captioning sponsored by wpbt this is n.b.r. susie: good evening everyone. i m susie gharib. worries about political gridlock, in italy and in washington, cause investors to dump stocks. it s the worst day for wall street since the november elections. tom: i m tom hudson. with $85 billion in federal spending cuts just days away, we talk with congresswoman cathy mcmorris rodgers. susie: and the man who founded barnes and noble wants to buy his bookstores back, but he has no interest in the company s electronic book reader b&n s nook business. tom: that and more tonight on n.b.r. ! susie: a sharp sell off on wall street today, as stocks suffered their biggest drop since november. italian and american politics put investors in a sour mood. behind the selling: a strong showing in italy s elections by groups opposed to economic reform, on top of that, u.s. equities face a looming friday deadline for massive government budget cuts, known as sequestration. the dow tumbled 216 points, the nasdaq fell nearly 46, and the s&p 500 lost 28 points. while there s been much talk of a correction in the stock market, sequestration may not be the catalyst. suzanne pratt reports. reporter: it is widely accepted on wall street that sequestration is coming. and, with it a new reason for the fragile u.s. economy to sputter. but, what will the first phase of billions of dollars in federal spending cuts actually do to the u.s. stock market? after all, major market averages are hovering close to all-time highs, and don t forget investors are finally warming up to equities again. floor broker art cashin says today s selling was mostly a reaction to italy s election, and that the stock market is not yet focused on sequestration. i don t think that even we slip into sequestration it will have the same dramatic effect that the fiscal cliff and the debt ceiling had. it is seen as somewhat temporary. reporter: others say stocks can weather another political deadline dominating u.s. headlines, as long as lawmakers reach an agreement soon. they are expecting that dip into sequestration to be fairly short-lived and there to be a compromise worked out sometime before the ongoing resolution on march 27. so, there is room for disappointment if we don t get that silver bullet. reporter: still, stocks are vulnerable to myriad other headwinds too, the most notable is the end of a surprisingly good earnings season, and a muddled outlook for corporate profits in 2013. we ve seen first quarter earnings growth expectations shrink to just a little over 0% from expectations of 3% or 4%. so, it s almost as if for every percentage point companies were beating fourth quarter numbers analysts were cutting the first quarter numbers by a similar amount. reporter: so even if sequestration doesn t kill the stock market rally. it could certainly amplify a correction that may have already gotten started. suzanne pratt, n.b.r., new york. tom: as suzanne mentioned, we re just days away from $85 billion in federal spending cuts hitting the u.s. economy. today, the war of words over the sequester continued. president obama called on the nation s governors today to pressure lawmakers over the sequester, saying citizens of their states will be out of work. the american people are out there ef row day meeting their responsibilities, giving it their all to provide thor their families and their communities. a lot of are you doing the same things in your respective states. we need that same kind of attitude here in washington. at the very least the american people have a right to expect that from the representatives. we ve got more on this from darren gersh. he spoke with one of the republican leaders in the u.s. house today. cathy mcmorris rogers. we began by asking whether the sequester will actually happen. i hope not. we ll see. march 1st is right around the corner. and what we need is for the president and the democratic senate to sit down and come up with a proposal to replace the sequester with a smarter approach to cutting the federal government. it s 2.4% over the next ten years. what is going to happen under the sequester and all the 50 states. and in your state, there will be a heavy impact on defense employees. 29,000 in your state. what are youoing to tell those people when they re furloughed. i m very concerned about the way sequestration disproportionately impacts the military, our national defense which is the priority within the federal government to protect the citizens. so there is a better way. and the republicans in the house have twice now passed legislation. we passed legislation six weeks ago. we passed a bill six months ago to replace the president s sequester cuts with smarter cuts in reforms that will accomplish the goal. so the president says we need spending cuts but we also need tax increases. it should be balanced. are there any tax increases that republicans would accept to get over this problem that you say you want to get over? the agreement a year and a half ago was to reduce some spending in the federal government. and it just, to some it s like it s never the right time to actually cut the spending. the president often says well we need to raise taxes. that seems toe his solution every time. and we need the democrats to recognize that we have a spending problem. but if we cut 700,000 jobs, that s what some estimates are of the sequester, how does that create certainty, doesn t that hurt the economy? well, there s a smarter way than the president s sequester. it doesn t have to be the approach that he s outlined. and that s where we really need the president, we need the senate, to sit down and start talking about, start figuring out the better way forward where we replace the president s sequester, but still find the savings within the federal government. and they re there. 2.2 billion dollars for a free cell phone program, just in 2013. we spent 2.2 billion. there s smarter ways to go in there and find the savings within the federal government. and that s where we need to get. that s where we need to start having that discussion. are there any tax changes, tax loophole changes anything like that that the president has suggested that republicans might support? well, we re going to talk, we believe in tax reform. and we need to talk about a simpler, flatter, fairer tax code t would also help our economy if we could simplify the tax code both for individuals and corporations. and the republicans have long been talking about the importance of tax reform as a part of getting our economy growing. and that is going to be a separate discussion though than sequestration. sequestration, across-the-board cuts, that is part of raising the debt ceiling a year and a half ago. and we agreed that we were going to find some spending reductions in the federal government, it s slowing the ate of growth within the federal government by 2.4%. this is possible, everybody in america has had to tighten their belt a little bit and it s time for the federal government to do likewise. we ve seen record increases in spending under this administration. so you talked about these cuttings about 2.4% of spending, so are you saying basically that the white house is kind of blowing this out of proportion when they say this is going to be such a terrible impact on the economy and people. it depends on how the white house, how president obama actually implements hits sequester and how he finds these saving, for him to say within the defense part, the first place we are going, we are to the going to send the second carrier into the persian gulf, i really question that decision. there is other areas within the defense department where we request find the savings. that needs to be the goal, the smarter spending reductions that will actually help get our budget where it needs to be and ultimately help get our economy growing again. which is the goal. kathee mcmorris rogers the chair of the house republican conference, thank you very much for your time. thank you. susie: still ahead, will rising home prices keep shares of home improvement retailers like lowes and home depot popping this spring? tom: an update tonight on two big trials, first, the civil trial against b.p., and its contractors, stemming from the 2010 rig explosion and subsequent oil spill in the gulf of mexico. the government began the trial saying the primary fault of the disaster quote lies with b.p. the other big trial, saw some high profile testimony today as macy s c.e.o. terry lundgren testified in his company s fight with j.c. penney over who has the rights to carry martha stewart home goods. susie: despite the big stock sell-off today, shares of barnes and noble surged more than 11%. investors bought up the stock on news the bookseller s founder and chairman wants to buy the retail business. in a securities and exchange filing, leonard riggio said he plans to make an offer for barnes & noble s bookstore chain, but not its nook e-reader business. erika miller takes a closer look at whether splitting the company makes strategic sense. reporter: what s interesting about leonard riggio s bid is that he wants to buy the weakest part of barnes & noble s business: the bricks and mortar bookstores. during the all important holiday season, sales at b&n s bookstores and website fell more than 10%. still, some think those bookstores may be a hidden gem: there are many americans who still like walking into a store to buy books to browse through the books and get a better sense of what they might want to read. often times, if the price is about the same, and you re already there, you can have it. you can walk out with that book. reporter: the bookstore business has deteriorated dramatically in recent years, as more people choose to buy their print books online from places like amazon.com. in addition, more and more people are reading their books electronically, on devices like tablets and e-readers. borders, dalton, and other boochains have ne out of business. but that means less competition for barnes and noble: analysts think riggio may have a viable turnaround plan ready: he s looking at everyone who has gone out of business and he s saying to himself, if i can add three or four more categories in these big box stores, that are consistent with the book business, i ve already got all the overhead. i can close a few stores. suddenly, i ve doubled my profitability. i think he s got something like that inind. rorter: riggio joins a growing list of executives hoping to buy the struggling companiethey founded, including michael dell of dell computer, and best buy s richard schultze. erika miller, n.b.r., new york. susie: lowe s nails it today with better than expected quarterly results. not only did the home improvement retailer post solid earnings and revenues, it s upbeat about its outlook for this year. but as ruben ramirez reports while lowe s and its competitor, home depot expect a bump in sales on the back of new home construction, their success is still dependent on everyday consumers opening their pocketbooks. reporter: home improvement retailers continue seeing the trickle down effect of a recovering housing market and a boost in renovations on the back of a better economy. about a quarter of sales at lowe s and home depot come from home construction and renovation. during the housing downturn, lowe s tightened its toolbelt, closing stores, cutting costs and investing in its online business. it s a plan that is starting to pay off. it really will take a couple of years yet before the combination of improved merchandising, better supply chain execution and really overhauling a lot of the stores operations before we see some meaningful operating margin expansion. reporter: wahlstrom says lowe s 4% growth target for 2013 is aggressive but achievable. the company saw some strength in sales from superstorm sandy, home depot, which reports results tuesday, likely will also see a sandy-related sales bump. most analyst expect home depot to outpace lowe s for the fifteenth straight quarter. renovation activity will be key here as people rebuild and renovate so i think that s going to be a key sector as well in the recovery in housing this year. reporter: both retailers are getting ready for their biggest selling season, spring. lowe s says it will add workers this year. already, home depot has announced it plans to add 80,000 seasonal workers. they re seeing good traffic in the stores and they just want to capitalize on the individual that does come into the store and hopefully help them out with their project and establish a long-term relationship and get them to spend a little bit more money. getting shoppers to spend a little bit more is something both lowe s and home depot are banking on this year. but economists say it cou be a challenge as consumers realize how much the expiration of the payroll tax cut took out of their pockets. ruben ramirez, n.b.r., new york. tom: over the past year as the housing market bottomed and began to turn up one of the hottest stock sectors was the homebuilding sector. as orders for new homes picked up, earnings improved and the homebuilders exchange traded fund gained more than 37% in the past 12 months. it has fallen recently as earnings comparisons are getting tougher. tonight s word on the street is: homuilder. debra borchardt is markets analyst with the street.com. deborah is the home building stock rally over. no i really don t believe so although what i would say is some of the names are a little bit overbought. and that they have seen this rally and they ve really made some big moves. and so what i really did was try to take a look at some of the home builder names that are fairly new to the market, names that people aren t as family with and don t really have a lot of analyst coverage so there might still be some room to play. the headline members here lennar, kb ho, pulte group but one of the new ones is tri-point homes, tpa the ticker, became the first home builder with an ipo in almost a decade earlier this year, $17 a share, it s above that today. what do you make of tph. when you look at the numbers, it was almost shocking because i thought are you kidding me? a home builder in california. that was ground zero for toxic mortgages. and i was a skeptic going in. but i looked at the numbers and i was really impressed. they built 100 homes in their first year. they had a community called they completely sold out of all of those homes. they are really doing very well. they ve got a very experienced management team. they re going in to colorado in the spring of 2013. so i was really impressed at the numbers that they are pulling in. and the amount of homes that people in california are buying. i mean it looks like thins are really starting to turn around in california. skeptic turns around herself it sounds like for tph. you mentioned building homes. you have to have a lot of supplies do that. boysy cascade is one of those, bcc, familiar long-term it just became a new public compy early th mont engineered wood products. it sold at 21. it s at $27 her share, it s had a nice rally. it sure has. but i really think that this stock has not been discovered by the general public because again the analysts have not started covering these stocks because they are fairly new so when you really take a look at their numbers, this is a really impressive company. and as you mentioned they do engineered wood products, laminated veneer lumber which is lvl, and these are much stronger materials than just a plain wood to put in a home. and with the housing codes gettg rely tgh, they are really the product of choice. they are building a new facility down in florida. and i hope that s not because there are so many hurricanes down there. but they are building a whole new facility, they re increasing and expanding the facilities that they have. so i really think that this is a name that s been under the radar and that s boise cascade. on the radar now tonight. how but, do you have any positions in these stocks? i don t. it s word on the street. debra borchardt from thestreet.com. warren buffett said today he s buying another newspaper. he s picking up the tulsa world, bringing berkshire hathaway s port pot of small and medium size newspapers to 28. and you know tom, it s really surprising because buffett has told shareholders in the past that the newspaper s industries prospects are so bad that he wouldn t buy a paper and here s a quote at any price. but now last year he bought his hometown paper, the omaha world herald, now this deal sounds like maybe a change of heart, right? maybe. a media mogul in the making. he began as a paperboy in omaha so he certainly knows well of that industry, and the woes it had over the past several years. speaking of woes, how about the markets today on this monday back to, without. major indes. the major indices suffered their biggest one day decline of the year with traders pointing to a closer than expected election in italy. there was no clear winner of the italian election, fueling worries about political and economic instability. here in the u.s., the s&p 500 saw its morning rally fizzle before noon eastern time, with the selling picking up in the final hour of trading. the index finished down 1.8%, failing to find buyers despite several announced corporate buy- outs. trading volume was on the heavier side. 818 million shares traded on the big board. just under two billion moved on the nasdaq. all 10 of the major stock sectors were down, with the heaviest selling in the financial, energy and material sectors. each dropped by more than 2%. life insurance stocks weighed on the financial sector, as their investment portfolios may have experienced some pressure with the down market. genworth financial fell 5.6%, lincoln national was down 4.7%, and hartford financial dropped 4.3%. all three have traded at 52 week highs this month. there was a billion dollar deal in energy, and this one involves a chinese company buying u.s. energy resources. sinopec international petroleum will buy a stake in an oil and natural gas field straddling the oklahma, kansas bordr. sinopec is buying the stake from chesapeake energy, which has been looking to sell off assets in order to raise money and pay down debt. the chinese company is spending just over $1 billion. but that price was lower than expectations, sending shares of chesapeake tumbling 6.8%. volume was heavy with the stock finishing at a three week low. this deal markets just the latest buyout of u.s. energy fields by a foreign company. the biggest deal of the day was in health care with irish drug maker elan the target of an offer from a pharmaceutical investment firm. royalty pharma said it approached elan last week about a take over. after talks, the offer was $6.6 billion, or $11 per share. the two companies reportedly have not had any talks since. shares of elan rallied 5.1%, closing above the offer price, indicating the market thinks a higher price could be coming. just this month elan announced a $3.3 billion deal to sell its share of multiple sclerosis drug tysabri to its partner. the drug accounts for most of elan s revenue. bio-pharmaceutical company affymax was a half billion dollar firm friday. tonight its market values under $100 million with its share price cratering 85%. after reports of severe allergic reactions, and some deaths in kidney disease patients taking its anemia drug, affymax yanked the medicine off the market. four of the five most actively traded exchange traded products were lower. the s&p 500 volatility note, which moves in the opposite direction of the broad market, shot up 13.7% as stocks sold off. and that s tonight s market focus. tom: we continue our monday series with some of the nation s top universities, we call it nbr-u. our partners from harvard, stanford, wharton and vanderbilt, bring us vast knowledge about business issues. and you can read in-depth articles at: www.nbr.com, just look for the nbr-u tab. tonight, the bond market rally has lasted for a generation. with interest rates at historic lows, there is concern rates have only one direction to go, and that will push bond prices down. i spoke with franklin allen, professor at the wharton school, and began by asking whether he thinks the 30 year bull run in bond prices, is coming to an end. ask. it may do but i woon be sur prised if it went on for a little bit longer. when it does end will it be with a whimper or with more of a bang? it depends very much what happens between the president and congress in the negotiations about the budget deficit this year, i think. we certainly saw in 1994 the last time we had a really big move in a very fast move in interest rates, they moved higher pretty quickly. could we see the same thing if there is no long-term resolution? i think it is unlikely that we ll see a very fast move if there s no long-term resolution immediately because there s always the possibility of pushing it into the future. and that s quite possible this time around too. the one thing that might make a big move possible is if there s some international incident or something like that which gets the chinese and the japanese to start withdrawing large quantities of their money. then i think we could see a big rise in interest rates. those, of course, are big buyers of u.s. bonds. some argue though that essentially the federal reserve is making an artificial interest rate. would you agree? i agree with all of that few. and i think it s not necessarily a good thing because they are discourting the distorting the prices and not giving the correct feedback to the economy from the long-term interest rate because they re making is so much of the market. certainly bond investors have benefited from it though. was s the damage to them with the federal reserve in there? well, the damage is that some point in the future, and who knows when, but there is likely to be a significant rise perhaps because of inflation fears. and then they will lose out. and that will be a problem, i think. it s very unlikely long-term interest rates will stay where they are at the moment for a long period. the low-interest rates. impacted almost all of fixed income including even municipal bonds, corporate bonds and even the so-called junk or high-yield bonds. is there much value left any longer, could interest rates still fall from these historic lows? yes, that is certainly possible, although it seems strange. i got to ask professor do you own any government treasuries yourself? . trying to take advantage, should there be inflation in the years ahead with those treasury indexed protection securities. yup. professor. exactly. professor franklin allen along with us, with the wharton school at the university of pennsylvania. thank you, sir susie: tomorrow on n.b.r. susie: and finally tonight, nothing like winning a best picture oscar to boost sales, taking the top honors, argo. produced, starring, and yes, directed by ben affleck. argo already beat warner brothers expectations taking in $127 million in u.s. and canadian theaters. the dvd came out last week and is expected to see a spike in sales. tom, just taking that oscar statue home can raise a film s revenue by a third or more, it s what hollywood calls the oscar bounce. susie: that s nightly business report for monday, february 25. have a great evening everyone, you too tom. tom: goodnight susie, we ll see you online at: www.nbr.com and back here tomorrow night. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org
