October 5, 2008 3:12PM
Our SMART Viewers
By Liz Claman
Gang,
It’s been a harrowing 2 and a half weeks and I’m still shell (and sticker!!) shocked—$700 BILLION??– by all that’s come to pass. Just to give you the inside story, for me it all started with Lehman Brothers filing for bankruptcy. Folks, Friday September 19th, I was literally swinging from the Beverly Hills city limits sign shooting my “Opportunity in America: My Hometown of Beverly Hills” story when my cell phone rang. It was a source of mine telling me that Lehman was hanging by a thread that would soon snap. The source told me that if Lehman didn’t find a cash infusion or partner over the weekend (unlikely), then pre-packaged bankruptcy would be staring them in the face come Monday. I dropped to the grass, told my crew I had to make some phone calls and rushed to the car where I chased down a couple of other sources, got the story confirmed, called into “Countdown to the Closing Bell” (which Brian Sullivan was anchoring for me) and went with the news.
I took no joy in breaking the news. You know from this blog that I actually believed the Lehman Bros. would pull a rabbit out of the hat and surprise us all. Clearly I was wrong. CEO Dick Fuld’s window has slammed shut right on his fingers. Closed, never to open again. I went back to playing Tarzan on the Beverly Hills sign (which you’ll all see Friday October 17th barring any new financial dramas) and finished my shoot with somewhat of a heavy heart.
I had NO IDEA what Lehman’s failure would trigger.
Since then, it’s been a focused push by our team at Fox Business to cover each and every single development of this monster of a story. Some of us hopped on planes, others stayed up all night waiting for comment from various Congressional members, others ran to Times Square to get comments from regular folk who’s 401k’s and pensions were shrinking by the minute. There’s been no breakfast except coffee from our green room, and lunch, but only in the form of high-protein Ensure drinks (vanilla’s the best). I ran from my own shows (which we quickly moved to the New York Stock Exchange) to the O’Reilly Factor, to syndicated radio programs across the nation, to CBS News’ The Early Show to the “Mike and Juliet Show” and back again just to tell people what was going on with each new development. Mike and Juliet have a live audience and at one point, I turned to them and said something like, “This is YOUR money. Don’t you want answers??” and the entire audience cheered. I got the blogosphere version of that with your comments. I was just spending some of my Sunday reading your replies to my “And What Do YOU Think?” blog from last week and I am so bowled over by your responses. They are so thoughtful and smart and ….ANGRY. I completely get that emotion, especially when you look at the price-tag of this bill-that’s-now-a-law.
Thank you SO much for taking the time to comment. Knowing where our viewers stand on this is crucial. We’re in this for you. This is FAR from over, I’m sorry to say. But we’ll do our fighting best to give you the proper perspective you won’t get anywhere else. I’m so proud of our team but I’m even more proud that our viewers are with us. THANK YOU.
See you tomorrow,
Liz
Comment by B Scott
Oct 5th, 2008 at 8:00 pm
Below your article is an ad that reads, I had high blood pressure, now its down to 120/75,find out how I did it without drugs.Your next article should read.. the average Americans blood pressure was 120/75, find out how it went to 250/200 without drugs!
Comment by Randy Gimenez
Oct 5th, 2008 at 9:31 pm
Liz,
Are we buying, by virtue of this bailout, actual mortgage-backed securities? Or are we going to be buying the CDS’s, which is apparently the major problem. The bill, which I’ve read, seems to be extremely flexible in what the government can choose to buy.
Comment by Eric W
Oct 6th, 2008 at 7:04 am
Liz:
Not many on the Fox business team were as vocal and anti-bailout as Cody. He was the only one literally standing on top of his desk (does he have a desk?) yelling at us not to do it. Many others sheepishly agreed that the bailout was not good, but it was for the best.
The dopes in Congress have done more financial damage to this country than the terrorists of 9/11.
