Asian Markets Slip on Word of U.S. Recession
Associated Press
Transcript
Official word of a US recession and a dismal start to the week on Wall Street are prompting a worldwide sell-off. Stocks in Australia, Japan, and Hong Kong are all posting big losses on the heels of yesterday's 700 point slide in the Dow Jones Industrial Averages. It seems that the recession in which the world is finding itself is going to be pretty deep and quite protracted and that's why investors are marking down their expectations regarding earnings and stock prices have to fall. Shares in the US fell yesterday on reports that retailers saw just modest gains at the start of the holiday shopping season. The bleak economic outlook has pushed crude prices to around $48 a barrel, their lowest point since 2005. Diane Kley, the Associated Press.
Automakers Say How They'd Use $25 Billion
Associated Press
Transcript
Ford GM and Chrysler amounting a second attempt for $25 billion in Federal loans and this time they're responding to the request by Congressional leaders to outline how the funding will help them to survive long term this follows a less than successful trip to Capital Hill last month that will probably be remembered for the trips taken to Washington by the automaker CEOs on private jets among the plans expected to be outlined by the automakers are reduction in executive compensation a restructuring of their debt and the seeking of concessions from their workers the automakers have been suffering because of the worst sales they've seen in decades low consumer confidence and lack of available credit Ford GM and Chrysler combined burned through about $18 billion dollar in cash during the last quarter and GM and Chrysler have said that they could run out of money in a matter of weeks each of the Detroit based automakers are submitting their turnaround plans ahead of hearings on Capitol Hill later this week GM is expected to discuss efforts to get rid of some of its Brands preferring to sell them as opposed to shutting them down and some lawmakers have asked the heads of these companies to take big pay cuts in return for the bridge loans Chrysler Chief Bob nardelli has said he'd be willing to work for $1 a year Ford's Alan malali says he'll do the same and GM's Rick Wagner is expected to make a similar offer among the big three Ford is in the best shape financially CEO Alan malali is saying the company will accept the federal funding only if the market continues to worsen the situation is much more pressing for Chrysler and GM said to be running close to the minimum amount required to run the companies that means they could run into trouble paying their bills by the end of the year mark hamri the Associated Press Washington
College Tuition Rising As Economy Sinks
Associated Press
Transcript
Hopefully I'll be at Texas next year. Courtney Cantu is studying hard. The high school senior from Mansfield, Texas, eventually wants to go to law school. I'm not as well prepared as I probably should have been. Courtney's dad, Jerry, says he'll find a way to put her through school, but with the economy struggling, he's worried about just how he'll foot the bill. I've kind of given up on retiring, you know, when I've got the first opportunity. With college costs rising and loans harder than ever to get, next year parents could be in for sticker shock as their children start college. We do hear concerns from parents. A lot of it is that they're just anxious. They don't know. Karen Krause is financial aid director at the University of Texas Arlington campus. She says while money is tight, there's still scholarship and loan money out there. I would encourage families to apply for financial aid, and doing that, they can begin that process any time after January 1st. And while tuition hikes get a lot of the press, many universities nationwide are working harder than ever to provide more aid for virtually every student. My number one thing I tell them is don't ever let anyone tell you you don't have enough money to go to college. And I tell the parents that, too. There's money out there. Mendy Gregory is a high school counselor. Recently, she's gone into classrooms urging students to continue their education, even if it doesn't mean attending a four-year university. As long as they do something and do something past high school, to further their education, then there's going to be a job out there for them. And we talk to them about jobs that are on the rise. Right now, the average cost for a four-year college is just over $18,000 a year. That number is expected to rise in 2009. Rich Matthews, The Associated Press, Arlington, Texas.
