February 24, 2009: Dramatic falls on stock markets in Asia and US

Dramatic falls on stock markets in Asia and US

Al Jazeera English

Transcript

bad Tidings from Japan's Finance Minister Market Falls seriously hitting the economy the falling stock prices have a great effect bigger than we can imagine I can think of many negative effects happening with impair assets held by Banks and life insurance companies in short the bank's Capital diminishing as shares they own Plunge in value the Nick a down 1 a 12% on Tuesday the government now considering buying shares itself as part of measures to try to St iiz the markets Hong Kong's hangsang index fell 4% in early trade before recovering some of that ground markets across Asia following Wall Street down after the Dow Jones posted its lowest closing figure in nearly 12 years the fact is is that the stimulus package in the United States hasn't been particularly stimulating in terms of us and of course in turn Global uh stock prices and I think the real concern at the moment is that even though stock prices are down in the US 50 3% from the peak as you pointed out in October of 2007 if you look at the uh the stock market from a dividend perspective Dividends are being cut at the fastest Pace since 1955 and that gives investors even fewer reasons uh to buy into the stock market so even as President Obama pushes the merits of his $787 billion stimulus plan the Market's so far failing to buy into it on Monday he told assembled economic gurus Trade union leaders and politicians that would not only spend the money needed to rescue the economy but also har the budget deficit in the next 4 years by rolling back the Iraq War and restoring honest accounting we do ourselves no favors by hiding the truth about what we spent in order to address our fiscal crisis we're going to have to be candid about its scope on Tuesday Obama will address a joint session of the US Congress a day later Administration officials will begin stress testing the banks a checkup on the health of alien lenders the results of which could leave the government demanding greater direct ownership in America's biggest financial institutions like City Group the world's biggest bank which apparently needs help more than most federal authorities are reportedly in negotiations to grow the government's stake to 40% City Group stock has fallen in value by 91% in a year another bank groomed to need help is Bank of America though management denies it into this mstom of economic activism FW Taro asso Japan's Prim Minister struggling to hold on to office at home but ready for talks on concerting efforts in Washington and Tokyo as the realities of recession grip both capitals Harry foret Al jazer

Asian Markets Tumble on Wall Street Woes

Associated Press

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hours after the dow posted its lowest close in nearly 12 years asian markets are sinking on fears that any economic recovery is far away japan's nikkei index is hovering near a 26-year low meanwhile indexes in south korea and hong kong have finished the day down around 3 percent today the local market is following the lead from wall street in the united states there's massive concern there about citigroup about bank of america but these two banks problems just show how how huge these problems are in the united states japanese officials also are looking west for economic help one says u.s markets have to recover quickly and japan will also have to act on its own to tackle the financial mess investors are closely watching president barack obama's plan to fix the struggling financial system the administration plans to launch a revamped bank rescue program this week and obama will discuss the economy tonight during a speech to a joint session of congress john belmont the associated press

Bernanke: Recession May End in '09

Associated Press

Transcript

Americans are not bullish about the economy consumer confidence dropped to a record low this month amid growing concern about Job losses and retailers like Target reporting sharply lower earnings Federal Reserve board chairman Ben beraki says it's a severe contraction but stressed the government is doing everything possible to turn it around if actions taken by the administration the Congress and the Federal Reserve are successful in restoring some measure of financial stability and only if that is the case in my view there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery the key to any recovery banki said is stabilizing the financial system and he forcefully dismissed an idea that's been roing the markets nationalizing banks that are on shaky Financial ground I don't see any reason to destroy the franchise value or to create the huge legal uncertainties of trying to formally nationalize a bank when it just isn't necessary about 20 of the nation's largest banks are set to undergo so-called stress tests to analyze whether they are adequately capitalized or if they would need some help should the economic downturn become worse than expected Jerry bodlander the Associated Press Capitol Hill Europe and in the UK

Feb. 24: Stocks End Up on Bernanke Assessment

Associated Press

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Federal Reserve chairman Ben bernacki has given Wall Street a double dose of reassurance B's testimony that the recession might end later this year and that Regulators aren't planning to nationalize Banks helped lift Stocks by more than 3% but while that gave investors some confidence a wide range of negative factors have weighed down the markets recently and investors could simply be snapping up the bargain but you could also say maybe today's uh action was in response to the large sell-off over the past several days and this simply was a relief rally within an overall bare Market investors are also hopeful that President Barack Obama will provide specifics about how he plans to stabilize the financial system and further stimulate the economy during his prime time speech this evening well I think that the market has pretty much felt that the uh the effort by the Administration has been laudable but the execution has been pretty bad uh but they've gotten it wrong a few times so I think investors are hoping that when President Obama speaks tonight that he'll get it right this time around because he certainly had enough miscues to learn uh how not to make mistakes like that in the future the Dow Jones Industrial Average ended the session up 236 points to 7351 broader stock indicators also rebounded the S&P 500 added 30 points to 773 while the NASDAQ gained 54 to close at 1442 David mendi the Associated Press

