Money Crisis: Ask Ali

why don’t we just get done to the bare bones and tell how AIG sold insurance on those bundled real estate packages and raked in big bucks cause people always pay insurance and when you put in a claim you’re usually denied and AIG did this and claimed they had no money to pay the insurance claims, while not disclosing this to the general public and put in a claim to the government for a bailout and they are basically thieves preying on us again by passing out these “retention bonuses” when these people are the same ones who scammed us in the first place!!! They got to keep all the money they collected from selling insurance on something they knew, well in advance, would fail and just cashed in on it.

California needs a bailout not AIG let those predators go to another company and get some honest or more honest folks in there to fill their positions.

Ali..great show BUT what about getting the prospectives of a “real” smallbiz owner? I mean really? 90% of small businesses do not get venture capital money..they finance their businesses on credit cards, family loans (forget the meaningless SBA), Home loans, etc. They are between $200k and $5mil in size. They have incredible health care costs, high taxes and NO support from the government…They “WE” need our own stimulus package since we are the only ones going to create jobs….big business will not be hiring anytime soon…in fact..they will have less people doing more work for a long while. It is TIME for the media to stop speaking to pundits and start speaking to REAL people. Small Biz needs specific attention. We are the American Dream!!! Watch the video link from CNBC, and Please Tell Donny Deustch he knows NOTHING about small businesses…he inherited a mutilmillion dollar Ad agency from his DAD!

http://www.cnbc.com/id/15840232?play=1&video=1063058328

West Virginians are rather sensitive about not being thought of as Virginians. As we say here, ” I am from West, by God, Virginia! We may be small. We may be owned and controlled by out of state coal, oil, gas and timber companies but we are proud to be WEST Virginians.

QUESTION CORRECTED
Ali, I would like to know why the increase in homeowners insurance premiums and taxes are NOT considered to be the foundation of the foreclosure problem. I keep hearing homeowners say that this is their problem. I am with a foreclosure law firm

Ali, I would like to know why the increase in homeowners insurance premiums and taxes are considered to be the foundation of the foreclosure problem. I keep hearing homeowners say that this is their problem. I am with a foreclosure law firm

President Obama said during his campaign that he would like to waive the penalty for early withdrawl from 401K to help the people. Was that just an empty campaign promise or did he really mean it.

Please respond,

I previously suggested a Federal Credit Insurance Corp, similar to the Federal Deposit Insurance Corp, which would insure bank loans. I thought something along those lines could be self-funding, nudge the banks to willingly open up credit lines, and help solve our country’s economic woes.

I have another suggestion, which is something from the 1970s. An Investment Tax Credit, whereby big-ticket purchases of American-made products would earn a tax CREDIT for businesses and people. Has the government ever considered something along those lines? It seemed to help then – I was with IBM and the incentive helped sell alot of computers even in the late 1970s when the economy was tough.

Ali,
Im looking to buy into a co-op in Manhattan. its 350,000. Ive heard that I need at least 20% to get the loan. Problem is im 25 and dont have 70,000. even if I could save 1000 a month it would take me 6 years to get that money. Is there anything I can do, or alternatives available for me.

Ali please help me? I have my paycheck directly deposited to a prepaid visa. I used a National City atm over the weekend, the transaction went through twice!! This has caused my automatic bill payments to be denied! Today,I went to the bank to resolve this,I was told that National City can not help me because I am not a customer of their bank. Though the manager did give me the instructions to dispute the matter with the prepaid visa issuer. National City is the bank that took my money! I would think that if the atm accepts my request and charges the fee to take out the money then I feel I am their customer aswell. When asked why this happened the bank manager had no reason other than that this does not happen often and of course he gave a empty apology. The matress is looking like it might be the best option, our financial institutions in this country are corrupted. The process that I have to take is long and drawn out, in the meantime I am out three hundred bucks, where is it. Could my money be a small portion of some sum that is traded overnight? If so how much money can they make off of me for that matter am I the only one, it is a far fetch to say so. Thanks The Carter

ALI VELSHI
If govt give evey American Prepaid Visa or Master card instead of stimulas chk with 90 to 120 days expiration then everybody will spend tht money & it will boost the economy also govt can get 1% credit card fees back from VISA & Master card also govt can sell advertisment on those cards and also big American companies can sponsor those card by giving 10 to 20 % off to customer when they buy their product this my suggestion only.

Hi Ali
We viewed the documentary yesterday, I.O.U.S.A. It was EXCELLENT. I found the information very detailed yet at a level that the average person could understand. I thought your panel was very good with their comments. I have shared this within my office today and would hope that this will air many times over for more people to watch and absorb. Everyone needs to see this and think hard and long as well as be ready to be asked to “give”. You should also think strongly on Pete Peterson’s suggestion of CNN doing a show on HOW TO SAVE – excellent suggestion.
On other notes, I have wondered about several areas but have not seen anyone address this to any detail with regards to generating more revenues to offset our deficit. The 1st being Social Security: why don’t they lift the earning ceiling from Social Security. There have been a lot of people retiring from their line of work or wanting to cut back once they reach 62 yet still want to be productive, especially the self-employed – but they have to watch what they make so they don’t have to pay back to SS if they go over the earning ceiling. If they did away with earning ceiling and let people draw their SS early if they “wish” but still be productive and pay taxes on whatever they made, I think this would benefit SS greatly. I have asked this amongst friends at various income levels and they would not mind. Also, why have a ceiling limit on the regular wage earner where after a certain earned income you no longer pay into SS – this makes no sense whatsoever. If you earn it then you contribute accordingly on everything. Again, this would certainly add to offset the problem.
Finally, if banks are charging lower interest rates for mortgages but ridiculously higher rates on credit cards why can’t they give reasonable rates for REGULAR SAVINGS account – it would put more $$ in the hands of the banks. You can’t encourage people to save if they can’t get a good rate for their savings.
I enjoy listening to your feedback on CNN – keep up the good work – Thanks

I’ve asked this question at least a dozen times, and I have yet to hear it addressed. How can what Wall Street, all the way down to the mortgage brokers, who wrote these home loans based on over inflated home values, and non verified incomes, not be criminal acts? There is no way I can believe that when these mortgages were traded, with full knowledge that their values were at best only worth half their face value, that this is not bank or securities fraud. Those who made millions off this took the money and ran, leaving the tax payer hold the bag. This is nothing less than what Madoff did, only it was played the same way ENRON was. They robbed the bank(s), often with the help of the bankers, and now we, the American tax payer, is stuck with the bill. So where are these criminal indictments for theft, bank and securities fraud??

Dear Ali
Am curious to understand better the effects of the debt of our nation. Our nation has our debt,and our nation borrows money to pay for that debt and its interests charged.
So, what ratio of countries largely own US debt? China own the most of our debt? If so, are we simply robbing peter to pay paul, as the phrase goes.
We owe monies to China for our debt.We do not pay that debt,so we borrow monies and sell that debt to China. China buys that debt, so we can continue to spend, and China continues to manufacture goods cause they buy our debt?
Then,will we ever not remain in debt?
What would happen if oil drops to $2.00 a barrel? Would our nation scrap its quest for alternative fuels like it scrapped its goals in the epic of OPEC 1970s? Brazil subsidizes its farmers to grow sugarcane for ethanol,told car manufactures to equip cards to operate on sugarcane ethanol, or get lost.
Now, Brazil is among the most intelligent while our nation most likely laughed at their quest to change away from oil.
Would Brazil now have the last laugh?
Why can our nation scrap corn based ethanol and replace with sugarbeet ethanol instead?
Since genetically modified sugarbeet processed sugar got approved by USDA and FDA, why not use the GM sugarbeet for cars, since americans have enough of the GM mumbo gumbo from big business.
I suggest, the Monsantos of the world, just create GM oil to operate cars and then see what happens.

