Iceland's financial crisis spreads
Al Jazeera English
Transcript
Iceland has never defaulted on its sovereign debt and will not words of reassurance from the Icelandic prime minister as the country struggles to cope in the wake of the global economic crisis just 24 hours after he introduced emergency legislation giving the government sweeping new powers over the financial sector Iceland has nationalized its second largest bank the bailout of Lans Banky comes after trading in shares of major Banks was suspended on Monday and the exchange rate of the Icelandic cow was fixed after it lost a quarter of its value against the Euro I think it's very unlikely that the assets owned by L funy for instance in the UK uh will not be able to take care of of this situation but they have enough assets to take care of their liabilities in this respect Lance Banky is the second Icelandic Bank to be taken over to prevent a collapse of the country's banking system last week gliter the country's thirdd largest bank was nationalized and the largest bank thing has been given a loan of $680 million from the country's Central Bank and now Russia has agreed to help the Iceland Central Bank itself giving it a loan of more than5 billion to strengthen its foreign exchange reserves we will be sending people to Moscow uh either today or tomorrow to negotiate with Russia on the terms and conditions and so on Iceland is home to just three 300,000 people and has always enjoyed a standard of living among the highest in the world but the combination of the Global Credit crisis soaring inflation as well as a weak local currency have all been disastrous the measures taken may be extreme but given the heavy investment by Icelandic Banks and companies across Europe a collapse of the Icelandic Financial system could be felt across the continent and even the world Sylvia lenon Al jazer
Inside Story - EU rescue plan - Oct 6 - Part 1
Al Jazeera English
Transcript
individual EU governments rush to Stave off the snowballing credit crisis while leaders of the continent's largest economies fail to offer a rescue package just why are European leaders so divided over a disaster that's facing them all and what are they going to do about it this is inside story hello I'm Nick Clark and welcome to the program it's being felt from Berlin to Sydney the world's financial crisis continues to spiral downwards in Europe this week stock exchanges open to mix reactions to the US rescue package it had been hoped the $700 billion do agreement would boost shares around the world but as it turned out any effect was negligible in Germany the government has been forced to follow several of its EU counterparts and bail out its second biggest mortgage lender before it collapsed hypo real estate is being saved with a68 a half billion dollar deal in one week hypo's share price had fallen by over 44% leaving it floundering the German government Central Bank and private banking have come together to rescue the company Chancellor Angela Merkel has also announced that Germany will give unlimited guarantees for all the Count's private savings accounts while the German move comes after a mini Summit of EU members failed to come to an agreement over how to rescue Europe's economies over the weekend leaders from France Germany Britain Italy and Luxembourg met in Paris in an attempt to thres out a deal they were unable to come to a joint agreement and are to meet again on how to bail out their economies the French President Nicolas sarosi said each government would be left to act individually but that should be in a coordinated manner with the rest of Europe but along with the European commission and Central Bank they have managed to agree some measures these include easing accounting rules and looking into tougher Financial regulations at the same time as the leaders were meeting French Finance giant BNP was brokering a deal to take control of the failing group Forst in both Belgium and Luxembourg this has left investors asking are these private deals The Way Forward well joining us today are our guests in Rome Stefano MOSI author and director general of the association of Italian limited liability companies in London David Buick a partner with the brokerage firm BGC partners and in New York Michael Hudson author and president of the institute for the study of long-term economic econ IC Trends welcome gentlemen I'd like to start with the former head of the Federal Reserve Alan Greenspan who said early on when this crisis All Began H we need to win back the trust of investors otherwise 1929 the Great Depression of course will just look like a picnic that went bad that is to say it could get a whole lot worse uh David Buick in London is that how things look for Europe are things potentially that bad well potentially because there is absolutely no trust at all amongst the banks confidence is shot to rivens and sentiment is very very negative um I find Dr Greenspan's comments somewhat rich I must say since I consider him with many others to being the architect of this situation that we've got at the moment having seen at the end of the century on a falling um structure of interest rates him allowing Banks to lend money indiscriminately and thus making everybody else around the world so incredibly competitive that we're in this sort of mess that we are at the moment but the thing is now I think is to try find a way out of this mess and the way out of this meth is the joint help which currently the central banks are being incredibly constructive over and also I was pleased to see that the FED today is looking to extend the amount of money that it's going to put into the market maybe it's much as $900 billion to go right to the end of the year which is extremely helpful and very very needed but at the same time before we get into the nitty-gritty of that if you don't mind I just want to go across Thro across to Stefano makosi in Rome what do your thoughts about this what's happening in Europe is it is it a correction for Europe or is it a crisis on the verge of collapse well I I wouldn't say we are on the verge of collapse but I think we can say we are moving now to a serious banking crisis um as the previous speaker said there seems to be a complete um collapse of of trust between the banks um and I think part of the problem is the insufficient response that was given over the weekend by the leaders gathered by president sarosi in Paris that's interesting Is It Michael Hudson over in America the big four yes they get together uh in Paris France UK Germany and Italy to have a stab at fixing things but did it surprise you that they didn't even come up with a plan uh along the lines of the American bailout plan no there's no way that such a plan could have worked and there's no way it'll work here uh many of these people claim to be followers of Adam Smith but Adam Smith said that no government has ever repaid his debts and uh today you could say that no private sector has repaid its debts either uh the amount of uh credit has grown Way Way Beyond the ability to pay and there's no way that the debts can be ba bailed out and if you can't pay the debts that means that the saving that are the counterparts of these debts have to go under because the savings are backed by collateral it's worth much less than the savings we have negative equity in the banking system negative equity in Wall Street negative equity in real estate and negative equity in many corporations that have borrowed uh by highin bonds so uh the only way to solve this basically is to write down the debts but instead they're giving more and more money uh to the Savers and uh they're working at the wrong end of the Spectrum meanwhile Mr Hudson the IMF the international monetary fund is calling for Europe to forge a collective response is that the way forward do you think it sounds good in principle but the question is what kind of collective response uh probably the weakest part of Europe are the post Soviet economies and uh these many economies Hungary the Baltic states have been running a chronic uh trade deficit that they've been financing by borrowing foreign currency to fund real estate with so what has financed their trade deficit is a real estate boom now that the real estate bubble is collapsed there's no way that these countries can Finance their structural trade deficits and uh this is this makes the European situation unsolvable it's not