February 20th, 2009
09:03 PM ET

Evening Buzz: Bank Fears

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/02/20/t1home.wallstreet.gi.jpg]
Maureen Miller
AC360° Writer

It was a brutal day on Wall Street. The Dow closed at a 6-year low, down 100 points to finish at 7,365.67. A lot of people are asking: How low will it go? It's anyone's guess.

But there's no guessing as it what caused today's roller coaster ride. Stocks tumbled on worries over the economy and talk that the government might have to nationalize some of the biggest banks. Such a move would wipe out shareholder value, which is why you saw a lot of bank stocks taking hits today.

Dow components Bank of America, Citigroup , JPMorgan Chase and American Express all fell though out the afternoon. But by the close, all except Citigroup managed to cut losses.

Here's what's fueling the wild ride: Senate Banking Committee Chairman Chris Dodd, D-Conn., said that short-term takeovers of banks may be necessary. However, the White House is not in favor of such a move.

Do you think banks should be nationalized? We'd love to hear your thoughts.

Tonight, we're also looking at how America's mayors are trying to get a slice of the $787 billion stimulus plan. But several GOP mayors are vowing to refuse some of the funds for their states. Other GOP mayors who publicly opposed the plan now have no problem taking the cash now that the bill has been signed into law. We'll have the raw politics.

Join us for these stories and more starting at 10pm ET.

Filed under: Maureen Miller • The Buzz
soundoff (72 Responses)
  1. Michael C. McHugh

    The main thing I want to know, whether these big banks are nationalized, subsidized or whatever, is what public service they are going to do? If you take public money, then you do public service. You are no longer just working for the wealthy executives and stockholders.

    February 23, 2009 at 8:12 am |
  2. MAC

    Banks still adding to the crisis
    Banks getting major benefit of the so many bailouts (our money) so far, however Banks are busy adding to the crisis

    Credit cards loans defaults

    Banks are actively busy pushing people over the edge and get them to default
    1- If we miss payment Banks add the late fee upfront (minimum + fee) making it more difficult to catch up
    2- Banks have started checking credit score without consent and if score not satisfactory – increase interest rate, which will increase monthly payments
    3-Closing accounts or reduce credit limits even if you are paying them on time, because bad credit score. Will further decrease the credit score.


    Credit score going down even further
    Monthly payments going up possibly increasing defaults
    With low scores, no possibility of refinancing home loans, so mess continues and few people can borrow

    February 22, 2009 at 7:20 pm |
  3. Bill M. from Florida

    Maby it's time that we Nationalize the Banks. They are totally out of control. They are far from helping the American people. Interest rates on Credit Cards are being raised weekly. How can any individual get ahead when interest rates keep going up. They are using individuals to pay for there mistakes. We need to support President Obama on the decisions that will help the American people . We are in a "Melt Down" and need to act.

    February 22, 2009 at 5:51 pm |
  4. William of Iowa

    I agree with the administration. Nationalizing the "big" banks will not happen overnight. This would be a huge and complex undertaking requiring a great deal of organizing on the part of the government. I think it would be better to explore regulation of institutions pointed towards elements that have created confusion and less than acceptable behaviours by bankers. Some of the stagnation in lending, I believe, is due to an atmosphere of uncertainty. They don't know which direction the government is going, therefore planning is day to day, not with a confident eye toward the future and the courage to challenge it. I also believe that allowing banks to fail is a double edged sword – maybe for the best but history will show it can be devastating. When FDR was sworn in, shortly thereafter a bank holiday was declared, the net result was nearly 2500 bank failures and the complete collapse off the economy. Net result: The Great Depression.

    February 22, 2009 at 12:11 pm |
  5. Kirby-Jay

    I am sorry but the news media is making things worst . What I mean by that is, you are picking apart things that will make the public worked up and have them focusing on the wrong thing.