The economy is consumer based, all predicated on the ability for people and businesses to borrow money which the banks are just not offering.

So, how about a Federal Credit Insurance Corporation? Here is how it would work.

1. Bank Loans and Mortgages are guaranteed by the Fed.

2. The Fed charges 1% interest to the consumer / business to fund the program.

3. U.S. Citizens and U.S. companies are eligible.

4. Loans are available up to a maximum based upon income reported to the IRS.

5. Loans for catastrophic health care can exceed the maximum. Loans for unemployed people are made available as well if the person was employed at least 75% of the time over the previous two years. Borrowers can make interest-only payments if hardship can be proven, without damaging their credit.

6. Banks cannot turn down a loan request if minimum requirements are met, including credit scores and other existing debt. Interest rates are capped at prime plus 2%.

7. Bankruptcy cannot absolve the loan principal (only interest). The borrower gets 15 years to repay the government even if the borrower goes bankrupt. For businesses, the shareholders / owners share the obligation in proportion to their ownership interest.

I lived in Alabama for 12 yrs. and Atlanta for 3.5 years. Theres alot of High Tech and Goverment/Defense companies there which may account for the higher job rate. You also have a good amount of military bases.

To Ali Velshi regarding his comments about Alabama not having a high unemployment rate: Look at the BRAC coming to Huntsville, AL and how the Army and NASA are boosting the economy in Huntsville. That has a LOT to do with the lack of high unemployment in this state.

Hey Ali, Going to buy your book before work today better be good, im sure it will be, you are good at what you do, I need advice. Im 22 and started my 401k about 2 years ago, I put about 200$ a week in, How should I slip my money up, I have 40% in Asset Allocation and 60% in Capital Preservation, Please help scared on how to move my money around with this market. Thanks Ali

I am retiring from public school teaching in June and will receive a severance package of $35,000 from unused sick leave. Would it be better to defer it into a 403b plan and pay the taxes on it as required when I withdraw amounts from the account, or take the full amount then, pay the taxes, and use the rest to pay down credit card balances?

As I continue to watch you, the president, and other “experts” on the countries economic situation I never see any mention of cutting off the flow of jobs out of the country. Would seem to me that it would be a priority to get the country produceing something instead of consumeing from else where. If nothing else tax the imports to death and the companies that go overseas should be taxed more also. Use that to shore up the ones that have stayed here. Our country needs an attitude adjustment. Someone working on an assembly line in Detroit does not deserve to be making so much money that he has a $300,000 home, a beach condo, a Harley, a boat, and a motor home. We need to get back to what we need, not what we want. It is this attitude that has put us where we are today. In the presidents speech today he talked of energy production and just a few weeks ago Progress energy sold its nuclear power plants to a French group. So now our home produced energy is owned by another country. I could go on forever but who would hear?????

I LOVE YOUR SHOW AND COMMENTS BUT

HELP CNN AMERICAN MORNING is not available anymore in Guadalajara Mexico, they are telling us (the cable company) Telecable that CNN changed the Signal and we are getting the international version. With all due respect the international version is NO GOOD. we want the CNN signal we had before.. please help.. Luis Briseno. Guadalajara Mexico

Where should I invest if Iam a 60 year old teacher and will retire in 2 to 4 years?

Hi Ali,
Not that it should make a difference, but I am a senior citizen. I have an excellent credit rating that I have maintained for 35+ years. In that time, I have found the proper use of a credit card to be a convenience and seldom carry cash. I have a credit limit of $25K with Citi M/C, but never use more than a fraction of that amount.
Recently, I drifted my car into a gas station with an empty tank at 2 o’clock in the morning and hundreds of miles from home. I was shocked to have my card rejected at the pump. Without any cash of my own, I was humiliated and forced to beg money from strangers in order to get enough gas to reach home.
Later that day I received a phone call from the Citi Fraud Alert. They had placed an automatic, arbitrary Hold on my card without making any attempt to contact me beforehand with a warning.
I do not accept the argument that they were acting on my behalf. For me, it was more a case of CYA. They know that by law I am not libel for any misuse of my card, so, to save themselves the potential loss, they invalidated my card and had me suffer the consequences. If they were truly looking out for my best interests, they should have contacted me BEFORE taking action on my credit.

Hi Ali,

I would love to see a segment on local tax authorities across the country raising the appraisal values on homes despite the decline in property values across the country. The Wall Street Journal recently had an article about the same thing but little notice seems to have been paid. I myself protested with our local Authority who said I would have to go through Arbitration in the District Courts. The cost of this would have been more then paying the tax raise. For years since I purchased my home, every year taxes were raised. The tax authority said it was based on the price of homes sold in my neighborhood. For the last two years homes on my block have stayed on the market for months and up to a year before the owners lowered the price or turned them into rental properties. Perhaps you could interview the local tax assessors office in New York and see how they rationalize the raise.

Dear Mr. Ali,
Do you know anything about the new Credit Scoring System “FICO”?
I’m ask you because for the past few years I have been improved my credit score to be a better citizen with all my honor to US Credit Score System AKA FICO and today I can tell that the system which is most important thing in this country is not honest at all. Here is the short pre-story of what force me to say so: as October of 2008 my credit from all 3 major credit companies was approximately 681 and just few days ago I have found that my credit score has been dropped to 583 with no reason for it, generally speaking the FICO is the system which could changed or recalculating at any time no matter of time, The question is could you or somebody else is able to help me to get back on my previous score now? At the end I would like to know does it true that this system has been changed over these 3 months

I have about $1000 to invest. I am thinking that eventually the market will get better. Do you and should I invest in “penny stocks”? Or should I go conservative and but it in my savings, or a CD???

Ali: I recently read an article in the AJC editorial section where the author suggested a stimulus package for all Americans…give each person $1 Million dollars tax-free and let them take care of themselves. I’ve thought about it and why wouldn’t this work? It’s a lot cheaper than the billions and billions we’re throwing around now…can we actually consider something like this?

hi Ali,
I want to refinance my home. IS 5% good (FAH LOAN) or I should wait a little bit? thanks

Instant and simple idea to get economy rolling again is to restore everyone’s credit scores to what they were 18 months ago. The economy started tanking about then and all were making late payments, etc. This will also encourage everyone to apply for monies without having an outrageous interest rate which put us here in the first place.

Hi Ali:

I will be turning 50 soon. I have a Roth IRA that was worth $22,000 and is now only worth $14, 000 (through no fault of my own). I have credit card debt of $7000. Do you think I should close out my Roth IRA and pay the penalties and taxes for doing so early and pay off my credit card debt and put the rest away as you suggest for emergencies and then start with a new Roth IRA from square one?

I heard your comments re: the stimulus package. I also disagree with the tax cuts for the middle class (that includes me!); any tax cuts to businesses need to accrue to VERY small business. It is way past time to dump the supply-side model, which is what tax cuts are.

Increasing the marginal tax rates would be a huge stimulus. This is because the top 1-2% hoard their money (the top ½% have as much money as the bottom 50% per Howard Zinn). That money needs to be in our economy working for everyone. The top marginal tax rate should be no less than 70%, with incentives for these individuals to spend pre-tax dollars on American-based businesses. Combine that with a) removal of incentives to work off-shore, b) fair trade and c) Card Check and you have done tremendous things for our economy. This is called “demand-side” economics.

Ali, invest???? what are you talking about? I am trying to get food on the table….my husband, a heavy highway and bridges construction journeyman has had no overtime this year and on lay off for four months…with no end in sight for at least two more months…unemployment allows us to pay two bills every two weeks…electricity, phone…and food…let alone the three credit cards and home equity loan…I am a student working towards my nursing degree……Our income for last year fell over 1/2 from the previous year. We need to get the infrastructure jobs going….that is the cure….JOBS JOBS JOBS….most important…I think that you are still only talking to those with jobs…..

how do I find the asset alocation analsis that you talked about on cnn this morning.

