Dan Rather Reports

Episode Number: 407

Episode Title: SOLD!

Description: Ft. Myers Florida is knee deep in bankruptcies and foreclosures. But even bad economic times can be profitable. Also, the woman in charge of finding the billions in tax dollars given to the banks.

Transcript:

WHEN CONGRESS ALLOCATED THE $700 BILLION, ONE OF THE VERY FEW INDICATIONS OF DIRECTION THAT IT GAVE WAS DO SOMETHING ABOUT MORTGAGE FORECLOSURES. NOT ONE STEP WAS TAKEN IN THAT DIRECTION UNDER SECRETARY PAULSON. NOT ONE.

MY GOAL WAS, IN TEN YEARS, THAT MY SOUP KITCHEN WOULD BE A MUSEUM, THAT WE WOULD HAVE FIGURED OUT A WAY TO ADDRESS THE NEEDS OF THE PEOPLE WHO ARE HOMELESS. AND NOW I'M JUST TRYING TO THINK HOW WILL I FEED PEOPLE TOMORROW.

LITERALLY A YEAR AGO TO DO A 100 PROPERTIES, 150, 175 PROPERTIES IN A DAY, WE WOULD'VE CONSIDERED TO BE A VERY LARGE AUCTION. AND NOW WE'LL DO ANYWHERE FROM 200 TO 350 HOMES IN A DAY. WE'LL BRING YOU THE NEWS, TONIGHT ON DAN RATHER REPORTS.

GOOD EVENING. TONIGHT SOME SOBERING STRAIGHT TALK ON THE UNITED STATES ECONOMY. WE AIM ON THIS BROADCAST TO GIVE YOU IN DEPTH REPORTING, BUT ALSO ANALYSIS, PERSPECTIVE AND CONTEXT. WE DON'T AIM TO BE ALARMIST. BUT WHAT YOU'RE ABOUT TO HEAR TONIGHT IS WORRISOME AND WORTH PONDERING.

