Bush warns bailout must be passed
Al Jazeera English
Transcript
[Music] a lame duck George Bush making another appeal for support good morning he says the focus should be on the trillion doll loss of asset value on Wall Street on Monday which proves that action is needed the reality is that we're in an urgent situation and the consequences will grow worse each day if we do not act bush had another message this one for Rebel members of his own party 2third of Republicans voted against the bailout many saying government has no role in helping Wall Street Bush told them that much more is at stake our country is not facing a choice between government action and the smooth functioning of the free market we're facing a choice between action and the real Prospect of economic hardship for millions of Americans presidential candidates John McCain and Barack Obama warned of catastrophe for ordinary Americans if Congress fails to act McCain speaking in Iowa stressed the need for republicans and Democrats to work together to solve the problem now I call on everyone in Washington to come together in a bipartisan way to address this crisis and I know that many of the solutions to this problem may be unpopular but the dire consequences of inaction will be far more damaging to the economic security of American families and the fault will all be ours and Barack Obama addressing supporters in Nevada said the financial crisis is the result of greed and irresponsibility on Wall Street and in Washington for the past eight years while there's plenty of blame to go around and many in Washington and Wall Street deserve it all of us now have a responsibility to solve this crisis because it affects the financial well-being of every single America there will be time to punish those who set this fire but now is the moment for us to come together and put the fire out members of Congress will get back to work on Thursday meanwhile us authorities are making $430 billion available to Banks to help ease the crisis President Bush can make all of the appeals he likes but with popularity ratings below 30% it's probably only bad news from Wall Street that can get people to change their minds in other words it will take their fear of losing their savings to overcome their anger at having to pay for the $700 billion bailout next Spicer Al daer Washington
Analyst: Monday Was Bad, but No So Bad
Associated Press
Transcript
well yesterday the Dow Jones Industrial Average declined 778 points a lot of people asked me it's 1987 all over again isn't it and I say well no uh even though in 1987 we fell 508 points we experienced a 222% decline in a single day back then to equivalent or to have an equivalent Point loss today we would have had to have fallen more than 2500 points or three times as what much as we experienced yesterday so uh it was bad yesterday but it could have been a lot worse I think today knowing that uh Congress is pretty much on recess because of the holidays that we're probably going to be focusing more on consumer confidence as well as the S&P K Schiller index coming out today and in a sense refocusing on the economy because once we do get a Wall Street rescue plan passed which I believe we will uh in the next couple of weeks uh then we're going to wait to see whether that uh rescue plan works and if it does well then we're going to be focusing again on recession 101 here in the United States well some of the data that we're going to be looking at to help to decide whether we are in recession is housing data coming out today as well as consumer confidence and employment data on Friday
Australia, New Zealand React to Bailout Failure
Associated Press
Transcript
I think we're all very disappointed that the US Congress and the administration haven't agreed on the rescue package that rescue package would have injected a lot of confidence into the International Financial systems the fact that it hasn't happened has obviously affected share markets as far away as New Zealand the attitude that we'll adopt and I believe other friends and allies unit States will adopt uh is to urge the United States Congress uh to pass this or a similar measure when it's represented to the Congress later this week this is necessary for the stabilization of us um financial markets it's necessary for the stabilization of global financial markets I think that the failure to reach a package will have implications that will Rumble for some time clearly the administration saw it as an emergency hence the very large amount of money it put on the table but the representatives of the American people in the Congress have still to be persuaded yeah
Bailout Revival Sought; Better Deposit Safety Se
Associated Press
Transcript
as Congress scrambles to revive the bailout Bill President Bush says he understands it's a tough vote but the reality is that we're in an urgent situation and the consequences will grow worse each day if we do not act even with the Halls on Capitol Hill largely empty as the house takes two days off for the Jewish New Year there were behind the scenes talks on how to move ahead after Monday's stunning defeat the basic question rework the bill I don't think we have to start all over we do have a solution that will that will fix the problem or scrap it all together the problems that we face today were not going to be solved by that legislation that we defeated yesterday the Senate meanwhile is waiting for some house action fix the problem this week fix the blame next week people need to calm down a little bit that all of us are dealing responsibly with uh with different approaches but serious approaches to try to resolve the issue and there were campaign Trail calls to the president from both wouldbe successors Congressional in in action has put every American in the entire economy at the gravest risk so this is no longer just a Wall Street crisis this is an American crisis and it's the American economy that needs this rescue plan both are backing the idea of boosting bank deposit Insurance limits as a way of increasing confidence in the banking system the bottom line here is lawmakers say they need to do something and do it it soon the Senate's top Republicans predicting something will happen by week's end but that won't leave the house much time to act after it returns Thursday but in Senator Mitch McConnell's words it's time to start acting like grown-ups Sager meani the Associated Press capito Hill
Bush Implores Congress to Act to Rescue Markets
Associated Press
Transcript
we're at a critical moment for our economy and we need legislation that decisively addresses the troubled Assets Now clogging the financial system helps lenders resume the flow of credit to Consumers and businesses and allows the American economy to get moving again I recognize this is a difficult vote for members of Congress many of them don't like the fact that our economy has reached this point and I understand that but the reality is that we're in an urgent situation and the consequences will grow worse each day if we do not act dramatic drop in the stock market that we saw yesterday will have a direct impact on the retirement accounts Pension funds and personal savings of millions of our citizens and if our nation continues on this course the economic damage will be painful and Lasting as much as we might wish the situation were different our country is not facing a choice between government action and the smooth functioning of the free market we're facing a choice between action and the real Prospect of economic hardship for millions of Americans for the Financial Security of every American Congress must act my Administration will continue to work closely with leaders of both parties on Capitol Hill I I appreciate their determined efforts well Congress is out today for the Jewish holiday my Administration will be talking to Congressional leaders today about how we can move legislation forward when members begin returning to the capital tomorrow our economy is depending on decisive action from the government the sooner we address the problem sooner we can get back on the path of growth and job cre cre ation this is what elected leaders owe the people and I'm confident we'll deliver
Bush Says 'Congress Must Act' on Bailout
Associated Press
Transcript
