Bush: Congress Must Act Now

CBS

Transcript

it's been a difficult time for many American families who are coping with declining housing values and high gasoline prices this week my Administration took steps to help address both these challenges to help address challenges in the housing and financial markets we announced temporary steps to help stabilize them and increase confidence in Fanny May and Freddy Mack these two Enterprises play a central role in our Housing Finance system so treasury Paulson has work with the Federal Reserve chairman banki so that the companies and the government Regulators put the companies and their government Regulators on a plan to strengthen these Enterprises to help address the pressure on gasoline prices my Administration took action this week to clear the way for offshore exploration on the outer continental shelf it's what's called OCS Congress has restricted access to key parts of the OCS since the early 1980s I've called on Congress to remove the ban there was also an executive prohibition on exploration offshore exploration so yesterday I issued a memorandum to lift this executive prohibition with this action the executive branches restrictions have been removed this means that the only thing standing between the American people and these vast oil resources is action from the US Congress our citizens are rightly concerned about the difficulties in the housing markets and high gasoline prices and the failure of the democratic Congress to address these and other pressing issues yet despite the challenges we Face our economy has demonstrated remarkable resilience while the unemployment rate has risen it remains at 5.5% which is still low by historical standards and the economy continued to grow in the first quarter of this year the growth is slower than we would have liked but it was growth nonetheless we saw the signs of a Slowdown early and enacted a bipartisan economic stimulus package we've now delivered more than $91 billion in tax relief to more than 112 million American households this year it's going to take some time before we feel the full benefit of the stimulus package but the early signs are encouraging retail sales were up in May and June and should contribute and will contribute to economic growth the months ahead we expect more Americans to take advantage of these stimulus payments and inject new energy into our economy bottom line is this we're going through a tough time but our economy has continued growing consumers are spending businesses are investing exports continue increasing and American productivity remains strong we can have confidence in the long-term Foundation of our economy and I believe we will come through this challenge stronger than ever before

Eye To Eye: GM Restructures

CBS

Transcript

hey everyone and welcome to eye to ey GM announced a restructuring plan today aimed at Reviving its North American operations Nancy ctis spoke with GM chairman and CEO Rick Wagner about what the plan might mean for the future of the company so all the changes you've announced today this all seems to indicate that you think high oil prices are here to stay well we think it's prudent to plan our business on that basis and we fought thought for a long time that with the demand patterns we see in the world um that oil prices would increase I would have to say what has been surprising to us and I think everybody is how rapidly they've increased in this year but you know I think um the lesson we take away from that is we really do need to make sure we do our planning on a very conservative set of assumptions hope that it gets better but certainly we haven't seen any any moves in that direction in the last in the last month I didn't hear you use the word layoffs well um we had talked about uh particularly on the salary side that we plan to try to through our our total salary and related cost take out over 20% of our the cost in US and Canada some of that will be through changes in benefits some of it will be through foregoing uh wage increases in bonuses but we also talked about um headcount reductions that will be achieved we hope primarily through early retirement programs or um the opportunity for people to leave Le leave with some with some benefits so we hope to be able to do that on on a voluntary basis so layoffs could still be down the road Well we'd like to avoid layoffs because you know that's basically um you know not really in consistent with moving to to a leaner structure what we'd like to do is hopefully through the um offer for people to be able to retire early or you know we've had a number of um attrition programs for our early employees those kind of moves enable us to to get our Workforce down to the right size and and for people to do that on basis they make their own calls so that that's what I hope happens so when you talk about these um bonus freezes and salary freezes how much of a hit is your average mid-level manager or engineer going to take well I think for the um average person out there the the the ramifications particularly those that that continue employment will be you know we've said no no no salary increases further this year and and and no bonuses so there's obviously some sacrifice but I think it's fair to say you know Frank Frankly everybody is is is is being asked to pitch in some we we cut dividends and um you know we the some of the cuts affect our our supply base and stuff so everybody's really being asked to pitch in it what what's a challenging time for the industry really for the economy you talked about workers 65 and over getting taken off healthc care how many workers do you have that are in that boat that will be losing their healthare yeah I'm I'm you I have to get back to you with a specific number um but as we as we looked at it it's it's a fairly large population in our Sal Workforce obviously that that group is eligible for Medicare and and to cushion the the the blow here we we're planning a significant increase in their monthly pension payments so it won't if they want to replicate the same healthc care coverage the GM gives it won't fully cover the the cost but it'll cover a lot of the cost so our our Focus was to try to use our overfunded pension plan to help um the individuals that are affected by the need to to to to to to unfortunately get out of the health care business once people are eligible for Medicare is this really going to write the ship or are you just postponing the inevitable no I mean we we you know we said we we as of the last available date that we published financials was which was March 31st we have 24 billion in in cash and and you know short term assets and financial assets and 7 billion in committed credit facilities and we said with that store of value we felt that would enable us to get through 08 under any circumstances even tough ones that we could foresee and now with today's actions to raise a further 15 billion in liquidity mostly from internal actions we've said that we think that will will cover a very conservative scenario for 09 so hopefully this responds very effectively to any rumors of bankruptcy which we absolutely are not considered have not considered and we will not consider under any scenario that we can see couldn't you have avoided this situation by moving more quickly to make your factories more flexible to be able to produce cars instead of trucks sure we we we have we have been moving on a direction of flexibility but let's be honest there's nothing you can do when when the industry drops from 17.5 million units to 14 million units you're going to have to really go through a tough period of adjusting to smaller smaller demands so I think some of it um certainly as we we continue to drive and as we've indicated 18 out of our next new 19 new products will be cars or crossovers as 11 of our last 13 have been in the US so I think it shows we we have been moving in this direction and you know with the benefit of hindsight sure it been great to have moved faster to to be fair I don't think too many people saw the rate of increase in oil prices that we've seen we all I think saw it coming but uh the amount of the increase has been pretty shocking over the last 6 months

IndyMac Hysteria Continues

CBS

Transcript

fear anger and high anxiety were the prevailing emotions outside branches of the failed indac Bank out in California Bill Whitaker is an enino where it got ugly today we've been here since 4:30 in the morning have you there was a far different mood outside Indie MAAC today oh Lord yesterday's calm was today's anger relax you idiots let's not fight Bank employees who tried to ease the tension the money is safe in an FDIC owned institution only inflamed all people won't be here that gentleman doesn't know what he's talking about because Arman Garden lost $31,000 when Indie MAAC stock tanked he's not taking any chances with his deposits I don't have any confidence in them they're not they're not telling the people the truth lack of confidence the constant refrain because I don't believe the bank like all customers with deposits above the ferally insured limit $100,000 small businessman Don hosa's account was frozen he was hot I got a mortgage payment due car payments due how am I going to make those payments Lisa Hester learner got in line when she found everything above the insured limit had disappeared from her online account I think it's Mass hysteria I I think this is similar to what happened during the Great Depression and everybody wants their money and they want to touch it and hold it and see it in the 11 business business days before the FDIC takeover frustrated depositors withdrew more than $1.3 billion from indac another troubling sign tumbling stock prices at other major Banks after meeting with Bankers Hester Lerner found out her uninsured money was in the bank but Frozen her frustration level 1 to 10 I'm in about an 11 customer Joan rubben said what almost everyone else was thinking well we damn well do need to be here this is our money the federal government says most of the 275,000 depositors 98% of them can trust that their money is safe it's just that people here don't seem to be in a trusting mood Katie Bill Whitaker Bill thanks very much

Is Your Bank At Risk?

CBS

Transcript

so what I know you're thinking right now is my bank at risk joining us from Washington this morning is Sheila bear chairman of the Federal Deposit Insurance Corporation the FDIC good morning to you Sheila good morning we're talking about more than 90 Banks right now that are in danger of folding can the FDIC provide a financial safety net for Americans who have their Savings in these Banks um yes absolutely no insured depositor has ever lost a penny of insured deposits throughout the fdic's 75 year history insured depositors are absolutely safe I would also like to say the banking system as a whole is absolutely safe uh and listening to uh the the segment that ran before this interview I heard words like massive bank failures and banks in deep trouble those are not factually accurate statements overwhelmingly banks are safe and sound in this country indac was one of 8,500 depository institutions that we ensure represents less than 2% of total banking assets well she let me interrupt because analysts say that as many as 150 of the nation's 7500 Banks Nationwide could collapse in the next 12 to 18 months is that well I don't make predictions I I don't make predictions well but if analysts say that and that could happen how how can we feel we have 8500 we have 8,500 Banks to put this in context during the SNL debacle there were over 2,000 banks that were closed over a period of time the peak was 534 closures in 87 we've had five Bank closings this year year I won't say that Banks don't have challenges right now they do but historically we're operating at fairly low levels and all I ask is is that this this closing and the current situation be put in appropriate context there 8,500 Banks out there this is one yes there will be more failures but it will still be low certainly by in comparison to what happened during the SNL days all right Sheila be we're out of time but just a yes or no if you would up to $100,000 100% coverage well that's that's that's another uh something I would like to clarify the basic limit is 100,000 per institution 250,000 for an IRA an additional 250,000 however it is possible to get more than 100,000 depending on how your accounts are structured so many of the people that had over 100,000 were still insured and our claims agents are working with the indac folks right now to make sure they have maximum benefit of their Deposit Insurance Sheila bear we'll talk more about this thank you very much we're all feeling the big squeeze joining us is ver Gibbons Financial journalist and CBS News contributor good morning good morning Harry the people feel uneasy right now watching all of this unfold I don't want to use the word panic but some people are wondering what what am I supposed to do there is panicking going on here's here's the thing this is the fifth financial institution to fail this year first seven months of the year that's not normal we haven't seen the last of these failings as many as 150 Banks could fail over the next 12 to 18 months combine this with a whole Fanny May Freddy Mac situation the crisis is getting worse mhm so in the meantime if I have money in a bank should I be thinking about moving it somewhere else or you anything rash here here you want to make sure your deposits are insured by the FDI FDIC that way you can have up to $100,000 in your accounts in your savings in your checking your CDs up to $200,000 for your joint accounts $250,000 for your retirement accounts your IRA for example beyond that here's where it gets problematic if your bank actually closes you've got more money than that you're in trouble because trying to get get that money back you're going to be standing in line like they are Indie MAAC with the rest of those creditors and you're not going to get 100% of it back more than likely in fact you're going to get probably on average about 75 cents on the dollar of uninsured deposits so for that group of people out there that have more $100,000 in a regular deposit account or more than 250,000 in an IRA it's time to get your financial house in order well it's always time to get your financial house in order but this is a lesson to all of us pay attention Vera thanks so much as always do appreciate it

Notebook: Fall Of The Giants

CBS

Transcript

the names sound like two of your neighbors old Fanny and Freddy sitting on their porch swing but Fanny May and Freddy Mack are actually the two biggest mortgage finance companies in America they handle half of all Home Loans about $5 trillion do worth and are the foundation of the housing market but that Foundation has begun to crack the government will help them because their collapse would be a disaster but the rescue of Fanny and Freddy treats a symtom not the disease half a million homes are in foreclosure and that number could double by the end of the year housing prices are falling in many parts of the country creating situations where even responsible homeowners end up with little or no equity the FED has finally stepped in and is cracking down on predatory lenders but for now that old porch swing is an unattainable dream for too many Americans that's a page from my notebook I'm Katie kurick CBS News

Obama Leads In Latest Poll

CBS

Transcript

the election meanwhile is 16 weeks from today and our new CBS News New York Times poll shows Senator Obama leading by six points but there are even more ominous numbers for Senator McCain in that poll Jeff Greenfield reports he Trails by a much wider margin among some key voters John McCain's Camp agrees that it has an uphill climb and the latest poll number suggest why the terrain is steep Obama leads McCain by nine points among women but he leads among men as well by three points George Bush carried Men by 11 points back in 2004 Obama's lead among blacks is almost unanimous 89 to2 but he also has a huge lead 6223 among Hispanics a big shift from four years ago when Bush got some 44% of the Latino vote Obama does Trail among Whites by nine points but remember John Kerry lost the white vote by nearly twice that margin in 2004 Obama leads among all age groups except the oldest and among those over 65 he's only two points down McCain also faces a challenge in distancing himself from a highly unpopular president 78% of Voters say that McCain would follow Bush on Iraq some 61% say he'd follow Bush on the economy McCain does have one clear advantage in the pole Katy nearly twice as many people say he'd very likely be an effective commander-in-chief as Obama meanwhile Jeff it's nearly four months until election day and according to this latest poll more than one in four supporters or 28% of both candidates say they could change their mind is that a surprising number of Voters at this juncture who haven't signed on the doted line for any candidate for either one no especially when you consider it's a kind of campaign where people want change but they're not sure about the change agent and as with Reagan in 80 with Clinton in '92 with John KY in 2004 voters may make up their mind very late on this one or at least these voters anyway and we have certainly learned from recent history it all comes down to the Electoral College so how is the electoral map shaping up it looks good for Obama right now and all the key Battleground states that Democrats must hold like Michigan and Pennsylvania and Wisconsin he's ahead but he's also ahead or competitive in lots of States like Ohio and Missouri that Republicans have to have Jeff Greenfield thanks very much