WASHINGTON, July 20, 2008
Paulson Warns Of More Tough Times
Treasury Chief Says Number Of Troubled Banks Will Increase As They Struggle To Cope With Losses
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Henry Paulson On The Economy
U.S. Treasury Secretary Henry Paulson speaks with "Face The Nation" host Bob Schieffer about the current state of the economy and the controversial decision to assist Fannie Mae and Freddie Mac.
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Bob Schieffer questions the $2 billion which will be spent on presidential campaigns this election year, as the "Face The Nation" host wonders if candidate spending has become too excessive.
"I think it's going to be months that we're working our way through this period - clearly months," he said.
Paulson said the number of troubled banks will increase as they struggle to cope with big losses on bad mortgages. The government this month took over IndyMac after a run led it to become the largest regulated thrift to fail.
"Of course the list is going to grow longer given the stresses we have in the marketplace, given the housing correction. But again, it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation," he said on Face The Nation.
Paulson used appearances on the Sunday talk shows to tell people that deposits up to $100,000 are fully insured. He said no one has lost a single penny on an insured deposit in the 75 years that the Federal Deposit Insurance Corporation has operated.
"We're going through a challenging time with our economy. This is a tough time. The three big issues we're facing right now are, first, the housing correction which is at the heart of the slowdown; secondly, turmoil of the capital markets; and thirdly, the high oil prices, which are going to prolong the slowdown," he said.
"But remember, our economy has got very strong long-term fundamentals, solid fundamentals. And you know, your policy-makers here, regulators, we're being very vigilant."
Paulson said he hoped Congress soon would approve his plan to help shore up Fannie Mae and Freddie Mac, the government-sponsored mortgage companies
"I'm very optimistic that we're going to get what we need from Congress here, because Congress understands how important these institutions are," Paulson said.
The House plans to vote Wednesday on a housing bill that is expected to include a rescue for Fannie Mae and Freddie Mac. The companies' shares have plummeted because of fears about their financial stability. Fannie Mae and Freddie Mac are private, but they were created by Congress to encourage homeownership by buying mortgages from banks. The two hold or guarantee more than $5 trillion in home loans - almost half of the nation's total.
"Our first priority today is the stability of the capital markets, the stability of the system. And these institutions have investors all around the world ... and those investors need to know that we in the United States of America understand the importance of these institutions to our capital markets and to our economy and to our housing market," he added.
Read the full "Face the Nation" transcript here.By CBSNews.com producer David Morgan.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Bush and the GOP are trying to "spin" the truth.....so what else is news? The "Spin" to me is like making a spider web, all sorts of branches intertwined to create a trap for unsuspecting prey.
Hard to see until you walk right into it, and then it''s too late. Luckily some of us have seen the web of deciet and plan on tearing it down. If need be one stand at a time.
What an idiot. We are not that stupid. It is a bailout and no matter how hard the Repugs try to sell it as anything but that, It is what it is. A Bailout.
We already knew we were living in tough times.
Have you seen how inflation is up over 60% since Clinton left office. Gas from $1.14 a gal to $4.19 a 2 Liter Coke a Cola from .89 cents to $1.99.
Jimmy Carter only faced inflation of 14%. I wish he was President instead of Bush. You guys are simply incompetent.
They can print all the fake money they want, but people are hip to the game.
This is always reassuring to know, when work is handing out pink slips.
..........
Those fundamentals are GONE!
Those fundamentals that were able to bring America back from previous recessions are GONE!
The (current) crop of government officials and this current criminal regime in the White House do not believe in government programs to help the working class, and to rebuild the infrastructure of this country as the Roosevelt administration did during the Great Depression of the 1930s.
Just a few months worth of money spent in Iraq, or the cost of bailing out Fannie Mae/Freddie Mac, could afford to build a glorious rapid public transit system for every major metropolitan area in this country! There would be no need for long commutes by car with the kind of public transit systems found in far more advanced countries like Germany, Great Britain, France, Japan, and others.
But of course, some would call those programs as "socialism". But is it not "socialism" for the government to bail out companies that knowingly piled huge sums of money into extremely risky investments?
Posted by marizara
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Would those include the company executives and lenders who are getting rescued, or are being fired but still given golden parachutes?
Posted by marizara at 07:27 PM : Jul 20, 2008
............
Our country, the United States of America, is at its gravest danger when more and more "Americans" take the nonchalant attitude of "marizara".
Please do us all a favor and read the Declaration of Independence, the WHOLE THING, and not just the popular first few sentences.
You will realize that if our founding fathers took the attitude that this republic is fail-proof, then they would not have specifically given the American people written permission to forcefully change our government as it currently stands.
The attitude of "nothing can go wrong" and that "everything is okay," and that things will definitely get better no matter what... is EXACTLY what corrupt power wants the masses to believe at all times. It makes the masses less threatening to the elites in charge.
