Charlie Rose Interview With Paul Volker-Part 4

Charlie Rose Interview With Paul Volker-Part 5

Charlie Rose Interview With Paul Volker-Part 6

Interesting Perspective and Comments Made About Economic Crisis

This short interview outlines a few things that have not been widely discussed concerning the economic crisis. It is worthy of note what Mark Bloomfield says in this interview. Please watch.

G7 Agree to 'Aggressive Action Plan' to Fight Global Economic Crisis, But Lacking Any Specific Course of Action

By David J. Lynch, USA TODAY

WASHINGTON — The G7 group of nations agreed Friday on what U.S. Treasury Secretary Henry Paulson called "an aggressive action plan" to combat a worsening global financial crisis.

The five-point, single-page document gave evidence of a shared approach on the part of several of the world's major economic powers, but the meeting ended with no specific new anti-crisis measures.

"Never has it been more essential to find collective solutions to ensure stable and efficient financial markets and restore the health of the world economy," Paulson told reporters.
That was evident on Wall Street Friday, where the Dow Jones industrial average plummeted more than 700 points at the opening bell before recovering to end the day down 128 points at 8451. The past month, the Dow has lost 25% of its value as markets grew increasingly worried about policymakers' grasp on the crisis.

In their highly anticipated meeting, the G7 finance ministers agreed to coordinate their individual responses to the financial upheaval that has roiled markets around the world, saying the gravity of the situation demanded "urgent and exceptional action."

But the joint communique released at the end of Friday's semi-annual meeting of finance ministers from the six nations contained no specific new commitments.

"It doesn't sound like any fresh initiatives…The market was hoping for some sort of bolder, coordinated initiatives," said Marc Chandler, senior vice president at Brown Brothers Harriman in New York.

In the days leading to today's meeting, hopes built in financial markets for specific measures that would address a crisis of confidence in the markets. Among them: provisions to guarantee lending between banks.

But Paulson said demands for "precisely the same policies" from countries with different legal systems, banking industry structures and regulatory systems was "naive."

Asked if today's statement would be enough to calm skittish financial markets, he said: "I think we'll have some volatility for a while," adding "This is about confidence. We need to restore confidence…And there is every reason for people around the world to be confident."

Paulson says U.S. planning to Buy Financial Equity Stakes In Banks For First Time Since 1930s

By David Lawder, Writer for Reuters News

WASHINGTON (Reuters) - The United States is developing plans to buy equity stakes in financial institutions, providing another weapon in its war against financial market turmoil, U.S. Treasury Secretary Henry Paulson said on Friday.

Providing the first confirmation of the plan after a meeting of Group of Seven finance chiefs, Paulson said the equity purchases would be made alongside purchases of distressed assets as a way to recapitalize U.S. banks and other institutions reeling from soured mortgages and illiquid securities.

The Treasury will use authority granted by Congress in last week's $700 billion financial rescue legislation to buy largely non-voting common or preferred shares. Paulson said the two-pronged approach would more effectively recapitalize banks.

"We can use the taxpayers' money more effectively and more efficiently, have it go farther and get more for their dollars and more protection if we develop a standardized program for making and encouraging equity participation," he said.

Disclosure of the plan comes as the Treasury is considering a number of other major steps to deal with a worsening crisis of confidence that has frozen credit markets and halted interbank lending.

The Treasury may also push for a global backstop of interbank lending and possibly an unlimited guarantee on bank deposits, according to sources familiar with the discussions. A Treasury spokeswoman said the Bush administration is reviewing a British proposal to guarantee interbank lending.

The direct capital injections would help banks overcome the bad debts weighing down their balance sheets and boost their capacity to lend, complementing the bailout bill's objective of removing illiquid assets.

Oil plunges to 13-month Low on Global Slowdown

By STEVENSON JACOBS, AP Business Writer

The stunning collapse in oil markets accelerated Friday, with a barrel plunging below $78 as investors grow more pessimistic about a mushrooming global economic crisis.

A barrel of oil hasn't been this cheap in 13 months — a rare silver lining for consumers amid a rapidly imploding financial landscape.

Crude's steep losses came as Wall Street headed for its worst weekly drop ever. The Dow Jones industrial average fell as much as 700 points earlier in the day but swung in and out of positive territory as investors grappled with whether the market has finally hit a bottom.