HERE'S A PERFECT EXAMPLE OF WHAT MAKES THIS A VERY TROUBLING TIME. THIS IS A NEIGHBORHOOD OUTSIDE FT. MYERS FLORIDA. BUT IT COULD BE MANY PLACES IN AMERICA. THE SIGNS ARE THE SAME. FORECLOSURES ARE EVERYWHERE. NEIGHBORHOODS WIPED OUT. MORE THAN 10 THOUSAND A DAY, THAT'S RIGHT 10 THOUSAND HOMES A DAY ARE TAKEN BACK BY BANKS ACROSS THE COUNTRY. IN JANUARY FOR THE 10TH MONTH IN A ROW, THERE WERE AGAIN MORE THAN 250 THOUSAND FORECLOSURE FILINGS. ONE IN SIX AMERICAN HOMEOWNERS IS "UNDER WATER" A TERM USED IN THE REAL ESTATE INDUSTRY THAT MEANS THE HOMEOWNERS OWE MORE THAN THAT THE HOME IS WORTH. ONE IN SIX. IN 2008, MORE THAN THREE TRILLION DOLLARS WAS LOST IN HOME VALUE IN AMERICA. 80 THOUSAND, 80 THOUSAND , 80 THOUSAND, PRACTICALLY FREE! LADIES AND GENTLEMEN. 80 THOUSAND DOLLARS. AND THIS IS A CALL THAT IS HEARD ACROSS THE COUNTRY - THE AUCTIONEER. I SAID SOLD FOR 35 THOUSAND DOLLARS. THIS ONE IS IN SOUTH FLORIDA. ON A SATURDAY MORNING. HUNDREDS OF HOMES ARE PUT ON THE AUCTION BLOCK. AND THERE'S ANOTHER AUCTION JUST LIKE THIS ONE IN MIAMI, STILL ANOTHER ONE IN DALLAS, ORLANDO. ENEVADA HAS THE MOST FORECLOSED HOMES. FOLLOWED BY CALIFORNIA, ARIZONA, AND HERE IN FLORIDA. THESE AUCTIONS ARE LURING BARGAIN HUNTERS SEARCHING FOR A STEAL, OR JUST SEARCHING FOR THEIR FIRST HOME AT A MORE REASONABLE PRICE. THERE ARE BEGINNING TO BE AT LEAST SMALL SIGNS OF HOPE. NATIONWIDE THE FORECLOSURE RATE SLOWED SOMEWHAT IN JANUARY OVER DECEMBER BUT THE NUMBERS ARE STILL UP DRAMATICALLY YEAR TO YEAR. SO THE QUESTION IS, IS THERE AN ANSWER TO THIS MESS? A FEW DAYS AGO I HAD A VERY INTERESTING DISCUSSION WITH ELIZABETH WARREN. IF YOU DON'T KNOW THE NAME YET, YOU SOON WILL. SHE'S A BANKRUPTCY SPECIALIST AND POPULAR PROFESSOR AT HARVARD LAW SCHOOL. SHE CLOSELY STUDIED THE AMERICAN ECONOMY, FORECLOSURES, AND THEIR DRAMATIC EFFECT ON THE MIDDLE CLASS. WE HAVE KNOWN THAT WE ARE IN A FORECLOSURE CRISIS FOR MORE THAN A YEAR NOW. AND WITH EACH PASSING DAY, IT'S THOUSANDS OF FAMILIES WHO ARE MOVED OUT OF THEIR HOMES AND THOUSANDS MORE WHO WHO HANG ON THE EDGE TRYING TO SCRAMBLE AND FIND A WAY NOT TO FALL OVER. AFOR HOMEOWNERS, OTHER FANCYM NAMED PROGRAMS, BIG ESTIMATES ON HOW MANY PEOPLE ARE GOING TO BE HELPED. AND WHAT DO THE NUMBERS EVENTUALLY SHOW? THE NUMBER OF PEOPLE WE'VE HELPED CAN BE MEASURED IN THE HUNDREDS IN AN AREA IN WHICH WE'RE TALKING ABOUT LITERALLY NOW, MILLIONS OF FORECLOSURES. THE SENSE OF URGENCY, I I DON'T KNOW HOW TO MAKE IT MORE INTENSE THAN IT IS. THESE ARE FAMILIES. THESE ARE FAMILIES WITH CHILDREN. THESE ARE OLDER PEOPLE WHO CAN'T SELL THEIR HOMES AND MOVE TO OTHER FACILITIES THAT THEY NEED TO. THESE ARE THESE ARE PEOPLE WHO CAN'T LEAVE OHIO TO TAKE A JOB IN SOUTH CAROLINA BECAUSE THEY CAN'T SELL THEIR HOMES. THIS IS A FREEZING UP OF THE ECONOMY, NOT ON WALL STREET, BUT DOWN AT THE FAMILY LEVEL. IF WE DON'T FIX THAT PROBLEM, WE CANNOT FIX OUR ECONOMY. WE JUST CAN'T. HOW DO WE GET ACCOUNTABILITY OUT OF THE CONGRESS, OUT OF THE PRESIDENT, OUT OF THE SECRETARY OF TREASURY? 'CAUSE I KNOW A LOT OF PEOPLE, AND I'M SURE YOU DO, WHO ARE JUST ABOUT AT WITS' END SAYING, "I'VE HAD THE SOS UP FOR A LONG WHILE. BUT THERE'S NO HELP COMING." THAT'S RIGHT. AND THE WATER'S RISING FAST. I THINK WE NOW MEASURE OUR TOLERANCE IN DAYS. WE NO LONGER GIVE MONTHS. WE HAVE BEEN DRIVEN AS A PEOPLE TO THE EDGE WITH EMPTY PROMISES AND FREE SPENDING THAT THAT HAS PRODUCED RESULTS THAT, AT BEST, WE CANNOT MEASURE. WHAT CAN BE DONE? CAN YOU GIVE MONEY GOVERNMENT GIVE MONEY DIRECTLY TO PEOPLE WHO ARE IN THE WORST SHAPE AND INDICATE SOME POSSIBILITY OF GETTING OUT? WHAT CAN BE DONE NOW? WELL, THERE'S SOME OF THAT. BUT THE MORTGAGE CRISIS PRESENTS A SOMEWHAT DIFFERENT PROBLEM. THE PROBLEM THERE IS MUCH MORE A ONE OF WHO'S GOING TO BEAR THESE LOSSES? WE'VE GOT HOUSES THAT ARE NOW WORTH $100,000, LET'S SAY. BUT THEY HAVE MORTGAGES AGAINST THEM FOR $140,000. AND THE MORTGAGE ON THAT HOUSE HAS BEEN SOLD AND SLICED AND DICED AND MOVING OUT BUNDLED. BUNDLED AND ALL THE FANCY THINGS THAT HAVE HAPPENED. AND NOW YOU'VE GOT A FAMILY LIVING THERE. AND BECAUSE OF THE CRAZY TERMS IN THIS MORTGAGE, THEY THEY CAN'T PAY THE $140,000 MORTGAGE. THERE'S NO POSSIBLE WAY. IF THIS HOUSE GETS FORECLOSED, THEY'RE GONNA BE OUT OF A HOUSE. AND ULTIMATELY, HERE'S THE IRONIC PART, THE INVESTORS WAY ON DOWN THE LINE, $100,000 HOUSE, THEY'RE LIKELY TO GET SOMEWHERE BETWEEN $40,000 AND $50,000 BY THE TIME YOU WORK THROUGH THE PROCESS. LOSE, LOSE FOR BOTH GROUPS. WHAT WE HAVE TO DO IS WE HAVE TO FIND THE MECHANISM TO GET 'EM TOGETHER AND SAY, LOOK, LET'S BE REALISTIC. CAN YOU PAY $100,000 FOR THE HOUSE? CAN YOU GET YOURSELF IN A LEVEL MORTGAGE? IF YOU CAN, LET'S DO IT. AND YOU HAVE GOT A YOU GOTTA EAT THE LOSS. MR. INVESTOR, MR. BANK? THAT'S WHAT THAT'S THAT'S EXACTLY WHAT IT'S ABOUT. THAT'S WHAT YOUR YOUR YOUR ADVENTURE HERE WAS ABOUT. GET THESE TWO THINGS INTO ALIGNMENT. AND IN THE CASES WHERE FAMILIES CAN PAY FOR THOSE HOMES, LET'S HAVE 'EM STAY IN THOSE HOMES, LET'S STABILIZE THOSE NEIGHBORHOODS. AND LET'S STOP BRINGING TENS OF THOUSANDS MORE HOMES ON TO THE MARKET THROUGH FORECLOSURE. WE'VE JUST GOT A GLUT ON THE MARKET NOW. LET'S STOP THAT AND STABILIZE HOUSING PRICES FOR EVERYONE. WHAT ABOUT THE BANKS? DO YOU MAKE THE BANKS, LET THE BANKS TAKE THE HIT? LOSE OUT AND CLOSE DOWN? WHAT DO YOU DO ABOUT THE BANKS? WELL, PARTLY THEY'RE THE ONES WHO TOOK THE PROFITS. THEY'RE THE ONES WHO TOOK THE RISKS. AND NOW IT'S TIME FOR THEM TO RECOGNIZE SOME OF THE LOSSES. THIS-YOU KNOW IN A FUNNY SORT OF SENSE, THIS ISN'T ABOUT BANKRUPTCY, THIS IS ABOUT REALITY. YOU CAN BEAT ON THIS FAMILY ALL YOU WANT. BUT THEY'RE NOT GONNA PRODUCE $140,000 FOR THIS HOUSE. THEY JUST CAN'T DO IT ANYMORE. AND THE DAY WE FINALLY GET REALISTIC, WE RECOGNIZE THE LOSSES, WE WRITE DOWN WHAT WE HAVE TO WRITE DOWN, WE LET SOME BUSINESSES GO AWAY AND WE BEGIN TO COUNT ON THE FACT THAT THOSE THAT ARE LEFT REALLY DO HAVE THEIR FEET ON THE GROUND, YOU KNOW, THAT THE IT IT'S SOLID ALL THE WAY DOWN, THEN WE START TO REBUILD AN ECONOMY. WELL, YOU'VE WRITTEN A GREAT DEAL ABOUT FAMILY ECONOMICS AND THE MIDDLE CLASS. ARE WE IN DANGER OF FOR ALL INTENTS AND PURPOSES LOSING THE MIDDLE CLASS? OR IS THAT TOO MUCH OF A FEAR? NO, I THINK THAT'S THE REAL FEAR. SO, HERE'S THE HERE'S WHAT'S HAPPENED OVER A GENERATION. SOMEBODY OUT WORKING 40 HOURS A WEEK IS MAKING LESS THAN HE WAS MAKING 30 YEARS AGO. HOUSEHOLD INCOME HAS GONE UP A LITTLE. HOW? BECAUSE WE PUT THE SECOND EARNER TO WORK IF SHE COULD DO IT. BUT THAT HAS NOW FLATTENED OUT. THERE'S NO ONE ELSE TO PUT TO WORK. WE'VE PUT TO WORK AS MANY MOMS AS WE CAN POSSIBLY DO. SO, WHERE WE STAND NOW IS INCOME HAS FLATTENED OUT AGAIN. TRANSPORTATION, CHILD CARE AND TAXES, BECAUSE THEY'VE GOT THESE TWO SALARIES, HAVE ALL GONE UP. AND THAT'S LEFT THE BASIC FAMILY WITH LESS MONEY THAN THEY USED TO HAVE A GENERATION AGO. SO, THEN WE HIT THE SKIDS OF THIS RECESSION. THE BOTTOM FALLS OUT OF THE HOUSING MARKET. THEY CAN'T TAP HOME EQUITY. THESE CRAZY MORTGAGES FOR MANY OF THEM ARE FORCING THEIR EXPENSES UP. THEY'RE LOSING JOBS. AND THAT MEANS WE HAVE NOT A FEW PEOPLE, WE HAVE LITERALLY TENS OF MILLIONS OF AMERICANS, HARD-WORKING, PLAY-BY-THE-RULES, WHO GOT DECENT JOBS, PEOPLE WHO GOT MARRIED, MOVED OUT, BOUGHT HOUSES, THE BACKBONE OF WHAT WE ARE AS AMERICA, THOSE PEOPLE ARE NOW HANGING ON BY THEIR FINGERNAILS. IF WE LOSE THE MIDDLE ECONOMIC CLASS DO WE HAVE AN AMERICA APPROACHING ANYTHING WHAT WE'VE KNOWN IN MY LIFETIME AND YOURS AND OUR FATHER AND MOTHER'S LIFETIME? NO. IT'S A DIFFERENT AMERICA. IT BECOMES A TWO-CLASS AMERICA. IT MAY ACTUALLY HAVE A LARGER UPPER CLASS. YOU KNOW, MAYBE MAYBE THAT MOVES TO TEN PERCENT OF THE POPULATION WHO REALLY DO QUITE WELL. YOU KNOW, THE KIDS AND THEY GRADUATE WITH NO DEBT. THEY DO FINE. NOBODY GETS SICK. YOU KNOW, THAT'S THE GROUP THAT WORKS. AND THEN WHAT WE HAVE IS A BIG UNDERCLASS. IT'S FOLKS WHO JUST LIVE BASICALLY PAYCHECK TO PAYCHECK. IF IF YOU CAN HANG ON, IF YOU DON'T GET A LAYOFF OR A CUTBACK IN HOURS- OR YOU DON'T GET VERY ILL? IF AND ONE OF THE KIDS DOESN'T GET SICK, IF GRANDMA DOESN'T FALL AND BREAK A HIP, IF YOU DON'T GET DIVORCED OR HAVE A DEATH IN THE FAMILY, YOU MIGHT BE ABLE TO SKIRT THROUGH. BUT IF ANYTHING GOES WRONG, YOU'RE LIVING ONE PINK SLIP, ONE BAD DIAGNOSIS AWAY FROM COMPLETE FINANCIAL COLLAPSE. WELL, AT THE RISK OF ENACTING A CLICHE , LET'S PRETEND FOR A MOMENT THAT I'M PRESIDENT OBAMA AND I SAY TO YOU, WHAT CAN BE DONE? WHAT CAN BE DONE NOW? WELL, THE FIRST THING HAS TO BE THE HOME MORTGAGES. WE WE HAVE TO BRING THE PARTIES TOGETHER. WE HAVE TO USE THE POWER OF THE LAW TO SAY I KNOW THAT THE INTERESTS HAVE BEEN SLICED AND DICED. GET IN HERE. GET THOSE $100,000, 30 YEAR FIXED MORTGAGES IN PLACE. STABILIZE THE FAMILY. IT STABILIZES NOT ONLY THE FAMILIES AND THE BAD MORTGAGES, IT STABILIZES THE COMMUNITIES, IT STABILIZES VALUES FOR THEIR NEIGHBORS. WE GOTTA DO THAT. SECOND THING WE'VE GOTTA DO IS WE GOTTA WORRY ABOUT YOUR OTHER CREDIT CIRCUMSTANCES. CREDIT CARDS, FINANCIAL PRODUCTS THAT ARE JUST HOLES IN YOUR POCKET. CAR LOANS? CAR LOANS, MONEY THAT'S JUST DRAINING OUT HERE. WHAT ABOUT THE ARGUMENT THAT SAYS, LISTEN, THE THE GOVERNMENT SHOULDN'T TRY TO DO TOO MUCH. THE GOVERNMENT SHOULD STAY OUT OF IT. THE LESS DONE, THE BETTER. IT'LL WORK ITSELF OUT. WELL YOU KNOW, IT'S THE OLD STORY. HOW LONG WE GONNA LET THIS THING WORK ITS WAY OUT? HOW MANY GENERATIONS? BECAUSE THOSE ARE THE KIND OF NUMBERS WE COULD BE TALKING ABOUT. YOU KNOW THE THIS THIS IDEALIZED NOTION THOUGH THAT WE COULD LIVE WITHOUT A GOVERNMENT, SOMEHOW THESE MARKETS WILL GO OFF. THEY'LL STRAIGHTEN IT OUT. FAMILIES WILL DO WHAT THEY NEED TO. THAT JUST FITS A WORLD THAT DOESN'T EXIST ANYMORE. TO SEE THE MELTDOWN OF THE MIDDLE CLASS FIRSTHAND, TRAVEL TO FT. MYERS, FLORIDA LIKE WE DID. IT'S THERE THAT A HIGHER PERCENTAGE OF JOBS HAVE BEEN LOST THAN ANYWHERE IN THE COUNTRY. RIGHT NOW IN LEE COUNTY, THE AREA SURROUNDING FT. MYERS, UNEMPLOYMENT IS NEAR 10 PERCENT - FAR ABOVE THE NATIONAL AVERAGE. THE FOLKS HERE IN LEE COUNTY FLORIDA KNOW THE ECONOMY IS BAD BUT MANY ARE WONDERING JUST HOW MUCH WORSE IT'S GOING TO GET. LAST WEEK PRESIDENT OBAMA STOPPED IN FORT MYERS BECAUSE IT HAS ONE OF THE HIGHEST FORECLOSURE RATES IN THE COUNTRY. ONCE VIBRANT MIDDLE CLASS NEIGHBORHOODS ARE LARGELY EMPTY - YOU'RE STRUCK BY THE LACK OF PEOPLE. NO KIDS ON BIKES. NOBODY WEEDING THE FRONT YARD. NOBODY WASHING THE FAMILY CAR IN THE DRIVEWAY. ABANDONED HOMES ARE THE MOST VISIBLE SIGN OF THE HARD TIMES BUT WHAT HAPPENS WHEN A HOME IS REPOSSESSED, OR A PERSON LOSES THEIR JOB IS HARDER TO SEE. WE DON'T KNOW WHAT WILL HAPPEN TOMORROW BUT WE CAN SAY ABOUT TODAY AND WE WILL FEED YOU, LORD AND WE WILL FEED YOUR PEOPLE AND WE THANK YOU FOR THEM. IN A SMALL CITY PARK ONLY ABOUT A MILE FROM WHERE PRESIDENT OBAMA GAVE HIS SPEECH LAST WEEK, PEOPLE OF ALL CREEDS, AGES AND COLORS LINE UP FOR A FREE MEAL ON SATURDAY AFTERNOON. IT'S A BURGEONING PROBLEM IN THE WEALTHIEST NATION ON EARTH HUNGER. THE SYMPTOMS OF HUNGER ARE GONNA BE HERE AND GROWING NON STOP SO I THINK WE NEED TO BE SUPER PROACTIVE SARAH OWEN IS PART OF THE LEE COUNTY HUNGER TASK FORCE A SELF APPOINTED GROUP OF COMMUNITY ORGANIZERS THAT HAVE BEEN MEETING EVERY WEEK FOR 18 MONTHS TRYING TO TACKLE THIS LATEST CONSEQUENCE OF THE MORTGAGE CRISIS. THIS AREA'S BEEN REALLY IMPACTED BY THE HOUSING CRISIS THAT YOU'RE SEEING ALL OVER THE COUNTRY. I OFTEN SAY SOUTHWEST FLORIDA AND THIS REGION'S REALLY KIND OF ON THE FRONT OF THE WAVE. IT BEGAN HERE. IT'S HAD ITS GREATEST IMPACT HERE. THE FORECLOSURE RATE IS THROUGH THE ROOF. THE UNEMPLOYMENT RATE IS THROUGH THE ROOF. I THINK ONE OF THE MOST TELLING STATISTICS THAT IN OUR LOCAL SCHOOL SYSTEM, OVER 60 PERCENT OF THE CHILDREN ARE NOW ON FREE OR REDUCED LUNCH. IT'S DIRECTLY TIED TO THE HOUSING. IF YOU LOSE YOUR JOB, YOU'RE GONNA BE HUNGRY. IF YOU LOSE YOUR HOUSE, YOU'RE GONNA BE HUNGRY. HUNGER IS A SYMPTOM OF ALL OTHER THINGS THAT ARE GOIN' ON IN THIS REGION. OWEN RUNS AN OUTREACH CENTER IN FORT MYERS, THE COMMUNITY COOPERATIVE MINISTRIES INCORPORATED OR CCMI. SHE SAYS THE NUMBER OF PEOPLE ASKING FOR THE BASICS HAS RISEN DRAMATICALLY. A YEAR AGO WE WERE REALLY LOOKING AT PEOPLE WHO WERE CHRONICALLY HOMELESS, HAD BEEN HOMELESS FOR A PERIOD OF TIME. NOW WHAT WE'RE STARTING TO SEE IS PEOPLE WHO HAVE NEVER HAD TO REACH OUT TO ASK FOR HELP BEFORE. WE'RE SEEING PEOPLE WHO'VE WORKED FOR THE LAST 20 YEARS FOR A COMPANY, HAVE SUPPORTED THEIR FAMILY, HAVE LIVED A LIFE IN MIDDLE CLASS AMERICA THAT ARE SUDDENLY WITHOUT JOBS. THEY'RE SUDDENLY ON THE VERGE OF LOSING THEIR HOME. THEY'VE LOST THEIR HEALTH CARE. AND WE'RE REALLY HAVING TO COME UP WITH NEW APPROACHES TO MEET THE NEEDS OF THESE PEOPLE AND OFFER THEM LONG-TERM SOLUTIONS IN ADDITION TO THAT SHORT-TERM HELP THAT THEY NEED. I NEVER NEVER IN MY LIFE THOUGHT I WOULD BE HOMELESS, HAVING EVERYTHING THAT I HAVE HAD IN THE PAST. AT CCMI WE MET PAUL CLARK. HE'S RECENTLY JOBLESS AND NOW HOMELESS. HE SAYS WHEN THE HOUSING BOOM STOPPED SO DID THE CALLS FOR WORK. I'M A CARPENTER BY TRADE. IT'S IT'S BEEN MY BUSINESS, IT'S BEEN MY LIFE, ALL OF MY LIFE. SINCE I WAS 18, GOT OUT OF HIGH SCHOOL. AND THE ECONOMY THE WAY IT IS NOW, HOMES AREN'T BEING BUILT. IT'S REALLY HURT MY PROFESSION. AND IT'S REALLY I'VE NEVER BEEN WITHOUT WORK. AND I'VE NEVER HAD A PROBLEM FINDING A JOB. AND I'M STRUGGLING RIGHT NOW. I HAVE A COUPLE OF PROSPECTS THROUGH THROUGH CONTACTS THAT I'VE MET HERE. YOU KNOW, HOPEFULLY THEY PAN OUT. HEY, HOW YOU DOING? PAUL CLARK NOT ONLY LOST HIS HOUSE, HE LOST HIS CAR. EVERYDAY, TWICE A DAY, HE HOPS A BUS TO THE LOCAL LIBRARY. IT'S YOU KNOW, IT'S JUST EVERY DAY, THERE'S MORE AND MORE PEOPLE. YOU KNOW, IT'S JUST I MEAN, YOU YOU TRY NOT TO LOOK HOMELESS. YOU TRY AND KEEP YOURSELF CLEAN OR WHATEVER. BUT IT'S YOU KNOW, IT'S JUST WHEN WHEN YOU BECOME HOMELESS, YOU CAN LOOK YOU KNOW, YOU CAN LOOK AROUND AND YOU CAN SEE 'EM. BEIN' ON THE STREETS. YOU KNOW, AND GOIN' TO THE FOOD PANTRIES AND GOIN' TO THE TO THE PLACES THAT THAT FEED YOU DINNER AND LUNCHES, YOU KNOW. AND AND YOU SEE THE THE PEOPLE. AND IT'S JUST IT'S OVERWHELMING, YOU KNOW? I'M ACTUALLY ON CRAIG'S LIST, FOUND A CERAMIC STONE AND TILE INSTALLER JOB. TRYING TO GET THE REPLY EMAIL.