even a problem to be solved the problem has a solution what Europe has is a quandry a quandry is a problem with no solution is that how you see it Mr Buick that it's unsolvable no I don't I mean I understand where Mr Hudson's coming from but the fact remains is dealing with the United States is one thing but dealing with five or six major countries who've all got their own personal agenda together with a lot of other smaller countries is impossible and I don't really actually believe that all this nonsense in Paris over the weekend that you could have ever have expected anything a possibly the agreement over what to do about guaranteeing deposits for the time being for a for an greed period of time could conceivably have been delivered but anything else was Insanity it just couldn't happen and wouldn't happen each country has its own problems with its own banking system I agree over the question of uh property at the moment and Germany has got this proly with obviously with hypo real estate in the case of the United Kingdom much of our problem as regards property I think has been cleared up off the street for one of a better expression and if banks can't stand alone in the United Kingdom then I think there should be merges of trying to put them together but a talk of semi nationalization of a bank is just doesn't make any sense to me at all I think our system is quite different from that in the United States I think the thing has grown in the United States that I'd like some clarification from Mr Hudson of having so many Regional Banks which have contributed to the demise via The Fanny May and Freddy Mack situation which really has never given us a clear position of whether people were capable of borrowing money and capable of paying it back in the same bread all right when you talked there of personal agendas Mr MOSI this mini Summit so-called mini Summit full of contradictions on the one hand all saying that Greece and Ireland acted irresponsibly by guaranteeing savings then meeting over Germany does it too it's some U-turn from Angela Merkel isn't it but the the key point I would like to make is that I I completely disagree with both speakers that I've heard um Continental Europe has shown in on several occasions that it is able to find Cooperative solutions to Cooperative problems now the idea that you can avoid nationalization by play the game by playing the game as the last speaker said this is ludicrous the UK too has already nationalized Banks and banks are falling into the arms of the public sector all over Europe so let's stop with the ideological garbage and concentrate on serious matters now the key question is this uh cross large crossborder transnational European Banks highly leveraged cannot be rescued only by national governments there is no way it is nonsense complete nonsense now the one thing that of course you can do is a transnational European operation to meet a transnational European problems uh the way to do it is obvious you have today a l complete lack of trust and The Disappearance of the crossborder money market uh Market what you need to do is a Europe wide strong injection of capital into the large transnational Banks of Europe if the UK doesn't want to participate we can live without it they will handle the problem alone but the key issue is that to handle beot like Deutsche Bank like B IBA if the crisis comes to them you will need the definite a European scheme because no government has enough means and enough credibility to guarantee deposit across many count let's just pass it on very brief idea of a fund makes sense let's pass it on very briefly to Mr Buck I see you noding in agreement there I'm not in some agreement as that the UK really wants no part of this and I think this is absolutely right but in regard to believing that Europe can actually coordinate a one um system in order to accommodate all the banks who've got issues and problems I think it's a wonderful idea in theory but in practice I think it's absolutely impossible to put in all right well let's leave it there just for the moment it's uh time for a short break now and when we come back we'll talk about Rising calls for a new Financial order we'll ask could it prevent a further mess stay with Inside Story
Inside Story - EU rescue plan - Oct 6 - Part 2
Al Jazeera English
Transcript
hello again and welcome back with the financial system on the brink of collapse many across the world say it's time to build a new Financial world based on real business rather than greed and speculation now one of those is the French President Nicolas sarosi this is what he had to say in one of his speeches on the crisis self-regulation to sort out each problem that's over not interventionism that's over the old all powerful Market that it's always right that's over we must throw lessons from the crisis so that the crisis doesn't recur we just came within a whisker of a catastrophe the world came within a whisker of a catastrophe we cannot take the risk of it happening again if we want to reconstruct a reliable Financial system creating Morality In Financial capitalism is a priority well we're still joined by our guests in Rome Stefano Mosi in London David Buck and in New York and Michael Mr Hudson if I could start with you creating Morality In the financial system that will have many people choking on their dinner won't it it sounds like an oxymoron uh and it also sounds as if all three of us are basically in agreement that the banks are broke and if the banks are broke and if they have negative equity I don't see what governments or any anyone else can do to make up the difference between the volume of savings deposits which is high and the debt volume of debt that can be paid which is very low the people can't pay the existing debts the corporations can't real estate can't now the only way of solving a problem like this uh throughout history has been to write down the debts and nobody's talking about and that means writing down the savings because when you cancel a debt one person's debt is another person's savings I don't hear anyone in Europe or in America talking about writing down the savings and taking a loss and for the government to try to make the savings whole is just creating uh money to compensate for negative equity that really can't uh can't work let's just spin it forward a little bit and look to the Future president sarosi talked of um the foundations of future capitalism uh being of the entrepreneur and not the Speculator Mr mcco how what do you think he meant by that precisely well I think some of the tones of this debate uh uh are there to ponder to reassure the public opinion and there is a populist element there um I don't think there is serious discussion in Europe about setting out with another system or finding alternatives to capitalism I think this is just language I wouldn't overestimate it what is serious is the fact that we continue to disagree on what to do and basically the solution that came out of the Paris Summit was in the end everyone on his own but please let's keep each other informed this is not enough and this is why markets are nervous now it may be true that with present prices of assets uh many banks have negative equity fair enough but if the prices are too low because of a confidence crisis and we can restore confidence maybe prices will go higher and some of the problem will go away please keep in mind that European Banks were not the main involved with the kind of uh scrap paper issuance and purchase uh to the extent of uh American Investment Banks so there is a difference here that we should keep in mind which brings us back to the original question though doesn't it is does it then remain possible for Europe all the European countries to agree uh given the different cultures and different uh economic systems that they have within those countries Mr B well well unfortunately I'm not the most objective person in the world when it comes to talking about the European Union and let me apologize before that I mean from what you know from what has been said uh makes a lot of sense that those people part of the European Union because they are committed to that culture should do an awful lot more than just um you know making nice sound bites and uh you know posturing which is what happened in the Elis Palace over the weekend which is no good to band a beast and if there is a way that that can be done and he's