from billion dollars down to $450 million. mattressales have suffered in the economic downturn. simms bankruptcy filing could come within 90 days. >> paul: de soap is joining forces with brylcreem. consumer products giant unever is buying sara lee's body re products unit. the price tag nearly $2 billion. the acquisition boosts unilever'sresence in western europe and aa. saraee will use part of that money for a billion-llar stock buyback program. the de is still subject to regulatory approval, but suld close next yr.
>> susie: here's a look at wh's happening next week: our friday "market monor" guest isichael hasenstab, senior vice presidenand pofolio manager of the templeton global bond fu. on the economic calendar: tuesday, the s&p casshiller home price index for jy is released; wednesy, the final reading on second quarter g.d.p.; thursday, 's september auto sales, and t august reports on personal ince and construction spending; friday, e september employment report. >> pl: my guest market monitor this weeks mark leibovit,
chie marketstrategist for vrtrad.com, and welcome back to nbr, mark, good to see you >> paul, glad to see you, always good to beack. >> paul: u have been correctly bullish on thstock market in general and gold in particur. we've had a heck of a run on the stock market since mah with the dow soang from 6900 to 9800 lev. is it ti for profit taking in stocks here? >> it appears so. 've been in an upward chael since march, looking at the dow industrials,here's a risk perhaps of a pullbacko nine,000, 890, maybe, but it's still an upward chnel. and theork basicay says we're in a bull market here which could last a lot longer and go a lohigher. some of the technical wo we're doing, particularly a rerse he and shoulders pattern we put together on the chart shows potential as high as 103. i was talking three. any llback here in oober,
november, would be abuy for a move to th higher lel. think some time into next year >> paul: all rig. so sti bulli long te on stocks. now, you hav been extremely bullish onold, pricting last april would go from around a $900 perounce level then, to $1,000 an ounce wch it did early this wk. good call. where do gol pricesead now? >> well, we've only started, paul. there's so revse headnd shoulders asurement in gold up to about 1300 and you know i have a biggericture number up at 3,000. but our annual forecast model for go pretty muchinned it all year calling f a high he in the septeer time frame and then maybe a little pullback. i think that'shat we're starting to s now alittle bit of a correction in th gold. and then i see it breing through, and t,000 level is gointo become the flo and we're going to start moving up and up into the higher leveli ink into next yea >> paul: t forecast mod cell very good. i complint you on it. back in nuary, weaid high
in september a here we are. >>aul: do you like silver at the price levels, a little over 16 an nce. >>e have technal up tohe high, 21 an ounce, and numbers wa way higher than that. >> paul: soou liket. on your st visit inlate april with us, you had four buy recommendation let's see how ey've done sce then. fit was central fund of canada up nearly 11%, and heckler mining up 83.. are you still with them? would you buy them here? i buy them every da i doll cost avege with an uptrend in the metals that i projectingwhy not. >> paul: hutwo more recommendations back in apri seatsee what theyid. dennison up 21%, thas four for four, congratulations, goocall >> well, the market-- theind was at my back. let's put it that way >> paul: do u have some new remmendations, mark? >> well, i would go back and stayith the ntral fund of canada, c.e.f 60%old, 40%
silver. and as silver mes higher, it's a nice safe way of playing that market short of owning t physical metals. >> pl: to move along we only have a mine. >> s.l.f., the e.t.f. for sier. i would b that. it's tradi aroundhe $15, $16 leve if silver goes to $21-plus, that's going to go upo those levels. my next play would be p.a.l., which is north amecan palladium. is is a play onalladium, and withll the che cars being produced in india and china there's going to be a t of demand for pallium and platinum because of the catalytic converter issues so this is a goodlow-price play. 's three bucks andould probably double. >> paul: one more cice quickly >> one py for the overall market would behe total stoc market index, v.t.i.. any pullback weget here in october,ovember, i woulduy v.i.. w goes to ,000 you have
total stock mark play here. >> paul: do you personally own the securies mentioned herer have other disclosures? you do >> i tra and own these securities, yes, pl, thank you. paul: our te has run out. thanks for being wi us once again >>hank you, paul, r having me >> my guest, markleibovit of vrtrer.com. >> susie: that "nightly busine report" for friday, seember 25. i'm sie gharib. good nighteveryone, and have a great weekend. u, too, paul. >> paul: and you, well, susie. i'm ul kangas, wishing all of you the best of gooduys. "nightly business reportis made possie by: