tv Nightly Business Report PBS April 10, 2014 1:00am-1:31am PDT
this is "nightly business report." with tyler mathisen and susie gharib. fed friendly, stocks pop as the federal reserve calls concern over when the central bank may start to raise rate. and pricing power, the government releases a massive amount of data on medicare pricing and the doctors who bill the very most. what it says about the system and what every patient and taxpayer should know. and making your spending secure, steps companies are taking to protect your credit data and the huge costs involved. we have all that and more on "nightly business report" on this wednesday, april 9th. good evening everyone, and welcome, go to any business meeting anywhere, and the reading of the minutes from the last session is likely to beñi e
biggest snooze on the agenda, but not today, and not when it comes from the federal reserve meeting. stocks went up from the meeting after the march meeting, bond prices rose, too. why? fairly simple. the minutes reaffirm the idea that the fed is in no hurry to raise interest rates. what is more, it was revealed today that new chair janet yellen was so concerned about fine-tuning the guidance that she called a video conference on march 4th to discuss the matter. the dow soured 81 points, the nasdaq jumped almost 71, and an almost 2% spike for the day, the s&p added 20. there is the bond note, you see the yield coming down there. the dollar index weakened a bit and the gold prices turned higher after the fed prices were released. but they ended the day slightly
lower. steve leaseman has more on where the bank stands and when interest rates may start to climb higher. >> the minutes of the federal reserve's march meeting suggested maybe the fed was not as hawkish as some in the market believed at the time. the fed said it was concerned that the market would take the wrong signal from the individual funds rates from the forecast members, the forecast shows the rates would be higher in 2015 @ld 2016 than the market had previously thought. it is a big problem for the fed where it says one thing in the statement about the funds rate but also provides the individual forecast of its members. in this case those were at odd and it spooked the market into thinking the rates would be higher. they were concerned that they would think the fed would be tighter than it otherwise would have been. the minutes say specifically that the public should follow statements not the individual forecast. all but one fed member sees rates rising not into 2015 or
later. a large majority of the feds see a gradual rise to the fund rates when it does go up. there was further tapering throughout the rest of the year assuming the economy continued to improve. and the feds saw better growth and thought the weakness in the winter was largely the result of the weather. for nightly business report, i'm steve leaseman. and let's turn more on the fed and the economy. lindsey, it seems like the fed's message really didn't change. they just confirmed what they said before that interest rates will go up gradually, is that your take on it? >> that is exactly right. the minutes reminded the market that it is the statement and not the famed dot plot that confirms monetary policy intention. and the statement was very clear, very dovish, reaffirming the minutes stance, so that
reaffirms in the market the intention of the monetary policy. >> so how do i take this statement today, these minutes and apply them in my investing life? >> well, you know, i think the market's reaction tells all. the market liked the idea that the fed's commitment to accommodation was reaffirmed. and again, when we look at the monetary stance against the back drop of the labor conditions, very minimal income growth, the fact that the feds seem like they want the money to rise it is more likely they remain at this stance well into possibly 2016 and 17, if we see this very slow growth. >> you know the investors are always looking at headlines to let them know they're on track with their investments. i mean, what is the key thing
they should look out for? is it something like the job market, just overall economy, housing, i mean what are you monitoring? >> it all comes down to jobs. and i think the fed's adjustment to forward guidance really highlights the recovery in the labor market, not only in terms of investment but guidance for monetary policy. and moving away from just looking at the unemployment rates the feds said look we have to keep an eye on average hourly earnings which are flat at 9.1%, the participation rate, which remains at a three-decade low. all the factors contribute to the broader health of the labor market which gives us a much broader, dire picture than the unemployment rate that has come down from 10%. what if anything should we draw from the -- from the unusual video conference meeting that chair yellen called in advance of the main meeting? does it signal anything about