How is Obama going to help the “retired” or individuals who are not employed but still paying taxes due to investments, IRAs, etc. Disallowing the need to record RMDs for one year won’t help–it takes away expected income. Having individuals making less than $50,000 won’t help either. I’m losing a out $1,000 a month on my IRA, annunity, pensions. etc. I can’t spend is I don’t have the money anymore.

Hi Ali

Do you know some sites thier you can buy your book? I’ve been looking oround on the internet bute.I can find it.

P.s I’m living in Sweden

Ali,
We have heard of people who are upset about the bail outs and are deliberately defaulting to get their share of the package. The banks are so backed up with forclosures that it will take them a lot longer than the usual to do proceedings. It is also disheartening for those of us who have stayed conservative and realistic in our spending and are keeping up with our bills and mortgages to have those who bought houses too high for their budgets and filled them with new furniture and parked their new vehicles in the driveway and now they are crying for help. Are their “safety” stops for those who have deliberately over spent, so that those of us who are responsible with our money won’t be paying for their greedy spending?

Ali,
What ever happened to curbs ? They used to put curbs in when the market was going too high or low.

Hi Ali,

I was reading this news item (http://www.cnn.com/2008/US/10/03/eviction.suicide.attempt/index.html) on the woman who attempted suicide because of the foreclosure of her home. One interesting (sad) thing which I noted in the news was that she had been lent a Mortgage loan in 2004 when she was at the age of 86 and that too the loan period being 30 years! My question is why would anybody grant a loan for 30 years for woman who is already 86? is the life expectancy in this country 120?? And what was the source of income on which the Bank relying on when they granted the loan?? isnt this insane? isnt this fraud and greed on the banks part? Am sure the bank was waiting for her to die so that they can encash the Mortgage property? forget the CEO’s CFO’s, I want to know how the Bank manager, the broker and the bank official who signed on the loan documents will be prosecuted and when will that happen??

My question is not what to do with my money, because you have answered that many times. My question is what happens to my personnel information. I have credit cards which have changed hands, (1) twice, (1) 3 times- (Providian, WAMU,?) What happens to my personal information? Each company has different privicy policies. are they selling it, exchanging it, or simply not securing it. how do I know?

I have a question? Seeing the banks are being bailed out by the government and their slate is wiped clean, can we as American citizens, that are suffering the most have the opportunity to have the 3 major credit bureaus wipe our slate clean & increase everyones imperika number to 800, so that we to can have the opportunity to bail ourselves out of this economic mess? Fair is fair….let everyone have a second chance and have equal credit opportunities.

When looking up information of the DJIA at http://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average, the DJIA is
calculated by the sum of the prices of all 30 stocks
is divided by a divisor.

Was the these 30 prime corporations that lost the 1.2 Trillion Dollars earlier
this week?</p

Question: What does the bailout do for small business owners forced into chapter 11? Firms struggling not because of a lack of business but the need for operations funds. Funds that did not materialize as part of an SBA loan after construction cost went sky high after Katrina.

My son says the CEO of the very large phone company my son works for will get his usual $10,000,000 this year. I say he won’t. Will he?

In light of a 700 billion dollar bailout of private business interests can any politician still make the argument that Social Security is going to go bankrupt?
Why shouldn’t we assume that Congress will treat the citizens with concern equal to the treatment of private business interests?
After all I have contributed to SS all my working life and by no streach of the imagination could be considered responsable for mismanaging the SS fund.

Susan Ormand says to reduce the percentage of my paycheck going to my 403B to the minimum that is matched by my company. I did this the other day, going from 12% to 4%. Now, at age 55, what type of mutual fund/bonds/etc.do you recommend I invest in, and how much of that should be in the fixed income part of the pie?
Thanks Ali!
Oh, my husband wants to know how come during the hurricane coverage, all other newscasters are safely reporting from balconies of hotels, and you get stuck on an island that is two feet above sea level?? Is this some of evil plot to remove you from the show? LOL

If this bail, sorry bill, sparked huge opposition from the American people the first time around, why do the politicans think they want it three days later? One small change for small businesses does not a better bill make!

I’m a single mother with 2 teenage kids. I’ struggling every month to meet my regular bills. How’s this bailout going to help me-the REAL average american: living paycheck-to-paycheck? Is it going to lower the cost of gas, utilities, groceries and other necessities? It doesn’t seem so.

Don’t see how this bailout is helping folks facing foreclosure. Force the banks to give folks fixed rate mortgages, ergo, folks can pay their mortgages, banks get their money and folks can pay their credit cards debts as well…another plus for the banks. I think this whole mess has to do with these bad mortgages. Folks are trying to hold on to their homes therefore other debts like credit cards are not getting paid. Folks don’t need to borrow more money, we need to be able to pay the banks the debts we owe!

Why, if the ‘pressing problem’ is with the short term credit markets, are the solutions to give our money to the bad actors? Why not create a Federal insurance program to cover them, with appropriate fees and liens/guarantees??

Ali,

In your opinion, is it a wise move to suspend 401K contributions and redirect those funds into an alternative investment like a savings account,cd, or gold? Also, how long after the bailout do you estimate it will take to have an effect on the mortgage industry; making it easier again for credit worthy persons to secure loans at good rates?

Ali are you going to take responsibility when the bailout fails the American people?

Are you on the payroll out and out or by proxy of any of the involved companies or politicians?

Hey Ali,

I’ve been really sick the last couple of days and haven’t been able to sleep. My question isn’t bailout related, it’s Ali related: Do you sleep? You seem to be on live shots from 6am to midnight!

I have heard recommendations about investments if you are working or near retirement.
But I heard nothing about if you are already retired. What are your recommendations for retired people.

what are the pros and cons of putting money in a bank savings account vs. a money market account, assuming they both earn the same rate of interest?

I retired from civil service last year at the age of 54. I am debt free, including my mortgage. Since I don’t plan on moving or borrowing money, how will the bailout effect me, rather it passes, or not?

I think this would be a good time for a Fair Tax. Tax on things you buy. No more income tax. Let us keep what we earn.

************Hello
I live in CA and paid cash for a 500,000 home I have lived there for 7 years
I am buying a new home and have never had a mortage.
Is now a time to try to get a mortgage and get in the market
I have found it a difficult process and they want me to take an equity on my home
HELP

Good Morning Ali!

Is this a good time to start a 529 College Plan? If it is, which is the best one right now? Thanks, You are Awesome!!!!

Ali
What are some examples of these “bad assets” that the government would be buying under the bailout and how would they become profitable in the future if the government were to sit on them?

So, Ali, When do you sleep? Everytime I turn on the TV you’re there worrying about my money. You’re the hardest working man on TV!

Hi Ali — I hope you can help me with this one — I am a 26 year old teacher with an account at TIAA Creff. My account is said to be moderately aggressive in it’s diversification. Is now a good time to increase my aggressiveness and make it more risky since the market is likely to go back up? Thanks in advance!

Ali,

1. What should we on Main street do with our money if this bailout/rescue doesn’t pass?

2. Do you ever sleep? You’re on when I go to bed, and when I wake up!!

Is there anything we (us guys who get stuck with this mess) can do to turn off this ear marks spigot… now and permanently?

What impact does the crisis in the US and the “bailout” plan have on Canada?

Now that I am choking on the Senate version of the bailout, I have noticed media coverage has turned to a more favorable position on this. I am assuming this is to help stem the overwhelming opposition to this bailout. What is going to happen to the value of the dollar should this be passed in the house? Please thank Lou Dobbs for being courageous enough to speak the truth about this bailout. Thanks Ali.

