Auditors doubt GM's ability to survive
Al Jazeera English
Transcript
General Motors troubles and the woes of the US Auto industry in general have been public knowledge for months but to have the company's Auditors declare in the official annual report released to shareholders known as a 10K that there is substantial doubt about the company's ability to continue as a going concern is a stark illustration of how serious that trouble is GM is heavily dependent on high sales volume to fund its operations Auto Sales have dropped off the cliff down to depression levels with sales numbers not seen since the second world war most of the world's automakers are seeing sales drop very very sharply yes these are these are horrendously bad sales numbers so GM is begging the government for $30 billion in loans the task force on Autos has been meeting um uh around the clock to come up with and uh with a solution to this crisis uh they continue to meet and uh are working towards uh what's likely to be a restructured and retooled Auto industry in this country Auditors say if the restructuring plan GM submitted to the government last month isn't approved GM will have to liquidate the bankruptcy of one of Detroit's big three would have a large ripple effect through the wider economy hitting suppliers of parts and raw materials dealership and repair shops and further depressing public confidence in the economy these are very familiar brand names they've been around all of our lives and to see them disappear is not only a tragedy for those communities that produce the cars it is even for the people who live many many miles from the nearest auto plant the center for Automotive Research estimates that if one or more of the automakers fails this year there would be immediate job losses number in about 25 million GM's warning that it might seek bankruptcy protection could also be seen as a bargaining tool in negotiation with its labor unions the company is seeking wage and benefit concessions GM laid off more than 10,000 workers worldwide last year Rob Reynolds Al jazer Washington
California jobseekers struggle in the recession
Al Jazeera English
Transcript
they call it the Golden State for Generations California has drawn people seeking new lives and wealth people came to work on farms in factories and Silicon Valley to make California the eighth largest economy in the world but now in 2009 at this Career Center in San Francisco people like Martha Garcia spent hours scouring the internet searching for jobs I've been going to to a lot of job fing my resl foxing everywhere and find a different ways and it just there's no life 20 years ago Martha came to the US from Al Salvador with nothing she worked her way up and became a nurse but the single mother of four got laid off over a year ago she's lost her home and the emotional stress is taking its toll it is hard to think that you can can't provide for your kids very Jim Carrey also knows how difficult it is to find work these days he's been looking for a job for over 8 months this is the first this is the first time I've really had to make a conscientious job search and in 30 years before getting laid off he was a building manager in San Francisco making more than $50,000 a year now he sends out six resumés a day but rarely gets a call back my motivation is finding a job so I just try to keep that in the Forefront I mean there's some other aspects uh you know I've lost housing so pretty much homeless at this point job fair on next Wednesday thousands of people around the state like Jim and Martha are losing their jobs every day California has always represented the land of opportunity and for decades millions of people have come here in search of the American dream but for many that dream is quickly disappearing unemployment in California shot up to its highest level in nearly 26 years in January leaving more than one in 10 workers without a job Economist Michael Leman expects unemployment numbers to keep Rising I'm hoping it doesn't get to 15% but it'll be more than 10 I I I figure it's going to get to 12% anyway it's it's a very bad situation after Decades of economic growth many Californians like Nancy brck are surprised at how quickly the state has slipped into a recession I didn't think California would be hit this hard she is already thinking about what she can do next if she loses her landscaping business and you can't sit in a a cocoon or a bubble and wait for someone to come save you you have to go out and make strides in other directions given the state's economic troubles the road back to prosperity for Nancy and millions of others in Califor California may be a long one Rachel Lin San Francisco California
China's growing jobs crisis
Al Jazeera English
Transcript
the unexpected snowfall is a good thing for this Orchard suffering a Long Winter drought water in any form will help improve the yield of kiwi fruit that's what Lee jine discusses with the Villagers here the young man has learned much about farming over the last few months when I first arrived the villagers were skeptical not sure about the whole thing and they thought I was very young after spending time with them they've accepted me and now I chat with them and if they do need any help we try to work together to solve the problem he has a University diploma but instead of work in the city Lee Dre means out here part of a government job placement project for new graduates the most educated person in the village he also does secretarial work for The Village's party Chief it took some time to adjust to life out here the government is working hard to get college graduates to consider working in villages like this one but life in the countryside is tough and it can be hard sell to get people to sign on for the usual three-year term but one of the biggest unemployment rates in China is that of the college graduate population it's triple the average National percentage putting this Elite group in the same uncertain circumstance as dollar a day Factory workers with people suffering at both ends of the socioeconomic Spectrum the government has responded with a comprehensive stimulus package but one of the pillars of the plan depends on people in China spending more that's unlikely in a country with low incomes and a traditionally High savings rate even if consumption increases it might not achieve much and on a consumption base since consumption in China is quite low China's consumption is probably less than France's consumption so if we're expecting a major boost in consumption to save the world it would be more reasonable to ask can France save the world the world has great expect for China but it's becoming clear the leadership is very much wrapped up in fixing the domestic situation first whether something like this Countryside Employment Program will succeed and whether the totality of all these many efforts would actually affect the global economy is a question far too early to ask Melissa Chan Al jazer sheni Province China
