After Bair downplayed the possibility of a government takeover of banks, Rodriguez countered: "But it sounds to me like it's a very real scenario that the government could wind up owning a majority stake in these banks if these stress tests show serious cracks because the stock is worth so little now, we don't have to put that much money in to own a majority." Bair replied: "Well, I think the inter-agency statement that was released yesterday indicated a strong presumption in favor of private control. And I think we would like to continue that. It's a very tough thing to run a bank." Rodriguez responded: "You would like to but is it realistic, do you think?"
Prior to her interview with Bair, Rodriguez touted new CBS poll numbers on Obama: "We're going to learn more about how President Obama plans to hopefully calm the markets when he addresses Congress and the nation tonight. And he'll deliver his with address with very strong public support. A new CBS News/New York Times poll shows that 63% of Americans approve of his handling of the job, 22% disapprove, and 15% have no opinion." However, in a report that followed, correspondent Bill Plante pointed out that Americans were not supportive of Obama’s bank policy: "Americans aren't happy with the bank bailout. The latest CBS News/New York Times poll shows that well over half the public has little or no confidence it'll help the economy. Believing it will help only the bankers."
Here is the full transcript of the segment:
7:00AM TEASE:
MAGGIE RODRIGUEZ: World markets are down this morning after yesterday's Wall Street plunge. As President Obama prepares to face the nation.
HARRY SMITH: I'm Harry Smith at the New York Stock Exchange, where the Dow is flirting with 7000. That's half its value from 16 months ago.
RODRIGUEZ: And I'm Maggie Rodriguez on Capitol Hill. President Obama will lay out his plan tonight in a prime time speech. Can he calm the nation?
BARACK OBAMA: I refuse to leave our children with a debt that they cannot repay.
7:01AM TEASE:
MAGGIE RODRIGUEZ: Good morning from the nation's capital, I'm Maggie Rodriguez here in Washington, D.C., where President Obama will take center stage tonight, right there in a prime time address from the Capitol, he will address our concerns about the economy. It'll have much the same trappings of a State of the Union, but he will speak specifically about the economy to the American people, a message that everyone will undoubtedly be listening to, especially given the confidence crisis that we're seeing right now as evidenced by the slide on Wall Street yesterday.
7:06AM SEGMENT:
MAGGIE RODRIGUEZ: Maalox, Pepto and hopefully a pep talk from the President tonight. We're going to learn more about how President Obama plans to hopefully calm the markets when he addresses Congress and the nation tonight. And he'll deliver his with address with very strong public support. A new CBS News/New York Times poll shows that 63% of Americans approve of his handling of the job, 22% disapprove, and 15% have no opinion. We're joined by CBS News senior White House correspondent Bill Plante, who's at the White House this morning. Good morning, Bill.
BILL PLANTE: Good morning, Maggie. The President tonight will tell the nation that there is reason for optimism despite the grim economic climate. And as investors yesterday were selling off on fears about the financial system, the White House was still denying that the administration wanted to nationalize some banks. Tomorrow the government begins a new program to calm market concerns. It will start computer modeling of about 20 big banks. The so-called 'stress test.' Designed to find out which banks may need more capital to survive future economic problems. If the test shows a bank needs money but can't raise it from private investors, the U.S. Treasury will purchase the bank's stock. A Treasury official says the program is supposed to free the banks from concern about the future and get them lending again. Americans aren't happy with the bank bailout. The latest CBS News/New York Times poll shows that well over half the public has little or no confidence it'll help the economy. Believing it will help only the bankers. And in case there is any doubt about how people feel about the bankers, a whopping 83% in our latest survey say that if they get the money from the government, they should have their executive compensation limited. Maggie.
RODRIGUEZ: CBS's Bill Plante, thank you, Bill. Let's talk more now about federal assistance to the nation's banks. We're joined exclusively by Sheila Bair this morning, the chairman of the FDIC, the Federal Deposit Insurance Corporation. Very tough job for you lately.
