tv Nightly Business Report PBS August 24, 2009 7:00pm-7:30pm EDT
captioning sponsored by wpbt >> paul: from china to germany to france, economies around the globe are perking up. we look at whether that rising tide will help lift the u.s. economy. >> susie: prospects for recovery are definitely lifting oil prices. crude continued its march higher on hopes a recovery will bring with it a big boost in demand. >> paul: "cash for clunkers" heads to history's scrap heap but dealers are getting a little extra time to cross their "t's" and dot their "i's".
so what's next for the u.s. auto industry? coming up, some answers from a noted analyst. >> susie: this recruiter is trying to fill 300 positions but he's swamped with thousands of resumes. tonight, standing out in a crowded field of applicants. >> paul: i'm paul kangas. >> susie: and i'm susie gharib. this is nightly business report for monday, august 24. "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. oil prices closed at a new high for the year: $74.37 a barrel. in new york trading october crude futures rose 48 cents to settle just shy of $75. prices have doubled since february. so what's fueling the run-up: optimism about a global economic recovery. as scott gurvey reports, while the debate over the state of the american economy continues,
there are fresh signs the recovery is well under wayn other parts of the world. >> reporter: economists once believed the american economy, first to fall into deep recession, would lead the world out of it. not any more. china has already bounced back from a short decline. germany is now reporting positive growth after a severe recession. and france is also reporting growth. all these countries implemented stimulus programs. bruce kasman of jp morgan says a world wide economic recovery will help the american recovery he believes is already under way. >> we're already seeing the fact that u.s. exporters are actually starting to see growth in their sales abroad which is a very unusual event to happen before the economy begins to recover. >> reporter: a world-wide recovery would literally be the rising tide which could lift all ships. bob brusca of fact and opinion research notes that industrial orders for euro-zone countries posted their best gain in 19 months in june. >> it's curious to me that so many people are so pessimistic
about the u.s. prospects when so many other countries in the world are already involved in an economic recovery. so i think that we have lots of evidence here that our recovery is growing. i think its going to continue and i think europe's recovery is looking more solid. >> reporter: some of the pessimists about the u.s. economy worry not about the near term but about 2011 and beyond, when government stimulus ends. others see world wide demand replacing those spending programs. >> partly due to the synchronization of growth across the world the chances that once we get this going that its going to get turned off are actually unlikely. and where we are very much mindful of is the idea that the synergies across borders and synergies across financial markets are like to cause significant positive feed back loops here. it wouldn't be a straight line but i think the chances of a double-dip are actually quite small over the coming quarters. >> reporter: there have been some concerns about inflation in britain. but confidence among business leaders there is rising. and most project the u.k. will join the u.s. in reporting positive growth this quarter. scott gurvey, "nightly business report", new york.
>> paul: that strength in the oil pit combined with gains in overseas markets to send stocks on wall street higher at the open. by 11 a.m. the dow was up 74 points and the nasdaq posted a 14 point gain. but as the day wore on a lack of economic news and light trading volume derailed the rally. so the market stair stepped its way lower to end narrowly mixed.
it appears that the market is making a comeback. for the first time in the year the number of companies filing for ipo's is on the rise. so far, only 21 ipo's have raised and the largest monthly increase in a year. and the trend continues. but last month alone, 12 companies filed their intentions to go public with the securities and exchange commission the largest monthly increase in a year. and the trend continues: nine firms have filed so far this month. late last year, the ipo market virtually collapsed, with only 1 company going public during the entire fourth quarter. >> susie: bank failures are also on the rise. so far this year, 81 banks have closed. veteran banking analyst richard bove is forecasting that up to 200 more u.s. banks could fail. but he adds that there are not
enough healthy banks to buy the ones that are struggling. federal regulators now seem poised to loosen restrictions on private equity firms seeking to buy failed banks. on wednesday, the fdic is expected to vote on the issue. in court filings today the b of a defended the fairness of the proposed $33 million settlement with regulators over bonuses paid to merrill check executives calling it a constructive conclusion. the penalty "strikes the right balance between violations and shareholder protection". a federal judge rejected the settlement saying he wanted to know who was responsible for the bonus decision. the judge is expected to rule on the settlement september 9. judge jed rakoff is expected to rule on the settlement september
9th. >> susie: irish drug maker warner chilcott is buying procter and gamble's global pharmaceutical business for $3.1 billion. that unit makes prescription drugs like actonel for bone loss and asacol for digestive disorders. those drugs generate $2.3 billion in annual sales, adding about $540 million in profits to p-and-g's bottom line. warner chilcott expects to keep most of the p-and-g pharmaceutical employees, the deal's expected to close by the end of the year. in another acquisition, charlotte russe is being taken private by advent international. the private equity firm is paying $380 million or $17.50 a
share for the mall-based seller of young womens clothing. the offer is a 27% premium to friday's closing price. charlotte russe has 500 stores in the u.s. and puerto rico last year it's sales topped $823 million. >> paul: susie, the company began exploring its options in january as sales slumped and put itself on the market in march. we'll see it as we take a look at our stocks in the news tonight.