Comment by chuck
Oct 6th, 2008 at 11:25 am
Hey Liz there are a lot of unhappy campers out there and one of them.
It’s like Lehman created actions of unattened conswquences within the financial markets. Now with the bill as law…eveyone is wondering why the Sec Paulson only needs 700 billion. Where this criis before its overwith could require more money. One thing I learned is don’t throw money at the problem.
Like I wrote in several blogs this problem hasn’t been carefully thought out. Last night I watch Asman’s special onm the Saving the Economy. History is an excellent baramoter to learn from. Like I learned last night that FDR’s on policies prolonged the depression until World War 2 and the Dow didn’t bounce back until 1954. U should do a special on the fall of Bear Sterns and Lehman Brothers sometime. Just an idea.
As of today no one doesn;t know how this new economici stabelization law is going to create. One thing a down market is a marker for confidence. Seriously. But keep up the fab work.
Look forward to see how some are going to solve this problem. I’m a dude on the sidelines on this one but I’m watching too. Waiting for the next act to happen.
Comment by Barry
Oct 6th, 2008 at 11:53 am
Liz,
You are absolutly correct, THIS IS NOT OVER, the next crisis will be the scandal that makes the headlines regarding how this bailout money was spent. The potential conflicts of interest in who gets bailed, what securities get purchased, how much is paid/cents on the dollar, how much of the 700 billion was spent on fees to Wall street to exacute this plan, etc.The forth coming scandal will have a cascading affect on an already cynical public.
By the way love your show and the blog, keep the info. coming.
Barry S.
Ararat NC
Comment by chuck
Oct 6th, 2008 at 4:19 pm
Liz wht Dick Fuld did with Lehman Brothers is a news story onto itself. U know so far there hasn’t been any sort of news coverage on Fuld’s activities. Did he cheat on his employees? pension holders too? Now his story deserves to be told no matter how bad. Arrogont executives like him need to be exposed for they really are. Expose Fuld for the company’s shareholders sake. I encourage you too:)
I want to say I learned a lot from the news coverage this past two weeks too. Drop me an email sometime ok? U can read other comments I wrote too in the Glick Report.
The present: THE UNDISCOVERED COUNTRY-WILLIAM SHAKESPEARE.
Comment by Steven Eisenpreis
Oct 6th, 2008 at 8:59 pm
Great story, Liz, and thanks for the compliment! I’ve followed Lehman’s implosion since the beginning, (When I saw David atop FOX NEWS 2 in front of the then-Lehman building, I showed him my LG Flare Virgin Mobile phone which can receive FoxBiz updates, and I told him I was expecting more positive updates from your Fearless Leader, Neil Cavuto. Although he hasn’t been reporting good news in most of his updates, he’s still been doing a great job, as have the rest of the FoxBiz staff. Although the Barclays Eagle now rules Lehman’s roost, I agree with most of your guests that better days ARE coming. Maybe not immediately, but they ARE coming.
Keep up the TERRIFIC work! At least YOUR stock is rising!
Excelsior!
Steve
Comment by joebhed
Oct 7th, 2008 at 5:03 pm
Elizabeth.
Prescient, while otherwise obscure, observations of the month.
From your article, the first is that people REALLY DO want answers.
And they are not getting them.
Second, and I ask you to think about this one for half a moment.
Hank Paulson - grilled.
Soul-searching for a comment that can ease his day just a little.
“Those same American people are already on the hook”.
It is to me the moment of a generation.
Not one of either the assembled pols, nor ANY of your brethren biz-blog reporters asked:
“What the F are you talking about? The American people are already on the hook for the Trillions in layered paper known as leverage?”
“How can that be?”
I know its true because of the $USD.
The pols and the pundits left the American people watching their TVs and wondering -
“What’s he talking about?”
And they still want answers.
Comment by monkeyfurball
Oct 7th, 2008 at 10:33 pm
Try $2 trillion. That’s how much has been lost in retirement plans this year. Makes your measly $700 billion look like tip change.