absolutely correct that the toxic debt that the European banks have own is nothing like as bad as that in the United States of America and I think it is crystallized and focused in certain areas particularly with the hypo um real estate which is a domestic mortgage lender very similar to a building Society such as the UK's had problems with with two or three of theirs now those I think have been accommodated and as far as I'm personally concerned I I don't know for sure but the banking system such as left in the United Kingdom I would have thought was pretty solid and if it wasn't I would have thought there was plenty of scope and opportunity for mergers to take place whether it's just within the United Kingdom or cross Frontier with other parts of the world were there in abundance to create some very powerful banks in the next two or three years Michael Hudson one aspect of a potential new Financial World Order would be perhaps some analysts are saying the decline of the stock market altogether is that something that you could see well I want to talk about confidence for a moment that the other two people have spoken about the word confidence in America has a a much worse contact than it does in Europe here we say a confidence man a con man is somebody who's trying to cheat you and if you have confidence in the financial system for the last few months you've been losing your money almost every day on the uh business channels here they've talked about every market decline say Layman Brothers it's going down another 10% they call it a buying opportunity another 10% buying opportunity uh the next day it's bankrupt and you've lost your money so uh the confidence is a psychological Factor the reality is uh financial and if you look at the actual numbers there's no way in which uh the numbers of the value of what people can pay how much they earn uh can actually be paid in America between 40 and 60% of many people's income uh go for the mortgage the home ownership uh 40% and another 20% for interest charges that doesn't leave any money at all to buy goods and services so the result is debt deflation people are not buying cars here they're buying even fewer cars in Britain uh so we're finally getting to the uh debt squeeze debt deflation and to have confidence going into a situation where people cannot afford uh to buy very much more is the Surefire way of losing your money quick and it was confidence that produced The Crisis to begin with and what's going to bring back that confidence Mr MOSI well um first let me note that the only savers who have lost money in Europe so far as those who held the Layman paper uh there's been so far no other major loss uh for Savers and Retail investors which is not an irrelevant Point um what to do to restore confidence in my view we have to restore a functioning wholesale market for banks uh basic money market funds for banks and in my view the way to do it is to restore confidence between Banks themselves so today Banks don't trust each other because they know that they are in the main heavily under capitalized and no one is sure about how many losses are still hidden in their balance sheets so the key point is by recapitalizing with a joint operation major banks that were cross border we can perhaps restore confidence between Banks themselves and this scheme is not too complicated it is sufficient for the large Banks to to for the large countries to agree you can have the European Investment Bank for instance issue bonds guaranteed by governments to buy preference shares or warrants in the capital of banks an easy scheme can be done under present rules within six weeks in your country Sylvia biscone has said that we'll work with all major economies to rebuild in the international banking system I'd like to put this point to Mr Buick it really isn't as straightforward as that though is it no I mean I wish it was but I think you know from what I gather from the you know from the L we've got from the United States from a highly intelligent person Mr Hudson defe defeatism unfortunately over here in Europe in the United Kingdom we can't afford that so we have to seek some sort of you know answer and solution to the problem without actually creating Anarchy just to let the banks because of indiscretions uh from politicians and other people to just say well that's it and let them all go to the wall it's just Unthinkable all right let me just put that let just running out time so let me just put that to Mr Hudson you are accused of defeatism what did you say to that I I I think that we call that realism here uh what you're talking about in Europe is for the European governments to bail out the private sector losses we would consider that crooked here and there was an overwhelming uh re uh objection by Americans to the uh political bailout plan voters said they don't want it they don't believe that private money should bail out uh that government money should bail out private losses they think that the gamblers should lose these Banks took a gamble every Banker I knew knew there was going to be a collapse their Hope was to sell it to the Europeans their Hope was to sell it to a sovereign wealth fund and leave some other person holding the bag for bad loans so these guys knew the system didn't work we call that realism they thought they'd have time to sell it to the Europeans and they sold a lot of junk to the Europeans but they couldn't sell all the junk to the Europeans and Arabs and Japanese so everybody was left with enough chunk to create negative equity that's the reality all right Mr Hutton we'll have to leave it there gentlemen we're right out of time Stefan makosi Michael Hudson and David Buick thanks very much indeed for joining us and thank you so much for joining us here on this edition of Inside Story We of course welcome your comments and suggestions please email them to us at insidestory al.net bye for now
Bernanke: More Economic Pain Ahead
Associated Press
Transcript
all told economic activity is likely to be subdued during the remainder of this year and into next year the heightened Financial turmoil that we have experienced of late May well lengthen the period of weak economic performance and further increase the risk to growth to support growth and reduce the downside risks continued efforts to stabilize the financial markets are essential the Federal Reserve will continue to use the tools at its disposal to improve Market functioning and liquidity overall the combination of the incoming data and recent Financial developments suggests that the outlook for economic growth has worsened and that the downside risk to growth have increased at the same time the outlook for inflation has improved somewhat though remains uncertain in light of these developments the Federal Reserve will need to consider whether the current stance of policy remains appropriate
Bush: Americans Will Get Through Economic Crisis
Associated Press
Transcript
there's no doubt that people from all walks of life and all aspects understand that we're having serious times families are uh squeezed by the high price of gasoline and feeling to pinch your food prices and monthly mortgage payments workers are anxious about whether their paychecks will stretch some workers are anxious about whether not they're going to keep their jobs we also know that we're the most dynamic economy in the world that we have been through tough times before and that we're going to come through this time again our entrepreneurial system has delivered unparallel levels of productivity and growth and prosperity during my presidency we have faced tough times after the terrorist attack of 9/11 and we came through strongly and we're going to come through this no question that times are tough but no question America will emerge
Dow Dips More Than 500 on Worries About Financia
Associated Press
Transcript
