what the unemployment rate is and then know what fed policy would be given that unemployment rate. >> reporter: at the other end of the policy spectrum is dallas fed president richard fisher. just yesterday, fisher said more help from the u.s. central bank would be a mistake, especially so close to a presidential election. fisher and rosengren currently don't get to vote on monetary policy, but you can be sure fed chairman ben bernanke hears them loud and clear. bernanke and company also listen to investors and lately another round of economic stimulus, known as qe3, is a favorite topic. market pros say more honey from the fed's hive would spark a sweet 5% to 10% rally in stocks. >> i think the market would cheer a... some more stimulative action from the fed, although to the extent that it doesn't lead to an increase in inflation. >> reporter: surprisingly, however, lefkowitz predicts the lack of more fed juice is unlikely to do much damage to the stock market. >> do we get a... a knee-jerk reaction that's negative? it's possible. but at the same time, i don't think markets are... have assigned a 100% or a high likelihood of some type of stimulus from the fed. >> reporter: of course, there's still plenty of time for investors to start clamoring for the federal reserve to do more. the next fed policy meeting isn't until mid september. suzanne pratt, "n.b.r.," new york. >> tom: the federal reserve has been very careful in its language, trying to manage investor expectations even while technology snafus like the one experienced by knight capital group last week may erode some confidence. this week here on "n.b.r.," we're looking at individual investors and trusts in the markets. frank murtha is a managing partner of market-psych, a behavioral economics consultancy. frank is with us tonight at the nasdaq. so are these technology problems doing long-term damage for long-term investor confidence? >> that's a great question. it's interesting. trust, unlike fear, trust is a long-term situation. people get scared in the short term, but they can return a sense of normalcy fairly quickly. trust takes a long time to earn back. when it comes to the technology glitches, certainly it's the sort of thing that is going to upset people's sense of the basic functioning, the basic underpinings of the market itself. by the same token, i actually think you can make an argument that a situation like the one we experienced with night almost ought to restore people's confidence, if that's the worst that happened. >> tom: well, make the argument then, that in fact the market behaved appropriately and corrected and for those individual investors thinking that they don't trust and it the market is stacked against them. >> well, it's interesting, i think by some peoples count knight capital is the largest market maker in the country or one of them, and here you have a major problem. at the largest market maker in the country. i think the dow was up 200 points that day. so, and that actually points to something that we've studied at market psych, at market psych data, our research an alitics function. investor fear is not very high right now. investor trust is very low. so on one hand, people don't appear to be steering performance in the market. but increasingly things that happen lately, and there's been a bunch of scandals, people's trust in the basic functioning of the stock market is after an all-time low. >> tom: to that point we went online and asked our facebook friends for our thoughts on this issue. and james posted i'm not terribly confident in the single technology platform, i have found myself using multiple platforms, including calling my broker, a person to person transaction replacing technology. perhaps making your point, frank. >> i think so. talk about diversification, that's a great way to diversify, diversify across platforms. when we experience anxiety we naturally seek to take back a sense of control, it's the antidote to the poison, and that's a good way to do it. >> tom: joseph also posted this note on our facebook wall: a failure to take capital risk there. >> yes. the number one fear is the fear of loss. and certainly the situation like that, feel like a sitting duck is a pretty sickening feeling. i would caution people not to get too caught up in what number of stars a fun has at any moment. we all have taken thed aage that we should buy low and sell high. you know, a lot of times those five-star rating are because the funds have gotten great performance. you want to -- i wouldn't worry about that. >> tom: we'll leave it there, putting the market on the couch, frank murtha with market psych. >> susie: and still ahead: big profits at the house of the mouse. we get a look at the latest earnings from walt disney. >> tom: one of the government- owned mortgage giants has turned a profit. freddie mac made $3 billion in the second quarter, and it did not have to ask taxpayers for more money. uncle sam already has pumped $190 billion into freddie mac and fannie mae since they went bust. but just how good is this news of a profit? darren gersh takes a look. >> reporter: here's what the turnaround in the housing market means for the u.s. treasury: last year, taxpayers gave almost $8 billion to shore up freddie mac; this year, the mortgage giant asked for just $20 million. >> better is better than bad. is better good? not yet. >> reporter: a turn in home prices is helping