"nightly business repo" is made poible by: is program is made possible this program is de possible by contributions to your pbs station fromiewers like you. thank you. captioning sponsed by wpbt tom: good evening. at caused the financial crisis? d what can be done to preven another on sue, those will be the key questions inashington tomorrow. >> susietom, there's sure to be a lot of finger pointin now a new panel will t to figure out what brought th american financial systeto the brink of collapse. >> tom: it's the financial cris inquiry commission. and for its first meeting, t headof the nation's biggest banks have been lled to explain what they did and dn't do. here's darren gersh with a preview of what to expt. >> reporter: whamore could they say? g bank c.e.o.s have been dragged before congres they have been summoned the ite house. now, economist simon johns says therisis commission should find out whether the lords of finance have ally learned anything. the perception that we've had, somewhat from aistance is that they remain vy arrogant, ey don't recognize the mistakes that they'vmade and th don't understand the nature of dangerousower which they have acculated. >> reporter: tunderstand that power, johns and other obrvers say, the panel must get down into the nittgritty of disions made by bankers on the fronines as the crisis begato build. while volumes have beewritten on t financial meltdown, johnson says the idea is to pu banker actions into a context most people can undersnd. >> sebody's enormous salary, for exple, while managing something that became sastrous and wiped t the life savings of a million peoe. proach than the 9/11 commission, afr which the financial crisis iestigation is modeled 9/11 commissioner mie gorelick says the terror investigion did not name nes. instead, it conclud the entire intelligce community suffered om what the commission calle "aailure of imagination." she also expects that ayed a role in the financl collapse. >> to me it seems none imagined that a catastphe of this sort could anate from the seemingly und financial system d seemingly robust regulator environment that we ha >>eporter: johnson thinks regulators underood there was a daerous bubble in subprime mortgages and me prices. buthey didn't understand that bubble would tank the nancial system >> that's a failure of analys, failure to understand what i staring you inhe face, rather than aailure to imagine something fairly n. >> reporter: when meers of the financial commissi have asked foher advice, gorelick suggested they do sothing washington rarely does these days: build bipartisan consensus based what actually happened. >> i would really hope thaone of the thingthat this commsion could learn from us is to spend time together ally rking on the facts and that will, in and of itself breedn environment in wch one can come to coensus. >> reporter: gorelicsays, if republicans and democrats ca spend a year examing the financial cris and agree on what happened d why, that coulhelp restore some of the confidence that'been lost in our government and our marts. darren gersh, "nightly busins port", washington. >> susie: the tion's banking gulator says high pay and bonusecould lead to u.s. banks paying higher inrance premiums. the propos got a national umbs up, but still has a long way to go a the agenc wants to hr from the fun about the idea. it know of americans are outraged over huge pay days, for taki huge risk in the financial services indtry. >> tom: a stiff selloffn alcoshares led wall seet lor, but it closed off the worst levels othe day. the dofell 36 points, the sdaq down 30 points, and the s&p 500 off n points. the fedel reserve made a ton of mon last year thanks to ofits from its bank bailout progra. the fed earn $52 billion. st of that, $46 billion, goe to the treury's coffers for genel government use. anwhile, a house panel today bpoenaed the federal reserve bank of new york. it wants the paperrk from uncle m's bailout of a.i.g. to find out just how the billio of taxpayer doars were used to sa the company. and the tion's ports have been busy, but there's mo stuff cong in than going out. noveer's trade deficit hit $36 billion, up alst 10% from october. >> susieamerica's factories get a bad rap. many people think mafacturing is an indust with no growth and no jobs. but there's lotsf optimism at one metal pas factory in new jersey. erika miller went ere to find out y, and discovered that thisne company may be part of biggerrend. >> we've seen pick up in demand sce about the middle of 2009 across all sector and it actually happenedery quickl >> reporter: jim mccliock is the president of micro smping, a company at cuts metal parts used in cars, mecal instrunts, computers, and airplanes. the company is loced in this unassuming building in subban new jersey but don't let that fool yo its perspecte is big. is it fair to y that although u're a new jersey-based manufaurer, you have your pulse on the global econom >> we do have our pulson the global economy, and it's absolutely imperive. today's manufacturg envinment, it's so easy to ansact business around the world fluidly. reporter: the company is reporting