3 Cities Want Piece of Federal Bailout
Associated Press
Transcript
the meeting went very well I met with uh assistant secretary swagel uh delivered the letter uh signed by myself uh mayor Franklin mayor uh Phil Gordon out of Phoenix mayor Franklin from Atlanta of course uh to secretary pulson to talk about uh the significant issues that are affecting uh many many cities all across America big cities small cities medium-sized uh cities access to Capital issues the ability to uh borrow and support infrastructure projects uh but most importantly uh the tremendous impact that the downturn in the financial markets have had on our respective Pension funds uh in big cities all cities all across America and of course the financial uh downturn uh the impact that it's had uh on our revenues and so cities are hurting uh treasury uh we believe is a place for uh to get some relief certainly talking to Congress talking to uh president-elect Obama uh and his team um we just need need uh a presence at the table and a voice uh to be heard and some action to be taken and we need that action now sure and and do you think secretary Paulson was receptive to your message well um I met with his assistant secretary he very clearly understood he got it uh he knows that this is a major Challenge and of course they have many other competing uh interests and voices uh that are out there but he clearly understood what the need is knows that it's a much larger problem of course than just Philadelphia or Atlanta or Phoenix uh and uh we'll take some information back we're going to stay uh in touch and some dialogue try to get uh some of the other uh big cities to share some of their uh pertinent information and get a magnitude of the problem uh assessment uh so that treasury is in a much better position to try to help all of us
Retail Sales Drop by Largest Amount on Record
Associated Press
Transcript
retail sales plunged by 2.8% last month the largest amount on record the decline was led by a huge drop in Auto purchases but sales of all types of products from furniture to clothing fell as consumers retrenched disappointing earnings reports by JC peny and abocom and Fitch Illustrated the pullback the retailers posted third quarter profit declines of 52 and 46% respectively sign here please the Commerce Department says the October drop surpasses the old Mark of 2.65% that was posted in November 2001 in the wake of the terrorist attacks as the economy continues to struggle Federal Reserve chairman Ben Bernan has pledged to work closely with other central banks to fix the ongoing problems he's left open the door to a fresh interest rate cut Rita Foley the Associated Press
Treasury Official: Money Flow Takes Time
Associated Press
Transcript
the legislation that we asked for we asked for it to try to stabilize and prevent a complete Financial collapse of our financial system and every that was not to help Wall Street that was to help every American please sir please no no no let me tell you something I understand that that's why I voted for it yes sir but let me tell you when we gave them money when we give the gave the banks money money they still weren't loaning any money well let's talk about that because we are passionate about getting the banks to loan money in our community to help our small businesses and to help our homeowners first of all we allocated $250 billion for banks of all sizes across the country and just about half the money is out the door today I think we're going to approve another 20 Banks today large and small across the country potentially thousands of banks are applying and it's going to take a few months to process the thousands of transactions to get the money out the door so we're working as fast as we can we're working around the clock to process all these to get the money in our community bank first of all number two our banks are still we're still at a period of very low confidence in the system it's it's gotten better in the last few weeks but we have a long way to go and until and as we see confidence begin to be restored in our system we're going to see our banks feeling more confident in themselves and more willing to extend credit and our businesses and our consumers more willing to take on their own loans so it unfortunately it's not going to happen overnight but we're working very hard to get credit in our communities and I would say one other comment respectfully this legislation was focused on stabilizing the system for everybody for every American but it is different than a plan to it's not a stimulus it's not an economic growth plan it is an economic stabilization plan to stabilize the financial system and so I just want to respectfully set expectations that we are trying to use these resources to stabilize the system for every American but we also have real economic challenges that we all need to work through and this by itself is not going to solve all of our economic challenges I got that
Wall Street Ends Turbulent Week Sharply Lower
Associated Press
Transcript
w stre has ended a turbulent we with another as of volatility Market gated between plunging recovering and then plunging again as investors absorbed another wave of downbeat economic News this time unsettling comments from federal reserve chairman Ben Bern and the worst monthly Retail sales numbers on record Retail sales were down we knew they were going to Be Down they down 2.8% they look for 2% 2.8 is that bad but just go to show you that the economy is worsening and it looks like it's going to get worse As we go further disappointing profit outlooks from retailers aber crom and Fitch and JC Penny as well as job cuts from Sun microsystems added to the unease but some retrenchment was to be expected after thursday's 552 Point advance I think you're seeing a lot of hesitation a lot of trepidation and people that want to trade because they don't know we saw the market Yesterday Up 5 the Jones industrials the 338 points at 897 The standard 500 index fell 38,873 Nas dropped 80 to Settle at 1517 uncertainty is sure To Continue in the coming weeks especially with World Leaders Gathering in washing take new glob reg sy h