freddie mac. with delinquency rates falling, the company reduced its provision for bad loans by $1.7 billion. karen petrou estimates loan loss reserves are now less than 1% of freddie mac's mortgage portfolio. >> that might be enough, but it's a very risky proposition. >> reporter: and while freddie mac now owns fewer bad loans made during the housing bubble, it is taking on some new risk. 8% of its loans are now to people who have negative equity in their homes. >> so when they refinance, the loan has a very high loan-to- value ratio, 125% or even higher. those are by definition risky loans. they may be new, but they're risky. >> reporter: another risk: mortgage rates are hovering near record lows. >> they have a tremendous amount of interest rate risk in their book. so when interest rates start to go up-- i believe it will a year or two or three-- the value of their portfolios will start to plummet. so we have some losses baked into the cake we just haven't recognized yet. >> reporter: lawmakers have been talking about reforming freddie mac and its sister fannie mae for many years. the goal is to find a way to help homeowners without putting taxpayers at risk. but here's a case where a little good news could delay even better news. >> i've certainly talked to plenty of lobbyists in the housing industry who are very explicit about their strategy-- which is, once freddie and fannie are profitable, you lobby treasury and congress to suspend the dividends and then the push when there is no longer taxpayer money being put back really goes away a little bit for congress to try to do something about this. >> reporter: so far, freddie mac and fannie mae have paid back more than $40 billion of what they borrowed from taxpayers. now they just have another $148 billion to go. darren gersh, "n.b.r.," washington. >> susie: that standard charter money laundering scandal keeps getting bigger. now the white house says the u.s. treasury is closely monitoring the investigation of the u.k. bank. standard charter is accused of scheming with the iranian government to launder $250 billion. the bank's stock plunged 23% in london trading today. so what happens next? here to answer that: annemarie mcavoy, a former federal prosecutor specializing in money laundering. she is now a professor at fordham law school. ann marie what do you think is going to happen next, how much bigger is this going to get? >> this is only the beginning, this is going to get much bigger. there are going to be numerous investigations, not only the state but the federal regulators will get involved, the treasury department is getting involved, from will be criminal investigations, the f.b.i. is investigating. there will probably be an investigation an delight -- deloitt's involvement. it's going to get big and fines will be huge. in the end it will end with fines at the least. >> susie: how big are the penalties going to be and will anybody end up in jail? >> the penalties will likely be at least had the hundreds of millions of dollars, they could be over a billion in this case because the conduct is so egregious and it was clearly very knowingly done by certain people at the bank. and because of that, there also is a good chance that people may actually wind up having criminal prosecutions against them individually, and they may wind up going to jail as well. >> susie: it's not just standard charter, we've seen a string of banks behaving badly recently, the barclay's case, and hsbc is said to have been vfed in laundering money, and now this. at times like this people feel maybe it's time for some tougher and more regulation. is that the solution? >> it isn't. there are lots of regulations, and you can see they got standard charter with the regulations we currently have. so there are plenty of laws on the books, there are plenty of mechanisms that law enforcement has and the regulators have to bring these banks into compliance. but the problem is you have a case like this, they really went around the regulations, they actually apparently faked information on wire transfers in order so that the regulators could not find it so easily. when you have a bank doing that, it will be very hard to track them down. >> susie: you heard a conversation just a moment ago about investor confidence, and in a case like this it does undermine investor confidence and trust in the banking system. what do you think has to be done to restore that trust? >> well, hopefully if the public sees that the government can go after the banks that misbehave as this one did so egregiously and makes them pay for what they've done, then the public will feel the government is watching, law enforcement is watching and the right thing will happen in the end and that will help. and the other thing that will present happen is that standard charter will probably settle relatively quickly, they'll pay the fines and this will be out of the public's mind again because will it be out of the press. >> susie: we'll be following all those headlines, thank you so much, annamarie mcavoy,. >> susie: fossil is famous for >> susie: fossil is famous for its trendy watches, but today the company's stock was all the rage on wall street. shares soared more than 30%, making it the biggest gainer in the s&p 500. the company trounced earnings expectations and impressed investors with its profit forecast for the year. erika miller's on the retail beat, and she joins us