Inside Story - Financial crisis to hit the poorest - Mar 5 - Part 1
Al Jazeera English
Transcript
the global financial crisis is having a devastating impact on poor countries the international monetary fund is demanding urgent action by the International Community and to raise at least $25 billion this year but is helping the poor country still a priority for the troubled Rich world and can Dona countries keep their promises to double Aid to Africa by 2010 this is Inside Story hello and welcome to the program I'm Jane Dutton the global financial crisis is having a destructive effect on third world economies the international monetary fund is warning that the economic downturn could create a widespread humanitarian crisis in the world's most vulnerable countries the IMF has called on richer Nations to raise 20 5 billion in the next 12 months but if conditions get worse the figure needed could rise to 140 billion as the more developed Nations tighten their per strings foreign investment is expected to fall by 20% money sent home by migrant workers is also likely to decline there are concerns that social costs of failing economies could cause political unrest and even conflicts it's estimated that if conditions continue to get any worse anything from 1.4 to 2.8 million children could die between now and 2015 the imf's managing director Dominic stas Khan revealed the organization's predictions this week and urged the body to stick to its old commitments he said after hitting first the advanced economies and then the emerging economies a third wave from the global financial crisis is now hitting the world's poorest and most vulnerable countries I urge urge donors to rise to the challenge and provide the financing needed to preserve these hard one gains that many low-income countries have made over the past decade and prevent a humanitarian crisis well joining us today are our guests in was Washington DC Hugh Brien CP one of the authors of the report and deputy director of the strategy policy and review department at the international monetary Fund in Oxford Paul Kier director for the center for the study of African economies at the University of Oxford an author of the bottom billion why the poorest countries are failing and what can be done about it and in Doha Ibrahim o an international economic advisor and professor of Economics at Georgetown University Mr Bren Camp you say that at least $25 billion doar is needed is that what these countries really need well as as we say in the study the needs could even be greater than that what we've focused on are the roughly onethird of low-income countries that will have urgent balance of payments needs just to keep their foreign exchange Reserves at what we would consider comfortable levels in 2009 on that basis we we estimate the needs at $25 billion for 2009 but as we stress in the report first of all there may be some countries that don't have urgent balance of payments needs but do need support to protect their budgets and to make sure that they can sustain uh an adequate level of public expenditure during the downturn and we also emphasize that you know the the prospects this year are very uncertain the global crisis could well turn out to have a more severe impact globally and on low-income countries than we are currently projecting and if that is the case obviously the the financing needs could rise further how can you justify promoting Aid between 1970 and 1998 when Aid flows to Africa were at their Peak poverty in Africa Rose from 11% to 66% yeah those Deca those decades were very difficult ones for Africa and for the developing World in general but what we saw in the in the last decade uh since since the late 1990s was that the the policy reforms that these countries put in place painstakingly during the '90s finally started to pay off we started to see rapid growth uh throughout uh the low-income country uh Community uh we saw inflation coming down uh debt relief initiatives uh man dug these countries out of a big debt hole and so we we saw significant improvements in economic performance and poverty was starting to improve in many countries uh that's one reason why it's particularly important that we not allow we the International Community to not allow This Global recession to uh set back all the progress that has been made in the last decade okay Mr K do you believe that this is the right way to go or do you think that this report is just a waste of money no I think it is the right way to go I think what's happened is the it's tragic that the poorest countries the bottom billion have been hit by a bus who was driving the bus it was the governments of the rich countries the countries of the bottom billion are not responsible for this mess but suffering from it and so it's our responsibility in the rich countries to try and shield them from it okay Mr O I mean critics sorry excuse me interrupting M let me bring in Mr O here many of the critics of the IMF these developed countries say that they are responsible for much of the shortfalls happening in Africa this is very true um the industrial Nations and United States in particular is responsible for this fin Financial mess in the world after 8 years of uh uh the the administration of the Bush Administration and mismanagement greed and a number of other reasons but the sufferings and the