Why is it that if John Mccain is against earmarks and pork barrel spending that he would vote for this bailout bill? What happened to him saying he is against anything that has earmarks? Isn’t that what these “sweeteners” really are? They are trying to buy votes? Sounds pretty hypocritical to me!

Why are conservatives so opposed to converting mortgages in foreclosure to fixed-rate mortgages that the homeowner can afford? It appears that this problem will not resolve until we build a floor under the falling housing market.

Hi Ali
Given that capital is in such short supply, why have interest rates remained so low? It would seem that lenders would be trying to attract capital by offering higher interest rates to depositors, passing on these higher rates in new loans?

ali what would happen if the american people gave just one payday back to the economy to help with this mess?. wouldent the people be able to save their homes if we helped each other. the goverment is to blame for all this. We need some one to over see this how about YOU

Ali -
Please explain to me WHY the federal government absolutely refuse to listen to the majority of Americans who do NOT want this bailout? Ali, please address this question … we call our representatives, clog phone lines, crash email sites indicating to those we feel will listen and say “PLEASE don’t do this”. Why are they pushing this through without listening to the people they work for? I would very much like to hear your reply. Thank you.

Ali:
If our national debt exceeds our GDP will the international banking system not loan us money or not buy our Treasury bills?
Thanks,
Dave
Sarasota, FL

Ali – I’m in my 50’s, still working and built a new home 5 yrs ago with a 30 yr fixed mortgage. Early this year my 401K investments started to make me nervous and I reallocated to 100% into a fixed savings – less interest but more peace of mind. Regarding the bailout – the lendors should NOT be bailed out but rather the homeowner who was given the loan. Why not refinance these mortgages back to the original interest rate and let the banks wait for their money. Big business should not be allowed to have us give them money to lend out again to some other unknowing victim. If these highly paid CEO’s were so smart (to deserve their pay) we wouldn’t be in this mess!! Marcia

I know that I don’t understand all the details of the bailout plan, nor do I fully understand all the details of the crisis. Having said that, can someone explain to me why if we are willing to spend 700 billion on bailing out the very institutions that helped create this mess, why bailing out the American homeowner is out of the question? When I go the math 700 billion divided by the 55 million (+/-) outstanding mortgages would pay off around $12,000 + per mortgage. I’m not sure about anybody else but that would pay off about 8 months of our mortgage and really relieve some pressure. I not saying just hand this money over to the people but play it towards there mortgages. In my mind this helps both sides: gives money to the banks that are in trouble and helps the homeowners. Just a thought…

Ali..please be honest with me on this. Due to our company’s failure in late 2006 we had to bankrupt in order to keep our home & make mortgage payments. Since then, my employment has been off & on. We have a 1st mort. & a high interest 2nd on our home. We now are in danger of not being able to make payments on our home. Will anyone consider refinancing both mortgages or at least the high interest 2nd for us so we can continue to make the payments and not lose our home ??

How does raising the FDIC limit from $100,000 to $250,000 help? You’re not limited to one account now, or is this just making it easier for the rich to transfer from the market to banks?

So on Monday the House votes down a bailout bill that uses some taxpayer money to buy debt securities that Warren Buffet thinks will return a profit of 10-20% because their constituents think it is a bailout for Wall Street.

Now they are rewriting the bill to include Government insurance for these same securities with no hope of making any money on them, and tax breaks for Wall Street companies. This bill puts at risk even more of taxpayers money.

Does Congress really think that the American people will support a bill that looks to be the work of Wall Street and lobbyists? Or are they right and their constituents won’t notice?

Dear Ali,

How will this crisis impact the availability of private student loans? I have heard that even if the bailout package is passed by Congress, there is s a student loan crisis looming in the future similar to the subprime mortgage crisis.

1. what government marketing genius came up with the term Bailout? No one wants to think of digging into their own pocket to help Wall St. We can’t afford to fuel our vehicles or keep our homes and we’re suppose to support a Wall Street bailout? Maybe we’d have been more supportive of Phase 2 to the Economic Stimulus.

2. Sunday in the newspaper (AP article) a similar problem occurred in Sweden & Japan. The article suggests Sweden handled the bailout quickly and Japan did not. Sweden came out of the problem quickly & Japan did not.

3.I have yet to hear how this really occurred. Controls of the banking industry were designed to never let this occur. How did Wall Street skirt the regulations and what new regulations for Wall Street are being proposed in this new House bill.

Thank you,

Ali,

Taking a higher view of this overall American crisis, can it not be a natural result of the “economic global equalization” in which our inflated lifestyles, thanks to easy credit over the past decades, reduces to a more reasonable level closer to the rest of the world?

Ali, Maybe I am not seeing the whole picture here, but if mortgages are the main culprit in this crises why cant the banks simply renegotiate there loans with the consumers to keep then from defaulting? Isnt renegotiating a lower profit better than no profit?

Why are the American taxpayers buying worthless securities to shore up financial service industries liquidity? Why can’t the American taxpayer make a loan instead of a gift? My suggestion would be the following: 1. Have financial service industries who need liquidity apply for a loan from the American taxpayer. 2. Have financial services industries who apply for these loans provide a corporate resolution from the board of directors that authorizes the financial institution,s designated official(s) to make and execute loans on behalf of the entity. 3. Require these designated officials to provide personal guaranties to back up the loans acquired by the entiey. By requiring this any golden parachutes that are offered to officals of the entity can be attached as security to all loans. 4.Require security or collateral for the loan that is worth something, i.e. preferred stock, common stock, accounts receivable, land, buildings, inventory, equipment, stock warrants etc. 5. In addition to the above security that is worth somethin, accept the worthless securities as worthless and let the federal government forbear and renegotiate individual mortgages so that people can stay in their homes and neighborhoods and property values will be stabilized avoiding further deterioration of the problem. The above suggestions are only common sense and are usually what is required of any individuals who obtain a loan. Please tell our representatives to act in a responsible manner to protect taxpayers of our country!!!

Increasing the FDIC coverage on deposits from $100K to $250K is good, but it primarily benefits small business; what about the retirement accounts that are on CD’s which in most instances exceed $250K, are these going up too? I have not heard comments in this regard.

ali, you are brilliant!!!
could you explain the flowchart you have made in the opposite direction, the american people getting bail out instead the of the banks. (arrows in reverse)

Ali, I have a variable annuity with allocations invested 10% in international equity, 5% in emerging markets,40% in inflation protection (msa/american century & 45% in long term gov’t bonds (msa/pimco – my question is should i move the 10% & 5 % into the other funds for a 50/50 split or should I do something else. i am 2 years from retirement.

Hey Ali,

The main U.S. lenders are the U.K., Japan and China. But since they, as well as just about every other major world economy are experiencing market meltdowns for various reasons, what happens if the can’t or won’t loan us the money to bail us out of our current financial crisis?

Ali,
I don’t doubt that you are highly educated and informed but I find your views and comments to be very narrow minded. You seem to concentrate on the woes of INTERNATIONAL banks, businesses and, to be blunt, the rich scumbags on Wall Street that created their OWN mess at MY expense.
Now they are trying to distract us with this idiotic increase in FDIC insurance. The same tactic Bush has been using for years now – create another mess and yell “Hey look at that”.
I challenge you to find ANY hard working taxpayer in this country with a quarter million dollars in his or her bank that is losing their home or can’t pay the bills.
This “bailout” is strictly for the same rich assholes responsible for it.
The average or “middle class” citizen in this country has already been enduring the effects of Paulson’s and Bush’s “or else” threats for several years now. If either of these mental midgets would open their ears and shut their mouths they would be aware of this. They only seem to have noticed that there was any problem at all when their rich friends started to be affected.
Let them see what it is like to actually work for a living. NO BAILOUT

Get real Ali. You hype the economy package will free up loans for autos, houses and college loans. You say right now, you have to have a good credit rating and collateral to get a loan…duh? What do you think got us into this situation in the first place? Also, do you really think with runaway inflation, a downward spiral of the stock market, and economic uncertainty (whether or not this package is passed)
do you really think people should go out and buy new cars and houses with deflated dollars? If so, I’m glad you’re not my financial advisor.