for the second stray day the president has made a pre-market opening plea to lawmakers to pass the economic bailout bill on the heels of yesterday's stunningly quick and big drop on Wall Street something the President says had a direct impact on many Americans we're in an urgent situation and the consequences will grow worse each day if we do not act now even with Congress on a break for the Jewish holidays the President says Administration officials will talk with lawmakers on the way forward for this bill he says it doesn't much matter the path a bill takes to become a law he says Congress simply must act for the Financial Security of many Americans Sager meani the Associated Press the White House
First Person Analysis of 'Hope for Homeowners"
Associated Press
Transcript
this is a program designed to help people that are in danger of losing their house to foreclosure the idea is to intervene before they get in so much trouble with their payments that they can't catch up and to allow them to refinance into a mortgage that's more affordable for them to carry each month and be able to handle with their monthly pay that means that that lender or owner of the mortgage will have to agree to accept this payment in full an amount that's less than what may be actually owed so they have to agree to write down the mortgage and accept that lower amount as payment fall the the hope is that um in order to prevent the foreclosure that the lender or the owner of the mortgage will decide that they'll recoup more money by accepting this reduced payment than by going through the the foreclosure process which can be quite costly and well it's very significant they've given the federal housing administration 300 billion dollars in additional authority i think it's very important for the borrowers to contact the person that holds their mortgage whether it's a servicer many of these loans have been sold by the original company that made the loan but they should have that information on their monthly statement contact the the person that that's listed there and if you're having trouble with your mortgage payment explore as soon as possible this program are other alternatives to find a way to to make your payments more affordable
McCain: 'Disappointed' Bailout Failed
Associated Press
Transcript
we are in the greatest financial crisis of our lifetimes Congressional inaction has put every American in the entire economy at the gravest risk yesterday the country and the world looked to Washington for leadership and Congress once again came up empty-handed I am disappointed at the lack of resolve and bipartisan Goodwill among members of both parties to fix this problem bipartisanship is a tough thing never more so when you're trying to take necessary but publicly unpopular action but inaction is not an option businesses all over the country cannot borrow to finance their own operations and pay their bills if we do nothing many May Fail Sonic Corporation a drive-in restaurant chain based in Oklahoma learned on Thursday that one of its lenders GE Capital had stopped extending new loans to the chains franchisees that will block plans to rebuild restaurants add equipment and open new Loca and open new locations when small businesses and big businesses like Sonic Sonic franchisees can't borrow contractors don't get the remodeling work equipment makers lose sales and restaurants go out of business it hurts the entire community
Obama Calls on Americans to Support Rescue Plan
Associated Press
Transcript
[Applause] so I know that many of you are feeling anxiety right now about your jobs about your homes about your life savings but I also know this I know that we can steer ourselves out of this crisis because that's who we are because this is the United States of America this is a nation this is a nation that's faced down war and depression great challenges and great threats and at each and every moment we have risen to meet these challenges not as Democrats not as Republicans but as Americans with resolve with confidence with that fundamental belief that here in America our destiny is not written for us it is written by us that's who we are and that's the country we need to be right now so this is no longer just a Wall Street crisis this is an American crisis and it's the American economy that needs this rescue plan I understand why people would be skeptical when this president asks for a blank check to solve a problem I've spent most of my time in Washington being skeptical of this Administration and this time has been no different and that's why over a week ago I demanded that the plan that was presented include specific proposals to protect American taxpayers
Stocks Fall Around the Globe
Associated Press
Transcript
one of the worst days in the history of Wall Street is spreading the financial markets around the world the numbers simply staggering stocks in Japan down more than 4% including Sony down almost 7% Toyota off 4% in Hong Kong the Hang sang index sank more than 3% but the sharpest fall might have been in Australia where stocks knows die more than 5% in the first 15 minutes of trading I've spoken also to the British prime minister this morning uh Gordon Brown and the attitude that will adopt and I believe other friends and allies the United States will adopt uh is to urge the United States Congress uh to pass this or a similar measure when it's represented to the Congress later this week this is necessary for the stabilization of us um financial markets it's necessary for the stabilization of global financial markets some of the Banks overseas are not exposed to the Bad Mortgages at the center of the financial crisis but there remains concern that a Slowdown in the US economy would have a trickle down effect around the world so I think the uh the confidence about the economy uh in the US will further deteriorate uh maybe because of this uh problem and that should have the real impact uh on the investment uh sentiment and I think the our biggest concern is the stock markets uh could go down uh continuously uh for some time even as markets around the world fall some investors continue to see a silver lining it is a concern but uh my husband and I are there for a long haul we can't you can't just go out now we have a very good stock have to recover in America they will come to to some kind of solution it will steady Market eventually despite Monday's down day oil prices are down slightly in Asian trading at $96 a barrel that price is down more than 20% in the last seven days or L re the Associated Press
Stocks Jump After Steep Sell-off
Associated Press
Transcript
stocks staged a partial rebound early Tuesday after their biggest sell-off in years however a key rate that Banks charge to lend to one another shot higher tightening available credit the credit markets are tighter today than they were last week so that's the big fear once you get credit real tight then it starts to Domino not Wall Street but Main Street right across the country a snapback in stocks wasn't unexpected as Carnage on Wall Street often attracts bargain hunters though questions remain about how investors will proceed in the absence of a government bailout it's like if you go to a store and there's a 50% off sale that's what you have behind us so there was a lot of value a lot of stocks on discount yesterday and you saw them picking them up today Wall Street will likely proceed cautiously as Traders gauge prospects for resurrecting the bailout effort meanwhile there was plenty of finger pointing going on on Main Street I'm one of those people who have no confidence in government and uh because government in my view has created the very mess that we're in and that people were warn for years and years and the Congress did absolutely nothing black Congress does have its work cut out for itself the house is slated to meet again on Thursday to iron out details on a revised bailout package Ed Donahue the Associated Press
Stocks Surge Higher, but Credit Worries Persist
Associated Press
Transcript
