Bernanke: Meet Needs of Credit-worthy Borrowers
Associated Press
Transcript
the primary objective of these and other actions we have taken is to stabilize credit markets and to improve the access of credit to credit of businesses and households there are some signs that credit markets while still strained are improving inbank short-term funding rates have fallen notably since mid October and we are seeing greater stability in money market mutual funds and in the commercial paper Market interest rates and higher rated bonds issued by corporations and municipalities have fallen somewhat and bond issuance for these entities Rose a bit in recent weeks the ongoing Capital injections under the tarp are continuing to bring stability to the banking system and have reduced some of the pressure on banks to deleverage two critical first steps towards restarting flows of new credit however overall credit conditions are still far from normal with risk spreads remaining very elevated and Banks reporting that they continue to tighten lending standards through October there has been little or no bond issuance by lower rated corporations or securitization of Consumer loans in recent weeks to help address the tightness of credit on November 12th the Federal Banking agencies issued a joint statement on meeting the needs of creditworthy borrowers the statement took note of the recent strong policy actions designed to promote Financial stability and improve Banks access to Capital and funding in light of those actions which have increased the capacity of banks to lend it is imperative that all banking organizations and their Reg Regulators work together to ensure that the needs of creditworthy borrowers are met in a manner consistent with safety and soundness
Big 3 Automakers Beg Congress for $25 Billion
Associated Press
Transcript
Mr chairman I do not agree with those who say we are not doing enough to position GM for Success what exposes us to failure now is not our product lineup is not our business plan is not our employees and their abing willingness to work hard is not our long-term strategy what exposes us to failure now is the global financial crisis which has severely restricted credit availability and reduced industry sales to the lowest per capita level since World War II our industry which represents America's real economy Main Street needs a bridge to span the financial Chasm that is open before us we'll use this bridge and we'll use it effectively to pay for essential operations new vehicles and power trains parts from our suppliers wages and benefits for our workers and suppliers and taxes for state and local governments that help deliver essential services to millions of Americans and in the process we'll continue to reinvent the automobile and to improve the nation's energy security through develop ment of Advanced Technologies like those in the Chevy Vault what would it mean if the domestic industry were allowed to fail you heard Senator staban also I won't repeat other than to say the cost would be catastrophic in jobs lost income lost government tax revenue lost and a huge blow to Consumer and business confidence I believe it's fair to say that such a level of economic Devastation would far exceed the government support that our industry needs to weather this current crisis
Paulson, Bernanke Defend $700 Billion Bailout
Associated Press
Transcript
is recognized for 3 minutes Stout defense of the management of the $700 billion Financial bailout was waged on Capitol Hill Tuesday treasury secretary Henry pson and Federal Reserve chairman Ben banki outlined why the administration abandoned the original strategy of buying distressed assets from financial institutions it is clear that an effective mortgage asset purchase program would require a massive commitment of tarp funds in September before economic conditions worsened 700 billion doar in troubled asset purchases would have had a significant impact but half of that sum in a worse economy simply isn't enough Firepower lawmakers worried that the bailout plan is not transparent enough said the administration was sending confusing signals to taxpayers and Wall Street investors conditions on the ground change and you must be agile and adjust and uh I hope we all understand that uh I have a particular concern concern and that's that we don't appear to have an exit strategy while the recipients of tarp funds have primarily been major financial institutions much of the hearing focused on why distressed homeowners aren't seeing much needed assistance in a timely manner everyone agrees that more needs to be done for homeowners we need to prevent unnecessary foreclosures and we need to modify loans at a much faster Pace foreclosure prevention is essential to helping find a bottom for home prices to stabilize mortgage credit markets and to restoring economic growth we all know there's no single solution or Magic Bullet but as for closures escalate we're clearly falling behind the curve so far the treasury has pledged $290 billion doll to Banks and insurers leaving just $60 billion from the first installment of tarp funds Paulson says he's unlikely to tap the remaining 350 billion before the Bush Administration leaves office on January 20th Diane kepley the Associated Press
Paulson: Preserve Flexibility in Bailout
Associated Press
Transcript
Capital strength enables Banks to take losses as they write down or sell troubled assets stronger capitalization is also essential to increasing lending which although difficult to achieve during times like this is essential to economic recovery we expect Banks to increase their lending over time as a result of these efforts and its confidence is restored this lending won't materialize as fast as any of us would like but it will happen much much faster having used the tarp to stabilize our system as we continued significant work on our mortgage asset purchase plan it became clear just how much damage the crisis had done to our economy third quarter GDP growth showed negative 3 3/10 of a percent the unemployment rate Rose to a level not seen in 15 years home price data showed that home prices in 10 major cities had fallen 18% over the previous year demonstrating that the housing correction had not Abad the slowing of European economies has been even more dramatic we assessed the potential use of remaining T tarp funding against the backdrop of current economic and market conditions it is clear that an effective mortgage asset purchase program would require a massive commitment of of tarp funds in September before economic conditions worsened $700 billion in troubled asset purchases would have had a significant impact but half of that sum in a worse economy simply isn't enough firep plower we have therefore determined that The Prudent course at this time is to conserve the remaining funds available from the tarp providing flexibility for this and the next Administration
Raw Video: Praying for a Financial Solution
Associated Press
Transcript
Oh heavenly father, we come in the name of Jesus just to say thank you. Thank you Lord for allowing us to intercede on behalf of our brothers and our sisters who have already lost their homes. We pray for their welfare. We pray for their safekeeping. We pray that they would find a place to rest and lay down their heads. And we don't just pray for them. We pray for those who are in danger of losing their homes. We pray that you would turn this situation around because Lord, we know that you're able to do exceedingly abundantly above all that we ask or think. Heavenly Father, right now we pray that you would remove the veil between the people of this nation and the people in authority. We pray that you would pierce the veil of Secretary Pollson. We pray that you would pierce the veil of Congress. We pray that you would move upon their hearts today in the name of Jesus. We pray that you would work in a miracle, marvelous way. We pray that you would turn this situation around. Oh, heavenly father, we know that we've done some things that are not pleasing in your sight. You say it in your word. If we confess our sins, we're faithful and just to forgive us of our sins and cleanse us from all unrighteousness. Lord, we confess we've done wrong, but we're here today asking you to fix this situation. Continue to move. Continue to touch hearts. We thank you for what you're about to do. We're claiming the victory in advance. We're looking for a miracle this day. Thank you in Jesus name. Amen.