EVERY MORNING I COME DOWN HERE AND THEN I COME BACK IN THE AFTERNOON AFTER I'VE BEEN OUT LOOKING FOR JOBS. COME BACK AND SEE IF I'VE GOT ANY RESPONSE ON MY EMAILS FROM ANY OF THE JOBS I'VE BEEN APPLYING FOR. GOT TO KEEP TRYING KEEP WORKING AT IT, THEY'RE NOT GONNA COME TO YOU. GOT TO GO TO THEM. I MEAN, I WOULD I WOULD DEFINITELY LIKE TO SAY TO TO TO PEOPLE OUT THERE WHO ARE WHO STILL HAVE THEIR FAMILIES TOGETHER, NUMBER ONE, YOU KNOW, TO THINK ABOUT THINK ABOUT THE DECISIONS YOU MAKE. AND YOU DON'T WANT TO END UP HERE. YOU KNOW, YOU DON'T WANT TO END UP WHERE I'M AT. AND IT'S JUST YOU KNOW, IT HAPPENS SO QUICK. YOU KNOW? AND IT'S JUST IT'S JUST WITH A BLINK OF AN EYE, YOU COULD BE GOIN' YOU CAN HAVE, YOU KNOW, A BEAUTIFUL HOME. YOUR CHILDREN RUNNIN' AROUND. TWO NICE VEHICLES. AND AND AND FROM THERE TO HERE. YOU KNOW? AND IT JUST IT IT COULD HAPPEN OVERNIGHT. IT REALLY, IT LITERALLY CAN. THERE ARE MANY THOUSANDS OF PEOPLE WITH STORIES LIKE CLARK'S ACROSS THE COUNTRY. AND AS MORE PEOPLE LOSE THEIR JOBS AND BUSINESSES SHUTTER WE CAN EXPECT THE NEED TO BECOME EVEN MORE ACUTE. FOR THOSE STILL HOLDING JOBS, THEY'RE ALSO HOLDING THEIR MONEY. AND THAT IS NOT GOOD NEWS FOR SAM GALLOWAY, THE LOCAL FORD DEALER. HE'S HURTING, BUT HE'S STILL SELLING OPTIMISM. FIRST THING, I THINK YOU SHOULD KNOW, IS WE NEED SOME POSITIVE PRESS INSTEAD OF ALL THE NEGATIVE. I PICK UP THE FT. MYERS NEWS PRESS, AND I PICK UP THE WALL STREET JOURNAL, AND EVERYTHING IS NEGATIVE, NEGATIVE, NEGATIVE. AND UNFORTUNATELY, SO IS THE BOTTOM LINE AT HIS FORD DEALERSHIP. GALLOWAY IS SURVIVING BUT ROUGHLY 900 CAR DEALERS WENT OUT OF BUSINESS LAST YEAR ACROSS THE NATION AND ANOTHER 1200 ARE EXPECTED TO GO OUT OF BUSINESS THIS YEAR. I SOLD 5636 CARS IN 2005. AND IN 2008, I SOLD 2029, WHICH IS A 64 PERCENT DECLINE. THAT'S IN NEW VEHICLES ALONE. SO OUR BUSINESS IN SOUTHWEST FLORIDA, AUTOMOTIVE WISE, HAS BEEN PRETTY WELL DEVASTATED. BUT MORE THAN SELLING CARS - OR NOT SELLING THEM AT THE MOMENT, GALLOWAY WORRIES ABOUT THOSE GOING HUNGRY IN HIS OWN BACK YARD. AND HE'S DETERMINED TO HELP. WE CAN CORRECT THIS SITUATION THROUGH SOME OF THE PROGRAMS THAT ARE OUT THERE. FOR EXAMPLE, FOOD CAN BE PURCHASED FOR 18 CENTS A POUND. AND WHEN YOU TAKE TEN POUNDS OF CHICKEN AND FOUR POUNDS OF RICE AT 18 CENTS A POUND, YOU HAVE JUST PROBABLY FED 40 50 PEOPLE CHICKEN AND RICE. SO, IT CAN BE DONE. AND THOSE THAT HAVE, NEED TO HELP THOSE THAT DON'T HAVE. IT REALLY COMES BACK TO SOME KIND OF BASIC IT'S OLD CLICHE LOVE THEY NEIGHBOR. BUT LOVE CAN ONLY GO SO FAR. GALLOWAY SAYS HE'S HAD TO CUT BACK HIS CHARITABLE GIVING BECAUSE OF THE ECONOMY. HE'S NOT THE ONLY ONE GIVING LESS. AND FEWER DONATIONS MAKES SARAH OWEN'S JOB AT THE OUTREACH CENTER ALL THE MORE DIFFICULT. I CAN'T STAND THE THOUGHT OF ANYBODY GOIN' HUNGRY. A COUPLA WEEKS AGO WE FOUND A COMMUNITY WHERE WE FOUND OVER 500 CHILDREN WHO ARE EATING NO FOOD OVER THE WEEKEND. AND SO, THEIR LAST MEAL WAS THEIR FREE LUNCH ON FRIDAY AFTERNOON AND THEN THEIR NEXT MEAL WAS MONDAY MORNING. AND THEY WERE BRINGING BROTHERS AND SISTERS WITH THEM TO SHARE THE MEAL. AND LITERALLY, I COULDN'T SLEEP OVER THE WEEKEND THINKING ABOUT THAT. WHEN I FIRST KIND OF ARRIVED ON THE SCENE, MY GOAL WAS, IN TEN YEARS, THAT MY SOUP KITCHEN WOULD BE A MUSEUM, THAT WE WOULD HAVE FIGURED OUT A WAY TO ADDRESS THE NEEDS OF THE PEOPLE WHO ARE HOMELESS, AND AND LOOKING FOR FOOD. AND NOW I'M JUST TRYING TO THINK, YOU KNOW, HOW WILL I FEED PEOPLE TOMORROW. HOW WILL I HOW WILL I HELP BE A CATALYST FOR THIS COMMUNITY TO SOLVE THIS ISSUE.