Please explain what exactly the crisis is if you can.
As an engineer we have learned to define the problem, develop solutions, do the worst case analysis and then implement the best solution.
In this case it appears the rise in ARMS caused a melt down in the Mortgage market. So if we buy back those mortgages, convert them to 30 or 40yr fixed then the problem goes away.
Who benefits most from the 700B? The already rich?
……….. Al

Ali,
Your observation of Mark to Market Rules is brilliant, and incisive.. That IS the problem and the answer.. Please notice that the SEC issued a new opinion on the issue yesterday 09-30-08, and FASB – the accounting standards board has changed their hearing subject for today’s meeting to Mark to market rule changes.. This whole problem may be being exacerbated by an “accounting fiction” which is seeking the lowest value of an asset, thus forcing insolvency in the markets.. Please stay on the issue and advise John Roberts it is “not cute”, nor helpful to “not say the words” “Mark to Market”. They are essential words and bring the focus to the real issue not the ridiculous give away to wall street which without an accounting rule change will do nothing but bankrupt the U.S. The accounting rule change will fix the fiction that has created the “crisis”..

In 8 years of President Bush’s term, when did he listen to the people about:
Spending
Illegal Immigration
Border Patrol, Fence, Prisoned Agents
Weapons of mass destruction
The Great Highway
Joining Mexico, Canada and the USA
Ending the War
Keeping his Secretary of War too long
Etc, Etc, Etc.
We all know he went into Iraq for his buddies and himself. Look what it has cost us in loved service men and women and dollars.
SO WHY SHOULD WE TRUST HIM NOW??
He is probably thinking of himself or his friends now. I’m not about to trust him now or give him, his cabinet, or his friends a hand up.

Mr. Velshi:
as with Al in FL I also wonder about PMI. On my first mortgage I didn’t have 20% of appraised value to put down so I had to pay that high PMI untill the the principle was payed down to 80% of appraised value. Is PMI required on these “sub prime” mortgages where banks had loaned out principle in access of 100% of appraised value, or is PMI just another scam? I assumed this insurance was in place to protect the banks in cases of foreclosures

John Roberts is clever in taking shots at Ron Paul. What a clever man. In fact, what a clever show. Thank goodness we have CNN, Ali and John to straighten us out on what is and isn’t real in this very confusing world of finance. LOL.

Some have mentioned suspending the mark-to-market accounting rules as one means of helping alleviate the current credit crisis, in the interim it has been suggested we return to the economic value approach based on a discounted cash flow analysis of anticipated income streams as was done before the adoption of the mark-to-market began to take hold. Can you explain what impact would this have on banks and mortgage holders.

- Would you please explain to viewers that the “economy” and the “financial markets” are related, but not one and the same.

- It seems to me that Wall Street is simply the “tail” that is wagging the “dog” of American industry and commerce.

- Why do we need to allow Wall Street to run Washington and Main Street any longer?

Ali:
Please comment on the effect MtM could have on companies required pension contributions next year. The concern is a one day low stock market on 12/31 (like 9/29)could cause nearly all US pension plans to appear very underfunded requiring massive contributions next year, at a time when all companies are struggling for cash. A large correction on January 2, 2009 (like 9/30/08)would not mitigate any such damage done on 12/31. MTM in an unstable market seems a strange and dangerous way to value assets (and the present value of liabilities I might add) that are set aside to pay pension liabilities that will not come due for as long as decades. This could be the next crisis facing business as pension contributions are calculated next year

Why Can’t they split the 700 between
the organization that put their money in T Bill a couple of weeks ago, along with the House and Senate Members and the Main Street, say maybe in thirds. That way it would be better shared.
RMaas

I’m “upper middle class” (make 85K/yr) and don’t have $100,000 in the bank. Who is supposed to be “reassured” by raising the FDIC limit to $250,000?

How can Bush & Paulson Rob Americans in their last 4 Months in office??

Like so many young Americans, I’m in law school with tens of thousands of student loans. While I had no problem getting student loans several years ago, what is the professional job market going to look like in a few years when we have to start paying them back?

“My wifes company told them yeesterday that they will be taking between $500 to $1,000. dollars from their 401k to pay for the bailout. is this something that is suppose to happen?”
Only under The Bush Administration!!

Ali, Last week a lot of the talk about the BAILOUT centered around payments to CEOs of failing companies. Thie week I have heard nothing if this BAILOUT bill has restrictions on that. A story AM ran this morning was about home builders going bust. How can they expect to sell new homes with all the foreclosed properties on the market? Doesnt this make the problem worse, glutting the market with available homes. Why cant the bailout be focased on the home owners in trouble ? Take over their mortgages, at a fixed market rate and if they can then pay it the bank will have a flow of cash from that source.

Ali..Thank you for letting us “Vent” I am soo Mad at these Con-Artists George Bush and Henry Paulson!!

The criminals who lied to us and got us into this mess are the same bunch you would have us believe can get us out. They just haven’t explained it well enough to us stupid Americans. Give me a break! The one man in Congress – Ron Paul – who has been warning us about our monetary policies and predicting this crisis, literally for decades – you just dismissed as though you were waving away an annoying insect. Next EFFECTIVE question, please? Apparently, he has not been able to explain it to you so that you understand that you can’t solve a problem by continuing the same actions that caused the problem. Get him back on the air to try again, more slowly this time.

Won’t raising the FDIC cap just encourage people to take money out of the market and put it in traditional bank accounts?

Mr. Velshi,
I wouold hope that this simple question will be answered because of its gravity. The bailout is unnecessary. $700 billion is enough money to correct every property in foreclosure. Most are in foreclosure because of greed.

I and the majority of Americans are not being bailed out. What gives major corporations the right to be bailed out?

It would be in America’s best interest that credit be reduced and the failure of the present system would create a scenario, though painful, that people would address credit in a more reasonable manner.

Hi; My comment is positive, actually it’s a question. How do you solve a problem with the same mind that created it? Yours Truly, John Hickey

I have been watching this morning and have seen nothing about the Aisan markets reaction to the recovery (albeit only one day) in the US market yesterday.

Also, if the US market was down 777 on Monday and lost US$1.2B, and was up 485 yesterday, the math would indicate that we recovered US$750B not the US$600B reported – what is the difference?

Are any of these Toxic Mortgages homes that may have been already destroyed like in Hurricane Katrina or Ike?
What is the lag time in the unraveling of these mortgages?

Why doesn’t the U.S. Government issue each American actual Stock in this Bailout Plan?

I couldn’t believe that you are now blaming “1930 regulations” for the current financial crisis! … It’s the job of our elected officials and the “experts” they appoint to both set and adjust regulations to keep our financial systems functioning… your comment is at the root of the problem, lack of sound policy, integrity and accountability … please, let’s put blame where it belongs: on the 8-year Bush administration who have been saying up until a week ago that the economy was fundamentally strong while “Rome” has been burning.

If I understand correctly that the stock market in New York City also impacts the markets overseas, thus making the impact global, why is our so-called representatives in Washington making us American taxpayers dish out the billions to restabilize the market? Why don’t we hear governments of other countries making a contribution in stabilizing the market?

