Oil at $110; S&P sees end to mortgage write-downs in sight
CBS
Transcript
[Music] relief could be coming to The Battered banking system standard and pores predicted an end to mortgage write Downs is in sight that gave Wall Street reason to Rally the Dow erased a 235 Point drop to close up 35 points while the NASDAQ gained nearly 20 investors are hoping February's report on consumer prices will offer signs that inflation is in check that would clear the way for the Federal Reserve to cut interest rates again next week when it meets but that could be wishful thinking oil and gas prices continue their record run crude finished the day over $110 a barrel meantime treasury secretary Henry Paulson called for changes to avoid another mortgage meltdown the proposals include National licensing for mortgage brokers and clarifying the terms of home loans for borrowers mortgage rates Rose as falling home prices create a more affordable market for buyers Freddy Mack says the the average rate on a 30-year fixed rate loan jumped this week to 6.13% that's up from 6.03% last week for a 15-year mortgage rates averaged 5.6% that's your money watch be sure to click on cbsnews.com for the latest business headlines at the New York Stock Exchange I'm Alexis christopherus
Eye To Eye: Art Cashin (CBSNews)
CBS
Transcript
[Music] now from the New York Stock Exchange art cash and director of floor operations for UBS Financial Services art how did it come to this well it it got into a terrible bit of a mess what what had happened was uh there were started with mortgages it started with subprime it seems to have leaked everywhere and then the rumormongers uh got loose and uh their favorite Target was to pick on be Stern ears and what they did was uh start the equivalent of what we saw in It's a Wonderful Life when everybody came to the bile building and Loan right and said I want my money and I want it right now and that put them under a great deal of pressure and uh apparently Thursday they contacted the Federal Reserve and the Federal Reserve through the agency of JP Morgan um made a special case and has St them to money for the next month or so what would have happened art If the Fed hadn't stepped in and taken such a dramatic action well I I don't know that we have enough details to be sure but clearly for the FED to kind of step out of character and do this unusual step they must have felt whatever would have happened would have been somewhat disastrous for the general Marketplace you've been working on Wall Street for a fair number of years art have you ever seen anything quite like this we've had a variety of different crises but this is the most analogous there something that happened strangely 28 years ago on this month in in March of 1980 uh the Hunt Brothers that tried to Corner the silver market it came apart and everybody said uh-oh they owe money to this brokerage to that brokerage to this bank so that was pretty much analogous to what we're seeing today was the Fallout in the stock market the result of this news about be Sterns uh very much so uh and it was that not so much that they got the money but where they got it from from the fed and that uh gave it a sense of urgency and maybe emergency and immediately there were question and concerns about other fiduciaries and how did everybody stand and and uh if I'm in trouble and I owe you money then you're not going to get paid and then you may be in trouble and that kind of that's the kind of thing that spreads well do you think those concerns are are valid after all what does this say about the health of our financial institutions well it the difficulty is in in a in a relationship and even in a financial relationship trust is very important and when trust is shaking it takes a while to get it back so uh I'm sure there'll be meetings over the weekend of all the big bankers and and and maybe the treasury and the FED uh I don't know what magic bullet they will find having done this for years as you said this doesn't go away quickly this will take several days to get straightened up do you think aren there other financial institutions in similar danger at this point well it depends as I say I think the rumormongers played a large part in this and if if uh uh if I'm susceptible and I can't Pro that I'm AAA all the way through I'm sure they would spread rumors about me or anybody else and uh that's what happens when the people come and say I want my money back do you think what the fed and JP Morgan Chase did today will calm the nerves of jittery investors well it it it may calm the markets what we need to see is what happens over this weekend is there an emergency meeting uh is there a program to give such guarantees to other brokerage other uh investment Banks uh that might SU things because then they'd say okay they're not not going to let anybody else go out of business they are going to guarantee the loans all right art cash and Art thank you very much my pleasure thanks Katie