Anger At Bailout Hearing
CBS
Transcript
I don't want these companies coming to the Congress with the handout thinking that they can take the money do whatever they want to do and then you know have their little parties have a good time get their manicures pedicures massages pay sixteen hundred dollars a room and then come dancing back to us and say give me more when the American people's tax dollars are being wasted it is very upsetting my interpretation of mr. Koo Shari's testimony and the remarks by secretary Paulson on Wednesday demonstrate to me that the administration is ignoring congressional intent and reversing course of their original request I don't know whether to call this fire ready aim or something more pejorative our system is stronger and more stable than it was just a few weeks ago although a lot has been accomplished we have many challenges ahead of us we will focus on the goals outlined by secretary paulson and develop the right strategies to meet those objectives we had spent all 700 billion dollars on loans that be around 3 million loans there are 55 million mortgages in America 25 other million Americans own their homes outright so they're 80 million homeowners in America we could benefit 3 million directly by buying all their loans or we could benefit every American by not allowing the financial system to collapse
Sen. Dodd Wants Answers
CBS
Transcript
members of Congress are growing increasingly exasperated with major banks that have received billions of dollars in federal bailout programs what they want the banks to do is increase lending thereby funneling those billions into the economy joining us from Capitol Hill Senator Chris DOD chairman of the Senate Banking Committee who had some tough words for some of the bankers yesterday good morning Senator good morning Harry you think the guy sitting in the room with you yesterday got the message well I I'd like to tell you they did but I doubt it uh if if if the last two years is any experience at all I just don't think they seem to understand that when you receive it isn't just 700 billion if you C tally up all of the guarantees and other assistance that's been provided over the last number of months one way or the other it gets close to 5 trillion in support in fact as one witness pointed out yesterday but for that kind of support and assistance many of those Banks wouldn't even been at the table yesterday they would have been gone by now and the question everyone asks I'm asking and others are Where is the commensurate respons ibility to mitigate foreclosure to get money out the door to lenders to understand you don't give bonuses or necessarily dividends to shareholders that uh with the major job here is to get credit moving get credit moving Only One Bank yesterday said they even had a committee established to see if they couldn't seek out creditworthy borrowers to get money out to to start credit flowing so there is a more than a level of exasperation is there any is there would would you be able to resend this would you be able to say you know what you guys don't want to play ball we're going to we're going to we're going to uh kite the check we're just going to we're just going to cancel it well be careful what you wish for in some cases obviously we need these financial institutions to allow the economy to once again grow and the the the economic circulatory system to work obviously but there are other steps that can be taken we drafted that bill the $700 billion bill in September in 13 days and obviously I think we did as good a job as you could do under that time constraint given we were 30 days away from the national election but there are other things that can be done without any question and uh I'm tired of the jawboning I started pleading two years ago then sort of begging them to do things then jawboning on it but obviously we're running out of patience on that Senator I'm just looking at yesterday's foreclosure numbers more than a quarter of a million new houses in foreclosure we've got uh up 25% from a year ago in terms of foreclosure numbers 84,000 uh homes reported uh now now vacant brand new house just people just walking away what when does the money get down the food shap well so in in fact even sometimes those numbers Harry can can I think hard to understand put it in these terms 9,128 foreclosures per day per day now that's every single day close to 10,000 families are adversely affected by this and that is the root cause of our financial difficulties the Foreclosure problem if you can put a tourniquet on that you really do begin to get to the bottom of this and reverse this cycle what needs to be done are two things one the Federal Deposit Insurance Corporation under Sheila Bayer we wrote together the provision in the 7 that $700 billion Bill going to happen yeah well I hope so because the treasury is still reluctant to move on if they should the second is you know Harry if you have a boat a vacation home and a principal residence under bankruptcy law your boat and your vacation home are protected you get to keep those but your principal residence goes assume you're an American like most people are who only have a principal residence under that of course the bankruptcy court can take it why don't we just change that provision of law that would get borrowers and lenders to negotiate those two things I think could do a tremendous amount Senator do thanks so much for your time this morning good luck thank you har [Music]
Why Help AIG?
