Analysts Caution US Banking Crisis May Not be Over
Voice of America
Transcript
as u.s banks repay billions of dollars in government bailout funds president obama held meetings with top bank executives in december telling them it's time to return the favor the way i see it having recovered from with the help of the american government and the american taxpayer our banks now have a greater obligation to the goal of a wider recovery but the president may be giving the financial sector too much credit it wasn't a free fall and it was a very scary period economist martin neal bailey author and former advisor in the clinton administration says after the failure of lehman brothers towards the end of 2008 many of the world's largest banks feared the worst as a collapse of the housing bubble exposed investments in risky subprime loans the banks that came closest were citibank bank of america and if those had not been supported by the government i think it might have caused a cascading crisis that would have been much worse than the one we actually had although he says the worst is over bayley says the banking crisis is not more than 130 u.s banks failed in 2009 the most since 1992. he predicts high failure rates for smaller regional banks in 2010 as commercial real estate loans come due and so there may be actually a worsening of credit availability to a small and medium-sized business in the next year or so analysts say the biggest problem is high unemployment which weakens demand and makes banks reluctant to lend but u.s bancorp chief richard davis sees the situation differently we're probably more optimistic than the pundits might be with that in mind we're putting everything we can it's the call to our engine lending is what we do and so we want to make more loans we have to find a way to qualify more people and not put ourselves in risk while some economist predict continued recovery in 2010 bayley says the only certainty is that banks are unlikely to make the same mistakes twice you know forecasting's become a very hazardous business so i don't want to commit myself too much i don't think we know exactly what's going to happen but it's certainly possible that we could get very sluggish growth over the next year or two and possibly even growth could stall out if it if it doesn't get underway if the so-called double-dip scenario happens in which the economy starts to shrink again bailey says it would make a strong case for a second stimulus something the obama administration hopes will not be necessary mill arsega voa news you
Preview: The Long Recession
CBS News
Transcript
everybody's cut back whether it's been the government whether it's been individual families uh you know they're pulled they're pulling those belts pretty tight and putting extra holes in them mr mayor you're paid to be an optimist and i think you're an optimist by nature but we're talking about ten thousand jobs those are not coming back soon it's going to be very difficult to get them back soon you know how do you look at the glass is it unfortunately ours is not half full or half empty it's almost empty and we've got to start adding some water to it the town runs on hope at this point the town runs on hope a lot of hope came wilmington's way in the year after our first story in february a dozen trucks from the charity feed the children rolled down main street folks lined up for blocks thousands of them for free food in may jay leno staged a benefit show here oh my god in october rachel ray sponsored an extreme makeover of the sugar tree ministry soup kitchen and the people pulled together in the fall they harvested community potatoes part of a drive to grow food all over town bin 15 three bags family221 and now in december again the line this time is for christmas gifts donated by folks who have a little something to spare careful for neighbors who don't what can i get you today we got pies back there as well if you like that folks who are out of work are volunteering anita bach used to work two shifts at the air park sleeping in the company cafeteria in between now she helps out in the soup kitchen hi how are you but what wilmington has learned in this year of unemployment is that charity retraining and government can't replace the enormous number of lost jobs while anita bach volunteers she and her family also get most of their meals in the soup kitchen how are the children coping with the economy one day at a time my son he had come to me and asked me if i had a couple extra dollars to give to the homeless shelter or if we had any extra toys at home that they can give to them for christmas your kids are looking for extra toys at home that they can send to the homeless shelter yes so they have christmas as well
Global Economic Upturn Seen as 2010 Approaches
Voice of America
Transcript
[Music] 2009 began with a sinking global economy Paralyzed by a worldwide credit crunch bank failures and investor Panic from Wall Street to Tokyo major industries and credit markets needed cash infusions and central banks and governments scrambled to provide it days before becoming US President Barack Obama warned of the economic perils ahead in short a bad situation could become dramatically worse the global economy is expected to show a slight drop in output in 2009 following 5% expansion in 2007 and 3% in 2008 unemployment hit above 10% in the United States 9% in Europe and Brazil and nearly 6% in Japan but US Treasury secretary Timothy gner says a turn around is underway the US economy and the global economy are now growing again bu businesses are just starting to invest again consumers are now spending business and consumer confidence has improved global trade is now expanding at an encouraging Pace Financial analysts warn that perils remain and financial reforms are needed Economist Mark xandy policymakers have done a lot of good work stabilizing the financial system but they've not changed anything fundamentally and until they do the risk of another Financial panic in our future is still very high policy makers also must decide when to wind down unprecedented levels of government support that could lead to inflation Russian Deputy Prime Minister Igor Shalo I think that this year it would be more about how to live after the crisis what to do with exit policies and whether All of Us carry on with fiscal uh stimulus or when we exit and on what conditions the global economic downturn struck Advanced industrialized nations particularly hard but allowed Rising economic powers like China and India to shine says World Bank president Robert zelich India is now a rising economic power that handled the recent economic crisis very well is contributed to World economic stability and could become a poll of global economic growth over time in developing countries such as Kenya the World Bank stresses the need to refocus attention on long-term problems obia jelli isili is the world bank's vice president for Africa in terms of the competitiveness of the new global environment Kenia would have absolutely no choice but to tackle the most important constraint to its development it has been um corruption unlike in past recoveries the United States is not expected to drive global economic growth again World Bank president Robert zelic and in every past economic crisis what you've had is the US consumer and the purchasing start the ball rolling again and that consumption then leads to increased business demand investment in the business side most economists expect that's not going to be the case this time instead of advanced industrialized nations leading the way Global growth will likely be powered by rapid expansion in countries like China and India with contributions also coming from lesser developed Nations Michael Bowman vaa news Washington