her tenure or leadership, how she is going to do things? what she is concerned about? >> you know, i don't know if we can really draw a conclusion from that. remember there was a lot of confusion after the march meeting and i don't think yellen or any individual member can be placed for that. instead, i think it points to the idea that the economy is really at a precipice, we have had a slow economy for a long time and yet the economy seems to just bounce along. and so what i think the chair is saying, we're sending an unclear signal. the market needs now more than ever guidance from the feds. and i think in the back drop of the confusion from the march meeting she simply wanted everybody on the same page to make sure a unified message was conveyed to the market, that message being a very dovish message. >> all right, lindsey, thank you for translating it for us. and despite the gains, a weaker than expected report out on wholesale inventories
prompted j.p. morgan chase to lower its forecast for first quarter overall economic growth from 1 and a half percent to 1%. but the bank did raise its outcome for the second quarter, which we're in right now by the way from 2 and a half percent to 3 and a half percent growth. and there is still a lot of work to do to get the american economy where it needs to be. >> we took tough decisions, you know six years ago. and we stuck with them. we have our economy growing. we reformed our financial situation. we have our fiscal house in a much better place, and by world standards we're doing better. as long as there are millions of americans who want to work full-time or who want to find jobs and can't we're not done with our work. >> lou says that kick starting the economic growth is his top priority when he meets with
other financial advisers at the annual meeting in washington. and a real setback for president obama's equal pay rules for men and women. the senate voted against debating what was called the pay check fairness act which would require employers to compensate and bar any employees who discuss their pay with others, some argue it would cause frivolous lawsuits and bar women in the work place. in detroit, a settlement for bond holders getting nearly 3/4 of the money owed to them. kevyn orr, the emergency management manager, says it could influence others to reach the credit decision as the motor city heads in the right direction. >> the city itself is thriving.
the other 130 miles here, we're the size of san francisco, and new york city altogether. the city itself is going to take a period of time but we're getting it altogether. >> when the deal gets the final okay from a federal bankruptcy judge detroit will pay 74 cents for each dollar owed. an important hearing today as comcast, the nation's biggest cable provider explained to lawmakers why it should be allowed to acquire warner time cable company. there was a lot of skepticism on capitol hill. hampton pearson has the story. >> reporter: at the first public hearing on the proposed $45 billion merger between comcast and time warner cable, lawmakers on the senate judiciary committee voiced concern about higher prices for consumers and too much power over what americans watch on tv. and on line. >> consumers want to know where a combined tcomcast/time warner
will be in a position to provide high speed internet access, will consumes have more cable bills and more or less content? >> this issue touches people's lives every day and touches their wallets every month. >> a post-merger comcast will serve anywhere between 20 to 40% of the high speed internet market. but not at the expense of consumer choice. a top executive from comcast says that is because the competitive landscape is changing. >> while this transaction will make us bigger that is a good thing, not a problem. most of our real competitors are national and global and larger than us, like the bells, satellite companies, apple, google, sony and netflix. >> however, critics repeatedly pointed to comcast ownership of nbc universal.
and the potential to levy that. >> so it could undermine the new innovative options that consumers are seeing. comcast, with its control of video and high speed broadband adding time warner systems could lock in high prices for nbc, programming, and sports and regional sports and cable programming. >> the real audience for today's hearing, top regulators and lawyers at the fcc and justice department. they will have the final word on one of the biggest proposed media mergers in history. for "nightly business report," i'm hampton pearson. and we should point out that comcast is the parent company of cnbc which produces this program. and coming up, why a small fraction of doctors get a big payment from medicare and why it matters to you.
some car trouble to tell you about, toyota is recalling more than six and a half million cars worldwide, this involves 30 different models in all for a variety of problems ranging from faulty air bags to defective steering columns, to bad starter switches. meanwhile, volkswagen ordered its dealers to stop selling 20,000 newly manufactured jetta's andçó beatles, this is e one with the automatic transmission, the reason, the transmission may leak and cause a fire. and company offering 95 million shares at $25 each. that is at the low end of the estimated pricing range.