now. erika? >> reporter: susie, fossil is more than a watchmaker. because it gets more than half , it isrevenues overse considered a bellwether stock for the global consumer. many regions around the globe are struggling, but overall sales of fossil products are going strong. >> we believe the investments we have may and our talented infrastructure, coupled with the strength of the brand will allow us to achieve our long-term growth and earnings target. >> reporter: fossil highlighted growth in asia, where revenues jumped 24%. in europe, they rose 4%, and in north america 17%. there's another reason fossil is doing well: strong appeal of skagen watches, a danish brand it bought in january. now take a look at this chart of fossil shares this year. there was a big sell-off in may after the company warned of weakness in europe. the shares traded as high as $138 back in april. fossil's strong results come at a time when many retailers are experiencing trouble in europe. but longer term, fossil sees strong opportunities to boost its market share in the region. erika miller, "n.b.r.," new york. >> susie: also strong profits from movies like "the avengers" plus a related theme park expansion turn walt disney's third-quarter profits into a welcomed surprise. quarterly profits for the mouse skyrocketed 24% to $1.83 billion. the super hero movies have made more than 1.4 billion worldwide and the studio results helped to offset a drop in profits at the pour house. tom, disney shares went into this report just below a 52-week high. they closed up at $49.81 a share but fell slightly in after-hours trading. >> tom: let's get going with tonight's "market focus." hopes for more help from the federal government helped fuel stocks today, with the indices at their highest levels since early may. the s&p 500 spent the entire session in the green. one piece of economic data showed the highest number of job openings at the end of june since the summer of 2008, indicating the potential for job gains. trading volume was up from yesterday's pace-- 727 million on the big board, just under 1.9 billion on the nasdaq. the energy sector led the gains, up 1.3%. the material sector gained another 1.1%. one other consequence of expecting more stimulus from the federal reserve: higher energy prices. more stimulus could help the economy, and that could fuel demand for energy. oil settled at $93.67 per barrel. globally, a hurricane threatens some offshore mexican oil production, and north sea oil production is expected to drop to a record low next month. chesapeake energy rallied 9.4%. earnings were up, and it said it will continue selling assets helping pay down debt. cabot oil jumped 5.1% to close just below its highest price of the year. and refiner tesoro is at a new 52-week high, up 5%. tesoro may see business pick up thanks to a fire last night at chevron's refinery in richmond, california. but the market didn't seem too concerned about the damage. chevron stock gained a fraction. it's refinery outside san francisco handles 10% of the refining capacity on the west coast. we have a closer analysis of chevron's stock chart on our web site, www.nbr.com. you can find it under the "blogs" tab with michael kahn. reporting results after the closing bell was priceline.com. the travel web site earned $7.85 per share, well ahead of the average analyst estimate. despite the worries about europe and a slowdown in china, the company saw its international hotel bookings. shares were up 2.2% in anticipation of these results, closing just below $680 per share. but the headline out of the company's report was a disappointing outlook. both revenue and earnings growth came in well below expectations, and that sent shares plummeting down more than 15%, trading below $575 per share in after- hours action. meantime, a different kind of travel company, luxury suitcase and baggage maker tumi, raised its financial outlook. tumi shares jumped 23% as volume was eight times normal. second quarter earnings came in as expected. tumi went public in april at $18, but its first public trade was over $26. tongight, it closed at $22.78 per share. satellite radio company sirius xm radio added hundreds of thousands of new subscribers in the second quarter. that along with an income tax benefit helped it report a profit. this stock is usually one of the most actively traded, and it was today with more than 190 million shares trading. it gained 4.6%, it's highest price since april. four of the five most actively traded e.t.f.'s were higher. a leveraged small stock bearish fund saw heavy volume as it fell 2.8%. and that's tonight's "market focus." >> tom: disappointing news in the search for a treatment for alzheimer's. two drug giants ended their experiments on a drug that held high hopes of becoming the first to help fight the slow loss of memory that marks alzheimer's. johnson and johnson and pfizer dropped any further experiments on a drug called bapineuzumab. a late-stage trial failed to help memory loss in certain patients with mild to moderate alzheimers. >> while i think everybody across the board is disappointed, i don't think that people should be discouraged. >> tom: the experiments centered on an i.v. treatment targeting a sticky plaque that builds up in the brains of alzheimer's patients. while the medicine appeared to remove the plaque, it wasn't enough to show a benefit in patients who did not have a genetic mutation with