third world countries uh are far beyond what the report of the IMF is just uh um referring to uh in fact I would have much preferred that there would be certain case studies in depth about what is happening to particular countries in Africa uh in particular uh where the uh poverty had prevailed and the famine is spreading unemployment is increasing and therefore the human tragedy there or the human misery there is beyond uh any measurement so the $25 billion in my opinion is only a drop in a bucket uh compared but you also brought up the fact that uh many of these countries suffer from different problems Mr Bren Camp how can you put all these countries in one basket when putting together this report surely their problems differ greatly the problems do differ greatly and obviously that's a challenge when you write a report like this you're covering a huge range of countries across the globe with different kinds of problems you know some countries uh for example as the commodity prices have dropped this year oil prices have come down food prices have come down that has benefited some of the countries that were importing these products last year but it's also now hurts uh the the exporters of those Commodities so there's a huge uh income shift going on um between countries it's also true that uh you know these countries are much more vulnerable to the shocks than the than the Richer countries you have many more people living close to or even below subsistence levels so any shock that hits their incomes or that raises the prices of the products that they they need to survive has a much more damaging effect on their welfare than than is the case in in the more advanced economies Mr CIA you write a lot about the bottom billion and uh the bottom dollar there what what are their needs and how would that fall into this IMF report it is brought in um the the IMF report is careful to discuss uh social safety nets and increased spending on social safety nets but I just want to say we we're in danger of of talking Africa down um Africa's going to be hit by this shock is being hit by this shock but actually it's still going to be growing uh the the it's the rich countries that have um managed really to shoot themselves in the foot and so in relative terms Africa now looks more promising than the economies of the rich countries and we shouldn't lose sight of that the tragedy uh for the bottom billion is that they're already so poor that being hit by this shock which they were not responsible for is a call for action from us to help them but it's not a shock that is as devastating to their economies as it is to our own so they're not that risky an environment anymore Mr O though isn't it rather patronizing there's a call initially for $25 billion if you look at the bailout of AIG Insurance in the US one of the main donors for IMF that's at least six times as much are the priorities right here well uh I I think that um over the years we found out the responsibility of the industrial nations of the world had been dwindling uh V Visa the third world countries uh from the time when Robert mcnamer was the president of the World Bank when he asked for 1% of the GDP to be allocated to Aid to third world countries um that percentage had been reduced substantially year after year so there is some sort of lack of responsibility that I see amongst the industrial Nations and particularly at the time now when the world recession is affecting almost every nation around the globe in varying degrees uh I think that this is the time that there could be there should be more uh uh International cooperation to help those countries because as had been mentioned this is a a country a continent particularly of Africa it is full of uh resources and it actually can develop and can grow much faster with some with some help uh financial help and try very much to get them away from any sort of reversal of uh the uh free trade or uh uh the uh condition that the IMF had had been imposing on those countries for reforms and and and we find out that there now there is a call for um nationalization of okay well very interesting and I'd like to pick up on that point after the break CU we are going to take a short break now but when we come back what happened to those old commitments has the money been delivered well stay with us
Inside Story - Financial crisis to hit the poorest - Mar 5 - Part 2
Al Jazeera English
Transcript
welcome back much of the developing world is in crippling debt and it looks like it's going to get worse the IMF is proposing Aid as well as loans in richer countries have been called on to help poor Nations yet again in 2005 the eight wealthiest countries in the world the G8 pledged a total increase of $25 billion in annual Aid to Africa since then only $3 billion have been delivered a 2008 un report suggested the 22 richest countries donate at least .7% of their overall national income and aid but most of their donations hovered around 0.45% now this raises some questions why is so much been promised and so little being delivered and have the existing resources been allocated efficiently still joined by guest in Washington DC H beden camp in Oxford Paul colier and in Doha Ibrahim o Mr Bren Camp the G8 your donors promis to have poverty by 2010 they promise billions only 14% of those promises have been delivered what went wrong there well yes it's true that eight budgets have not uh grown as quickly as uh was promised uh four or five years ago particularly around the time of the Glen Eagles Summit uh I think you know there is always it's always a challenge to to maintain the political me momentum for Aid and that will obviously be particularly difficult in the current circumstances and that's one reason why uh we want to put this report out and and get the message out that uh these countries uh are in need of of uh urgent support as Professor klier has said these countries played no part in the in the uh the crisis and will be among the most vulnerable to its effects the IMF is ready to play its part uh our managing director is is pushing our membership to double the imf's concessional resources so that we can provide low-income