Fast Draw: Monster market

CBS

Transcript

what to make of the ongoing Financial turmoil and meltdown on the stock market here with their take the Fast Draw team Josh Landis and Mitch [Music] Butler for years people have been making nice Returns on their Investments stocks Rising steadily retirement accounts growing the future bright but the market dropped and became a monster years of profit wiped out in minutes investors Running Scared because they don't want to lose any more money but did you know over the last 30 years there have been six other monsters like the one we're facing right now each one looks a little bit different but they each represent at least a 20% drop in the market wait a minute how scary are these monsters really so let's say you didn't run away like this guy here let's say each time the market drops 20% you invested $5,000 that's right if you did this the last six times a monster appeared today you'd have about 150,00 ,000 even after these recent historic losses that's because over time the market has gained more than it's lost these are scary times but maybe if you don't run away the stock market monster might turn out to be one of your best [Applause] friends it's it's okay I'm I'm all right I'm

Global Financial Rescue

CBS

Transcript

europe's leaders have rarely agreed on so much so fast but after meeting for only four hours they emerged with a plan to tackle the crisis this is not a gift to the banks cautioned france's president nicolas sarkozy but it is a lifeline financed by billions in taxpayers money and modeled on a rescue package designed by the british government today we discussed a plan which is a comprehensive plan that would involve not only more cash in the financial markets but also the recapitalization of our banking system in other words european governments will inject cash into troubled banks by buying shares they'll also make more money available to lend to the banks and finally they'll guarantee bank debt all in all officials hope it's enough to calm the fears that have all but shut down normal banking operations in europe they've lit the fuse we can hear it fizzing the dynamite's in the log jam the question is now i've got to wait and see if the log jam actually does burst as that dynamite goes off it's a big expensive gamble in all of europe's capitals tonight fingers are firmly crossed with no one willing to speculate what the next move will be if it doesn't pay off we'll get some indication tomorrow morning how the markets like this rescue package certainly the political resolve is there but investors are going to be waiting to see exactly how much cash is being made available to back it up russ elizabeth palmer in london thank you

Psychology Of Financial Fears

CBS

Transcript

after the Dow dropped 18% last week and the S&P 500 experienced the biggest onewe drop since 1933 fear is trumping reason and investors find themselves in a crisis of Faith it's Panic it's fear I think we just we don't know what's going to happen the media drum beat doesn't help when people hear this whatever money you may need for the next 5 years please take it out of the stock market right now they call their Brokers and many sell the markets even track fear itself the volatility index or vix is at a record high the vix has been soaring and I think as the credit crunch continues it will continue to sore the mint has had to stop taking orders for gold coins as panicked investors Stampede out of the banks and stocks into the safety of tangible assets history tells us that investors go through an emotional cycle starting with hope as growth begins moving to Greed then to skepticism of high prices then fear as the stock drops panic and finally despondency and a bottom before moving back to Hope but as to whether we've reached that bottom we're we're on our way there but I don't think we're there yet now you start having these Perma bears come out the people who say who are saying repent now the end is near uh and they're talking about uh seeing another 20 30 or 40% decline but stovel points out that 2third of stocks on the New York Stock Exchange are trading at a 52 we low he calls that a sure sign of an emotional Bottom now when everybody is telling you how bad they feel chances are we're at a bottom and it's time to buy but no one knows exactly where the real bottom will be and it could be weeks before we even know we've hit it people who are trying to buy stocks even strong stocks right now are trying to catch a falling knife one thing that's for sure is we're going through a period of uncertainty as investors try to figure out if it's too late to sell or too early to buy the experts we spoke with today agreed on one thing that investors should make their decisions based on facts not feelings so they say take a deep breath before you take your next step Russ okay Pria David here in Manhattan thank you

Save Our Sinking Banks!

CBS

Transcript

it is a stunning turnaround for an Administration with a strong ideological aversion toward government intrusion but with the economic freefall the treasury secretary is set to buy stakes in US Banks we will be able to use taxpayer money more efficiently and more effectively if we also have a broad-based standardized uh program to invest and encourage Equity Investments and institutions with banks unwillingness to lend even to each other causing a debilitating credit crunch the treasury is following the European blueprint to help stabilize the world's financial markets on Capitol Hill word of the pending move brought Swift though cautious approval an injection of capital into the banks is gaining uh Steam and I think that's where the government has to go there has to be great care about uh the issue of nationalizing the banking industry to make sure that what is done doesn't go that far and what is done is uh is temporary much of the focus has been on the government's plan to purchase troubled Financial assets and Loans through the $700 billion rescue plan passed by Congress less than 2 weeks ago but investing in Banks is also an option in the bill and experts say the process is much faster and speed is of the essence you can put the money in quickly you leave the process of working out the loans to the banks and frankly they understand that much better than the government or anyone the government would hire in New York City to do it Economist Peter Maurice says the move is a must we did this during the Depression we are in that kind of Crisis so in my mind we should first of all recognize that the government is not nationalizing the banks and second all that this is a required step to unlock credit markets the government intends to buy non-voting shares in the banks but it's unclear how much of the $700 billion is going to be needed or even if that's going to be enough Russ th as we look at the next few days what happens next well the big Next Step is actually to figure out the details of this plan and it promises to be very very complicated Russ okay th assur us at the White House thank you very much