FORT MYERS, FLORIDA. COMING UP IN A FEW MINUTES ON OUR PROGRAM THE BAILOUT MONEY AND THE BANKS, WHERE, OH WHERE, DID THE BILLIONS GO. THAT'S NEXT.

WHEN CONGRESS PASSED THE 700 BILLION DOLLAR EMERGENCY ECONOMIC STABILIZATION ACT LAST OCTOBER, THE FINANCIAL MELTDOWN THAT IS NOW SO MUCH A PART OF THE NATIONAL PSYCHE, HAD ONLY RECENTLY EXPLODED INTO THE HEADLINES. THE STOCK MARKET THEN WAS DOWN, BIG, AND BANKS WERE FAILING OR ON THE BRINK OF COLLAPSE. PRESIDENT BUSH'S SECRETARY OF THE TREASURY, HENRY PAULSON, WAS A RESPECTED VETERAN OF WALL STREET AND HE SEEMED TO MANY LIKE THE PERFECT PERSON TO MANAGE THE CRISIS. HE BECAME THE FACE OF THE BUSH ADMINISTRATION - SPEAKING DIRECTLY TO THE PRESS AND TO CONGRESS. GIVE ME THE MONEY AND I'LL TRY TO MAKE SURE EVERYTHING TURNS OUT ALRIGHT. SO CONGRESS GAVE HIM THE MONEY WITH FEW RESTRICTIONS. BUT THEY DID SET UP AN OVERSIGHT PANEL TO TRY AND TRACK WHERE THE MONEY WAS GOING AND "REVIEW THE CURRENT STATE OF FINANCIAL MARKETS AND THE REGULATORY SYSTEM." THEY PICKED DISTINGUISHED HARVARD PROFESSOR ELIZABETH WARREN TO CHAIR THE PANEL. AND SHE'S BEEN ON THE CASE EVER SINCE. SECRETARY PAULSON WENT TO THE CONGRESS AND SAID, "I NEED MONEY AND I NEED IT FAST AND I NEED A LOT OF FLEXIBILITY ON HOW TO SPEND IT." AND CONGRESS, BELIEVING THEY WERE FACING AN EMERGENCY, BELIEVING THE SECRETARY OF TREASURY, SAID, "WE'LL GIVE YOU THE MONEY AND WE'RE GOING TO GIVE YOU A LOT OF FLEXIBILITY AND WE'RE GONNA PUT AN OVERSIGHT PANEL IN PLACE AND AN INSPECTOR GENERAL TO CHECK TO MAKE SURE THE CHECKS GO WHERE THEY'RE SUPPOSED TO." AND YOU KNOW, I UNDERSTAND THAT MOVE. I REALLY DO. I UNDERSTAND IT WAS A DIFFICULT CHOICE FOR CONGRESS. BUT I UNDERSTAND REASONABLY SAYING THIS IS AN EMERGENCY. YOU DON'T STAND BEHIND THE FIRE FIGHTER AND SAY, "HEY, SPARE A LITTLE MORE WATER OVER THERE AND TURN UP YOUR PRESSURE AND AIM YOUR HOSE THIS WAY." I UNDERSTAND THAT. YOU REPOSE GREAT CONFIDENCE. YOU GIVE GREAT FLEXIBILITY TO THE ONE ON THE FRONT LINE WHO SAYS, "I'VE GOTTA FIX THIS PROBLEM. IT'S AN EMERGENCY." DOES THE TREASURY DEPARTMENT HAVE TOO MUCH DISCRETIONARY POWER IN YOUR JUDGMENT? YOU KNOW, IT'S A IT'S A VERY HARD CHOICE. WE'RE STILL IN CRISIS. INDEED, THE CRISIS HAS DEEPENED SINCE SECRETARY PAULSON WAS BY THE WAY, THERE'S NO DOUBT IN YOUR MIND ABOUT THAT? NO. WE'RE WE'RE IN A VERY DEEP, DOWNWARD SPIRAL? WE WE ARE IN A VERY DEEP CRISIS AT THIS MOMENT. WE ARE WE ARE IN A VERY PRECARIOUS POSITION. SO I STILL WORK WITH THE FIRE FIGHTER METAPHOR. I THINK THAT HAVING CONGRESS TRY TO POINT IN DIFFERENT DIRECTIONS WOULD WOULD NOT BE THE MOST EFFECTIVE WAY TO DESIGN A SYSTEM TO GET US OUT OF THIS PROBLEM. IF WE, THE PEOPLE ARE TO GIVE THE TREASURY SECRETARY A LOT OF DISCRETIONARY POWER, AND HIS POWER COMES FROM THE PRESIDENT, WHOM WE'VE ELECTED, THEN HOW MUCH TRANSPARENCY DO WE HAVE A RIGHT TO DEMAND? AND HOW MUCH SHOULD WE PRACTICALLY DEMAND? ONE HUNDRED PERCENT. I'M I'M SORRY. I'M JUST I'M ABSOLUTELY, THERE IS NO ROOM FOR AMBIGUITY HERE. COMPLETE TRANSPARENCY. HOWEVER IT WAS ANYTHING BUT TRANSPARENT. AND ELIZABETH WARREN EVENTUALLY FOUND OUT WHEN HER PANEL STARTED REALY LOOKING INTO THE DEAL. THE AMERICAN TAXPAYER, BLUTLY PUT, GOT TAKEN. ACCORDING TO WARREN, HERE'S WHAT HAPPENED. WHEN THEN SECRETARY OF THE TRESURY PAULSON BEGGED, SOME WOULD SAY DEMANDED, THAT CONGRESS GIVE THIS MASSIVE INFUSION OF CAPITAL, HE SAID THE PLAN WAS TO USE IT TO BUY UP THE BAD MORTGAGES-BASED ASSETS THAT LED TO THE FINANCIAL COLLAPSE. BUT AFTER THE BILL WAS PASSED, HE ABRUPTLY CHANGED COURSE COMPLETELY. HIS NEW APPROACH WAS TO INVEST TAX PAYER MONEY INTO BUYING UP EQUITY IN THE BANKS THEMSELVES. HE SAID THAT APPROACH WOULD HELP THE BANKS, THE MARKETS, AND THE AMERICAN TAXPAYER BECAUSE HE SAID THESE INVESTMENTS WERE FAIR. THE U.S. TREASURY INVESTED ABOUT $256 BILLION IN THEIR FIRST SERIES OF TRANSACTIONS. SECRETARY OF TREASURY PAULSON SAID WE INVESTED IT, THIS IS JUST AN INVESTMENT ON THE PART OF THE U.S. TAX PAYER. YOU'RE NOT GONNA LOSE YOUR MONEY. IN FACT, YOU MAY ACTUALLY MAKE MONEY. AND I SENT HIM A LETTER. AND THE LETTER SAYS, AMONG OTHER QUESTIONS "ARE WE GETTING A FAIR DEAL? FOR EVERY $100 WE'RE PUTTING IN, ARE WE GETTING BACK STOCK AND WARRANTS WORTH $100?" SECRETARY PAULSON WROTE A LETTER BACK TO ME. AND HE SAID, "YES, THESE TRANSACTIONS ARE AT OR NEAR PAR," WHICH JUST MEANS EVERY TIME YOU PUT $100 IN, YOU'RE GETTING $100 BACK IN VALUE. SOUNDS FAIR. RIGHT? IN OTHER WORDS, THEY'RE JUST USING OUR MONEY TO TRY TO DEFROST THE SYSTEM. THAT'S WHAT HE SAID? THAT'S WHAT HE SAID. AND HE SAID IT VERY CLEARLY. NOW, WE COULD'VE STOPPED THERE. SAID THANK YOU VERY MUCH, WE APPRECIATE IT. SECRETARY PAULSON, CHECK OFF THE BOX. BUT WE DECIDED WHAT WE SHOULD DO IS MAKE AN INDEPENDENT INVESTIGATION. EVERY $100 WE PUT IN, WE GOT $66 BACK. WELL, THAT WASN'T THE DEAL? THAT WASN'T THE DEAL. AND HERE'S THE PROBLEM YOU PUT IN $100 AND GET $66 BACK, YOU DO THAT OFTEN ENOUGH AND IN THIS PARTICULAR CASE YOU END UP ABOUT $78 BILLION SHORT. THAT IS, WHAT SECRETARY PAULSON SAID, WAS AN EVEN DEAL MISSED BY $78 BILLION. I THINK PEOPLE HAVE TROUBLE WITH THIS. MAYBE BOILING IT DOWN AND SAY IT WAS EITHER A DUMB MISTAKE, MAYBE THAT'S WHAT WE'RE SAYING, BUT A MISTAKE OR THE PEOPLE THAT DESIGNED IT KNEW HOW IT WAS GOING TO GO BUT DIDN'T LEVEL WITH WE, THE PEOPLE. I THINK THAT'S RIGHT. I I WISH I COULD SAY OTHERWISE. BUT I THINK THAT'S RIGHT. YOU THINK THEY DIDN'T LEVEL WITH US? I KNOW THEY DIDN'T LEVEL WITH US. I MEAN FOR SECRETARY PAULSON TO DESCRIBE THIS AS A PAR TRANSACTION AFTER HE HAD PLENTY OF TIME TO THINK ABOUT IT HE DIDN'T DESCRIBE IT JUST AS A PAR TRANSACTION ON THE DAY IT HAPPENED BACK IN OCTOBER. IT WAS A LETTER DECEMBER 30TH ADDRESSED TO ME AS CHAIR OF OVERSIGHT. AND HE SAID, "OH YES, THAT'S WHAT IT $100 FOR $100." AND THE NUMBERS JUST SHOW FLATLY IT WAS NOT. THE LOSS OF GOVERNMENT FUNDS-YOUR TAX DOLLARS, IS WHY WARREN THINKS OVERSIGHT IS SO IMPORTANT. THE NEW ADMINISTRATION IS STILL FORMULATING THE SPECIFICS OF ITS BAILOUT APPROACH AND ITS BEEN WIDELY CRITICIZED FOR A LACK OF SPECIFICS. WARREN SAYS REGARDLESS OF WHOS IN POWER, THEY MUST BE HELD ACCOUNTABLE. AFTER ALL, THE STAKES FOR EVERY AMERICAN HAVE SELDOM BEEN HIGHER. WE NEED TO SEE IT AND SEE IT ALL. IT CANNOT BE THE CASE THAT THERE IS A SINGLE AMERICAN CITIZEN WHO HAS ANY DOUBT ABOUT HOW THESE TRANSACTIONS ARE GOING FORWARD, WHO'S GETTING WHAT, WHAT KIND OF INFLUENCE IS BROUGHT TO BEAR. WE SIMPLY HAVE NO MORE ROOM FOR THAT SORT OF THING. NOW, WHERE IS THE MECHANISM THAT WILL DEMAND AND GET THAT KIND OF TRANSPARENCY? IT'S RIGHT HERE. I'M LOOKING AT HER? NO. I'M LOOKING AT HIM. I'LL DO IT AS BEST I CAN. BUT ULTIMATELY IT'S MAKING SURE THAT THE AMERICAN PEOPLE ARE INFORMED, ENGAGED AND READY TO SPEAK UP. THAT'S WHAT MAKES THE REAL DIFFERENCE HERE. NOW THE PRESIDENT ANNOUNCED THAT HE WAS "CAPPING PAY FOR EXECUTIVES AT BANKS RECEIVING BAILOUT MONEY"? YES. I THINK THAT'S A DIRECT QUOTE AND CERTAINLY A AN ACCURATE PARAPHRASE. NOW, IMMEDIATELY THERE ARE THOSE PEOPLE SAY, "LISTEN, YOU CAN'T DO THAT BECAUSE IF YOU DO THAT YOU'RE GONNA LOSE THE BEST PEOPLE. AND YOU'RE NOT GONNA BE ABLE TO RECRUIT THE BEST PEOPLE." DO YOU BELIEVE THAT? NO. LOSE THE BEST PEOPLE? ARE WE TALKIN' ABOUT LOSING THE PEOPLE WHO GOT US IN TO THIS MESS? AND TELL ME EXACTLY WHERE IT IS THEY'RE GOING TO GO. YOU KNOW, IT'S NOT LIKE THIS IS AN INDUSTRY THAT'S DESPERATE TO HIRE MORE PEOPLE TO RUN THESE BUSINESSES. LET ME TELL YOU HOW IT WORKS IN THE WORLD OUTSIDE FINANCIAL SERVICES AND TREASURY PUTTING IN BILLIONS OF DOLLARS. I WORK IN THE