countries with more support but even with that we could only provide around 11 billion over the next 5 years okay so tell us how are you to get that money because it seems a lot easier to bail out Banks there's no problem getting that money but it's very difficult getting money to the poor so how are you going to get it well we we will uh you know we we can put out uh the facts and the analysis in the most compelling way uh our managing director will be taking this the message also to the G20 uh meetings uh culminating in the G20 Summit on on April 2nd we have uh you who have a global membership at the IMF we can uh get the message out uh through our executive board and uh through our through our membership okay let's talk about that G20 Summit Mr CER with the Chinese on board do you think this will change the way business is being done I think the G20 meeting is going to be narrowly focused on the issue of financial transparency so trying to get much of an aid debate into that I think will be very difficult um but even if the issue is financial transparency there's a quick win that the uh poor countries of the world could get because of course what the um what the rich countries mean by Financial transparency is um avoid another crisis in the rich countries but what Financial transparency should mean is helping the poorest countries to recover the enormous amounts the billions of dollars that Crooks who've been governing the bottom billion have stashed away in our banks and it's our banking secrecy which is keeping that money there preventing it being recovered that to my mind is the feasible addition to the G8 the G20 agenda on financial transparency well Mr O it certainly seems that a new economic model is needed here well I in addition to Aid I just wanted actually to take the discussion into another Direction um there is a call for Aid and I admire the role of the IMF in trying to raise the red flag now for the time being in order to help those poor countries uh in addition to Aid there must be also a program of debt relief or debt forgiveness um that many of those countries are being griddled by debt that they cannot Service uh they do not export enough to be able to pay for the interest and for a part of the of their debt and therefore uh debt relief at this particular uh time would help those countries somewhat but this does not mean that uh this would be enough uh furthermore I will not be at all surprised that if some of those countries will in fact reverse their economic reform programs and pursue a policy which uh is not compatible with what had been uh pushed for in the past having free trade and U and at the same time okay let's um let me just bring in Mr Bren Camp should the IMF not relax as far as uh allowing countries like Russia and China to get involved in alleviating this problem I know that it it was only when Iceland said that they would look to Russia to get money the IMF stepped in I know that the IMF is very unhappy that China is investing so heavily in the Congo no actually we're not we're not unhappy with uh any investment that goes into to Africa provided of course it's it's transparent we are concern thef have threatened to penalize Congo if they do indeed uh join forces with China no what we've emphasized in the in the case of Congo is that the the terms of any uh investment that involves borrowing or involves government guarantees should be consistent with Congo's capacity to to carry any the additional debt or to carry the the guarantees that that's the issue there and that is in general uh but hasn't that always been the problem jaian meas measures imposed on these countries they cannot keep up with uh this foreign debt they need to look elsewhere and and the the beauty for them you know of Chinese intervention is that they they go into the countries they build infrastructure and their demands are very little what we try to achieve actually is is the opposite of draconian when we go in to support a country we actually enable more financing opportunities for that country both by through the money that we ourselves provide but also because we help the country mobilize additional support to finance its budgets and to finance its infrastructure uh spending what we do emphasize though is that we should not be loading countries up with additional debts that they cannot sustain this was the origins of the debt crisis in the 1980s and 1990s uh thanks to the debt relief initiative we've gotten now most of these countries already out of the those debt problems we don't want to see them going back in and that's why we've emphasized that donors should now be providing support on highly concessional terms as much as possible in the form of Grants but where grants is not possible they should be providing very low interest interest loans Mr K would you like to see more planning more government intervention what I'd like to see is uh is better government policy within Africa policy has improved but it's still got a long way to go the whole discussion on Aid is in a way exaggerates the importance of um policy in Africa set by African governments used to be terrible it's got better there's a lot of room for improvement broadly the IMF has been scapegoat in these scapegoated in these matters the sort of policies the IMF promotes actually turn out to be the sort of policies that ordinary citizens want and Achieve when they get the chance to hold governments accountable through elections policy as defined by the IMs improves when governments are subjected to genuine elections and do you think that ultimately why Poli are so unpopular in Africa is because the IMF policies hit directly the patronage seeking Elites that too often hold power and so the IMF is unpopular with them and ultimately these countries need to be responsible for themselves of course and so the whole attention on Aid is exaggerated relative to governments taking responsibility for the fate of their citizens of course there's stuff we can do to help and we've got a responsibility to do that that's the thesis of the bottom billion but in the end it's governments being accountable to their own citizens and delivering decent