Wall Street Pulls Off Final-hour Rebound
Associated Press
Transcript
Wall Street pulled off another Rebound with the Dow climbing 280 points in the final hour to finish in positive territory stocks rallied in part because fund managers whose portfolios are tied to the S&P 500 rush back in after the index tested a 2003 low in the end I think the market really was just looking to make sure that we broke back above the 848 closing low that we saw back on October 27th so that we're still in a testing phase with the erratic trading in recent weeks it's been difficult for Traders to gauge the direction of the economy more bad news on that front kept stocks lower for most of the day well the producer price index uh told us that over the past month that uh prices declined but on a core basis excluding food and energy that actually prices uh continue to rise modestly on a year-over-year basis we still were up more than 5% uh so basically the implication is that inflation is still out there we don't have to worry about deflation just yet the uncertainty in the financial system was illustrated by lawmakers on Capitol Hill treasury secretary Henry pson and Federal Reserve chairman Ben banki were grilled about recent changes to the $700 billion Financial bailout the Dow Jones Industrial Average ended the day up 151 points at 8,425 the S&P 500 Index climbed 8 points to 859 and the NASDAQ Composite ended up a point at, 148 83 investors found some encouragement in earnings from hulet Packard the positive results signal HP is weathering the economic crisis that is siphoned off sales at other technology companies Mark hamri the Associated Press
Automakers Argue For Rescue
CBS
Transcript
The Big Three automakers take their case to Capitol Hill today they hope to convince lawmakers that a taxpayer bailout is not only good for business but good for America CBS News correspondent Jim axlerod is in Washington with more Jim good morning good morning Julie this afternoon the CEOs of General Motors Ford and Chrysler will appear in front of the Senate Banking Committee to plead their cases that they need money or could soon be out of business the big three and their allies on Capitol Hill are looking for an immediate cash infusion of $25 billion all it does by waiting is ADD huge risk uh and that is a risk which no C no other country will take this risk with their automo automobile industry Democrats and the White House agree on the amount just not where it should come from Democrats want to carve it from the $700 billion Wall Street bailout package the White House says no because once you start down that road it's a it's a slippery slope uh to other Industries it might say that they need for the Auto industry to completely collapse uh would be a disaster in this kind of environment as for president elect Obama he says any Aid must be accompanied by fundamental changes in how the big three does business as the price of Detroit getting help my hope is is that the discussions are shaped around providing assistance but making sure that that assistance is conditioned on uh Labor Management suppliers lenders all the stakeholders coming together with a plan what does a sustainable US Auto industry look like the Auto industry itself is casting the threat as America's problem not just Detroit's warning of the ripple effect if they fail the big three employ roughly a quar million people GM 133,000 alone suppliers for the car makers employ 2.3 million more in all 50 states letting these companies fail could have Ripple effects and by the way one of them may fail anyway or be sold anyway but you'd have Ripple effects uh that would really extend and deepen the recession the three CEOs aren't done today they'll stick around here in Washington DC to make their cases to the house Financial Services committee tomorrow morning Julie CBS is Jim axod thanks Jim and now here's Maggie joining us now from Dearborn Michigan is Alan malali president and CEO of Ford Motor Company good morning Mr mul hi Maggie I'm sure that you have heard the criticism that the Auto industry has been brought to the brink of collapse because of bad management how much responsibility do you personally accept for the problems at Ford well in my case specifically Maggie uh I just uh arrived here about two years ago most of my career was at the Boeing Company in commercial airplanes and when I had a a chance to um join Ford to help uh accelerate the transformation of Ford I it was an opportunity I just couldn't pass up was it bad management before you well in Bo's case we've got a a tremendous uh plan we've decided to be in every Market segment with cars utilities as well as our industry leading trucks and so we're making great progress on our quality on fuel efficiency and safety and most people believe that uh we absolutely will have the best lineup going forward of vehicles that the consumers really do want so if you get the $25 billion does that mean that you will continue to run the company exactly the same way and if so won't that lead you down the same path well the transformation that we on that we are on is very very significant because not only have we restructured to operate profitably but also we are accelerating the development of the new cars and trucks that people really do want in value especially the Improvement in quality the sustainability the fuel efficiency and also the safety so we are making great progress on that and we'll be using that money to continue to improve these wonderful Vehicles if you're bailed out though does that send the message to other companies that no matter what happens no matter what mistakes they make Uncle Sam will come to the rescue Maggie I don't really think of this as a as a bailout at all and I'd just like to give you a little bit of perspective on that uh first of all uh we're in probably the worst economic situation that uh the industry has ever been in our sales for the industry for the first nine months is down nearly 45% and the actual sales for October are the lowest for the industry in over 25 years so when your sales fall off that much the issue that we have is this crisis in the economy and with the banking and the and the uh the credit so the most important thing that we're doing is uh to set up a a fund or a bridge loan that if needed we can access that to keep our transformation going but we are going to pay it back as part of the plan to continue this transformation of of the industry and Ford in particular so it's not a bailout it's a support and a partnership to continue through these toughest of times Ford CEO Alan malali thank you for your time this morning [Music]