Dec. 2: Wall Street Advances 270
Associated Press
Transcript
buyers returned to Wall Street sending stocks higher in a session that was marked by indecision over the fate of the Auto industry Ford announced it has enough cash to make it through 2009 and might not need government help but General Motors said that it needs 122 billion in government loans to continue operating but analysts say there were encouraging signs that steps are being taken to calm the shaky markets Bargain Hunter stepped in after the uh near 10% decline for the S&P 500 on Monday also I think investors are expecting that uh the auto companies will be supplying to Congress packages that Congress will accept and offer some sort of a bailout toward uh and then lastly I think investors anticipate that Central Bankers around the globe will look to continue to stimulate economic growth and therefore keep us away from both deflation and a worldwide depression the Dow Jones Industrial Average Rose 270 points to close it 8,419 broader stock indexes also soared the S&P 500 Index Rose 33 Point 849 and the NASDAQ Composite gained 52 to close at, 1450 trading is likely to remain volatile in the coming days as a number of economic reports will help to outline the months ahead Friday's jobs report will likely gain most of that scrutiny as it's widely considered the most important economic reading of the month Mark hamri the Associated Press
Money Minute: Big Three, Delta, Oil
Associated Press
Transcript
AP money minute more troubles for the big three Chrysler General Motors and Ford all reporting dismal sales reports for November Chrysler says sales were off 47% for the month GM seeing a 41% slide and Ford Sales drop 31% jury news comes as the automakers are scheduled to present their plans to Congress for how they expect to return to profitability and to justify up to $25 billion in government loans Delta airlin says it will reduce Consolidated system capacity by up to 8% next year that could mean more job cuts are on the way Bel is blaming the sour economy for a decline in ridership which along with higher fuel costs has already forced it to cut 4,000 jobs this year Delta will have more to say when it hosts its investor conference December 9th oil and Retail gasoline prices dip to new three-year lows Tuesday light sweet crude for January delivery fell more than 4% or 232 to settle at $46.95 a barrel in New York and the national average for a gallon of gas now stands at 181 I'm Mark Hamrick with ap money minute
Pelosi: Automakers Must Demonstrate Commitment
Associated Press
Transcript
there's certain standards that we want to see we want to see a commitment to the future we want to see a restructuring of their of their uh approach that they have a new business model a new business plan there has to be a com a compensation reform uh it's ridiculous uh to ask the taxpayers uh to fund the shortfall of companies that are paying millions of dollars to their Executives while the companies are losing billions of dollars and so some of the standards that they are self-evident in the Frank legislation similar legislation in the Senate and uh so again the industry must show how it will innovate and prepare to take the country companies into the 21st century
Your Money: the Return of Layaway Programs
Associated Press
Transcript
hi my name is lindsey morgan and i'm from san francisco by way of seattle and my question is about layaway programs i've been reading that more stores are doing them and i'm wondering if this is something that's going to become more common as the holiday season goes on and if it's something worth looking into the idea of shopping on layaway is a notion that many of us haven't seen in years but last month sears restored its layaway program which essentially allows you to make a down payment while the store holds the item until payments made in full in this case sears restored its program but requires payment to be made by december 23rd layaway programs have been out there for decades there have been smaller retails that have kept them around and you can still find them occasionally but in this instance sears just began promoting its program but whether it's something that will catch on still remains to be seen and even in these tough times because it is a cost issue for the stores to continue to hold that inventory
Automakers Return With A Plan
CBS
Transcript
the victory automakers are going to be back in washington today unlike their appearance two weeks ago when executives slew in on corporate jets this time they want congress to feel their pain cbs news correspondent thalia sures is on capitol hill with more thalia good morning good morning harry and this time congress will get some details of the automaker's turnaround plans in gm's case i'm told a comprehensive plan as big as a book now all three gm ford and chrysler will have their proposals hand-delivered to capitol hill this afternoon the specifics remain under wraps but cbs news has learned that general motors will address restructuring including employee numbers and plant sizes streamlining its brand lines and compensation for its executives details are exactly what members of congress are looking for to persuade them to cough up any cash some real contours of what they think their companies will look like in four to five years as well as how they'll use the money in the next four to five months democrat sander levin of michigan home state of the car companies doesn't use the term bailout instead we're now talking about a 25 billion dollar bridge loan and when people say to where i think the answer is to a viable domestic industry a vital part of the american manufacturing base ford's survival pitch is