    If we sit back and let things fail with out trying some thing together and working together to make it work instead you are splitting the country apart instead of bring us together. Why cant you put a positive spin on things why do you always go negative.
    I am watching the state of the union now and what are you talking about ? You are talking about people getting the money to help them paying their mortgage who over shot their ability to pay because they took to much on. Why cant you focus on the fact they lost their jobs and we can come together to help them to. Why are you always to negative. Why you boost about help other countries but yet you are talking not helping fellow Americans. Come on now stop the negative spin and get all of us together and work towards making things work. CNN you should take the lead on this..please we have to try to make it work only way we can do that is by focusing on how to make it work for all of us...

    February 22, 2009 at 12:11 pm |
  6. Art

    Hi Maureen, I don't think the bank in it self is the problem. Its the people who run them. What I find most disturbing is that the ceo's and everyone else is still employed. Why???? If I did such a lousey job at my company I would be terminated, just like alot of other people would be in other companys. Until we fix the integrity and responsibility problem in this country,top to bottom, the boat will continue to fill with water and eventually, sink. Thanks for reading, Art

    February 22, 2009 at 10:43 am |
  7. Larry

    By the way..... thank you for keeping Mike Huckabee off CNN. I am listening to his show on Fox right now because I enjoy listening to him demonstrate yet another reason why the Republican party needs to do some serious talent recruiting. George Bush was the absolute worst public speaker I have ever heard, Mike Huckabee wasn't anywhere to be found in the presidential race, John McCain simply has no vision nor the ability to inspire anyone, and Sarah Palin has more drama in her life than daytime soaps. She is the absolute worst role model in politics today. President Obama won the election because he has a vision for the country, displays a high degree of honesty and integrity, speaks with intelligence, gives people inspiration, and is committed to rebuilding this nation on the backs of the working class, It is time we give a credible person the chance to lead the nation.

    February 22, 2009 at 2:47 am |
  8. Larry

    I am amazed at the number of republicans and their constituents who continue to poke fun at the Obama administration's efforts to fix all of the issues left to our nation by republicans themselves! What in the name of God were they doing these past 8 years besides backing yet another financially crippling war? They simply lined their pockets with profits from personal investments along with the other financially irresponsible institutions in this country. It is hilarious..... my father is a staunch republican and all he has done in his retirement for the past 8 years is wine about how broke he is!

    February 22, 2009 at 2:25 am |
  9. Larry

    Hello Anderson,
    I think it is important for the people of this nation to understand the root cause(s) of the current financial implosion. The fact remains that our nation's greedy banking institutions and other big business have raped and piledged this nations working class to a point of irrecoverable proportions. Let us keep in mind, for every situation an American makes application to borrow money, the financial institutions APPROVE or DISSAPPROVE the credit application. THEY irresponsibly marketed and approved credit card applications for just about every college student I knew for the past 10 years, THEY approved refinance applications at 125% of property value for many years, THEY capitalized on the nation's irresponsible automobile industry and made loans resulting in HUGE monthly payments, and so on. So, before we blame our next door neighbors for their foreclosure issues, lets at least admit that our nations big businesses traded ethics for dollars!!!!!!

    February 22, 2009 at 2:06 am |
  10. Ray

    Thanks Mr Obama. Your stimulas package has succesfully killed a deal that would have taken a house off someones hands that they were about to loose. Because of your "moratrium on foreclosures Wells Fargo will no longer give second mortages on properties to do 90 10 deals. This has been a stable in the investment property industry.

    It seems that if you have done the right things and not taken on more debt than you should then you are being punished. I guess no good deed goes unpunished . I wanted to thank our democrats for what they done. So thanks for nothing.

    Ray Columbia SC

    February 21, 2009 at 8:51 pm |
  11. KIm

    Holly smokes on the river of Jordon and where is the stimulus package ?

    February 21, 2009 at 5:01 pm |
  12. Greg -

    Hey Cheryl –

    Look for the facts... the $40Bn at BAC? They lent $118Bn in NEW MONEY in Q4 of 2008 alone – car loans, mortgages, personal loans, loans for auto dealers, small businesses middle market companies and large corporate companies.

    Shame on them for not promoting and marketing how they're managing their funds, and for allowing the media to sensationalize the story.

    They paid $402MM to the gov't in the last few weeks as their first dividend payment on the TARP investment.. BAC is strongly capitalized, and financially sound regardless of the stock price....