Big 3 Collapse 'Ripple Effect'
CBS
Transcript
just how bad will the ripple effect be if the us auto industry goes under we're joined by vera gibbons financial journalist and early show contributor good morning good morning harry how many jobs are you talking about immediately just in terms of the big three auto makers if they cease to exist tomorrow the big three automakers you're talking a couple hundred thousand jobs there a little bit more than that but you've also got the suppliers to think about here we're talking over six hundred thousand jobs there we're talking people who work at microsoft 3m honeywell michelin these types of companies so you see these are suppliers to the b3 right automakers are big buyers of iron steel aluminum electronics plastic so that has an effect there then you have the dealerships over 740 000 jobs there accounting for about seven percent of a typical state's payroll so there are detrimental effects no matter how you slice it ripple effects throughout the economy not just in manufacturing right but in the service sector as well and beyond so if you extrapolate that then to the communities where these companies are or even a town where there's a dealership when the dealership closes there's so many jobs there there's the restaurant next door it really starts to i mean the dealership goes under the whole community suffers you suffer i suffer businesses suffer charities also suffer these automakers give a lot of money to charities support for research for hospitals so there are detrimental effects throughout that people don't even know about you could be working at a graphic design firm in rochester new york don't even drive an american car sure and this could work its way down right down to you very good example the other thing that we feel especially in the television business is the u.s automaker spent so much money on advertising in the u.s and so much of it goes to television right i mean look at this about five billion dollars a year combined that's what they're spending here they account for a huge portion of this in fact they give the big ad agencies about six percent of total revenue so tv networks newspapers media companies pr firms all would suffer if they were to go under and we haven't even talked about the taxes that wouldn't be going into the system right if these people stopped and the teachers suffer et cetera et cetera all right very good thanks so much
Education Stocks
CBS
Transcript
back to school in october america's unemployment rate hit a 14-year high so far this year 1 million people have lost their jobs in this country if you don't know someone who lost their job recently you probably need more friends so what are all these jobless americans to do they could spiral into a deep depression become alcoholics or take up tennis and they probably are but a lot of them are also going back to school hey professor take it easy will you for the unemployed a return to college means starting over making new friends remembering how fun homework is but for investors in education stocks unemployment is a cash cow for-profit education companies like devry itt educational services and strayer education are experiencing major growth despite or because of the slow economy apollo group which owns the university of phoenix reported that its earnings more than doubled last quarter enrollment is up revenue is increasing this segment is having a party in the basement of our economic sorrows please have a party feed us drinks get us laid now you may recall that going to school requires um money which the unemployed sometimes have trouble with but it looks like student loans are still pretty easy to come by plus the recent increase in federal loan limits and pell grants have eased the need for private loans when all else fails the school can avoid losing students by offering them internal loans look we could paint a pretty bow on this say it's an opportunity for the unemployed to take a new lease on life but come on it sucks you try taking care of the kids working two jobs and going to school and then you have to pay a loan on top of it but hey they're helping some down on their luck investors and that probably makes them feel better the least the shareholders could do is throw a kegger or something
Execs Refuse Bonuses
CBS
Transcript
with the market in such turmoil will bonuses for big execs be handed out at all CBS News correspondent Priya David is here good morning Pria good morning Maggie now in the first half of the Year alone the uh Wall Street investment firms lost more than $15 billion now that's before the bottom dropped out in just the last few months still wall Street's been on track to spend more than4 billion dollar on bonuses alone apart from stock option Awards Executives now say they'll cut back but some say that move is largely symbolic the financial industry is seeing massive layoffs and dismal earnings reports things were so bad they even received $125 billion rescue check from the federal government but somehow the cash is still flowing for Wall Street investment firms with tens of billions of dollars expected to be paid out in year-end bonuses and stock options now industry leader Goldman Sachs says its top seven Executives will foro bonuses they've received uh billions of dollars um from the public and uh to receive bonuses in the face of all that would have appeared to be a piggish compensation consultant David Schmidt says Goldman Sachs was under tremendous pressure to cut bonuses especially considering its close ties with treasury secretary Henry pson good morning everyone a former Goldman executive Goldman's top Executives would have received more than $300 million in total yearend awards that may sound like a lot but it's a drop in the bucket 1.6 % of the $18 billion in bonuses paid to all employees including Rank and file workers last year while experts agree many of the other banks will follow suit maril Lynch and City Bank told CBS news they haven't made a decision on bonus Cuts Bank of America however says it will cut bonuses for senior managers by more than 50% and with City Group announcing 52,000 layoffs coming New York attorney general Andrew Cuomo is calling on them to drop their executive bonuses too people are upset and with good cause you know you have people who have seen their life savings go out the window and they did nothing wrong here and analysts say so far these executive bonus cuts are mostly PR a rare case on Wall Street where taking less means more Maggie prya thank you very much