[Music] feels like it's the 12th round of a heavyweight bout best to be very Nimble in this kind of environment it's the kind of climate where a 500 Point drop is almost normal people on the trading floor don't even know where the markets will turn next I I'm not fearing many more days like that I think we're we're we're kind of at the end of that I think we're we're close to a capitulation we're going to have these big swings and it's going to be going on for quite some time I think markets plunged in the last hour of trading after Bank of America considered one of the nation's healthiest Bank reported a third quarter profit loss of 68% the Dow closed down 58 at 9,447 the standard in poor Dro below the Thousand Mark at 996 its lowest close in 5 years the NASDAQ closed down 108 at 1,754 investors now turn their attention to the troubled foreign markets you know everyone's are on Europe and what's going on over there and people are concerned you know they're a little bit behind the curb as far and the US is a little bit ahead of the curb but you know there's still immense amount of problems out there and although the subprime mortgage crisis started here in the US the Halt and the flow of money is hurting many foreign markets us investors look towards the Federal Reserve which just announced they would buy up short-term unsecured loans which is a start but investors want more perhaps another interest rate cut anything that can help inject confidence into the the credit markets after a wildly volatile day Monday investors are still staying out of the water the volume here on the trading floor is still low it's below that 10,000 level so investors are just waiting and seeing what the Federal Reserve does next in New York Bonnie go the Associated Press
Financial Planner Tells How to Protect Assets
Associated Press
Transcript
i'm deborah brennan tag and i'm a senior financial advisor at brennan financial services on a personal level i think it's very difficult to be a financial advisor these days because you get to know your clients so well and you want the best for them there's not really good answers out there right now there's a lot of we don't know and there are a lot of people that are making guesses about when the recovery is going to happen but really in the end nobody knows when that's going to happen so it makes it much more difficult to manage client portfolios through that so yes the stress level is definitely higher i'm frustrated by a number of things right now yes the media coverage is one of the pieces and part of what we're seeing is that people are giving sweeping generalizations uh as advice and and it doesn't work that way especially in a market that is this severe it really only makes sense to go on a one by one basis and to talk to people about what they need to be doing because what makes sense for one person may not make sense for another person and the unfortunate thing is that people are so concerned right now that they might hear advice from someone on television or on the radio or in print and say well so and so said that's what should be done that's what i should do and it may wind up being a mistake for them we have to be very very conservative right now about how we make our way through this careful about any steps that we make we don't want to make snap decisions about anything and we want to be still long-term in our focus while maintaining the fact that we need to make some short-term decisions that we may not normally make under regular circumstances it is so severe that you know there are certain times that we just have to say it's out of our hands and we can't do everything to protect every portfolio at all times
Money Minute: European Banks, Pensions, Paulson
Associated Press
Transcript
AP money minute central banks around Europe are continuing to push cash at markets in an effort to keep the financial sector flush with ready money European Central Bank said it was offering $50 billion for the second day in a row to banks that have become reluctant to lend to one another the bank of England has also offered $20 billion over the past two days Pension funds have lost as much as two trillion dollar in the past 15 months Peter orag the top Congressional budget analyst says losses are likely to force many workers to hold off on major purchases and delay their retirements and protesters took to Wall Street today to demonstrate against the government's 700 billion bailout plan hey Paulson come over here we want to thank you Hank thank you Paulson thank you one of us I'm Mark hamri with ap money minute
Stocks Fluctuate After Fed Corporate Debt Plan
Associated Press
Transcript
stocks fell in quiet trading early Tuesday but the federal reserve's announcement that it plans to buy massive amounts of commercial paper or corporate debt gave investors some comfort a lot of corporations are having trouble turning over their paper in other words these short-term debts are just for like 30 days or 60 days and after 30 days you have to reissue new paper the market hasn't been accepting it trading remained fractious and the major indices alternated between gains and losses a day after the market suffered another huge drop but despite the government's latest move investors showed some trepidation about the recent Market turmoil I think I think there's still a lot of volatility there I think there's still a lot a lot of emotion in the market but uh uh that it I don't know that it's found its bottom yet I think we'll see a lot more fluctuations still investors are still hoping to see other moves from the FED to boost confidence Australia's Central Bank lowered interest rates by the largest amount since 1992 in a surprise move and that reignited hopes that others including the fed and European Central Bank might follow suit Diane kepley the Associated Press
Wall Street Shows Modest Rebound After Rout
Associated Press
Transcript
[Music] Wall Street may be in for another shaky day this morning the Federal Reserve announced in a radical move that they would be buying up short-term unsecured debts now this would help businesses maintain their day-to-day activities and it's yet another attempt by the federal government to unfreeze those credit markets that's really ailing this economy but it's almost as if that $700 billion bailout plan is a blip on investors radar right now the attention turns to the global markets economists are talking about the threat of a global recession yesterday we saw many of the international markets take a huge hit European Asian markets the Brazilian and Russian markets halted trading all together and some of the Emerging Markets had their worst single day loss in 21 years the Australian Central Bank is cutting interest rates in order to jumpstart their economy and the investors are hoping that the Federal Reserve as well as the European Central Bank will do the same so right now investors are watching the Dow very very carefully to see if the Federal Reserve will come back with some good news to help this economy in New York Bonnie go the Associated Press
Bailout 2: Electric Boogaloo
CBS
Transcript
bailout 2 electric boogaloo on friday the bailout bill passed the house and pushed the markets down way down yesterday the dow dropped 800 points before rebounding and despite the midday turnaround the dow finished the day below 10 000 for the first time in four years but hey at least we're not alone in the past couple days germany ireland greece austria denmark and sweden decided to offer protections for bank deposits even iceland is hurting the country stopped trading on shares of major banks yesterday and today they announced they were nationalizing their second largest bank it's very unlikely that the assets owned by lance monkey for instance in the uk will not be able to take care of this situation it was literally a global sell-off yesterday today some asian markets are rallying after australia's central bank made its biggest rate cut in 16 years on this side of the world we've got the house oversight committee hearing from the prodigal bankers yesterday was the ceo of lehman today is the aig probe which means we'll be hearing about credit default swaps aig holds a lot of them so basically the company promised investors it would insure their bonds think about it a bunch of people invested say a billion bucks in a bond paid two percent a year to aig for protection on that billion and when all of those bonds actually defaulted aig couldn't pony up in other news the fed announced today that they would buy up massive amounts of short-term business loans this means the fed is putting money directly into the market by buying commercial paper these are basically loans that last anywhere from one night to a week you know short term and guess where that money's coming from why the treasury department of course so the bailout isn't working fast enough we'll solve it with taxpayer dollars they don't need it since the bailout bill passed credit has been getting more expensive that's why the fed had to jump into the commercial paper market the bill allowed the government to buy up securities at more than their current market value but if credit skyrockets we're going to need a bigger bailout bush says the rescue may take some time but clearly we don't have time so the fed tries to keep the bailout bill relevant bank of america agrees to fix mortgages to avoid a lawsuit the government conducts greediness trials and bernanke gives a speech americans lost 159 000 jobs last month the world is full of debt that can never be paid by individuals by businesses by countries this is officially a global crisis maybe we should start working on a global answer