Comment by Harriet
Oct 8th, 2008 at 3:14 pm
Liz,
When I see those 2 from AIG that testified in Congress yesterday and the rest of those greedy crooks marched off to prison, I’ll get back in the stock market.
Comment by ken
Oct 8th, 2008 at 4:11 pm
There is one major cause to all of this turmoil in the U.S. economy that NO ONE seems to want to talk about and history of the world is our most blatant guide. . . .
We hardly manufacture ANYTHING in this country anymore. I live in NC. We do not make furniture here anymore or textiles. We have given up a lot of our food, electronic, automobile, pharmaceutical, and many many other products to be produced in foreign countries. How long did people think we could survive by doing NOTHING?? Unemployement, keeping money “in house”, staying out of debt to other countries. . . . these are all problems I think are directly tied to the fact that we whored ourselves out to the rest of the world.
When a politicial steps up and decides to change that, maybe we will have a shot at being the top of the world economically again. Until then, I am practicing my Spanish and learning Chinese!
Ken
Charlotte, NC
Comment by Umpire
Oct 9th, 2008 at 1:34 pm
We may not know who will come out ahead but the loser has already been announced.
The only good thing that seems to be coming out of Treasury’s actions is that the workload of bankruptcy judges is being reduced.
Comment by Tony B
Oct 10th, 2008 at 1:04 am
Liz,
We can all be mad, and we should be. At ourselves… We as a nation have allowed this. We ship our money to foreign entities by the boatload to car companies, oil cartels, and foreign manufacturers of all sorts of trinkets. Then we turn around and borrow money from the same to support our insatiable desire to consume and pay interest to a major bank so that they can write a zero down, interest only ARM mortgage (with the interest) to people that have no business owning something that they cannot possibly pay for. Then the banks package the worthless paper to sell at a profit 4-5 times and write themselves a nice bonus because they have lots of assets. It is an endless circle of debt that got us here, so what does the government want us to do? Borrow more money, how brilliant!!!! Let’s refuse to participate by getting out of debt and saving the finance charges so we can buy stocks when this mess bottoms out. I am sorry but the whole lot of the government needs to be fired from Paulson and Bernanke to Palozi, Reid, Bush, you get the picture.
Comment by Gary
Oct 10th, 2008 at 8:29 am
Liz,
Any chance I can get my hands on a very minute amout of the $700B to pay off my credit cards and student loans? Come on, let’s get real. This whole bailout was a bill of goods sold to the hard working American people by instilling extreme fear that the whole world would implode. Do we need to do something………..yes, was the bailout the right solution……….no, should the government had looked, I mean really looked at other options…absolutly.
Comment by jay Helt
Oct 10th, 2008 at 1:58 pm
Liz,
I am 76 years old and have been in the market for almost 60 Years since my dad gave me a few shares of Pullman stock on my 16th birthday. What we have today is a “correction” not a crash. The housing market is just a “correction” back to true value. Those affected don’t think so but we need to accept personal responsibility for a bit of this problem. A lot of folks are getting hurt but that is because they did not really live within their means especially the lower income and minorities. These folks wanted more than they could afford and our system since Jimmy Carter encouraged them to purchase more expensive houses with little or no collateral, so here we are. But the market although wiping out a lot of people is an opportunity that I haven’t seen in my life time. I feel badly for making money in the future on the backs of the unfortunate but I live conservatively, within my means and have little tolerance for those who do not. I will be paying the price for others foolishness for years to come and it really turned me around in my compassion for those unfortunates who bought into this chicken in every pot concept.
There are excellent companies getting beat up worse than they should be and when a 200 dollar stock a few years ago is now down in the 80s for no reason other than fear and lack of faith, it becomes an excellent opportunity to make some money. I am buying all the Goldman, Wells Fargo and JPMorgan I can manage. My Advice to you youngsters is we have been here before just have Faith - Like Macarthur, it will return. He took three years. I think this will be a bit less.