policies Mr oow briefly if you will if this money doesn't get to those who need it the most what are your biggest concerns well the biggest concern is famine and unemployment um uh the human tragedy um a large scale misery uh diseases uh Rising crime uh so these are only part of the uh unpleasantness of the current situation in those countries if uh the world does not uh help at at this at this particular time uh for a problem that they were not responsible about in the first place and therefore it is extremely important and I as I I repeat that I admire that uh that the IMF had raised a red flag in this regard to show that the tragedy of those countries particularly the African countries okay let's leave it there Mr Ibrahim ow thank you for your thoughts as well as Hugh Brien C and Paul Kia thank you all very much for talking to us and of course thank you for joining us here on this edition of Inside Story we welcome your comments and suggestions please email them to us at Inside Story at al.net goodbye for now
Unemployment on the rise in Dubai
Al Jazeera English
Transcript
last month the government in Dubai issued a decree making it illegal to fire an emirati citizen while at the same time retaining an overseas worker doing the same job but unfortunately for these employees they say this is exactly what's happening I've been working with one company for 12 years it took them 3 minutes to sack me even the way they fired us was humiliating it's the first time this has ever happened to us it wasn't because of anything we done so how is it they give us 3 minutes notice and Say Goodbye it takes you by surprise when they search you and your car before being told to leave now those companies seem to be violating the decree have been put on notice with what some are seeing as a clear threat Dubai's chief of police has issued a statement declaring his police force will quote commercially boycott all companies that terminate UAE Nationals without giving them any notice or a chance to search for another job under the pretext of the current economic meltdown what the government and by extension the police don't want to see is companies using the global economic slowdown as an excuse to get rid of local workers but many unemployed emiratis say they're suspicious they say they're being fired arbitrarily my question is this do we as Nationals pose a threat to the private sector if so why are these companies employing so many Nationals and then turning around and firing us those suspicions come at a time when great strides had been made in the past few years to improve integration of the local Workforce as well as reducing unemployment overall the unemployment rate here dropped to 6% in 2008 compared to 12% just 2 years before this is a low rate if we take into account the other economies in the region actual unemployment figures are hard to come by in Dubai as the government is extremely reluctant to confirm the thousands of layoffs being reported each month but the problem here is acute especially when taking into account that the emirati people make up less than 20% of the population this city has been hit extremely hard by the economic crisis largely by overreaching in areas like construction now it's not just the overseas workers who have to pay the price of these mistakes it's the people of Dubai themselves Owen Fay Al jazer
How Long With Americans Stay Patient on Economy?
Associated Press
Transcript
slumping stocks and Rising unemployment means fewer customers shopping at Ron seer's suburban Chicago toy stores seert has already cut his employees hours in half and is limiting his purchases of new merchandise the question he and millions of Americans are asking is just how long will the economic crisis last doesn't seem to be getting better quickly and I don't anticipate it getting better quickly but for President Barack Obama the question is how long will the public wait before they start demanding results from his economic recovery plan typically presidents have a honeymoon of about 4 to 6 months I think Obama will have a longer period in which to show results just because of the severity of the crisis thus far notoriously impatient Americans seem willing to give Obama some Breathing Room an Associated Press gfk poll suggests 72% of Americans believe it will take more than a year to see any noticeable Improvement in the economy the president himself is pushing for patience telling americ he'd rather focus on long-term Financial stability than a quick fix what I'm looking at is not the day-to-day gations of the stock market but the long-term uh ability for the United States and the entire world economy uh to regain its foot but not everyone is willing to be patient my patience level for the entire situation we're in is zero because I think it was totally preventable in the first place um and patience for getting it fixed it needs to be fixed as as quickly as possible but I don't have a lot of confidence that's gonna that's going to happen for now Obama can contend that he's dealing with a crisis he inherited not one of his own making but eventually Obama will come to own the problems if by 2010 2011 we don't start to see Improvement then his political fortunes will start to decline but Congressional Republicans are hoping the public holds Democrats accountable sooner than that specifically before the 2010 midterm elections the GOP is already trying to counter Obama's claims that he inherited the crisis with assertions that it's Democrats who are now voting for higher spending that's increasing the national debt Julie Pace the Associated Press the White House
Jobless Rate Bolts to 8.1 Percent
Associated Press
Transcript