it's very irrational what's going on we we all feared that we would see a wave of selling sweeping around the globe and coming into our markets this morning and that didn't happen that good news sent stock soaring Tuesday bargain hunters were out in full force the day after the Dow tank 778 point it's like if you go to a store and there's a 50% off sale that's what you have behind us so there was a lot of value a lot of stocks on discount yesterday and you saw them picking them up today markets rebounded with the Dow closing up 485 point to 10,850 the other major indexes rallied 5% higher but there was little relief in the Frozen credit markets uh people aren't lending to each other Banks aren't lending to each other uh housing prices are still though they're not going down as much as they did earlier they're still going down that coupled with the uncertainty surrounding the bailout plan traders arew of how long this rally will keep up while lawmakers have promised to work through a deal Congress isn't scheduled to meet until Thursday right now the main worry for Traders is that the lack of a plan will make it difficult for some companies to fund basic operations like making payroll so the more time goes by before a bailout plan is in place the more this crisis will trickle down to small and medium businesses in New York Bonnie go the Associated Press
Traders Optimistic on Market Rebound
Associated Press
Transcript
the markets are up after a stunningly bad day on wall street yesterday a 778 point drop the worst single day drop ever but today is a different story right now investors are going off of the anticipation that there will be some type of bailout bill passed it's a very different mood on the trading floor today after i talked to some of the brokers they said yesterday they were hanging their heads in disbelief after lawmakers failed to pass that bailout bill but today investors are a little bit more optimistic well we're running almost entirely on emotion right now you know the market was like a patient who went to bed last night with a terrible fever i'm not sure if they're going to make it to the morning well we all woke up this morning we're relieved we're alive we're breathing and the market has rallied as a result right now the markets are up but each day that a bill out bill is not passed investors are not sure how long how much longer they'll be able to keep this rally going they're hoping that congress will be able to make this decision very very soon and that the markets will be able to recoup from yesterday's losses in new york bonnie gauche the associated press
Wall Street Looks to Regain Losses
Associated Press
Transcript
wall street opens this morning after a record-breaking day a 778-point loss in the markets yesterday after the house failed to pass a bailout plan that would help rescue this economy from financial crisis where investors are still rubbing their eyes in disbelief that 1.2 trillion dollars was wiped out in just a few hours the house says they plan to go back to the negotiating table because they understand how important it is to work out this deal worldwide markets took a hit overnight european markets asian markets all reported losses in new york bonnie gosh the associated press
Advice From Financial Expert
CBS
Transcript
we're joined by Tim Hansen who's a senior Analyst at the mle uh fool people who have been in the uh business of trying to help uh advise folks on what to do with their money for a number of years now as your phones are ringing off the uh hook yesterday what was the primary piece of advice you gave well you got to be you got to be patient don't panic I mean times like this you can make a lot of rash decisions which can have severe consequences later on you know the key to being in the market is time and if you have that time you want to stay there and and and make decisions that will keep you there are so worried about their 401ks they've been plowing all of this money into all of these different you know money funds and everything else and and mutual funds for so many years and they're seeing it shrink all of the gains of the last couple years have just completely disappeared should I pull my money out of there yeah it's been a tough 10 years but it depends on on how much time you have into retirement when do you need that money if you need it within the next 5 years yes probably is now a good time even if you've lost money to reallocate cuz I don't know what's going to happen over the next 3 months I don't think anybody does it could get worse before it gets better do you really think it could could get worse cuz the big question of the day is where is the bottom you yesterday the bottom I don't think so because the problem is home values really need to to rationalize before everything stabilizes and and we've been talking to a lot of people and they seem to think there's another 5 to 10% to go before that happens in the stock market or in the home value in the home value market but the stock market you know is a is sort of a leading indicator so the stock market is going to go up and down it's going to be volatile but fundamental once that stabilize then theoretically the stock market will start to get traction we hope so yeah once home value stabilized consumer confidence comes back then you can see the stock market start moving back but you know this bailout plan is is one of those things that that can help as well volume thing across the street make mine a double all right thanks very much Tim Hansen do appreciate it thanks very much
Bush: Congress Must Act
CBS
Transcript
good morning yesterday the House of Representatives voted on a financial rescue plan that had been negotiated by Congressional leaders of both parties in my Administration unfortunately the measure was defeated by a narrow margin I'm disappointed by the outcome but I assure our citizens and citizens around the world that this is not the end of the legislative process producing legislation is comp ated and it can be contentious it matters little what a path a bill takes to become law what matters is that we get a law we're at a critical moment for our economy and we need legislation that decisively addresses the troubled Assets Now clogging the financial system helps lenders resume the flow of credit to Consumers and businesses and allows the American economy to get moving again I recognize this is a difficult vote for members of Congress many of them don't like the fact that our economy has reached this point and I understand that but the reality is that we're in an urgent situation and the consequences will grow worse each day if we do not act dramatic drop in the stock market that we saw yesterday will have a direct impact on the retirement accounts Pension funds and personal savings of millions of our citizens and if our nation continues on this course the economic damage will be painful and Lasting I know many Americans are especially worried about the cost of the legislation the bill the house considered yesterday commits up to 700 billion taxpayer dollars to purchase troubled assets from Banks and other financial institutions that no question is a large amount of money we're also dealing with a large problem but to put that in perspective the drop in the stock market yesterday represented more than a trillion dollars in losses furthermore both the nonpartisan Congressional budget office and the Office of Management and budget expect that the legislation considered would ultimately cost a taxpayer far less than the 700 billion because the government would be purchasing troubled assets and selling them once the market recovers it is likely that many of the assets would go up in value over time ultimately we expect that much if not all of the tax dollars we invest will be paid back as much as we might wish the situation were different our country is not facing a choice between government action and the smooth functioning of the free market we're facing a choice between action and the real Prospect of of economic hardship for millions of Americans for the Financial Security of every American Congress must act my Administration will continue to work closely with leaders of both parties on Capitol Hill I appreciate their determined efforts well Congress is out today for the Jewish holiday my Administration will be talking to Congressional leaders today about how we can move legislation forward when members begin returning to the capital tomorrow our economy is depending on decisive action from the government the sooner we address the problem the sooner we can get back on the path of growth and job creation this is what elected leaders owe the American people and I'm confident we'll deliver thank you
Credit Freeze Weighs On Wall St.
