How should the government help homeowners?
From CNN's Jack Cafferty:
Home foreclosures were up a record 81% in 2008…that's a 225% increase since 2006. If that doesn't get your attention how about this: more than 3 million foreclosure filings were issued last year and more than 860 thousand families lost their homes.
Should the government be doing anything to help homeowners?
Some say that number is on the low side, and this year things may get worse. Efforts to stop or even slow the crisis have failed. The two government- sponsored mortgage companies, Fannie Mae and Freddie Mac, temporarily suspended foreclosures at the end of November. But foreclosures in December were higher than in November. The experts are now predicting we could see another 3 million foreclosures this year.
The rest of the problem is tied to collapsing prices. The S&P/Case-Shiller Home Price Index says home prices have dropped 21% on average nationally from their peak, and in some of the worst hit areas, like Phoenix, they've dropped as much as 40%. What this means in many cases is that people who can no longer make their mortgage payments also cannot sell their house for enough to pay off their mortgage. The houses are worth less than what is owed on them.
Here’s my question to you: What should the government be doing, if anything, to help homeowners?
Interested to know which ones made it on air?
How Bad Will the Economy Get?
FROM CNN's Jack Cafferty:
In 2008, the United States lost more than 2.5 million jobs. That's more jobs than were lost than in any year since 1945. The losses accelerated during the final four months of the year once the credit crisis hit. Unemployment now stands at 7.2 percent, and there is more to come. This afternoon Boeing announced it plans to cut 4,500 jobs.
How bad can it get?
And many people who still have jobs are facing shorter hours and pay cuts.
The automobile industry is in crisis. Retail sales are awful. In fact, some stores, like Macy's, will be closing some of their locations.
Consumer confidence is at an all time low. It's like a dog chasing its tail. People are worried about loosing their jobs so they aren't spending money. Or they simply don't have money to spend. If customers aren't buying, businesses can't turn a profit and pay their employees so they have to cut jobs. Then the cycle begins anew.
Things are on their way from bad to worse.
A dire warning from President-elect Obama yesterday: If nothing is done, the recession could go on for years.
Here’s my question to you: How much worse do you expect the economy to get before it begins to recover?
Interested to know which ones made it on air?
When Will the U.S. Economy Turn Around?
FROM CNN’s Jack Cafferty:
News on the economy just keeps getting worse. We're officially in a recession, unemployment filings are at a 26-year high and more layoffs are reported every day. No one really knows if the end is near.
Two-thirds of Americans don't see the economy turning around anytime soon, according to a Gallup poll. Most of those surveyed think a turnaround is at least two years away.
Here's how it breaks down: 29 percent say it will be two years until the economy starts to recover, 20% say three to four years, and 17 percent say five or more years. Just 15% think it will be within a year.
This is mostly unchanged from how Americans felt three weeks ago despite the fact that the news has continued to get worse during that time.
It becomes a vicious cycle: public fears of a lengthy recession lead consumers to stop spending which makes the recession worse.
It's been a year since the recession started. As the folks at the Gallup Poll point out, if it takes two more years for recovery to start, this could be one of the worst economic downturns in the nation's history.
Here’s my question to you: What will it take for the economy to begin improving?
Tune in to the Situation Room at 5pm to see if Jack reads your answer on air.
And, we love to know where you’re writing from, so please include your city and state with your comment.
How has economic crisis affected Christmas shopping plans?
[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2008/images/12/02/art.shopping.a.gi.jpg caption="Sales for Friday and Saturday were up about 2 percent from a year ago."]
FROM CNN's Jack Cafferty:
The nation's retailers got a bit of boost on Black Friday. Sales for Friday and Saturday were actually up about 2 percent from a year ago, according to research firm ShopperTrak. But the Christmas shopping season has a ways to go, and the jury is still out on whether the beleaguered consumer has enough left in his jeans to make the season a success.
