Will bring justice to the families of the men who died when the deepwater horizon exploded. Perhaps the greatest tragedy is that the deaths of the 11 men on board the deepwater horizon could have been avoided. The explosion of the rig was a disaster that resulted from b. P. s culture of privileging profit over prudence. Reporter b. P. Has agreed to plead guilty to 11 counts of felony manslaughter and one felony count of lying to congress. In addition, two b. P. Supervisors on the deepwater rig have been charged with 23 counts of manslaughter. Another b. P. Executive was charged with lying to congress. B. P. Will also pay a record setting 4 billion in criminal fines and penalties. Thrown in with the criminal charges is a civil settlement with the securities and exchange commission. B. P. Will pay more than half a billion dollars to settle charges it lied to investors, telling them the macondo spill was onetenth its actual size. B. P. Executives made numerous public statements in which they stood behind the flow rate estimate of 5,000 barrels, despite an evergrowing body of evidence that the estimate was unreasonably low. Reporter b. P. Has now resolved two massive problems. It has settled a longrunning dispute with its partners in russia, and now it has put to rest the risk of a criminal trial in the united states. Its a record settlement. Its hard to say that admission of guilt and a 4. 5 billion fine is a good thing for a company, but this could be the beginning of the end of this saga for b. P. Reporter b. P. Is not done yet. It still faces up to 20 billion in civil fines. A trial in that case is scheduled to begin in february. Darren gersh, nbr, washington. Susie joining us now, mitchell crusto. Hes a law professor at Loyola University in new orleans, and has been studying the b. P. Case and the relationship between business and the environment. How important is todays set element settlement. This is the biggest story. No. We have more dollars at stake. In terms of how importantthil us a little more. Its a record settlement. But it does encompass quite a few different features. In addition to the felony charges there is the fec investigation and the resolution of that matter and that is a big deal. Darren is saying its notove. The government is bringing gross negligence charges against bp. Bp is going to fight it vigorously how is that going to play out . Its difficult for them toave standard when they admitted to the felony charges. When its related to the environment. Its some 20 billion this is a big story but its an even bigger story ahead. There have been so many fines there a Silver Lining to all of this . Does this make the deep water drilling safer going into the future . Well its certainly a goodstr investors and the shareholders will see the company in a greater light. Brrchltbut unfortunately we aret going to see the end to oil spills. Its a slap on the wrist and it doesnt change regulations or the risk involved. Bp was a reasonably qualified company to do this type of drilling. There is probably other drillers who are not as careful as bp has been in the past and may not be in the future. So to put this inperspectives and the prison term and the apology from bp. Is there any satisfaction for the victims . Does the punishment fit the crime. Suzie i think not enough. We d as a result of the disaster no. 1. And no. 2 there is still risk involved that the regulations and the process of risky drilling encoupl encumbers. And this does not stop the companies from doing business the right way and the same way they have been doing business in the past. We are going to leave it here. A lot of issues unresolved. It was a Natural Disastermeae Economic Data tom it was a Natural Disaster that showed up in some Economic Data today. Weekly filings for first time Unemployment Benefits jumped to a oneandahalf year high, surging 78,000, thanks to super storm sandy. The total was 439,000. Meantime, consumer inflation slowed to a one tenth of a percent increase, thanks to lower energy prices. Without food and energy, core inflation was up two tenths of a percent. On wall street, the dow fell 28. 5 points, the nasdaq was down almost ten, and the s p 500 dropped two. If you want to know how the economy is faring, it pays to keep an eye on walmart. After all, it has over 10,000 Stores Across the globe, selling more than 1 billion worth of stuff every day. It earned 1. 08 per share in the Third Quarter, a penny more than estimates, and up 11 from last year. But revenues were a little shy of forecast, and walmarts outlook for this quarter was less than anticipated. Compare that to rival targets Quarterly Earnings four cents better than expectations at 81 cents a share and a Holiday Outlook that didnt disappoint. Erika miller reports on what the results say about allimportant the holiday season. Reporter 3. 