expected to include an outline of how it is retooling itself to build fuel-efficient small vehicles in contrast to its traditional trucks and suvs while chrysler's proposal also includes restructuring details some analysts expect it may suggest a merger as a long-term option as public disenchantment with bailouts grows some analysts are suggesting the automakers should be allowed to sweat it out on their own the automakers need to deal with their problems and the mechanism in the law for for legally letting them restructure at a faster rate and and and to make hard decisions is the bankruptcy court the proposals will also be made public this afternoon and there will be hearings at the end of the week and harry as you said no one is going to be using a corporate jet to come here this time and those that is those testifying in fact ford's chief is supposed to be using a hybrid to come here harry all right it's a long car ride all right thaiya sures thank you very much joining us now is verge monero the mayor of lansing michigan lansing is home to two gm plants that employ some 6 000 workers mr mayor good morning good morning do you have the confidence that the big three automakers that these chiefs going to washington here this week have got their act together sufficiently to get at least something out of washington this time around well we're certainly very hopeful i'm an optimist and you know working people see the bailouts for wall street uh 150 billion to aig with no strings attached citicorp you know you talk about mismanagement we've certainly seen it from wall street wall street helped us get in this situation so we'd like to see some reciprocity we don't mind conditions and strings look the auto industry has been in transition and they will be in transition and they ought to be they're cleaner and greener than ever before look gm makes more hybrids than any other company on earth so they've been in transition they will be in transition but these companies are crucial to our economic future they've been an important part of our past and they'll be an important part of our future you know what the critics say investment but the all these companies are bleeding money billions and billions and billions of dollars every month a lot of critics are saying well you're just going to throw good money after bad why bother yeah i don't think so you know look at the chrysler aid package 30 years ago that was a good investment for taxpayers it was paid off early and in full and i believe this will be a prudent investment you look at the auto industry it has tentacles throughout this economy and all across the country these are working men and women these are people that actually produce something unlike wall street and washington where they mainly produce hot air and hysteria these are real people making real products and it's worthy of our investment again the tentacles we're talking about three million jobs and i i saw your comment about the recession you know this is a sure prescription to go from recession to depression if you allow this auto industry our manufacturing prowess to fall by the wayside but mr mayor let me ask you this question very quickly can you envision your town without those two gm plants in it absolutely not it's unfathomable it's unthinkable failure is not an option this industry is too important not just to lansing michigan but to the whole country uh this is our manufacturing base you know we were the arsenal of democracy we've talked a lot about economic security and that's number one but what about national security you know we were the arsenal of democracy in world war ii it was the auto industry that helped turn us around can you imagine a country i would ask can you imagine america losing our manufacturing edge not having that manufacturing prowess that hurts our national security can we really rely on china japan and korea to supply us the tanks the guns the jeeps that god forbid we might need in the event of a future war so there's a lot of things to consider here the auto industry has been an important part of our past i think it'll be a vibrant part of our future these companies have been in transition let's give them the support and the tools they need in order to succeed other countries do it we should keep in mind this is not a level playing field you know our companies are competing with countries around the world china produced 10 million cars you know last year china is up and coming and when you compete with the chinese company you're competing with the chinese government we should support our industry like these other governments support theirs mayor virgin monero thanks very much from lansing michigan this morning we do appreciate it thank you
Big Three Make A Big Plea
CBS
Transcript
Ford's CEO says he'll work for $1 per year if it helps convince Congress to give the major US automakers a$ 25 billion bailout last month lawmakers shot down that request they said they won't hand over taxpayer dollars until they see details of how Ford GM and Chrysler plan to survive and thrive but with sales tumbling again last month Executives at the big three say without the bailout one or more of their companies could collapse the cost of a if a bankruptcy or a loss of the US manufacturing of automobiles is a far greater cost than a loan for a couple of years Ford's plan calls for the CEO pay cut if the company uses money from the bailout it also speeds up development plans for electric cars and includes new Investments aimed at improving gas mileage Ford predicts it can break even or turn a profit by 2011 if the economy doesn't get worse as Executives prepare to make their case in person this week Auto Workers are talking about their role in keeping the industry in gear United Auto Workers union leaders will hold an emergency meeting Wednesday night to discuss concessions they could make to help the big three get the government loan lawmakers are sure to ask the auto Executives about worker benefits and other major issues when they return for hearings Thursday and Friday all three CEOs are leaving the corpor Jets at home for this appearance on Capitol Hill taking separate private planes to Washington to ask for a handout last month one them few friends in Congress Susan Roberts CBS News Washington