Asian economies in recession
CNN
Transcript
Hong Kong restaurant owner Alex Lee is toasting the times with his friends. This is a rare celebration for Lee. He had to close one of his four Chinese restaurants a year ago, and with the economy here in recession, he fears the worst is yet to come. Now that the financial tsunami has arrived, consumers hesitate when it comes to spending. Before, they ate out every night, but now they stay at home. Consumers all over Asia are feeling nervous about their financial health. Countries out here have built their economies by exporting goods to places like the U.S. and Europe. But slower demand amidst the global credit crisis is tipping places like Singapore, Hong Kong, and now Japan into technical recession. In other words, two quarters of negative growth. In Hong Kong, small and medium-sized businesses are struggling. Restaurant trade chief Simon Wong expects thousands of outlets here to shut down. They don't have enough cash flow, and they have to pay rent, and they have to pay the salaries for the staff. We are very afraid and concerned that the crisis might last for, you know, we don't know, probably two years, three years, or even longer. To survive, businessmen like Lee have started offering customers steep discounts for the first time. We have to retain our customers. I have to ensure that there's a solid flow of liquidity. The important thing is to keep the money flowing in, even if it means lower profits. This restaurant has slashed the price of its signature hot pot dish from the equivalent of 60 U.S. dollars to 35. That's a 40% discount. Governments are also looking for ways to keep the cash changing hands. Political leaders are drawing up packages to stimulate their economies through lower income. Interest rates, loan guarantees, public work spending, and tax cuts. Yet analysts aren't convinced the measures can avert a further slowdown here if the U.S. economy continues to slide. That could spell tougher days ahead for Lee. Eunice Yoon, CNN, Hong Kong.
Auto bailout looms over
CNN
Transcript
Two recent rivals meeting face-to-face after a long and bruising campaign. U.S. President-elect Barack Obama and Senator John McCain promising now to work together on the nation's critical challenges, but the talks weren't all serious or necessarily comfortable. CNN political editor Mark Preston joins us live from D.C. with more. You know, Mark, we hear this a lot these days. If we could only be a fly on the wall of that meeting. Yeah, really. If we were a fly on the wall and we had a camera, could you imagine what we would have walked out with? Absolutely. What seemed to be a pretty uncomfortable meeting right at the top when John McCain and Barack Obama met today in Chicago, you know, how they broke it was how they broke really the ice was to talk about football, which I guess, as a lot of men will attest to, is the way. And women, too. And women. You know what? Especially if you're an SEC football fan, no question about that. But, look, they talked a little bit about football. But what brought them together, really, I think, was this mutual need for one another. For Barack Obama, having someone like John McCain as an advocate and as an ally on Capitol Hill will certainly make his, you know, his term in office a lot easier. And for someone like John McCain, who's 72 years old, whose Senate seat is up in 2010, who's not going to run for president again, his ability to put aside any differences and frustration and anger that he might have of not winning the presidency and turning around and helping Barack Obama, you know, move forward on some initiatives, whether it be reform-minded initiatives on earmarks or defense spending or even on the issue of global warming, certainly will help define his legacy. So I think it's mutually beneficial if these two men are able to come together. Yeah, a lot has been said about how Lincoln brought together a team of rivals. And now we're not only seeing him reach over to his rival from the other ticket, but also reaching out to his former rival, Hillary Clinton. What is the latest here? So much speculation about whether or not she's going to be asked to be secretary of state. Yeah, absolutely, Nicole. You know, well, they met last week, Hillary Clinton and Barack Obama in Chicago, to talk just about that subject, to really gauge the interest of Hillary Clinton to see would she accept the role, the position as secretary. Yeah. And what we've learned just in the past couple of hours, our own Ed Henry, who's out at Transition Headquarters in Chicago, has learned that the Obama campaign, or the Obama Transition Team now, is asking for financial information from the Clintons. Specifically, what they want to know is the business dealings of former President Bill Clinton, his personal business dealings, as well as the work that his foundation has done. Of course, this is all the work that he's done since he left office as the president, and really to figure out if there's any stumbling blocks or anything that could be potentially embarrassing to Hillary Clinton or Barack Obama, should she be named secretary of state. So it really is the next step in the vetting process of Hillary Clinton to be secretary of state. Because there is this huge vetting process, 60-some questions you're asked when you're going through the vetting process to be in the cabinet. I mean, just a very, very long quiz, so to speak, you know, that you really have to do. You divulge every little nugget about your life, and that's what the Clintons are doing right now. That's what other people that are looking for positions in the Obama administration are doing right now. You know, we'd be remiss not to say that Bill Richardson, another rival, he's the New Mexico governor, he