Chrysler Slams On Brakes

CBS

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the crisis in the Auto industry intensifying with word of Chrysler temporary sus temporarily suspending operations we're joined by CBS News senior White House correspondent Bill plant with more on that good morning Bill good morning Harry this is stunning but perhaps not a complete surprise because the Auto industry is still waiting for that $14 billion loan from over here from the White House and in the meantime the Detroit big three automakers are taking drastic action it's definitely a signal of what we're going through I mean this is the real deal for Chrysler the deal is a month-long manufacturing Hiatus beginning tomorrow twice the normal 2E holiday shutdown Chrysler's entire North American operation is affected 30 plants in all 30,000 workers it really sends the message that what the automakers have been saying for the last several weeks is accurate that they are in trouble the trouble Auto Sales are at their lowest point in 26 years making matters worse many who want to buy can't get credit and it's not just Chrysler Ford said it's shutting down 10 plants for an extra week in January and General Motors says that it has shut 20 assembly plants in North America for at least part of the first quarter workers at Chrysler and Ford will receive nearly full wages thanks to Union contracts and unemployment benefits will it be hard on people yeah because they might have to wait for a check for a week or two longer because of unemployment and stuff like that but I mean most people we've been living through this for probably going on a year Chrysler at and GM say that without help from the government they won't have enough money to pay their bills in a matter of weeks when it's all done I'll be really surprised if Chrysler survives this Auto industry analyst Dan mcin says the shutdowns come as no surprise this would be like 10 katrinas hitting America at the same time if we let this industry go down the American public understands that now the Bush Administration continues to say that it wants to lend a hand and that it is continuing to work on a bailout package but they won't give us details of how close they are or when we could expect this meanwhile The Wall Street Journal is reporting this morning that GM and Chrysler are in merg your talks again all right thanks very much Bill plant Washington [Music]

Credit Card Crackdown

CBS

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Federal Regulators are expected to make the most sweeping changes to the credit card industry in decades they're getting very tough on Banks and lenders over fees and interest rate changes so what will it mean for you in your wallet Jordan Goodman is an author and personal finance expert and he joins us this morning good to see you again good morning mag nice to be with you again so they're going to talk about changing these controversial practices I'm going to go over my personal favorites and you tell me if they're changing Absolut number one when they charge you when they raise your interest rates even when you're like a day late with your payment that's not going to happen anymore that's a really good these are really good things they've been a long time coming so the first thing is they're not going to raise the interest rate if you've been uh you know more than less than 30 days late so in the past if you're 3 days late you know they'll hit you that's not going to happen anymore so that's a really really good thing so it won't show up on your credit report unless it's more than 30 days late either cor that's correct that's that's a good thing because a lot of people been hurt by that one the second one is no retroactive interest yeah cuz sometimes even when you pay in full you get that late fee well this is what's called a double C billing is you've paid your bill for last month but you're still paying interest even though you've paid it off in the past right it's outrageous so they're going to stop double cycle billing so that's really a very good thing okay the second next thing is they're not going to increase interest rates if your payment is missed on another card now this is what they call the universal default clause if you miss on your phone bill or something like that the credit card companies see it and they raise all your interest rates to 29% across the board that's what's called the universal default cause that one's going to be gone too when the FED votes said today and and the fourth one is they're going to improve the readability of monthly statements you know these things have got all kinds of legal EAS and very difficult that's supposedly going to make it much easier to read to understand the interest rates you understand the late fees and all that so that hopefully should make things a little bit better these all sound great but I can't imagine that the banks and the credit card companies will will go quietly we'll accept this blindly well that's right the banks are going to you know really battle on this one they're going to lose about 12 billion wow in income from these kind of things and they're going to try to make it up in other ways so like how well they probably will uh the 0% offers you see these days or the bounce transfers those might be much more limited or not available at all they'll raise Annual fees they'll do all kinds of other things to squeeze money out of us one way or the other well that's fair because right now it was almost too good to be true the credit has been flowing very very well but for a lot of people with these things they were getting caught and really really getting hurt there are some things people can do today though you know without having these these rules are going to go into effect probably 2010 something like that so what we'll do is we'll put those up on our website early show. cbsnews.com these are things you can do right now this probably we won't see till you said 2010 that's right that's where I'm going to go into effect they're getting voted on today but effect 2010 Jordan Goodman thank you thank you Maggie happy holidays

Bush weighs GM bankruptcy; credit card rate-hike rules adopted

CBS

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the big three could be in big trouble the bush administration is now considering a managed bankruptcy the car companies have been begging for a government bailout but congress wouldn't give the green light and the president is still exploring his options credit card companies soon won't have the option of raising interest rates in the biggest crackdown in decades regulators are adopting new rules they want to stop card companies from surprising card holders with hikes on current balances the rules go into effect in 2010. fedex delivered an unwelcome surprise to its employees it's cutting pay and freezing contributions to retirement funds while earnings went up 3 percent demand for shipping is down and fedex is bracing for a tough road ahead president-elect obama is looking for ways to jump-start the economy aides are working on a giant stimulus package to create new jobs and provide tax relief but the price tag is high 850 billion dollars over two years and 554 000 americans filed for unemployment claims last week while that number is high it's lower than expected that's your money watch for all your business news log on to cbsnews.com at the new york stock exchange i'm allison harmelin

More Investment Scams To Come?