    February 21, 2009 at 4:34 pm |
  13. Natalie

    Is there any reason the CEO's of the banks who received bailout money have not been fired? Why did we trust that they would do the right thing and lend the money as well as renegotiate mortgages when they have been engaging in immoral practices for so long. They will not change! The solution is so simple. Bring in new minds and leadership and start from scratch. Hire people who know how to manage money responsibly and have a proven record. I would like to suggest the CEO of USAA Savings and Loan for one.


    February 21, 2009 at 3:33 pm |
  14. N

    Great comments! I'm in agreement. Let the banks fail. They mismanaged money and should get fired. Big Brother cannot help you out at this time. Open more credit unions since they have a higher success rate, if need be. Like someone said already (Mircea) open a Federal Bank. It's a win-win for everyone, but let these businesses fall away.

    February 21, 2009 at 2:51 pm |
  15. Neo

    Maybe they should have kept their banks operationals in America instead of having people overseas in charge of the money. Just a thought. There is no coincidence in the fact that once these banks started hiring overseas workers to handle operationals that in the short turnaround we know have major fiscal problems. I used to work for JPMorgan Chase, I know where the calls were dropped to. I know that 2 months later I got laid off : \ And now they can't sweep under the rug the fact that this was a costly mistake. Who gambled with the American Banking system, went all in, and lost .....

    February 21, 2009 at 2:25 pm |
  16. Barbara Murray

    I feel the same about letting the banks fail. They don't treat their customers well and they deserve to fail. With all this news people need to go pull their money out of the banks, buy a wall safe and a reloadable debit card and stop worrying about the money.

    February 21, 2009 at 10:12 am |
  17. Jack Betcha

    Capitalism proved failure after 8 years of Republicans Reign bringing America and the whole globe to economic recession. If capitalism persists, Republicans and the rich will enslave America
    and put all Americans back into slavery economically for what's so-called Economic Neo-Slavery. Non-Capitalism is needed no-matter what it's called.

    February 21, 2009 at 10:03 am |
  18. Gene Penszynski from Vermont

    P.S. .... and for all those that are bain washed with G W Bush et. al. concept of 'Capitalism' How do you plan to wether the imminent demise of your jobs when the banks and the auto-industry is just left to 'fail'. Do you think you'll still have your pathetic burger fliiping Wal-Mart or downsized retail or sales jobs when no one can afford to by burgers or even cheap COMUNNIST Chinese goods anymore ????

    Sure just let it all 'Fail' ........ you folks think your jobs a soooooo secure and stable while all else around you collapses ????? .......... Be careful what you wish for ...... It just might come true.

    February 21, 2009 at 9:56 am |
  19. janet

    Anderson, all these foreclosure stories are terrifying to a single parent of two children like me. What I want to know, I mean, really want to know; is "Where are all these people – whom the banks have foreclosed on- actually going for heaven's sake?"

    February 21, 2009 at 9:48 am |
  20. Als

    CNN is starting to look like the ad for the GOP election. I thought the repulicans lost the election. Prea Obama has a documentary trail. Pres Obama didn't create this mess. He told everyone this is not a quick fix. I do not think the media listens very well. I saw a rep- stand up and say where are the rich people. Rep- and others need to learn how to read before they disagree with something.

    February 21, 2009 at 8:29 am |
  21. David

    Show me the money. Some people don't understand the numbers.

    $250,000.00 per year = $120.00 per hour.
    $1 Million per year = $480.00 per hour.
    $100 Million = $48,076.00 per hour.

    Buy depreciated homes and wait for the market to recover…it's already happening...from those with the money.

    February 21, 2009 at 4:12 am |
  22. Zyworski

    If stock was priced according to the dividends that it yields the Dow Jones would be at 3000. The stock market is a giant speculative bubble full of imaginary value. I hear the talk about the stock market being a reservoir for the hopes and ambitions of the American people, and there is a sucker born every minute.
    The administration may not favor taking the banks into receivership, but that is exactly what our forefathers would have done to reward incompetence.
    I look back on what I just wrote and ask myself, am I a liberal or a conservative?

    February 21, 2009 at 3:10 am |
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