sought the Democratic nomination. He, too, met with Barack Obama last week for the same position as secretary of state. So Barack Obama, as you said, is looking past any grudges, perhaps, and certainly bringing his rivals into his inner circle. I was in D.C. last week, and I've got to ask you, because you mentioned a lot of other positions in the administration, and everywhere I went, people were talking about the Plum Book. Yeah, exactly. What's the Plum Book? The Plum Book is put together here in Washington, D.C., and it details every position in the Obama administration, every position that he can control. And what you're actually going to find here in Washington, after eight years of Republican rule of the White House, which is basically Republican rule of all of the agencies here in Washington, D.C., you're going to see a lot of job openings, and you'll see a lot of Democrats come to town. I remember back in 1994, now, this did not have to do with the Plum Book, but this had to do with control of Congress. The Democrats had controlled Congress for many, many years, and the House of Representatives, I think, was more than 50 years, and the Senate, I guess it had been about six years. And I remember the turnover in 1994 to 1995, and all of these Democrats were basically thrown out of office, and all these staffers were thrown on the street, and all these Republicans had come to town. What we're seeing here now with the Obama administration coming in, you're going to see all these Republicans, all these staffers, basically thrown out onto the street, and they're going to have to find work, and all these Democrats are going to come to town, and they'll move into these federal positions. And that was the Plum Book, and it's appropriately plum-colored. Also, when I was in D.C., everybody was talking about getting tickets, perhaps, to the inauguration. What is up with this? Thousands and thousands of dollars in some cases? Yeah, absolutely. I've got to tell you, and I'm even getting questions from my own family about going to the inauguration, and my answer is, no way. No dice to the kids? Yeah, no way. Well, I don't even need my own kids. Gosh, just give them some Matchbox cars and some Barbie dolls. They'll be happy. But, no, what we're seeing here is that there are 240,000 inaugural tickets that will be put out by members of Congress to their constituents to come and see this swearing-in ceremony. You know, there's talk that there could be a million people who show up here, Nicole, in Washington. I don't know if you've heard of that.
Cafferty: Bailout freeze?
CNN
Transcript
Republican Senator Jim Inhofe from Oklahoma, Republican Senator, wants to put a freeze on the remaining cash in that $700 billion bailout of the financial industry. In this week's lame duck section of Congress, Inhofe plans to push for legislation that will require Treasury Secretary Henry Paulson's plan for the remaining $350 billion in that bailout package to be voted on in Congress. Despite promises from Congressional leaders at the time that there would be both, there is absolutely no transparency or Congressional oversight on where the first $290 billion has gone. That's our money. Senator Inhofe suggests Paulson, quote, may have given the money to his friends, unquote. Inhofe, who voted against the bailout package when it was originally passed, said in a letter to fellow lawmakers this weekend, quoting now, It is Congress's duty to have a fair and fair deal of money. We have a say in what happens with the remaining authorized amount of $350 billion. It's clear that it was a mistake to sign a blank check to one man for such a tremendous amount of money, unquote. Duh. Here's the question. Should Congress freeze the remaining bailout money? Robert writes from New Jersey, the bailout money should be frozen. The entire bailout plan was hastily concocted by Congress to help improve their public image and make Americans believe the government was doing something to help them. When Congress rushes to pass a bailout plan worth $700 billion in less than a month, nobody should be surprised that the money is being misused and unregulated. See in Kansas. Freeze the remainder until there's accountability for the monies distributed to date. Transparency was supposed to be built into this plan. Show us who got the money, how much they got, what they intend to do with it, or what they did with it. Ken in Washington says Paulson duped us all into thinking the world was going to come to an end unless taxpayers gave him $700 billion. He gave taxpayers a wink and a nod regarding actually doing something constructive by helping homeowners hang onto their homes in order to convince us that his intentions were good. All he's done to date is help his crooked cronies on Wall Street and in the banking community. Brian in Puerto Rico, a freeze would seem a good move if they're unwilling to say what they've done with the money so far. Must be something to hide. Jamie writes, yes, it's clear that Paulson and the Bush administration and even Congress have no clue what's going on at this time. We'll see.
G-20 leaders agree on plan
CNN
Transcript
The American Pronunciation Guide Presents ''How to Pronounce Bush'' The scope of the crisis, massive. The task at hand for these world leaders, critical. A point underscored by President Bush. Those of you who have followed my career know that I'm a free market person. Until you're told that if you don't take decisive measures, then it's conceivable that our country could go into depression greater than the Great Depression. So, around the table, they debated how to restore global growth, calling on some members to increase government spending to rapid effect, and where appropriate, cut interest rates further. We all agreed in the necessity of a revival of coordinated action. The ten-page declaration set out an ambitious four-month action plan to introduce new rules for markets, targeting complex financial assets. It was the failure of these which were partly responsible for the extent of this current crisis. In the future, no market, it seems, shall be allowed to go unsupervised. Also, the IMF and World Bank are to be comprehensively prepared to respond to the crisis. The IMF and World Bank are to be comprehensively prepared to respond to the crisis.