Some say the financial institutions making bad loans got us into this mess. So why does Congress think helping them be able make more loans will solve the problem? Right now I am worried about making payments on my mortgage, not about borrowing more money.

Ali,

We are in unchartered waters when it comes to our economy. So in order to fixed the problems we have to do something that has never been done. Instead of a 700Billion dollor bailout to the individuals that created the problem, why not make a taxable payment to each voting American over the Age of 18. This will infuse each individual without about 400 thousand dollars per individual and the taxes back will be about 190 thousand. Inflation will go up but the average american can catch up and the banks and companies will get their monies back through a natural progresson of supply and demand. On the negative there will be a quick boost in inflation but the law of supply and demand will gradually put things back in the natural order.

Mr. Velshi, why aren’t you even talking about the “No Bail-out Act,” sponsored by Representatives Peter Defazio and Marcy Kaptur? That would use the Resolution Trust Corp. model that successfully solved the S&L mess, saved the economy of Sweden, etc.That model would use banks’ money, and not put taxpayers at risk. WHY aren’t you covering this story???

Mr. Velshi,
I have a home equity line that’s drawn down less than half of its availability. Several months ago, the bank reduced the line by 30% based on alleged loss of value in my home. I know I’ll need money from the line to pay for my daughter’s tuition in December. Should I draw down the line now and deposit it in my savings account and not risk losing the rest of the line?

Ali, talk slower. Anyhow, why are the CEO’s of failed institutions keeping their jobs and not being accused of mal-, mis- and non-feasance and being kicked out with no severance. If it were me, I’d be practicing “paper or plastic.” And why are Senators and Representitives allowed to take money from the groups they are supposed to be regulating. And if months ago, Secretary Paulson didn’t see this coming, how can he say months from now this was the right thing to do?

Good Morning,
Please do not promote the ‘Bail-out’ of the markets. As I have left my thoughts in earlier email messages.
Again, my reasons are that both the banks and the markets are not the direct problem. The need to fix the job market first is the solution. All loans will be paid if jobs were paying better. The requirement of a ‘living wage’ is the solution. The housing prices are coming in to line with lower wages of most people. The need for credit by people is part of the problem. Moreover, the term credit is really a loan, this ‘loan ability will not open up for the average person without better pay.
Therefore, credit cards usage is not the way for a person to live. Nor will they ever meet the goal of paying off their debits without a system of allowing these people to improve their pay scale on a regular bases. Yes, this is not good for a balance sheet that fuels the Stock Market, but at this moment we are dealing with what happens when people that were with in their means lose their better paying to become people that are living above their means. Increasing their second mortgage in order to meet their obligations is also not good for America.
Moreover, students have their loans secured for this year, and people do not need new vehicles today either. Loans to meet payroll is not something a good small business does, larger businesses do it because it is a tax write off. Loan money will ease up if people are paid better. As to Student loans and a new car the congress has 9 months to correct the issue, which is a ‘Living Wage’.
I am giving you a basic understanding of my reasons. Credit is not the fuel for Main Street. High paying jobs are the fuel for Main Street. Insuring people’s money to $250,000.00 in banks is correct for the times. The money to buy not functioning loans is not the way to go. Sure up a bank is not the solution; it is only a short fix.
The solution is a ‘LIVING WAGE’ not buying bad loans.
Yours Peter W

My daughter and I were discussing the bailout. We decided this sounds like something out of an Austin Powers movie. ‘I’ll release toxic debt ruining your economy unless you send me 700 billion dollars.” 700 billion dollars, I’ve got toxic education loans for my daughter, I would love to have the government pay them off.

I am confused, in one breathe you say the problem is that there is no way to determine what these assets are worth, then without even taking a breathe, you asert that we are buying these assets at a 20 to 30% discount. Which is it, do we or do we not know how much these assets are worth?

Bailout is not going to resolve the catalyst of varying oil prices. The approach seems to have some merit but I haven’t heard the oil mentioned once. How can we get stabilization of oil prices for our homeowners or is this a pipe dream? I sincerely believe this is the root of the financial crisis we are in.

I think a $700 billion dollar bail-out based on financial institution ’speculation’ is foolish.
I suggest everyone remember Enron, and how they manipulated speculative markets in order to defraud the American public of money. The parallels are unmistakeable.

hey Ali. i work at a office supply retailer. right now our stock price is 5.82, a year ago it was 22.00 and 3years ago it was 44.00. would it be smart to enter the employee stock purchase plan??? please let me know

Ali,

We concede to the actuality that the imminent collapse of the economy was due to the imprudent, unregulated ingenuity of the sub-prime mess by the mortgage lending industry. What I don’t understand is why the government is bailing out Wall Street. Why can’t the government through the housing authority buy down and refinance these mortgages directly from the homeowners to eradicate this mayhem, and reset home values. The lending industry will still benefit, but I don’t believe they should get a direct bailout.

Ali: I have attempted to read the present proposed bill. It is so full of legal E’s; I wonder if anyone can understand it. Why can’t they put it to the American Public in plain simple English?!

Ali,

We concede to the actuality that the imminent collapse of the economy was due to the imprudent, unregulated ingenuity of the sub-prime mess by the mortgage lending industry. What I don’t understand is why the government is bailing out Wall Street. Why can’t the government through the housing authority directly buy down and refinance these mortgages directly from the homeowners to eradicate this mayhem, and reset home values. The lending industry will still benefit, but I don’t believe they should get a direct bailout.

Ayo, Reno Nevada.

WHY IS NO ONE ADDRESSING THE FACT THAT THE BAD MORGAGES ARE GOING TO BE GOING ON FOR YEARS,PEOPLE WILL STILL BE GETTING HIT BY INCREASES,FOR YEARS TO COME BY THOSE MORGAGES THAT WILL UP THEIR HOUSE PAYMENTS,THIS BAIL OUT IS A JOKE,ONLY HELPS THE RICH,THE BANKS WERE GIVING 60 BILLION DOLLARS A MONTH AGO AND THEY ARE HOADING IT,INSTEAD OF MAKING LOANS.THEY AND WALL STREET GET WHAT THEY DESERVE,THIS IS THEIR OWN CREATION,AS GREEDY PEOPLE.

I believe that something needs to be done, but not at the expense of the taxpayer. The problems I have with the current bill are the provisions that will allow the individual in the house up the street that’s close to foreclosure to have their interest rate decreased as well as their PRINCIPAL BALANCE decreased. What!?!? So does this mean that when the housing market does correct itself and residential real estate appreciates, that same individual will be able to make more money
when they sell their home than I will because the government GAVE them instant equity? What about the people like me who’ve paid their mortgage on time every month for years? Have any provisions for us? A possible reward for being financially responsible and opting to live with our means and decide to not keep up with the Jones’s!

If we are going to spend $700 Billion to stimulate our economy and pull us out of this economic disaster the Federal Government should pass a tax free check to every homeowner for 10-20% of the value of their home. Then force the homeowner to pay it to the banks therefore bringing many of the bad mortgages current, helping both Main Street and Wall Street. Isn’t it better to help both instead of pitting one against the other?

Ali,
My mother is nearly 67 and retired. She placed all of her money (barely 10,000)in a 401(k). She is determined to take it out. I have tried to calm her fears to no avail. Where should she put it since she won’t listen? PS Do you EVER sleep?

Can the value of homes purchased in the last 3-5 yrs be revalued to a more realistic price? My daughter’s family live in Northern Va. It got to the point where buying was cheaper than renting but houses were over priced by at least 80%. Now they and many other families are stuck in a home for at least 10 yrs that is too small for a growing family but can’t be sold because of the loss in value.

Ali,
WHAAAT??? Is the Federal Reserve Really PRIVATE?????