male coming out now with a knife. martha: molly line is live in boston. molly, what do we know about this second suspect and whether there they were connected in this alleged plot? reporter: we re expecting to learn more here in federal court when the second suspect david wright is expected to be arraigned in relation to the j.t. tf, joint terrorist task force investigation. he is linked in some way to a man killed yesterday by an fbi agent and police officer officer here in boston. that man s name 26-year-old, usaama rahim who attacked investigators with a military-tile knife. they spent much of yes, sir in everett, massachusetts, suburb of boston. local and federal authorities all over the scene in the neighborhood. wright was taken into custody in the afternoon. they are looking for a link at rahim and wright and possible connection in a plot to harm a law enforcement officer. here is what neighbors in the area had to say. so close to you you re like, what else will happen, what s next? i was surprised. i heard it was him i was even more surprised i spoken to him a couple of times. like, i would have never thought reporter: this is really so early in the investigation. police just beginning to go to some various scenes. investigators pouring over a scene in warrick, rhode island as well. with any luck we ll be hearing more in federal court today clarification what it is they say this individual did. martha? martha: as you say they have been watching these individuals for quite some time, the joint terrorism task force in boston. do they know or have they revealed whether they were radicalized online or perhaps related in any way to isis molly? reporter: we have at least one federal source telling us they re looking at possibility that rao happy in rahim in particular was radicalized online by isis propaganda. fbi officials would not name any other people they re looking atn with yesterday but we know there was at least one arrest. the boston police commissioner talking about what a surprise it was the way rahim had reacted. they wouldn t say why they chose yesterday to approach him. it was a surprise. take a listen to commissioner evans. he kept retreating. verbally, giving commands, drop the weapon, drop the weapon. at some point the individual, proximity came close. the fbi and boston police did everything they could possibly do to get this individual to drop his knife. unfortunately am some point we had to take his life. reporter: want to reiterate they re watching a couple of developing situations here in federal court seeking further information on david wright and another scene in warwick, rhode island that has been active. state investigators and federal investigators taking a look at that, linked as well to the j.t. tf investigation. martha: we ll have more later on in the program. chairman of house homeland committee mike mccaul will join us live about what is happening in boston and what can be done about terror suspects radicalized online is a big issue. he will take that on. martha: brings in questions of nsa, whether or not there was any involvement of that program tracking phone calls between these individuals. all that coming up. meantime, president obama signing legislation that will haul our controversial surveillance programs we were just discussing. the senate approved the bill yesterday after weeks of deadlock, passing the freedom act, it ends the national security agency s bulk collection of americans phone records. now there will be a more targeted system for that in place. we re very much enjoying the passage of this bill which has now passed with a supermajority. it passed the most significant surveillance reform in decades. we will protect the security of the united states but we also will protect the privacy of americans. martha: it s a big deal. kentucky senator rand paul pushed back against the reauthorization of nsa techniques, dragging out the debate past the june 1st deadline and foursing surveillance programs to expire. bill: brand new polling shows the obvious. there is no republican frontrunner. yet another candidate gets ready to join a already crowded primary field. louisiana governor bobby jindal expected to announce his ambitions for 2016 on the 24th of june. governor jindal not among the top five contenders on this poll on the screen. governor walker tied for 11%. governor walker has not officially announced. jeb bush and rubio tied at 10%. well within the margin of error. mike huckabee. byron york, washington examiner, fox news contributor. back in myrtle beach south carolina. good morning. good morning, bill. bill: as you say wide open doesn t begin to describe this field, does it, byron? absolutely not. we re haven t seen anything like this right now. we re seeing sew decline of jeb bush. remember back in january he seem to got a jump on rest of the republican field, announcing he was exploring a run doing a lot of fund-raising. in this same washington post poll he was at 18%. now he has gone down to 10%. scott walker got a big jump in late january, on impressive performance in iowa. he is keeling off a it about. those two things opened up some room. you ve seen marco rubio rise pretty dramatically in the past couple months. ben carson is holding his own as is rand paul. bill: let s get to the others okay? there are two more panels to come byron, so sit tight. carson, cruz christie santorum in the third group, kasich,. less than 1% is bobby jindal. can he catch on? jindal is a bit of a mystery. he has been a top administration official. he has been a two-term governor. he has a lot of experience yet he is has not caught on yet. some people believe he is not very well-known. his only national experience was a response to a it staff union address that didn t go well a few years ago. but he will have a chance to make his to make his case in iowa and new hampshire and if he can, get up in the polls just a little bit if he gets on that debate stage, his supporters think he will be able to make a good impression. bill: seems one pattern is for sure. when they announce they get a little bit of a bump at least temporarily if not longer. they do. now the question continues, byron, with such a large field is that good for the party in your view or not? i think there are a lot of republicans certainly in the upper echelons of the party who are worried this large tightly bunched field, will lead to a long, drawn out destructive battle that weakens the eventual nominee. i think they would like to see something somewhere in the middle of this coronation that we re seeing on the democratic side, and this huge free-for-all on the republicanside right now. they can t make that happen. there are a the lot of candidates. they all have a chance to rise in the republican race. bill: makes interesting summer. byron york live in myrtle beach. governor bush has not declared either yet. martha: nope. bill: sometimes you get a little bump with a attention. they were down with neil cavuto down in florida. martha: some thought his interview with neil was edgy or testy. sound bites from jeb bush s interview yesterday if you feel like the competition you showed everybody is getting to him a little bit. we ll talk about that coming up. meantime this awful story as 19 more bodies are recovered after a passenger ship capsized on a river in china. more than 420 people trapped inside of the hull of the eastern star when that ship went down on monday. only 14 known survivors. the ship overturned during a storm with 80 mile-an-hour winds. the search continues. bill: president obama not just showing his hand with iran and throwing his cards on the table for everyone to see. what he is not willing to do with a deal with tehran. we ll talk with the chairman of the senate foreign relations committee, bob corker standing by on the hill. more on that. martha: was the engineer of the amtrak train that derailed on the phone? why they re having a very hard time figuring that question out and how important that question is. bill: the white house says we re one of the most transparent you have ever seen but there appears to be a lot more red tape for journalists and watchdog groups trying to get information. what can be done to get better access? listen here. the freedom of information act or foia, should be one of the most powerful tools of the public and the press in a free and open society. instead it s largely a pointless, useless shadow of its intended self. but not every insurance company understands the life behind it. those who have served our nation have earned the very best service in return. usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life. when you re living with diabetes steady is exciting. only glucerna has carbsteady clinically proven to help minimize blood sugar spikes. so you stay steady ahead. you probably know xerox as the company that s all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? 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senator bob corker, chairman of the senate foreign relations committee. back with us in america s newsroom. senator, good morning. thank you for coming back to our program right here. a military solution will not fix it even if the united states participates. is as they say in tennessee is that smart pool? no, bill, we ve known for a long time through not only our intelligence agencies but those from some of our friends that the iranians have never believed that under this president sy there would be a presidency there would be a military option. as they negotiate they are negotiating with a country they believe will not do that at least during the time this president is in office. this is not really news to us that following this closely. bill: that might be but you do still throw all the cards on the table? the critics say that is what the president did. do you think he did that in that comment? he spoke about something the iranians already believe to be true. no, actually, i think they have been saying a lot of things. every time they khamenei supreme leader comes up with objection or secretary kerry and mitigate that negotiating publicly saying we can get around that. so no, i don t think there is a backstop here if you will. there is not a person sitting there that is that backstop. that is why bill, it was so important for us to pass a bill that we passed in congress over the last three or four weeks while congress will be that backstop, i wish it could be even stronger than it is. because when you get to the point where a p5-plus-one have agreed to a deal, it is very difficult at that point to undo. we re having hearings this month. i talked to off-line to share with you last night we met with scientists in classified setting about laboratories and our secretary of energy to make sure congress really understands all the details of this, can raise concerns. i give you one right now. we know there is already an agreement relative to the iranian nuclear development program beginning in year 10. when the president said in that clip that you played that they can not get a nuclear weapon for 20 years, that is contrary to what he said on npr right after the april 2nd agreement where in essence you said you go down to almost zero time in year 13. we re trying to get our hands on this document we know exists, it is not signed but it is our understanding what we agreed to will be the iranian nuclear development program. all of us want to see what our administration agreed to there. there is a lot of details bill, that are important. bill: certainly is. what you are saying then, senator, whether year one or year 12, iran is going nuclear, is that right? well, i think there is, there is great concern on years zero through 10 about covert development especially research and development. and how do we prevent that then there is significant concerns afterrer. tern when we have this agreed-to program that they can enter into. what does that say? where are they going to be? so all of those things are important. bill for us to have gone through this as long as we ve gone through it and in 10 years iran potentially have the ability to get a nuclear weapon, 10 years is nothing. i ve been in the senate now eight 1/2 years. seems like yesterday. so again we want to make sure this is something that will stand the test of time. i appreciate you covering this and making the american people aware of some of the concerns that we have but back to your original question. look the iranians have never ever, ever, thought this president would use the military option ever. i think they have shown that it feels like they re doing everything they can to race to a deal instead of sitting back and letting iran come to them. on this program before, seems like we re marching towards their position. bill: one more point here. you met with these nuclear scientists last night to get a gauge when this happens. during the commercial break you describe yourself being nervous after meeting them. back that up. well, there are just so many technicalities. i mean, bill, are we going to be able to actually get into their military sites? is there going to be some committee approach which allows iran to move the ball? are they going to shift their 20% enriched out? are they going to downgrade,down blend the 5% enriched you uranium uranium that they have. there are questions that still have not been answered. unless iran agrees to all issues we raised they will not enter into a deal. seems like so many red lines we ve moved. this month again bill, we re spending inordinant amount of time understanding every detail that is important in a nuclear agreement. we hope the questions we ask will be a brace-up if if you will for negotiators themselves. bill: june 30, a deadline coming up, four weeks away. senator we re in contact with you and others. bob corker, republican from tennessee. thank you. a lot to think about. roller coasters are supposed to give you a good fun scare but passengers on one ride got a whole lot more than they bargained for. we ll tell what happened. bill: well-teal you about the foia request, freedom of information act basically getting documents from the government well, information is supposed to be free or sometimes easy but should be anyway but journalists telling congress this has become a big washington joke. it sends a signal to those men and women on the front lines trying to do their jobs, hiring to do it, don t you dare send that to mr. lee polled. don t you dare give that to new york city times. how do you dare talk to newsweek.. heaven forbid you give mr. anderson records about his captors because we wouldn t want to offend people that kidnapped mr. anderson. bill: four teenagers suffered serious injuries after an accident at a popular amusement park in the u.k. it happened on a roller coaster known as the smyler. so much for that. a car carrying 16s collided with an empty car that was not moving. the ride has since been suspended. martha: fox news alert. we re watching a hearing underway on government transparency. the house oversight committee hearing media professionals explain how they believe government agencies formally botch their formal requests for information. i filed eight foia lawsuits on behalf the times. much of that was not about disagreement legal issues but in response to unreasonable delays by agencies. it s a violation of foia to interpret exemption 7-a the way it has. the fbi continues to be in routine and flagrant violation of the law. federal bureaucrats paid tax dollars to act on our behalf, routinely break the law with impunity treating public material as if it is confidential secret information to be controlled by a chosen few. they withhold it from the public its rightful owners, while sharing it with select partners. the larger problem that we face though right now that our role of objectively collecting and reporting the facts has been increasingly and aggressively blocked. how about that? joining me, mike warren, staff writer for the weekly standard. mike good to have you here this morning. good morning martha. martha: these are interesting and forceful arguments. we ve seen these things get slow-walked time after time and reporters do have a right to information that is on the books and is public and often, basically they just try to wear you down with delay. right. it is not just reporters. it is watchdog groups but actually any american under the law who can file these things. we have to be fair though. this hasn t started in this administration. it has been going on white a while. talk with reporters who deal with foia requests. it has been on the up tick for 20 years in terms of slow walking or stalling or using these excuses. you kind of can t blame them. there is a weird twisted logic if you re blocking this if you re the white house or an administration. that is more scrutiny. more people are looking at your communications and how you re making decisions. you might have to actually be held accountable for what you re doing in government. i guess if it weren t for this law, we would never know anything. this is a real problem. it is only been ramped up extremely by the obama administration and, you know, good for con dress to actually be delving into it. but there has to be more done. say it has been ramped up under the obama administration which i think a lot of people believe but is that a fact in your opinion? well, you can just look at numbers and see how much more slowly these requests are being granted or the number of redactions that are being added. there is one particular exception that journalists are citing. called, 8. about, which essentially if that a government document or decision had to do with decision-making on some kind of government policy, then that can be excepted from a foia request. you talk to any journalist deals with that stuff that they say that has been abused over the last five, six seven years. martha: they can slap the label on anything. this matter has to do with decision-making. therefore you can t know it. is there any move afoot in congress congress is not subjected to foia requests is there any move there to say this has to be reasonable limit? this can last six to 12 months but they absolutely must give an answer? this is big part of what this jason chaffetz-led hear something about of getting that out there putting pressure on maybe getting better limitation on this. this is something that s that is really dogged the administration the way they treated the press in particular. you think about the way that the justice department has gone off some journalist including one at this network. martha: that s right. the white house press doesn t really have any sources within the white house on this the white house really closed themselves off from reporters. it is really