steady increase of new orders since last summer, and it is hiri in anticipation of 20% revue growth this year. the questions whether micro stamng is an isolated bright spot in a long depssed secr. economist joe rson says no. he thinks manufauring is at the start of i biggest recovery in 25 years. >> ihink the manufacturing recoveryo far is the first surprise. its showing unusual strength when everyone expeed it to be a mediocre recovery. it's coming in a sector that eryone thought was dead. >> reporter: but makno mistake, no e believes manufacturing is completelout ofhe woods. one big challenge for coanies like micro stampinis stiff coetition from lower cost producs outside the united states. thamerican manufacturing workforce has shrunk by re than 40% from it's peak in 19. many economistfear job losses will getorse, especially if congss raises corporate tas or requiremore employers to prove health insurance for their workers. either cou make it more expensive operate a factory in the u. but joe carson thinks manucturing jobs will start to me back, thanks, in part, to falling dollar >> given the changing ndscape, particularly on thcurrency side, a lot of feign firms may start to movproduction to america produce things. we're seeing a shift by auto manufacturers ming to america to produce and protect tir market shares. >> reporter: micro stamping ys the key its success is emphasizinmore than just parts prodtion. it tries to he clients cut costs by iroving product design, turnaroundimes, and quality contro >> lifecles are shorter now an they've ever been in products. and so trying to be ab to manufacture halfay around the world can be very trky in sht life cycle products. so, we're optimistic thawe're in a goospot. >> reporter: if that ueat outlook gains tracti, experts say it increaseshe odds of stamping out the economic recession. erika miller, "nigly business report", somerset, new jery. >>om: still ahead, detroit's electric dres. how the ture of the motor city more about amps and less about gas guzzlers. >>usie: looks like investors weren't too happy wi alcoa shares. >> tom: no, we talked about the earnings, a disappointi as they were, we saw the stock dropig today. the biggest drop of thdow, so t's take a lookt our market focus this evening a daof weakness across the board, with the stiffest sling ong commodity stocks, transportation, and tech. part of e market focus was in the corn fields today th agriculturaltocks in t red. ag stocks hit the di thanks in part to a big cornarvest. the govement says last year's rn season was bigger than expeed and there's a lot more corn left ov than predicted as well. corn prices were limit dow meaning they couldn'fall any more for the d. all this may addp to less corn planted is spring, which may lead tless business for those big ag companies. cateillar gave up about half of yesteay's gains, which came on theeels of hope that chinese demand may pick up. toy, it's worries about american demand. deere sliding on heavyolume. dutch compy c.n.h. and the georgia-sed agco also getting caught up in the selling. it wasn't just thequipment stocks getting hurt. if fewer acres a planted, that may an less fertilizer, and we saw those fes today as well. like t farm equipment stocks, these fertilizer stockhave en a nice rally over the pas year potash, mosaic, agrium, d intrepid all seeing some prot taking on the backof the harvest numbers. usually companies tend to ta about theiearnings before or after the trading da but not today for aea. just after nooeastern time today, the company warned at its 2010 operating profitsould probably be a littleower than last year. and thstock dove. this is today's action. atts worst it was down $2.25, hittina new one-month low. just before christma aetna tradedround $34 a share before falling on the profit rning. the aetnnews midday helped drag down the health insuran sector. aetna saw the worst seing, but united healt wellpoint, cigna, and huma all slipping around 2%. eaings season is unofficially underway with alcoa nuers that weold you about last night. by the way, ala was the worst dow stock today down 11% on thursy, intel will amp up the earnings seasofor high tech. expectations are high r the tech sector and for tel. the stk is just below a 52- week high. today, slightly weaker oabout one and a half times norl volume. kefor the "market focus" may be intel's 2010 tlook and expections that people who have put off buyg a new computer may do this year. a follow up a couple of earngs calls we mentioned last night that fueled some mov today. homebuilder k.b. home saw lling on heavy volume. revenues connue to fall, down 27%, along with selling pres even thoh it was able to turn a profit thas to a tax benefit. meantime, survalu stock showing some life today, jumng to a one-month high trading volume five times the noal amount. the mpany is pulling back on discounting fo, helping it to rert a better than expected profit. and, accding to the new york times, gdman sachs may have gin investment ideas to its own tradg group, or some clients, before sharing th with others. the tis has an email goldman sent clien explaining the situation, aarently