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tv   Nightly Business Report  PBS  November 14, 2011 7:00pm-7:30pm EST

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>> tom: the u.s. supreme court will take up the health care reform law, deciding if requiring people to have health insurance is constitutional, but an eventual ruling is unlikely to stop the debate. >> sometimes, the constitution rulings, if they're too sweeping, short-circuit the necessary compromises and difficulties of reaching a political equilibrium, which isn't always there, and we sometimes outsource these things to the court and don't get the answers we want, either. >> tom: and warren buffett changes his tune on technology, buying up a big stake in big blue-- i.b.m. it's "nightly business report" for monday, november 14. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
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this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> tom: good evening and thanks for joining us. susie gharib is on assignment. italy's new government comes under pressure as investors around the globe question whether new leader mario monti can make the cuts needed to bolster italy's struggling economy. already, we're hearing plans for 300,000 public sector job cuts by 2014 and spending reviews for all government agencies. european markets finished broadly lower and u.s. stocks followed suit.
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the dow fell almost 75 points, the nasdaq fell 21 and the s&p 500 lost 12 points. trading volume started the week light, with just 709 million shares moving on the big board and less than 1.5 billion on the nasdaq. where stocks head this week will depend in large part on a slew of europe and of u.s. economic reports. from retail sales to inflation, investors are hoping for signs the recovery is finally picking up steam. erika miller reports. >> reporter: if you want to know if the economy is registering growth, it pays to watch the registers. after all, consumer spending makes up more than two-thirds of the economy. unfortunately, tomorrow's retail sales data for october is expected to be fairly soft, rising just 0.3%. that would be a sharp pullback from september's 1.1% gain, but economist anthony chan isn't worried about holiday spending.
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>> net-net, we probably will see a little softer retail sales number in october. but the hope is it's temporary and we will see a little bit of a boost to that trend as we go into the calendar quarter. >> reporter: also tomorrow, the labor department reports wholesale inflation data. producer prices are expected to be lower for october after a sharp rise the month before. economists say that expected reversal is thanks to a drop in commodity prices, especially oil. the other big inflation news this week comes out wednesday and tracks prices at the retail level. economists are looking for prices to be flat after a 0.3% rise in september. excluding food and energy, core consumer prices are expected to eke out a small gain. economists say tame inflation means holiday shoppers will get more bang for their buck. >> that's actually good news for consumer spending, because what the fall or deceleration in consumer prices or producer
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prices will do, is that it will tend to boost real incomes. >> reporter: but no matter how encouraging the u.s. economic data is this week, it may not be enough to help the stock market. strategist steve freedman says the wild card is what happens in europe. >> you are in a stage where you are just getting a lot of comments from different countries, from policymakers, and those things are random and hard to predict. i think that they do have the potential to continue promoting volatility in the markets. >> reporter: so in this week before thanksgiving, brace yourself for the possibility of more market indigestion. erika miller, 'nightly business report," new york. >> tom: still ahead, tonight's "word on the street" wal-mart. the world's biggest retailer reports earnings just before the most important season for its industry.'s jeanine poggi joins us. president obama's health care overhaul is headed to the u.s. supreme court. the justices announced this morning they will hear challenges to the law, which
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could lead to one of the court's most important decisions in recent history. at issue? a mandate that requires all americans to enroll in a health insurance program by 2014. 26 states and one business group have asked that the entire law be repealed. the high court expects a decision by june, just over four months before the 2012 elections. tom miller of the american enterprise institute says the case is all about the individual. >> if we believe that there are some balance of power and checks and balances between individual rights and different levels of government, then this is a very significant case, because it will say a lot about what our role and relationship is between government and citizen in the future, and sometimes we have to think about doing things the right way, as well as whether you've won or lost in a narrow political sense. >> tom: while the white house prepares to defend the health reform law, the obama administration will use money included in that legislation to train and hire health care workers. the initiative earmarks $1 billion for grants focused on
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improving care for medicare and medicaid patients. in this age of uncertainty, over health care and other regulations, we visited a health care company today as it announced adding 100 new jobs over the next year. mako surgical makes robotic devices for knee and hip surgeries. we spoke with c.e.o. dr. maurice ferre. >> the importance of health care and health-care technology i think is going to play a very important role going forward here in this country. and one of the things that we're doing developing robotic systems for surgery and that's all about innovation, about efficiencies. and you know, we're dealing with a patient population that every day 10,000 people turn over the age of 6 a opinions you mentioned in your public remarks announcing the jobs in south florida, that innovation takes cash. dow have enough to continue to innovate. >> absolutely. absolutely. that's why we need to be competitive. that's the dream of america. america is about being focused on innovation and creating great, great jobs. these are high-paying jobs.