CBS
Transcript
the dow rebounded sharply rallying on hopes congress will still ride to the rescue but the stock market's just a sideshow in this financial circus says veteran trader art cashion the center ring is obviously the credit markets and the credit crisis worsened overnight the interest rate banks charge each other for overnight loans more than doubled so small businesses are finding it harder and harder to borrow money there is no extra capital jay cullimore needs that extra capital to buy holiday inventory for his florida lighting company so we're kind of playing it by ear because we can't really get the kind of cash that we're looking for and if sales dropped this season he says we could definitely go out of business small businesses employ 116 million workers but two-thirds of small business owners say they're feeling the impact of the credit crunch it's been a dramatic effect bo scott says his nissan dealership in roswell georgia is being hit from both sides you've got consumers that are trying to arrange financing for new and pre-owned automobiles but then the other side is is we certainly take out loans to for our inventories and the banks are raising those rates as well that credit squeeze is what's weighing on wall street you've got a long career down here how seriously worried are you i am very worried because it is it is systemic art cashion says investors are counting on congress if they do nothing and if the credit market freezes up we could see much more severe than what we saw yesterday bottom line the stock market is still highly volatile and wall street is still edgy because the credit markets are still frozen
Economic Bailout & Politics
CBS
Transcript
hard to believe it's been 9 months since those first in the nation Iowa caucuses here since that time the presidential contenders have been settled this economic crisis has not this is what you get when you combine a once every four years presidential election with a once every 80 years economic meltdown this bill is fueled by fear and hinges on haste there's got to be a better way one big mess that has enveloped everyone Washington Wall Street Main Street and our next commander-in-chief both of these candidates were caught fatf footed they're Senators a failure of Washington is a failure of them Barack Obama's campaign had already released copies of a planed speech saying lawmakers have agreed on an emergency plan when that prediction went poof Obama urged calm one of the messages that I have uh to Congress is get this done Democrats Republicans step up to the plate get it done but politicos Mike Allen believes John McCain had far more to lose by suspending his campaign and jetting back to Washington McCain staked a critical part of this campaign on a deal then most of his fellow Republicans voted no and not a single representative from McCain's home state of Arizona voted yes McCain set himself up for trouble he came in late he was a little half-hearted and now he owns a failure on Monday a short statement from McCain acknowledged a grim situation ation with no clear ending I believe that the challenges facing our economy could have a grave impact on every American worker small business owner and family if our leaders fail to act both John McCain and Barack Obama will stay in the campaign Trail today in Key swing States both are expected to return to Washington when if there's a vote in the Senate sh [Music]
Effects Of The Market Meltdown
CBS
Transcript
joining me now from Washington is Peter macei he is a professor of business at the University of Maryland good morning Peter good morning how are you good we just heard the politicians go back and forth they admittedly are not experts on the economy you are so please give us some perspective we saw the markets here render their verdicts on the failed bailout yesterday explain how this could create a domino effect of bad repercussions on our economy well as you saw yesterday the financial sector fell a great deal along with the rest of the market uh this whole process impedes the ability of banks to make credit to make loans to businesses to hire people and to just keep their payrolls going you know a lot of department stores borrow money to buy the goods that they sell and they pay them back when the goods are sold if people can't borrow money to stay in business or if the cost of borrowing becomes prohibitively high they lay people off or they don't hire workers so we're going to see unemployment rise more rapidly than we anticipated as the economy slows and we'll see the Slowdown deepen it's that simple then is more people lose their jobs they spend less money it Cycles through and you get into and you get into that you know downside of the power curve so to speak Peter people are concerned you're hearing constituents uh calling their representatives in Congress and saying we don't want the government to use that much of our money so what should we be worried about the return on this investment that we might get uh that the government is making with our money or what could happen to my home or my job if Congress does nothing well I think we always have to be concerned about our own personal finance and in that regard this is a good time for people to be conservative about that this is is a good time to be paying down credit card debt if you have a car that works and you want to buy a new one you might put it off a year I know economists say spending is good for the economy but it might not be good for you personally I would say though that without a bailout without some sort of assistance to the bank everyone's personal finances are going to be worse this has to be solved all right Peter Maurice unfortunately we have to leave it there I guess uh we'll see what happens whether the market will correct itself or whether we're headed down a dangerous road thank you
Market Meltdown
CBS
Transcript
Wall Street went into shock when the bailout Bill failed because credit is the grease that keeps the economy going but for more than a week now the credit markets have been virtually Frozen how long before the economy is in deep trouble well we're already in deep trouble and you know when does it become cataclysmic it's very difficult to see it's hard to see and I and I don't think anyone knows for sure banks are reluctant to lend money even to each other businesses can't borrow the cash they need without relief says Economist Mark xandy Main Street could feel the pain and soon we're going to see it in the form of rising Unemployment uh job losses uh cutbacks and even bankruptcies and if you sense we're already in a recession then you ain't seen nothing yet this would deepen that recession and and potentially deepen it to the point where you would see the kind of uh economic deceleration that we haven't seen since the 30s because businesses that can't get access to credit of course can't hire workers that puts the brakes on the entire economy and Maggie that's why Traders down here are saying if we don't get some relief soon we could have more days like yesterday all right Anthony thank you that's also why people on Main Street maybe more so than ever are watching to see what happens here on Wall Street Harry is talking to some of them this morning at a diner in New Jersey good morning Harry yeah thanks very much Maggie we have a real mixed bag of opinions here in the diner this morning people think that bailout should be support Ed by their members of Congress others who think no way no how I want to start with ED Latimer