CBS
Transcript
Mr Cash Cary um in the neighborhood I grew up in in inner city of Baltimore one of the things that you tried to do was make sure that you were not considered a chump and what chump meant was that you didn't want to see want people to see you as just somebody they could get over on and I'm just wondering how you feel about an AIG given $53 Million worth of bonuses out of one hand and accepting 154 billion from hardworking taxpayers you know what AIG did they even will tell you they coming back for some more and they have the nerve the nerve to Grant some $53 Million worth of bonuses there's absolutely something wrong with that picture and so I wonder do you all I mean do does that go through your head or is it just me am I missing something no Congressman you know I share your I saw the same images that you saw of the parties and I share your frustration with that we what about the $3 million worth of bonuses let's let's talk about that because I heard about that this morning I think as you did in the paper and I asked my colleagues to check on it and say what is this because I was outrage when I saw the headlines what was explained to me is that this was money apparently and I'm not defending it but this is money that had already been paid to uh employees that was set aside in a separate fund that they would get if they left AIG and we need AIG to keep running as a company so that it can sell off its assets and pay back the taxpayers and so from what's been explained to me is that this money that had already been paid but set aside to the employees was now released so that the employees did not have an incentive to quit I guarantee you there are people who are lined up saying please quit so I can get a job and that's what the American people are looking at and they are frustrated a lot of times when we have these hearings and I'll close with this and I walk away from the hearing I I often ask myself does the witness I mean does the witness then go to his friends and his employees and say we got through that one that and I am and I'm I'm talking about constituents man I mean I'm talking about people who are hurting I am praying that you will never be the same after this hearing it is too much people are hurting and they are in pain and so I hope that when while we're looking at Wall Street and we're looking at all the folks that's got their hands out and we're looking at all the AIG officials as they go on their little junkets and whatever that you keep in mind as I know you've been doing it but I want you to do it even more that every decision that you make you think about those folks who are losing their jobs and all of these people and I hope that as they come to you begging for the the taxpayers money that you'll remind them of all the people who are suffering and that are in pain and tell them that it cannot business as usual thank you very much Mr thank you for the opportunity to be here today uh just to Mr Cummings uh I don't know how to work any harder than we're already working and I I take your feedback very seriously that's why we're working as hard as we are and we're just going to keep doing and trying to accomplish and meet your expectations thank you very much take the prerogative as chair to say I don't think anyone questions Mr kashari that you're working hard our question is who you're working for
World Markets Swing Up
CBS
Transcript
overseas markets rally this morning after big gains in Wall Street yesterday early show of national correspondent Jeff Glor is live at the new york stock exchange with more Jeff good morning hey Russ good morning to you where a wild days here have kind of become the norm keep in mind that yesterday afternoon at one o'clock the Dow Jones was down 316 points it finished up 553 so in the span of three hours that's a swing of nearly 900 the Dell went for a trampoline ride thursday but don't expect the economy as a whole to bounce back nearly as fast we are faced with the prospect of a global meltdown which is why the President and others are using such strong language in advance of this weekend's twenty nation economic summit in Washington I think this could go on for a while what was a subprime mortgage crisis has become a consumer confidence crisis and a budget crisis for state and local governments a many tentacled economic monster proving tough to slay there's so many problem areas we don't quite know which one to to pay attention to first they're all bad plenty or trying I Thursday lawmakers grilled bank executives on what they're doing or maybe not doing with the money they got from the 700 billion dollar government rescue plan it is still confounding to me why the secretary of the Treasury and others refuse to understand this is the heart of the problem Democrats are urging significant help for the ailing auto industry Republicans are resisting as the bailout plan keeps evolving President Bush urged patience this crisis did not develop overnight and it's not going to be solved overnight President Bush delivered this passionate speech in defense of the free market system yesterday and looking long-term unfortunately that doesn't really help in the short term Russ
Brown: Where's the oversight?