meant to clarifits conflict of interest policy. goldmahas been criticized in the past for tradinghead of its clients. and that tonight's "market fos". >> susie: there's electrity in the air inetroit. electric cars are taki over the rth american international autohow. the chy volt goes on sale late this summer. anthere are dozens of other electric vehicles rey to roll off assembly lines but as diane eastabrooreports, the big estion is whether consers will buy them. >> reporte on electric avenue at the detroit auto ow, electric plug-inlike b.y.d.'s e6 are supercharging t exhibit. the chinese coany hopes to roll out the all-ectric car with an expected range of 200 miles inhe u.s. at the end of this yea but as spokesman paul liadmits gornment approval is still pending. >> for dot we are woing for sure. >> rorter: nearly every car manufacturer at the show has a electric car somewhere in s pipeli. hyundai s the all-electric blue will concept. nissan has t leaf. the electric sedan iexpected to hit swrooms this fall and s a range of 100 miles per charge. tesla which currtly has a $130,000 roadster on t market pes to rolout the model s in two years. the coupe could have aange of to 300 miles per charge and is expected to cost unde $50,000. ceo elon musk says me affordle plug-ins are in the works. >>oing beyond that we want to do a me affordable car on the der of $30,000 and that will be 200,000 production unit >> reporr: chevrolet's volt is expected to be theirst mass produced electric r out of the gate, hitting showrooms in le suer. >> it's always great to beirst at a concept. there's no doubt aut it. >> repter: jon lackner helped develothe electric plug-in with a bk up gasoline engine. e volt is expected to be priced below $,000, but a tax credit of $7,500ould make that price int more attractive. lackner thinks in a feyears prices will come down evenore. >> we are going to see advancemen in battery technology over e next five years that's going to ta the cost levels downignificantly because we'lhave more capability ithe battery cells themselves a we'll also have moreapable battery energy in the battery cks. this mighte a mainstream oduct in a country like indi orhina. >> reporter: david colis the direor of the center for tomotive research or "car". he's been watching the development of electc plugs from small utility vehics like golf carts to larger automobiles. cole thinkbattery prices will eventually go downmaking electric vehicles cheaper. but he says there are othe hurdles for electrs, like the ability to recharge on theo. so forow all electric plug-ins might not be practical. >> to get highange you really ve to have a big battery and then y have what is called range xiety. if you run out of charge thas a problem. you don'fill it up on a fuel nk like you do a car with a gallon of gasoline. >> reporter: cole thinksf the volt is a hiwith consumers it will pave thway for further acceptance oother plug-ins. g.m. thinks coumers will emace electric vehicles. inact, the company says to da as many as 40,000 consumers have contacted theompany saying they're ierested in buying a volt. diane eastabrook, "night business report", detroit. >> susie: e more note on genel motors, and its saab story. the automar is still interested in selling the na- plate, but says the dealas to make financial sense. so far, g. says none of the offers are good enough. sa still has at least one serious suor, dutch carmaker spyker. the mpany's c.e.o. believes saab can be viab under his leadership. but g.m. says if an agreent isn't reached soon, itl close the doors saab. >> tom: here what we're watching for tomorw. we'll t a snapshot of economic tivity around the country, i thfed's first beige book repo of the ye. speaking of the fed, tomorro we'll also talk with one othe st powerful men on wall street. join us for our clusive interview with williamudley, esident and c.e.o. of the federal reservbank of new yo. >> susie: 15 companieshat make homeoans got an unwelcome surprise in the mailoday. th were subpoenaed by the u.s. department of hoing and urban develoent. uncle sam wants know why there's such high level of an defaults at those firms, and if fraud wasnvolved. thosbad loans have cost the federal mortgage insuran fund millions of doars. >>om: now that brian moynihan is in ple as bank of america's new c.e.o., he's assembling s management tm. moynihan today tapped ief finaial officer joe price to head b of a's consumer, all business, and cred card units. the nk will start searching for a new c.f.o. iediately. meanwhil chief risk officer gregurl, who was in the running for e c.e.o. post, will head strategic partnerships. it's the second execute shakeup since rmer b of a c.e.o. ken lewis announc his retirement lasaugust. >> sie: tonight's commentator says with a budget dp in red ink and a congress thahasn't cut ending, she's taking a fresh look at ings. she's maya macguineas, psident the committee for a responble federal budget. >> for yrs there has been a push to create budget commission, and en though many of my fellow fisl worry warts liked the idea; i ju didn't. couldn't avoid the nagging feeling th coming up with a workablelan