who is a psychiatrist what is your feeling about the vote yesterday well uh it's obviously something that's important for the welfare of the country and I hope uh Congress gets their act together and uh does the right thing yeah shaken G as a truck driver what's your feeling should Congress have voted for this bailout uh no I think they shouldn't have you know because uh what about the homeowner they didn't build us out you know you feeling like you're left behind right I'm paying taxes for somebody else's mistakes yeah in the end what happens if this if this bailout doesn't come through are you concerned about today and tomorrow and the next day well you know if this really gets uncomfortable and bad we could become a cash only uh Society that's going to be real painful Harry right and on the other hand while there's animosity toward these guys on Wall Street who you know made this mess in the first place is there some sense that if there isn't a bailout it could end up being worse for you in the end I think it could end up worse for us but I don't think the bail out is the right solution maybe think of something else another alternative all right that's just a couple of the opinions from the diner here in Clifton we want to talk to a couple of members of Congress who voted yesterday on this massive 700 billion doll bailout package we're joined by representative Marsha Blackburn from Tennessee who voted nay and representative James Moran of Virginia who voted in the affirmative let me uh first start with with uh representative Blackburn why did you vote the way you voted well let me first say we're committed to finding a resolution to this and I think that by week's in we will have a solution to this problem there are some reasons that I cast a no vote yesterday uh this was too much bailout and not enough workout in this plan it also was $700 billion and an immediate $ 25050 billion blank check the federal debt limit was raised to $ 11.3 trillion in this bill and there are some other things that could and should be done first and should be done in conjunction with the actions that were taken yesterday uh increasing let me ask you this very let me ask you this very quickly yeah there's so much involved in this but let me ask you very quickly you make the vote the stock market goes down 700 points do you feel in any way responsible for that we are all very concerned about the total picture and have been and that is why we've worked diligently all throughout the week and we'll continue to work this week until we solve this problem this is something you can't leave on the table and leave Washington this is something that affects every man and woman every family in this country and I have a commitment and I know that those that are negotiating have a commitment we are going to solve this problem we have to okay Congressman Moran let me ask you you voted in the affirmative yet at least 40% of your uh Democratic colleagues voted against that how how are you going to convince them that they should change their votes Harry I'm surprised it was that high this is a Republican bill it was the bush Cheney Administration with secretary Paulson who offered it uh getting 60% of the vote was pretty impressive uh what was shocking was that um the Republicans voted against it 2third of them I I I mean I don't know where the leadership was the Democrats were willing to hold the vote open so the president could call members and get them to switch their vote but it didn't happen um you know maybe if the market Falls another thousand points maybe they'll get some Congressman Congressman though hang on a second it's it's easy enough to blame it on hang on hang on one second well let's just hang on a second it's easy enough to blame it on the opposition Democrats are always seemingly going to uh be happy to vote for putting on more debt or making government bigger you all you needed was another dozen votes or so how come the Democrats couldn't come up with them well you know the speaker Pelosi had said to mjor minority leader Boehner if you can put 110 votes up we'll match it we will at least do half of this task but we don't want to own this bill this is your bill if it's our bill we want to put in some mortgage protections to help out the homeowners as much as we do Wall Street we want to pay for the bill so we can do other initiatives rather than financially strapping the country for the next decade there were a number of things that Democrats wanted but nevertheless they realized the urgency of the situation and so almost two-thirds of them went ahead and voted for it what we need to do now is to make this bipartisan to get half at least half of the Republicans as well and I thought that would happen it didn't and uh and now I think you'll see continued crash the key day is today it's the last day of Financial and as a and and as a result there are a number of businesses that could go under uh without being able to get a cash infusion today all right for the for the time being we have to leave it exactly where it is a grave situation and for the moment we can do some actions to take well we should have done it and we should have done it when it needed to be done Mara there's really no excuse Congress Congress so much do appreciate it leave it right there for now [Music]
Dow rebounds 485 after record drop; credit costs rise
CBS
Transcript
a major comeback for Wall Street one day after the Dow saw its biggest Point drop in history Monday's giant selloff created some cheap stocks which investors scooped up throughout the day the market made big gains even with the bailout package still in flux lawmakers are trying to figure out how to get the $700 billion rescue plan passed in the end the Dow Industrial shot up 485 points the NASDAQ Composite rallied nearly 99 while stocks turned higher some negative news when it comes to credit a couple of key interest rates Rose today making it more expensive and difficult for consumers and businesses to borrow money the lack of lending is also taking a toll on car dealerships the CEO of Auto Nation says tougher credit requirements are making it harder for people to buy a new car his company's sales volume has dropped 20% this year at last check Auto Sales were down 11% Nationwide the latest numbers come out Wednesday and home prices tumbled by the sharp annual rate ever an index looking at 20 US cities shows a record 16% drop in one year Las Vegas was the hardest hit prices there plunged nearly 30% on Wall Street I'm Alexis christopherus
Notebook: Congress Breaks
CBS
Transcript
Congress took a break today for the Jewish New Year and that's probably a good thing it's giving negotiators behind the scenes time to take a new look at the financial bailout plan and changes that could finally get it passed now one Amendment would raise the amount of your bank deposit the government will ensure to a quarter million dollars the tone of the debate got a lot more hopeful today as well Senators McCain and Obama phoned President Bush and afterward the White House said both calls were quote very constructive the president said he's optimistic a bill will be approved house Speaker Pelosi and Senate Democratic leader Reed welcomed that and promised to work with Republicans to get it done the stock market is hopeful too there was a huge rally today on rashash Shana a chofar or Rams Horn is sounded as a kind of call to action perhaps Washington is finally listening that's a page from my notebook I'm Kitty kurick CBS News
'Party's over'?