GM's woes hit England
CNN
Transcript
Vauxhall Motors relocated here to Luton from London in 1905 and became a part of General Motors in 1925. Luton has already suffered through the closure of Vauxhall's car production six years ago. It's been left with just van production under another GM subsidiary, IBC Vehicles. And that plant is not running at full tilt. Still, GM is very much a part of the landscape here, and people in Luton are closely following GM's troubles. A lot of people are going to be affected by it. Yeah, I'm very worried. You know, there are people that want to get out of bed in the morning, work, earn a living, pay their way, honestly, for their life. This sandwich shop caters to the plant, and a lot of workers come in. When there is work. They have lots of down days. I call this week it's closed down there. Obviously, the office staff are in and things like that. The workers aren't in. Next week, they've got three days off. I mean, every week, they seem to go into work and be told, oh, we're shut another couple of days. We're shut next week. The old Vauxhall plant was torn down when car production stopped. All that's left is Vauxhall's war memorial. Sarah Nunn was counting on new business from a proposed retail park. It's just delayed. It will happen, but obviously, due to the way things are. At the moment, I think all building work in the area is sort of delayed. Still, GM's two British plants make nearly one in five vehicles in the UK and employs five and a half thousand people. The company says a further 23,000 British jobs are indirectly tied to it. The member of parliament for Luton from the ruling Labour Party will be meeting with the unions and Vauxhall management next week. I haven't been called upon to go and ask for government support, but should that arise, I will certainly be in there fighting for it. I'm not going to be able to get a job. I'm going to be in there fighting for IBC and Vauxhall. So, no word yet on a UK financial lifeline. Vauxhall's future might depend on whether Washington agrees to a massive bailout before GM runs out of cash. Some analysts say even if GM were to file for bankruptcy in the United States, its European operations, like Vauxhall here in the UK, could continue with little disruption. That is, if GM does not withdraw funds from Europe. Of course, GM could also try to get Vauxhall to withdraw funds from Europe. That's the latest news from the UK. The latest news from the UK.
Saving Opel
CNN
Transcript
. Running out of options, GM Europe executives took a ride in the newest Opel sedan to a place they thought they might get help, the German Chancellor's office. Angela Merkel, however, is counseling patients. We from the German government have said we will assess granting government loan guarantees in a constructive way, Merkel said. I think that is a very important message to the employees of Opel. Opel, GM's German subsidiary, says it might need up to $1.5 billion worth of loan guarantees from the German government. So Opel doesn't get sucked into the abyss if GM goes bust. I want to emphasize that we are not talking about the German government. I want to emphasize that we are not talking about government subsidies, says GM Europe's President Karl-Peter Forster. We are talking about a safety umbrella for the very worst eventuality, in case we don't have access to liquidity anymore. 25,000 jobs are at stake. The German government says it wants to help if things go bad, but that it sees dangers. Officials wonder if a bailout could remain limited to Opel alone, or if other German automakers, all of them grappling with falling costs, will be able to get a loan guarantee. The German government says it is not going to be able to get a loan guarantee.
Global Economic Crisis Deepens
VOA News
Transcript
Although the financial summit in Washington over the weekend did not produce immediate results, President Bush called it a good start. A meeting is not going to solve the world's problems. A meeting will help begin a process. But financial markets remained volatile on Monday. The Dow Jones Industrial Average lost another 2.5% after Croup announced it will cut 53,000 jobs worldwide. Forbes magazine editor Jack Gage says the announcement only deepens the already substantial job losses in the banking industry. So this is increasing that by almost a full third and in the context of uh you know the current meltdown and the crisis thus far that's certainly yet another leg down uh for job costs you know going forward. The bad news comes as US senators debate a bailout package for the struggling auto industry. Michigan Senator Carl Levan says a collapse of the nation's big three automakers would have disastrous consequences. 200 billion in lost taxes is the estimate if the domestic automobile industry goes under. 200 billion lost to the taxpayers of America through the loss of these three million jobs. But the bill to give automakers a $25 billion loan faces opposition for many Republicans. Senator John Kyle says throwing more money will not solve the industry's problems. This didn't happen to the auto companies overnight. For years, they've been sick. They have a bad business model. Some say bailouts provide only short-term relief. British Prime Minister Gordon Brown says cooperation like that shown by world leaders at the G20 summit is needed. It's clear that this is a global problem that requires global solutions and the outlines of a global root mat map for recovery were agreed last weekend. Leaders of the 20 developing and industrialized economies agreed in Washington to cooperate to combat the global financial crisis, but offered no concrete measures. Economists say 15 European nations are already in recession, while the US appears to be on the verge of one. On Monday, Japanese officials confirmed the world's second largest economy had already slipped into recession, defined as six months of negative growth. Millar Sega, VA News.
