March 5: Stocks Tumble on Bank and GM Woes
Associated Press
Transcript
[Music] investors flood the stock market again Thursday driven by worries about the stability of the nation's big Banks as well as the future of General Motors investors wrestled with more disheartening economic data new concerns about GM and ongoing uncertainty about the financial system we had uh some news in the banking sector that wasn't very good uh late yesterday uh Moody's came out and uh and threatened to uh said they might cut the the ratings for some of the nation's biggest banks uh JP Morgan Wells Fargo that pressured the banking sector and then finally sort of the cherry on top of it all was uh City Group shares which about a year and a half ago traded at $57 fell below a dollar for the first time Short Selling ahead of the government's Friday employment report exacerbated the losses sending the major indexes down more than 4% the Dow Jones Industrial Average plummeted 281 points to 6594 the S&P 500 dropped 33 to 6 78 and the NASDAQ fell 52 points to end the session at 1301 stocks fell in every industry with the banking sector posting some of the steepest losses City Group at times sank below a dollar a share finishing down 10% at a doll two General Motors ended with a loss of 15% at a186 Mark Hamrick the Associated Press
New Mortgage Bill Explained
CBS
Transcript
the Obama Administration yesterday launched a $75 billion foreclosure relief plan it's intended to help 9 million struggling homeowners here to help us break down who qualifies is early show Financial contributor Ray Martin good morning Ray good morning Maggie we have our fancy Ray's Big Board because we're going to break it down very simply but first in a nutshell rate tell me what does this plan offer okay this is called The Making Home Affordable plan there are three components there's a home affordability refinance option that tells people whose Mortgage Balance equals about what their value of their home is they can refinance to a lower current rate there's a mortgage modification program here for people whose mortgage payment exceeds and is not affordable to them exceed 31% of their gross income they can get a restructured mortgage at an artificially low rate that's really a bailout mortgage and then finally there's a massive amount of funds dedicated to the mortgage Market that should bring mortgage rates down for everybody okay if you are thinking about refinancing your home watch this screen and see if this sounds like you who qualifies for refinancing okay for the for the uh home affordability refinance option this is for folks who if their mortgage balance is about 105% of their value or less they could still refinance their mortgage here um they must have income they have to be able to afford their morgage it has to be the house they live in it has to be their primary residence here and the mortgage has to be this is really important it must to be owned or guaranteed by Fanny May or Freddy Mac for them to get and they can just refinance to current rates and they have to pay closing costs here must have income correct okay LTV can't exceed 105 that's the loan to value ratio your mortgage can't exceed 105% of the balance and you have to be current on your payments you can't have missed payments you have to have income to be able to afford a payment but this will let these folks whose loan to value right now is about equal to their home or 105% to refinance now to current low rates you got a 7% mortgage you can get down to 5 and a quarter you'll pay closing cost to do that but that won't be an obstacle and your mortgage has to be with Fanny May and Freddy Mack okay great now let's talk about who qualifies for a modified loan okay this is the home affordability modification program the number one thing is this is for folks whose current housing payment principal interest taxes and insurance exceeds 31% of their gross income here okay okay wait say that again their their housing payment principal interest taxes and insurance exceeds 31% of their monthly gross income okay that means your payment is just unaffordable it's 50% of your gross income this is modification to so many people and what happens here is because you lost lost some income or whatever you have to have a job you have to have income your mortgage gets restructured down to 2% some of your your principal may be stretched out to 40 years or even written off you could save thousand of doar here a month and you pay no closing cost here okay if you think you may qualify what should your first step be well first you know you can visit the financial stability. goov to learn more about it call your lender though and say are you participating most major lenders do ask them if you qualify for refinance or modification they'll walk you through it if you want to find out if your mortgage is held by Fanny or Freddy call Fanny or Freddy uh 1800 Fanny or 1800 [Music] Freddy
Geithner Blames Budget Deficit on Bush
VOA News
Transcript
economists say there is plenty of blame to go around as a nation faces its worst crisis in decades most say the recession is likely to deepen as more consumers lose their jobs their homes and their confidence testifying before the Senate finance committee treasury secretary Timothy gner went a step further and blamed the Bush Administration for the largest Federal deficit in decades we start with a $1.3 trillion deficit the largest is a share of GDP the nation has faced since the second world war but many Republicans dispute gner statements Senator Charles Grassley used a graph to show the deficit grew to its present size under a democratic controlled Congress so President Obama inherited the deficit and debt and of course it's very very large as you can see there with the last column but that request was bipartisan the deficit is projected to grow to 1.75 trillion in 2009 to reduce a deficit and reignite the economy the Obama budget aims to increase taxes on Wealthy Americans and stabilize financial markets to get credit flowing again it also plans to launch the biggest peacetime spending in American history the combined effect of these Investments and tax measures will be to save or create between three and four million jobs and to increase real GDP by 3.2 percentage points by the end of 2010 relative to what would have occurred in the absence of that program despite G's projection many economists believe the worst is yet to come independent reports show us companies continue to slash their payrolls laying off nearly 700,000 workers last month milar Sega vaa news
Citigroup Stocks Plummet
CBS
Transcript
Wall Street never thought it would see this one of its biggest names became a penny stock Citigroup which a year ago was $22 today briefly fell below a dollar for the first time ever as the embattled banks led another sell-off and stock sank two levels last seen in 1996 I think the mood is quite dire I mean I think people are extremely concerned about what's going on in the banking industry that unshakeable fear has infected the entire market it's down thirty-seven percent and spooked small investors people are concerned that the contagion will move on to other industries that's why you see broad-based selling in the stock market since October investors have withdrawn a hundred and eighty billion dollars from mutual funds for the first time since records started being kept in the 1970s five of the 30 stocks in the Dow Citigroup GM GE bank of america and Alcoa are trading below ten dollars and a sixth American Express is threatening to join them I don't think anyone could have possibly foreseen that we would have so many of America's greatest corporations selling and hat sizes and lower the dow down twenty five percent already this year is still searching for a bottom traders say the banks need stability before stocks can stage a turnaround a lot of stocks that are real bargains out there but until these big significant problems get dealt with they're going to continue to be bargains there's more bad news due tomorrow the februari jobs reports expected to show the economy lost at least another 600,000 jobs last month we did find one bright spot today Walmart which had strong februari sales announced eight will raise its dividend by fifteen percent Katie all right Anthony Mason I'm sure we'll be talking to you tomorrow night as well Thank You Anthony