only controlled, intentional leaks. i think this is a real problem for an administration that came in and said we re going to be the most transparent here. martha: that s true. they used to be acceptance of fact it is responsibility to share information with the press. there were times people didn t like doing it. that relationship was an understood things. there was responsibility on part of the white house to do so. that seems to have changed dramatically over these years. maybe over the last 20, as you say. michael, thanks very much. good to see you. thanks martha. bill: there was new reaction after a fatal shooting after reported connection with isis. police gunning down police say may have been radicalized online by isis. we ll talk to the chairman of the homeland security committee, texas republican mike mccaul about that in a bit. martha: with the soccer world in the midst of a massive corruption scandal, the head of the soccer s body announcing a very big change. translator: although the members of fifa reelected me as president this mandate does not seem to be supported by everybody in the world of football. there s just one last thing to do: check with truecar. car prices change all the time for all kinds of reasons. but truecar pulls in the latest, most accurate data so i can be sure if i m getting a great price. this is truecar. martha: a second suspect is set to be charged today in connection with a potential plot to kill police officers in boston. is a look at the video of his arrest. he was brought out of his house yesterday afternoon after a fascinating and frightening day in the boston area. he apparently expressed interest in isis and their call to arms to attack authorities which we heard a lot about across the country in recent months of the his arrest is connected to a another suspect who was shot and killed by the boston police yesterday. his name was usaama rahim. he came out of a cvs threatening police with about an eight-inch military-style knife you see on the right-hand side of your screen. he was watched quite closely by the joint terrorism task force in boston. he had been under 24 hour surveillance for weeks according to reports. they say both men may have been radicalized by isis online. that is threat taken up by the homeland security committee set to get underway in a half an hour from now. we re happy to have with us texas republican mike mccaul the chairman of committee and main driver behind this discussion. mr. chairman welcome. thanks for being on the program this morning. thanks, martha. thanks for having me. martha: what did we learn from the investigation? i think this is good to point out this was joint terrorist task force operation. since the tsarnaev brothers we ve been looking for greater cooperation with all of the law enforcement people in boston. we ll hear from the fbi this morning and homeland security. this was a success in my judgment. we ve been moner toking individuals who have been, basically terrorism has gone viral. it is all over the internet. what we re finding are operatives in syria, recruiters that have sent directives or calls to arms, calls to arms to people in the united states to activate them like sleeper cells. in this case the individual is going to attack the police. we ve seen directives to attack military installations and also police officers. i think the good news is, i think the fbi and homeland were on top of this one. martha: this seems to demonstrate what is possible. you know, they were on to these guys. they were watching them. do you have any idea how they were watching them? were they seeing their internet activity? how did this operation get pulled off? these guys were under 24/7 both physical and technical surveillance. my understanding is that it was triggered by a lot of this internet communication that that we picked up. again we re seeing a lot of this. remember people these top recruiters in syria can have thousands of followers in the united states if they try to activate. again this is kind of a new concern wave of terror we re trying to deal with. it is very hard to stop because there are so many americans following these twitter accounts that come out of syria. the garland case is another example of that. martha: yes it is. this is what i find fascinating because we re having a discussion about the nsa and they have lost perhaps temporarily their ability to collect bulk records. this seems to be coordination between police officers on the ground and the fbi in this joint terrorist task force operation and they don t seem to have had any restrictions on their ability to get access to these guys. is that, you know, do we need this nsa bulk collection if we have the kind of coordination we saw this case? we passed the usa freedom act which will transfer the records from the government back to the private sector like what i used to do when i was federal prosecutor. i tell you the one concern we ll hear from the fbi today these isis extremists are very sophisticated on social media. they know how to jump out of different platforms. they change their twitter accounts almost daily. and then they also go into what is called dark space, securecom. that is very difficult for to us monitor even if we have coverage by say, a warrant or wiretap they can jump into a message box and then to another platform that is called dark space that we can not cover. we don t know what those communications are. i think we re doing to hear today from homeland security and fbi, that is probably biggest concern is what we can t monitor and what we don t know and what is occurring in the united states right now. martha: yeah. understood. but in terms of the warrants that would be needed in a case like this because as you say they were following their online activity. i understand they would have to gotten a warrant. grow to the court, we re suspicious about these two guys. they got a warrant they needed in that case, correct? right. look there is also activity over the internet that is in the public domain, that is open to anybody that could be monitored. then if it is getting more into another platform than a warrant would have to be executed and so that s what occurs here. if they go into dark space we can not pick up that coverage. martha: which is a real problem. you re right, we have to deal with that. want to let people know, david wright who we showed at the beginning of this segment, maybes first appearance at boston courthouse at 3:30 this afternoon. i want to get you to respond to one more thing. that is the abysmal report we got this week on the tsa. what is your reaction to the fact that they got 96% of the these weapons through the tsa in this operation? i m getting classified briefing from the inspector general this afternoon. i m highly disturbed. these red teams are very good at what they do. they usually spot vulnerabilities and expose shempp them. but a 95% unsuccessful raid is unacceptable within the tsa given the high threat environment that s out there. we had a threat to five airliner jets just this week that turned out to be a hoax but we know that threat of nonmetallic i.d.s on airlines to blow up airplanes is still very real. the idea that weapons are getting through and potentially explosive devices getting through, whether human error or technical is unacceptable and i will be holding oversight hearings on the issue. martha: very clear from everything we re learning they re trying to pull something off here, even at a local law enforcement level as we saw in boston or airlines as we saw in the other plot this week. you have a lot on your plate, chairman. we thank you very much much for spending time with us today. we ll see you soon. thank you martha. bill: fifa president sepp blatter is out. the five-term president announcing his resignation only days after his re-election as corruption scandal rocks soccer s governing body. greg palkot watching that out of london. good day to you. what was the reason given for him stepping down now? reporter: bill this is very big deal, as of nfl commissioner roger goodell times 10 would step down because of possible wrongdoing. sepp blatter, head of fifa, that is international body that runs the world cup soccer games, made dramatic announcement yesterday from his switzerland base, reports from the u.s. justice department they were also investigating him and people close to him on corruption charges. this all comes after he was re-elected by the fifa board last friday for yet another four-year term. but this also critically comes after nine fifa officials and four corporate executives were hauled in last week on charges again, coming from the u.s., on various elements of raketeering, bribery, money laundering and fraud, amounting to $150 million changing hands in association with the awarding of those important world cup games. today the international policing body, interpol, announced an arrest warrant, red list of those, to make sure these guys don t go on the lamb. we re looking at a lot more probing and a lot more housekeeping inside of fifa. and a lot of people very thankful that the u.s. in this case stepped in on matters that came across their soil and use their institutions from time to time. we ll see where it goes. bill: greg palkot from london. thank you greg. martha? martha: the president made a strong claim about the u.s. respect level in the world but is he missing what is really going on in the world right now? big question on a lot of people s minds now. he wants credit. when things go wrong it is still bush s fault or someone s else s fault. the ego of this president is just incredible to me. what do you think of when you think of the united states postal service? exactly. that s what pushes us to deliver smarter simpler faster sleeker earlier fresher harder farther quicker and yeah even on sundays. what s next? we ll show you. usaa makes me feel like i m a car buying expert in no time at all. there was no stress. it was in and out. and it was just easy. usaa, they just really make sure that you re well taken care of. usaa car buying service. powered by truecar. save money zero hassle. (charge music) you wouldn t hire an organist without hearing them first. charge! so why would you invest without checking brokercheck? check your broker with brokercheck. what people don t remember when i came into office the united states in world opinion ranked below china and just barely above russia. and today once again the united states is the most respected country on earth, and part of that i think is because of the work that we did to re-engage the world and say that, we want to work with you as partners, with mutual interests and mutual respect. bill: so that s interesting. president obama saying under his leadership america is number one. florida congresswoman ileana ros-lehtinen responding and then some on greta last night. the ego of this president knows no bounds. is there anything that he won t take credit for? i mean the oceans are receding, the planet is healing. now we re the world s most respected country even though he took it over, took over the presidency when we were down in the dumbs. this guy is revisionist when it comes to history. bill: so who is right in this argument? a lot to chew on it segment. alan colmes, host of alan colmes radio show, fox news contributor. mercedes schlapp former spokeswoman for president george w. bush. a lot on our plate mercedes. we re number one. we contacted the white house looking for the poll specifically which president is referring to there. there is one poll called reputation institute. had us number 22 behind brazil and singapore. i don t know where does this come from? i think the president lives in this idealistic cocoon where he is more concerned about trying to please his european friends as opposed to coming up with the best approach to how to lead in the world and how to really be involved in this process. let s take his comment about the fact that he said about we re partnering with those with mutual interests. i m sorry, i don t see mutual interests with the communist dictators in cuba where they re suppressing cuban people as opposed to president obama who basically not even dealing with the cuban dissidents. i think he is plainly wrong. he must be living in a bubble. bill: alan, russia, china isis russia, china, the fact we re opening the gateway to cuba, pardon me, is great idea. i give you numbers. without negotiation, alan. helps promote democracy in cuba. you want to do away with dictatorship you open up the floodgates. that really worked hang on just finish mercedes. here is global survey came out by pew just recently. 65% voiced affirmative action for the united states. 74% in africa. 66% in western europe. 66 in asia. 65 in latin america. these are far above numbers from previous administrations. yes, i m shocked to hear a republican congresswoman put down the president saying he is doing terrible job. bill: he said want to be liked there is whole debate on that. there is another question too apparently david axelrod gave an interview to jp updates.com which reports on israeli news and affairs. this is what he said about the president. he also recalled obama venting in moment of come testimony place, quote i think i m closest thing to a jew that ever sat in this office. for people to say i m anti-israel or even worse, anti-semitic, it hurts. mercedes? well, i believe bill: where does this come from? i believe the jewish people in israel are not necessarily in favor of what president obama, his stand with israel because of the fact that he insults his leadership. the fact that he has this tense relationship with prime minister netanyahu. i just, so perplexed by his comments. he is probably one the of the least jewish presidents that we have seen in our time. merely because of fact that he has defend, he continues to deal with iranians and speaker boehner once said, we don t even know if he thinks who is america s friend or who is america s enemy when we re dealing with israel and iran. bill: same interview axelrod point ad finger blaming netanyahu. where does this come from? most jewish president ever. look, this is the president that contributed hundred of millions of dollars to the iron dome. robert gates no democrat, has said that we have the best intelligence relationship with israel we ve had in years. the first veto obama gave at the united nations was to go against anti-israel forces who didn t want settlements in the west bank which is opposite what happened during both bush administrations that had terrible relationships. george h.w. bush and they hated each other. to say we re not pro-israel is ridiculous. bill: scared about what is it going on. i think i m the closest thing to a jew that ever sat in this office. he looks good in a yamulke. bill: thank you a an. as we do all. thank you. 10 minutes before the hour. martha: breaking news coming out of boston and a terror plot we ve been watching said to have been targeting police officers. we now know what they are planning to do. fox news confirmed it. breaking news, coming up next. wow. sweet new subaru, huh mitch? yep. you re selling the mitchmobile!? man, we had a lot of good times in this baby. what s your dad want for it? ..like a hundred and fifty grand, two hundred if they want that tape deck. you re not going to tell your dad about the time my hamster had babies in the backseat, are you?! that s just normal wear and tear, dude. (vo) subaru has the highest resale value of any brand. .according to kelley blue book .and mitch. love. it s what makes a subaru a subaru. martha: authorities in boston now confirming a horrifying plot. they have confirmed those details to fox news. we now believe that the two individuals, one of whom is now dead, the other who was arrested in everett, boston on the right-hand side of the your screen who will be in court this afternoon, that part of their plot here was to behead police officers. we know from the police officers who were on the scene and with the joint terrorism task force they had that knife, the individual in the cvs parking lothat knife with him and it just goes to illustrate how how horrible and horrific the plans are of these individuals. and you know, the evidence is still looked at in terms of whether or not there was a direct isis investigation. there is discussion that they were radicalized online perhaps in these communities in boston where we saw the really most horrific attack play out on the streets of boston since 9/11 in the boston marathon bombings. we continue to stay on top of this story. this is the kind of thing we ve been warned about time and time again in terms of military and police officers across this country being subject of threats and plots by members of isis or people inspired by them. very stunning detail and we ll continue to cover the story. bill: that is an eight-inch blade too so he wasn t messing around. this is the police working with the fbi. that is part of the jttf, joint terrorist task force, borne out of the boston bombing and all criticism they took and since that time they have martha: give a lot of kudos for the jttf in boston the fact they uncovered this plot illustrates what you re talking about bill. we re getting more local coordination between people on the ground and fbi which was sorely missing in the boston marathon bombing case. that is good takeaway and those police officers are safer because of this. bill: here is more breaking news. fox houston has a shot in the air here, a television shot in the air of a man now barricaded by police. there is a police chase in houston, texas, a short time ago. the chase is over but the suspect is still in his car and is not cooperating. we ve seen a police dog move in. there is a ambulance clearly there screen right and a number of patrol cars surrounding what we believe the suspect s car that could be that dark suv. we can t confirm that. that is what we believe based on scene we re seeing here. we re waiting to see what comes of this. there is likely a conversation now, some communication between the authorities and this man and what he wants, what his intentions are. we don t know how long the chase lasts. we don t know if he made any demands or what led him to this particular spot in houston, texas. looks like a parking lot right? perhaps the a road next to it. the suspect is still in his car and not cooperating. martha: they release ad police dog on this suspect in the effort to get him to come out of the car after quite a chase on streets of houston. we ll give you more on that as we get it as well. bill: we re looking online with our affiliates in houston. when we get more we ll bring that to you next here on america s newsroom. when you re living with diabetes steady is exciting. only glucerna has carbsteady clinically proven to help minimize blood sugar spikes. so you stay steady ahead. stunning story this morning. a possible plot to behead police and david wright has been arrested and the officers were forced to shoot another man after lunging at the officers in the parking lot of a cvs with a hunting knife. it started here with the shooting of the man on the cvs. both men are said to have possibly been radicalized online. mike mccall last hour said this about that: basically, terrorism has gone viral. it is all over the internet. we are finding operatives in syria, recruiters that sent directives to people in the united states to activate them like sleeper cells. in this case the individual attacks the police. we have seen directives to attack military operations and police officers and i think the fbi and homeland security were on top of this. catherine heritage is live. good morning. what more can you report? reporter: the boston police did fear an isis style execution and had the subject under 24 hour surveillance. the man carrying the eight inch knife was being tracked and approached for questions about a plot to target and execute police officers who he drew the knife and was shot. a second man has been arrested and appears in a boston federal court later today. the boston police commissioner is defending these extreme measures. it is a difficult part of the job when we have to take a life but in these circumstances the fbi and the boston police did everything they could possibly do to get this individual to drop his knife and at some point we had to take his life unfortunately. reporter: we don t know this morning if the suspects are alleged to have been inspired by or directed to attack by isis. what do we expect to learn from the hearing? reporter: this brings together fbi and homeland security officials. the thing to watch for is the discussion the way american suspects are connecting with isis in syria and iraq and how these operatives are being redirected to encrypted forms of communication that allow them to essentially go dark to the fbi and other investigators. watt we expect to hear this morning and these investigators are having to look at the operatives almost blind and deaf to the way they are being directed by isis in iraq and syria and what the investigators don t know is what