6 billion. That almost unthinkable number is what walmart earned in the Third Quarter alone. It works out to about 40 million in profits a day. To wall street analysts, its proof the companys turnaround strategy is working. What walmart does so well is they are offering amazing values at very low prices. And they do such a good job providing what you need to make your life easy to live. It gives consumers in a tough environment the opportunity to shop at a low price. Reporter walmart has also added more merchandise to store shelves, giving customers more selection. But the retailer still faces serious headwinds, most notably a weak global economy. What happens at walmart is watched closely by wall street, because it provides a glimpse into the mindset of low and middleincome shoppers. Unfortunately, the picture isnt pretty. Theyre the most poverty stricken, theyre the most with subprime mortgages, theyre the ones with homes being repossessed. Theyre the ones whose hours are being cut. Theyre the ones who are under the most stress. Reporter rival target appears to be in better shape. Its core customer has a higher household income, 65,000 a year. And it has another advantage. Much more Attractive Stores and fixtures. They dont have apparel next to cookies. Reporter thats why he and others think target may have the edge this holiday season. The store has also expanded its pricematching policy to include online rivals like amazon, which could help attract more toy business. Erika miller, nbr, new york. Reporter im diane eastabrook. Still ahead, chrysler is expanding in the wake of block buster truck sales. Ill have details coming up. Tom the worlds second biggest economy made its oncea decade change in leadership today. Chinas communist Party Central committee selected its new sevenmember ruling team in beijing. The group rules over a chinese economy that has been slowing and showing signs of stress after years of expansion, built on global trade and helped by keeping its currency value locked with the u. S. Dollar. But currency expert wolfgang the chinese currency that is going to be accelerating the unpegging versus the u. S. Dollar, which will create more uncertainty about the dollar versus china, and therefore the value of what Business Companies are doing in china. Tom we spoke with william nobrega, managing partner at the conrad group, an emerging markets Investment Advisor about what the new leaders need to do. One of the things that they need to do is taking the reform and building the institution so they need a robust Healthcare System and education system. Therthere is a growing inequaliy between rich and poor in china and that is a grave concern for the new leadership. The outgoing president senet corruptions that you havent heard from a chinese leader. Saying combatting corruption is a Major Political issue how big of an economic issue is it. They are going to lose faith in the government and you can see some wide scale issues coming about. The question is can they tackle corruption and they have not been successful yet. 120 billion has left the country in graft. It filters through to the provinces and its a big issue. Are you looking at china puta significant barrier to Foreign Investment . You cant do business inchi. They have to be connected to the chinese government. It leaves American Companies a a bit edgy. Lets talk about the newleade announced as the general secretary of the chinese party. Hes Vice President of china. He has a long resume of a chemical engineer degree and served in the army and he grew up in privileged life and as a laiblabourer. Is this a guy to attack corruption. I think hes serious aboutit. All leaderships are timid. Can they make the Bold Decision to go of a th of a after then year leadership members that are corrupt. Is there Global Support fori . We cant have a stanc transpe corruption at that level. And they know it. They want to foster a corruption free based society safer whats next for venture capitalism in china . Go online to nbr. Com to learn more about investing in this emerging market. Just look for the nbru tab. Another encouraging sign today the u. S. Auto industry is beginning to fire on all cylinders. Chrysler announced that it plans to hire 1,200 additional workers and invest about 240 million in three michigan plants. Diane eastabrook has details. Reporter the bulk of chryslers 240 Million Investment will go toward reopening the companys detroit engine plant. Chrysler is spending just under 200 million upgrading the facility to make v6 pentastar engines. The remaining 40 million will go towards upgrades at another engine plant. Those engines will go into additional ram pickup trucks the company will be producing at a nearby plant in warren. The expansions underscore chryslers optimism about the improving u. S. Economy and