Fear Runs The World Markets
CBS
Transcript
[Music] Good morning from Wall Street. Reeling from the steepest drop yet in the stock market roller coaster ride, which is proving to be a bumpy one across the globe. I'm Maggie Rodriguez back on the floor of the New York Stock Exchange for a second consecutive Tuesday reporting on yet another Monday meltdown. At one point here yesterday, the Dow was down 800 points before a late day rally. But even that comeback was not enough to keep it above 10,000. This morning we will have full analysis of what's happening here and around the world from my vantage point as will Julie and Harry from theirs. Good morning guys. Good morning. Yeah, morning Maggie. Uh we're on the campus of Belmont University. Morning everybody. Which of course is where the big debate will happen tonight in a town hall format. Who does that does that pose an advantage for one candidate or the other? So much at stake. We'll talk about that and a lot more too in just a little bit. Julie and we are conducting our own town hall meeting on the economic crisis. We'll take questions on some of the most important issues facing many American families. In fact, our financial adviser, Ray Martin, will help answer those questions. So, go ahead and email him if you'd like. Go to our website earlyhow.cbsnews.com and click on ray martin or just email us at the early showc.com. Maggie. But first, Julie, there is no question this financial crisis is global. We want to show you what happened overnight. European stocks were lower this morning as European leaders struggled to come up with a unified response to this financial crisis. In Australia, the central bank announced an unexpectedly deep interest rate cut. The key rate there was cut by a full percentage point, an effort to ease the worldwide credit crunch. That sent stocks in Australia and in most of Asia higher. But in Japan, the NIK index still closed down 3% to its lowest level in almost 5 years. In the meantime, here on Wall Street, we have been watching the futures index this morning. I'm learning how to read this now and it is up ever so slightly. The hope is that this morning the opening will be higher after yesterday. Our business correspondent Anthony Mason picks it up from here with a look. Good morning. Good morning, Maggie. These markets really have been running on fear. That's why you've had these sudden and massive mood swings. The Dow down 800 points yesterday, then rallying up 400 points in the last half hour. Wall Street is finding something new to worry about virtually every day. Yesterday, it was the credit crisis spreading to foreign banks that sent stocks into a tail spin. Wall Street whipsawed through another frantic trading day as investors looked for a break in the clouds of the financial crisis. I think we're on the back side of the storm right now and you know that can be just as vicious as the front side of the storm. A year ago this month, the Dow hit its all-time high at more than 14,000. It's now fallen nearly 30% since then. To head the new office of financial stability. The Treasury appointed 35-year-old Neil Kashkari Monday. He'll spearhead the new $700 billion rescue effort, but it's going to take a while. President Bush repeated that again. And it's going to take a while. And again, Monday, it's going to take a while to restore confidence in the financial system. Americans seem to understand. 55% in a new CBS News poll say the economy is in very bad shape, the highest number ever recorded in the poll, and three out of four see the economy getting worse. And many economists agree with them, forecasting a deepening recession next year, brought on in large part by the credit crunch. One more thing for Wall Street to worry about. Maggie, thank you very much. I'm joined now by someone in the know to talk more about this. Liz Clayman is host of Countdown to the Closing Bell on the Fox Business Network. We also have Julia Coronado who's an economist with Barclay's Capital. And I say good morning and thank you to both of you ladies. Good morning. This you heard Anony's piece. Both of you heard Anony's piece. This is about confidence. 89% of Americans now no longer have confidence, right, Liz? That's true. And I think that it's just dismal out there. As far as emotions are concerned, people get very emotional about their money. That's understandable. They've worked very hard for it. They see the stock market coming down. They see that this bailout package was needed, $700 billion, and it's going to be at least a couple of weeks before that money starts to go to work as the Treasury Secretary had hoped it would. So, people are feeling very bad right now. But Julie, a passage at least of that $700 billion bailout was supposed to ease consumer and investor confidence was supposed to make people feel better. And in fact, we have a graphic illustrating that it's done just the opposite. Since it was signed into law, the Dow has lost 527 points. What do you think, Julia, needs to be done in addition to that bailout? Clearly, it's not enough. No, I I agree. I don't think it is enough. And I think right now the both the Federal Reserve and the Treasury are hard at work thinking through what what else needs to be done and I think we're probably going to see a number of actions taken in the coming days and weeks to address areas of the market that are really seized up and really pose an imminent threat to the economy. Liz, what is your biggest worry if something isn't done? Well, I look at unemployment. Our unemployment rate is already around 6.1% and people get very upset when they start to see their jobs slipping away and that's when you start to see the domino effect when people lose the money that they have from their income and next thing you know they don't have enough money to buy things that is so-called discretionary income type of purchases whether that be a purse or a flat screen TV or a second car and then you start to see companies not getting their wares purchased they have to lay off people and you start to see the unemployment rate tick up and then you've got a serious problem. We just had one of the Federal Reserve officers, Jeffrey Lacker, saying that he thinks we're in a recession now. That's not news to a lot of Americans who have felt that, but it just is a matter of a protracted slowdown that we can expect to see for a while now. Julia, not only are we now hearing the R word from more and more people, I hear people tossing around depression. Do you think that the warning flags are up? Well, I think we're in a very serious situation. That's clear. But the difference between now and then is that we have the government institutions hard at work aggressively trying to do things to address the crisis. Back in the depression, part of the problem was that the government stood back and said, "Let the free markets work." So I think it's very different and we have to believe that when the Treasury, US Treasury and the Federal Reserve and central banks around the world are throwing their weight behind this that it will have some effect. I don't think it's going to be today. I don't think it's going to be next week, but ultimately I think they will be effective in stabilizing things. Let's hope Julia Liz ended on a comfortable note here. It's, you know, that's the thing. We need to understand we've made it through times like this before. People are still going to go out and buy their kids their Halloween costumes and Christmas and Hanukkah presents. They might not buy them in the volume that we've seen in the past, but we'll get through this. We have in the past and we will again. Thank you, Liz Clammy and Julia Julia Coronado. Thank you both of you. My pleasure.
