Charlie Rose

Christopher  10/03/2008 06:21 PM Report

Senator Judd Gregg's comments about the credit crisis were more informative and understandable than almost anyone else I have heard try to explain what has gone wrong and what can be done to 'attempt' to fix it. Charlie Rose can have him on again any time and I for one will be listening to what he has to say. He is one of only 3 or 4 people in the Senate who seems to know what he is doing. The other 96 can go home and stay there.

Diane Chigounis  10/02/2008 02:50 AM Report

I have spent a week watching C-Span and The Charlie Rose Show. I wish to thank you and thank you, for your shows on the bailout and, especially, for the Warren Buffet interview. I have been waiting all week for him and,finally, you announced it. It was great, and now I really understand what is happening.

I discovered Judd Gregg on C-Span and was impressed with his presentation. He was a good choice for your show, also.

CJ  10/01/2008 11:56 PM Report

Per the comments made on Sep 30 by Martin Feldstein, while talking to Charlie Rose, there are currently around 10 million home owners who owe more on loans than their home is worth. Some of these are trying to sell. Some are considering the idea of stopping their payments due to the drop in value of their bad RE assets. Most of this is due to 95% or 100% loan to value situations (in their initial loans) and then having house values reverse direction recently. Many may have begun with 95% loan to values back prior to 2005 or 2004, had their LTV drop to more like 80% when the market was still rising (as in my case for example), but have still been caught short now that values have dropped back down so quickly and sharply. In any event... If 1 in 5 (it is probably far less than 1 in 5 keep in mind) of these people are trying or have to sell in today's market, but can't, then that comes to 2 million (give or take) owners who are up side down and can't sell or who may short sell or perhaps go into foreclosure. So, if all of these properties turned into distressed properties and the Fed were to take the $700 billion they plan to use to buy junk paper and, instead, were to buy ALL of the distressed properties and ended up owning actual real assets vs. paper assets THEN, on average, they could buy upwards of 2 million such houses for an average of $350,000 each. So, the numbers I suggested a few days ago would actually work and would work even easier than I first thought. So, why isn't anyone looking at this as a viable option?

CJ  10/01/2008 11:55 PM Report

HERE IS WHAT I WROTE TO CONGRESS, PALIN, MCCAIN AND OTHERS A FEW DAYS AGO... The U.S. Congress, as I type this, is debating how to bail out the U.S. economic boat... with a big wad of cash! President Bush was on TV the other night and said it all started way back when and had something to do with the so called sub-prime loans. The folks who took out those loans began to default and it went down hill from there. Eventually lenders came up short because sellers came up short and before long anyone who owns a house has lost money on paper at least. Anyone who needs to sell, for whatever reason, is having a heck of a time finding buyers because of a number of reasons, not the least of which being that the lenders are getting tighter with their cash because they don't want assets backing loans that are dropping in price either and because they can't sell those loans and because they are having liquidity issues thanks to goof balls packaging the loans by the thousands into "mortgage backed securities" that could once upon a time be sold on some securities markets but now they can't because buyers have no idea what these fancy securities with a complicated bunch of mortgages behind them are or are not worth. Talk about grid lock. In the mean time the stock market is going south as people cut and run and hide under their beds while hundreds of financial company stocks are dropping like flies and the companies are thus being sold off in fire sales. And, when companies get sold, left and right, people lose jobs and retirement plans invested in stocks lose value and... you get the idea. So, what is the FIX? That depends on who you ask. Should we use tax payer IOU's to buy the mortgage backed junk paper? Or should we ignore the situation and let everyone sort it out on their own? Or should we bail out each company we think holds the world together and let all the other small potatoes cave? Or should we give everyone $600 again and see if that helps? Boy was that a lame idea!! Answer: NONE OF THE ABOVE. What we should do is very simple and easy and will get right down to the root cause. We should BUY HOUSES... directly... with tax payer funds. Rather than use $700,000,000,000 in tax payer money to buy "securities" or "companies" what we should do with that load of cash is BUY HOUSES. The US government owns forests full of trees. Now they should own cities full of HOUSES... and perhaps a few townhomes and condos also. Which houses and what am I talking about? Answer: Any houses that meet certain REQUIREMENTS should be purchased, on sale, for what is currently owed on the houses plus closing costs. The requirements are as follows... (1) House owner must be in default for 90 days or more (and thus have a big fat ding on their credit history by now). Bad home owner. Shame shame. (2) House should have been listed for at least 120 days with no sale offer pending. Honest effort has been made but no luck. (3) House appraised value and sale price should be less than balance on loan plus late fees. Upside down thanks to bad house market. (4) Home owner should have been out of work or, at least, earning less than needed to pay high house payments and have little or no savings as reason for missing payments. (5) Lender must show proof that loan was reasonable to begin with but due to terms or current situation of borrower loan has gone bad. (6) House must be in decent shape and will cost very little to clean up and be able to be rented. If not owner must make effort to bring house up to snuff. (7) House loan must be under $500,000 and average $300,000, give or take, over entire market of houses being purchased. (8) Can not be owned/occupied by illegal aliens, rats, ... (9) Etc. If house meets Government requirements then Government will make offer to seller, on a first come first serve by who is most in distress order, to buy house for loan amount plus closing costs. House is purchased only once. Then becomes exempt from any other Government loans or bail outs for 20 years. Don't expect to buy that house or sell it again to the Government. Once purchased then house is contracted to real estate managers (share the business) who find renters who rent houses at fair value in the area. Landscapers are hired to maintain yards and exteriors and cost is included in rent price. HUD manages all properties and hires enough help to take care of all issues. Eventually, when market recovers houses are sold a few each year over time. Others that are profitable as rentals are retained longer while tax dollars are recovered via rents. How many houses would be purchased? Simple. $700,000,000,000 worth. At an average of $300,000 that would be about 2,300,000 houses the U.S. Government would PERHAPS own. So, we are talking about a LOT of houses. A LOT of houses. About 46,000 per state on average. About 3,800 per month per state on average over the next year. Just enough to stimulate the housing market. Probably not enough to buy all the bad loan homes. But a dang good start. (see below) And a lot of banks would get a lot of bad loans paid off keeping them in business. And a lot of those mortgage backed securities would be worth something again rather than backed by a lot of bad loans. And if not, well, too bad. And a heck of a lot of buyer and seller RE agents would get commissions too. And a heck of a lot of RE managers would have good businesses again. And a heck of a lot of people could rent those houses for a good rental rates. And a heck of a lot of landscapers could keep working too,making neighborhoods look better in the process. And the property tax bases of a heck of a lot of counties would be shored up and peoples' home sales would happen and all of a sudden the bad buyers would become renters... perhaps even renting back the houses they sold for less than they were paying in mortgage payments too... if they qualify... or are the best rent applicants that can be found. And, with any luck, the houses still left on the market would not have to be sold at fire sale prices because supply would, once again, be more in line with demand. And builders could get their employees back to work building a few extra new homes again too as there would finally be a better economic environment in which to sell the houses in. And, guess what else, maybe even all the other businesses in town would come back to life... and on Wall Street too... and people would keep their jobs and have a place to live and we might just get out of this mess w/o bailing out the scum bags who cooked up the "mortgage back paper mill" to begin with. In fact they could also pass a law that says, "You make a loan... you keep the loan... you don't sell the loan... so it better be a good loan." Now, last question. HOW DO WE ALL GET A COPY OF THIS EMAIL TO ONE OF OUR FINE FEDERAL AND/OR STATE GOVERNMENT REPRESENTATIVES so they can get with the program?? http://www.usa.gov/Agencies/Federal/Legislative.shtml You know, come to think of it, what would stop each state and county government from getting with this very same program and kicking in a little free cash also? In fact, what would stop any "fat cat" with a few billion laying around (can you say Bill Gates or Warren Buffett or Carlos Slim Helu or Forbes Richest People ... http://www.forbes.com/worldsrichest/ ?) going to waste on the stock market from doing the very same thing? Makes you kind of wonder doesn't it? Pass it on before it is too late. PLEASE.