"There's so much fear out there and that's really gripping the oil market. People are just afraid to hold a position so they're closing out and selling off," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.

Light, sweet crude for November delivery fell $8.63 to settle at $77.99 a barrel on the New York Mercantile Exchange. It was the lowest settlement price for a front-month crude contract since Sept. 10, 2007.

Crude has now lost 47 percent of its value since hitting a record $147.27 on July 11 as a deepening credit crisis sparked by the subprime mortgage fiasco wreaks havoc around the globe and drives down energy demand.

Investors have shrugged off an array of market-stabilizing efforts by world governments, including a $700 billion U.S. financial rescue plan, several bank bailouts and a coordinated interest rate cut by the Federal Reserve and central banks around the globe.

Underscoring Americans' waning appetite for fuel, a gallon of regular gasoline dropped 5.3 cents overnight to a new national average of $3.35 a gallon, according to auto club AAA, the Oil Price Information Service and Wright Express.

Prices dipped below $3 a gallon on average in Kansas, Missouri and Oklahoma. If crude keeps falling, the rest of country should see sub-$3 gasoline in the next few weeks if not sooner, experts say.

Oil market traders got more proof that energy demand is falling away across the globe.

The International Energy Agency on Friday cut its global oil demand forecasts for this year and 2009, pointing to the worsening economic conditions and the tight credit supply.

The Paris-based energy watchdog cut its forecast for oil demand this year by 240,000 barrels per day, and slashed its 2009 forecast by 440,000 barrels per day. The IEA now expects global oil demand to total 86.5 million barrels per day this year and 87.2 million barrels per day next year.

"The fundamental game for oil has changed. In the last decade, oil went up because of strong global economic growth. That story for the near term is over, so everybody has to re-evaluate," said Phil Flynn, energy analyst at Alaron Trading Corp. in Chicago.

OPEC signaled it may tighten output to put a floor under falling prices, but it didn't seem to matter.

The Organization of the Petroleum Exporting Countries said Thursday it will hold a special meeting Nov. 18 to discuss how the economic crisis is affecting oil prices. The head of Libya's national oil company, Shukri Ghanem, called on oil producing nations to cut output.

Many doubt that an OPEC cut would reverse the extreme downward momentum on oil. OPEC's decision last month to cut production by 520,000 barrels a day did little to stop the losses.

Flynn said another output cut "may actually accelerate the slide."

"What's driving this market right now is fear of demand destruction and lack of credit," he said. "If you can't borrow money to buy crude, then demand falls more and so do prices."

US Stock Market Extends Loss Streak For Week

Benanke Says Economic Activity Will Be Subdued For Remainder of 2008 & 2009

Bush Says Financial Rescue Plan Aggresive Enough To Work

By TERENCE HUNT, AP White House Correspondent 10/10/08

President Bush said Friday that the government's financial rescue plan was aggressive enough and big enough to work, but would take time to fully kick in. "We can solve this crisis and we will," he said in brief remarks from the White House Rose Garden.

Bush spoke as leaders of the world's top economies gathered in Washington amid frozen credit markets, panic selling in stock markets and a looming global recession.

The president noted that major Western countries were working together in an attempt to stabilize markets and end the spreading panic, including coordinated cuts in interest rates.

"Through these efforts, the world is sending an unmistakable signal. We're in this together and we'll come through this together," Bush said.

Finance ministers and central bankers from the Group of Seven — the United States, Japan, Britain, Germany, France Italy and Canada — were here for a weekend meeting. Bush plans to meet with the leaders on Saturday.

Bush said he understood how Americans could be concerned about their economic future. "That anxiety can feed anxiety and that can make it hard to see all that's being done to solve the problem," he said.

But despite a relentless sell-off that has seen the Dow Jones industrials plunge 20 percent in the past seven trading days, Bush said, "We are a prosperous nation with immense resources and a wide range of tools at our disposal."

The president said the new $700 billion rescue plan that he signed into law a week ago authorizes the Treasury Department to use a variety of measures to rebuild their balance sheets including "purchasing equity of financial institutions."

It was the first time the president has mentioned suggestions that the government buy shares of banks, although it has been mentioned by other administration officials.