unemployment now stands at 88.1% the highest since late 1983 hammered by the severe recession employers SL 6 151,000 jobs in February revised figures for January and December 655,000 and 681 th000 helped push the rate above 8% we think the the numbers over the last three months may be the worst of it because companies try to acrw the restructuring charges in the previous year so in 2008 so a lot of these were announced December and then the actual layoffs get made between December and January so the January and February numbers tend to show them um we're hoping that things calm down a little bit but we still expect to lose at least another two million jobs by Fall the February Cuts were widespread affecting all parts of the economy 180,000 positions in professional and business services 168,000 at factories 104,000 in construction retailers cut nearly 40,000 employers are shrinking their workforces at an alarming clip and turning to other ways to slash costs including trimming workers hours freezing wages or cutting pay with the government feverishly working to prop up the economy even the best case scenarios for Recovery see unemployment moving higher as the recession deepens we had 10.8% unemployment rate in 1982 I don't think we'll break 10% but we're going to get awfully close to it by next spring all told the number of unemployed people now stands at 12.5 million a number that the government expects to stay elevated until 2011 economists say the job market may not get back to normal meaning a 5% unemployment rate until 2013 Diane kepley the Associated Press
Madoff Plea Deal May Be in Works
Associated Press
Transcript
disgraced financier Bernard Madoff may be ready to plead guilty to a sweeping financial frog that's according to the US Attorney's Office filing a motion indicating Madoff may waive an indictment such language is often used when plea deals are ready to happen Madoff is accused of orchestrating one of the biggest financial frauds in history wiping out the savings of investors around the world so far made offs lawyer is not talking and prosecutors are offering no comment lee powell The Associated Press
March 6: Stocks End Mixed After Jobs Report
Associated Press
Transcript
Wall Street fluctuated in and out of positive territory Friday as investors struggled to find Bargains in the face of massive us job losses while the February jobs report showing unemployment had risen to 88.1% was worse than expected many investors had braced for even Grimmer data giving stocks a temporary bounce in the morning the bump quickly faded as familiar problems such as banks at Washington's respons of the crisis weighed on investor sentiment that unease drove the DOW Industrials average below 6,500 for the first time in nearly 12 years but in late afternoon trading the Dow pushed into positive territory and ended the day up 33 points at 6627 the standard and pores 500 Index added 1 point to 683 the NASDAQ lost six points to finish at 1294 uncertain how much lower stocks might go investors have retreated to the sidelines as a result analysts say the market is largely being driven by short Traders those who sell borrowed stock and then buy it back later in hopes the price will decline in the meantime Mark hamri the Associated Press
More Losses Cap Tough Week for Asian Stocks
Associated Press
Transcript
a rough week for stocks in Asia is coming to an end with another down day every major Asian market traded in the red Japan's Nik had the steepest losses down about 3% there were also losses in Hong Kong as well as in South Korea all those losses in Asia follow a major selloff Thursday on Wall Street where stocks reached their lowest levels in more than 12 years while wall Street's uh 280 points dropped last night will still dictate the tone of the day um people still worry about the financial firms in the US prob probably with dra with Dr down uh the uh Financial firms in Hong Kong Thursday's 281 Point drop was based on continued trouble with the US Financial system and deepening fears about the future of General Motors GM released a report Thursday saying the struggling automaker may actually have to file for bankruptcy the first and most immediate effect of of a GM bankruptcy would be uh massive layoffs um would be layoffs at general motor and would also be layoffs throughout the whole chain uh the whole supply chain of the Auto industry uh there have been a number of of different estimates as to what that would be but I think it's safe to say in in an already weak job environment that would you know a bankruptcy of GM could could create hundreds of thousands of new job losses over the next several months it also appears that stocks on Wall Street are headed for a week opening Friday the Dow and the S&P futures are both up slightly Brian Thomas the Associated Press
Money Experts Take Questions
CBS News
Transcript
these days almost all of us have questions about the economy here to provide some answers we hope early show Financial contributor Ray Martin and investment adviser Jill slesinger good morning good morning a bunch of questions we're going to go right to them you ready absolutely let's uh head out to Florida with this first one for Ray hi my name is Maria null I'm from Naples Florida and I'm really concerned about um how much I'm going to have to pay to support people who can't afford their housing Ray take a shot at that you know her question galvanizes a lot of folks out there just this mortgage bailout program and this home affordability program from the president is a lot of people are upset about this over 90% of people are current on their mortgage because they bought an affordable home or they had an emergency fund so if they lost their job they can still make their payments that modification program is going to give people a 2% interest rate mortgage as low as 2% stretch it out 4 years even pay off some of their principles some people are going to save over $1,000 a month and the only stick here is they have to sign a letter saying they'll get credit counseling if they get a government bail out mortgage it's not enough of a stick I say Mr President you're not done here you got to say these people can't make a reasonable decision about credit and spending then what you need to do is freeze their credit and credit cards use some of the savings and make them pay down their credit cards and autol loans with that and build up an emergency fund if they're getting this subsidized mortgage don't use it to inflate your lifestyle you owe a responsibility to get a government mortgage this is this is Ray Howard be not going to take it at the moment so people are upset about that rightfully so can't