CNN
Transcript
It was less than two months ago that Congress passed a $700 billion bailout package. Do you remember how it went down? Treasury Secretary Hank Paulson went to Capitol Hill. He got down on his knees. He begged House Speaker Nancy Pelosi, warning us all there would be financial Armageddon if he didn't get this cash. He asked for a blank check. And at the time, I criticized him and applauded Congress for saying, no way, there has to be oversight. You must account for the money you spend and answer to us every step of the way. Well, what a joke. Because here we are today. More than a third of the $700 billion has been spent. Paulson tells us yesterday, oh, by the way, he doesn't think the money is being spent the right way. And he's now going to redirect the rest of it. Now, for all I know, Paulson is right. Maybe the original plan was a bad one. And we do need to regroup right now. But where the heck is the oversight? I mean, members of Congress, you delayed the passage of the bailout bill because you wanted checks and balances. You wanted oversight over what Paulson does. Today, the Washington Post reports that the independent oversight jobs that were created as part of this bailout plan, they haven't even been filled. No one is keeping watch on how $700 billion of our tax dollars are being spent right now. The law requires that Congress get a formal report by a certain deadline. The deadline is passed. And big surprise here, there's no report. Here's the quote the Post had from the Treasury Department's inspector general. It is a mess. I don't think anyone understands right now how we're going to do proper oversight of this thing. He is right. And who is to blame? Both the White House and Congress were supposed to nominate people to these oversight positions and confirm them. Both the White House. Both the White House and Congress have dropped the ball and not done their jobs. And because of that, Hank Paulson, a former Wall Street banker, has a blank check and our money. We should all hope and pray he is doing the right thing because right now he is answering to no one.
How to fix an economic crisis
CNN
Transcript
The world is in economic crisis. So what can you do? Well, hold an international economic summit. That's what President George W. Bush is doing this weekend in Washington, bringing together representatives from the so-called G20, 20 key developed and emerging countries. It wasn't his idea. The Europeans were pushing for it. They're dubbing it Bretton Woods, too. If Bretton Woods sounds familiar, it should. The historic Bretton Woods conference took place in 1944 at a hotel in the woods of New Hampshire. Representatives from 44 countries restructuring the international economic system to avoid another Great Depression by promoting trade and stable exchange rates. Bretton Woods gave birth to two of the world's most famous international institutions, the International Monetary Fund, the IMF, and the World Bank. The headquarters of these two institutions are located right next to each other here in Washington, D.C., just down the street from the White House. Let's begin with the IMF. Its main purpose is to ensure the security of the international monetary system. The IMF has 185 member countries. It monitors economic and financial development developments around the world, especially with an eye to preventing economic crises. It provides temporary financing to countries and technical assistance and training in its areas of expertise. It has 2,500 staff members. About 40 percent of them are economists. Where does the IMF get money to operate and to lend? Each member country pays what's called a quota. The bigger the country's economy, the bigger the quota. The United States has a total of 1,500 members. The United States has a total of 1,500 members. The United States has the largest quota. Now the World Bank. It's not a bank the way we usually think of one. It doesn't have an ATM cash machine. Its focus is on developing countries. The World Bank, also with 185 member countries, has two main development institutions. The first provides low-interest loans and grants to middle-income and poor countries. The second provides the same help to the world's poorest countries. The World Bank has 10,000 staff members here in Washington and abroad, including economists, social scientists and other experts. So the IMF and the World Bank, key tools that world leaders can use to try to fix the global economic crisis. But critics of the IMF claim its policies more often throw a wrench into the economic gears of developing countries. But with this crisis raging, there's no time to waste. The IMF is the only country in the world that has the resources to address the global economic crisis.