Migrant Workers Hurt by Slowdown
VOA News
Transcript
The US economy is suffering its worst crisis since the 1930s. Unemployment here is at a 14-year high and is expected to worsen. This is bad news for the millions of immigrants in the United States. Here in Woodside, Queens, the heart of the Filipino community in New York, everyone is worried. If you lose your job here, that's a big problem. The economy here has repercussions back home. Edelin Ribbe, who has lived in New York for 10 years, has cut back on the money she sends to her family in the Philippines. My sister told me to keep my money because she heard from the news that many people in America are losing their jobs. As people in America cut back their spending, demand for Asian exports slows down, as does Asia's economy. Hong Kong, home to more than 130,000 Filipino workers, also feels the pain. Most Filipinos here are domestic workers. financial analyst Abbe D Ramos. I've already seen some unemployment both in in the financial sector and um and in the trading sector. With greater unemployment um within these households, they would have less capacity to hire domestic workers. Filipino workers around the world sent more than 14 billion dollars to the Philippines in 2007, equal to 13% of the gross domestic product. So lower remittances will hurt the economy. In this small city in the southern Philippines, remittances help jumpstart the local construction industry. Alice Baliaderas has a new two-story concrete house with a garage built with remittances sent by her daughter in the Middle East. Like many, Alice faces two problems. Increasing cost and shrinking remittances because the US dollar buys fewer Philippine pesos. Yes, we have a beautiful house, but our problem here is our daily needs. Raymond Rgnagner, whose company handles money transfers to the Philippines in New York, says remittances may not slow significantly because Filipinos have a strong sense of responsibility and will always send money. No matter what happens, a Filipino will send money even if there's nothing left for himself. We send money because people rely on us. But many families in the Philippines are not so confident that they and their relatives overseas will escape the effects of the weakening economy. For producer Pros Laut, this is Kate Pound Dawson, VA News. [Music]
Patients Cutting Back on Medical Care
VOA News
Transcript
a CT scan like this one could provide critical information for Betty Corbett her doctor believes it would show whether Corbett's ovarian cancer is being treated successfully with chemotherapy but Corbett says her income goes toward daily needs such as food and gasoline I should have the right to know you know we're um you know where I'm standing medically many Americans are in the same situation while Betty Corbett has medical insurance through her job her budget will not cover medical costs she has to pay yourself it's my Integrity I've always been able to pay my bills and that really that that's how the study gathered information from about 7500 chronically sick patients in eight industrial nations in many categories surveyed patients in the US ranked near the bottom or last in Access to Health Care and in concerns about medical safety at least 40% of the Americans surveyed said they could not afford to fill a prescription and stretched out the doses at least 30% would not go see a doctor because of cost another 30% reported not following through with a recommended test treatment or medical evaluation again because of cost Professor Jean Mitchell is with Georgetown University's public policy Institute in Washington DC even for people who have insurance they are faced with paying an increasing share of the health insurance bill out of pocket medications can be expensive even when Insurance picks up most of the cost georganna Ekman needed insulin for diabetes and medicine to treat her heart she says going without her medicine was humiliating I have to admit that not only could I support myself but I didn't even know how I was going to get the medication for tomorrow the study showed that at least 40% of those Americans reported paying a larger share of their medical treatment than patients in other developed countries there were some bright spots in the study many of the chronically ill Americans waited far less time to see a specialist than patients in other countries and those Americans who had medical treatment in the hospital had a more positive view of the care they received than patients from the other countries Melinda Smith vaa news yesterday
The rise and fall of the US auto industry 18 Nov 08
Al Jazeera English
Transcript
this is the age of Swift flexible Transportation 50 years ago the US Auto industry was the engine of America's growth massive car ownership allowed young families to move from cities into suburbs highways were built to accommodate all the new vehicles the car became a symbol of the American dream it was the King of the Road General Motors chairman at the time said what was good for his company was good for America but in the ensuing years cheaper more fuele efficient cars built by Japanese automakers took market share away from Detroit's big three their products were more reliable and their management practices were more efficient and in more recent times the big American firms insisted on turning out profitable but gas guzzling sports utility vehicles and pickup trucks instead of the fuele efficient smaller cars that a new environmental Consciousness demanded when petrol prices Rose earlier this year Detroit was left with hundreds of thousands of unsold Vehicles its demand for a bailout reflects its inability to adapt to new conditions and some say to its putting profits over efficiency but it is not only Detroit's American operations that are being affected over the past 2 days GM's German subsidiary Opel has asked Berlin for1 billion EUR in credit guarantees Ford is trying to sell its 20% stake in Japan's Mazda and is cutting nearly 4,000 jobs at its Volvo subsidiary in Sweden the big thre's plants in Mexico Brazil and even China could be set for cutbacks too so just as in the case of the financial crisis that has spread across the globe The Wider world is not immune from the Troubles of us industry Roger Wilkerson Al jaaz Washington
Big Three Strapped For Cash
CBS
Transcript
