Charlie Rose

Ludwig  10/08/2008 02:04 AM Report

Why doesn't someone propose something like the economic plan on the site below? We need to do more than waste money on bailouts that don’t work and attempts at a quick fix.

www.feedingwealth.com/Home/Default.aspx?tabid=72&forumid=5&postid=10&scope=posts

Alice  10/02/2008 06:30 PM Report

Zuckerman gets it, the rest of them don't. Feldstein's solution won't work. It doesn't matter if you give them ZERO % interest. People won't keep the house if they have negative equity no matter what interest rate. Buffet is wrong because buying the garbage at market price won't help the financials. Sorkin is wrong in saying the 'public doesn't understand'. We saw this coming over a year ago when the media and talking heads were fast asleep. The bill that's going to pass is A CRIME AGAINST AMERICA and it won't put a dent into the problem. Listen to ROUBINI, in his interview with Bloomberg radio (google it) he described the best solution to deal with this crisis.

mark lymer  10/02/2008 01:19 PM Report

correction: Kevin Phillips on Bill Moyers (doh!- brain spasm)

note to neil - how many contracts have you had broken by the other party? it's very common, really. i realize that business majors take 'ethics' classes in school, or at least they used to. architects even take ethics classes, and indeed being a member of the AIA there is a code of ethics, for what it's worth, it's always an individual path choice each time. the 'bottom line in dollars and cents' is not the whole story. capitalism is just math. governance is about a civilization. the real 'bottom line' is about things like integrity, etc. those are social issues. elected officials are people, they can be held accountable. you can call, write, visit them. and if they dont do the job, vote them out. how the math works out (the money split) can be used or abused to produce more for everyone or more for a few. even Condi Rice's cousin, an ACLU lawyer in LA knows that. the wealthy in LA at least are softer touches for social programs she fundraises for, because they know that if things are better for everyone, things will be better for them too.

tony maffei  10/02/2008 10:00 AM Report

Hi Jhon,I usually keep my views to myself. But you bought it up a while back, saying you could not wait for the democratic party to take control of Congress, because they were going to strengthen the dollar. And we're all gonna be happy. Well, they now have a 9% approval rating and they have been called the do nothing Congress. Barney Frank and Chris Dodd were supposed to overlook Fannie Mae and they did absolutely nothing, except receive large contributions. And saying that affordable houses were needed, even if a person did not have the means to pay for it .

I also would like to mention the names of Jeannie Jonson and Frank Raines, two big players in the deal. Frank Raines left Fannie Mae with a 6 hundred million profit and Jimmy Johnson made out pretty good himself. They are now top advisers for Senator Obama. Senator Dodd and Senator Obama were rewarded well with large contributions from Fanny Mae. In the meantime, the stock market takes a big dive largely because of Fannie Mae. And I lose close to $200,000 in my portfolio. Oh, I forgot to mention Congressman Charlie Rangel, who can't even pay his own income taxes, is handling the money supply. I am still your good friend, but I just had to vent. Tony

anthony Maffei  10/02/2008 09:53 AM Report

Why no questions or discussion about ACORN's and Obama's involvement with pushing loans to people who couldn't afford them off on FANNIE AND FREDDIE? OR Raines and Gorelick and Johnson were fully involved in the same thing while taking millions of dollars from these two organizations? As well as Dodd and Frank doing the same thing? Gingrich said ACORN got $ 500 million from the government for organizing. Just criminal - that's all.

Thomas Hobbes  10/02/2008 12:01 AM Report

You all should read a little book I wrote called "Leviathan."

Uncle Ron  10/01/2008 11:53 PM Report

Why no questions or discussion about ACORN's and Obama's involvement with pushing loans to

people who couldn't afford them off on FANNIE AND FREDDIE? OR Raines and Gorelick and Johnson were fully involved in the same thing while taking millions of dollars from these two organizations? As well as Dodd and Frank doing the same thing? Gingrich said ACORN got

$ 500 million from the government for organizing. Just criminal - that's all.

CJ  10/01/2008 11:28 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?

hrc  10/01/2008 11:27 PM Report

What a great segement to the Wall St./ Banking collaspe. It's absolutely no surprise to many average citizens, and others more savvy. I don't understand the rush to a plan unformulated and on what basis. What's happening in London anyway and the rest of the world in response to this. Where is the plan before the fall. The current administration in Washington is simply inept as proven over and again the past 7 years. I feel we may as well let the various sectors self-correct until a new administration is in place, which is thankfully only a few months away. I hope that isn't too purist.

CJ  10/01/2008 11:27 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.

Neil MacCallister  10/01/2008 08:51 PM Report

Mark (below): Houses are widgets, ..they'll be built (often cheaply) and sold, as long as people want them. But I wish we wouldn't get into the "Capitalist system is the highest profits possible, no scruples, morality, or integrity: Those are to be supplied by the government" trap. You seem to trust no one, but then you ask for a group of these "untrustworthies" to supply you with honesty.

The dollar, and whether you kept it or lost it, is the real "honesty".