is concerning them the most. i would imagine so. bleep documents are showing officials at the national archives were concerned that high level memos on hilary clinton s private server were thought going to be saved especially the benghazi ones. the chief record keeper at the archives wrote this there are plans afoot for clinton taking her records from state to little rock. we need to discuss what we know and how we should delicately go about learning more about clinton s departure from state. chris sty wall is here. chris, you know this is the librarian of all of this information who was thinking about this before leaving the state department. she has a home severer and it is our job to make sure we have this stuff. this is revealing. and delicately. don t upset anything but it seems as if someone is breaking all of the rules in a highly sensitive post so inquire. when you talk about what happened happen to anybody else who wasn t the former first lady of the united states and wasn t already then the democratic nominee for the next presidential cycle. you talk about anyone else. may we privy and inquire about your home server? and that is the problem. everybody failed to hold hillary accountable. sounds like they were afraid of her. and sounds like the state department was a political space where she could operate with her advisors and no one was present or willing to stand up and say madam secretary what you are doing is wrong and i will not abide to it. trey gowdy s investigation on benghazi continues. he will hear from sidney blumenthal today. the fox news capital hill team found out it will not be held today but they will hear from sidney blumenthal in the future. there were communications from sidney blumenthal who was not supposed to be working for the state department but was a friend talking to a former cia operative and passing that information along to hillary. so there is a lot they want to know about sidney blumenthal and his communication with the state. this case of sweden is one thing we want to get in. and the money bill clinton made. $26 million given through the government to clinton. quick thought on that. that is some volume of money. $750,000 for a single speech. that must have been quite a speech bill clinton gave and it happened at the same time they lobbied hilary clinton s state department to keep iran s sanction from affecting their major telecom company erickson. fox houston here with a picture of a police chase ending with a suspect held up in his car and not cooperating. jonathan hunt has been watching this. what happened here? reporter: this began with a car chase we don t know what prompted cops to chase that man in the car. but the chase only lasted ten minutes and then there was this standoff and the person in the car was seen throwing things out of the window. the police were able to persuade him to leave the vehicle and at some point shots were fired. we don t know who shot first exactly what happened but the man was then on the ground and we are being told by local reporters the cops have placed a sheet over that man. we do not know his condition. he is obviously injured in some way. we don t know if he is dead or alive and we don t know whether he shot himself or was hit by shots fired by police. it is an ongoing situation. we know a ten minute car chase, a standoff and now a man down on the ground covered by a sheet according to local reporters. and apparently that suspect was throwing something out the window repeatedly and officers drew their weapons. jonathan hunt, thank you for the update on what is happening in houston. lawmakers are bracing for a supreme court decision on obamacare. if the court rules against the law in this case the federal marketplace may have to shutdown and that would force americans to turn to their own state for coverage coverage. but the majority of states don t have an online exchange to help people. rich is live obviously this is the latest development and it could be the latest ruling that will force a huge change in obamacare. what does it mean? millions of americans would lose billions of dollars the government gives them to by health insurance. the law says credits are available to those requesting them with exchanges made by the state. 34 states use federal exchanges and if they are ruled not to be able to do that 6.3 million would lose is $1.7 billion a year. states using the federal plans are working on plans if the supreme court rules their citizen citizens cannot receive federal credits. holding a meeting to discuss this as citizens in their state use the federal website. the options are likely unworkable. and in pennsylvania the governor, tom wolf submitted an application to set-up a state-base system to make sure his state is still eligible. state verses federal and a potential mistake the court may find in that law. thank you rich. former florida governor jeb bush going on the defensive. people have given up. and he is saying things are better. mark me down as no. is the one-time front runner taking the gloves off? and there is this also: today, once again the united states is the most respected country on earth, and part of that i think, is because of the work we did to reinengage the world. president obama is claiming the united states is the world s most respected country. by what measure? we are not sure. we will talk to dave bluff about if that is a true statement. and a car sliced in half with a train. we will tell how you this ended up. the impact i could not hear or see for a second. i was dazed and out of it. but all i could think about was by girls and jumped out of the car for them. when i turned around the car wasn t there. shocking video of a crash in florida. watch the train slamming into the tracks right there. that train spent the vehicle in two. two people inside the car only had minor injuries but the car banged up beyond belief. the father said the teens are relieved the train didn t derail. we didn t want it to happen at all but maybe he will learn and slow down and not cross when the arms are down. amtrak says no one on the train was hurt. that is a tough lesson to learn and i will gladly write the $300 ticket if you come out of that. they are very lucky. and a huge lesson that will make an impression on them for a while. some are reporting that jeb bush is getting testy during an interview he did with our own neal yesterday. as new polls show he is slipping out of first place according to this one. the former florida governor hasn t declared but neither as governor scott walker who is tied with rand paul who has declared first place. these are all of the folks expected to run. jeb bush and mark rubio in second place. but jeb bush says he believes his record is still going to be strong for him even without running for eight years. it has been a while since a governor has cut taxes every year totaling $19 billion, been a while for the governor to drop the workforce by 13,000 for many states to go to aaa bond rating status it has been a wile to have the prosperity we have had. ed rollins and dean tripi are here. welcome, gentlemen. ed he sees the competition as the other governors and wants to to be clear although he has been out of office for a while he thinks his record holds up well against any of them. would you describe this as testy? i think he is a little testy. i think he started off as the nominee and he is no longer that and has to fight a difficult battle. he is not doing well in the polls but very well with fundraising. he is not a declared candidate running the funny money putting the money in the super pac. you have a bunch of governors with strong records. this isn t about the past. you can remind people what you did in florida six to eight years ago but it does matter in terms of reform. if you can prove you have cut taxes and that you have been you know come out with a stronger economy. i am just telling you. there is a bunch of them with the same kind of record and they will all argue i was the best governor in texas florida, and even new york. but i think the country today is about the future; who can take us in a different direction and have a serious plan about where we go and what you did as governor was a good preliminary step but you will not get elected based on the fact you are a good governor of florida. i see what you mean. let s look a little more at the interview from yesterday. the way things are going right now florida for example, you and mark rubio, the looser is done. you are so processed driven and focused on economic policy. i don t buy any of the horse race stuff. this is a long process. if i become a candidate i will win if i show my heart, advocate ideas that give people the sense they can rise up and if i share i have the leadership skills to make it. joe what are you hearing in that? i think ed is right. critics of late. we want to have more jobs and faster economic growth. we have to trade and we have to open markets to our products. that is why you need trade promotion authority. paul ryan and joining us to talk about why he discusses the trade deal backed by the white house and opposed by most democrats. plus this: some scary moments. that maybe set his car on fire on purpose and the outcoming coming up. t every insurance company understands the life behind it. those who have served our nation have earned the very best service in return. usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life. a man in texas set his car on fire during a confrontation with the police. this is a bit disturbing. oh my gosh. wow. suspect apparently called 911 to say he planned to light his car on fire with himself inside and used a cigarette lighter to ignight ignite the flames. the police were able to pull him away. a very disturbed individual and a big scare. the only reason i put myself out there and speak to is bring my husband home and bring the father of my children home. he is an american citizen sentenced to eight years and the iranian government said he would add on more because he is refusing to deny this christian faith. that is the wife of a man who has been in prison since 2012 in iran. her and the family of many others are pushing for the release ahead of a looming deadline that is four weeks ago. good morning to you. it is good to have you back on the program. i was struck by what you said. i have been carrying a deep excruciating pain knowing my husband continues to suffer another day at one of the worst prisons in the world. did you help your husband s cause yesterday? i think i did. it was a good meeting with the congress and foreign affairs committee. they will look at the final deal with iran and they are the ones that define foreign policy with iran. so it was good to have their support. one of the other things you said is we only have a few weeks left. why do you believe that? this is the best time to get the americans out. either a deal is made or not i think it will get much harder once we walk away from the table. this is the time we are sitting across the table. i don t want to walk away without securing the release of my husband or other americans. you are aware of what the spokesman of the white house said? we will not allow these american citizens to be used for bargaining. i don t want to bargain for them. i think we need to demand iran releases them. if they want to enter into a better relationship with the united states and the rest of the world they have to prove they can be trusted. how can we trust them when they are holding four americans host hostage and my in jail for four years because of his christian faith. before any further discussion they need to release them. you met with the president at the end of this year? yes, he was in boise. did that give you a sense of optimism. if it did, what now, six months later? it did. it showed it was an important issue for him. my son asked him to bring his daddy home on his birthday and woke up in march and expected daddy to be home which didn t happen. i think as other family members mentioned the nuclear deal has made his harder. that is the focus and priority and unfortunately there might be americans left behind in the process. you think it is harder to win his release? it has. this is the first time we are talking with iran and we have americans who have been held by iran longer than any time even when there was no diplomatic relationship. americans have been held two or two and a half years and now we are up to three years for my husband and four and eight years for the others. we are talking with iran and it seems to get worst. lawmakers passed a resolution calling for the release of these people and we hope that is the case. keep pushing. thank you from washington. president obama says america is now more respected in the world since he took office. but his critics say they don t agree with that. we will talk to the man who helped president obama win the white house twice. you see him in the picture. and a fan coming home from the ballpark with a unique souvenir. the story behind this photo. this is judy. judy is 65 years old. her mortgage payment is $728 a month. that s almost $9,000 a year now judy doesn t think that she ll be able to retire until her mortgage is fully paid off. this is mike. mike is also 65 years old. his monthly mortgage payment was $728 a month. now mike thought he would have to work for another 12 years until his mortgage was paid off. and then mike heard that a reverse mortgage may help him. he called one reverse mortgage to get the details. mike retired immediately after getting his one reverse mortgage loan. maybe you too can benefit from a reverse mortgage. call one reverse mortgage now and find out if you qualify. they ll send you an information guide that includes all the details and the stories of mike and others. a reverse mortgage. is a mortgage with no required monthly payments. it was created for homeowners 62 or older so they can continue to afford and own the home they love. many one reverse mortgage clients find they can retire sooner, do more the things they love or simply put more money in the bank. a reverse mortgage could change your retirement and your life. i examined my finances and i said, there is no reason why i shouldn t retire today. 10, 12 years earlier than i had anticipated. in the first year, his cash flow savings totaled $8,736. after 5 years, it will be over $40,000. it really is worth a call to find out if a reverse mortgage can help you too. call one reverse mortgage now and ask for your free guide. a man was taken into custody in connection with a terror plot making his first appearance in boston. david wright was arrested at his home in everate, massachusetts yesterday. we believe the plot was an effort to behead police officers in boston. you remember that yesterday we started getting news in the morning that a suspect was shot and killed in a cvs parking lot. it is believed the two men were working together. bill daley is on the phone with us. what do you make of the plot? the joint terrorist task force had the individuals in their sights and in fact under 24 hour surveillance. we are not sure how they picked up on it. it could have been monitoring of tweets or messages going out that connected them to the plots or threats of beheading police officers and taken very seriously seriously. we know one of the suspects started waving a knife they felt threatened by that and asked him to drop the weapon he didn t and they took action to mitigate that exposure. the fbi and local law enforcement officers were on to this plot and worked together sharing information to take care of this guy and bring the other one in. but it always illustrates bill that we are seeing an increase in this threat. and we know this is something they want to pull off. it is scary stuff. exactly right. it is one of the things that we know law enforcement is very much concerned about. it is about the radicalization of individuals by isis and others. but isis right now who are both of a campaign out of the middle east and syria as far as other follow followers here picking up on it. if those people are being encouraged here in our own country to commit acts we are concerned about. as we know in the past, even here in new york city where events took place last year where someone was encouraged to attack police officers with an ax. you don t know who you are reaching when you invoke these people to do these things and what acts they will take. the fbi and joint terrorism task force took it seriously and gladly so because it seems there is a lot more behind the story. bill thank you. people don t remember when i came into the office the united states in world opinion ranked below china and just barely above russia. and today once again the united states is the most respected country on earth. that comment getting a lot of reaction. president obama remarking on what he believes could be his legacy after eight years in the white house saying his effort to to reengage the world with partners with mutual interest says we are number one. the vice president of uber and white house senior advisor is here live from san francisco. we have been trying to get you on and now we have you so good morning to you in california. what do you think about the comment about most respected? where is that coming from? he looked for the poll and contacted the white house and couldn t find had specific poll he is referring to. right. bill now i am retired from politics and out of practice about commenting on it. but i think that is true. i think certainly i travel around the world a lot now and i think compared to where we were six or seven years, i think they see america is still the strongest leader in the world, but doing it in a more cooperative way and winding down wars and i think the iran deal is something that is largely supported around the world. so i think our position around the world has been strengthened. russia, iran, isis syria, red line, all of that hasn t been great. what i think the critics heard in that comment is he wants to be liked rather than affective. do you understand that? yeah, well i mean i worked in the white house and we never made a decision about being liked. i think he made very effective decisions in terms of iran iraq, afghanistan, we have a lot of trek out there but has done a good job of waging a continuing fight against terrorist leaders. but it is a complicated world out there. you will have critics out there obvious obviously but i think the decisions he made was what was in the best interest of the american people and protecting this country of building our alliances because this is a global battle against terrorism. i think you will agree history is the legacy here. now it is 2016 hilary clinton found this this morning, an abc poll about if she is honest and trustworthy. 52% found she wasn t and 41% agreed she was. what does she need to do to fight back on those numbers? one of the things i enjoy being out of politics the most is not responding oo the poll of the day. this stuff bounces around. what do you think about how she is doing? well you know again i am not falling it that closely day to day. i think she is off to a good start and engaging with voters and small business people. my understanding is she is come out with a formal announcement and that is important. every candidate has to say this is why i am seeking this office and why i think i am the best person to lead. it is a fascinating race. i don t have the luxury of following it closely. but the clear frontrunner on the democratic side and the republican side is a fascinating race where there is almost a couple dozen running and none enjoying much support at the moment. it will be fascinating to watch that race shake out. i wish we had more time. let s talk about uber. i think it is an american story that is unique. you have detractors but the growth has been phenomenal. what do you think people watching this needs to understand about the way the sharing economy is changing their lives? well the company just started five short years ago this week we are in 300 cities and 58 countries. let s talk about in the united states new york, chicago, los angeles miami people want more transportation options and the decision they are making there is more competition with taxi now and that is good. most people who chose to use uber are not choosing to not use a taxi but choosing not to drive. cutting down on drunk and distracted driving. 