in Los Angeles today workers were setting up for the city's major Auto Show which opens to the media tomorrow the cars are here but Executives from GM and Chrysler will be conspicuously absent this a big party and they decided not to come absolutely absolutely it's like the World Series is here and the coach hasn't turned up instead the heads of GM Ford and Chrysler were all on Capitol Hill begging for a $25 billion bridge loan to save them from bankruptcy we just can't be confident that we'll be able to successfully emerge from bankruptcy GM's CEO said 3 million jobs could be at stake that's why this is all about a lot more than just Detroit it's about saving the US US economy from a catastrophic collapse but many senators weren't buying it by the fact they are seeking treatment for wounds that I believe to a large extent were self-inflicted we're about to employ the ready fire aim approach to problem solving the Auto industry is trying to stir up report at this rally in Texas and through an email GM fired off to its customers saying we need your help now urging them to call their Congressman this wheelmaker in California has already taken a hit we just are closing a plant in Kansas that will be approximately 700 people CEO Steven borck says his business is down more than 30% this year does Detroit need a bailout Detroit needs to remanufacture themselves for their future in other words the industry needs a new set of wheels the problem is Detroit is just structurally all wrong for example while GM and Toyota each have about 20% of the US market GM has eight Brands and Toyota only three General Motors has 7,000 dealerships the Japanese automaker just 1,500 it's got too many people making too many products in too many factories selling through too many dealers but the bailout debate may be mot and until the Obama presidency in January the White House reiterated today that President Bush does not support using the $700 billion bailout package for the automakers calling it unnecessary and unreasonable Katie so Anthony why doesn't GM streamline and possibly eliminate some of those Brands because frankly Katie it's too expensive I mean to shut down dealerships costs a lot of money the estimates are that shutting down Oldsmobile and buying out all the dealers cost over billion dollars and remember a lot of people are saying GM needs to shut as many as four Brands Katie all right Anthony Mason reporting from Los Angeles tonight Anthony thank you
House Hammers Paulson
CBS
Transcript
treasury secretary Henry Paulson traveled to Capitol Hill armed with optimism I think we've turned the corner in terms of stabilizing the system preventing a collapse but that wasn't nearly enough Ammunition To Face Down angry house Democrats you Mr pson took it upon yourself to absolutely ignore the authority and the direction that this Congress had given you just amazes me they'd been waiting to grill Paulson since he announced last week the $700 billion troubled asset relief program or tarp wasn't going to buy up troubled assets all those Bad Mortgages after all was an extreme change and rather shocking but use the money instead to inject cash in the banks it seems to be the second largest bait and switch scheme that history has ever seen second only to the reasons given us to vote for the invasion of Iraq Paulson said he change strategy once it became clear that loosening up a frozen credit system was the single most important factor in steadying the economy when the facts changed and the circumstances changed we changed the strategy we didn't Implement a flawed strategy we implemented a strategy that worked but the house members hammering Paulson said they sold the program back home as a way to help people out of Bad Mortgages I hope that you understand the pain and the suffering of so many homeowners in this country that are losing their homes Democrats are now getting behind an FDIC mortgage relief program Sheila bear a bush appointee who runs the agency is pushing for $24 billion of tar money which she says could prevent 1 A5 million foreclosures over the course of the next year Jim axod CBS News the White House
The Credit Crunch Worsens
CBS
Transcript
when pamela sandy bought her new ford taurus she was thrilled it's got that new car smell but like most consumers she had no reason to care how her bank got the money to give her that loan this market is currently in distress now however it is time to care for years up to 40 percent of all auto loans all credit card purchases even student loans have been bundled by banks and finance companies the same way they bundled risky mortgages and then sold them to investors as securities that's the problem all those buyers the same global investors and pension funds that got burned by securities based on mortgages don't want anything to do right now with securities based on consumer loans investors are suspicious of securitized products so they're no longer willing to buy those products since investors stopped buying the market for consumer credit has collapsed by 80 percent and shocked the american credit system 638 billion dollars from investors that was available last year isn't even in the pipeline this year and is not being used for new loans that leaves the big finance companies like gmac struggling for cash with gm now running ads and hundreds of lenders to help get you behind the wheel sending customers to banks which might have cash their business model make the loan get it out the door to the investor make new loans doesn't work anymore and that's what's frozen and that's what's frozen to get the credit markets unfrozen treasury secretary henry paulson wants to use the remaining bailout funds up to 50 billion dollars to buy or prop up consumer credit the lack of funds he argues is harming growth this is creating a heavy burden on the american people and reducing the number of jobs in our economy so with finance companies withering and investment capital drying up banks once again are where the money is including that 159 billion dollars they got from taxpayers so are banks making more loans now well i'd say that they are the banking industry insists it is loaning money but that the days of easy money or non-stop credit card offers are over it's 5.99 just like car buyer pamela sandy a good credit score gets you a loan but a poor credit score gets you a higher interest rate for the consumer it's a much tighter market out there today the credit standards have tightened and you've seen a retrenchment as the non-bank players have left the marketplace and now with even more bankruptcies and more delinquent loans of all kinds the declining credit picture for millions of americans is an obstacle for treasury's new strategy as one economist put it even if secretary paulson can fix the credit markets he can't fix the credit scores of all those borrowers wyatt andrews cbs news washington