Housing Market. James schrager is a management professor at the university of chicagos booth school. He says the expansions here could also underscore chrysler and fiat c. E. O. Sergio marchionnes pessimism about europe. In the u. S. , he is implementing well, making good cars with designs people want to buy, but when the market it is here, you spend your capital dollars here. Reporter fiat bought a stake in chrysler after it emerged from bankruptcy three years ago. Since then, its invested nearly 5 billion in u. S. Plants and added 6,000 workers. And chrysler has been the cac auto industry. Its been ringing up month after month in both cars and trucks. Its interesting there is ad. Are people interested in buying trucks like the dodge rams you are standing next to given the price of gas these days. That took a hit during there. A lot of builders that buy trucks stopped by them. We are seeing the housing march coat tur market turn around. We saw the dodge pick up sales up 20 . That is amazing. One thing we learned in the eat after Hurricane Sandy is that people wan want to have a car tt gets good gas mileage. Are American Automakers taking this serious too. A lot of these trucks havev6e enhancements that are put on the vehicles to get better gas mileage and they are coming out with direct injection engines. Thanks a lot diana the Housing Market is far from being out of the woods. Thats what Federal Reserve chairman ben bernanke told Business Leaders in atlanta today. He said the fed will keep Interest Rates ultra low so the housing sector can recover. Bernanke also noted that one in five borrowers owe more on their mortgages than their homes are worth, another sign that housing is still struggling. His comments came as foreclosure filings fell 19 in october compared to a year ago. Its the Third Straight month of annual declines, according to Market Research firm realty trac. Tom u. S. Stock indices continued sinking, falling for the sixth time in the past seven sessions. The s p 500 made a couple of runs into positive territory today but couldnt keep up the bid. The trading range was a little bigger, a dozen points top to bottom as it ended down a fraction. Trading volume was a bit heavier 775 million shares moving on the bog board; just over two billion on the nasdaq. The Telecommunications Sector saw the biggest slide, down 1. 1 . And utilities extended their selloff with the sector down another seven tenths of a percent. Walmarts less enthusiastic outlook for the Fourth Quarter hung over retail stocks. Shares of walmart dropped 3. 6 as volume more than tripled. After running to a new alltime high just last month, shares tonight are at their lowest level since june. After the closing bell, fellow retailer sears was in focus. The Parent Company of sears and kmart did not lose as much money has feared. But sales at stores in the u. S. Open for more than a year fell, and the company said it is dealing with inventory shortages in groceries and electronics. Shares gained a fraction in the regular session, closing at 58. 48 per share, but traded down to around 55 per share in extended hours trading. That is a drop of more than 5 . Another retailer worth watching tomorrow may be the gap. After closing at 33. 26 today, the stock rallied to 34. 50 per share. Earnings came in as expected but Profit Margins were up and sales at its north American Stores were growing. Dell computer is expecting the big shift in computing from traditional Desktop Computers to tablets and smart phones to continue. The shift is hitting its bottom line as profits have fallen for four consecutive quarters. Thirdquarter earnings per share were a penny less than estimates, showing another doubledigit drop from a year ago. One of its Major Business lines, its servers and networking business, showed sales increases. Shares closed at 9. 56 during the regular session, and fell below 9. 50 in afterhours action. The stock is down 40 in the past year as dell wreles with a shrinking computer business. Despite all the worries about the fiscal cliff and the stock selloff weve seen since election day, gold sold off today. Prices fell nine tenths of a percent, settling at its lowest price in a week, losing some of the rally since election day. The World Gold Council noted Global Demand for the yellow metal fell in the Third Quarter. Three of the five most actively traded Exchange Traded products were higher, led by the japanese e. T. F. , rallying 1. 