20,000 people driving on the platform in chicago. a lot of income and a lot of jobs. people want to do everything at the press of a button. we bank, we do research we stay in touch they want to get transportation. if we want to cut down on the backup we will have to provide more mobility. i think the uber debate is looked upon narrowing as a stagnant market and it is people who use taxis but that is not what is happening. i think it is interesting when it comes to cars and renting homes and clothes it is a shift in the economy really and it is going to be very interesting to see how the plays out against the standard model we have watched for 50 years. david, thank you. we will talk politics next time. there is a trade deal that is in the works and making very strange political bed fellows. many democrats are against it. president obama likes the deal. and so does republican congressman paul ryan who is trying to get his side on board. he has been pushing the bill true the house and he joins us live to explain why coming up. and this: climb out the back seat. the back window is open. get out of the car. never a dull moment at the boat ramp. we will tell you how this happened. feel secure in your dentures. feel free to be yourself all day. just switch from denture paste to sea-bond denture adhesive seals. holds stronger than the leading paste all day. without the ooze. feel secure. be yourself. with stronger, clean sea-bond. when kevin jorgeson needs light, he trusts only duracell quantum because it lasts longer in 99% of devices. if i buy a car through usaa, i know i m getting a fair price. i was like, wow, if i could save this much, then i could maybe upgrade a little bit. we realized, okay, this not only could be convenient we could save a lot of money. usaa car buying service. powered by truecar. save money zero hassle. i like my seafood like i like my vacations: tropical. and during red lobster s island escape, three new tropical dishes take me straight to the islands. so i m diving fork-first into the lobster and shrimp in paradise, with panko-crusted lobster tail and jumbo shrimp in captain morgan barbecue glaze. or the ultimate island seafood feast, with tender crab wood-grilled lobster and two island-inspired flavors of jumbo shrimp. because a summer without tropical flavors might as well be winter. this escape is too good to miss so.don t. when broker chris hill stays at laquinta and fires up free wi-fi, with a network that s now up to 5 times faster than before you know what he can do? let s see if he s ready. he can swim with the sharks! book your next stay at lq.com! paul ryan is leading the charge to get a big trade deal through the house and his strongest ally is the man he ran against last time; president obama. the chairman of the house, ways and means committee paul ryan working to get democrats and republicans on his side and joins me now. great to have you with us this morning. good to be here. does it feel odd you and the president are on the same page in wanting to get this past? the joke iut to friends in congress is a broken clock is right twice a day. but with hadhen the president agrees with your policy take it. the deal with this trade promotion authority is different than the fast track. the president goes through and passes up and down. we are doing it the opposite of that way and putting congress in charge. it is because we don t trust the instruction and want to confirm them to work within congress rules. this is just a process on how you get trade agreements. we need to open markets, sell them overseas, and other nations are getting better agreements for their countries and we are loosing marketshare and market share. tpa is a process in how you do it and we are saying you have to do it our way mr. president. the agreements have to be the kind we want people in congress have to be able to see the agreement and when there is an agreement the country gets to see it for 60 days before it is considered then we vote and congress decides up or down whether we do it or not. this specific trade deal, and i know you want to affect how they can forward in the future it will give them a chance to look it over and they cannot weigh in on changing the vote. elizabeth warren spoke out against this with the president saying she is dead wrong. but democrats are lining up the way they are. they think the unions and jobs will pull away if you get this passed. some of the republicans don t want the president to have a win it seems because it lines up with things they might be in favor of. republicans hate the president s foreign policy and we argue the the world this is obama s foreign policy. trade is america. this is an issue of american leadership and as republicans we rin favor of a american leadership. the rules of the global economy are being written now. the question is who is going to write them. are we going to write them by getting other countries to agree to our rules and standards or do nothing and let china write the rules. we don t like the iran deal president obama is doing. imagine if we would tpa deals for the iran deal. we would know what was in the deal. the country would see what was in the deal. and congress would have veto power. i wish we had tpa for the iranian agreement because then we could stop it. that is why we are doing tpa for the trade agreements. the issue conservatives don t like is trade assistance which is federal jobs given to people whose job is replaced by the agreement. you think this is okay? this has a lot of bipartisan supports. the bill is a republican bill from washington state. this program has been in law for decade decades which is when a factory closes down those workers get job benefits to learn a new skill and get a new job. that is what trade adjustment assistance is. some republicans don t like it some do democrats like it. it is something that is considered not inside the tpa vote itself but separate. when you have a big plant closing in a town there is no jobs for that kind of industry. i experienced this. the taa says here is job training benefit do is get skills to get another job. it seems like everybody is running for president but you. do you miss the action? i am good with it. i can do a lot of good with the ways and means committee and i get to be home with my family on the weekend. an out of this world experience that changed the course of history for all of us. i don t want to fire the gun now. okay. i am up. that there is the first american astronut stepping into space 50 years ago. more on this jaw-dropping journey through time. you re living with diabetes steady is exciting. only glucerna has carbsteady clinically proven to help minimize blood sugar spikes. so you stay steady ahead. relook. rethink. reimagine. because right here, right now it s time to take a closer look at botox® cosmetic, the only fda approved treatment for the temporary improvement of both moderate to severe frown lines and crow s feet. see what real results can really look like. so talk to your doctor about botox® cosmetic. and make it part of what you do for you. the effects of botox® cosmetic, may spread hours to weeks after injection, causing serious symptoms. alert your doctor right away as difficulty swallowing speaking, breathing, eye problems, or muscle weakness can be a sign of a life-threathening condition. do not take botox® cosmetic if you have a skin infection. side effects may include allergic reactions injection site pain, eyelid drooping and swelling. tell your doctor about your medical history muscle or nerve conditions and medications including botulinum toxins as these may increase the risk of serious side effects. look me. in the eyes. and see what s possible. botox® cosmetic. it s time to take a closer look. i think i am dragging a little so i don t want to fire the gun. okay. i am out. ed white became the first american to walk in space pushing himself out of the space capsule capsule linked by a tether for a heart dropping 23 minutes. phil is live here. this is one of the most exclusive club on earth. 211 men and women have floated up above us all tethered only by the space cord. okay. i am coming over. i feel like a million dollars. 50 years ago today, ed white became the first american to do a space walk. tethered to gemini 4 he floated above hawaii. four years later neal armstrong put footprints on the moon. it is one small step for man, one giant leap for mankind. 300 space walks followed. in the 1970 s they ventureed outside of the sky lab and the hubble tellescope e captured planets far away. beautiful. and the international space station would never be what it was without the routine space walks. and earlier this year a go-pro space walk. changing time there. phil keating in florida. a terror suspect was shot and killed yesterday and chilling news from boston that you must hear. we will be right back. stuff going on in boston. the court appearance will happen at 3:30 this afternoon for a man from everett. don t know where that is going. have a good wednesday. see you back here tomorrow. happen now starts right now. jon: on court action linked to the did the shooting of a terror suspect in boston as we learn a second suspect may have been part of an isis inspired plot to be had police officers. welcome to happening now. it is a story that broke during our show yesterday when a police officer and fbi agents over fire killing a man in boston who was under surveillance by terrorism investigators. boston police have video showing a man identified as osama has seem. a second suspect has just arrived.
profits in 2013. we ve seen first quarter earnings growth expectations shrink to just a little over 0% from expectations of 3% or 4%. so, it s almost as if for every percentage point companies were beating fourth quarter numbers analysts were cutting the first quarter numbers by a similar amount. reporter: so even if sequestration doesn t kill the stock market rally. it could certainly amplify a correction that may have already gotten started. suzanne pratt, n.b.r., new york. tom: as suzanne mentioned, we re just days away from $85 billion in federal spending cuts hitting the u.s. economy. today, the war of words over the sequester continued. president obama called on the nation s governors today to pressure lawmakers over the sequester, saying citizens of their states will be out of work. the american people are out there ef row day meeting their responsibilities, giving it their all to provide thor their families and their communities. a lot of are you doing the same things in your respective states. we need that same kind of attitude here in washington. at the very least the american people have a right to expect that from the representatives. we ve got more on this from darren gersh. he spoke with one of the republican leaders in the u.s. house today. cathy mcmorris rogers. we began by asking whether the sequester will actually happen. i hope not. we ll see. march 1st is right around the corner. and what we need is for the president and the democratic senate to sit down and come up with a proposal to replace the sequester with a smarter approach to cutting the federal government. it s 2.4% over the next ten years. what is going to happen under the sequester and all the 50 states. and in your state, there will be a heavy impact on defense employees. 29,000 in your state. what are you going to tell those people when they re furloughed. i m very concerned about the way sequestration disproportionately impacts the military, our national defense which is the priority within the federal government to protect the citizens. so there is a better way. and the republicans in the house have twice now passed legislation. we passed legislation six weeks ago. we passed a bill six months ago to replace the president s sequester cuts with smarter cuts in reforms that will accomplish the goal. so the president says we need spending cuts but we also need tax increases. it should be balanced. are there any tax increases that republicans would accept to get over this problem that you say you want to get over? the agreement a year and a half ago was to reduce some spending in the federal government. and it just, to some it s like it s never the right time to actually cut the spending. the president often says well we need to raise taxes. that seems to be his solution every time. and we need the democrats to recognize that we have a spending problem. but if we cut 700,000 jobs, that s what some estimates are of the sequester, how does that create certainty, doesn t that hurt the economy? well, there s a smarter way than the president s sequester. it doesn t have to be the approach that he s outlined. and that s where we really need the president, we need the senate, to sit down and start talking about, start figuring out the better way forward where we replace the president s sequester, but still find the savings within the federal government. and they re there. 2.2 billion dollars for a free cell phone program, just in 2013. we spent 2.2 billion. there s smarter ways to go in there and find the savings within the federal government. and that s where we need to get. that s where we need to start having that discussion. are there any tax changes, tax loophole changes anything like that that the president has suggested that republicans might support? well, we re going to talk, we believe in tax reform. and we need to talk about a simpler, flatter, fairer tax code t would also help our economy if we could simplify the tax code both for individuals and corporations. and the republicans have long been talking about the importance of tax reform as a part of getting our economy growing. and that is going to be a separate discussion though than sequestration. sequestration, across-the-board cuts, that is part of raising the debt ceiling a year and a half ago. and we agreed that we were going to find some spending reductions in the federal government, it s slowing the rate of growth within the federal government by 2.4%. this is possible, everybody in america has had to tighten their belt a little bit and it s time for the federal government to do likewise. we ve seen record increases in spending under this administration. so you talked about these cuttings about 2.4% of spending, so are you saying basically that the white house is kind of blowing this out of proportion when they say this is going to be such a terrible impact on the economy and people. it depends on how the white house, how president obama actually implements hits sequester and how he finds these saving, for him to say within the defense part, the first place we are going, we are to the going to send the second carrier into the persian gulf, i really question that decision. there is other areas within the defense department where we request find the savings. that needs to be the goal, the smarter spending reductions that will actually help get our budget where it needs to be and ultimately help get our economy growing again. which is the goal. kathee mcmorris rogers the chair of the house republican conference, thank you very much for your time. thank you. susie: still ahead, will rising home prices keep shares of home improvement retailers like lowes and home depot popping this spring? tom: an update tonight on two big trials, first, the civil trial against b.p., and its contractors, stemming from the 2010 rig explosion and subsequent oil spill in the gulf of mexico. the government began the trial saying the primary fault of the disaster quote lies with b.p. the other big trial, saw some high profile testimony today as macy s c.e.o. terry lundgren testified in his company s fight with j.c. penney over who has the rights to carry martha stewart home goods. susie: despite the big stock sell-off today, shares of barnes and noble surged more than 11%. investors bought up the stock on news the bookseller s founder and chairman wants to buy the retail business. in a securities and exchange filing, leonard riggio said he plans to make an offer for barnes & noble s bookstore chain, but not its nook e-reader business. erika miller takes a closer look at whether splitting the company makes strategic sense. reporter: what s interesting about leonard riggio s bid is that he wants to buy the weakest part of barnes & noble s business: the bricks and mortar bookstores. during the all important holiday season, sales at b&n s bookstores and website fell more than 10%. still, some think those bookstores may be a hidden gem: there are many americans who still like walking into a store to buy books to browse through the books and get a better sense of what they might want to read. often times, if the price is about the same, and you re already there, you can have it. you can walk out with that book. reporter: the bookstore business has deteriorated dramatically in recent years, as more people choose to buy their print books online from places like amazon.com. in addition, more and more people are reading their books electronically, on devices like tablets and e-readers. borders, b-dalton, and other book chains have gone out of business. but that means less competition for barnes and noble: analysts think riggio may have a viable turnaround plan ready: he s looking at everyone who has gone out of business and he s saying to himself, if i can add three or four more categories in these big box stores, that are consistent with the book business, i ve already got all the overhead. i can close a few stores. suddenly, i ve doubled my profitability. i think he s got something like that in mind. reporter: riggio joins a growing list of executives hoping to buy the struggling companies they founded, including michael dell of dell computer, and best buy s richard schultze. erika miller, n.b.r., new york. susie: lowe s nails it today with better than expected quarterly results. not only did the home improvement retailer post solid earnings and revenues, it s upbeat about its outlook for this year. but as ruben ramirez reports while lowe s and its competitor, home depot expect a bump in sales on the back of new home construction, their success is still dependent on everyday consumers opening their pocketbooks. reporter: home improvement retailers continue seeing the trickle down effect of a recovering housing market and a boost in renovations on the back of a better economy. about a quarter of sales at lowe s and home depot come from home construction and renovation. during the housing downturn, lowe s tightened its toolbelt, closing stores, cutting costs and investing in its online business. it s a plan that is starting to pay off. it really will take a couple of years yet before the combination of improved merchandising, better supply chain execution and really overhauling a lot of the stores operations before we see some meaningful operating margin expansion. reporter: wahlstrom says lowe s 4% growth target for 2013 is aggressive but achievable. the company saw some strength in sales from superstorm sandy, home depot, which reports results tuesday, likely will also see a sandy-related sales bump. most analyst expect home depot to outpace lowe s for the fifteenth straight quarter. renovation activity will be key here as people rebuild and renovate so i think that s going to be a key sector as well in the recovery in housing this year. reporter: both retailers are getting ready for their biggest selling season, spring. lowe s says it will add workers this year. already, home depot has announced it plans to add 80,000 seasonal workers. they re seeing good traffic in the stores and they just want to capitalize on the individual that does come into the store and hopefully help them out with their project and establish a long-term relationship and get them to spend a little bit more money. getting shoppers to spend a little bit more is something both lowe s and home depot are banking on this year. but economists say it could be a challenge as consumers realize how much the expiration of the payroll tax cut took out of their pockets. ruben ramirez, n.b.r., new york. tom: over the past year as the housing market bottomed and began to turn up one of the hottest stock sectors was the homebuilding sector. as orders for new homes picked up, earnings improved and the homebuilders exchange traded fund gained more than 37% in the past 12 months. it has fallen recently as earnings comparisons are getting tougher. tonight s word on the street is: homebuilder. debra borchardt is markets analyst with the street.com. deborah is the home building stock rally over. no i really don t believe so although what i would say is some of the names are a little bit overbought. and that they have seen this rally and they ve really made some big moves. and so what i really did was try to take a look at some of the home builder names that are fairly new to the market, names that people aren t as family with and don t really have a lot of analyst coverage so there might still be some room to play. the headline members here lennar, kb home, pulte group but one of the new ones is tri-point homes, tpa the ticker, became the first home builder with an ipo in almost a decade earlier this year, $17 a share, it s above that today. what do you make of tph. when you look at the numbers, it was almost shocking because i thought are you kidding me? a home builder in califoia. that was ground zero for toxic mortgages. and i was a skeptic going in. but i looked at the numbers and i was really impressed. they built 100 homes in their first year. they had a community called they completely sold out of all of those homes. they are really doing very well. they ve got a very experienced management team. they re going in to colorado in the spring of 2013. so i was really impressed at the numbers that they are pulling in. and the amount of homes