WORLD OF CHAPTER 11. BANKRUPTCY. THAT'S RIGHT, BANKRUPTCY. YOU TAKE A BIG PUBLICLY TRADED COMPANY INTO BANKRUPTCY AND WHAT THE DATA SHOW IS THAT THE CEOS NEARLY ALWAYS A, LOSE THEIR JOBS AND B, NEVER GET A JOB ANYWHERE ELSE IN A BIG COMPANY. BUT YOU ARE IN THIS WORLD. I MEAN, YOU KNOW THIS WORLD. AGAIN, FOR FOR REGULAR PEOPLE, WHAT CAN YOU SAY TO THEM WE ARE A PEOPLE WHO BELIEVE THAT OUR WHOLE COUNTRY IS BASED ON MERIT. THAT IS, YOU PERFORM WELL, YOU GET A PROMOTION, YOU GET A RAISE, YOU DO WELL. THAT'S RIGHT. YOU DON'T PERFORM WELL, YOU'RE OFF THE TEAM. THAT'S RIGHT. WHAT HAPPENED? THAT'S RIGHT. SO FAR TREASURY IS PAYING AND THAT MEANS HE WHO PAYS CALLS THE TUNE. AND THE TUNE IS THAT THE CEOS GET TO STAY. AND THEY GET TO COLLECT A LOT OF MONEY WHILE THEY DO IT. WELL NOW THE NEW TREASURY SECRETARY, MR. GEITHNER HAS ANNOUNCED CHANGES FOR BANKS GETTING FUTURE FUNDS. FIRST OF ALL, WHAT ARE THOSE CHANGES? AND THE CORE QUESTION IS WILL THOSE CHANGES HELP? RIGHT NOW WE'RE WE'RE GETTING THE HEADLINE VERSION. AND I HATE TO SAY IT BUT IN AN AREA LIKE THIS, THE DEVIL'S IN THE DETAILS. SO, HERE'S THE GOOD NEWS. THERE ARE SOUNDS COMING FROM THE OTHER SIDE OF THE WALL. AND THE THE SOUNDS ARE WE NEED TO DO MORE WITH TRANSPARENCY. WE NEED TO DO MORE WITH ACCOUNTABILITY. WE NEED TO STRUCTURE A AN OVERALL PLAN. THE SOUNDS ARE ARE THERE. BUT THE DETAILS AREN'T IN PLACE YET. SO SO, WE JUST WE WE WAIT. BUT BUT I WANNA BE CLEAR. THIS DOESN'T CHANGE MY JOB IN THE SLIGHTEST BECAUSE MY JOB REMAINS THE SAME. AND THAT'S TO KEEP ASKING THE QUESTIONS, TO KEEP INSISTING THAT WE NEED MORE TRANSPARENCY, MORE ACCOUNTABILITY, A CLEARER STRUCTURE FOR HOW THIS PLAN IS GOING TO WORK. AND I'LL KEEP ASKING THOSE QUESTIONS REGARDLESS OF WHO'S SITTING IN THE TREASURY OFFICE. EVERYBODY KNOWS NOW, UNLESS THEY'VE BEEN ON ANOTHER PLANET, THIS STARTED WITH THE SUB-PRIME LOANS. AND WHEN GOVERNMENT FIRST STARTED TALKING ABOUT DOING SOMETHING IT WAS TO HELP HOME OWNERS. YES. KEEP HOME OWNERS IN THE HOMES IF THEY POSSIBLY CAN. YEP. NOW, WHAT HAVE WE LEARNED ABOUT THAT ALWAYS SUCCEEDING IN DOING THAT? IF WE HAVE WE EVEN STARTED TO SUCCEED IN DOING THAT? YOU KNOW, WHEN CONGRESS FIRST ALLOCATED THE $700 BILLION, ONE OF THE VERY FEW INDICATIONS OF OF DIRECTION THAT IT GAVE TO THE TREASURY DEPARTMENT WAS DO SOMETHING ABOUT MORTGAGE FORECLOSURES. HELP FIND A WAY TO STEM THIS THIS DOWNWARD SPIRAL THAT'S GETTING US MORE FORECLOSURES, DRAGGING DOWN HOUSING PRICES AND IN TURN, DRAGGING DOWN THE WHOLE ECONOMY. NOT ONE STEP WAS TAKEN IN THAT DIRECTION UNDER SECRETARY PAULSON. NOT ONE. THAT'S GOING TO STRIKE A LOT OF PEOPLE, INCLUDING THIS PERSON AS INCREDIBLE. IS THAT TRUE? WELL, WE RAISED IT IN OUR DECEMBER REPORT. WE RAISED IT IN OUR JANUARY REPORT. AND WE HAVE NOW RAISED IT IN OUR FEBRUARY REPORT. NOT ONE CENT. YOU DID A SPECIAL REPORT ON REGULATION. TAKE US BACK QUICKLY OVER THE LAST 25 YEARS. WHAT'S HAPPENED TO REGULATION OR SUPPOSED TO HAVE HAPPENED TO REGULATION. SO SO, HERE'S ONE WAY TO LOOK AT IT. IN 1792 OUR YOUNG REPUBLIC, GEORGE WASHINGTON IS PRESIDENT, HITS ITS FIRST ECONOMIC CRISIS. AND CREDIT MARKETS FREEZE. DOES THIS SOUND FAMILIAR? YES, IT DOES. AND IT ALMOST BRINGS THE COUNTRY TO ITS KNEES. AND HERE'S WHAT HAPPENS. ABOUT EVERY 15 TO 20 YEARS WE HAVE ANOTHER CRISIS. WE CALL THEM PANICS. WE HAVE DIFFERENT NAMES FOR THEM. DEPRESSION? DEPRESSION. BUT THEY HAPPEN ABOUT EVERY 15 TO 20 YEARS FOR 140 YEARS. THE PATTERN IS JUST UNMISTAKABLE. THEN WE HIT THE GREAT DEPRESSION. AND COMING OUT OF THE GREAT DEPRESSION WE PUT THREE NEW COMMUNITY BANKS BASICALLY FROM THE WALL STREET INVESTMENT BANKS, FDIC INSURANCE, PUT MONEY IN THE BANK AND KNOW THAT IT'S SAFE AND SOME SEC REGULATIONS SO YOU CAN INVEST ON WALL STREET AND THEY CAN'T CHEAT YOU TOO DIRECTLY. THAT'S WHAT WE PUT IN PLACE. FOR 50 YEARS WE HAVE NO BANK FAILURES, NO MAJOR CRISES. IT WORKS. NOW, THERE'S INNOVATION. THERE'S CHANGE. IT'S TIME TO CHANGE REGULATIONS. IT GETS TO BE THE EARLY 1980S. AND WHAT DO WE DO? INSTEAD OF SAYING NEW PRODUCTS, WE NEED TO CHANGE REGULATIONS TO ADAPT, WE TAKE A DIFFERENT PATH. WE SAY WE LET BANKS TO GO IN THE INSURANCE BUSINESS AND VICE VERSA? LET'S DEREGULATE. THAT'S EXACTLY RIGHT. WE BEGIN TO BREAK DOWN THE OLD REGULATIONS. WE SAY, "WHO NEEDS REGULATIONS? THEY'RE SO POKEY. SO OLD." SO, WE GO WITH THIS IDEA OF LET'S GET RID OF REGULATION AND WHAT HAPPENS? LATE 1980S, SAVINGS AND LOAN CRISIS SHOULD'VE BEEN A WARNING. LATE 1990S, REMEMBER LONG TERM CAPITAL MANAGEMENT, HEDGE FUND? SHOULD'VE BEEN A WARNING. BUT WE LET IT GO. EARLY 2000S, ENRON, BAD BOOKS, NOT TELLING THE TRUTH. SHOULD'VE BEEN A WARNING. BUT WE LET IT GO. AND WHERE DO WE END UP? IN THE BIGGEST CRISIS SINCE THE GREAT DEPRESSION. MARKETS ARE WONDERFUL. THEY PRODUCE GREAT WEALTH FOR US. BUT THEY ARE BY THEIR VERY NATURE SOMETHING WE CALL PRO-CYCLICAL. WHEN THEY'RE GOING UP, THEY CHASE THEMSELVES UP. HEY, WOW, IT'S DOIN' GREAT! UP THEY GO. AND WHEN THE GO DOWN, THEY CHASE THEMSELVES DOWN. AND THEY GO LOWER THAN ACTUAL SUPPLY AND DEMAND WOULD SUGGEST. NOW LOOK, WE CAN LIVE IN A WORLD ALL UPS AND DOWNS FOR THE REST OF OUR LIVES. WE CAN SAY, "WHO NEEDS REGULATION? LET'S JUST RIDE THAT ROLLER COASTER WHEREVER IT GOES." BUT, YOU KNOW, WE HAVE TO REMEMBER WHEN IT GOES DOWN, IT DOESN'T JUST TAKE DOWN THE PEOPLE WHO GAMBLED. IT DOESN'T JUST TAKE DOWN THE PEOPLE WHO INVESTED ON WALL STREET. IT TAKES DOWN EVERYBODY WHO'S GOT A PENSION. IT TAKES DOWN FOLKS WHO HAVE JOBS IN CONSTRUCTION INDUSTRIES AND AND OTHER INDUSTRIES THAT GET HIT BY THIS. IT TAKES DOWN IN THIS CASE, IT TAKES DOWN HOMEOWNERS, PEOPLE WHO THOUGHT THEY WERE DOING THE RIGHT THING TO PROTECT THEMSELVES FOR THE FUTURE. IT TAKES DOWN THE PRUDENT ALONG WITH THE GAMBLERS AND THE WILD ONES. WHICH IS WHERE WE ARE TODAY? WHICH IS EXACTLY WHERE WE ARE TODAY. SO, WE COULD SAY, "HEY, NO MORE REGULATION. THAT'S FINE." BUT LOOK WHAT IT'S BROUGHT US. WE ARE NOT WILLING TO LET THESE BIG FINANCIAL INSTITUTIONS FAIL. WE'VE GOT THIS TOO BIG TO FAIL NOTION. SO WE ARE GOING TO SHOVEL BILLIONS OF DOLLARS IN THEIR DIRECTION AND STILL TAKE THE POSITION WE SHOULDN'T REGULATE THEM? I THIS IS A WORLD THAT MAY BE A LOT OF FUN FOR THE HIGH FLYERS WHO GET THEIRS AND KEEP THEIRS. BUT IT'S NOT A WORLD THAT WORKS VERY WELL FOR ORDINARY FAMILIES. WHAT ABOUT THE ARGUMENT THAT SAYS, QUOTE, "WHEN YOU BOIL IT DOWN, YOU'RE TALKIN' ABOUT US BECOMING A SOCIALIST NATION." YOU BUY THAT? YOU KNOW, I I'M SORRY. I JUST THINK THAT'S JUST SILLY, THE ARGUMENT THAT WE'RE SOCIALIST. EVERY GAME HAS RULES. AND THIS IS REALLY ABOUT WHERE WE'RE GONNA SET THE RULES. ARE THE RULES GONNA BE THAT YOU CAN BE SO BIG AND SO POWERFUL THAT THE U.S. TAX PAYER ENDS UP GUARANTEEING YOU, IN EFFECT, TOO BIG TO FAIL? BUT THERE'S NO REGULATION? THAT'S A CRAZY SET OF RULES. IF YOU'RE GONNA BE THAT BIG, IF YOU'RE GONNA PUT MY FUTURE AT RISK, THEN I WANNA BE ABLE TO SAY SOMEBODY HAS TO WATCH YOU AND MAKE SURE YOU DON'T TAKE RISKS WITH WHAT COULD TURN OUT TO BE MY MONEY. THAT'S NOT SOCIALISM. THAT'S JUST GOOD SENSE. YOU PUT ME AT RISK? THEN I WANT SOME RESTRICTIONS ON WHAT YOU DO. WHAT SHOULD WE, AS A NATION, BE DOING NOW IN YOUR OPINION TO PREPARE FOR THE NEXT ECONOMIC CRISIS? WHAT WE DO IN THE NEXT SIX MONTHS OR SO, IS GOING TO DETERMINE THE COUNTRY WE ARE FOR THE NEXT 50 YEARS. WE REALLY HAVE TO DECIDE FOR WHOM DO WE RUN THIS? WILL THE COUNTRY BE RUN FOR FOR FAMILIES, FOR FOR ORDINARY FOLKS? OR WILL THE COUNTRY BE RUN FOR THE GIANTS? NOW, UP NEXT - THE HOME AUCTION BUSINESS IS BOOMING. WE'LL TAKE YOU TO A HOME AUCTION RIGHT AFTER THIS.