CNN
Transcript
The House will be in order. The US Congress now says greed isn't good, it's unacceptable. The party is over. The error of golden parachutes for high-flying Wall Street operators is over. Golden parachutes, or golden handshakes, are the colourful names for the huge payments given to executives who fail, leaving their company or bank in a far worse position than they found it. Some recent examples. Dick Fould, who oversaw Lehman Brothers' collapse, received $35 million. Citigroup's Chuck Prince got almost $40 million. And Stan O'Neill of Merrill Lynch parachuted with a $161 million package. They are numbers that inspire public outrage, especially given the public money now bailing out world finance. It seems really inappropriate at a time of great need. When other people need it a lot more than they do. A completely understandable view, says this business ethicist. It's seen to be a sort of reward for incompetence. And that does not go down well with the general public, because it's seen to be unfair, or if you like, unethical. There may be public will to wipe out golden parachutes from corporate culture, but governments have not yet declared an intention to change laws. It could be up to the industry, or even individuals. The ethical thing would be to say, I haven't done what I've been doing, I've been incompetent, I haven't done my job well, I will not take that bonus. British shareholder groups say in recent years the situation has improved in London, where failed executives usually get one year's salary, with any extras determined by how well or how badly they did their job. We do think that in the US there's a weaker link between pay and performance than there is in the UK. Big rewards in the finance industry are usually justified as the only way to attract the best people, who then make lots more money. But it's a difficult argument to maintain at a time with historic levels of failure and record taxpayer-funded bailouts. Phil Black, CNN, London.
Africa markets not immune
CNN
Transcript
Hi, I'm Robin Kurnow and I'm in an area called Melrose Arch. It's a business center here in Johannesburg and it's also a great place to get a cappuccino. Many of these people here drinking their coffee say that they are drowning their sorrows after a bloodletting in the South African markets. That's what one of the financial newspapers called it here. Of course, South Africa is not immune to the vulnerabilities and the insecurities in the markets at the moment. But what is important to remember is that South Africa's economy and its currency and its markets have generally weathered this economic storm quite well. And that's mostly because South Africa's financial institutions, the banks, many of them are behind me, are actually not as exposed to the U.S. banks as many other global banks. So that means that they are not feeling the pinch of the credit crisis overseas. Also, South African banks are far more risk adverse. They don't lend as easily because of the poverty here. So that's also. Made them in a far better position than many of the global banks. That said, many people here are concerned about the fact that this credit crisis might have spread to Europe. And that, of course, worries many South African investors because South Africa's links and relationships with Europe are far more stronger than they are with the U.S. I'm David McKenzie in the giant Kabir Islam in Nairobi. There's been a lot of talk about the financial markets, but we've come to a food market because this corn over here that people are trying to buy is 10 times more expensive than the food market. People are struggling to afford food here in Kenya. The U.N. secretary general has said that if there isn't a bailout of the financial systems, then rich countries will be unable to afford to pay for development and aid programs in Africa, leaving these people extremely vulnerable.
Asian banks: 'Alive and kicking'
CNN
Transcript
The American Pronunciation Guide Presents ''How to Pronounce Asian Banking'' Andrew, why isn't Asia going on Wall Street? Because we have been decoupled from the United States for a very, very long time. And I use the word decoupling in a very structured, considered and modified manner. Asian banking systems in the last 12 months have not needed to be supported, nationalized, injected, re-protected, re-privatized or otherwise interfered with either by the central banks or the Asian governments. The Asian banking systems are absolutely sound, alive and kicking. Exports from Asia to the United States will suffer and this will of course have an impact on GDP growth. But the notion that if something dramatic happens to the United States, we are all dead, I'm sorry, it is just not true. And at long last it is coming to percolate through to the equity markets. So what you are saying is that Wall Street might have a disease, Europe might be catching part of it, but Asia? Doesn't have that disease. For the time being the reactions are very much part unexpected. Equity markets do move when the American equity markets are moving. And yesterday's news was of course very big news by the Congress rejecting it. But it does not mean that Asia stands around and says this is the end of the world. Neither states is going to meltdown and we are going to meltdown. The answer is no we won't. What about the sense that some people are talking about, about a global recession? Surely that should be weighing down heavily on markets, even here in Asia, a lot of export markets. I will give you a very simple example that financial markets in real life are not at all connected. The best economy possibly in the world in terms of GDP growth is China. The worst equity market in Asia is, guess what, China. One has to disconnect between the two things. Not that the financials will not affect the reals, but to move from what is happening to the United States to an equivalent of a recession in Asia is a huge jump and this is just not going to happen. Are you saying it doesn't matter if Congress comes up with a dialogue? It matters a great deal. Because that affects the equity markets. But to jump from the equity markets to the real markets is a big jump. I am not saying that what happens in the United States does not matter. But it does not matter as much as people think it does. And we are beginning to see the results of that now. Would you suggest then that there are buying opportunities in Asia? Most definitely I am very happy with the Asian banking system. But to move from that to an expectational point of view whereby we think that everything is perfectly alright, it is not the same. I am trying to look at the real, the expected and the going forward situation. And more and more I am convinced that the structured form of decoupling not only has taken place, not only is taking place, but it is very much alive and kicking in with us today. How much of this resilience do you think is because the people in Asia have woken up, they have seen the news coming out of Washington and they have said, you know what, I don't believe they have given up on a bailout. I think they will sort this out. Sure, they are bashing heads together, but they will work this out. And they are pricing in the price. So, there is a possibility a bailout is still on. Well, that is definitely the case because I agree with that. I don't think that is the Congress said, well, we are not going to bail you out because the Fed, very naughtily, has extended its processes, has extended the amount of assets they are willing to refinance and therefore they are injecting liquidity in the market. So, to some extent the Asian markets are taking this into account and also to some extent there must be a degree of weariness, okay, that we get up every morning and we have to worry continuously with what happens in the United States whereas a great number of things are happening in the United States and a lot of things are happening in Asia that are equally important. The last three months, the key policy consideration in Asia was not the United States, it was inflation. Okay, that has fallen off the cracks right now.