SHEILA BAIR: Yes, these are challenging times.
RODRIGUEZ: Good morning.
BAIR: Good morning.
RODRIGUEZ: I can't think of a better morning to have you here, because all the talk is about the bank and if you look at the cover of The Washington Post, there it is, the n-word, 'nationalization,' which you have said you would be surprised if we get to that point. But isn't it maybe going to be a necessary evil?
BAIR: Well, I think there's ambiguity about the word 'nationalization.' It means different things to different people. I think in terms of a resolution process where the government would take active ownership and control and actually run the bank, I think that is something that would be surprising. We have announced that we're going to be doing these stress tests to determine whether banks have enough of a capital buffer to withstand fairly adverse economic scenarios over the next couple of years. And if they don't have an adequate enough buffer, then, as the Treasury has indicated, the Treasury is willing to come in and make additional stock purchases to increase the capital buffer. The type of stock will determine whether there is voting associated with that or not. But I think we need to do the stress test first and determine what the capital situation is of these banks and whether they have an adequate buffer before we get to the stage where we can determine what types of additional capital investments the government needs to make.
RODRIGUEZ: But it sounds to me like it's a very real scenario that the government could wind up owning a majority stake in these banks if these stress tests show serious cracks because the stock is worth so little now, we don't have to put that much money in to own a majority.
BAIR: Well, I think the inter-agency statement that was released yesterday indicated a strong presumption in favor of private control. And I think we would like to continue that. It's a very tough thing to run a bank.
RODRIGUEZ: You would like to but is it realistic, do you think?
BAIR: Well, I think -- I don't want to get ahead of ourselves. I think the Treasury's going to be making a more detailed announcement tomorrow. And I certainly don't want to front-run that. And then we need to do the stress-testing process to determine what the adequacy of the capital buffer is right now. As of this date, is the static date, all these large banks exceed regulatory standards for being well capitalized. So for right now, they're fine. I think the issue is how much of an additional buffer they have to withstand more adverse economic situations. And that's what we're going to try to figure out with the stress tests.
RODRIGUEZ: Do -- does the American public have the right to know the results of these stress tests to know which banks are stronger and which are weaker?
BAIR: Well, I think there will be -- there will be information about that, yes. After the stress tests are over, I think we'll look to the banks to make those announcements. But yes, I think that's right. The taxpayer, the government as investor has a right to a lot of transparency. So I would agree with that, yes.
RODRIGUEZ: Chairman Bair, we have a question from the floor of the New York Stock Exchange. Harry Smith is there.
BAIR: Okay, alright.
RODRIGUEZ: Take it away, Harry.
HARRY SMITH: Ms. Bair a question from down here, a lot of doubting thomases at the New York Stock Exchange. They're looking for something they can put faith in. Is there one specific thing that the federal government or the FDIC is doing right now that they could really hang their hats on, so to speak, or say, 'this is a sign, we know we can go forward and have some optimism'?
RODRIGUEZ: Well, I think there's a series of initiatives that have been announced by the Treasury Department. The stress testing is one component. The aggregator bank, the public/private investment fund is also an initiative that will be launched, I think, in the near future. We've already taken a lot of steps. I think the most important thing the FDIC has done is to provide a strong guarantee against insured deposits. We have a very strong record of insuring deposits. Nobody's ever lost a penny of insured deposits. And, in fact, main street depositors are maintaining their faith by keeping their deposits in banks. And that perhaps more than anything is important and crucial to keeping the banks having the funding they need to continue lending and to support the economy. So I know -- I used to work on the New York Stock Exchange. I know that there is an expectation sometimes, people want the quick fix. And if you're looking for the quick fix, you're not going to get it. This is going to take time to dig out and people need to be patient, but they need to keep faith, they need to keep confidence, and we will dig out of this.
RODRIGUEZ: Madam Chairwoman, thanks.
BAIR: You're welcome.
RODRIGUEZ: Thank you, Chairwoman Bair, good to see you again.
BAIR: Good to see you, bye, bye.