Financial Troubles Spread to Europe, Japan
VOA News
Transcript
extraordinary Economic Times bring extraordinary events like sheep grazing at the Eiffel Tower as Farmers demand more financial support from the European Union and we need some confidence in order to carry on Europe like America is facing a financial meltdown Germany the world's third largest economy is in recession the government says falling exports are to blame and a new report predicts that the economies of countries using the Euro will shrink by a half a % next year the oecd's policy studies director says governments need to do more further Cuts Inc Bank interest rates and uh measures to reduce taxes or or or boost government expenditure uh may also help on Saturday leaders from 20 industrialized and emerging economies Gather in Washington for an emergency Financial Summit ahead of the meeting President Bush defended us capitalism but the crisis was not a failure of the free market system and the answer is not to try to reinvent that system saving financial institutions has been the focus of the Bush Administration but for some US senators the answer is rescuing homeowners from foreclosure a real estate report shows that every day in October 9,000 American Homes were facing foreclosure Democratic senator Christopher Dodd heads the Senate housing committee it is still confounding to me why the secret the treasury and others refuse to understand this is the heart of the problem and until we address this this problem is not going to go away President Bush seemed to dispute that same time we must recognize that government intervention is not a cure all for example some blame the crisis on insufficient regulation of the American Mortgage Market many European countries had much more extensive regulations and still exp erience problems almost identical to our own President Bush hosts world leaders at a White House dinner on Friday formal discussions begin on Saturday here at the National Building Museum the country's attending account for nearly 90% of the world's economy and 2third of its population Carolyn purui VA news
Congress Questions Bailout
CBS
Transcript
do you solemnly swear it for more than two hours Congress fired questions at Neel Kashkari the man in charge of the bailout questions like why are taxpayer billions buying stock in big successful banks instead of helping consumers with mortgages and loans when did you first hear that that money was not going to be spent that way I want to know the time and date because I want to know whether Congress was lied to congressman forgive me on october third we created a team no no does that not answering the question you know we can go ring around the Rosie here but you're here today because Congress is feeling that you played a bait-and-switch game my people don't believe that you all care about them and I hate to tell you that but they don't and they're angry the legislation that we asked for we asked for it to try to stabilize and prevent a complete financial collapse of our financial system and every that was not to help Wall Street that was to help every American please sir no let me tell you something I understand that that's why I voted for it yes sir but let me tell you when we gave them money what we give they gave the bank's money money they still weren't moaning any money then they asked for cash Cara's reaction to news today that insurance giant aig which is getting a hundred fifty two billion in taxpayer funds is handing out five hundred million dollars in bonuses supposedly to keep executives from jumping ship we need AIG to keep running as a company so that it can sell off its assets and pay back the taxpayers guess what hey a whole lot of people that can replace them because they're p so many people losing their jobs I guarantee you there are people who are lined up saying please quit so I can get a job Congress of course also bears some responsibility on Wednesday we first reported that they have not filled the first slot on their own bailout oversight board finally late today they named three members rusts cheryl atkinson in Washington thanks
Losing The Foreclosure War
CBS
Transcript
with as many as 4 million homeowners facing foreclosure this year and next the chairman of the FDIC warned today we're losing the war and said the government needs to get more aggressive we are behind the curve we are desperately behind the curve and we need a comprehensive National program to deal with this so today Sheila bear unveiled a sweeping FDIC proposal to keep distressed borrowers in their homes by reducing their monthly mortgage payments either by cutting the interest rate on loans or extending the pay payoff terms from 30 to 40 years in exchange the government would pay lenders $1,000 for each loan modification and agree to cover half the loss if the borrower ultimately defaults you'd have at least 1.5 million foreclosures prevented next year which is a it's a big junk that would make a huge stent in what we're seeing right now the cost more than $22 billion bear believes that money is available in the $700 billion bailout package but the treasury Department dis agrees the FDIC proposal at the end of the day is a spending proposal when secretary pulson came to the Congress to ask for the Authority for $700 billion that was $700 billion to make investments I respect secretary Paulson's view but on this one we do have a difference a different view despite treasury's resistance Congressional Democrats are pushing hard for the fdic's Foreclosure bailout but prospects for an auto industry bailout are looking increasingly Bleak Senate leaders say the votes just just aren't there