that people in california are buying. i mean it looks like thins are really starting to turn around in california. skeptic turns around herself it sounds like for tph. you mentioned building homes. you have to have a lot of supplies do that. boysy cascade is one of those, bcc, familiar long-term it just became a new public company early this month, engineered wood products. it sold at 21. it s at $27 her share, it s had a nice rally. it sure has. but i really think that this stock has not been discovered by the general public because again the analysts have not started covering these stocks because they are fairly new so when you really take a look at their numbers, this is a really impressive company. and as you mentioned they do engineered wood products, laminated veneer lumber which is lvl, and these are much stronger materials than just a plain wood to put in a home. and with the housing codes getting really tough, they are really the product of choice. they are building a new facility down in florida. and i hope that s not because there are so many hurricanes down there. but they are building a whole new facility, they re increasing and expanding the facilities that they have. so i really think that this is a name that s been under the radar and that s boise cascade. on the radar now tonight. how but, do you have any positions in these stocks? i don t. it s word on the street. debra borchardt from thestreet.com. warren buffett said today he s buying another newspaper. he s picking up the tulsa world, bringing berkshire hathaway s port pot of small and medium size newspapers to 28. and you know tom, it s really surprising because buffett has told shareholders in the past that the newspaper s industries prospects are so bad that he wouldn t buy a paper and here s a quote at any price. but now last year he bought his hometown paper, the omaha world herald, now this deal sounds like maybe a change of heart, right? maybe. a media mogul in the making. he began as a paperboy in omaha so he certainly knows well of that industry, and the woes it had over the past several years. speaking of woes, how about the markets today on this monday back to, without. major indes. the major indices suffered their biggest one day decline of the year with traders pointing to a closer than expected election in italy. there was no clear winner of the italian election, fueling worries about political and economic instability. here in the u.s., the s&p 500 saw its morning rally fizzle before noon eastern time, with the selling picking up in the final hour of trading. the index finished down 1.8%, failing to find buyers despite several announced corporate buy- outs. trading volume was on the heavier side. 818 million shares traded on the big board. just under two billion moved on the nasdaq. all 10 of the major stock sectors were down, with the heaviest selling in the financial, energy and material sectors. each dropped by more than 2%. life insurance stocks weighed on the financial sector, as their investment portfolios may have experienced some pressure with the down market. genworth financial fell 5.6%, lincoln national was down 4.7%, and hartford financial dropped 4.3%. all three have traded at 52 week highs this month. there was a billion dollar deal in energy, and this one involves a chinese company buying u.s. energy resources. sinopec international petroleum will buy a stake in an oil and natural gas field straddling the oklahoma, kansas border. sinopec is buying the stake from chesapeake energy, which has been looking to sell off assets in order to raise money and pay down debt. the chinese company is spending just over $1 billion. but that price was lower than expectations, sending shares of chesapeake tumbling 6.8%. volume was heavy with the stock finishing at a three week low. this deal markets just the latest buyout of u.s. energy fields by a foreign company. the biggest deal of the day was in health care with irish drug maker elan the target of an offer from a pharmaceutical investment firm. royalty pharma said it approached elan last week about a take over. after talks, the offer was $6.6 billion, or $11 per share. the two companies reportedly have not had any talks since. shares of elan rallied 5.1%, closing above the offer price, indicating the market thinks a higher price could be coming. just this month elan announced a $3.3 billion deal to sell its share of multiple sclerosis drug tysabri to its partner. the drug accounts for most of elan s revenue. bio-pharmaceutical company affymax was a half billion dollar firm friday. tonight its market value is under $100 million with its share price cratering 85%. after reports of severe allergic reactions, and some deaths in kidney disease patients taking its anemia drug, affymax yanked the medicine off the market. four of the five most actively traded exchange traded productse were lower. the s&p 500 volatility note, which moves in the opposite direction of the broad market, shot up 13.7% as stocks sold off. and that s tonight s market focus. tom: we continue our monday series with some of the nation s top universities, we call it nbr-u. our partners from harvard, stanford, wharton and vanderbilt, bring us vast knowledge about business issues. and you can read in-depth articles at: www.nbr.com, just look for the nbr-u tab. tonight, the bond market rally has lasted for a generation. with interest rates at historic lows, there is concern rates have only one direction to go, and that will push bond prices down. i spoke with franklin allen, professor at the wharton school, and began by asking whether he thinks the 30 year bull run in bond prices, is coming to an end. ask. it may do but i woon be sur prised if it went on for a little bit longer. when it does end will it be with a whimper or with more of a bang? it depends very much what happens between the president and congress in the negotiations about the budget deficit this year, i think. we certainly saw in 1994 the last time we had a really big move in a very fast move in interest rates, they moved higher pretty quickly. could we see the same thing if there is no long-term resolution? i think it is unlikely that we ll see a very fast move if there s no long-term resolution immediately because there s always the possibility of pushing it into the future. and that s quite possible this time around too. the one thing that might make a big move possible is if there s some international incident or something like that which gets the chinese and the japanese to start withdrawing large quantities of their money. then i think we could see a big rise in interest rates. those, of course, are big buyers of u.s. bonds. some argue though that essentially the federal reserve is making an artificial interest rate. would you agree? i agree with all of that few. and i think it s not necessarily a good thing because they are discourting the distorting the prices and not giving the correct feedback to the economy from the long-term interest rate because they re making is so much of the market. certainly bond investors have benefited from it though. was s the damage to them with the federal reserve in there? well, the damage is that some point in the future, and who knows when, but there is likely to be a significant rise perhaps because of inflation fears. and then they will lose out. and that will be a problem, i think. it s very unlikely long-term interest rates will stay where they are at the moment for a long period. the low-interest rates. impacted almost all of fixed income including even municipal bonds, corporate bonds and even the so-called junk or high-yield bonds. is there much value left any longer, could interest rates still fall from these historic lows? yes, that is certainly possible, although it seems strange. i got to ask professor do you own any government treasuries yourself? . trying to take advantage, should there be inflation in the years ahead with those treasury indexed protection securities. yup. professor. exactly. professor franklin allen along with us, with the wharton school at the university of pennsylvania. thank you, sir susie: tomorrow on n.b.r. susie: and finally tonight, nothing like winning a best picture oscar to boost sales, taking the top honors, argo. produced, starring, and yes, directed by ben affleck. argo already beat warner brothers expectations taking in $127 million in u.s. and canadian theaters. the dvd came out last week and is expected to see a spike in sales. tom, just taking that oscar statue home can raise a film s revenue by a third or more, it s what hollywood calls the oscar bounce. susie: that s nightly business report for monday, february 25. have a great evening everyone, you too tom. tom: goodnight susie, we ll see you online at: www.nbr.com and back here tomorrow night. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org ) ( theme music ) matt elmore: ( ) welcome to imagemakers a weekly showcase featuring the best short films from around the world. stay tuned and enjoy the filmmakers of tomorrow today on imagemakers. imagemakers is made possible in part by a grant from: celebrating the vitality and power of the moving image. and by the: ( ) ( ) (sheep sounds) ( ) ( ) ( music changes ) ( ) ( music continues ) ( )
profits in 2013. we ve seen first quarter earnings growth expectations shrink to just a little over 0% from expectations of 3% or 4%. so, it s almost as if for every percentage point companies were beating fourth quarter numbers analysts were cutting the first quarter numbers by a similar amount. reporter: so even if sequestration doesn t kill the stock market rally. it could certainly amplify a correction that may have already gotten started. suzanne pratt, n.b.r., new york. tom: as suzanne mentioned, we re just days away from $85 billion in federal spending cuts hitting the u.s. economy. today, the war of words over the sequester continued. president obama called on the nation s governors today to pressure lawmakers over the sequester, saying citizens of their states will be out of work. the american people are out there ef row day meeting their responsibilities, giving it their all to provide thor their families and their communities. a lot of are you doing the same things in your respective states. we need that same kind of attitude here in washington. at the very least the american people have a right to expect that from the representatives. we ve got more on this from darren gersh. he spoke with one of the republican leaders in the u.s. house today. cathy mcmorris rogers. we began by asking whether the sequester will actually happen. i hope not. we ll see. march 1st is right around the corner. and what we need is for the president and the democratic senate to sit down and come up with a proposal to replace the sequester with a smarter approach to cutting the federal government. it s 2.4% over the next ten years. what is going to happen under the sequester and all the 50 states. and in your state, there will be a heavy impact on defense employees. 29,000 in your state. what are you going to tell those people when they re furloughed. i m very concerned about the way sequestration disproportionately impacts the military, our national defense which is the priority within the federal government to protect the citizens. so there is a better way. and the republicans in the house have twice now passed legislation. we passed legislation six weeks ago. we passed a bill six months ago to replace the president s sequester cuts with smarter cuts in reforms that will accomplish the goal. so the president says we need spending cuts but we also need tax increases. it should be balanced. are there any tax increases that republicans would accept to get over this problem that you say you want to get over? the agreement a year and a half ago was to reduce some spending in the federal government. and it just, to some it s like it s never the right time to actually cut the spending. the president often says well we need to raise taxes. that seems to be his solution every time. and we need the democrats to recognize that we have a spending problem. but if we cut 700,000 jobs, that s what some estimates are of the sequester, how does that create certainty, doesn t that hurt the economy? well, there s a smarter way than the president s sequester. it doesn t have to be the approach that he s outlined. and that s where we really need the president, we need the senate, to sit down and start talking about, start figuring out the better way forward where we replace the president s sequester, but still find the savings within the federal government. and they re there. 2.2 billion dollars for a free cell phone program, just in 2013. we spent 2.2 billion. there s smarter ways to go in there and find the savings within the federal government. and that s where we need to get. that s where we need to start having that discussion. are there any tax changes, tax loophole changes anything like that that the president has suggested that republicans might support? well, we re going to talk, we believe in tax reform. and we need to talk about a simpler, flatter, fairer tax code t would also help our economy if we could simplify the tax code both for individuals and corporations. and the republicans have long been talking about the importance of tax reform as a part of getting our economy growing. and that is going to be a separate discussion though than sequestration. sequestration, across-the-board cuts, that is part of raising the debt ceiling a year and a half ago. and we agreed that we were going to find some spending reductions in the federal government, it s slowing the rate of growth within the federal government by 2.4%. this is possible, everybody in america has had to tighten their belt a little bit and it s time for the federal government to do likewise. we ve seen record increases in spending under this administration. so you talked about these cuttings about 2.4% of spending, so are you saying basically that the white house is kind of blowing this out of proportion when they say this is going to be such a terrible impact on the economy and people. it depends on how the white house, how president obama actually implements hits sequester and how he finds these saving, for him to say within the defense part, the first place we are going, we are to the going to send the second carrier into the persian gulf, i really question that decision. there is other areas within the defense department where we request find the savings. that needs to be the goal, the smarter spending reductions that will actually help get our budget where it needs to be and ultimately help get our economy growing again. which is the goal. kathee mcmorris rogers the chair of the house republican conference, thank you very much for your time. thank you. susie: still ahead, will rising home prices keep shares of home improvement retailers like lowes and home depot popping this spring? tom: an update tonight on two big trials, first, the civil trial against b.p., and its contractors, stemming from the 2010 rig explosion and subsequent oil spill in the gulf of mexico. the government began the trial saying the primary fault of the disaster quote lies with b.p. the other big trial, saw some high profile testimony today as macy s c.e.o. terry lundgren testified in his company s fight with j.c. penney over who has the rights to carry martha stewart home goods. susie: despite the big stock sell-off today, shares of barnes and noble surged more than 11%. investors bought up the stock on news the bookseller s founder and chairman wants to buy the retail business. in a securities and exchange filing, leonard riggio said he plans to make an offer for barnes & noble s bookstore chain, but not its nook e-reader business. erika miller takes a closer look at whether splitting the company makes strategic sense. reporter: what s interesting about leonard riggio s bid is that he wants to buy the weakest part of barnes & noble s business: the bricks and mortar bookstores. during the all important holiday season, sales at b&n s bookstores and website fell more than 10%. still, some think those bookstores may be a hidden gem: there are many americans who still like walking into a store to buy books to browse through the books and get a better sense of what they might want to read. often times, if the price is about the same, and you re already there, you can have it. you can walk out with that book. reporter: the bookstore business has deteriorated dramatically in recent years, as more people choose to buy their print books online from places like amazon.com. in addition, more and more people are reading their books electronically, on devices like tablets and e-readers. borders, b-dalton, and other book chains have gone out of business. but that means less competition for barnes and noble: analysts think riggio may have a viable turnaround plan ready: he s looking at everyone who has gone out of business and he s saying to himself, if i can add three or four more categories in these big box stores, that are consistent with the book business, i ve already got all the overhead. i can close a few stores. suddenly, i ve doubled my profitability. i think he s got something like that in mind. reporter: riggio joins a growing list of executives hoping to buy the struggling companies they founded, including michael dell of dell computer, and best buy s richard schultze. erika miller, n.b.r., new york. susie: lowe s nails it today with better than expected quarterly results. not only did the home improvement retailer post solid earnings and revenues, it s upbeat about its outlook for this year. but as ruben ramirez reports while lowe s and its competitor, home depot expect a bump in sales on the back of new home construction, their success is still dependent on everyday consumers opening their pocketbooks. reporter: home improvement retailers continue seeing the trickle down effect of a recovering housing market and a boost in renovations on the back of a better economy. about a quarter of sales at lowe s and home depot come from home construction and renovation. during the housing downturn, lowe s tightened its toolbelt, closing stores, cutting costs and investing in its online business. it s a plan that is starting to pay off. it really will take a couple of years yet before the combination of improved merchandising, better supply chain execution and really overhauling a lot of the stores operations before we see some meaningful operating margin expansion. reporter: wahlstrom says lowe s 4% growth target for 2013 is aggressive but achievable. the company saw some strength in sales from superstorm sandy, home depot, which reports results tuesday, likely will also see a sandy-related sales bump. most analyst expect home depot to outpace lowe s for the fifteenth straight quarter. renovation activity will be key here as people rebuild and renovate so i think that s going to be a key sector as well in the recovery in housing this year. reporter: both retailers are getting ready for their biggest selling season, spring. lowe s says it will add workers this year. already, home depot has announced it plans to add 80,000 seasonal workers. they re seeing good traffic in the stores and they just want to capitalize on the individual that does come into the store and hopefully help them out with their project and establish a long-term relationship and get them to spend a little bit more money. getting shoppers to spend a little bit more is something both lowe s and home depot are banking on this year. but economists say it could be a challenge as consumers realize how much the expiration of the payroll tax cut took out of their pockets. ruben ramirez, n.b.r., new york. tom: over the past year as the housing market bottomed and began to turn up one of the hottest stock sectors was the homebuilding sector. as orders for new homes picked up, earnings improved and the homebuilders exchange traded fund gained more than 37% in the past 12 months. it has fallen recently as earnings comparisons are getting tougher. tonight s word on the street is: homebuilder. debra borchardt is markets analyst with the street.com. deborah is the home building stock rally over. no i really don t believe so although what i would say is some of the names are a little bit overbought. and that they have seen this rally and they ve really made some big moves. and so what i really did was try to take a look at some of the home builder names that are fairly new to the market, names that people aren t as family with and don t really have a lot of analyst coverage so there might still be some room to play. the headline members here lennar, kb home, pulte group but one of the new ones is tri-point homes, tpa the ticker, became the first home builder with an ipo in almost a decade earlier this year, $17 a share, it s above that today. what do you make of tph. when you look at the numbers, it was almost shocking because i thought are you kidding me? a home builder in califoia. that was ground zero for toxic mortgages. and i was a skeptic going in. but i looked at the numbers and i was really