Europe after the plunge
CNN
Transcript
I'm Matthew Chance in Moscow. Stung by the rejection of the US financial rescue plan, Russian stocks have been plunged into a new round of volatility amid concerns of a global economic downturn. Remember, this Russian economic miracle has been fuelled by high commodity prices, particularly of oil. In a downturn, demand for commodities could drop. Oil has already lost 35% of its value since July. And if that continues, the impact on this country could be devastating. I'm Jim Bitterman-Parris, where the street markets may not be showing signs of economic downturn, but the stock market certainly has. And while state television was running stories about the security of accounts in French banks and insurance companies, President Sarkozy is meeting with executives of both just to make sure. And there was even an impact out on the catwalks during the normally formal election. The French Fashion Week. Maverick designer Vivienne Westwood put out a note to her customers saying that in these hard times, one should still dress up and that do-it-yourself fashion and wearing worn-out clothes could just become the style.
Italian markets skeptic
CNN
Transcript
I'm Alessio Vinci in front of the Italian Ministry of the Economy, and this is where, for the third time in two weeks, top Italian financial officials met to discuss the crisis. Policymakers here are appealing for calm. They're saying there is enough cash in Italian banks to sustain the impact, and they will be able to ride this crisis out. If people think that governments will give in to fears, they are wrong, said the Italian head of the central bank. Adding that the response of central banks and governments throughout Europe has been wide-ranging and strong. However, Italian markets are reacting with skepticism. Shares of all major Italian banks are down significantly, with one major Italian bank losing 10 percent in just one day, dropping to its lowest levels in a decade.
Reaction from Wall Street
CNN
Transcript
Wall Street knew there might be trouble ahead if Congress turned down the federal bailout plan, but even experienced traders were surprised by the big tumble. And many still hope that some type of recovery plan could be approved in Washington. They have to pass some sort of bill, or otherwise this market is going to continue to go down because people are going to lose confidence. Soon it's going to get down to the point where people are actually going to take money out of the bank and put it in their mattress. You know, we kid around on everything else, but if these institutions keep failing, you know, you're safe up to $100,000, it's really become a problem. Disgusted traders walked out refusing to answer questions, having to pass through a media gauntlet. It was the biggest Dow decline ever. However, traders who have been here on the street for more than four decades were a little optimistic. The clouds will go away, the sun will come out again, and life will go on, and the markets will adjust and we'll get to levels where there are, the values become so compelling that investors will basically see the, they'll see the positive side of the equation. Another investment counselor said though Americans feel like putting their cash under a pillow right now, it's an opportunity to consider buying stocks. Others caution that as long as uncertainty continues, prepare for a market rollercoaster ride. Richard Roth on Wall Street in New York.
S. American markets react
CNN
Transcript
I'm Harris Whitbeck at the Mexico City Stock Exchange. While Latin Americans have not been as exposed to the U.S. markets as Europe and Asia have, markets tumbled across the region here, too. Many are concerned about less U.S. investment in the region, less liquidity, and, in the case of Mexico, more unemployment, because the Mexican economy is so closely tied to consumer spending across the border. But analysts say some Latin American investors are optimistic and are actually hunting for bargains on Wall Street. I'm Brian Burns in downtown Buenos Aires, Argentina. Just as banks in the U.S. are being blamed for that country's financial crisis, banks here in Argentina took a beating in 2001 when Argentina had its financial meltdown. The peso was devalued and lost two-thirds of its value, wiping out people's savings overnight. They took their anger out on banks like this one with bloody and violent protests. As the crisis drags on in the U.S., that means banks here in Buenos Aires could once again be the site of protests.
Bailout Weekend - NYTimes.com
The New York Times
Transcript
[Music] this was the weekend of bailouts both in Europe and the United States and that has produced a very nervous Market reaction today it looks like Congress will pass the $700 billion bailout bill but even as they're discussing it today we had wacovia taken over by City Bank on very bad terms for wacovia shareholders they're going to get a dollar share now this stock last week plunged but only to $9 a share there's speculation now about who's next and that's not the kind of speculation that helps a whole lot to reassure people even while they're debating this bailout move in Washington in Europe a series of Banks and an insurance company have had to get government Aid in a variety of countries and the reason for that is not America's problems it's not American subprime debt blowing up again a lot of this is homegrown and a lot of it is the international credit crunch then on top of everything else this morning the government reported on personal income and personal spending for August and the numbers are bad there is speculation now that we might have a decline in GDP for the third quarter and of course that number will be reported the first estimate of that number will be reported in the last week of October which is just before the election so that could have an impact there
Buffett Invests in Goldman - NYTimes.com
The New York Times
Transcript
[Music] is Warren Buffett calling a market bottom that's the question this morning as Mr Buffett the Oracle of Omaha the man whose words are watched by everybody on Wall Street spends 5 billion to invest in Goldman Sachs the question is is he catching a falling knife or have we hit the bottom he has spent $5 billion and it's known frankly as what's called expensive money he's giving over $5 billion in return for a 10% dividend in addition to that he has the right to buy an additional $5 billion worth of stock at a massive discount so it's probably going to be a good deal for Warren Buffett but the real question is what does it mean for the rest of the markets he's doing it an interesting time amid the biggest crisis on Wall Street he hasn't bought into any other Financial stock and there have been questions about the future of Morgan Stanley the future of Goldman Sachs and so the question today is given this investment is this really the bottom is there a future for these stocks is there a future for these investment Banks as independent Banks or do they need to merge these are the questions being asked as a $700 billion proposal makes its rounds in Washington to rescue Wall Street so far that bill hasn't instilled the confidence that the markets had hoped for perhaps Warren Buffett's investment in Goldman will
Examining the Financial Crisis - NYTimes.com
The New York Times
Transcript
[Music] in the coming weeks Financial reporters at the New York Times are going to be presenting a series on the financial crisis these stories are going to be seen Through The Eyes of some of the major players at some of the biggest companies involved in the crisis it's a way for us to explain to you how just a few Bad Mortgages could have gotten the American economy into this current state the first story in the series is about AIG American International Group the world's largest Insurance Company this is a story of how a very solid well- capitalized immensely powerful company was taken down by a tiny obscure unit of people working in London called AIG financial products this was a company a a unit that had 400 people or so out of 116,000 at AIG that were taking on some risky Securities and agreeing to ensure them for their clients what this illustrates is how aig's unit took a very small tiny sliver of risk and yet that little risk almost blew up the entire company this is something that it's very hard to understand but I think is really um so crucial to our comprehension of where we are today in the financial crisis and the other stories in the series will also examine how precisely we got into this fix