THERE ARE SO MANY FACETS TO THIS RECESSION THAT ARE HEARTBREAKING. THE WORRY THAT STRETCHES ACROSS THE COUNTRY PAINTS WITH A WIDE BRUSH. AND THERE ARE NO SIMPLE SOLUTIONS. THERE'S A SENSE OUT THERE THAT THE AMERICAN DREAM IS SLIPPING AWAY. PARENTS FEAR THEIR CHILDREN WILL BE WORSE OFF THAN THEY WERE. AND MANY DREAM HOMES HAVE TURNED INTO NIGHTMARES. IN EVERY ECONOMIC CRISIS THERE ARE MANY LOSERS, AND FEW WINNERS. AND THIS RECESSION IS NO DIFFERENT. BUT ONE OF THE BIG WINNERS THIS TIME ARE THE REAL ESTATE AUCTIONEERS. FT. MYERS HAS BECOME THE MOTHER LODE FOR THE REPOSSESSION MARKET, HUNDREDS OF HOMES ARE ON THE AUCTION BLOCK. IF YOU HAVE A REGISTERED BIDDER CARD, PLEASE STEP FORWARD. REGISTERED BIDDER? THANK YOU. THIS IS WHAT A RECESSION SOUNDS LIKE FIRSTHAND... HOW YOU DOIN? MORNING. MORNING. SO WE ALL GOOD? ABSOLUTELY. THEY'RE GONNA MAKE AN ANNOUNCEMENT TOO AND SEND ANYBODY BACK TO PREQUAL WHO HASN'T ALREADY DONE SO. SO YOU GOTTA MAKE SURE THAT THE ONES WHO AREN'T BIDDING, THAT YOU GOT A CREW OVER THERE READY TO GO. ABSOLUTELY. OK. WE UP? OKAY TO START? BRIAN? GOOD TO GO? WE GOT ANY WATER OVER HERE? WE'VE HEARD A LOT ABOUT HOMES THAT ARE REPOSSESSED BY THE BANKS. WE'VE SEEN THE PICTURES OF SUBURBAN BLIGHT, BUT WHAT HAPPENS TO ALL THOSE HOUSES ONCE THE DEFAULTED OWNERS ARE GONE? THEY ARE OFTEN AUCTIONED OFF TO THE HIGHEST BIDDER. THANK YOU, JIM, VERY MUCH. CAN EVERYBODY HEAR ME IN THE BACK OKAY BACK THERE? THE REAL ESTATE DISPOSITION CORPORATION, REDC, HELD A MASSIVE HOME AUCTION IN FORT MYERS THIS PAST WEEKEND AND HUNDREDS TURNED OUT LOOKING FOR A BARGAIN. MY NAME IS JIM CORUM. I WORK WITH REAL ESTATE DISPOSSESSION CORPORATION REDC. WE RUN A A REAL ESTATE AUCTION COMPANY. I THANK YOU AND WELCOME YOU THIS MORNING TO THE REDC LENDER FORECLOSURE AUCTION. I DO APPRECIATE YOU COMING OUT AND SPENDING YOUR SATURDAY WITH US TO TAKE ADVANTAGE OF THIS WONDERFUL OPPORTUNITY THAT PRESENTS ITSELF TODAY. WE ARE THE NATION'S LARGEST REAL ESTATE AUCTION COMPANY. WE ARE VERY, VERY CONFIDENT IN WHAT WE DO AND YOU CAN BE CONFIDENT IN YOUR REAL ESTATE PURCHASE HERE TODAY. NOW THE AUCTION IS IS A FAST PACED ENVIRONMENT BUT IT ALSO EASY AND I BELIEVE IT IS REALLY THE EASIEST WAY TO PURCHASE REAL ESTATE. ALRIGHT PROPERTY 802B LET'S START THE BIDDING AT ONE THOUSAND DOLLARS.