M. Feniello  10/01/2008 10:01 PM Report

Watching legislators step on their "assets" is getting old.

Are we as inescapably doomed to hear mortgage-backed securities, CDO's and mortgages themselves called "assets" as we are to hear all things nuclear called "nucular?" If anything related to mortgages, other than the real property itself, were truly a hard asset, this discussion wouldn't be taking place. Yet the bailout proponents will buy up these "assets" in spite of growing awareness that using debt to support more debt is indeed as silly as it sounds. Collateralized, no-recourse mortgage debt smells almost as bad as cheque kiting, and mom says if it smells bad, don't buy it!

Maybe this is the chickens coming home to roost... didn't we skew our thinking when usury laws were relaxed back in the 80's? Didn't we let Visa and MC teach us the shell game when they jacked rates and then gave us more cards on which to transfer balances at 0% 'till we make one late payment? Andrew Kahr let the cat out of the bag years ago in a Frontline interview. Ask a mortgage broker what percentage of sub-prime paper was written just to pay off credit card debt... my accountant says it's more than half. Americans appear to be more worried about losing their cards than their homes. Any wonder how big credit-card banks like JPM/Chase and Citibank are able to scoop up the deals, laughing all the way to the "bank?" Yet no pundit or official has cited this dynamic as having desensitized us to the peril of runaway debt, much less as a direct causal contributor to the current crisis.

Shuffling debt will now go down in history as the greatest of the boomers' many addictions. Feldstein's idea may actually be workable... too bad Gregg wasn't listening to the first segment. Let's see how many of those "assets" Gregg buys.

Brian  10/01/2008 08:23 PM Report

Why does the Senate bailout bill have tax breaks for:

- "Wooden arrows designed for use by children" (Sec 503)

- Wool Research (Sec. 325)

- Film and Television Productions (Sec. 502)

- Litigants in the 1989 Exxon-Valdez oil spill (Sec. 504)

- Virgin Island and Puerto Rican Rum (Section 308)

- American Samoa (Sec. 309)

- Mine Rescue Teams (Sec. 310)

- Mine Safety Equipment (Sec. 311)

- Domestic Production Activities in Puerto Rico (Sec. 312)

- Indian Tribes (Sec. 314, 315)

- Railroads (Sec. 316)

- Auto Racing Tracks (317)

- District of Columbia (Sec. 322)

????

THIS is the bill that senators are screaming about, saying "IT MUST BE PASSED OR DOOMSDAY!" Who believes them? And yet the bill will easily breeze through Congress.

EC  10/01/2008 08:09 PM Report

Mr. Rose,

Thank You for streaming your epsiodes online at such a fast rate in a time when people are starved for insightful information in the state of the economy.

TABS  10/01/2008 04:23 PM Report

Judd Gregg

Comment by: TABS on Wed, Oct 1 at 02:18 PM

Rep Clyburn(D)SC, Head of the Black Caucus,was almost crying after the vote went down in the house. Sen Judd (R) of NH looked like and talked like a man whose elevator had just went down leaving him on the top floor.....Fear people is the least of it, the government went DYSFUNCTIONAL and the markets dropped 777 DOW points. .............and the rest of this is somewhere in the ether?