Jay Helt
Comment by Jerry Traver
Oct 10th, 2008 at 2:10 pm
Ms. Claman,
I am not sure if Dick Fabian is still around or not but you should track him down and interview him. He provided a simple, quick roadmap to the “markets” some 30 to 40 years ago. I still use it and it had me 100% in cash right at the beginning of 2008.
Mr. Fabian pointed out many years ago that there would always be plenty of reasons to be found to explain bear markets after it became too late to do anything about them and that is certainly the case right now. While most of the current mess was only being whispered about at the end of 2007, Mr. Fabian’s simple to use process moved his followers to cash at the end of the first week in January, 2008 or shortly thereafter. I hope that many others besides myself still keep track of his teachings as they are much better off than most investors today if they have continued to follow him.
Thanks for listening and I hope you can find Dick Fabian.
Jerry Traver
Comment by chuck
Oct 10th, 2008 at 4:10 pm
Liz,it’s Friday and your pal David Asman made a real fine point a few nights ago. On Scoreboard in his comments and I saw the link what he said too here on the website too. I believe the anger of the masses which is bipartsian should now focus on the greed,graff in Congress. I remember that old saying either your part of the problem or part of the solution. Well congress is the problem prolonger. The Democratic leaders should have hearings on their owon corrupt practices may it be a senator,rep. Accountablity needs to be enforced. The libs have overplayed thier hand here. When zealot politicans attack corparate capitolism; well its time for thier house to be looked at. I’m on David A’s ship on this one. Look into the congressional pandora box: what we would find? How many deals? it’s time to rein them in too.
Comment by Mike
Oct 10th, 2008 at 4:40 pm
none of this will ever change until we get back to the old days where stock holders actually took part in how the companies were run. Stock holders today are just day traders and don’t buy stocks for the long haul, growth and dividends. Stock holder meetings are conducted by webinar and nobody even knows who they elect to the board. guess i am just old fashion.
Comment by Ben
Oct 11th, 2008 at 1:10 pm
Welcome to the USSA.(like USSR,without the “R”, and they are working on that.)
Comment by B Scott
Oct 11th, 2008 at 8:12 pm
Apparently the gov,t is confiscating all Monopoly games in the country,I heard they are tired of playing Risk, not to mention the need for new capital for upcoming new stimulus checks,I don,t care what anyone says these guys are the best and the brightest.
Comment by Pat Kalup
Oct 11th, 2008 at 8:53 pm
All,
Two thoughts I have on the current stock market decline; energy cost and economic terrorism. Firstly, oil prices increased faster than the economy could absorb the cost. Secondly, a concerted effort tamper with the economy for political change. I hear that 95% of the mortagages are current, if this is true, I do not feel that Wall Street should not have declined so much. The reason must be elsewhere. Any other thoughts out there?
Thanks Liz for the forum.
Comment by Nick Quinn
Oct 12th, 2008 at 9:32 am
All,
I would like to know WHO the short sellers were that have played our markets down in the past few weeks. Is it POLITICAL? The endowment funds of the most liberal universities in our country control billions. Have they been the source of the last hour shorting that has helped the Democrat candidate? How much control of our markets do these funds have?
Thanks Liz for your shows and this forum.
Comment by George
Oct 13th, 2008 at 6:48 pm
Someone from FBN should have a little talk with Geraldo. Watched him the other night and his solution to the problem was to give each American citizen one million dollars which he thought would be “cheaper” than the bailout.
Let’s see now - giving 320 million Americans 1 dollar = 320,000,000
10 = 3,200,000,000
100 = 32,000,000,000
1000 = 320,000,000,000
10000 = 3,200,000,000,000 3.2 trillion
100000 = 32,000,000,000
$1,000,000 = 320,000,000,000,000 320 trillion
Hardly ‘cheaper”.
