>> i'm sorry that the financial crisis has had such a devastating financial impact on our country. i'm sorry for the millions of people, average americans, who have lost their homes. >> suzanne: the former head of citigroup apologizes for his bank's role in almost bringing down the u.s. financial system. >> tom: but the people investigating the crisis aren't buying the apology. you're watching "nightly business report" for thursday, april 8. this is "nightly business report" with susie gharib and tom hudson. "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 >> suzanne: good evening, everyone. apologies today from two men who were once powerful leaders at citigroup. tom, it was a quite a moment on capitol hill-- charles prince, the former ceo, and robert rubin, an influential advisor to the bank, admitted they made mistakes that contributed to the financial crisis. >> tom: susie, it was day two of hearings looking into the causes of the meltdown. and the panel members were just as tough on citi's big wigs today as they were on alan greenspan yesterday. >> suzanne: tom, as far as the panel was concerned, "sorry" just wasn't good enough. washington bureau chief darren gersh reports. >> reporter: former citigroup ceo charles prince said the two words many people have been waiting to hear from a top banker. >> i'm sorry. i'm sorry that the financial crisis has had such a devastating financial impact on our country. i'm sorry for the millions of people, average americans, who have lost their homes. and i'm sorry that our management team, starting with me, like so many others, could not see the unprecedented market collapse that lay before us. >> reporter: the apology fell flat with commission vice chairman bill thomas, who demanded to know how prince and other executives could walk away from the near-collapse of the bank they ran without giving up a nickel of the tens of millions of dollars they earned before the meltdown. >> and to make the argument that somehow a simple apology still allows you to maintain a profile of income based upon what devastated everyone else doesn't fit the scale test. >> reporter: both prince and robert rubin, the former treasury secretary who ran citi's executive committee of the board, said they trusted the triple-a ratings attached to the mortgage securities that ultimately cost citi $30 billion in losses. >> sitting here today, that belief looks pretty unwise. but i think, at the time, people believed that the structuring process had gotten to a point where that top level would be immune from the problems that were being seen at the lower levels. >> reporter: rubin and prince say they did not know the bank had taken on extensive sub-prime risks until the fall of 2007. answers like that did not sit well with commission chairman phil angelides. >> at the end of the day, the two of you, in charge of this organization, did not seem to have a grip on what was happening. >> reporter: rubin argued it would be impossible for board members to know about the details of specific transactions in a bank that moves a trillion dollars a day across thousands of accounts. >> i think all of us in the industry who failed to see the potential for this serious crisis, and failed to see the... the multiple factors at work, bear responsibility and i think we all have a great deal to regret in that respect. >> reporter: tomorrow, the former ceo of fannie mae will be grilled about the role his company played in pumping up the housing bubble. darren gersh, "nightly business report," washington. >> tom: as president obama prepares to meet with china's leader on monday in washington, expectations are that china may let its currency strengthen against the u.s. dollar. the chinese yuan has been pegged to about 6.83 for every one american dollar since the middle of 2008. that pressures u.s. manufacturers and others, because it helps chinese companies keep costs low. a stronger yuan could boost the u.s. economy by making u.s. goods cheaper in china, but at the same time, it could cost u.s. consumers, says ted fishman, author of "china, inc." >> if the price in global terms of land, of taxes and labor in china increase because the chinese currency is going up against a basket of other currencies, that means the rest of the world is going to be paying more for chinese stuff. and we'll feel that in our pocketbooks. >> tom: treasury secretary timothy geithner briefly met with his chinese counterpart in beijing today, but would only say the two exchanged views on u.s.-china economic relations and the global economy. >> susie: here are the stories in tonight's n.b.r. newswheel. strong retail sales helped wall street get back in the black. we'll have more on the retailers in just a moment. the dow rose 29.5 points, the nasdaq added 5.5, and the s&p 500 was up four. but trading volume backed off from yesterday. weekly jobless claims rose unexpectedly last week, jumping by 18,000 new claims. a labor department economist blamed the rise on seasonal factors like the easter holiday. meanwhile, mortgage rates continue to tick higher-- they're now at 5.21% on a 30- year fixed rate loan. the increase comes just one week after the fed stopped its purchases of mortgage-backed securities. still ahead-- popping up new opportunities. how business brokers are helping the unemployed become their own boss. >> tom: speaking of business trends, the nation's chain stores posted their biggest monthly sales gains on record. a closely watched retail index shows sales jumped 9% in march, a sign that