GM On The Brink
CBS News
Transcript
the general motors that the president's auto task force was touring today is according to its own auditors a company on the brink so what would bankruptcy mean for gm the auto industry and for us if gm were to file bankruptcy the real key is in our restructuring mode the real key is how they do it bankruptcy for the country's largest automaker would cost at least another 50 billion dollars with the banking system crippled the government would have to help organize and pay for it but it could be a bargain is bankruptcy the cheaper option the faster option is the cheaper option industry analyst john cossessa says a bankruptcy judge could move much more quickly to streamline gm you will notice dealers going dark very soon you will notice plants closing very quickly products being canceled things that would otherwise take years in a bailout scenario retirees would likely see their medical benefits cut deeply lenders who own gm's debt might be offered 30 to 40 cents on the dollar most vulnerable could be the parts suppliers waiting to get paid by gm the bankruptcy court is looking at every payment to whoever it is and basically freezing everything supply base can't handle that right now if hundreds of parts suppliers many already on the edge of bankruptcy themselves don't get help too that could shut down the entire auto industry you can put money into the house but if you're not going to fix the foundation ultimately it's all coming down anyway but unless that happens gm's customers probably won't feel the impact there will be fewer dealerships to service gm vehicles but warranties should still be honored by subcontractors set up by the bankruptcy court i think ultimately the consumer benefits from all this once we go through the pain and there's going to be a lot of pain the sooner we take that pain analysts say the faster the auto industry can get on the road to recovery anthony mason cbs news new york
The Health Of Banks
CBS News
Transcript
want to talk about your money now great piece on 60 Minutes last night about the FDIC and its role in bailing out banks around the country 17 banks have failed so far across the United States just this year joining us from Washington FDIC chairman Sheila bear good morning good morning how are you 17 so far this year if you if you looked into your crystal ball how many will fail by the end of this year Well we don't make predictions like that we have said the number will go up and it will continue to go up but we've been preparing for this for some time so it's well within our capacity to handle well within your capacity and you said that last night but does the FDIC not need more money in order to do its job no we I think it's important to emphasize as the 60 Minutes piece did last night that we are have industry funded reserves that rely upon and are relying upon to cover losses right now we've already set aside $22 billion to cover losses that we project will occur over the next 12 months after that we have $19 billion left uh that said though we would we'd like a bigger C uh we'd like to be prepared for all contingencies so we are uh increasing our reserves our assessments uh to bolster our reserves some more and uh overall we're fine but it is important for people to understand we're backed by the full faith and credit of the United States government so the money will always be there we can't run out of money right so there is a move of foot in Congress to increase that funding by at least $200 billion right there's that's right to increase the well we have multiple lines of credit but the main line would be increased to100 billion with some emergency authority to go about that but this wouldn't be like tarp money this would be money that the banks then in turn would still back up right they would still that's right if we had to borrow they would have to repay that's right okay here's my question there there's this growing well I I don't know if the number is growing but at least in terms of volume number of people who are saying we should let some of these big Banks fail let City Group fail let some of these giant Banks fail from your perspective is there wisdom in that well I never comment on open and operating institutions I do think for the smaller institutions we are closing them we're selling off the assets transferring the deposits to healthier institutions this does have a cleansing effect on the economy the weaker institutions uh are are sold off to the stronger ones and that overall facilitates greater lending it works for the smaller Banks but for the larger Banks uh legally right now there's no resolution mechanism for larger Banks because of their they're really banking organizations so not just an insured depository institutions so there's some practical difficulties so we're we're supportive of the approach the treasury Department is using right now to support through Capital Investments and try to write these some of these institutions through a supervisory process so if your money's in a regular old mom and pop Bank in the neighborhood it's safe up to $250,000 it is safe that's right go to a my FDIC insurance.gov if you have any questions about your deposit Insurance limits yes make sure you're below our limit fails chairman be I was talking to my banker at Chase this weekend and he said that there's no limit that you can take as long as you like is that true no that's not true uh the the for insured deposits your access is virtually uninterrupted and it was nice the 60 Minutes piece really made that clear last that last night the bank was closed on Friday Saturday morning people still had their uh money access through the ATMs through the credit through their uh checking accounts whatever and it isn't important because we find there's some scam artists actually who go on the web I've seen this and they say it will take years to get your FDIC insured money back so take your money out of this nice safe bank CD and go byy gold or you know high-risk insurance policy or something so this is this has been a source of misinformation please people should understand their insured deposits even if their bank closes it's virtually uninterrupted access to your insured money virtually uninterrupted the longest virtually interrupted virtually interrupted well there are there is no statutory if you're saying there's a statutory requirement that we provide uninterrupted access no that's not the case but in point of fact we do provide uninterrupted access and every single bank failure will demonstrate that uh that is that is the process and again the 60 Minutes piece made that nice and clear last night sh [Music]
US Jobless Rate Jumps to 8.1%
VOA News
Transcript
The number of Americans who lost their jobs last month is worse than analysts had expected. More than 650,000 for the fourth straight month of job losses above 600,000. Bureau of Labor Statistics Commissioner Keith Hall explained the implications to Congresswoman Carolyn Maloney at a hearing Friday on Capitol Hill. Is there any good news in our economy? Um, there are very few bright spots, if it if any, in this this report. Um, labor market weakness is deep and broad across all industries and all demographic groups. When was the last time that the economy lost more than 600,000 jobs each month for this many months in a row? Uh, the answer to that is never. On Wall Street, early gains vanished after the unemployment numbers were released. Outside of expected growth in health care and government services, Standard and Pors economist David Weiss says all other sectors have seen major declines. manufacturing was down, big losses in trade, uh people just aren't shopping as much, and uh business and professional services largely reflecting layoffs of temp workers. At a job fair in New York this week, hundreds of unemployed workers competed for jobs they wouldn't have considered a year ago. Some people are willing to come down, you know, take a few steps down and take positions that they're, you know, over overly qualified for. So that makes it a little harder for me. And in Columbus, Ohio, where 25 police officers jobs were saved because of the stimulus plan passed by Congress, President Obama declared the nation's economic decline unacceptable. That is not a future I accept for the United States of America. That is why I signed the American Recovery and Reinvestment Act into law. The world's largest economy has lost more than 4 million jobs since the recession began 14 months ago. Some economists predict unemployment will climb to 9% before Americans see a turnaround in 2010. Millar Sega, VA News.