Comment by Lynne
Oct 16th, 2008 at 9:16 am
I appreciate Liz noticing the intelligence of the Fox audience. I can imagine how frustrating it must be for all the anchors to get questions from us the candidates will not allow to be asked in forums or debates. No, we are not stupid. As one who lost her retirement in the last Wall St. game I’m just wondering when the media will stop pretending these rallies have any substance. When the numbers go up you can be sure somebody is playing around to get just enough of a spike to pull some profits. How about we change the game on them? STOP being a consumer nation, act like we believe what we say we believe. Get out of the malls and love your kids. Play baseball with them instead of buying them Wii machines. Show the egomaniacs who have to live in mansions what true happiness looks like in a home that’s not only paid for but doesn’t require thousands of dollars a month to maintain. STOP working for your possessions America. Life won’t come to an end if you don’t own 200 pairs of shoes!
Comment by Jim Jochen
Oct 16th, 2008 at 5:44 pm
Ms. Claman: While I have not been dealt a ‘death blow’, my portfolio has suffered a nominal setback. The continuing obstructions placed by the democrats in congress (see the congressional record) to prevent intervention during the past many years is a practice that I will never forget each time I approach a voting booth. None of this need have happened if proper oversight and honest control had been exercised BY THE CONGRESS…BOTH PARTIES!!!! I have been practicing my spoken policy for years, and I urge everyone that will listen to me to do likewise. It is: Never, never, never, never, vote for ANY INCUMBENT in any election, regardless of party or ideology, and whether it is city, county, state, but especially federal level election….NEVER!!!! This is the only way to get a measure of ‘term limits’ and the only way to get rid of that pack of self-serving, hypocritical, lying, power-hungry pack of ‘holier than thou’ hyenas in that filthy den we call the capitol of our country. The power is in our hands, and if you want to see REAL PANIC, unseat a whole bunch, preferrably all, of these bottom-feeders from their trough in November. Then ask, “Now, gentlemen, who has the last laugh?”. I am 83 years of age, and I would like one more good chuckle. How about a bit of help in that direction. After all, what possible harm can this do, and consider the benefits of all those ‘new brooms’.
Comment by B Scott
Oct 17th, 2008 at 11:59 pm
Thank you for the smart reader designation…Regarding the Glenn Beck Show being essentially halted for six months,this smart reader can read between the lines.The readers comments overwhelmingly agree that the elite, whether gov,t or liberal media appear to be liars and crooks,then to see one of the few honest media outsiders silenced at this critical moment, all us smart readers can figure it out, this may well be the last presidential “election” in the USA.
Comment by Jeff Rock
Oct 18th, 2008 at 3:09 pm
Well there is no “Crystal Ball” that can forsee the ups and downs of the market. I have a 457b investment plan that I started Maxing out last year ($15,000) and took 1/3 of my money out of the market at Dow 13,700. I did this when oil hit $80 dollars a barrel. I felt that any continued rise (and experts predicting $120 a barrel) would begin strangling the economy. Myself and true middle class friends were really feeling the effects and were reigning in our spending. Since middle class and below make up the greatest proportion of spending in America it only makes sense that the economy would falter and then tank with $147 a barrel oil. Economists (who are fairly well paid) ignore this fact. I have been re-investing my money on the way down (even during the past 2 weeks with my account down $90,000 from my high last year). If oil goes to $60 a barrel or less the economy will turn around quickly. If OPEC lowers production in an effort to maintain $70 to $80 or above then the recovery will be much slower. Our economy thrived on inexpensive energy and choked on expensive energy. The mortgage problem was magnified by increased energy. If my mortgage is $1,000 dollars in 2001 and my gas and heat averaged $200 a month with disposable income left for the month at $400 a month THEN from 2005 to 2008 my gas and heat costs jumped to $600 a month I have no disposable income left and if I did not get “great” raises I am now unable to afford food and other goods. THIS is reality for the AVERAGE JOE. THIS is what brought down the economy. Lets see how this turns out over the next year.