give a bail out to everybody but make the people who get one be responsible with it all right there you go let's go to another question for Jill hi my name is Nick Vach from Costa Mesa California and my question is when will the private sector hiring start to increase now great question and obviously the key to a lot of people's worries right now certain parts of the private sector are going to start picking up in the next six months those that are affected by the stimulus bill so a health care spending some education spending you will see some tick up there if you're looking for a job in the financial sector I think you are looking for a long time so what you really want to do is look at that stimulus build identify the areas and the sectors that will be helped look in those areas that's where you're going to see the first pickup and buff off your res to make it look more uh user friendly for that industry right all right let's go to another question for Ray all right hi my name is Mike Alberts I'm from aahu Hawaii and my question is um as we see the stock market continue to come um uh how relevant is that to the General Health of our economy it's a really good question that's a great question you know the stock market started to cling October of 2007 before all this bad economic news comes out why is that the stock market is typically a discounting mechanism thinks about forward-looking events if you go back and look at the at the recession in 1973 to 74 the stock market uh fell about 45% but then it jumped about 37% in 1975 and in the Great Depression the stock Market jumped in 1933 by 54% the bad news wasn't over things were still tough but the stock market then climbed it leads a recovery even while bad economic news is coming out so it's sort of the canaran the coal mine and the bad times and then it looks for nuggets of good information and starts going up before the economy shows positive signs we keep we're going to keep looking for that that silver lining all right how about another Jill email emailemail email all right here's an email I have uh life insurance policies from four different companies should I keep paying the premiums take out loans for the current face values or what that's from Robin in North Carolina as more insurance companies are coming under pressure I think what's really interesting about this question is people are saying hey what happens if my insurance company goes broke and that's a very important question if you have an insurance policy with cash value and this is the the question that's at hand in this email that cash value is really a general obligation of the insurance company so ostensibly the insurance company goes broke you think I'm done but actually each state has a system in place to help insurers insured the people who hold the policy recap what they've lost so very important it's usually about $300,000 per policy both term and cash value all right Ray Martin Jill Slinger thank you very [Music] much
Unemployment Nears 8 Percent
CBS News
Transcript
when the closing bell rang here yesterday the dow was at 6594. that is the lowest close since 1997. it dropped more than 280 points that came after a couple of key things happened first citigroup stock fell to a little more than a dollar a share a little perspective a year ago it was 22 dollars and gm fell below two dollars for the first time ever but this morning it is the new jobless numbers that have everybody worried the labor department is expected to report that the unemployment rate rose again last month and analysts expect that it will be over 600 000 jobs lost that would mean an unemployment rate of 7.9 percent and that could be only the beginning cbs news correspondent priya david is here on the floor with me to talk more about that good morning priya maggie good morning to you and overseas markets are still rocky as well japan's nikkei index slipped another three and a half percent here on wall street everyone's going to be watching those unemployment numbers that are due out a little over an hour from now at events like this one in new york city nearly 4 000 job seekers are looking for any lead that could land them work it's a buyer's market right now and the people that are manning those booths i've got a lot of resumes to choose from i just hope they pick mine long lines and thousands of resumes have become the reality of an economy that has now lost over 4 million jobs in the past 14 months the largest economic contraction in the post-war period this is the worst we've seen for the job market since 82 and may end up being the worst we've seen since the depression state by state the unemployment rate has hit some harder than others michigan at 11.6 percent rhode island at 10.3 california at 10.1 each there is hit hardest by this recession michigan because the automobile industry florida california because the housing crisis rhode island because of manufacturing are all in desperate straits because they've been right at the center of the economic storm that's come this time around you feel both full and part-time an economic tsunami that has depleted jobs and will continue to devastate we know it's going to be really bad and we're looking for an unemployment rate that peaks out around nine and a half percent next spring and some think nine and a half percent may not be the end and we could peek out in the double digits before this is all over that would mean an additional three to four million jobs lost come back to my course fellow correspondent and anchor maggie rodriguez thanks so much priya here's a little perspective for everybody on just how bad things have gotten here on wall street as we mentioned yesterday the dow jones industrial average reached its lowest level in 12 years and this year alone the dow has lost nearly 25 percent of its value joining me right now is doreen mogavero she is a traitor and also president of mogavero lee and company good morning to you good morning let's hope it is one yeah let's hope it is one but i think is this one of those rare days that we can probably predict that it won't be given these dire unemployment numbers sure the futures have been very mixed this morning