CBS

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as the probe into disgraced money manager bernard madoff widens many people want answers from the sec on how it missed what may be the largest single swindle in wall street history cbs news correspondent bob orr reports if the alleged 50 billion investment scam run by bernard madoff is stunning in scope so too is the government's failure to uncover it in a shocking admission securities and exchange commission chairman christopher cox revealed government regulators failed to thoroughly investigate allegations of wrongdoing by madoff dating back to 1999. all we know right now is that over a period of time information was provided that was specific and credible to the agency cox says investigators never found the fraud because madoff kept several sets of books and lied to regulators to cover up an elaborate ponzi scheme the sec let down the public and failed to provide its core function and core responsibility in inspections and enforcement madoff who is now wearing an ankle bracelet and under nighttime house arrest told the fbi his clients lost up to 50 billion dollars but no one has a firm grasp on the scope of the damage it's painful for all of us robert crane is among madoff's victims the foundation he runs in new york has lost all funding we're closing we'll be going out of business at the end of january cox says there's no evidence that anyone at the sec did anything deliberately wrong but congress now is promising its own investigation demanding that someone be held accountable bob or cbs news washington we are joined now by richard parker an economist and professor at harvard's kennedy school of government good morning sir good morning how are you do you have a sense that where there's one made off there may be more oh yeah i think these are like cockroaches or termites they're always more that you don't see ken galbraith a great american economist wrote a book called the great crash 1929 and he coined the phrase the bezel to take account of this there's always in every economy somebody who's embezzling and when times are prosperous and the markets are rising nobody really notices that they're being embezzled if the embezzler is doing a good job and the total net psychic wealth of the country rises because both the embezzler is richer and the embezz lee doesn't know that he's lost money but now in times like ours uh the exact opposite hand uh happens and people scrutinize uh their uh resources approach analogy the lights go on and all of a sudden those things are flying all over the place absolutely and we're gonna see more after mr madoff i assure you how how do you account for this after the stock market crash in 20-h wasn't there's this whole thing about due diligence wasn't there supposed to be a notion of you you your advisor understands what it is you're supposed to be purchasing well there was i mean from 1930s up through the 1970s there was serious due diligence but for the last 10 or 15 years there's been an exploitation of sec rules to create these so-called hedge funds which are meant to be for very wealthy people and aren't scrutinized with the same level of detail as public mutual funds and the like or public stocks by uh the sec and so the room for fraud is enormous also these hedge funds have been reporting 30 40 sometimes 50 percent return and the attraction of that kind of money is magnetic and so people rush to put millions of dollars into them and don't often ask what it is exactly that the uh the investment to make the money sure uh so you have a sense if there's one there's more and how deep and how much money might they be worth oh i listen i i think that this will come trickling out fairly quickly next year as we see more of these hedge funds report out not being able to meet redemptions i mean i don't think that any of us thinks the recession is over i think that the stock market probably hasn't touched bottom it's not that far away from it but it's not at bottom right and um yeah exactly right oh my goodness uh richard parker thanks very much for the uh enlightenment this morning sorry to think of the bad news there she goes the cockroaches go running thanks

WH "Very Close" On Bailout

CBS

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I will tell you this the president is not going to allow a disorderly collapse of the companies that is not an option some people have assumed that one that's one of the things that we would decide um that is not going to be the case uh when the President says we're going to take all of this into account he means that we're going to do something uh and we're nearing a conclusion we're narrowing options I just don't have anything for you today let me just um ask two things quickly um do you think the week will end without a decision and two I I'm this may have been asked before so forgive me it's a repeat but when you say disorderly collapse can you explain what that means it does that mean that there's some kind of collapse it's okay but but a certain other kind of one is not there's by that I mean a disorderly collapse would be uh something very chaotic that is a shock to the system uh if there's there's an orderly way to do bankruptcies that provides for more of a soft Landing I think that's what we would be talking about that would be one of the options I'm not saying that that is necessarily what it would would be announced um and you asked if it would be before the the end of the week I just I can't tell you right now but I can tell you we're nearing a conclusion and we're very close