consumers may be feeling more comfortable spending. erika miller looks at whether the gains will continue, and whether now is a good time to go shopping for retail stocks. >> reporter: what's happening on the streets of manhattan is happening nationwide: shoppers are not just browsing, they are buying. retail analyst john morris believes the consumer mindset has shifted. >> the numbers that we are seeing out of the retailers today are truly of good quality. it suggests the consumer is really back shopping in the malls. it's not just a case of easy comparisons, but there's good quality underlying demand. >> reporter: he concedes retailers also got a boost from seasonal factors, including warm weather and an early easter. but morris believes the strong sales momentum is, so far, continuing into april. outside many stores these days, you see big sales signs like this one. but analysts say it's more than just promotions that are bringing customers into the store. >> within each demographic, there are a set of must-haves. it's a little bit stronger set of trends than we've seen before. so take, for example, within the teen segment. within the bottoms category, the "jegging," which is this interesting style-- a cross between a jean and a legging. that's a key item, that's a driver. that's bringing teens into the stores. >> reporter: he says consumers are buying more full-priced merchandise, and earlier in the season, which could help retailers' profit margins. but the s&p retail exchange traded fund has risen almost 75% in the past year in anticipation of good news. like many analysts, j.p. morgan's brian tunick warns against loading up on retail stocks now. >> a lot of investors already are expecting good numbers to continue. a lot of investors are expecting improvement in the employment picture. so, i think there is some of this good news baked into these stocks. >> reporter: the real verdict on retailers' profits will come in may, when stores release first quarter numbers. apparel is expected to be one of the best performing sectors, with earnings growth of 36%. erika miller, "nightly business report," new york. >> susie: airline stocks took flight today on word of renewed merger talks between u.s. airways and united airlines. the carriers aren't talking publicly about a deal, but their ceos have been some of the most vocal supporters of consolidation in the industry. it's an industry that's lost a combined $70 billion over the past decade. as stephanie dhue reports, those losses are guiding the new talks. >> reporter: u.s. airways and united have taken this route before. the companies' connection was blocked by the justice department and labor unions in 2000. the two talked about merging again a couple of years ago, but couldn't come to terms. industry analyst vaughn cordle says rising costs are driving the talks now. >> the catalyst to this decision to merge, potentially, is a function of higher costs coming, that are in the pipeline-- higher labor, fuel cost, and security and airport facility charges which are coming. >> reporter: u.s. airways and united face opposition from their unions. but cordle thinks there are reasons for labor to get on board. >> there's financial incentives to agree or sign off on the deal, because they could get a piece of the new company in equity. >> reporter: in 2000, the justice department concluded a merger between the two was anti- competitive. antitrust attorney bruce mcdonald says the justice department will need convincing that the competitive landscape has changed. >> united and u.s. air may go to the justice department and say, "you let delta/northwest through. that created a much larger network against which we have to compete. our combination will make us more effective competitors against that network." >> reporter: one red flag from the carriers' previous try-- competition in the washington, d.c., area. back then, the companies proposed creating a new airline to take over routes in the d.c. market. justice rejected that idea. but a source familiar with the current talks says the carriers may try a similar approach; this time, selling assets to jetblue. >> whether the parties can make a go of that same kind of solution with an established carrier, like jetblue, will depend on a lot of different factors, including what's changed in the market since then. >> reporter: with u.s. airways and united making headlines, and so many carriers losing money, analysts think more airlines will be looking for connections. stephanie dhue, "nightly business report," washington. >> those merger talks that stephanie was just telling us about gave a real lift to airline stocks. i understand transportation is the theme of your market focus. >> lots of transportation activity also helped out here, susie by a drop in oil prices as well. let's take a look at that market focus this evening. transportation stocks were hot, and it wasn't just airline stocks driven by a possible merger. transportation stocks had seen some selling over the past three weeks as oil prices climbed to new 18-month highs. this exchange-traded fund follows the dow transport index, and tonight, it is at a new 18- month high itself. the possibility of a big airline merger helped the sector take flight. as stephanie reported earlier, merger talk has heated up again around u.s. airways and united airlines. clearly, the market likes the idea of the combo, bidding up both carriers on big volume. these stocks have been climbing as traffic and passenger revenue have been improving. the