Financial News Raises Stress
CBS
Transcript
This morning in Healthw Watch, coping with stress. A new survey by the American Psychological Association finds that eight out of 10 Americans say they feel stress because of the economy. That's up from 66% in April. And women report feeling more stress about the economy than men. Joining us is Katherine Nordall, executive director of the APA. Good morning. Good morning. Why are more women stressed out about the economy than men? Well, I think women tend to be more open and honest about the kinds of things that they experience. So, I think a lot of the men are really stressed as well, but I think maybe they just don't talk about it quite as much as women. Well, men do obviously stress out about it. We have a man and a woman in Nashville standing by with our Harry Smith who are going to express how they're feeling right now. Harry. Yeah, thanks very much, Julie. With with Steve Surles and Wanita Lane, both small business owners. What's the biggest stress you're feeling right now? Well, the biggest stress that I have right now is the problem with employees and what to do about those and how to plan for them. How to plan for them because their business gets worse. Exactly. Yeah. All right. How about you? Well, I'm also a small business owner and I'm also a single mom. So, trying to balance everything that I have to do with work and home and with every day there's something new, you know, in the news about horrible horrible things happening in the economy. I mean, you wake up every morning at something new. So, wow. They you can you it's palpable when you're out on Main Street. You can feel the stress, Julie. Yeah, absolutely. Katherine, what do you recommend to Steve and Juanita? You know, Steve's worried about what does he do with his employees during this tough times? You know, Juanita's concerned about that too as well as she's been she's a single mom. She's got to worry about her own. Yeah, I think these are very tough times for employers with small companies or even with larger companies. It's very important that they be able to re reassure their employees uh just about how the company is doing and that their jobs are going to be secure. Single moms have a particularly hard time with this. You know, not only do they have the work life balance that they have to deal with, they have all of the responsibilities at home and unfortunately only have one income in the family to help them with all of that. So, it's particularly tough on single parents. Katherine Nordal, Steve Juanita, Harry, thank you. We'll be right back. This is the Early Show on CBS. [Music]
Small Businesses In Crisis
CBS
Transcript
continues over kitchen tables and water. It's 5:30 in the morning and neither Janet nor Chris Hildrid slept much overnight. The coffee is ready. Did you get some? This is the day they have to face a hard reality of the stumbling economy. It's going to be a matter of making payroll anyways, Janet. That's what's going to be in the end. Their hardwood flooring business is running out of money. This is just the first step in survival. The real struggle of what we're going to have to face. Juan Cordova. Their struggle this morning is drawing up a list of workers to lay off. I think he would survive. He would land on his feet out there more than and almost feel like that's a reason to pick him. Some of the men have worked for tree lovers floors for decades. Chris says they're all among the best hardwood floor installers in San Francisco, but at least a dozen of them have to go. Okay, let's go. So heading to the office this morning, Chris and Janet are facing a task becoming all too common for small business owners across the country. Telling loyal workers there isn't work anymore. Frankly, the phone is still not ringing. We have about a third as much work as we had a last year at this time. Now they find out who will not be getting a paycheck any longer. I've made a list of the guys to lay off. I'm going to speak to you individually. It's the hardest list he ever made. Those people are going to go home today and tell their their wives and their kids they were laid off. And uh I feel sick about it. Chris and Janet feel like the financial system has failed them, too. They had a line of credit set up to help them get through slow times without laying anybody off. We're really struggling to make ends meet. So, the minute we can't pay payroll is when that's when we'll need that to use that line of credit. But in this credit crunch, their credit lines disappear. I had a home equity line of credit, um, $250,000 with Indie Mac that got frozen. I had a $30,000 business line of credit that got taken away because I haven't used it. So, they're struggling to keep cash flowing through the business while they wait for money owed to them to come in. We're taking a pay cut. We're looking at using Christopher's life insurance policy at this point if we need the annuity. Yeah. To to make ends meet. It seems to have become a destructive circle. Money is tight, so people aren't spending. Workers get laid off. Now they can't spend. Jose Rodriguez, 20 years old, is one of the workers laid off. He'd been on the job just over a year. You've been like slow for a while. You're just really getting started. Yeah, I have a baby I got to take care of. One more worker with no paycheck. One more small business trying to survive. One more boss fearing the worst isn't over. John Blackstone, CBS News, San Francisco.
The Economic Crisis and the Candidates - NYTimes.com
The New York Times
Transcript
I'm John Harwood with the New York Times and CNBC leaders in Congress believe they're now on track to amass the support they need to pass the $700 billion package designed to bail out Wall Street and ease the credit crunch but they believe that on Monday too so they're taking a more cautious approach to Counting votes three developments have improved the odds this time around the first is the large drop in the stock market that occurred after the unexpected failure of the initial house vote on Monday that made it easier for lawmakers to explain to unhappy constituents many of whom watch the value of their savings fall the consequences of failing to act the second is that presidential candidates John McCain and Barack Obama both of whom spoke by phone with President Bush made a more concerted effort to explain how the crisis on Wall Street could hurt everyone else those efforts combined with the stock market drop may have slightly cooled some of the opposition from the left and right and the third is that House and Senate leaders in both parties working in concert have adjusted the initial house package in ways they believe might attract a few more votes one addition backed by both McCain and Obama would increase the amount of Bank deposits insured by the FDIC from $100,000 to $250,000 Democrats believe that may attract more votes from high income States like California where 15 house Democrats voted no on Monday another is adding a series of tax cut Provisions including extension of a business credit for research and development and protection for middleclass families from the Alternative Minimum Tax that have already passed the Senate but not the house those tax cuts May attract more support from House Republicans who've held out so far it's no sure bet some conservative house Democrats have resisted those tax cut provisions on the grounds they'd increased the deficit but both parties now have clear political incentives to get the bill passed John McCain has dropped in the poll since the financial crisis became the dominant story of the campaign and badly wants to move on to other topics and Barack Obama whose campaign is feeling increasingly confident that he's on track to win knows that further economic Fallout can only complicate the ambitious agenda he wants to pursue as president I'm John Harwood Chief Washington correspondent for CNBC
Weathering the Financial Crisis - NYTimes.com
The New York Times
Transcript