Since the bailout package was signed into law, the conversation about how it will be used has shifted from taxpayers buying troubled mortgages to taxpayers buying troubled banks. Or at least pieces of them.

Such a move would amount to a partial nationalization of the U.S. banking industry, a move once considered unthinkable.

The government is authorized under the law to buy "troubled assets."

Those assets include mortgages, but according to the law, they may also include "any other financial instrument" that is "necessary to promote financial market stability ... ."

It is the government's position that this authority extends to bank stocks.

"The plan we are executing is aggressive. It is the right plan. It will take time to have its full impact. It is flexible enough to adapt as the situation changes. And it is big enough to work," Bush said.

He also noted that the Federal Reserve has injected hundreds of billions into the system and with other central banks has made interest-rate cuts that should help thaw frozen credit markets and enable loans to flow again.

Government insurance on bank and credit union deposit accounts has been raised to $250,000 and the Treasury is offering insurance for the first time for money-market funds, he added.
"The federal government has a comprehensive strategy and the tools necessary to address the challenges in our economy," Bush said.

While he sought to reassure Americans that the government is doing all it can, Bush also acknowledged mounting worry among people about their retirement and investment accounts.
Bush said his administration had launched initiatives that "have helped more than 2 million Americans stay in their homes."

He also noted "rigorous enforcement" steps taken by the Securities and Exchange Commission to make sure that some investors don't "take advantage of the crisis to illegally manipulate the stock market."

Stock market volatility continued, with the Dow Jones industrials falling nearly 700 points soon after trading began, regaining all of that deficit to show an advance and then turning lower again.

"Over the past few days," Bush said, "we have witnessed a startling drop in the stock market, much of it driven by uncertainty and fear. This has been a deeply unsettling period for the American people."

NYC Mayor Bloomberg Preparing for Third-Term Despite Term Limits

NYC Mayor Bloomberg preparing for third-term despite term limitsNew York City Mayor Michael Bloomberg announced this past week that he plans to seek a third term as mayor.

The mayor will propose revisions to the city’s term limits law, which caps the number of terms for NYC officials to two terms. Bloomberg argued that the financial crisis in New York warrants an exception to the current regulations.

The City Council, which would benefit from the term limit extension, must pass Bloomberg’s legislative proposal in order to make the plan a reality.

According to a recent Marist College poll, city voters are evenly split on whether the current two-term limit should be changed to let Bloomberg run for a third term next year (46% in favor/44% opposed/10% unsure).

The poll interestingly found that Bloomberg would easily defeat any of the three Democratic challengers including City Council Speaker Christine Quinn, Rep. Anthony Weiner and City Comptroller William Thompson.

This article is from NYSAR Government Affiars Update for October.

Treasury Rushes to Set Up Rescue Program

The Treasury Department plans to hire five to 10 asset management firms that will set up a process to buy up to $700 billion of distressed mortgages and mortgage-related assets from financial firms.

One firm will be selected by Friday to provide custodial services such as tracking cash and assets. The asset management firms will be named next week.

Federal Reserve Chairman Ben Bernanke has said the government won't pay "fire sale" prices for the distressed assets, which would be less likely to achieve the bailout plan's objective of bolstering the financial sector.

Only companies with $100 billion in bonds and other fixed-income assets under management are eligible to apply to be asset managers, the department said, though future contracts will be opened to small businesses. Among those expected to bid are: Legg Mason Inc., Blackrock Inc. and bond manager Pacific Investment Management Co., or PIMCO.

Some anaylsts are concerned that the short timetable will result in the government overpaying for services. "We can't criticize them for rushing when we're telling them it's an emergency," said Steven Schooner, a law professor at George Washington University, but "there's no question when you rush, the contracts tend to be less well-drafted ... and lead to less disciplined cost control."

Source: The Associated Press, Christopher S. Rugaber (10/07/08)

This article is from Realtor Magazine Online Edition for 10/10/08

Bank of America Will Modify Troubled Loans

Bank of America on Monday said it is launching a "home retention program" on Dec. 1 to modify troubled mortgages for nearly 400,000 customers of Countrywide Financial Corp. Bank of America acquired Countrywide on July 1.

The program, which can reduce up to $8.4 billion in interest payments and principal, was developed in partnership with state Attorneys General to help borrowers that financed their homes with subprime loans or adjustable rate mortgages.