Money Minute: Home Prices, Stocks, Bernanke

Associated Press

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AP money man home prices tumbled by the steepest annual rate on record in the fourth quarter and the pace of decline continued to gain speed in all but a handful of battered cities the standard and Poor's case Shiller US national home price index plunged 18.2% during the quarter from the same period a year ago the largest drop in its 21-year history the New York Stock Exchange is considering relaxing a rule that requires shares to trade above a dollar or be Dlisted NYSC listed companies already trading below a dollar a share include the bailed out insurer AIG and homebuilder huanian Enterprises the Securities and Exchange Commission would have to approve the rule change for it to take effect Federal Reserve chairman Ben banki says the economy is suffering a severe contraction but the FED chairman has planted a glimmer of hope that the recession might end this year if the government manages to prop up the shaky banking system I'm David mendi with ap money minute

Stock Shock: a $2 Tour of the Economy

Associated Press

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to put a two dollar perspective on how bad the economy is for people like you and me and companies like office depot tuesday morning office depot stock price opened at a dollar 44 a share that's less than the price that i paid for this sharpie i bought at this office depot i only paid a dollar 49 for this sharpie really i got one of those pins a couple of them for this sharpie to make it to that store well it likely had to be delivered on a supply truck and if the driver of that supply truck filled up with gas today at this station in chicago well then that driver paid two dollars and nine cents a gallon that's more than the price for a single share of stock for general motors tuesday gm stock opened up at 1.85 a share i think it's to be expected i mean if you've seen the news in the last six months i mean you know gm chrysler or forward stock is worth almost next to nothing and to buy a general motors vehicle you're likely going to have to take out a loan if you take out a loan from a bank like citibank well citigroup stock isn't trading much higher than the cost of a gallon of gasoline in chicago on tuesday citigroup opened at 2.28 cents a share which happens to only be a few quarters less than what i got charged to withdraw 40 in cash from this atm they charge me three dollars because i'm not a citibank member and there you have it your two dollar tour of the economy mark carlson the associated press chicago

Bank Stress Test Hits D.C.