and those are the stocks in the news tonight, susie. >> susie: it's the end of the road for the government's cash for clunkers program. the $3-billion rebate plan ends tonight, for consumers. but late today, dealerships were given an extension. they now have until noon tomorrow to submit their paperwork for repayment. around the country, consumers filled auto showrooms to trade in their gas guzzlers for a more fuel efficient car. transportation secretary ray lahood says up to 800,000 new cars have been sold as a result of the program. this morning, car dealers submitted vouchers for more than $2.5 billion.
>> susie: the ranks of the unemployed have grown to almost 15 million. at the same time the number of job openings has plummeted since the recession began. now there are six times as many job seekers as there are available jobs. so how do you stand out as a job applicant, when the competition is steep? as dana bate reports, it's often about who you know. >> reporter: looking for a job? washington hospital center is hiring. right now they have almost 300 job openings. but here's the hitch: recruiting director dennis hoban says they also have thousands of applicants. >> our applicant pool has increased significantly. one of the famous phrases in recruitment circles right now is, same number of needles, much bigger haystack. >> reporter: last week, hoban received 1,000 applications for entry-level service positions, double the normal volume. that's why career coach sondra levitt says a candidate needs a clear, focused resume to get noticed. >> any time you have a good resume, it should reflect, really, what have you done, and
what impact did you make? so that's the first step. the second step is networking, networking, networking. >> reporter: and it's easy to see why: about 75% of jobs are landed through networking. to make networking work for you levitt suggests clearly identifying the industry you want to work in and the companies that interest you. then make a list of contacts you can talk to, who can help you get connected to people inside your target companies. if you've exhausted your networking list, use social networking sites like linkin and facebook. >> reporter: the point of a site like linkedin is to find people working at the company where you want to work. you may find that a friend of a friend works there. and by connecting with that person, you can get your foot in the door. it's all about getting someone inside the company to know who you are. and getting buzz around your name. >> so if you can get that person to walk that resume down the hallway and hand it to someone who's hiring and say, "you really need to speak with this person," that's the optimal way. that's how you set yourself apart from the hundreds of resumes that come across a hiring manager's desk or an hr person's desk.
>> reporter: nevertheless, labor economist lawrence mishel says even top-notch networking won't change the fact that there just aren't a lot of jobs out there. >> we're in an unfortunate situation now where there are six people unemployed for every job opening. so it's not going to be easy for people to find work. >> reporter: but remember, even if employers are searching for a needle in a very big haystack. that needle could be you. dana bate, "nightly business report", washington joining us now, george magliano, director of automotive research at global insight. >> hi, how you doing? >> good. thanks. was this cash for clunkers program worth it? >> most definitely. it has been a rousing success. it was amazing the way it started off with the first billion dollars and we thought when they put the extra
$2 billion in things would slow down a bit. but obviously the consumers warmed up to thing and they have been going to the show rooms in droves. and it really is -- it's helped pick up sales in the short run and it's going to feed its way back into production and employment and into the economy. >> well, do you think that you're going see more momentum on auto sales, will this spark a recovery for the auto industry? >> no. what's going to happen is once the stimulus is removed, once the program is stopped, and there's no more money coming, sales will drop back down. drop back down to the levels that they were at the beginning of the year. that's because of the recession, but what's happened is because of the program, we have seen maybe about a third of the buyers that have come in, this is going to be new business. people that would have never bought a new car or truck, it would have driven their clunker into the ground forever took advantage of this. this is additional business and it's cleaned out the unwanted
inventory of the 2009 models at the end of the model run. excellent for the dealers. >> what does in mean for the 2010 models? what does it mean in terms of car prices? >> what means they come in clean and it also means at this point in time we should be able to see better prices on the 2010. when i say better prices, less in the way of incentives, less in the way of those big give backs on the hood that the dealers have -- dealers and the manufacturers need to put on the car and truck to sell them. that's excellent. >> has this cash for clunkers program given you any indications of how automakers are going to do going forward? which automakers are going to do better in next phase? >> well, i mean, it's helped everybody, but obviously, the japanese specifically, toyota and honda, have come really above the top of the list. and ford has done very well for the detroit manufacturers.