Ali,

To what extent does gambling boats, drinking and drugs have on this crisis? What does the bailout do for those of us who do the right things with our money?

We have never bought a home unless we had 20% down. We’ve paid our credit card bills on time and now pay them within 30 days. We don’t spend money unless we have it or unless we can pay it off and we do that before we take vacations. We are very angry that we have to bailout Wall Street and Main Street. We hope Congress says “NO” and everyone starts to live within their means.

I opened a pharmacy 5 years ago. There was no credit available to me, 15 yrs pertinent experience and credit rating over 750. How is there less credit available today. I don’t use credit to make payroll or pay for inventory. I do NOT see how NO bailout is going to negatively affect me or my business. Paulsen wouldn’t help me and in fact GWB has acted to hurt main st. pharmacy repeatedly in the past. The strong survive, its economic darwinism, right Ali? Free markets?

“Carrier politicians” Democrats and Republicans are both responsible for our current troubles.
“TERM LIMITS” (8yrs)on politicians would be one of many solutions to our current problems.
Time to clean house and get fresh ideas on solving issues that have been problems for many years..

Ali,

I am 37 yr old single female, permanently disabled living off disability stipend, I don’t live beyond my means, put aside savings each month, & don’t use credit cards unless I have the cash to cover purchases.I had all my savings of $35,000 thus far (towards 20% down for future home purchase) in WAMU, I realized that it is well under the FDIC limit, but what should I do now that WAMU was taken over? My money was earning me 5.10% and just matured. Do I take it out? Change to another banking institution? Re-invest it?

What lending crisis? I was out with two real estate agents last night. Both just sold a home to two different buyers. The buyers has no problem getting a mortgage. One of the real estate agents has a 23 year old daughter that just got a loan for a brand new car worth $24,000. So, where is the lending crisis? Perhaps the banks are waking up and just giving loans to people who can afford them.

good morning ali whats your idea on starting at the bottom giving 50,000 to 200 million people it seems to me that would stimulate the economy!!

Ali, why can’t SBA be used, with funding, to help? We own Fannie/Freddie same with them. Why is the only solution saving the bad guys?

Could this crisis have been adverted if homeowners had been allowed to refinance their loans to an affordable interest rate? If so, why hasn’t this happened? Who benefits when homeowners default on their loans?

Why is the #1 concern of the Private Federal Reserve to “Hook” all Americans on DEBT??

I have a Variable Annuity Contract. I’ve watched its value decline over the last year. I’m 67 years old. Should I cancel the policy? The only thing it guarantees is life insurance, which does me no good while I’m alive.
For now, I’m living comfortably on a pension that has a cost of living increase every year, and social security.

Ali; I don’t have a question but share the following.

The American people have developed a system of commerce and have empowered the government to regulate and watch over same. Now because there are some serious flaws in the game we’ve invented and tried to regulated, all the finger pointing begins. From my point of view, congress ‘has to provide a stable platform’ upon which commerce is conducted. It’s no different than expecting the government to maintain the roads, bridges and airports. The banking/financial highway allows businesspeople around the country to coordinate their commercial activities. If the government allows the game they have been empowered to regulate go down the tubes, I have to ask them, what do you think your job is?

It was refreshing to hear you point out to the American public that despite the $1.2 trillion loss on Monday – there was a $600 billion gain on Tuesday – something politians ignored and they continued to try to instill fear into the citizens.

The problem for this failure rests with greedy wall street firms, the lack of governmnet oversight and loopholes written into laws to enable this to happen.

For too long Americans have lived on credit far beyond our means and it is time for the market to correct itself.

The bailout/recovery is JUST WRONG! It goes against the free market principals of America and we cannot continue to live in a consequence free society where no one takes ownership of the problems they create.

Call/email your senators today not to buckle under the ‘fear factor’ – leave that for ‘reality TV’!

Hello Sir;…

I’m getting out of the Market –(Mutual Funds)and going to a Money Market Account.. I have $250, 000.00 … Should I put some in Gold ?

Thank you .. Harry, Belleville, NJ

1. I appreciate your educating me. Can you recommend a book to read?
2. I am amazed that it seems Americans are against congressional measures that rescue them because part of the solution will benefit people who are in an economic stratosphere that was, is, and will be alien to them (and me). What really matters is can we preserve what we have worked for so hard. We have to get past our lesser feelings and work toward the greater good.

When is someone going to come out and say that voters’ lack of trust in the Bush administration is at the heart of this bailout/no bailout dilemma? No one really believes that (a) they are telling the truth and (b) that this bailout will really fix the problem.

Shouldn’t those who want to run the country for the next 4 years be paying close attention to the effects of lying/spinning?

If we had confidence in our government, we wouldn’t be dithering about this.

Why can’t the bailout money recue taxpayers first? For instance, they should do shortsale with the banks instead for half price and let the homeowners payback at 4 low interest rate which guarantee profit.Than the banks will be free and able to lend again smartly this time around. Purchased the forclosed houses and resale ith huge profit. Wall St made billons, let them take a lost and start over wisely

Pat, FL

My question is about a comment Ali made pertaining Credit Default Swap(CDS) market issues.

The concept is fairly simple, and I think if more viewers understood the concept and basis of the CDS market we would have a better idea of the problem and where it’s headed.
Could you take a moment and explain how the CDS market works and why it exists?

In spite of George Bush’s assurances that our economy was strong, I had my doubts so I sold my stocks early this year and put my money in the Reserve US Treasury Fund.

When the Reserve Primary Fund broke the buck, the SEC allowed Reserve to put a freeze on redemptions. So now my retirement is inaccessible to me. My broker says I “should” get “most if not all” of my investment back when the freeze is lifted.

So having a safe investment like a treasury fund or having FDIC insurance on your bank cash does not mean you will have access to your money. Why?

DO NOT HAVE A BAILOUT, INSTEAD WE DISTRIBUTE THE $700B AMONG ALL THE TAXPAYERS. THIS MONEY CAN ONLY BE USED TO PAY EXSISTING MORTGAGE ,BUY A NEW HOUSE,PAY OUT THE CREDIT CARD DEBTS, PAY OUT TUITIONS ETC…A NON-GOVERTMENTAL AGENCY SHOULD MONITOR THE ABOVE.THIS SHALL TURN AROUND THE ECONMOMY AND STOP THE MELTDOWN

Why isn’t anybody seeing the parallel to the S&L scandel of the 70s and 80s.
Why can’t we remember as a society the problems of the great depression. Why can’t the government relize that we need regulation because the greedy of this country will run it to the ground. Everyone is responsible about this mess. WHEN WILL WE RECOGNIZE THAT GREED CAN BE AN INSTITUTIONAL DISEASE!

If the FDIC starts insuring certain bank accounts for up to $250,000.00, will everyone with older accounts be forced to open new ones, or would the old $100,000.00 insured accounts simply be upgraded?

Ali, how did they arrive at the figure of 18 billion. How much is a bankrupt company worth? How much is AIG worth? I never hear anyone say who came up with the figure, and how theyt arived at it so quickly, Why not 70 billion, wil that be enough?

Why is no one talking about the real cause of this financial mess? Fractional Reserve Banking

Ali, I have just placed 70,000 dollars of my inheritance in an annuity with a rider clause with North American Company for Life and Health. I am 53 yrs old and this would be part of my retirement. Is my moneu safe in here? It is not FDIC Insured. This was done on advise of my financial planner and I have 30 days to accept or reject. Thanks

Ali, I just heard you read a question that stated most Americans are against the proposed bailout, yet according to CNBC earler today, a recent poll actually showed one-third for, one-third against, and a third undecided. It is another case of the noisy ones getting the attention. The White House email volume is from the unhappy one-third because the rest of us have no reason to write – Congress is acting. I don’t agree wholeheartedly with their plans, but it is better than no plan at all.