CBS

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Mayock's pepto and hopefully a pep talk from the president tonight we're going to learn more about how President Obama plans to hopefully calm the markets when he addresses Congress and the nation tonight and he'll deliver his address with very strong public support a new CBS News New York Times poll shows that 63% of Americans approve of his handling of the job 22% disapprove and 15% have no opinion we're joined by CBS News senior White House correspondent Bill plant who's at the White House this morning good morning Bill good morning Maggie the president tonight will tell the nation that there is reason for optimism despite the Grim economic climate and as investors yesterday were selling off on fears about the financial system the White House was still denying that the administration wanted to nationalize some banks tomorrow the government begins a new program to calm Market concerns it will start computer modeling of about 20 big Banks the so-called stress test designed to find out which banks may need more Capital to survive future economic problems if the Test shows a bank needs money but can't raise it from private investors the US Treasury will purchase the bank's Stock A treasury official says the program is supposed to free the banks from concern about the future and get them lending again Americans aren't happy with the bank bailout the latest CBS News New York Times poll shows that well over half the public as little or no confidence it'll help the economy believing it will help only the bankers and in case there is any doubt about how people feel about the bankers a whopping 83% in our latest survey say that if they get the money from the government they should have their executive compensation limited Maggie cbs's Bill plant thank you Bill let's talk more now about federal assistance to the nation's Banks we're joined exclusively by Sheila bear this morning the chairman of the FDIC the Federal Deposit Insurance Corporation very tough job for you lately yes good morning it's challenging times good morning I can't think of a better morning to have you here because all the talk is about the bank and if you look at the cover of the Washington Post there it is the nword nationalization which you have said you would be surprised if we get to that point but isn't it maybe going to be a necessary evil well I think there's ambiguity about the word nationalization it means different things to different people um I think uh in terms of a uh resolution process for the government would take active ownership and control and actually run the bank I think that is something that uh that would be surprising uh we have uh announced uh that we're going to be doing these stress tests to determine whether banks have enough of a capital buffer to withstand fairly adverse economic scenarios over the next couple of years and if they don't have an adequate enough buffer then as uh as the treasury's indicated the treasury is willing to come in and make additional uh stock purchases to increase the capital buffer uh the type of stock will deter whether there is voting uh associated with that or not uh but I think we need to do the stress test first and determine what the the capital uh situation is of these Banks and whe they have an adequate buffer before we get to the stage where we can determine what types of additional Capital Investments the government needs to make but it sounds to me like it's a very real scenario that the government could wind up owning a majority stake in these Banks if these stress tests show serious cracks because the stock is worth so little now we don't have to put that much money into own a majority well I think the inter agency statement that was released yesterday indicated a strong presumption uh in favor of of private control and uh I think uh we would like to continue that it's a very tough thing uh to run a bank like to is it realistic you think well I think I don't want to get ahead of ourselves I think the treasur is going to be making a more detailed announcement tomorrow and I certainly don't want to front run that and then we we need to do the stress testing process to determine what the adequacy of the capital buffer is right now as of this date this the static date uh all these uh large Banks exceed regulatory standards for being well capitalized uh so for right now they're fine I think the issue is how much of an ADD buffer they have to withstand more adverse economic situations and that what we're going to try to figure out with the stress test do does the American public have the right to know the result of these stress tests to know which banks are stronger and which are weaker well I I think there will be uh there will be information about that yes after the stress tester over uh I think we'll look to the banks to make those announcements but yes I think that's right uh the taxpayer the government as investor has a right to a lot of transparency so I would agree with that yes chairman bear we have a question from the floor of the New York Stock Exchange Harry Smith is there take it away Harry Miss bar a question from down here a lot of doubting Thomases at the New York Stock Exchange they're looking for something they can put Faith in is there one specific thing that the federal government or the FDIC is doing right now that they could really hang their hats on so to speak with say this is a sign we know we can go forward we can have some optimism well I think there's a series of initiatives that have been announced by the treasury Department the stress testing as one component the uh the aggregator Bank the public private investment fund uh is also an initiative that will be uh launched I think in the near future we've already taken a lot of steps I think the most important thing the FDIC has done is to provide a a a strong guarantee against insured deposits we have a very strong record of insuring deposits nobody's ever lost a penny of insured deposits and in fact Main Street depositors are maintaining their faith by keeping their deposits in Banks and that perhaps more than anything is uh is important and crucial to keeping the banks having the funding they need uh to continue lending to support the economy so I I know uh I used to work on the New York Stock Exchange I know uh that there is an expectation sometimes people want the Quick Fix and if you're looking for the quick fix you're not going to get it uh this is going to take some time to dig out and people need to be patient but they need to keep Faith uh they need to keep confidence and we will dig out of this Madam chairwoman you're welcome thank you chairman bear good to see you again [Music]

Bernanke: recession could end in 2009; AIG seeks fourth bailout

CBS

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Federal Reserve chairman Ben banki told Congress the recession could be over by the end of the year and on the road to recovery in 2010 banki also said getting the country's Banks back on track is key to fixing the economy also key loosening the purse strings across the country with the unemployment rate at a 16-year high consumer confidence hit new lows this month people simply aren't spending Macy's saw profits plunged nearly 59% in the fourth quarter targets fell 41% Americans are also watching nest eggs disappear the stock market is down roughly 50% from its highs that's hurting a lot of retirement accounts in the past 15 months Americans have lost over $2 trillion in the stock market and insurance giant AIG has its hand out again it's looking for a fourth loan from the government the insurance company has already been promised $150 billion but apparently that's not enough it's expected to post a $60 billion loss in the fourth quarter and piling on to the bad news home price is tumbled by the sharpest rate on record in December down about 18% from a year ago at the New York Stock Exchange I'm Alexis christopherus