the ipl will raise more than $2 billion. you may recall that ally is general motor's financing arm that bailed out big on sub-prime mortgages, the government needed to raise $1.9 billion to break even. it is expected to be the biggest week of public offering, and we begin with two companies that had successful trading debuts today. first we look at la quinta, getting off to a bumpy start, falling 4% below. the shares rebounded and the company raised $650 million from the offering, the stock rose a fraction to $7.12. meanwhile, pricing 11 million shares at 14 apiece. now ikang is china's largest
private operators of medical disease implements. and strong sales of corona and modelo beer in the u.s., the company will spend almost a billion, double what it expected to increase capacity at a mexican brewery, that worried investors, shares fell 1% to 80. and no kisses for hershey, they went south on hershey after they say the strong run is about to end. the stock off 98-91, another candy maker, mars, is buying the brand of pet food brands, they already own pet food, but the marketing with iams will boost up sales, the contract with
procter & gamble. and bed bath and beyond, i love the beyond department there posted disappointing earnings after the bell. they saw sales decrease in the fourth quarter, earnings in line with estimates but the company's revenue missed and the outlook came in weaker than expected. shares fell initially in the after hours session stock ended the day up a fraction at 67.91. a head-turning report about how much some individual doctors have been reimbursed for treating medicare patients, including one florida ophthalmologist who was repaid $21 million in just one year. scott cohen has more. >> there is no question salomon melgen of west palm beach is successful, a board certified ophthalmologist with successful businesses in florida, treating governors, celebrities according
to his website. solomon melgen is also the top medicare billing doctor in the country, collecting $21 million taxpayer alone. newly released information, information the government kept private for decades is shedding new light on a $100 billion system, showing just how flawed it is. >> look, in a business where every doctor is reimbursed for every single drug and situation, there is incentive to pay for care. >> a handful of individual doctors like dr. melgen raked in millions, more than 18 million for a cardiologist, new york radiologist eric snipper was nowhere close, collecting aboutr $25,000. but he says releasing the data in raw form is not fair. >> it is based on gross income.
so for example there is no accounting for how much money it costs the physician to provide the service. >> doctors get the money on reimbursement rates that are cut, take away the costs for a drug or procedure and medicare can be a money loser, nonetheless, fraud is rampant, florida recovered billions last year, and that just scratches the surface. solomon melgen has been under investigation over his billing, although his attorney says he always billed in conformity with the medicare rulings. the head of the medical association worries that they will all be painted with the same brush. but the obama administration which released data on hospital billing last year defends this latest release saying it will help the policy makers and the public to follow the money. scott cohen, "nightly business report." and looking at the data from
this medicare report in the context is senior associate with the kaiser family foundation, welcome, good to have you with us. this is an irresistible data base. i spent part of the afternoon looking at doctors and my family's doctor to see how much revenue they pulled in for medicare. but i guess the simple question for you is what am i to make of these numbers and is there a size necessarily telling in any way? >> well, what you make of the data and what other researchers make of the data can have different purposes. so i think what can come from this data is some analysis of variation in how many patients each doctor and other kinds of providers like physical therapists see. and by patients either all medicare patients and how many services they provide to each patient. and you will see that it varies
not just within a community but -- each provider within a community. but it also varies across the country in a variety of ways. >> you know, christina, let me just follow up on what tyler was asking, i did the same thing. i was also inputting my doctors. and i just wonder how are consumers supposed to use this data. until now none of us really knew why one company charged one price for a drug, and another charged another thing for a drug. or why a doctor charged this for a hip replacement and another charges a different price. there is no way to compare but how do consumers use this data? it seems like it is a consumer reports type indexing like that. >> well, the data right now that cms has put out is not extraordinarily user-friendly. but i imagine that several other organizations are going to quickly help consumers use it in