ALL THE HOMES THAT WE SELL HAVE ALREADY BEEN THROUGH THE FORECLOSURE PROCESS. THEY'RE THEY'RE BANK-OWNED PRIMARILY SINGLE-FAMILY RESIDENCES. THERE'LL BE CONDOS, TOWNHOMES, DUPLEXES AND TRIPLEXES. GENERALLY ALL OF OUR AUCTIONS ARE ARE GEOGRAPHICALLY CENTERED ON WHERE THEIR PROPERTIES ARE AT. SO, WE'LL SEE PROPERTIES TODAY FROM ALL THE WAY UP FROM PORT CHARLOTTE, WHICH IS NORTH OF HERE ABOUT 45 MINUTES TO 60 MINUTES, DEPENDING ON TRAFFIC, AND PUNTA GORDA, ALL THE WAY SOUTH THROUGH TO TO NAPLES. FORT MYERS, BASICALLY BEING THE GEOGRAPHICAL CENTER OF THAT POINT.

ALL THESE GUYS ON THE FLOOR THAT YOU SEE, THE GOOD LOOKING MEN IN THE TUXES, THEY ARE OUR BIDDER ASSISTANTS. AND THEY ARE AUCTIONEERS REALLY FROM ALL OVER THE UNITED STATES THAT COME ALONG AND TRAVEL WITH US. AND THEY ARE ACTING BASICALLY AS AN INTERPRETER FOR THE AUCTIONEER FOR PEOPLE THAT ARE NEW TO THE AUCTION BUSINESS. AND WHAT WE TELL THE CROWD IS IF YOU ARE INTERESTED IN A PARTICULAR PROPERTY AND IT'S GETTING' CLOSE CALL THE BIDDER ASSISTANT OVER AND SAY "HEY NUMBER 847, THAT'S THE ONE I'M INTERESTED IN." HE'LL COME HELP YOU AND MAKE SURE YOU KNOW EXACTLY, CAUSE YOU CAN HEAR - IT'S PRETTY RAPID FIRE. AND I REALLY THINK IT'S ALMOST LIKE A DIFFERENT LANGUAGE FOR SOME PEOPLE AS THEY GO THROUGH. AND THESE GUYS INTERPRET FANTASTICALLY FOR YOU.