I had to qualify for each home I have bought during my adult years. Why should I now be burdoned with higher taxes to pay for the greedy home buyers who bought more than they could afford?

Ali,
From my research, FDIC has about 2% of the money needed for US deposits on hand. Where is the other 40 trillion dollars needed and how are those dollars invested? Is that money safe?

Sal

There must be some reason that the Gov’t. can’t take the 700 Billion and pass it on to each citizen and legal resident of the USA eighteen and above. The Gov’t. can tax it at 30% and the people recv’ing the money will be able to pay off their cc debt, mortgage, school loans, and spend the money on food and more. This is what I call a stimulus check. Can you explain why this wouldn’t work?

Hi Ali,

I am writing to you from NB Canada, I watch your show every morning and cant help myself to wonder how this bailout plan can affect us in Canada. We hear alot about other country’s but your neigbours to the north are more interested in US politics and this situation then our own politics and this is a big concern for me. I have many investments in the US and answers are hard to get. Hope you comment on how this would affect Canada. Many Candadians wish they could get answers.

thank you for your time

Oscar

Ali — WHY is it that the House & Senate have NOT yet conducted hearings from panels of the US’s elite in the economic field as to their counsel to solving this problem?

NO! NO! NO! Not one dollar better be handed to those morons! I support loans and insurance. We are a democratic country, not socialist, and I want to keep it that way.

If the economy has been running on credit all these years, that’s a problem. The first rule of business is liquidity. Requiring credit to run is an indication that the business isn’t sound.

i have a different kind of question my mom had to go to assisted living and has some credit card debt she cant pay they take everything. can they do anything or come after us please give us some advise. thanks

Who designed this Bailout Plan..Michael Milken!??

I just heard Ron Paul talk about the reasons NOT to approve the bailout & I have also hear Lou Dobbs repeatedly speak against it, yet Ali and other commentators like Suze Orman are for it. Why the disconnect? Who’s right?

Is this administration trying to protect those who have the power to lobby by perpetuating fear – something it has done continually throughout its administration (e.g. – Iraq)?

I am retired and all my $$ is in fixed annuties. How safe are they? Thanks

living paycheck to paycheck is getting harder to do. If you don’t make enough money to make ends meet now, how does the government expect us to ’spend’ to make the economy improve?

Ali – The DOW went down 777 points and then came up 499 points the next day. Essentially many companies’ stock was on sale. On Tuesday millions of dollars were thrown in to buy these cheap(er) stock. Do we know who bought them? Do we know our enemies did not buy America!
Do we know Bin Laden didn’t buy million of dollars worth of cheap Fannie Mae stock knowing full well that the Bail Out would increase the value of that stock? Is the bail out money going to fund terrorism?
Who is minding the shop?

Ali, i am 40 yrs old, a mom, wife and RN. i put 10% of my income every week into my 401k. should i keep doing this or cut back for a little while? Also what will happen in jan. with FAFSA? i have 1 in college and 1 going in may.

Ali, Would you add some more arrows to your chart. Start with $700B and show us where all the money is going and how much ends up in the banks for mortgage loans.

The main rule in capitalism which USA follows is every thing should be free including trade. The mess on the wall street is created by those financial czars so let them face it. Why we taxpayers should bear it? This is not capitalism it is socialism which our founding fathers never endorsed.

Hi Ali, I am wondering, are seniors at risk of losing or having their private pension plans reduced due to all of this??
Cindy Woodland
Oshawa, Ontario

What happens to my Wachovia stock? Does it move to Citigroup or stay with what is left of Wachovia?

hi alli will the bailout lower interest rates or raise rates i am going to closing on my new home oct 30 and would like to know if i should lock in the rate

Does the bailout pkg contain provisions allowing criminal charges for CEO’s,or management involved in the worst economic crisis since the depression?

Will anyone be held responsible? Will the average taxpayer pay the price for this crisis and then just wait for the next one to pay for?

We the average taxpayer have no one to bail us out, as the bankruptcy laws are now so restrictive and almost unusable.

I do favor a pkg so we can keep America strong but ‘please’ not for free without a price to those responsible.

Hi, if a company gets some money from the $700bn, how does the government make sure that this money becomes available to the borrowers (all advocates say this would be the case) and is not used for operational expeses to keep the company alive for some more time?

Ali,
I thought that Seniuor management in companies all had fiduciary responsibility. If that’s so, then the least that should have happened is that all these guys should have lost their jobs or better yet be facing jail time for fraud. Why are’nt we seeing a lot of these guys losing their jobs?

What is the difference between LIBOR and the “prime rate” on which we’re told the banks base mortage and other loans to consumers?
Thanks,
Jane, New York

Who Bails out the FDIC?..American Taxpayer a.k.a. Buckets R’US

Ali why don’t you start selling the idea of giving the 700 billion the tax payers in the form of cash? This would grease the economy better than a bail out. Explain to the public how the money multiplier and a cash injection of 700 billion would not fix this crisis!

Ali,
The bail out of failing banks seems counter productive. A stimulous package of the same value should be directed toward successful and conservative institutions. These institutions will maintain the investors confidence. An infusion of money and an increase in the insured amount would encourage banks like BofA Wells Fargo and others to offer solutions. This would preserve our economic philosophy. Businesses have to fail in America, foreclosures and drops in our stock market are part of the game.

I have most of my money in CD’s in healthy Midwest savings banks (all are FDIC insured). Is my money safe?

Hi Ali,
Did you listen to what Dr. Ron Paul had to say. What do you think? Take a chill pill you sound like you need it.
Thanks, John

Hey Ali,
Why can’t all those illiquid mortgage bundles be unbundled? To separate the ‘wheat from the chaff’. The answers I have heard to date have been sophomoric at best.

Thanks,
Ed

What alternate ideas have been suggested? If there are so many opposed to this rescue plan, what other solution do they offer?

I am 63, retired and run a small nonprofit without taking any salary. I am concerned about my John Hancock IRA/annuity. Like all pensions, it is now plummeting. I recently changed the allocation to what they call “Lifestyle Moderate” a more conservative fund. Should I hold steady with this annuity or roll it over into bonds? Will I have to pay penalties if I move it?
Louise, Massachusetts

Ali,
Looking at the 401Ks down by ~ 25 to 30% compared to the beginning of the year makes us very nervous. Are we better off transfering money from stocks to bonds? Or it is a very bad timing to do it?
Thanks

My wifes company told them yeesterday that they will be taking between $500 to $1,000. dollars from their 401k to pay for the bailout. is this something that is suppose to happen?

Mr. Velshi,

You should be ashamed of yourself – advocating this bailout of Wall Street. Present the facts both sides – but stop advocating this bailout. It stinks – they scare us saying the world is coming to an end – and YOU are nothing more than a cheerleader.

Ali: Why are we presented with only one proposal to solve this problem.

If the fund were given from the bottom up instead of the top down would it not work, with restrictions maybe only the first time home owner and people who only own one home? morage

Ali,I heard the new senate bailout bill also includes modifycations to the alternative minimum tax. No one on CNN has mentioned that. The AMT is a disgrace and it punnishes upper middle class taxpayers for earning a living. While the poor pay no tax and the super rich pay no tax the middle and upper middle class continue to bear the largest burden. Please address

I couldn’t believe hearing on CNN the idea floating around to assist the market bailout of “mark to market accounting” to asssign an arbitary value to assets. Did we all forget Enron, that what they pulled off with the SEC blessing during the Bush administration.

i was woundering about the bail out what are the terms and why arnt the networks reporting on the tirms of the bail out how can we suppourt the bailout if we dont know the terms