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>> and these robotic systems are you sell cost more than a million dollars each. >> they do. >> do your vendors, customers have the cash necessary to purchase these machines. >> you know what we are seeing is our partners, the hospitals around the country, we have close to i a 100 systems all over the united states. we've done over 10,000 procedures and have been around only since 2004 and the product has been going on since 2006. we think this going to continue to go because it shows the importance of what this technology does for the quality of health care. >> is the availability of credit out there for those health institutions to take that step. >> we're seeing it. we're seeing it we're seeing a healthy environment out there on the capital spending of hospitals. hospitals that rolize what this technology brings, better-- better patients, quality of care. these are important messaging to the hospitals. the 4079s are making these types of investments and we're happy to see that. >> year-over-year you have add 40% to your payroll. dow expect to add a hundred more jobs and other double-digit increase over
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the next 12 months or so. what are you finding in availability of skills. >> it's a tough environment and you know, we're fortunate to have a lot of people looking for jobs. and you know, we have the ability to hire talent. >> the health-care reform act at its core looks to increase the pool of people in the insured market. would that benefit a company like mako or do some of the regulations and rules involved in that legislation hurt mako? >> you know, i am going to say, you know there is over a million people that have some form of knee or hip implant in the united states. it's estimated by the year 2030 it's supposed to go up to 3 million. that's a significant number. and i think right now that's the way we treat these diseases. and you know, what we're about is focusing on using technology to improve outcomes. and i think that's the focus. and i think there's a lot of growth in the sector. health care is a very important part of it. and we need to figure out not only to make it more
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efficient but more cost-effective. >> you touch on a testimony of different industry, health care being the biggest one but also manufacturing and advanced manufacturing in plants like this one here. what are your suggestions to public policymakers as they look to invigorate the job market? >> you know, i mean we have to find ways of stimulating good ideas and good innovation. because you know, with innovation comes good jobs >> tom: can you name the man who once said this?
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>> we have embraced the 21st century by entering such cutting-edge industries as brick, carpet, insulation and paint. try to control your excitement. >> tom: that was warren buffett, and he has now embraced the 21st century by purchasing a big investment in one of the oldest technology firms. i.b.m. is one of buffet's largest investments yet. darren gersh reports. >> reporter: warren buffett says he likes companies that are surrounded by a competitive moat, meaning other companies can't easily find a way into the fortress. the motley fool's eric bleeker says that is a good way to think of i.b.m. >> buffett said today no one's ever been fired for picking i.b.m., and if you move away from i.b.m., you're endangering your job and your entire organization. remember, i.t. is built on 99.9% always working, and once you have i.b.m. in your organization, to move it? that's a risk that you're not going to have that same reliability. >> reporter: that competitive moat must also come at a fair price. buffett disciples point out their guru won't buy a stock
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unless the price offers a margin of safety of around 20% to 25%. >> that's where i come back and say, "gee, if he is buying at $170 and that's the average price he bought at," then he's obviously thinking there has to got to be at least $35 or $40 more in the stock at the present time, and that's not priced to perfection, that's priced to opportunity. >> reporter: buffett has long argued technology is too hard to understand and too easy to pick wrong. so why i.b.m.? long-time buffett watchers say the key is big blue's very predictable business. >> it may have raised several eyebrows because it is in the technology area, but when one looks at its very stable and growing cash flows, i think that it is not a surprise at all. >> reporter: at $10.7 billion, buffett's i.b.m. investment is one of the largest he's ever made. the fool's eric bleeker urged buffett to take the plunge last
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year, though today's news came as a surprise. >> this is like your grandpa saying he's going to go out and buy an old rotary dial phone and coming back with an iphone. >> reporter: it looks like buffett may be over his technology phobia. berkshire hathaway announced today it has also bought a $200 million stake in intel. darren gersh, "nightly business report," washington. here's tonight's "market focus." earnings, the economy and europe all conspired to push up stock prices.