Federal Reserve Chief Ben Bernanke says the bad times will be around for awhile. The Dow plunged 680 points yesterday on the news that the U.S. economy is officially in a recession and has been for a year. Manufacturing has dropped to a 26-year low. The fate of U.S. auto industry remains uncertain. Unemployment stands at 6-point-8 percent. And news of layoffs continued today in both the private and public sector. Washington Mutual is planning to cut 9,200 jobs. The City of Atlanta announced today it's laying off 222.
There's not a lot out there to put you in the holiday spending mood.
Here’s my question to you: How has the economic crisis affected your Christmas shopping plans?
Interested to know which ones made it on air?
Warnings of mortgage meltdown: Why government did not act?
[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2008/images/12/01/art.foreclosure.a.gi.jpg caption="The government was warned of financial crisis and mortgage meltdown years before it happened."]
FROM CNN's Jack Cafferty:
It's official. We're in a recession, and we have been in one since December of last year according to the National Bureau of Economic Research. That's their job. They tell us when we're in a recession. Any American could have told you we've been in a recession for the past year, but the government agency that's supposed to tell us these things just got around to it today.
The government is great. According to a new analysis of documents conducted by the Associated Press, the government was warned of the coming financial crisis and mortgage meltdown years before it happened. But the Bush administration ignored the warnings under aggressive lobbying and promises of stability from some of same financial institutions that ultimately failed.
"Expect fallout, expect foreclosures, expect horror stories," one California mortgage lender wrote to U.S. regulators in January 2006. Some bank regulators proposed capping risky mortgages and providing clearer explanations of what mortgage-backed securities are. But regulators delayed putting new rules in place for the mortgage industry until later that year. By then it was too late. The meltdown was well underway.
The Bush administration has always been about trusting market forces and avoiding government intervention in the economy. The Associated Press points out that that philosophy "ironically has ushered in the most massive government intervention since the 1930s."
Here’s my question to you: What does it mean that the White House and Congress failed to act earlier on warnings about the mortgage meltdown?
Interested to know which ones made it on air?
State Budget Crunch: cut services or raise taxes?
[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2008/images/11/18/art.garbage.ca.gi.jpg caption="Would you rather your state cut services or raise taxes?"]
FROM CNN's Jack Cafferty:
Americans are feeling pretty cash-strapped these days and as a result, state budgets are feeling squeezed too. Many states are watching tax revenues simply melt away from sales taxes to corporate and capital gains taxes. People aren't shopping like they used to, or traveling, and the stock market's killing everybody - all of which is hurting local governments. And those states with high foreclosure rates? They're getting hit hard too.
According to the liberal-leaning Center on Budget and Policy Priorities, at least 37 states have faced or are facing budget gaps in the 2009 fiscal year totaling $66 billion.
Take California for example. Two months ago, the state faced a $15 billion deficit. Suddenly that number has shot up to $26 billion, and California may not be able to pay its bills this spring.
New York state isn't much better. It faces a $12.5 billion deficit in 2009. Cuts here are expected to include health care and education.
The governors of both states have called special legislative sessions to deal with this financial crisis. As the economy continues to deteriorate, states are facing increasingly difficult choices.
Here’s my question to you: Would you rather your state cut services or raise taxes to cover its budget shortfall?
Interested to know which ones made it on air?
Should Congress freeze remaining bailout money?
Click the play button to see what Jack and our viewers had to say.
FROM CNN's Jack Cafferty:
Republican Senator Jim Inhofe from Oklahoma wants to put a "freeze" on the remaining cash in the big government bailout of the financial industry. In this week's lame duck session, Inhofe plans to push for legislation that will require Treasury Secretary Henry Paulson's plan for the remaining $350 billion in the bailout package to be voted on in Congress.
Watch: Cafferty: Bailout freeze?
Despite promises from Congressional leaders that there would be both, there is absolutely no transparency or congressional oversight on where the first $290 billion has gone. Senator Inhofe suggests Paulson "may have given the money to his friends."
Inhofe, who voted against the bailout package when it was originally passed, said in a letter to fellow lawmakers this weekend, "It is Congress's duty to have a say in what happens with the remaining authorized amount of $350 billion. It is clear that it was a mistake to sign a blank check to one man for such a tremendous amount of money."