Global Markets Spiral Downward
CBS
Transcript
We Begin this morning with a Plunge in World Markets overnight Japan's Nik was down more than 6% Hong Kong's hangsang lost 5% they followed of course the dramatic drop in the Dow Jones yesterday nearly 700 points on word that we are now officially in a recession and then it's expected to go longer and deeper than we could have imagined we're joined Now by Liz Anne Saunders senior vice president and chief investment strategist of Charles schin company good morning good morning not a good morning though really no unbelievable overseas markets reacting the way they did not surprising because we're all in this together their manufacturing numbers were were terrible yesterday was particularly bad yes so what can we make of this well first of all I think the announcement that we're in a recession is is a bit the statement of the obvious um you know I I I've Had The View that we're we've been in one since early in '08 and actually felt it started in December so it was a little bit of indication yesterday but that is uh again that's an obvious statement I actually don't think that that really was behind the markets weakness yesterday we had a % rally in the market over a 5-day period in the week prior that's an extraordinary move in a very short period of time and the nature of the bare Market Beast right now is to see these massive swings so I think it was more about that I think you're right and I think it was the other announcements that came yesterday too that manufacturing is down construction spending is down the fact that jobs are lower all of that I think is more what caused it do you agree yeah in fact I happen to think that we're we're a year into this recession it probably is at least as long as the two longest recessions we've had in the post- depression error which were about 16 months so we probably go to at least mid 2009 but I happen to think this quarter we're in right now the fourth quarter of 2008 will be the worst single quarter in terms of GDP growth um we don't improve marketly in 2009 in my opinion but I think we're at really the peak of the pain right now let's look at what the government does to to ease the pain banki said he's going to keep cutting interest rates but you can only go to zero there so what do you think he will do after that oh my goodness they have taken every tool out of their toolbox they have invented tools that were not in the toolbox they're using tools they haven't used since the Great Depression we've had close to $8 trillion so far of various stimulus measures Investments guarantees loans and I think they will continue to and and they have the need to be creative because they are losing the ammunition of traditional rate cuts and I think the these more creative tools to get liquidity directly into the banking system are the appropriate steps if they've done all this and nothing is working what do we what do we take from that well we're starting to see a little bit of easing in the credit markets what we have what we're still lacking is that confidence Factor um banks have have been provided Capital they're just not yet willing to lend the confidence thing is that that sort of hard to to quantify it's a thing that that gets significantly um deteriorated when you go down into the depths of a recession it's a thing you need to uh to pick up we're not quite there yet but that can turn on a dime and I think all of these measures though it's going to take time are what we need to try to boost some of that confidence when the banks start lending then maybe that'll be the cue for everyone all right lizanne Saunders thank you so much [Music]
Notebook: Auto Bailout
CBS
Transcript
three weeks after asking for a 25 billion dollar taxpayer handout to make three u.s car makers are at it again but this time they have detailed promises of how they will make their ways jford and chrysler all say they'll cut executive pay with top bosses working for a salary of just a dollar a year they'll also ask for concessions from workers try to sell off some brands and concentrate on producing fuel efficient cars such as electric and hybrid models now that is a major change for companies that spend years and tens of millions of dollars lobbying against for fuel efficiency the three ceos learned from their pr plunder last time this time building their corporate jobs at home when they appear on capitol hill for this week the heads of gmp ford will make the 500 mile trek from detroit and cars but since they're going to the same place maybe they should consider a car pool that's okay for my notebook cbs news
Wall Street Tries To Stabilize
CBS
Transcript