THE BUSINESS HAS CHANGED JUST DUE TO THE VOLUME THAT WE'RE EXPERIENCING IN REAL-ESTATE-OWNED PROPERTIES AND BANK-OWNED PROPERTIES BEIN' REPOSSESSED. OBVIOUSLY, IT'S IT'S IT'S IT'S NO NEWS TO ANYONE THAT THE FORECLOSURES HAVE HAVE HIT A AN INCREDIBLE AMOUNT OVER THE LAST TWO YEARS. SO AT THE END OF THE DAY, AS FAR AS OUR OUR AUCTION BUSINESS IS CONCERNED, THE AUCTION IS THE AUCTION- IT'S RUN PRETTY MUCH THE SAME WAY THAT IS AL THAT IT ALWAYS HAS. BUT WE'RE CERTAINLY SEEIN' A GREATLY INCREASED VOLUME FOR THESE HOMES. WE'RE IN MULTIPLE STATES AT A TIME. LITERALLY A YEAR AGO TO DO A 100 PROPERTIES, 150, 175 PROPERTIES IN A DAY, WE WOULD'VE CONSIDERED TO BE A VERY LARGE AUCTION. AND NOW WE'LL DO ANYWHERE FROM 200 TO 350 HOMES IN A DAY. FOR SOMEONE INTENDING TO BUY A HOUSE AT AUCTION, THE THE VERY FIRST THING THEY MUST DO IS DO THEIR HOMEWORK. ON THE WEBSITE, YOU CAN SEARCH THE HOMES BY THE CITY, BY THE ZIP CODE, BY THE COUNTY. AND REALLY DRILL DOWN TO THE PROPERTIES YOU'RE INTERESTED IN. THEY NEED TO BRING A $5,000 CASHIER'S CHECK FOR THE EARNEST MONEY DEPOSIT THAT'LL BE REQUIRED THAT DAY AND THEIR CHECKBOOK IN ORDER TO TO PAY THE FIVE PERCENT EARNEST MONEY DEPOSIT. SO, THEY SHOW THOSE TWO ITEMS WITH A VALID ID. THEN THEY CAN GET THEIR THEIR BIDDER PADDLE AND PROCEED AND AND GO AFTER THE HOME OF THEIR DREAMS.

I THINK BUYING REAL ESTATE IN GENERAL AT AUCTION AT AT ANY TIME, I BELIEVE IS A GOOD IDEA. YOU COULD REALLY CALL IT THE PERFECT STORM. YOU HAVE LENDERS WHO WHO HAVE HOMES THAT THEY DO NOT WANT TO OWN. SO, YOU YOU HAVE A VERY MOTIVATED SELLER. YOU HAVE A MARKET THAT CERTAINLY HAS TO BE APPROACHING THE BOTTOM. WE ALL KNOW PRICES HAVE BEEN TUMBLING OVER THE LAST YEAR AND A HALF. AND THEN THIRD, YOU STILL HAVE INCREDIBLE FINANCING AVAILABLE. THE THE FINANCING PACKAGES THAT THAT ARE AVAILABLE FOR THE PEOPLE WHO QUALIFY ARE ARE AS LOW AS AS I'VE EVER SEEN. AND YOU ALSO HAVE AUCTION PRICES. YOU SHOW UP AT AUCTION, YOU ESTABLISH YOUR PRICE. THERE THERE'S NOT A TWO WEEK, THREE WEEK, BACK AND FORTH NEGOTIATING PERIOD. YOU COME IN, YOU SET YOUR PRICE. YOU BID AGAINST YOUR YOUR FELLOW COMPETITORS. AND AND AND YOU WIN YOUR HOME. THE BIDDING STARTS ON THIS ONE AT 69 THOUSAND DOLLARS. IT REALLY SURPRISES ME SOMETIMES WHAT BRINGS THE MOST ATTENTION. AND THEN AND THEN THERE'S OTHER PROPERTIES WHERE ONLY TWO OR THREE PEOPLE ARE ARE BIDDING ON. AND I FIND IT, YOU KNOW, BEAUTIFUL HOME, YOU KNOW, 2,500 SQUARE FOOT GOING OFF FOR FOR AN UNBELIEVABLE PRICE. SO IT'S REALLY JUST DRIVEN COMPLETELY BY THE PUBLIC. PEOPLE ARE JUMPING IN, THEY'RE GETTING SOME INCREDIBLE DEALS. I GOT SOME GREAT PEOPLE IN THE FRONT ROW I TOLD THEM I'M MOVING BACK TO FLORIDA AFTER SEEING SOME OF THESE PRICES. IT IS ABSOLUTELY AMAZING TO WATCH SOME OF THESE 2005 BUILT AND 2006 BUILT HOUSES GO FOR 45 THOUSAND AND 65 THOUSAND DOLLARS, IT'S JUST AMAZING.

THE HOUSING MARKET IN IN FLORIDA IS VERY SIMILAR TO A LOT OF THE OCALIFORNIA. WE WE'VE SEEN ITE MREALLY ACROSS THE UNITED STATES. THE MARKET'S TAKEN A BIG HIT HERE. BUT THE FLORIDA MARKET, AGAIN, IS NOT WHOLLY DIFFERENT THAN A LOT OF OTHER MARKETS WE FIND OURSELVES ALL OVER THE UNITED STATES. OVER THE NEXT THREE WEEKS I BELIEVE WE'LL PROBABLY DO AUCTIONS IN IN NO LESS THAN 20 STATES, FROM MISSOURI AND NEW YORK, NEW HAMPSHIRE, IDAHO. EVERY PLACE YOU KNOW, HAS RECEIVED SOME OF THE SAME DIFFICULTIES.

TODAY IS THE MOST EXCITING DAY. IT IS WHERE IT ALL COMES TOGETHER. AND IT'S WHERE YOU GET TO SEE FOLKS WHO A YEAR AND A HALF TWO YEARS AGO COULDN'T AFFORD TO PURCHASE A HOME. SELL IT TO HIM! NOW WE GET TO SEE IT FIRST HAND. WE GET TO SEE THOSE GUYS FINALLY TURN THAT HOUSE BACK INTO A HOME. LIKE IT NEEDS TO HAPPEN ACROSS ALL THESE AREAS.

"THE BIGGEST FINANCIAL CRISIS SINCE THE GREAT DEPRESSION." THAT'S A PHRASE WE HEAR A LOT THESE DAYS, BUT WE'RE JUST STARTING TO REALIZE WHAT THAT REALLY MEANS. SALES, LOW INDUSTRIAL ORDERS, AND A HIGH NATIONAL UNEMPLOYMENT RATE. BUT WHAT'S INCREASINGLY DAWNING ON AMERICANS OF ALL WALKS OF LIFE AND ALL OVER THE COUNTRY IS THAT THOSE STATISTICS TRANSLATE INTO REAL PAIN AND INSECURITY ON THE PERSONAL LEVEL. AMERICANS ARE HURTING AND THERE IS PLENTY OF BLAME TO GO AROUND. THE TITANS OF WALL STREET WHO WERE TOASTED AS GENIUSES JUST A FEW YEARS AGO TURNED OUT TO BE RUNNING A SCHEME WHERE THEY CASHED OUT IN GOOD TIMES AND NOW RELY ON THE AMERICAN TAX PAYER TO COVER THEIR RECKLESS BETS. THERE ARE POLITICIANS, SOME IN BOTH PARTIES WHO HAVE PLENTY FOR WHICH TO ANSWER, TOO. TOO OFTEN THEY DID THE BIDDING OF WALL STREET, BANKS, CORPORATIONS AND OTHER BIG CAMPAIGN CONTRIBUTORS. CONGRESS AND REGULATORY AGENCIES ARE SUPPOSED TO BE WATCHDOG. IN TOO MANY CASES, THEY WEREN'T. AND, LET'S BE HONEST, WE CAN'T ABSOLVE OURSELVES. SOME OF US DIDN'T DO OUR JOBS AS CITIZENS AS WELL AS WE SHOULD HAVE. MANY OF US MISBEHAVED. WE WERE IRRESPONSIBLE, SPENDING MONEY WE DIDN'T REALLY HAVE. NOW WE'RE LEFT WITH A MESS, AND THE QUESTIOFROM HERE? WHEREVER AND HOWEVER WE GO, WE NEED FROM THOSE WHO LEAD FAIRNESS, TRANSPARENCY AND ACCOUNTABILITY. AND THAT'S OUR PROGRAM FOR TONIGHT. FROM NEW YORK, FOR HD NET, DAN RATHER REPORTING. GOOD NIGHT.