Here’s my question to you: Should Congress freeze the remaining bailout money?
Interested to know which ones made it on air?
How has economy changed your holiday plans?
(PHOTO CREDIT: GETTY IMAGES)
FROM CNN's Jack Cafferty:
The shopping malls, department stores and discount retailers are doing all they can to let you know the holidays are almost here. This year, they really need your business. Last month, retail sales suffered the worst monthly drop on record. And the outlook isn't so bright heading into the Christmas season.
The unemployment rate is at a 14-year high of 6.5 percent, foreclosure rates have spiked across the country. Even if you're fortunate enough to still have a roof over your head and a job to pay for it, your retirement savings have probably taken a pretty hefty beating... as stocks continue their slide southward.
So spending money on holiday travel, food and gifts may a little harder to swallow this year.
There is one bright spot: gas prices are down...a lot. So you can at least drive to your relatives'. There are no guarantees what you'll find on the table or under the tree when you get there though.
Here’s my question to you: In light of the deteriorating economy, how have your holiday plans changed?
Interested to know which ones made it on air?
Is General Motors worth saving?
Click the play button to see what Jack and our viewers had to say.
FROM CNN's Jack Cafferty:
As GM goes, so goes the nation...That's the old motto anyway. Financially neither one is looking so good right now. And General Motors, along with Ford and Chrysler, is looking for some help from our already cash-strapped government to get back on track. Estimates are if the Big Three go belly up, unemployment could hit 10 percent.
But doubts about a bailout for the auto industry grew yesterday on Capitol Hill as Democratic leaders conceded they don't have the votes to get a measure through in next week's lame duck session.
Watch: Cafferty: GM worth saving?
If General Motors fails– and it would likely be the first of the Big Three to fall because Ford is in better shape and Chrysler is a much smaller company– the impact would be huge. It's not just the hundreds of thousands of jobs at GM that would be lost, it's literally thousands of smaller companies all over the country that sell their products to GM. It's highly likely many of them would fail as well.
As Time Magazine's Bill Saporito put it quote, "The decision that Washington has to make is whether we pay for G-M's survival or for its funeral."
Because whether G-M gets help from the government or not, as taxpayers, we are on the hook. We'll have to cover everything from lost tax revenues and higher unemployment costs to G-M's hefty pension obligations.
Here’s my question to you: Is General Motors worth saving?
Interested to know which ones made it on air?
Meaning of Goldman, Morgan Stanley‘s planned bonuses?
Click the play button to see what Jack and our viewers had to say. (PHOTO CREDIT: GETTY IMAGES)
FROM CNN's Jack Cafferty:
The economic picture got even worse today. Weekly jobless claims were the worst we've seen in 7 years. Mass layoffs continue to be announced across a variety of sectors. And the markets remain in a free fall as the Dow's off around 30 percent for the year and the NASDAQ and S&P 500 are both off around 40 percent.
The Senate Banking Committee held a hearing today with representatives from banks getting money from the big $700 billion financial bailout package. Committee members wanted to know where the money is going. Not an unreasonable question.
Bank executives said they are both lending and working with delinquent homeowners and that this money is not going to pad executive paychecks.
Watch: Cafferty: Planned bonuses?
A general counsel at Goldman Sachs told the committee that compensation, "will be down very significantly this year across the firm, particularly at senior levels... We get it."
But what does "down very significantly" mean on Wall Street? According to Bloomberg financial news, Goldman Sachs has set aside $6.8 billion for year-end bonuses, and Morgan Stanley, $6.4 billion.
That figure is down from the record setting $12.1 billion Goldman shelled out last year and the $10 billion Morgan Stanley doled out.
Granted they cut the bonus numbers in half, but that's still a mind-boggling amount. And both firms are taking taxpayers' money from the bailout package. Goldman Sachs and Morgan Stanley each got ten billion dollars.
Here’s my question to you: What does it mean when Goldman Sachs and Morgan Stanley are planning to pay $13.2 billion in year-end bonuses?
Interested to know which ones made it on air?
@jackcafferty on Twitter
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