H. INGBER  10/01/2008 08:03 PM Report

this was an outstanding program. no where else did i see such a clear explaination of what a real mess we are in. zuckerman has been predidting for the last 6 months that we are heading for a depression. feldstein made it very clear that there is no way out of this mess if we enact the current bailout bill. i listened to what was promised by the lawmakers and paulson and then read section 111 on executive compensation in the house bill. that section has no clearly stated limits on anything. again, they tell us we are looking at white and we see it's black. maybe you can fool all of the people all of the time!!

MotherLodeBeth  10/01/2008 05:43 PM Report

The thing that keeps coming to mind is how all those well educated (Ivy League) men and women who are supposed to be so much better than the rest of us 'average' Americans, are the ones who got us into this mess with their shady deals. Remember when NYC went bankrupt and we the 'average' citizens had to bail them out? Remember after 9/11 when tens of millions of 'average' Americans outside NYC stepped in to help/rescue? Now once again NYC which we are constantly told is the best city in the whole damn world again is needing outsiders to rescue this Wall Street mess. NYC needs some humility!!! Remember most of America lives west of NYC and Washington D.C. And when are we going to have assurances that we wont be bailing them out again in ten years?

mark lymer  10/01/2008 05:16 PM Report

i'm an architect. i have some idea of the cost of land, infrastructure, materials and labor to build a house. i got this from a fellow architects wife whose full time job is researching and implementing methods to reduce the cost of construction for a large houseing company here in arizona. during the last few years, the sales prices of homes ranged from 2 to 3 times the actual cost of the building. i would say those profit margins exceeded the typical. a small developer told me once, that because of the risk, he needed to make at least 20% profit, similar to a high credit card rate. i thought that made sense.

so for example, in 1990, i was living in palo alto, ca. my landlord offered to sell me the house i was renting. it was built in 1952 for maybe $4000. he said he would sell it to me for $290,000. i told the stanford university lit prof to his face "he was out of his fucking mind".

it seems alot of the real estate industry was recently possessed with the same dementia.

of course the regulatory agencies of the government were lax or non-existent. that's what all republicans wanted over the last 8 years! i resent Sen Gregg (r) of NH condescending attitude toward the American public. we can understand what happened if someone would stand up and honestly say 'why and how'. Lewis Phillips on Bill Moeur was very clear on the history of recent economic federal regulation a couple weeks ago. a friend who teaches econ at Purdue, also walked me thru the mechanics of the derivative market. i have to admit i'm limited to trying to balance my checkbook and one macro-econ class in college 30 years ago. but i think i got the idea.

so anyway, here's my prediction, the bailout will pass, the market will shoot up and then plummet after the share holders, investors and execs with stock options take all the assests out they can in a big hurry.

Zucherman was correct, let those huge un-earned 'bonuses' take the most risk with preferred stocks now. maybe they will be more cautious this time around. i also like Feldstein's idea to split homeloans with gov backed low interest loans. isn't it somehow odd that a Harvard prof can speak in plainer english about a complicated econ issue, than a US senator?

the capitalist econ system is a mathematical model to produce the highest profits possible. it has no scruples, morality, or integrity. those characteristics are to be supplied by the government; the elected officials and their appointees. so when the elected officials are corrupt, what do you expect to happen?

Karl  10/01/2008 04:51 PM Report

Mr. Rose has been asking a lot of knowledgeable people what has happened to cause this crisis in confidence in our financial system. At this point, I haven't heard anyone answer the question correctly or frankly. I humbly suggest that, as a nation, we have lost our integrity. We have become a dishonest people who freely lie to each other, especially if money is involved! We have concluded, again as a nation, that if you think you can "get away with it," then it is OK to try it. How many people have learned from our income-tax system and also from watching corporate America's bottom-line mentality (thank-you Harvard Business School) that, again, if you can "get away ......?" We have several thousand churches in this country, some of which are actually attended on Sunday, but in very few of which are the sermons truly listened to and accepted as having importance in our everyday/real mundane lives. I am not a sanctimonious nut, but I do "pay attention" and I am a pragmatist who long ago learned that "honesty in dealing with our fellow man" can bear great and good fruit, and that the opposite behavior is usually devastating to all parties involved. The demands for more regulation and/or supervision now is confirmation of my conclusion about our dishonesty. If the lenders and the borrowers were just "honest to a farthing" in their relationships, we would not be where we are, even with low interest rates and adjustable-rate mortgages. Of course, we have to be honest with ourselves first and foremost. I suspect that you, Mr. Rose, should have some of the most respected ministers on your show instead of the many financial experts who didn't foresee this crisis and now don't know how to fix it. I suggest also that "our leadership," if you can call them that, find an excellent communicator, like the late Mr. Rukeyser, to take the same amount of time as a political debate (1.5 hours, perhaps in place of one debate) on all TV channels to explain our national/world dilemma in layman's terms. Your show is great and more importantly informative and educational. Thank you for your efforts on our behalf. God Bless America and her people!