There is a huge difference between complacency and vigilance. It is common for those who are complacent to accuse those who are vigilant as being "doom-sayers" (etc.).
Posted by marizara at 08:05 PM : Jul 20, 2008
.............
Those are good ideas. Your earlier post sent shivers up my spine. But your most recent post clearly states your understanding of our situation.
One problem however, we ALL need to be "waving our arms" saying the "end is near".... because under our current government, our current regime, our current direction of this country... the end IS near.
But too many people are too fat, dumb, and happy with their 24-hour super retailer down the street and their high speed/high-def entertainment all day long.
When we have the powerful elites on daytime television caving in to reality, yet still trying to sugar-coat it, that sends a huge message (to those listening), especially if those already know the reality on the ground... beyond their own selves.
We need to completely change our government in its current form, or we will be planting our own vegetables... like surfs... for the rest of our lives!
Is that the new "American dream" for the 95% of this country?! If that is the case, then "the end" is not near... it has already occurred.
If the end is near, then it''s near. I''m sick of lefties (or certain righties) whining and crying.
Especially when I''m trying to exercise and put my life in order, I don''t need to read or hear whiners'' personal wet dreams about the future.
All of that time we pat ourselves on the back while the rest of the world was just laughing at us.
Now it''s our turn to get out of the malls and suvs and start manufacturing tv, toasters, and everything else for export because we owe the world.
I''m sorry folks I''m leaving this country, I''m not paying for the debt thrown upon us because Sean Hannity wants to make 100''s of millions of Federal Reserve Notes.
You pay these cons with your taxes you so willing give up.
The founders would be ashamed of what were putting up with
President FDR (on Fascist rule in a letter to corporate con man %u201CColonel%u201D Edward M. House, a founder of the Council on Foreign Relations and political fixer for the ruling class. House also handled President Wilson for the foisting of the privately rigged %u201CFederal Reserve%u201D Corp bank monopoly. 11/21/ 1933)
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." - Thomas Jefferson, Letter to Treasury Secretary Albert Gallatin
During times of universal deceit, telling the truth becomes a revolutionary act."
George Orwell
"Paper is poverty,... it is only the ghost of money, and not money itself." Thomas Jefferson to Edward Carrington, 1788
%u201CThe end of democracy and the defeat of the American Revolution will occur when government falls into the hands of [private cartel] lending institutions and moneyed incorporations.%u201D
%u201CI want to own nothing and control everything.%u201D
%u201CThe ability to deal with people is as purchasable a commodity as sugar or coffee and I will pay more for that ability than for any other under the sun.%u201D
John D. Rockefeller (Fascist cartel robber baron and promoter of the U.S. %u201CFederal Reserve%u201D Act in alliance with the Rothschild bloc. 1839-1937)
%u201CI don%u2019t care who the government is. Let me control the money and I will control the country.%u201D
Mayer Amschel Rothschild (attributed to the German godfather of the Rothschild bank cartel and grandfather to heir Lord Baron Nathaniel Mayer de Rothschild: owner of the Bank of England and a key promoter of the U.S. %u201CFederal Reserve%u201D Act. 1744-1812)
"Every citizen should be a soldier. This was the case with the Greeks and Romans, and must be that of every free state."
Thomas Jefferson
"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."
Thomas Jefferson
"If tyranny and oppression come to this land it will be in the guise of fighting a foreign enemy." Thomas Jefferson
"Anyone who would sacrifice freedom for security deserve neither". Ben Franklin (paraphrased)
"I would rather die with the constitution clinched in my fist, then live with shackles on my feet" Greywolf
"Arms are the only true badges of liberty. The possession of arms is the distinction of a free man from a slave."
"The unarmed man is not just defenseless, he is also contemptible." Machiavelli
"Pick up a rifle and you change instantly from a subject to a citizen." Jeff Cooper,
The Art of The Rifle
"Neither the wisest constitution nor the wisest laws will secure the liberty and happiness of a people whose manners are universally corrupt." Samuel Adams.
%u201CUnfortunately, nothing will preserve [liberty] but downright force. Whenever you give up that force, you are inevitably ruined.%u201D Patrick Henry
%u201CCourage is reckoned the greatest of all virtues; because, unless a man has that virtue, he has no security for preserving any other.%u201D Samaul Johnson
%u201COne of the penalties for refusing to participate in politics is that you end up being governed by your inferiors.%u201D Plato
I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them. Thomas Jefferson
The inflation rate during the Carter years was inherited from the Ford/Nixon years. A carryover from the Vietnam War. If you remember, Gerald Ford''s solution to the problem was W.I.N., ''Whip Inflation Now'' buttons. That was REAL successful! lol
And just as in the story, the foxes have been on a glutinous frenzy. Fortunately, Bush only has a few more months, and it seems the chickens are settling back down. If enough of us can get a grip and focus on restoring the barnyard, we may all just have a chance.