The goal is to "help as many Countrywide customers as possible stay in their homes," says Barbara Desoer, president, Bank of America Mortgage, Home Equity and Insurance Services.

The centerpiece of the program is a proactive loan modification process to provide relief to borrowers who are seriously delinquent or are likely to become seriously delinquent as a result of rate resets or payment recasts.

For more information, visit Bank of America's Web site.

Source: Bank of America

This article is from Realtor Magazine Online Edition for 10/6/08

Fed, Cantral Banks Around the World Cut Key Interest Rates

In an unusual coordinated move, the Federal Reserve and other major central banks from around the world slashed interest rates Wednesday to keep an escalating financial crisis from becoming a global economic meltdown.

The Fed cut its key rate from 2 percent to 1.5 percent. In Europe, which also has been hard hit by the financial crisis, the Bank of England reduced its rate by half a point to 4.5 percent, and the European Central Bank sliced its rate by half a point to 3.75 percent.

The central banks of China, Canada, Sweden, and Switzerland also cut rates. The Bank of Japan said it strongly supported the actions.

"The recent intensification of the financial crisis has augmented the downside risks to growth," the Fed said in explaining the coordinated action, the latest in a series of bold moves intended to spur lending and revive the global economy.

The Fed's action will reduce borrowing costs almost immediately for U.S. bank customers whose home equity and other floating-rate loans are tied to the prime interest rate. Bank of America, Wells Fargo, and other banks cut their prime rate by half a point to 4.5 percent after the Fed announcement.

White House spokesman Tony Fratto welcomed the cooperation among the Fed and other countries' central banks to battle the crisis. "It's important and helpful that central banks are working in a coordinated way to deal with stress in the financial system," Fratto said.
Source: Associated Press, Jeannine Aversa (10/8/08)

This article is from Realtor Magazine Online Edition Daily Real Estate News for 10/8/08.

John Weidman - Recipient of the Otsego-Delaware Board of Realtors® President's Award

John Weidman, Licensed Real Estate Salesperson for Benson Agency Real Estate, located in Oneonta, is the latest Realtor® to receive the President's Award from the Otsego-Delaware Board of Realtors®.

It was awarded to John on Tuesday October 7, 2008 at the Board's quarterly meeting - this time held at the Delhi College Golf Course Restaurant in Delhi, NY.

The President's Award is given to selected Realtor® members of the Otsego-Delaware Board of Realtors® who exemplify superior ethics, practices, and outstanding service to the buying and selling public - the essence of what a Realtor® is all about!

When presented with the award John commented that his buyer/seller clients and customers are the best. One of the many reasons he received this award is because John's customers and clients feel he's the best!

John represents the best qualities of a Realtor® - ethical, professional, knowledgeable, as well as caring for the needs and lives of the people he serves. It is an honor for the Otsego-Delaware Board of Realtors® to present John with this award.

Well done John!

McCain Mortgage Buyout Proposal Rouses Critics

Presidential contender Sen. John McCain stepped into a political hornet’s nest Tuesday night when he proposed that the U.S. Treasury department "buy up the bad home-loan mortgages in America and renegotiate at the new value of those homes at the diminished value of those homes."

In subsequent explanations, McCain’s economic adviser Douglas Holtz-Eakin said McCain is proposing that the government would buy mortgages from banks and investors at the original value of loan, no matter how inflated that it now appears to be, and then give the home owner a new mortgage at current value at a more affordable interest rate. “Obviously, the taxpayer is on the hook for the difference,” Holtz-Eakin said.

Barack Obama’s top economic advisor Austan Goolsbee was among those highly critical of the idea. "This proposal, if enacted, would be a massive government subsidy from taxpayers to the most irresponsible banks, including the ones that committed fraud," Goolsbee said, adding, "This proposal would give the taxpayer all the risk, with no gain."

Source: BusinessWeek.com, Jane Sasseen (10/09/2008)

This article is from Realtor Magazine Online Edition Daily Real Estate News for 10/10/08.

Seller Financing Becomes Popular Alternative

As credit and borrowing standards tighten, seller financing is becoming more common.

For those selling small business, the ability to offer it is particularly important.