6 . And thats tonights market focus. Susie tomorrow is a big deadline for president obamas Health Care Insurance reform. Its the day states across the country must decide if they will be setting up their own Health Insurance exchanges, or if they will opt out and let the government do it for them. Sylvia hall takes a look at the exchanges, how theyll work, and how they will impact the way americans pay for care. Reporter the idea behind state Health Insurance exchanges is Pretty Simple the uninsured will have a Central Place to shop for Health Insurance. All plans will meet minimum coverage requirements and no one is turned down. In exchange, Health Insurance Companies Get more healthy customers, costing them less, because virtually everyone is required to buy Health Insurance. For those who cant afford it, the federal government provides subsidies. Its a little bit of a grand bargain thats been struck with the Insurance Industry you stop doing some of that cherry picking behavior thats been so problematic, and in return, well guarantee you that there will be a steady stream of customers who will be buying their product. And theyll be able to afford to buy the good insurance because the subsidies will be available. Reporter it all goes into effect in 2014, with the goal of bringing down Health Insurance premiums by increasing Competition Among insurers. But Many Republican governors consider the exchanges too risky, expensive, and too regulated. At least 14 states have decided not to create exchanges. 15 states and the District Of Columbia are. The rest either havent announced a decision or plan to partner with the federal government. No matter who sets them up, the exchanges could start a permanent shift in the way we pay for health care. If the exchanges succeed, if they work, if they regulate insurance in a way that holds down administrative costs, that improves the clarity of information that customers receive, there are going to be other people who want to get in and use the exchanges. Reporter for Companies Offering their workers Health Insurance, about half are interested in similar private exchanges for their employees, according to a report out yesterday. Companies would let their workers pick out their own Health Insurance, then pick up a portion of the cost. We can expect announcements from more states tomorrow about their plans. States that decide to set up exchanges face another deadline in a month to submit their plans to the federal government. Sylvia hall, nbr, washington. Tom the fiscal cliff is just one of the big uncertainties for american Business Leaders. For banking bosses, specifics of Financial Regulation also remain unknown. John kanas is the chairman and c. E. O. Of bank united, a floridabased bank with 13 billion in assets. John welcome back to nbr good to see you again. Good to see you. Do new regulations mean theb. The new regula regulations a. The common thinking is that that it will be a catalyst toward driving consolidation in the industry. But frankly there has been a great deal of talk about consolidation and little consolidation. Why is that . Why that differe . The stock prices has a lot t. A lot of the smallerinstituts have grown to levels. And they have a new normal evaluation of banks. And that is changing slowly. And also, while regula regulatoe responsible for the extra costs they are not inviting consolidation either. Right. Because consolidation createe more complex and more difficult to regula regular regulate. Is that impacting yourlendin . Iit isnt for us. We were fors capital and be located in a market that is growing in south east miami. But as a industry comment it certainly is. And the uncertainty surrounding all of this. And not t to mention all of the other things coming down the road. Another cushion that is causing Bank Managers to hesitate. Besides the cushion and thelt how do you find growth as a bank. There are two forms of gomre. Report growth. Growth in asset size and earnings. We have been growing significantly. 2 billion a year but the margin on all of this new business is very, very thin because Interest Rates are solo i so low in the t place the net interest margins continues to collapse. As time goes by that is eroding the banks ability to make money. Asis that impacting the grow. Absolutely. Low Interest Rates arehurtin. They are clearly hurting they are unable to grow they are unable to support len lent loanh susie tomorrow on nbr, congressional leaders and president obama meet face to face on the fiscal cliff. And our Friday Market monitor is making plans for the fiscal cliff. Hes jack ablin of Harris Private bank. And thats nightly Business Report for thursday, november 15. Have a great evening, everyone. You, too, tom. Tom good night, susie. Well see you online at nbr. Com, and back here tomorrow night. Captioning sponsored by wpbt captioned by Media Access Group at wgbh access. Wgbh. Org join us anytime at nbr. Com. There, youll find full episodes of the program, complete show transcripts and all the market stats. Also follows us on our Facebook Page bizrpt. And on twitter bizrpt. The following production was produced in high definition. And their
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