merger talk helped lift the airline sector, including both major carriers and more regional ones. delta and continental each were stronger. regional carriers alaska and airtran also got into the buying. but it was more than airline stocks fueling the gains in the transportation space-- rail and trucking stocks saw buyers. rail giant union pacific hit a new 52-week high. csx is within about a dime of a new high. the biggest independent less- than-truckload carrier, yrc worldwide, still trades on the nasdaq, despite being below one dollar per share. it saw a volume spike after announcing first quarter shipments per workday improved each month. j.b. hunt shares staged a nice rally. all those trucks have to be pulled by something. earlier in the week, we reported on some semi truck makers rallying. today, navistar raised its guidance. n-a-v stock hit new highs. the stock is up almost 9% since the beginning of march. but instead of commercial trucks, navistar says it upped its profit prediction thanks to its military truck business. that strength in military trucks explains the rally in fellow defense department contractor oshkosh. o-s-k stock is less than a dollar away from a new high. earlier in the program, erika looked at the retail sector in light of the jump in march same- store sales; leading the stock moves was a mix of bricks and clicks. amazon.com saw the biggest percentage gain among the retail stocks inside the s&p 500. there are rumors that it may sell its electronic book reader through target. bed, bath and beyond hit new highs. fourth quarter profits were better than expected and it had strong guidance. the same goes for discounter ross stores. it was disappointment at drug maker forest labs. a new lung drug it was working on was rejected by a food and drug administration panel. that sent shares of f-r-x diving more than 13% on very heavy volume. the company lost $1.3 billion of market cap. forest faces a patent expiration of its antidepressant lexapro in 2012. that is its best selling product, bringing in 60 cents of every dollar in revenue. the news was better from the betting business. casino stocks were running higher as the action on the las vegas strip may be coming back to life. boyd gaming led the pack. it has three properties in downtown vegas. mgm has a bigger presence on the strip itself, along with las vegas sands and wynn. those three all hit new highs. they also have been climbing in recent weeks, thanks to a rebound of gaming in macau, china, where they also operate casinos. and that's tonight's market focus. >> susie: you get laid off. what's next? some people are looking for help by visiting their broker. not their stock broker, but their business broker. for many white-collar and blue- collar folks, buying a business is an alternative to hitting the want ads. and as jeff yastine reports, that's why business brokers are seeing a lot of business themselves these days. >> yastine: when chad simon goes to work, he's concentrating on just one thing-- he's in "the zone." yes... the popcorn zone. >> i never dreamed i would be doing this business, not at all. i question myself over and over before i bought the business. "am i really going to buy a popcorn business?" >> yastine: but buy it he did, after spending years in pharmaceutical sales and wondering... >> when they're done with you, they're done with you, and i realized the time might come for me sooner than i wanted to. >> yastine: andrew cagnetta's business brokerage helped sell the popcorn zone to chad simon. cagnetta's firm, transworld, lists hundreds of businesses for sale, priced from tens of thousands to hundreds of thousands of dollars. quite often, the buyers are former white-collar workers. >> they're looking to replace their income. i mean, some of these people have been sitting on the sidelines for a year now and they're burning through their savings, and they want to buy a business. i've seen... we saw an attorney buy an ice cream shop. we saw investment advisors, mortgage people, people from the construction industry, trying to buy something. >> yastine: that idea is popular now. bizbuysell is a web site that tracks thousands of businesses all listed for sale. as the economy fell apart in 2008, so did the interest in buying a small business. but those numbers rebounded strongly last year as the recession bottomed out. but brokers say financing for small-business purchases remains a major hurdle. the small business administration, or s.b.a., is making more loans, but government data shows banks have largely stayed out of the picture. that's left many deals being done with seller financing. here's how it works-- the buyer puts down some cash, say 10%. the seller writes a mortgage for the rest. the business is the collateral. that lack of financing and the poor economy has also forced lower prices for small owners who want to sell, a trend that was in place for nearly two years before a spike in last year's final quarter. but brokers say there are certain kinds of businesses that still command good prices. what kinds? well, repair businesses and service businesses. enterprises which always have customers, no matter the economy. >> a good business today is one that either has flat revenues, steady revenues, and steady bottom line growth, or even slightly declining. because you compare that to the general market-- most businesses are down 20%, 30%, 40% top line, and maybe even more bottom line, and it's across all industry segments. >> yastine: as for chad simon, his concerns about