a higher risk of developing the disease. it's discouraging news for the companies involved in alzheimer's research, and patients and their families. alzheimer's is the sixth leading cause of death in the u.s., with an estimated five million people suffering from it, paying $200 billion a year for care. >> this disease by itself has the potential to bankrupt the healthcare delivery system if nothing is done. >> tom: the research is expensive. ending the drug development will cost johnson and johnson earnings $300 million to $400 million this quarter. pfizer won't take a charge. irish drug maker elan also is involved. it owns a quarter of the experimental drug. one investment challenge for alzheimer's research is studying medicines for a disease that can take decades to develop. johnson and johnson and pfizer have other experimental alzheimer treatments that are in earlier stages of development. >> susie: tomorrow on "n.b.r.," we check in with starbucks c.e.o. howard schultze. we'll ask him how the recent u.s. drought is impacting food prices and see what the coffee chain is brewing up. >> tom: with the london olympics in full swing, we've been hearing a lot about amateur athletes, the time they spend training and the return on their investment. but what about the pros in the olympics? some of them take home big bucks beyond the games. are those salaries worth the money? rick horrow goes beyond the scoreboard. >> reporter: the debate always resurfaces-- are professional athletes overpaid? first off, there's no objective way to answer that. if the question is, "are athletes more valuable to society than teachers or doctors are?," i think few people would say yes. but from an economic perspective, it's hard to argue that athletes make too much money. the big four sports leagues in the u.s. all have very strong unions advocating on behalf of the players. three of those player associations-- the n.b.a.'s, n.f.l.'s, and n.h.l.'s-- negotiated salary caps that give players a predetermined percentage of the leagues overall income. in the n.f.l., players receive about 48% of league-wide revenue. the n.b.a.'s new labor deal guarantees players around 51% of basketball-related income. and in the n.h.l., the players' share has reached as high as 57% in recent years. major league baseball is the only league without a fixed revenue share, but thanks to large local tv contracts, players can change teams in a truly free market. and more so than almost any other industry, professional sports benefits from highly specialized workers, the best in the world at their craft. replacing these athletes with inferior ones would cause a drastic drop in revenue for the leagues, teams and their owners. it may be unpopular for athletes to make so much money, but it's hard to call it unwarranted. i'm rick horrow. >> susie: federal reserve chairman ben bernanke urged students to do their homework before taking out college loans. speaking at a town hall meeting with teachers today, he added that students should know what kinds of jobs and salaries they can expect with their degrees. the former economics professor said that the federal reserve has good reason to encourage financial education. he believes that financially capable consumers contribute to a stable economic and financial system. >> financial education supports not only individual wellbeing but also the economic health of our nation. as the recent financial crisis illustrates, consumers who can make informed decisions about financial products and services not only serve their own best interests, but collectively they also help to promote broader economic stability. >> susie: tom, the fed says that students who took a financial education course in high school turned out to be better savers. i'd add to that if they watch "nightly business report" they'd also become better investors. >> tom: seems to be part of the regular week night curriculum, absolutely, suzie. that's "nightly business report" for tuesday, august 7. have a great evening, everyone. and you, too, tom. >> tom: good night, 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 >> the following kqed production was produced in high definition. [ ♪music ] >> there was something saxophonist howard wiley heard in this music that opened up his world. >> howard wiley: it's a lot of traditions and cultures, a lot of field songs, slave hollers. i call it unrefined forms of black music. >> when adela akers retired from teaching, her work took the subtlest of turns. >> adela akers: i had more time. i could indulge in just experimenting more. >> marc bamuthi joseph: you arrive like mandela released. >> and the work and words of marc bamuthi joseph. >> marc bamuthi joseph: i want you to think about one moment in your life when you think you were behaving normally and got in trouble for it. >> this time on spark. [ ♪music ] >> major funding for spark is provided by the william and flora hewlett foundation, supporting creativity and innovation in the arts since 1967. the james irvine foundation, expanding opportunity for the people of california. diane b. wilsey. and by the kqed campaign for the future program venture fund with additional support from meridee moore and kevin king helen sarah steyer, and the phyllis c. wattis foundation. this project is also supported, in part, by an award from the henational endowment for the ar, which believes a great nation deserves great art. [ saxophone ]