impressed. they built 100 homes in their first year. they had a community called they completely sold out of all of those homes. they are really doing very well. they ve got a very experienced management team. they re going in to colorado in the spring of 2013. so i was really impressed at the numbers that they are pulling in. and the amount of homes that people in california are buying. i mean it looks like thins are really starting to turn around in california. skeptic turns around herself it sounds like for tph. you mentioned building homes. you have to have a lot of supplies do that. boysy cascade is one of those, bcc, familiar long-term it just became a new public company early this month, engineered wood products. it sold at 21. it s at $27 her share, it s had a nice rally. it sure has. but i really think that this stock has not been discovered by the general public because again the analysts have not started covering these stocks because they are fairly new so when you really take a look at their numbers, this is a really impressive company. and as you mentioned they do engineered wood products, laminated veneer lumber which is lvl, and these are much stronger materials than just a plain wood to put in a home. and with the housing codes getting really tough, they are really the product of choice. they are building a new facility down in florida. and i hope that s not because there are so many hurricanes down there. but they are building a whole new facility, they re increasing and expanding the facilities that they have. so i really think that this is a name that s been under the radar and that s boise cascade. on the radar now tonight. how but, do you have any positions in these stocks? i don t. it s word on the street. debra borchardt from thestreet.com. warren buffett said today he s buying another newspaper. he s picking up the tulsa world, bringing berkshire hathaway s port pot of small and medium size newspapers to 28. and you know tom, it s really surprising because buffett has told shareholders in the past that the newspaper s industries prospects are so bad that he wouldn t buy a paper and here s a quote at any price. but now last year he bought his hometown paper, the omaha world herald, now this deal sounds like maybe a change of heart, right? maybe. a media mogul in the making. he began as a paperboy in omaha so he certainly knows well of that industry, and the woes it had over the past several years. speaking of woes, how about the markets today on this monday back to, without. major indes. the major indices suffered their biggest one day decline of the year with traders pointing to a closer than expected election in italy. there was no clear winner of the italian election, fueling worries about political and economic instability. here in the u.s., the s&p 500 saw its morning rally fizzle before noon eastern time, with the selling picking up in the final hour of trading. the index finished down 1.8%, failing to find buyers despite several announced corporate buy- outs. trading volume was on the heavier side. 818 million shares traded on the big board. just under two billion moved on the nasdaq. all 10 of the major stock sectors were down, with the heaviest selling in the financial, energy and material sectors. each dropped by more than 2%. life insurance stocks weighed on the financial sector, as their investment portfolios may have experienced some pressure with the down market. genworth financial fell 5.6%, lincoln national was down 4.7%, and hartford financial dropped 4.3%. all three have traded at 52 week highs this month. there was a billion dollar deal in energy, and this one involves a chinese company buying u.s. energy resources. sinopec international petroleum will buy a stake in an oil and natural gas field straddling the oklahoma, kansas border. sinopec is buying the stake from chesapeake energy, which has been looking to sell off assets in order to raise money and pay down debt. the chinese company is spending just over $1 billion. but that price was lower than expectations, sending shares of chesapeake tumbling 6.8%. volume was heavy with the stock finishing at a three week low. this deal markets just the latest buyout of u.s. energy fields by a foreign company. the biggest deal of the day was in health care with irish drug maker elan the target of an offer from a pharmaceutical investment firm. royalty pharma said it approached elan last week about a take over. after talks, the offer was $6.6 billion, or $11 per share. the two companies reportedly have not had any talks since. shares of elan rallied 5.1%, closing above the offer price, indicating the market thinks a higher price could be coming. just this month elan announced a $3.3 billion deal to sell its share of multiple sclerosis drug tysabri to its partner. the drug accounts for most of elan s revenue. bio-pharmaceutical company affymax was a half billion dollar firm friday. tonight its market value is under $100 million with its share price cratering 85%. after reports of severe allergic reactions, and some deaths in kidney disease patients taking its anemia drug, affymax yanked the medicine off the market. four of the five most actively traded exchange traded products were lower. the s&p 500 volatility note, which moves in the opposite direction of the broad market, shot up 13.7% as stocks sold off. and that s tonight s market focus. tom: we continue our monday series with some of the nation s top universities, we call it nbr-u. our partners from harvard, stanford, wharton and vanderbilt, bring us vast knowledge about business issues. and you can read in-depth articles at: www.nbr.com, just look for the nbr-u tab. tonight, the bond market rally has lasted for a generation. with interest rates at historic lows, there is concern rates have only one direction to go, and that will push bond prices down. i spoke with franklin allen, professor at the wharton school, and began by asking whether he thinks the 30 year bull run in bond prices, is coming to an end. ask. it may do but i woon be sur prised if it went on for a little bit longer. when it does end will it be with a whimper or with more of a bang? it depends very much what happens between the president and congress in the negotiations about the budget deficit this year, i think. we certainly saw in 1994 the last time we had a really big move in a very fast move in interest rates, they moved higher pretty quickly. could we see the same thing if there is no long-term resolution? i think it is unlikely that we ll see a very fast move if there s no long-term resolution immediately because there s always the possibility of pushing it into the future. and that s quite possible this time around too. the one thing that might make a big move possible is if there s some international incident or something like that which gets the chinese and the japanese to start withdrawing large quantities of their money. then i think we could see a big rise in interest rates. those, of course, are big buyers of u.s. bonds. some argue though that essentially the federal reserve is making an artificial interest rate. would you agree? i agree with all of that few. and i think it s not necessarily a good thing because they are discourting the distorting the prices and not giving the correct feedback to the economy from the long-term interest rate because they re making is so much of the market. certainly bond investors have benefited from it though. was s the damage to them with the federal reserve in there? well, the damage is that some point in the future, and who knows when, but there is likely to be a significant rise perhaps because of inflation fears. and then they will lose out. and that will be a problem, i think. it s very unlikely long-term interest rates will stay where they are at the moment for a long period. the low-interest rates. impacted almost all of fixed income including even municipal bonds, corporate bonds and even the so-called junk or high-yield bonds. is there much value left any longer, could interest rates still fall from these historic lows? yes, that is certainly possible, although it seems strange. i got to ask professor do you own any government treasuries yourself? . trying to take advantage, should there be inflation in the years ahead with those treasury indexed protection securities. yup. professor. exactly. professor franklin allen along with us, with the wharton school at the university of pennsylvania. thank you, sir susie: tomorrow on n.b.r. susie: and finally tonight, nothing like winning a best picture oscar to boost sales, taking the top honors, argo. produced, starring, and yes, directed by ben affleck. argo already beat warner brothers expectations taking in $127 million in u.s. and canadian theaters. the dvd came out last week and is expected to see a spike in sales. tom, just taking that oscar statue home can raise a film s revenue by a third or more, it s what hollywood calls the oscar bounce. susie: that s nightly business report for monday, february 25. have a great evening everyone, you too tom. tom: goodnight susie, we ll see you online at: www.nbr.com and back here tomorrow night. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org ) ( theme music ) matt elmore: ( ) welcome to imagemakers a weekly showcase featuring the best short films from around the world. stay tuned and enjoy the filmmakers of tomorrow today on imagemakers. imagemakers is made possible in part by a grant from: celebrating the vitality and power of the moving image. and by the: ( ) ( ) (sheep sounds) ( ) ( ) ( music changes ) ( ) ( music continues ) ( )
more than 1,000 people have died in pakistan s brutal record-breaking heat wave. nearly all of those deaths happened in karachi, resources are overwhelmed with morgues and hospitals filled beyond capacity. pakistan s electricity grid is also being strained with frequent power outages being reported. earlier cnn correspondent saima mohsin visited a morgue and graveyard. these scenes may be upsetting. reporter: even as we approached the morgue the stench of death surrounded us. corpses covered in flies left out in the heat. a charity runs this morgue but it is struggling to provide the service. daily power outages means the cold room can t be kept cool. i want to take you in to show you the extent of the problem. there is a putrid, pungent smell. bodies upon bodies, piled high. 650 people have been brought here in just a few days. i really couldn t stay inside there any longer. that is supposed to be a cold storage unit in a morgue. it s hot and sticky in here. and it seems like even the dead aren t being given the dignity they deserve. lengthy power cuts plague the living and the dead. one of the major hospitals has treated up to 8,000 people since saturday s soaring temperatures struck. the unforgiving heat has spared no one. young children and the elderly, the most vulnerable. i felt so hot, i was vomiting says this old man. i felt weak and my heart sank. my son had a high temperature and then he had a fit, this woman says i ask her if she has water and electricity in her home. nothing. we have none of those things, she says. and the hospital they ve turned to for help is overwhelmed. these doctors and nurses tell me the government-run hospital has been relying on volunteers and donors. people are bringing us water, ice, and even medicines. their frustration was palpable. saima mohsin reporting there. and she joins me on the phone from karachi. i know this has been a very difficult story for you to cover there at the morgue and you ve just come away from the graveyard there. talk to us about the scene there. reporter: you know rosemary the more i cover this story and follow each chain of events whether it s the piece being rushed to the hospital as we saw, the ultimate man at the mortuary and further now where we have been to the graveyard it s just horrific how unable the city is able to cope with something as simple as a heat wave. there are no room for graves. there is just no space. they are trying to eke out space between graves that have been there for years. i saw one man digging into a grave. he told me that people are flocking to this graveyard because is it the major graveyard in this city. there are dozens of others in an incredibly large city but it s the bodies are decomposing so fast in this heat and as we saw, there s only one major mortuary that has the capacity to provide cold storage and that is failing because of power outages. people need to bury their dead fast. they are flocking to this particular graveyard. there is no space. and one grave digger told me they are in fact now opening up old graves and burying them in there. rosemary? it is too grim to bear and of course more than a thousand people dead now, the fear that the death toll will rise. joining us there, saima mohsin from karachi. i want to get more now. we have derek van dam in the studio. it is horrendous when you look at this. and the government hasn t done a lot to help people. there is little you can do to really offer some sort of relief. on top of that rosie, the heat wave is coinciding with ramadan. so you are fasting from sunrise to sunset no food or drink and that does not give you relief from the heat. five consecutive days of 40 degrees plus. three consecutive overnight periods that didn t drop below 91 degrees fahrenheit and the temperature just not cooling down at nighttime. it s not allowing the body to get that break it deserves and requires in order to cool your internal body temperature down. however, in karachi, the most populated city in the country, has seen some relief even though it is minimal, we ll take it. a couple of degrees thanks to an onshore wind. you can see the temperatures are just above average. we should be 33 degrees this time of year. but this is a far cry from the 40-degree plus weather we have been experiencing. and the overnight lows dropping below 30 degrees. the monsoon has not reached pakistan just yet. we are desperately waiting for the monsoon rains and winds to help cool us down. the area that have seen the monsoon weather places like new delhi and to the south we have seen that cooler weather settle in. that has brought the relief from the excessive heat seen two weeks ago in india. look at the heat wave into this region where we factor in the humidity levels it feels like 46 degrees in some locations. temperatures in the upper 30s. but when you factor in the humidity level it starts to feel oppressive. people are make due with what they can find. we are selling ice on the sides of the road handing out water to family and community members, anything they can do to bring relief from this heat wave. it s going to be a few days. it is. we have a couple of days of more heat but we should start to see the monsoon settle in in the next week or two. thanks for that appreciate it, derek. following developing news now, a car bomb has exploded in kobani near a turkish border gate. the militants are fighting kurdish ypg forces. dozens of people have been killed or wound bud an exact count is not known at this point. a kurdish ypg official tells reuters that isis staged an attack from three sides of the town. isis fighters have attacked government forces in the city of al hasakah. the fighting is still going on and the government has launched air strikes in the area. the group also says isis militants detonated a car bomb at a military check point and taken control of several neighborhoods in the southern part of the city. nato is more than tripling the capacity of its response force. the secretary-general announced the force will have 40,000 troops up from the current 13,000. the move comes in response to russia s involvement in eastern ukraine and moscow s decision to increase its nuclear arsenal. the alliance has been conducting military exercises recently. russia s foreign ministry has accused nato countries of sliding toward confrontation. france is fuming following spying allegations from wikileak. the report cites u.s. government documents indicating the nsa eavesdropped on french president francois hollande his two predecessors and other top officials from 2006 to 2012. president barack obama called french francois hollande on wednesday to smooth things over and u.s. secretary of state john kerry echoed the president s claims that this is not true. this is an old wikileaks document. i don t know what date it starts at or refers to. but i am telling you we are not and will not target the conversations of any friendly president, anybody i know of and certainly not president hollande or the french ministry. that is not happening. and mr. hollande gathered his defense council to discuss the allegations. and they summoned jane hartley to explain the report. but the french are still miffed over these revelations. translator: it is out of the question that we accept that the president of the republic the three successive presidents of the republic be wiretapped including their private conversations and anyone can understand that. that s the watch word and that s how it should be between allies. there should be a certain degree of trust. france s parliament gave approval to a surveillance law. it gives the government the right to collect data from phones without a warrant. critics say it gives the government far too much power. france s highest court still has to okay it before it officially becomes law. eurozone finance ministers will pick up negotiations on greece s debt crisis in the coming hours. wednesday s talks ended with no sign of a deal. the clock is ticking, of course for greece. it has just a few days to work out an agreement to secure more money before its next debt payment. other it will default. for the latest we want to go to elinda labropoulou who is live in athens. elinda as we mentioned, time is fast running out here as talks are resuming to try to find a solution to greece s debt crisis. how likely is it that a deal will be made by that deadline? reporter: well it s what everyone hopes or that they that s what they hope for. and we ve seen days and days of talks and hours and hours from all sides and efforts united. the truth is that 24 hours ago we were closer to a deal than we are now. in the last 24 hours a number of complications seemed to have arise. we have had a number of issues between greece and the imf. the imf saying that greece is talking about too heavy taxation and not enough spending cuts. it seems as talks resume today they are going to try to find another middle ground some concessions probably from both sides on the table before the euro group resumes later today as well. from the greek side we are hearing that you know greece came to the table with a number of proposals that were initially accepted on monday. then that seems to have changed and now they re being asked to do more. they re being asked to cover a number of red lines things to do with pensions things to do with v.a.t. these are lines that the greek government was not initially prepared to cross. we don t have some of the main issues yet addressed it seems and primarily the issue of dead relief is one of the key points in order to close this deal or not. greece has been asking for a sustainable solution that includes a debt relief in these talks. a promise a conversation about debt relief would at some point start. it would be something easier for the greek government to sell to its own parliamentarians. if we don t have that on the table or a solution that mr. tsipras can present to the greek parliament if there is a deal that will complicate the political situation in greece enormously. for the time being this could go either way. a lot of people wonder building the greek leadership understand the urgency of this. elinda labropoulou reporting live from athens many thanks to you. the boston bomber speaks out for the first time. what the convicted killer had to say to the victims of hawaiiis crimes. and the arrest of a second prison employee. the details coming up. shopping online. .is as easy as it gets. wouldn t it be great. .if hiring plumbers, carpenters and even piano tuners were just as simple? thanks to angie s list now it is. we ve made hiring anyone from a handyman to a dog-walker as simple as a few clicks. buy their services directly at angieslist.com. no more calling around. no more hassles. and you don t even have to be a member to start shopping today. angie s list is revolutionizing local service again. visit angieslist.com today. you know, when i started my business, a lot of people didn t believe in me. but things took off when i got a domain and built my website all at godaddy. now i can tell the doubters to stick it. hey, honey. stick it! stick it! stick it! nana? hi. stick it! can you give your mommy a message for me? stick it! get a domain website and email starting at $1/month all at godaddy. welcome back everyone. the convicted boston marathon bomber is now apologizing for his deadly crimes before being formally sentenced to death, dzhokhar tsarnaev said i am sorry for the lives i have taken, for the suffering that i ve caused you, for the damage that i ve done irreparable damage. after