World Markets Tumble

CBS

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how now Dow what's going to happen today a lot of eyes on Wall Street and eyes on markets across the world this morning as markets continue to Tumble overnight let's look around the country in in early trading today markets across Europe from London to Paris and Berlin all declined and there were sell-offs across Asia as well Tokyo's brch Benchmark n index finished near a 26-year low after losing 1.2% losses were worse in Hong Kong and South Korea the loss has come after wall Street's worst finish in more than a decade worried that the government's stimulus package and plan to rescue ailing Banks won't keep the worst recession in decades from deepening investors continued their selloff on Wall Street yesterday the Dow Jones Industrials lost 251 points to finish at 7,114 its lowest close since May 7th 1997 for the year the Dow is down almost 19% % and has lost half of its value since hitting record highs in October 2007 and we are joined Now by Doran mavo president and CEO of mavo Lee and Company and Jill Slinger Executive Vice President of strategic Point investment advisors good morning to you both good morning how bad was it here yesterday well it was pretty bad I mean I think it's a steady erosion it's not something that was dramatic all at one time but I think it's almost like a slow bleed how do you account for this almost 20% though since January 1st well I think that there hasn't been anything substi to for investors to really commit their Capital to the market keep in mind there is capital out there to be committed to the market at at a price obviously people waiting on the sidelines and people continue to pull money out though what sign is the street looking for to say let's get let's get this thing going again well I think we've had a lot of uh talk in Washington that's very difficult for investors to really understand it's very difficult for people in the industry to understand quite frankly so I think we need something that's very clear and very precise that people can really hang their hat on everybody thought maybe 9,000 was the bottom then they thought 8,000 is the bottom is 7,000 is a a bottom or could it go even lower than that well I think obviously it could go even lower only 100 points or so away from 7,000 and I think the news is not getting any better on the economic front so I think we really need to see some leadership out of Washington wow every all eyes are on Washington Wall Street and Washington at the same time well that'll be this week for sure I mean we've got a lot going on we to talk more about that in a second Jill people have been panicking they have been worried they have been ringing their hands is it is it too late to do anything about what's going on in their 401ks well it really depends on when you need your money if you need your money right now and you're still invested in stocks youve got to get out there's no there's no asking for help and hope and any of that if you know you need your money within the next year you just have to get out if you have a longer time Horizon we still are advocating staying in partially a diversified portfolio no matter who you are no matter when you need your money we have never believed that having 100% of your money in Risk assets make sense so diversification is still the key timeline and if you cannot sleep at night then just pull the plug and get out what could you put it in put it in cash put it in CDs and put it in us treasuries and you're not going to get paid a lot of money but the bottom line is again if you cannot sleep it is far better for you to feel at ease save more now work longer those are going to be the keys but if you can stomach it and you got a long time Horizon I know just get the Pepto-Bismol out you really are better off not panicking at this point diversification thanks so much dorine thanks so [Music] much

Students and the economy

CNN

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People, students here at Spelman talking dollars and cents when it comes to the economy. We're walking in, we're here in the Student Union as we're sort of waking up some of these students as they're eating breakfast before they head off to class. But Virginia, when you think back to when you went to college, you know, obviously we look back on it with very fond memories. It was fun, but it was also pretty tough. You know, you think about balancing all the different classes, and you think about maybe writing a thesis, getting good grades, graduating. On top of everything, you need to pay for it. And so it was tough then, but now between a recession and the rising cost of education, it is daunting for a lot of these students, including Brett Lampkins here. Brett is a freshman. She's from Shreveport, Louisiana. And she has been willing to interrupt her breakfast to chat with us about the issues facing American college students today. Case in point, you're a freshman, but you need to leave. Right. I'm a freshman here at Spelman College. And I love it a lot, but my parents and I and my sister were looking at the financial issues. And it's just the tuition is going up. It's better for me to leave because I'm trying to go to law school after I graduate. And I'm sure that's going to cost some, too. So I'm looking at it long term, and I don't think that I will be able to handle the student loans after this. Can you do me a favor and compare your situation to yours? Are your other friends, many of your friends working part-time jobs, are a lot of the gripes economically based? Yes, they are. And I think they feel that it's more worth staying here, paying the student loans and having a part-time job. I'm just trying to make my best grade so I can get to law school. And let's remind people, because I don't think I said it, tuition at Spelman, excellent school, not cheap, $27,000. That's tuition, that's room and board per year, so that's $100,000 plus if you're... It's actually gone up. It's $36,000, and it's expected to go up at least 2% more for next year. I'm just quoting what the college told me, but bottom line, it isn't cheap. And President Barack Obama, he's essentially outlining his economic agenda tonight in front of a joint session of Congress. He'll be talking a lot of issues, laying out his economic plan. I know you'll be missing it because you'll be in step practice. Right. But what would you like to hear him address, education specifically? Specifically, I would like to hear him address maybe some more funds going towards students that really do need it. I know they have some going towards them, but more coming from the college, from the government, and also for teachers. I believe that they need to be paid more, a lot more than they are right now. You bring up an interesting point because a lot of times we think about the students I think that's a good point.

Bernanke sees recession ending in 2009; AIG seeks 4th bailout

CBS News

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