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borrowing costs back on the rise for italy, american stocsk sank. >> with a 1% loss on its s&p 500. a little perspective stretching out to 30 sessions with that big sharp rally in october and the sell-off on halloween. we've been trading in a narrower and narrower range hitting lower highs and higher lows. all ten of the major stock sectored today sank. financials lead the way lower down 20%, energy and utility sectors falling 1.2% each. now leading financials lower, it was custody bank of new york melon, shares falling 4.5% way firm warning about its profit hit with the restructuring effort coming designed to save $700 million over the next three years. the bank also noted it faces higher regulatory and legal costs leading to the sell-off. big losers on the dow, both banking stocks as well, bank of america and jpmorgan each falling more than 2%. >> boeing, however, was the tailwind for the dow industrials rise --.5%.
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we're now just about 25 cents away from this october high. it was only one of three dow stocks in the green today. was's going on here? well, boeing saw some lift today thanks to a huge order of new planes placed from the mideast. em ritz air wants 50 of boeing's 747s a record order worth at least $18 billion. boeing thinks it could be just the beginning of $450 billion worth of business out of the mideast over the next two decades. the firm says that means judge demand for jets, pilot, maintenance and workers. while the energy sector was weak watch an anadarko tomorrow after closing around 79 dollars and 28 cents per share t was back above $80 after the close tonight. the company announced a new oil field in northeast colorado may hold more than one billion barrels of oil and natural gas. now speaking of energy, gasoline futures fell 7 cents thanks to new imports and refinery in the northeast coming back on-line. this is the lowest price for gas futures, gasoline futures in a month. nat gas meantime-- .
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>> in many ways i think it is a deadend trail, there is a great deal of talk, i'm speaking to you from washington and washington is from my perspective on economics, really markets things wrong. here of course people want to fix capital to get new companies going. in fact, the capital sources for new companies is, has
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perennially been first the entrepreneur himself or herself, family and friends and increasingly individual investors which we now know is angel investors. and angel investors last year overtook formalized venture capital funds as the largest source of new money for new firms. so this is a really interesting event. now the other part of your question is what do you do to stimulate more entrepreneurs. and i think well, i'm sure you've heard this a million times, our own data suggests that the uncertainty of the regulatory environment, and the uncertainty of the tax structure as it is debated endlessly in this town are actually really dampening the clothe of new firms, not the foremation. >> tom: but are you right in the thick of it. the supercommittee is due to report in less than two weeks on this plan on how to deal with spending and tax. anything you expect out of that that going to help entrepreneurialism into 2012? >> i'm, you know, like everybody else, pretty much
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in the dark, but if i was to make an educated guess, washington is more than ever focused on preserving big firms. and the thesis of entrepreneurs, first articulated by-- is we need for a healthy committee to have lots of new firms, turbulence at the bottom, challenging the incumbent big firms. and to the extent that washington wants to hold on to big firms like a safety blanket,hey are implicitly dampening the environment fo new firm starts. >> carl schramm, we appreciate your insights, great some of, always great to catch up with, you from washington carl schramm the chief executive officer of the kauffman foundation. all this talk about entrepreneurialism today marks today marks the beginning of global entrepreneurship week, which is supported by the kauffman foundation. the idea is to inspire the next generation of big thinkers. ken colwell, director of entrepreneuship at the university of miami school of business, says those outside- the-box thinkers are a different breed. >> successful entrepreneurs think and act differently than the average person.
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steve jobs revolutionized multiple industries, but refused to bathe even when his coworkers complained about the odor. when complaints about his dirty feet grew too loud, he would soak them in the toilet. thomas edison also disregarded his personal hygiene. he had three months of formal schooling. his teacher called him "addled." today, we would almost certainly say he had a.d.h.d. bill gates would rant and rave at subordinates and tell them how stupid they were until they fled in fear. entrepreneurs are artists, and the demons and eccentricities that they possess are the flip side of their creativity and drive to excel. so remember, when your kid refuses to do her homework, your boss has a tantrum because your work isn't perfect, or your husband refuses to bathe, people don't change the world by conforming to the norm. you just might be dealing with the next steve jobs. i'm ken colwell. >> tom: that's "nightly business report" for monday, november 14. i'm tom hudson. good night everyone. we hope to see all of you again tomorrow night.
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"nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. this program was made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt captioned by media access group at wgbh >> be more. pbs.
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