the sentencing survivors reacted to the apology. i regret having ever wanted to hear him speak. because what he said showed no remorse, no regret and no empathy for what he s done to our lives. tsarnaev told the court he was guilty in the april boston marathon bombing. he was convicted of killing a police officer in the manhunt that followed. to escaped murderers are still on the run in northern new york and now a second prison employee is charged in connection with their escape. prison guard gene palmer is accused of taking frozen meat embedded with tools, to the inmate s cell area. he is accused of taking the inmates to a cat walk area. they used the cat walks in their escape. it has been 20 days since richard matt and david sweat broke out of prison. authorities are following thousands of leads and they discovered the inmate s dna inside a cabin. jason carroll reports on what else has been found, including a bloody sock. reporter: the search perimeter nearly 75 square miles of rural, dense derare 1,000 people helicopters, and all-terrain vehicles but the focus on an area surrounding that hunting cabin in mountain view and a report from a witness who says he saw a man running from his hunting cabin. we have virtually 100% assurance that they were in that area. i believe that they were at that point last seen as of 10:30 a.m. on saturday morning. reporter: despite the two avoiding capture for 19 days there are clues that could help investigators learn more about the escaped killers physical condition. there are numerous items recovered from the cabin although i can t specify what the items were we have no definitive information to reveal that someone was injured. a bloody sock could mean someone had a blister or it could mean a lot worst. i m hoping for the best. reporter: as the search intensifies so too does the investigation into the inmates escape. joyce mitchell under arrest admitting that she put hacksaw blades and a large frozen slab of hamburger meat and convinced a guard to pass it on to richard matt. palmer s attorney says his client had no knowledge there was anything inside the meat. as for mitchell s relationship with the escaped inmates her attorney again denies it. she has indicated to me and to my knowledge to the police that she never had sexual relations with david sweat. that s all i m going to comment on. she has indicated that on denied that on multiple occasions. and did she mention anything about richard matt? i m not going to get into richard matt. her attorney reviewing 20 hours of interviews mitchell has given to police. what is she seemingly what has she admitted to at this point? i m not going to comment on that. that s something she has talked to the police. she may be in a position to continue to give help assistance to them and i don t want to be in a position of harming her plea bargaining opportunities. reporter: jason carroll, cnn, cadyville, new york. in charleston south carolina worshippers displayed their resolve, faith, and defiance on wednesday. they resumed bible study in the same room where nine people were murdered at emanuel ame church. wednesday s lesson listed on the church s website was called the power of love. we have certainly seen that. meanwhile, thousands of mourners spent wednesday in south carolina s state house viewing the open casket of reverend clementa pinckney who was a state senator. a public viewing will be held again thursday at emanuel ame and then another church nearby. president obama will deliver the eulogy on friday. more now from ryan young on the memorial surrounding pinckney s passing. reporter: state senator clementa pinckney s body arrived at the south carolina state house as hundreds lined the streets to pay their respects. his body lying in state inside the capitol while outside the symbol of the old south flies over the state grounds. it s time to move the flag from the capitol grounds. reporter: after nikki haley s statement, south carolina lawmakers voted to open the debate to remove the flag from capitol grounds once and for all. but the vote to take down the flag has yet to occur and by any measure its passing is not a sure thing. hailey s office says she does not have the authority to remove the flag herself today or any day and she will continue to work to change the law. as the debate over the future of the confederate flag overshadows the mourning in south carolina calls for taking down the flag are spreading across the south. alabama s republican governor ordered the confederate flag to be removed from the state capitol grounds joining virginia north carolina tennessee, and georgia, who have also sought to diminish the presence of the controversial symbol. even in boise, idaho, the mississippi state flag was removed from a display of state flags at city hall. it stays until the people of south carolina say it should come down. reporter: in south carolina taking down the flag is an uphill battle as some are trying to shift the focus of the debate. cnn spoke to william chumley. these people sat in there and waited their turn to be shot. that s sad. someone with a means of self-defense could have stopped this and we could have less funerals. are you turning this into a gun debate. you said guns why didn t somebody just do something? i mean, you got one skinny person. shooting a gun. ryan young reporting there. and we also just learned that the u.s. national park service has asked its bookstore and gift shop vendors to remove stand alone confederate flag items from their shelves. one of the biggest merchants has agreed and she expects all 70 vendors to comply. france is turning to the front line for a growing crisis in europe. hundreds of desperate migrants are trying to reach the united kingdom. what britain is considering to stop them. al shabaab militants attack government soldiers. you are watching cnn newsroom. welcome back everyone you re watching cnn newsroom. i m rosemary church. we want to check the headlines this hour. a car bomb has exploded in kobani near a turkish border gate. the militants are fighting a kurdish militia. the monitoring group says dozens of people have been killed or wounded but an exact count is not known at this time. police in hospitals in pakistan say the death toll from the country s record-breaking heat wave has topped 1,000. nearly all of those victims are in karachi, the country s largest city. hospitals and morgues are filled beyond capacity. the electricity grid is struggling to keep up with demand resulting in frequent power outages. now to brussels where eurozone finance ministers are set to pick up negotiations on the greek debt crisis in the coming hours. greece has just days now to work out an agreement to secure more money before its next debt payment or it risks default. we want to show you some incredible new video of a fire fight between kenyan security forces and al shabaab fighters. you can see militants sneaking up on an army base in kenya before fighting erupts. authorities believe this is the same battle where thomas evans, a british jihadist died fighting for althat shabaab back on june 14th. he is seen on camera the day before that attack. europe s migrant crisis is moving closer to the united kingdom and it has britain worried. 500 migrants were caught trying to cross the channel tunnel from france on wednesday. many were trying to exploit the chaos from striking ferry workers. many are take desperate and illegal measures in hopes of a better life. reporter: running after trucks on a busy highway. migrants storm a road in calais making a desperate dash for open vehicles to hide in. a police siren sounds, dispersing the small crowd and with batons officer force them off the trucks. chaos and desperation just a few hundred meters from the entrance to the channel tunnel. most of the migrants here are from sudan, ethiopia and ertrayair ander aerotray yeah and all say they have nothing left to lose. we are going to die and here we re going to die even. reporter: the attempts almost seem pointless at times. trying to open doors of cars loaded on a truck, these two men apparently wondering if they could fit under this vehicle. reporter: the desperation is leading people to try just about anything. they will jump on the truck but some will hold on to the undercarriage of the vehicle. they say britain holds the promise of a better future something they are just not finding here in france. 25-year-old said is from afghanistan. why is life better in england? more opportunity because you can work there. in france you cannot work. reporter: loriy drivers are largely patient. we saw them inspect their vehicles for passengers. but this man, whose truck was overrun by migrants was in no mood to carry an extra load today. inside migrants come out from every corner. the driver bangs on boxes with a metal crowbar. others emerge. but did more climb on to the truck than came out? hard to say. amid all the chaos, moments of humanity. a driver hands a migrant a bottle of water and gets a thumb s up as a thank you. today, authorities have started building a fence near this makeshift camp to keep illegal migrants from storming the highway. eventually it will be several kilometers long. but until then, these scenes will be routine, the ferry strikes on tuesday highlighted a crisis that s been ongoing here for years. in the distance men lie flat on the roof of more trucks. will they make it? will they get caught? either way, they re willing to take a life-changing risk to find out. meanwhile leaders in the uk and france are speak out about the problems plaguing the migrants. british prime minister david cameron called wednesday s events at the channel tunnel unacceptable. he is vowing to strengthen border controls. we have been looking at putting more personnel and sniffer dog teams on that side of the channel to make a difference and there s also more work being done in terms of installing fencing not just around the port at calais but around the euro star tunnel. we should work with the french very closely. there is no point either side trying to point the finger of blame at each other. this is a strong partnership we have in place and we should keep it that way. but the deputy mayor of calais is not on the same page as mr. cameron. most of the time when we talk to migrants they say the same they want to go to england. and our british friends are becoming more than hypokrilt call. they say it is your responsibility where they know that migrants being there want to go to england. for years calais is a gathering place for people without documents trying to find a way into the united kingdom. the u.s. will no longer threaten families of american hostages with criminal charges for trying to pay ransom to get their loved ones back. u.s. president barack obama announced the dramatic policy shift on wednesday after meeting with families of hostages. the government will be allowed to communicate and negotiate but it will be prohibited from making any substantive concessions or pay ransoms to captors. i believe paying ransom to terrorists risks endangering more americans and funding the terrorism that we are trying to stop. i believe our policy puts fewer americans at risk. a white house adviser also revealed that more than 30 americans are currently being held hostage overseas. that includes those held by terrorist groups drug cartels and criminal gangs. mr. obama is a signature away from one of the biggest legislative wins of his second term thanks to republicans in congress. on wednesday the senate advanced an ambitious trade bill that was once thought dead in the water. mitch mcconnell was behind the final push for the bill. it grabd grants the president fast track approval of major international trade deals. nancy pelosi now says she ll support the measure despite voting against its companion bill last week. here s republican house speaker john boehner on his rare this rare bipartisan victory. the relationship between the president and myself and senator mcconnell has been very good. a lot of coordination to get this across the finish line. i m proud of the work that we ve done. the fast trick bill could put presidential candidate hillary clinton in a dicey spot. the front-running democrat was an architect of the bill as secretary of state but she has been more skeptical of big trade deals since she started her presidential campaign. we ll watch that very closely. let s take a short break here. queen elizabeth spent her first day in germany touring berlin and paying her respect. details on where she is headed next are just ahead in a live report. stick around. most of my life. but that hasn t stopped me from modeling. my doctor told me about stelara® it helps keep my skin clearer. with only 4 doses a year after 2 starter doses. .stelara® helps me be in season. stelara® may lower your ability to fight infections and increase your risk of infections. some serious infections require hospitalization. before starting stelara® your doctor should test for tuberculosis. stelara® may increase your risk of cancer. always tell your doctor if you have any sign of infection have had cancer, or if you develop any new skin growths. do not take stelara® if you 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translator: i m asking for forgiveness from everyone who feels offended wronged or humiliated by my actions or those of my subordinates in the same state and in the time of my government civil and military. noriega was ousted from power after a u.s. invasion in 1989. he is serving a 60-year sentence in panama for murder embezzlement and other crimes carried out during his regime. in a few hours, queen elizabeth travels to frankfurt. wednesday she met chancellor angela merkel and went on a tour of berlin. max foster joins me now. it was a very busy day, one it that first day for queen elizabeth. walk us through it. it was interesting and finished with a powerful speak by the queen in a call for unity within europe. and this comes as there are so many issues around europe right now all being talked about with the summit later this week the migration crisis britain s membership in the european union and whether or not greece can stay in the euro monetary system. she spoke out at the end of a very busy day. one is amongst the most powerful women in the world, the other one of the most revered heads of state. german chancellor angela merkel invited the queen of great britain into her private residence and pointed to where the berlin wall once stood. they represent two nations once at war now meeting in an ongoing reconciliation with a dark past. and i think it s remarkable 70 years after the end of the second world war. 70th anniversary. the queen and duke had already paid their respects for the war dead on both sides. the couple both have german heritage. their job is to stay out of politics and strengthen ties between nations. but politics is at play here behind the scenes. the british prime minister david cameron among the guests at the state dinner. he wouldn t normally attend a royal tour but he needs merkel s support. something he promised during his election campaign earlier this year. in our lives, mr. president, we have seen the worst but also the best of our continent. we have witnessed how quickly things can change for the better. but we know that we must work hard to maintain the benefits of the post-war world. we know the division in europe is dangerous and that we must guard against it in the west as well as in the east of our continent. that remains a common endeavor. reporter: it was interesting, really the queen and the palace suggesting she wasn t talking specifically about the european union but they will be aware of that is the big talking point right now. the german president, her counter part can be more outspoken and he said in his speech that britain is stronger in europe. a desperate plea really to keep the european union project together. interesting and on her second day, the queen is off to frankfurt. what is going to happen there? what s ahead? it s about meeting lots of people. it s amazing to see the amount of media coverage here. rolling coverage on the tv networks. the magazines and newspapers in support of her coming here. simply calling her the queen and there are large crowds wherever she goes. there will be a walkabout and lunch in frankfurt as well and an emphasis of the family links as well. prince philip will be meeting with relatives as well. the trip going well emphasizing the links between the two countries. max foster following queen elizabeth s journey there in germany. appreciate it. finding a gift fit for a queen is no easy feat. that s a lesson that germany s president learned. he gave her a picture of her as a young child on a pony with her father holding the reins. that s supposed to be my father? yeah. if you don t like it here s this marzipan. the horse then princess elizabeth is sitting on is a shetland pony named peggy given to her by her father when she was 4. next on cnn newsroom a doctor s jokes in an operating room have cost her big. the story of a half million dollar colonoscopy is coming up. you know, when i started my business, a lot of people didn t believe in me. but things took off when i got a domain and built my website all at godaddy. now i can tell the doubters to stick it. hey, honey. stick it! stick it! stick it! nana? hi. stick it! can you give your mommy a message for me? stick it! get a domain website and email starting at $1/month all at godaddy. chinese authorities have seized about 800 tons of smuggled frozen meat and some of it is not only rotten and putrid it s ancient. state media report the meat was headed for restaurants, retailers, and supermarkets in hunan province. one batch dated from the 1970s. it included poultry and beef and was worth more than $1.5 million. xinhua reports chinese officials have detained 21 smuggling groups in the past month. there is no word where the smugglers are getting meat this old. three british teens have developed a condom that can detect std infections. it changes color when it comes in contact with cla mid yeah or sif list. the teens have been approached by a manufacturer to make it a reality. a virginia anesthesiologist was caught on tape making fun of a patient while under she dags. now her less than professional comments have become his major payday. jeanne moos has the details. reporter: as if a colonoscopy is not bad enough do you wonder what they say about you when you are knocked out? a virginia patient identified as d.b. found out. wow, this guy is something else. reporter: when he accidentally recorded his own colonoscopy and sued over remarks made mainly by the anesthesiologist who addressed him directly even though he was out cold. after five minutes of talking to you i wanted to punch you in the face. reporter: she found his questions annoying. the patient turned on his phone to record post-on instructions. the phone ended up in the operating suite. the doctor joked about steering clear about a skin condition on the patient. she mocked he spoke of wanting to be a surgeon but got queasy looking at a needle stick and wrote a nonexistent diagnosis on the chart. i m going to mark hemorrhoids even though we don t see them. reporter: but d.b. got the final shot. for malpractice and deaffamation the jury awarded $500,000. the doctor probably think she s has done enough talking. wheel of annoying patients. reporter: moral of the lawsuit even someone considered a pain in the butt patient should not become the butt of jokes. jeanne moos, cnn. i shouldn t be so mean. reporter: new york. makes you wonder doesn t it? you are watching cnn newsroom. i m rosemary church. do stay with us. early start is next in the united states and for the rest of you, another edition of cnn newsroom give begins after the break. have a great day. the decision to ride on and save money. he decided to save money by switching his motorcycle insurance to geico. there s no shame in saving money. ride on, ride proud. geico motorcycle great rates for great rides. you know, when i started my business, a lot of people didn t believe in me. but things took off when i got a domain and built my website all at godaddy. now i can tell the doubters to stick it. hey, honey. stick it! stick it! stick it! nana? hi. stick it! can you give your mommy a message for me? stick it! get a domain website and email starting at $1/month all at godaddy. breaking overnight, a new arrest in the prison break, two escaped killers, a second prison worker now behind bars for his alleged role in the crime. details ahead. new charges can soon be coming for the charleston church shooter as the first of his victims is laid to rest today. the boston marathon bomber says he s sorry. new reaction after the killer s apology. good morning, everyone welcome to early start, i m john berman. it s thursday june 25th 4:00 a.m. in the east. christine romans is off today. happening today in new york state prison guard is expected to plead not guilty in connection with the shocking escape of two convicted killers nearly three weeks ago. investigators tell cnn that