>> how about gm and chrysler, how did they fare? >> well, they started out fast and then lost moment up. both of them blame it on the lack of inventory. they were in bankruptcy, hut down their plants -- shut down their plants for an extended period of time and they were unprepared. >> i've heard some of the automakers are starting to ramp up production and in anticipation of more demand. are they jumping the gun here? is this premature? >> no. at this point in time, inventories are tight. by the end of the month they'll be tight. the announced increase by all the manufacturers really is to replenish inventory, bring the stocks more back into line, normal stocks. if they continue to produce and overproduce at the beginning of next year, then it's different. they have got to be in tune to the recession. to the fact that the market is going to go back pretty much to where it was and then it's going to build slowly as the economy
develops momentum throughout 2010. >> now, i understand that during this cash for clunkers program that used car sales picked up as well. do you see that continuing? >> yes, we do. used car sales generally do better when the economy is soft, and this time the economy was so weak, number one, it hurt all the entire market. both new and used. and of course, the issue with the used car prices and residual values was the trucks -- trucks and inventory, trucks coming off of the fleet that's helped the residual values and pushed them up. that's good for future business. >> very interesting information. thank you so much for coming on the program, george. >> thank you for having me. >> my guest tonight, george magliano, director of automotive research. >> paul: tomorrow, when it comes to the web economy, "free" always costs the same something. we'll explain. >> susie: the bureau of prisons said today bernard madoff is not terminally ill and has not been
diagnosed with cancer. that statement debunks a "new york post" report that said the wall street swindler is telling fellow inmates he is dying of cancer. one inmate told the post madoff was taking 20 pills a day and not doing well. madoff's lawyer said he would not comment on his client's medical or emotional condition. >> paul: the former president and chief operating officer of monster worldwide has been convicted of securities fraud and conspiracy in a stock options backdating scheme. prosecutors said james treacy understated monster's compensation expenses by more than $300 million. he now faces up to 25 years in prison. monster worldwide said today's verdict closes an unfortunate chapter in the company's history.
>> president obama will return from vacation to face calls for additional stimulus to lift the flagging u.s. economy. given the ineffective design of his first stimulus package, he would be wise to focus on two guidelines. the first guideline is that the downturn has been driven by falling asset prices, which weaken the balance sheets of households and financial institutions, curtailing both lending and spending. policies to stimulate the economy should focus on blunting falling asset prices. second, actions should be consistent with good long-term policy. temporary tax changes do little to affect aggregate demand. and expensive stimulus packages lead taxpayers to expect higher future taxes, slowing the recovery. the key to action? keep taxes on savings low. the tax code offers potent tools to stop falling asset prices. retaining the current low tax rate on dividends and capital gains would be an important
first step. and reducing corporate tax rates will raise both stock prices and investment. ways and means chair charles rangel has indicated an interest in cutting the corporate tax from 35% to 28%. higher investment makes this a potent stimulus that is not too costly. some recent studies suggest we could cut the corporate tax rate several percentage points with little loss of revenue. and if the congress has no good ideas? the president should just say no. i'm glenn hubbard. >> paul: recapping today's market action, wall street starts the week with a split decision: the dow gains 3 points while the nasdaq loses nearly that much. to learn more about the stories in tonight's broadcast, to watch our streaming video and to take part in our daily blog, go to "nightly business report" on pbs.org. you can also email us at email@example.com. >> susie: and finally tonight, you know the old saying, if you want something done, ask a busy person to do it?
well, a new study finds that's probably not the best course of action. researchers at stanford university found the brains of multi-taskers don't work as efficiently as you might think. the study looked at two groups: those who routinely consumed multiple media such as internet, television and cell phones, and those who did not. in a series of three classic psychology tests for attention and memory, the "low multitaskers" consistently outdid their "high multitasking" counterparts. and multi-taskers were less able to ignore irrelevant information. so paul, the takeaway is the people who multitask the most are the ones who are the worst at it. >> so i should be happy i can't run and chew gum at the same time? >> i guess so. >> great. >> what does that mean for me when i think i'm a multitasker. oh, no. >> beware. >> susie: that's nightly business report for monday,
august 24. i'm susie gharib goodnight everyone. and good night to you paul. >> paul: goodnight susie. i'm paul kangas wishing all of you the best of good buys. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org