an easier way. but the consumers could look at the data and be able to see the average prices that medicare pays for the various services that they might be interested in or how much medicare has paid their doctor. and also how much combined the doctor is paid with the co-insurance and medicare portion. but those fees are generally set by medicare. they vary for a few different reasons. but their variation is based on where they're provided and in what setting. so patients should be able to look at it and see more how many services the provider is providing during the year. and also it could help predict what kinds of costs the patient might expect going to that doctor. >> there are lots of anomalies in the data. for example, i believe in the case of the ophthalmologist in
cohen's report there he was prescribing a quite expensive opthalmic drug when another drug was comparable, according to many physicians would have worked just as well. but the numbers in the data indicate that medicare pays more for an expensive drug, are there indications here where a doctor might have been billed or received payment from medicare for procedures performed by other people in his practice? like at the mayo clinic, for example? >> well, that is possible. the physicians can -- can have a large practice where they have other providers that are working under supervision for them, for example some nurse practitioners can provide supervision under services. they can also provide and bill separately independently. but if they're providing services under the supervision of the physician, then the
billing can be under the physician's name and it can be that they see more patients under that area. >> and coming up next, the links and costs companies are going to make sure your transactions are secure. that is next. costs companies ar make sure your transactions are secure. that is next. and costs companieo make sure your transactions are secure. that is next. going to make sure transactions are secure. that is next. and costs companieo make sure your transactions are secure. that is next. going to make sure transactions are secure. that is next. it is being called one of the most serious internet security flaws ever, a computer bug known as "heartbleed bug" has been found in encryption codes at over two thirds of active website servers. the bug may have exposed the personal information of the millions of users, including
pass words and data. internet users are now being advised to change their passwords and keep a close eye on any activity in their bank accounts. well, it is official now. bank of america has been fined nearly $800 million by federal regulators after being accused of pressuring customers to sign up for costly credit card services that they didn't need. bank of america is the third to set we'll the comptroller regarding the currency. and retailers are rushing to make cash registers and mobile payment systems more secure. courtney reagan went to the conference in las vegas where the big eggest names in cybersecurity are looking to restore consumer confidence. >> reporter: the transaction associations bring every part of a payment together, credit card, banks, regulators and retailers,
all talking about securing spending while pointing fingers at each other for bearing the cost and liability. many retailers have had payment and data security teams in place for years and have been migrating, albeit slowly, the payment system is capable of using emv technology. this allows systems to read ships and pin cards currently used outside the u.s. visa and master card are giving retailers until 2015 to put the emv system in place. otherwise, the liability for fraudulent purchases shift s to the retailers. >> there will be enormous activities getting it done until 2015. it is not going to happen. >> although the world's largest retailer says it is already in the process of converting its system. as of two weeks ago, walmart turned on software enabling them to use the cards, they will be
ready to accept emv card's before the end of year. because walmart's current sale card is compatibleable, the cost is immaterial. it is part of a million dollar effort to ready all 1800 locations to accept emv cards by the first quarter of next year. now, migrating payment systems to pin technology is not cheap. >> if we have to go to a chip card system, however, we're talking $5 billion for the banks, another $30 billion for the retailers. >> is that cost prohibitive to the relationship in damage that could happen to a business if they get breached? >> if they get hacked, now they have major damage to their brand. so that is what is driving people to focus now on emv. >> emv is not necessarily a cure-all to prevent data breaches from hackers, but it allows data breaches encryption
sethi: this week on "quest"... sea otters combating climate change... sizemore: to see that change almost overnight was amazing. sethi: ...cars fueled by hydrogen... holloway: i was promised flying cars when i was a kid. this is as close as it's going to get. sethi: ...and scientists trying to build a more resilient forest. pecore: some of the best old-growth stands that we have are in the menominee tribal lands. announcer: major funding for "quest" is provided by the national science foundation. sethi: known as "science on a sphere," giant digital globes just like this one