and i think um a lot of what's anticipated is that it's going to be a bad number so it may be that we've already seen a lot of that yesterday depends on how bad it is but unemployment means people have less money to spend it's it's a vicious cycle right oh it is and i think there's no question that the economic data overall is not good but i think the market has seen such an erosion over the last few weeks we may have anticipated that and if the numbers come out even if they're bad if they're slightly better than expected we may see we may see a little bit of a push upward i'm hoping what is very mixed bag this morning what is the feeling here on the floor and what does that mean for the rest of us on main street well i think um there's certainly an awful lot of concern here on the floor um this in in great deal is is main street as well you know we we all have our 401ks invested in the market as well here so we have some of those same worries obviously uh financial sector has had a lot of contraction this year we worry about our own jobs as well so i think um i think the floor is uh in great in great part in sync with with main street if if the fdic borrows 500 billion from treasury as it hopes to and secures our deposits further do you think we'll see things start to come up well i think certainly that's a good confidence builder for for the investing public certainly to know that we have some some backing if something should happen would be i think good for confidence which is one of our main problems there isn't a lot of confidence these days we sure need some dream of cavero thank you very much
Help Not Wanted
CBS
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for the economy this is what freef fall feels like add those forced to take part-time jobs and those who've given up looking for work and the underemployed rate is now nearly 15% with job losses in December and January revised higher the economy has lost more than 600,000 jobs in each of the past 3 months the first time that's happened since 1939 I don't need to tell the people of this state what statistics like this mean President Obama speaking at a graduation class of Ohio police officers whose jobs will be saved by the stimulus package admitted there is no quick solution all of this takes time and it will take patience economists expect the unemployment rate to continue to rise for months the fiscal stimulus package hasn't kicked in the stock markets continue to fall so at this point you know relief may be on the way but it is not arrived not in Dalton Georgia with the housing slump unemployment in the country's carpet Capital has soared to 12% the second highest in the nation this is a town that two years ago the unemployment was in effect zero Pastor Bill Wilson of Dalton's First Baptist Church has started serving meals twice a month to help out we started with 35 people for a meal and now there were 350 here last night Nick Burns laid off from the Mohawk Carpet company has been coming to Dalton's career center for for weeks anywhere they will they will hire me I'm willing to take you traffic at the career center has more than doubled but the manager says they try to offer encouragement to everyone so many people nowadays that's that's what they really need encouragement and hope but once again only two sectors were posting help-wanted signs last month the government and the health care industry nobody else is hiring and Anthony I know the government is going to be creating jobs as we mentioned through the stimulus package and Healthcare as you just told us is another promising sector are there any other jobs to be had any other areas that are promising in the private sector Katie right now it's really only health care and education it's the government that's going to have to pull us out of this recession but we have an opportunity here to reconsider what kind of new jobs we need to create in this new economy as we go forward we've been hearing from companies for years there aren't enough scientists there aren't enough Engineers there aren't enough mathematicians so we can look in that direction of course if you've been working on an assembly line that's not going to help you right now hard to make that transition to be sure and who's been most effective by these massive job losses men have taken the brunt of this because they are the predominant Workforce in construction and Manufacturing which have been hardest hit by this recession but minorities as well have been taking it many of them are in Manual Labor uh African-American unemployment rate is now above 13% teenagers also because their least experienced the teenage unemployment rate is now over 20% cas all right Anthony Mason Anthony thank you
Unemployed Await Stimulus Jobs
CBS News
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foreign George de Bruno has a family of Florida support and a construction job that lasts only eight more weeks after that after this one you know we don't know which one to happen this is a three-prime job which is why seemingly humdrum meetings like this are so exciting for him their new construction bid meetings fueled by stimulus money it's estimated 1.8 million jobs will be created in middle and low income Fields by the stimulus jobs in construction manufacturing retail and Hospitality a third of those will be Union construction jobs electricians carpenters and project supervisors that typically pay three to six times minimum wage the jobs are out there the money's out there you just need to get it right if L Brown's small struggling welding business wins a contract it'll mean spots for eight to ten workers we're attending all the Outreach meetings letting people know who we are what we can do in Philadelphia overall 191 million dollars of stimulus money is being used for mass transit work managed by Bob Lund five thousand jobs in all these are all people who if that money wasn't available wouldn't be working that is correct we're just waiting on the check to actually hand the contract and start the work check is in the mail check is in the mail for blue collar workers the checks can't come quickly enough Jeff glor CBS News Philadelphia