I, for one, love this country enough to think we can. The week after Hillary conceded, I reversed positions between war and oil, to finance and construction. After 8 years, it''s refreshing to bet on America, instead of against her. Now all we have to do is clean out the likes of Paulson and the schisters running the SEC.
"But remember, our economy has got very strong long-term fundamentals, solid fundamentals."
This is an Absolute LIE to the American people...the Nation''s Economy is a complete House of Cards on the verge of total collapse...The National Debt is over 9 TRILLION and growing!!!!...the Trade imbalance is completely out of whack and not in our favor...the Dollar has lost most of it''s value...and the "Economy" is a "SPEND & CONSUME" economy, instead of a "Save, Invest & Produce" economy...our Nations "Leaders" are lying to us and have been lying for decades.
Does this greedy fascist look like a badly constipated Herr Chertoff, or what?
Indeed he does. Bet he has his hand signals down pat for the stalls in the mens room.
The Wall street journal would disagree with you,
"The fact that the economy has continued to grow while unemployment has shot up hints that adverse economic conditions have not fully made themselves felt in consumer spending. This is likely due to the effect of the $78 billion in tax rebates recently sent out by the government, which may have temporarily boosted consumer expenditures. Once those rebates are spent, however, it is likely that the economy will begin to contract and the current hemorrhaging of jobs will only accelerate. According to a recent survey, consumer confidence has sunk to its lowest level in 16 years.
All the while, real wages have continued to plummet. Median wages have increased by 2.8 percent in the past year; the Consumer Price Index rose by over 4 percent during the same period. This adds up to a decrease in median real wages of over 1.2 percent..."
The Wall street journal would disagree with you,
"The fact that the economy has continued to grow while unemployment has shot up hints that adverse economic conditions have not fully made themselves felt in consumer spending. This is likely due to the effect of the $78 billion in tax rebates recently sent out by the government, which may have temporarily boosted consumer expenditures. Once those rebates are spent, however, it is likely that the economy will begin to contract and the current hemorrhaging of jobs will only accelerate. According to a recent survey, consumer confidence has sunk to its lowest level in 16 years.
All the while, real wages have continued to plummet. Median wages have increased by 2.8 percent in the past year; the Consumer Price Index rose by over 4 percent during the same period. This adds up to a decrease in median real wages of over 1.2 percent..."
Is a prime example of a mental migit.......
Posted by DaysRnumbrd at 06:29 PM : Jul 20, 2008
This administration is more like that of Hoover. Just as they had ''Hoovervilles'' back in the Depression of the ''30s, we may start seeing ''Bushvilles''.
From the smirking, dancing Bush to the menacing serial killer Cheney to the owlish, blinking Paulson, they''re all in way over their heads.
And the Republicans put them there. And the Republican-ruled Congress didn''t even let out a peep as they ran up the national debt by over 50%.
Let''s hope the American Sheeple can remember that simple fact as long into the future as November.
Of course there may be a new TV show to make them forget.
Posted by ofbyfor1 at 06:43 AM : Jul 21, 2008
...............
"Bushvilles" are currently located in parts of Southern Louisiana.... distinguishable by Formaldehyde fumed FEMA trailers.
Posted by SistaTee at 01:05 AM : Jul 21, 2008
Yep! It''s amazing ONE PARTY and ONE LEADER can take us from a Balanced Budget and Surplus to this in LESS than 7 years. When the Fascist took office, the Regulations and Laws in place would NEVER have allowed this to happen. Now, after Dr. Phil and Deregulation of ALL Banks, we have this. Great job all you Fascist! Old Joe McCarthy would be proud!! SIEG HEIL BUSH
Well, that day has come, and now the same economists who sang the praises of "trickle down" economics are now claiming they can''t figure out how to get out of this mess?
I posited at the outset of "Desert Storm" that the neocon belief in a war economy was obsolete, now we have had seven years of war between the two Bush administrations, and nothing to show for it but debt, and a collapsing economy.
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by wardoglrs
July 22, 2008 8:55 PM PDT
- I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them. Thomas Jefferson
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See all 39 Comments"Paper is poverty,... it is only the ghost of money, and not money itself." Thomas Jefferson to Edward Carrington, 1788
President FDR (on Fascist rule in a letter to corporate con man %u201CColonel%u201D Edward M. House, a founder of the Council on Foreign Relations and political fixer for the ruling class. House also handled President Wilson for the foisting of the privately rigged %u201CFederal Reserve%u201D Corp bank monopoly. 11/21/ 1933)
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." - Thomas Jefferson, Letter to Treasury Secretary Albert Gallatin (1802)
When all government, domestic and foreign, in little as in great things, shall be drawn to Washington as the center of all power, it will render powerless the checks provided of one government on another, and will become as venal and oppressive as the government from which we separated - Thomas