what you did you're setting yourself up you know for a great opportunity as long as you're in the game you just got to be in the defensive mode don't try to be a hero and and have your portfolio accordingly I'm Michael Sawyer I'm with the city family office here I'm a financial adviser in the private Wealth Management Group it's pretty stressful um people are feeling the stress um you know you try to do the best you can I mean it's amazing I've become been doing this for almost 30 years very similar to ' 87 very IL to O2 it's nervous time and you know you just got to try to uh have have a strategy that you stay with um and and you try to basically hold the client's hands because it's it's easier to panic and and and the more you hear something that will reinforce your negative feeling the more nervous you would get so you kind of got to step back a little bit you know go outside uh and see that the world isn't coming to an end and and and and see that people are doing if anybody tells you they know what's going to happen you know you run as fast as you can the clients want to be called that's what we do they're nervous they don't know I mean um I mean you have so much volatility in the market you have the market down 777 points on Monday of 500 on Tuesday majority of our clients Do not sit and watch CNBC they're doing other things so I think it was two weeks ago if you went on vacation that Friday right and came back the following Monday you'd have seen the market was unchanged on the week in those five days there I think were three or four days where the market went up or down three or 400 points so if you if you focus on the dayto day you're going to be you're going to get wrapped up in it I mean Warren Buffett's not a dummy I mean he's looking at values five six years from now so if you're in for the long haul you know you're coming in arguably in the next couple years there some significant returns Mike Sawyer Hey Howard how are you good I just thought I'd kind of give you an update what's going on it still continues to be uh um interesting times if you're not comfortable in this environment go to cash and that's fine and so you know we've had a couple people do that but the majority don't and there could be a time when they do but so far no because like I said earlier you don't know so that's uh that's kind of how we talk talk him through it or talk them off the ledge so to speak but but this is without doubt probably the worst and as I tell these as you see our team is pretty young I said you know Mark these days down you're in you're you're you're in the history books here about uh about uh what's going on and how it affects the
On Wall Street, Dow Jones Average Sinks Below 10-Thousand
VOA News
Transcript
despite hopes that the government bailout plan would prevent another financial meltdown world stock market indexes fell sharply around the globe analyst ray carbone of paramount options says there is growing fear that credit problems in the u.s are spreading well it stems from the financial crisis that started in the u.s and now has worked its way over to the euro zone and it probably working its way over to the emerging market of china india and the middle east on wall street nervous investors sent the dow jones industrial average below 10 000 points for the first time in four years speaking in texas monday president bush asked for patience to allow the rescue plan to work it's going to take a while to restore confidence in the financial system but one thing people can be certain of is that the bill i signed is a big step toward solving this problem on capitol hill lawmakers were trying to get to the root of the problem by grilling the former ceo of lehman brothers once the fourth largest u.s investment bank some say the panic set off by the firm's collapse in september prompted the bush administration to come up with a 700 billion dollar rescue plan which was approved last week congressman henry waxman who chairs the house oversight committee scolded richard fuld for steering millions of dollars to departing executives even as his company pleaded for a federal rescue fold has reportedly earned 480 million dollars in compensation since 2000. it seems that the system worked for you but it didn't seem to work for the rest of the country and the taxpayers who now have to pay up to 700 billion dollars to bail out our economy full took responsibility for the company's failure but defended his actions in the weeks leading up to its collapse based on the information that we had at the time i believed that these decisions and actions were both prudent and appropriate none of us ever gets the opportunity to turn back the clock but with the benefit of hindsight would i have done things differently yes i would have to what you mean blame sensational media coverage and fearful investors for pushing his company over the brink the government allowed lehman brothers to fail only to bail out insurance giant aig the following day milar sega voa news you
Wall Street Rescue Plan Becomes Law
VOA News
Transcript
stocks open higher on Friday ahead of a make or break vote in the US House of Representatives Republican Congressman David drer and Democratic counterpart Frank palone said lawmakers had little Choice after the financial meltdown that followed the House vote on Monday with each new no vote the Dow lost points and greater Panic spread throughout the trading floor by the end of the day as we all know the Dow dropped 777 points or $1.2 trillion if we don't act today credit markets will freeze and Main Street will suffer families living from paycheck to paycheck will see their credit card limits slash and interest rates increase this is something we simply can't allow to happen despite confidence at the rescue Bill drafted by treasury secretary Henry pson would pass descent was evident as debate began Democratic Congressman Peter defasio this is at its core the same deeply flawed bush Paulson plan borrow $700 billion in the name of the American taxpayer give Paulson unrestrained unprecedented authority to buy anything he deems a troubled asset from anyone at any price on this vote the A's are 263 the names are 171 the motion is adopted in the end house members voted overwhelmingly to allow the US government to buy a billions of dollars in failed Investments President Bush said the measure would help put the US economy back on on track and he promptly signed it into law by coming together on this legislation we have acted boldly to help prevent the crisis on Wall Street from be from becoming a crisis in communities across our country we have shown the world that the United States of America will stabilize our financial markets and maintain a leading role in the global economy although US Stocks Clos lower after the vote standard in P's economy David Weiss said the bailout will ease Market pressures and restore investor confidence we expect the bill to do two things to help the credit markets number one it takes a lot of these Bad Assets off the books which will free up Banks to make some additional loans number two by setting a price for these assets uh it should help the market function but analysts say don't expect immediate results the latest economic readings show unemployment still high over 6% while home prices and consumer spending continue to drop Millar Sega vaa news
Washington DC Suburb Offers Tale of Two Economies
VOA News
Transcript
These are not the best of times in Manasses, Virginia. About 50 kilometers from the US capital, homes sit vacant. Many are in foreclosure and home values are way down. Nor is this the worst of times. There are customers for the tellers at the Synergy One Federal Credit Union. One, financial institutions like this one are not crippled because credit here is provided by a government established bank. President Bill White says he can still take care of his customers. We're still writing mortgage loans, uh consumer loans, credit cards, car loans. It's just that uh we're not having the members come in and borrow. White says most people here are anxious about the gloomy economic forecasts. Huge fear factor. And then I think they're angry too. Some people that I talked to about the bailout. Oh, the other is Christmas club. Customer Ann Adams says she is mad at big bankers and she counsels caution. And here's that one. We just all need to pay attention and focus and stop spending. Good afternoon everybody. At the local Rotary Club where they often serve up optimism, businessmen and women here are edgy. Even though their businesses in this growing suburb are surviving at Junction Travel, Bill and Janet Dennis are picking up tickets to Hawaii. The sort of travel the owner handles here. It's usually the kind of spending people cut back on first. Owner Steve Nelson says his business declined earlier this year, but not as alarm spread over possible financial collapse. Last few weeks, same. I mean, we haven't really noticed a significant difference. Um, we still have we still have people calling, booking new trips. Rich Kimble painstakingly molds neon tubes for new signs, a dispensable expenditure in an economy going bad. Well, those are LEDs for for the owner of Metro Sign and Design, Robert Anderson, says the phones haven't been ringing much with new customers in the last few days. Yet, money hasn't affected all those projects that are still in the pipeline. Even in neighborhoods like this one, dotted by foreclosure, the ground zero, so to speak, of the US financial crisis, some say there are signs of life in the real estate market. The Center for Responsible Lending estimates that a quarter of the loans here have been risky subprime mortgages, double or more than the rest of the capital area. With the price of many homes here cut in half, Don Williams real estate business is picking up. We are selling houses like crazy. Our inventory is going down. Travel agent Steve Nelson also heads the local chamber of commerce. He says the economy is bigger than the credit crisis. Do we go out to the restaurant and have dinner? Do we go out and uh and come into the office every morning? Uh as long as those millions of little transactions happen every single day, the underlying strength of our economy will start to move forward. Again, if this is a tale of two economies, business leaders, and people on the street have one thing in common, nearly all say they fear for the future. Jim Fry, VA News, Manasses, Virginia.