being laid off at his old job in the world of pharmaceutical sales turned out to be well-founded. he tells of a fateful conference call with his old employer, not long before he bought the popcorn zone. >> on that same call is when they told me and 25% of the company that we no longer had a job, and that was it. >> yastine: that was it. he wound up buying the business- - his business. one year later, he's not looking back. jeff yastine, "nightly business report," boca raton, florida. >> tom: here's what we're watching for tomorrow: the commerce department releases wholesale trade inventories for february, and liquor distributor constellation brands reports its quarterly results. also tomorrow, our friday "market monitor" guest is eugene peroni, portfolio manager at advisor's asset management. he'll tell us why he's still expecting the dow to hit 12,500 this year. >> susie: two big u.s. cities are suing wells fargo again. baltimore and memphis today filed new federal lawsuits accusing the bank of giving african american borrowers expensive home mortgages that led to an epidemic of foreclosures. those empty homes cost the cities tax revenue and forced both to spend more on public safety. wells fargo says it stands by its lending practices, and wants to help homeowners in need. the suits were filed as the naacp dropped its lawsuit against the bank. as part of an agreement, wells fargo will let the civil rights group review its lending practices. >> tom: the texas banker accused of a $7 billion ponzi scheme, allen stanford, has added a big name to his legal defense team. harvard law professor alan dershowitz is now working to free the jailed businessman. stanford is accused of 21 counts of conspiracy and fraud. dershowitz says keeping stanford in jail is unconstitutional, and he'll argue his case all the way to the u.s. supreme court. >> susie: the deadline for filing your federal taxes is just one week away. if you haven't started work on your return, there's no time like the present. and kevin mccormally is here to help with some tax tips. he's executive editor at kiplinger's personal finance. tonight, reporting de-mutualized stock sales on your taxes. >> every kid knows the joy of >> every kid knows the joy of winning a "yes" answer from one parent after the other has vetoed a great idea. and taxpayers enjoy a similar thrill of victory when a federal court says yes to a tax-saving move the i.r.s. has long rejected. and that's just what happened earlier this year when a court turned down the i.r.s.'s appeal of a case involving the tax basis of demutualized stock. that's stock an insurance company gives policyholders when a mutual insurance company becomes a stock company. for years, the irs has held that such stock has a zero tax basis, which means when you sell it, every dime you get is taxable profit. i told you last year about a court ruling that said the irs was wrong. and, earlier this year, the irs lost the appeal of that ruling. so, is the matter is finally settled? unfortunately, no. the irs is stubbornly sticking to its "no basis" opinion. maybe its hoping to find another case, and another parent... er, judge, who might agree with its anti-taxpayer stand. so, what are you supposed to do if you sold stock in 2009 that you had received in a demutualization? experts say the court ruling gives you the right to claim a basis-- probably whatever the stock was worth when you received it-- to hold down the tax bill on the sale. and, if you sold demutualized shares prior to 2009 and paid tax using the i.r.s.'s nasty zero-basis rule, you may deserve a refund. if you're in that boat, check with a tax pro about how to retrieve your money. i'm kevin mccormally. >> tom: if you have a specific question or problem with your taxes, kevin can help you online. just go to our web site, nbr on pbs.org, and click on the "tax tips" section. >> susie: and finally tonight, have you ever hoped for your own hope diamond? it may soon be yours. the smithsonian institution is teaming up with tv shopping network qvc to produce an "historic jewelry" line this fall. it'll be based on the gem and mineral collection at the national museum of natural history. it includes these diamond earrings once owned by marie antoinette, and the famous 44.5- carat hope diamond. some of the items sold on qvc will be replicas of pieces in the museum, while others will be "inspired" by its collection. tom? >> no prices on what these replicas will be but the real hope diamond n case are you interested, is $250 million. >> susie, you know mother's day is coming up, this is a announcement coming just in time, i suppose. >> very good idea. are you such a good husban husband/father. >> . >> susie: that's "nightly business report" for thursday, april 8. i'm susie gharib. good night, everyone, and good night to you, too, tom. >> reporter: good night, susie. i'm tom hudson. good night, everyone. we hope to see all of you again tomorrow night. "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
Related Keywords
New York , United States , Smithsonian Institution , District Of Columbia , Boca Raton , Florida , Macau , Las Vegas , Nevada , Texas , Alaska , China , Beijing , Washington , Americans , Chinese , American , Timothy Geithner , John Morris , Marie Antoinette , Allen Stanford , Bruce Mcdonald , Robert Rubin , P Morgan Brian Tunick , Susie Gharib , Alan Greenspan , Jerika Miller , Tom Hudson , Alan Dershowitz , Vaughn Cordle , Phil Angelides , Ted Fishman , Eugene Peroni ,
vimarsana.com © 2020. All Rights Reserved.