"Sellers really have to be prepared to take back more of the financing or to take a second position behind the banks to make them come together ... because of the financial situation of the world today," says Wally Kocemba of the BizDealer Team at Calhoun Companies, a business brokerage firm in Minneapolis.

While considered riskier than bank financing, seller financing -- which is sometimes combined with bank financing -- can offer owners a better price and a faster transaction.

“I believe sellers are going to have to understand that if they want to obtain the price that they’re looking for, they may have to consider seller financing as an integral part of the transaction," says Dean Bachelor, chairman and founder of the Platinum Group, a private-equity firm in Eden Prairie. "If they believe in the business and believe in the future of the business, that's less of a problem.”

Source: Minneapolis Star-Tribune, Todd Nelson (09/29/08).
This article is from Realtor Magazine Online Edition Daily Real Estate News 10/7/08.

Rescue Bill Not Perfect, But Still Best Solution

Rescue Bill Not Perfect, But Still Best Solution

On Friday, the U.S. House of Representatives joined the Senate in passing the Emergency Economic Stabilization Act of 2008 — and President Bush quickly signed the bill into law.

In a letter to members of the NATIONAL ASSOCIATION OF REALTORS®, NAR President Dick Gaylord thanks everyone who voiced support for the revised bill. A failure to act, he said, "Would have pushed consumers into more dire circumstances."

Gaylord acknowledged that many REALTORS® were torn over whether or not to support the bill. "We realize this bill is not perfect," he said. "However, we believe the additions made by the Senate, including raising the FDIC insurance limit and several other measures that will benefit and protect taxpayers, make it a more favorable solution than the previous proposal."

NAR will continue to work with Congress and the Bush Administration to make sure the measures included in this bill are implemented quickly, "with the needs of Main Street placed front and center," Gaylord said. Real estate experts say the bill will give the market a much-needed boost, but that substantial recovery of credit markets will probably take time.

"The market should regain some confidence, and since markets are built mainly on confidence, that’s no small thing," says Gary Keller, head of national residential real estate franchisor Keller Williams in Austin, Texas. "In fact it’s a huge thing and it’s imperative for the market to move forward. But beyond that, we have to wait and see."

"It should give calmness to the financial markets by showing that we will in fact work through this crisis," said Kenneth Riggs, head of commercial real estate analysis firm Real Estate Research Corp., Chicago. "That said, I don’t see the fundamental, or the mechanics, of capital changing right away. That won’t happen until we see how this package will actually operate."

To read more on what Keller and Riggs have to say about the legislation and the future of the real estate market, visit REALTOR® Magazine's blog, Speaking of Real Estate (REALTOR.org/speakingofrealestate).

This article is from Realtor Magazine Online Edition Daily Real Estate News for 10/6/08

The National Debt Clock

The Outstanding Public Debt as of 04 Oct 2008 at 08:04:01 PM GMT is:

10,154,667,862,448.11

The estimated population of the United States is 304,847,872so each citizen's share of this debt is $33,310.61.

The National Debt has continued to increase an average of$3.08 billion per day since September 28, 2007!

You can view this information at http://www.brillig.com/debt_clock/

Bailout Mania: The Staggering Number & Costs for the Bailouts

Bailouts & Cost to Taxpayers

(Source: Reuters)

Financial bailout package approved this week = $700 billion or more

Bear Stearns financing =$29 billion

Fannie Mae and Freddie Mac nationalization =$200 billion

AIG loan and nationalization =$85 billion

Federal Housing Administration housing rescue bill =$300 billion

Mortgage community grants =$4 billion

JPMorgan Chase repayments = $87 billion

Loans to banks via Fed's Term Auction Facility = $200 billion+

Loans from Depression-era Exchange Stabilization Fund = $50 billion

Purchases of mortgage securities by Fannie Mae and Freddie Mac = $144 billion

POSSIBLE TOTAL = $1.8 trillion+

NUMBER OF HOUSEHOLDS PER U.S. CENSUS = 105,480,101

POSSIBLE COST PER HOUSEHOLD = $17,064+

(The information above is taken from an article titled "Bailout Bill Loops In Green Tech, IRS Snooping" posted by Declan McCullagh and appeared on CNET.com 10/3/08 10:07 PDT.)

****By the way, $1 trillion would be enough money to buy about a 1,000 boxes of Girl Scout cookies for every person in the United States - just to put things in perspective!!!