right car sales are skidding more than thirty percent and the big three automakers are making their case for a government bailout dealership traffic is the worst in 25 years anybody who has a friend who is contemplating buying a car recently is probably heard that they decided not to go ahead with that purchase so I think that the markets priced a lot of that in the car companies are just the latest group looking for help in what is shaping up to be the worst recession in more than a quarter century businesses across the board are hurting General Electric lowered its profit projections and Sears lost more money than expected in the third quarter we're a year into this recession it probably is at least as long as the two longest recessions we've had in the post Depression era which are about 16 months so we probably go to at least mint 2009 the recession is creating a yo-yo effect on Wall Street we haven't seen this much volatility since right before at the Great Depression the Federal Reserve keeps looking for ways to create some stability it's already given troubled banks billions of dollars and is promising more we're starting to see a little bit of easing in the credit markets what we have what we're still lacking is that confidence factor banks have have been provided capital they're just not yet willing to lend prices are coming down everywhere especially at the gas pump after record highs this summer gas prices may be bottoming out hitting lows not seen since 2005 Alexis Christopher s CBS News Wall Street
Recession Putting the Brakes on NASCAR
Associated Press
Transcript
Jimmy Johnson NASCAR's reigning King is in New York this week the sports most accomplished driver is making the rounds with the media leading up to Friday's annual awards banquet to be sure it's been going well for Johnson of late having recently won his third straight Sprint Cup series title but the aien economy has forced the sport to wrap up the racing year on a sour [Music] note some NASCAR teams have had to cut jobs because of the recession some of that stuff is to tycal year end where you have teams and team members looking for new jobs New Opportunities um you know we've gone through some leaning down on our own just to run more efficiently at Henrik Motorsports and at the same time uh you know there are teams that are needing to lay people off and uh combining race teams and merging together so so you do have a little bit of everything Nascar has also suspended most testing to save money yeah for the time being and and basically it's just for the simple fact they're trying to preserve what we've got for the race teams there's a lot of race teams that are struggling because of the e omy you know cuz it does cost a lot of money to race cars economics aside 2008 was clearly a good year for Johnson he captured his third straight Championship only one driver had accomplished the feat kale yarboro and that was 30 years ago it means a lot I mean it really does but I don't think I'm really going to grasp it until I hang my helmet up and have time to reflect on it and really look back um and maybe that's just my personality I'm of course thinking about next season Johnson won three of his seven races in 2008 during the 10 Race Chase and never finished worse than 15th in that stretch his three Pat even caught the eye of former NFL coach Mike Ditka one day at ESPN as I walk in and I see him I walk to him and introduce myself and and he's like I know who you are champ and by the way you are a dynasty and it just it just took me back I mean it just took my I couldn't believe it bottom line I was just floored by that the way he's going these days the 2009 season can't start soon enough Dave leesy the associated press just
Automakers' Recovery Plans
CBS
Transcript
With auto sales going over a cliff plummeting to 25-year lows, Detroit's big three delivered their plans for salvation to Capitol Hill along with a desperate plea for cash. We need $4 billion by the end of this year. The situation's very tight. In asking for an emergency bridge loan, a total of $12 billion, GM agreed to a radical restructuring, pledging to cut as many as 30,000 employees, nearly a third of its workforce. eliminate up to 2,000 of its nearly 7,000 dealerships, sell or consolidate Saturn, Saab, and Pontiac, and close 11 of 48 plants. We just need less people. Ford, in seeking a $9 billion line of credit, agreed to invest $14 billion in new technology, improve fleet fuel economy by 26% over the next four years, and consider the sale of its Volvo brand. Chrysler is seeking a $7 billion bridge loan by the end of the month. And all three CEOs have agreed to work for a dollar a year if they get government money. On the assembly line, auto workers are bracing for the worst. You're seeing the company basically go through a meltdown. It's uh pretty frightening. And business keeps getting bleaker. GM sales fell more than 40% for the second straight month. Chrysler was down 47% in November. Ford, Toyota, and Honda all were off more than 30%. This is an incredibly weak market. They're getting no revenue at all and and all of the of the manufacturers are really suffering, not just confined to the big three. I think it's pretty clear that bankruptcy is not an option. House Speaker Nancy Pelosi said Congress will act, but it's looking for viability, accountability, and innovation. Either their plan will be one that we will act upon or we will say this is how we want you to restructure. The plans will be reviewed by the Fed, Congress, and government agencies, and the CEOs will be grilled again on Capitol Hill this Thursday and Friday. Whatever happens at the end of this road, Detroit is going to look very different. Katie and Anthony, what about the unions? Are they going to go along with all this or do they really not have a choice? No, the answer is they don't really have a choice. I mean, if the unions were to bulk at this for any reason, they could effectively force their companies into bankruptcy. Then their contracts get torn up. They become powerless. So basically, they have to make concessions here. All right, Anthony Mason. Anthony, thank you.