to fund our national priorities isupposed to be e core work of congress, and that congrs should just do its job. wellnough time has gone by without that job gting done, and the recent deteriotion in the cotry's fiscal health has causede to change my tune, and so i say bring on e commission. we no longer have the luxu of time. for every year we waitwe dig that deficitole billions of dollardeeper. rently a heated fight over creating a commissiohas broken out with those w oppose it on the leftrguing it is just a secret, well-fund plot to cut entlements, and those on the right arguing it ia devious strate to raise taxes. well, yeah, we are gng to have to do both. creating a commission wot make those policy choices much easi, but at least it will nd an important layer of political cover. i will say that the need to create a cmission is a poor reflection on politians more generally. soas a reluctant budget commission suprter, and an avid congression reform supporter,'d suggest that once a budget commiion comes up with a plan, congrs turn the mirr on itself and ask what it is doing there if it can't perform its most basic j. rhaps the next commission policymake create should be one to refm congress. i'm maya macguineas. >> tom: first me e.t.f.'s for stock indexes,ow we've got coodity and leverage-based exchange tradefunds. the increase in e number and typeof e.t.f.'s available for instors shows no signs of stoppi. i spoke wi joanne hill of e.t.f. firm profun at indeniverse.com's inside e.t.f. conference. i ben by asking about new kinds of.t.f.'s and whether th're getting too sophistited for many instors. >> if you ink about what we have there or what the industry has developed sfar, there really is a basic tools, the hammers,he saws, the screwdrive, that those have been aroun they will continue togrow. t what we'reeeing now is we're seeing newproductsand flows come in really two different areas. on woulde products that are impoant because of market themes and market conditions. >> tom: give us an examplef the ty of product, type of e. t. f. that's in the piline. >> some the newer prodt th have been and will contue to be offered will be lling in in those aas of the market that instors are moving their money t, such as fixed iome commotys and currencys. just thi year, for exale, we saw largflows intoold and natural g a short exposures on the s&p 500, and some of the newer fixedincome products. >> tom: prohares is probably best known for some of the leveraged funds or the inverse funds when thearket goes up or down or vice vers how do you protecthe investors from incing more risk? >> they have a dailybjective, so wtever the target multiples, ps 200. >> pirro:, minus 0%, that is set every day, so the fund is managed to keep that in place on a dailyasis, so what you need to know is that they are suect to compounding li most vestments over longer holding period. so this means tt if you hold them beyond a day, you will benefit in trending markets upward or downward and you will actually in more volatile market tt is are flatter you will tend to under perform what you mightxpect if you wanted two tim over a longer holding period. >> tom: how do you protect investorfrom misusin these products? >> there are some invests who e these for ttical views so, they willdecide what side of the markethey want to be on, are they bullish or bearishon this market segment. and as we look at investment, sometimes theye right and sometimes they'rerong. so there's nothin in the product itself that will prott them from that. but we also, i think see a very common application in ing them for risk management anfor hedging d to just highlight that, this year if you look at the flows into thehole leverage universe compl, tre was a reduction in leverage long and an increas in leveragehort. so wehink that thi is because investors are using them to complement som of the higher risks they're taking in other areaof their investing policy. so it really need to think of it in the context of the whole portfolio, not as a stand alone instrument. >> tom: are these becoming t sophisticated for most investors? >> i don't think so. the key is transrency,ules, disclosure of how t investmentrocess is built, and at is all on the website from the index managers and it's ver important with e. t. f.s as with any investment product to rlly understand how they work. >> tom: thank you ry much. joe an hl, head of investment straty at pro shares advisors. >> susiefinally tonight, when it comes to crsing the high seas, carnival lik kids over cougar not the animal, we're lking about older women who like younger n. toda carnival said no to hosting anotr cruise for california'singles travel company, saying it doesn'tit its family-friendly atmohere. but, riv royal caribbean apparently doesn't have a oblem bringing together ugars and cubs. in may, the secondnternational cougar cruise willarty on royal cabbean's mariner of the seas. that's "ghtly business report" for tuesday, january2. i'm susie gharib, have a gre evening everyone. tom, i'll see you tomorrow >> tom: goodight, susie. i'm tom hudson goodnight everne, we hope to see l of you again tomorrow night.