What Will the Bailout Buy? - NYTimes.com
The New York Times
Transcript
[Music] the Bush Administration is proposing to spend up to $700 billion buying troubled assets that could be anything from Securities backed by home loans and Commercial mortgages and the actual mortgages themselves it could include uh broader things things that we don't really associate with mortgages and it' be buying these things from financial institutions the most important question um at the moment is what price the government will pay for these Securities or these loans this is the fine balance that treasury has to strike the fair prices are very hard to determine at the moment for a lot of these assets because even investors even sophisticated investors with um complex computer models can't figure out what some of these mortgages and mortgage Securities are worth key here is what happens to home prices and the economy if you have home prices fall further that means these mortgage assets will be worth less because if you have a foreclosure for instance when you go back to sell the house in the marketplace you'll you'll recover less and if the economy worsens people lose their jobs people see their wages cut or their hours cut that will mean that more people will will become delinquent and go through the foreclosure process there's a very fluid Dynamic and a lot of um the value of these assets depends upon your assumptions of what's going to happen to the economy we took a look at a mortgage portfolio that was securitized by be Sterns the Investment Bank that that almost failed in March and was acquired by JP Morgan Chase uh this was a portfolio of about 3,000 loans a little bit less than 3,000 loans it was made to borrowers with good credit histories it had all uh about 800 of the loans had already been prepaid or gone through the foreclosure process so we had about 2,100 loans or so that were left um on the surface this Lo this pool looks pretty good but when you look sort of below the surface there were things you should be worried about um nearly 10% of the loans were either in foreclosure or the bank had already taken possession of the property um altogether 23% were delinquent by 60 days or more and or had been in foreclosure um so that sort of suggests wait a minute the losses are actually going to be a lot higher going forward oh and by the way that portfolio has about 36 different bonds that are issued against it so if you're the government which Bond are you going to buy what price are you going to pay for for Bond a versus bond B versus bond C that sort of just highlights the difficulty in valuing these assets
House Defeats $700 Billion Bailout
VOA News
Transcript
On Wall Street, stunned traders watched as the Dow Jones Industrial Index plunged nearly 780 points, the largest single day drop ever. Analyst Art Hogan says many investors assumed that Congress would approve the bailout. Everybody believed we had a pass here and uh to have this not pass, it's just devastating. The massive sell-off followed the US House of Representatives vote against the $700 billion proposal to buy up bad investments from troubled financial firms. Congressional leaders had warned a no vote would throw the US into economic turmoil. President Bush expressed disappointment, but promised to deal with the problem headon. We put forth a plan that was uh big because we got a big problem. I'm going to be talking to my economic adviserss after my meeting here with the president and uh'll be working with members of Congress, leaders of Congress on the way forward. Despite a weekend marathon session aimed at reaching a compromise, congressional leaders wasted no time in assigning blame. House Minority Leader John Boehner accused Democrats of injecting partisan politics at a critical juncture before the vote. We've put everything we had into getting the vote uh to get there today. Uh but uh the speaker had to give a partisan voice that that poisoned uh our conference uh caused a number of members that we thought we could get to go south. More than twothirds of Republicans opposed the bill while the majority of Democrats supported it. House Speaker Nancy Pelosi insists Democrats have more than lived up to their side of the bargain. Action was necessary to stabilize the markets and to protect the taxpayer. Clearly, that message was not has not been received yet by the Republican caucus. Despite the bickering, congressional leaders vow to cooperate on drafting a new plan. But the bill's architect, Treasury Secretary Henry Pollson, says time is running out. We've got much work to do and this is much too important to simply let fail. The rejection of the US bailout plan has heightened fears that the crisis will spread to other parts of the world. European governments have already announced bank bailouts from Germany to Great Britain. Millar Sega, VA News.
Bailout?
CBS
Transcript
times are pretty rough here on wall street so we came down here to find out from people exactly what happened what's wrong with this bailout plan and why didn't it pass nothing's wrong with it nothing it's good for americans it's good for us you think the bailout is a good thing absolutely i mean it's uh a bit of pill to swallow but it's necessary definitely don't support the bailout at all i don't believe that we should be using taxpayers money to bail them out i think it was a bad selling job by the leadership of both parties and including our president there's an election coming up everybody in the house is going to have to stand for re-election in just a few weeks time they're very very aware of that and so they put really the the the views of their of their constituents above the views of the party and the views of the of the administration i still think sometimes politicians still see it as a game they still want cert you know their piece of law somebody in november wants to be able to say hey i did this i did that what do you think they should do what's the solution um i think the first step is for them to step in and buy the mortgage-backed securities like they said will be the first step to clean up the bank's balance sheet make tougher laws about the banks giving credit cards to people who have no jobs we have got to restore the credit facilities in this country your loans are not going to be made you know i'm a social worker and for the longest time we talked about you know these kinds of bailouts the savings alone as you know welfare for the rich and you know now it's just another 700 billion dollars to to people that were irresponsible on wall street in a capitalist world if a company goes out of business they go out of business the stronger companies will survive and the weaker ones will fail how darwin have you it's capitalist natural selection sarah palin would not agree you don't think so i think it's going to get worse before it gets better i think it'll get scarier before it gets better but i think we're almost near bottom that's the good side what we need is some sense that there's going to be a an end to this whole kind of plummet this building across the street really thrives on certainty and right now all we have is panic and a kind of like almost like a no-nothing culture at the moment what's your bailout plan i'm i'm loving it i'm taking advantage of it yeah i lost money the past few days on wachovia and washington mutual but overall it's a buying opportunity of a lifetime so so you think that right now it's a good time to buy because everything's on sale it's like a clearance of stocks everything must go yes exactly exactly you know it's fine i'm just trying to figure out whether or not i'll have my job in a couple weeks we'll say you know it's fun