Immigrant Worker Woes Felt Back Home
Associated Press
Transcript
at a Los Angeles hardware store undocumented migrant laborers wait and wait and wait for work but mainly it's uh it's construction type of jobs because uh there's no money to invest in in homes right now Home Improvements I mean uh there's no construction jobs coming in and with economic woes plaguing the US you may continue to see sites like this Jose valiz helps manage a Day Labor and Training Center next door he says these men mostly from Mexico Guatemala and El Salvador they can't get any food some of them have been kicked out of their apartment cuz they can't pay the rent haven't been able to stay in the streets or shelter so yeah they're frustrated what's uh been going on on right now and if work isn't here that means they can't send as much money home to their families which they do through wire transfers 3 months ago they sent too much money 2,000 3,000 now it's too slowly they send only only $50 $100 is slowly the interamerican development bank which tracks remittance payments says the river of money sent from the US that was growing by double- digigit figures in the last 8 years is now drying up migrant workers sent home 67.5 billion doar to Latin America and the Caribbean but adjusted for inflation the idb says that's almost 2% less than last year the bank of Mexico says Mexicans living in the US sent home 12% less money in August the largest drop on record since the bank started tracking remittances 12 years ago well first of all it's a major source of foreign Capital to a Latin American countries in Mexico for example only the oil revenues exceed remittance is sent back by the immigrants Harry pachon of the Thomas Rivera policy Institute a Latino issues Think Tank says our economic flu is spreading if the remittances flow diminishes in a way the remittances are l larger than US foreign aid to either Mexico or to any of the Central American countries and that means suffering abroad John moan the Associated Press Los Angeles
Obama, McCain Trade Jabs on Economy, Open Debate
Associated Press
Transcript
one of the real uh catalysts really the match that Lit this fire was Fanny May and Freddy Mack I'll bet you you may never even have heard of them before this crisis but you know they're the ones that with the encouragement of Senator Obama and his cronies and his friends in Washington that went out and made all these risky loans gave them to people that couldn't never afford to pay back and you know there were some of us that stood up two years ago and said we've got to enact legislation to fix this we've got to stop this greed in excess meanwhile the Democrats in in the Senate and some and some members of Congress defended what what Fanny and Freddy were doing they they resisted any change meanwhile they were getting all kinds of money and campaign contributions Senator Obama was the second highest recipient of Fanny May and Freddy Mack money in history in history but look you're not interested in hearing politicians pointing fingers what you're interested in is trying to figure out how is this going to impact you this is not the end of the process this is the beginning of the process and that's why it's going to be so important for us to work with homeowners to make sure that they can stay in their homes the secretary already has the power to do that in the rescue package but it hasn't been exercised yet and the next president has to make sure that the next treasury secretary is thinking about how to strengthen you as a home buyer you as a homeowner and not simply think about bailing out banks on Wall Street
Town Hall Debate - Economic Conditions: What is the faste...
C-SPAN
Transcript
with the economy on the downturn and retired and older citizens and workers losing their incomes what's the fastest most positive solution to bail these people out of the economic R well Alan thank you very much for the question I I want to First obviously thank Belmont University Tom thank you and to all of you who are participating tonight and those of you sent uh email questions in uh I think everybody knows now we are in the worst financial crisis since the Great Depression and a lot of you I think are worried about your jobs your pensions your retirement accounts your ability to send your child or your grandchild to college and I believe this is a final verdict on the failed economic policies of the last eight years strongly promoted by President Bush and supported by Senator McCain that essentially said that we should strip away regulations consumer prote let the market run wild and prosperity would rain down on all of us uh it hasn't worked out that way and so now we've got to take some decisive Action Now step one was a rescue package that was passed last week we've got to make sure that works properly and that means strong oversight making sure that investors uh taxpayers are getting their money back and treated as investors it means that we are cracking down on CEOs and making sure that they're not getting uh bonuses or golden parachutes as a consequence of this package and in fact we just found out that AIG a company that got a bailout just a week after they got help went on a $400,000 junet and I tell you what the treasury should demand that money back and those Executives should be fired but that's only step one the middle class need a rescue package and that means tax cuts for the middle class it means help for homeowners so that they can stay in their homes it means that we are helping state local governments uh set up road projects and Bridge projects that keep people in their jobs and then long term we've got to fix our health care System we've got to fix our energy uh system that is putting such an enormous burden on families you need somebody working for you and you've got to have somebody in Washington who's thinking about the middle class and not just those who can afford to hire lobbyists Senator McCain well thank you Tom thank you Belmont University and senat Obama it's good to be with you at a town hall meeting and uh Allan thank you for your question you go to the heart of America's worries tonight Americans are angry they're upset and they're a little fearful it's our job to fix the problem I have a plan to fix this problem and it's got to do with energy Independence we've got to stop sending $700 billion a year to countries that don't want us very like us very much we have to keep Americans taxes low all Americans taxes low let's not raise taxes on anybody today we obviously have to stop the spending spree that's going on in Washington do you know that we've laid A1 trillion debt on these Young Americans who are who are here with us tonight 500 billion of it we owe to China we've got to have a package of reforms and it's got to lead to reform prosperity and peace in the world and I think that this problem has become so severe as you know that we're going to have to do something about home values you know that home values of retirees continues to to decline and people are no longer able to afford their mortgage payments as president of United States Allen I would order the Secretary of the Treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those Homes at the diminished value of those homes and let people make those be able to make those payments and stay in their homes is it expensive yes but we all know my friends until we stabilize home values in America we're never going to start turning around and creating jobs and fixing our economy and we've got to give some trust and confidence back to America I know how to do that my friends and it's my proposal it's not Senate Obama's proposal it's not President Bush's proposal but I know how to get America working again restore our economy and take care of working Americans thank you Senator we have one minute for a discussion here obviously the powers of the