From Wall Street to Main Street: The Effects of the Economy
ANNOUNCER: Live in the CNN NEWSROOM. Heidi Collins.</s>COLLINS: Dissecting a disaster. On Capitol Hill, lawmakers are looking at the growing taxpayer bill for insurance giant AIG. They want to know what went wrong, and why $162 billion of your money has been funneled into it. On another note, Congress wants Federal Reserve chairman Ben Bernanke to reveal AIG's trading partners, specifically lawmakers want to know who has benefited from the taxpayer bailout. And Bernanke has said AIG's behavior has made him angrier than anything else in the financial crisis. The Fed has not had any comment on Congress's demand. To Wall Street now. Yesterday's big rally seems to have been a one-hit wonder. That's for sure. At least at this point in the market. About an hour into the trading day now, Dow Jones industrial averages down by 136 points. Several times we've seen triple-digit losses so far resting well below the 7,000 mark we have been talking about at 6739. We'll be watching all of these numbers today. And tomorrow night, a reminder, "ANDERSON COOPER 360" special, Ali Velshi, and some of the sharpest minds in money take on the February jobs report. Who is hiring, who is firing, and what is means to you. Get all of the answers on "CNN's MONEY SUMMIT" happens Friday Night at 11:00 p.m. Eastern. I want to take a moment now to get back over to Susan Lisovicz standing by in the New York Stock Exchange. Yes, we are down now, bigger than I've seen so far this morning. I might have missed it but almost 140 points here, Susan.</s>SUSAN LISOVICZ, CNN CORRESPONDENT: Heidi, I'm sorry, I couldn't hear you for a second.</s>COLLINS: Go ahead. Just looking at the numbers once again, Susan.</s>LISOVICZ: OK. Somebody was talking in my ear, and I couldn't hear you. Yes, well, you know, and the fact is, that's right, we have erased almost all of the gains that we saw yesterday, Heidi. And it comes despite some encouraging news from the jobs front. The Labor Department reported that unemployment -- initial unemployment claims fell last week. Now, the level is still very high -- 639,000 is, in one week, is terrible. But the fact is, it declined. And continuing claims, which hit a record high for five weeks in a row, came off that record, so they also declined slightly. Still, exceedingly high. But that's the trend that the market would like to see. We all would like to see it on a continuing basis. Also, we got retail numbers for February. A tough month. No surprise there. Not as bad as expected. And case -- some examples. Target, Limited Brands, Gap, American Eagle. The standout for retailers, Wal-Mart. Its sales went up more than 5 percent, Heidi. And what people are buying are the basics, like food and health care. So, Wal-Mart shares are doing really well, not enough to offset what we're seeing with the Dow 30, but Wal-Mart's feeling so good about it, it's raising its annual dividend by 15 percent. Fifteen percent, at a time when companies are slashing their dividends back and forth.</s>COLLINS: Yes. Wow. All right. Well, they're doing something right. That's for sure. Susan Lisovicz, we sure do appreciate that again. We are continuing to watch the market, and as Susan already mentioned, all those gains from yesterday almost completely wiped out because Dow Jones closed up by about 150 points yesterday. We're already down 133. So we'll watch all the way through the entire day of trading. A "Snapshot across America." Today, we are taking a look at the effects of the economy from Wall Street to Main Street, talking to people in the trenches of the financial industries. From New York, we have market analyst Art Hogan. Hi there, Art. In Houston, we are joined by Julie Cripe, CEO of Omnibank. Interesting story here. And also joining us is former federal regulator Samuel Golden. Sam, we appreciate -- actually, we are still waiting for Samuel. Want to go ahead, though, and begin with you, Art. I guess the first question for you is, we just want to know, has the mood changed? I mean, what is happening inside your office?</s>ART HOGAN, CHIEF MARKET ANALYST, JEFFERIES & CO.: Well, you know, I think you'll see a lot of things, not the least of which, people are working harder and feeling like they're getting less traction. Meaning it's very difficult to come in and get anybody really to do anything.</s>COLLINS: Really?</s>HOGAN: In the financial markets right now, we're not getting deals, and we're certainly not getting, you know, a lot of interest in investment banking deals right now. And that's -- really, you know, points to what's going on in, you know, financial markets and the economy. But I think one of the larger things is, you know, people -- you're actually seeing people pare back on a lot of things they would normally do. You know, taking driving vacations instead of flying vacations. The trade-down in shopping, you know, as pointed out by Susan Lisovicz just a couple of minutes ago. Look at the fact that Wal-Mart's just doing very, very well, as well as Target and all the sort of low-cost providers. They're outpacing everyone else in retail right now, and there's a reason for that. There's a trade-down, and people are actually, you know, living that trade-down on a day-to-day basis.</s>COLLINS: Sure. And they're buying necessities, as she said, as well, as opposed to luxuries, certainly. What are you able to do, though, for your clients? I mean, I imagine there's a lot of tough questions out there. And, from what you're saying, you know, it's hard to get anybody to do their jobs. And how do you give advice and really get people feeling better, if that is even, you know, your job?</s>HOGAN: Well, you know, our job is to do a lot of that. A lot of hand-holding is extremely necessary right now. You want to, you know, stay with your clients, because they're just as panicked as anyone else on Main Street right now about what the future holds. And you really want to try to find those points of interest that, you know, that address where we might be getting to the bottoms of things. And, again, pointing out something Susan Lisovicz just brought up, as you look at the weekly jobless numbers, it does look horrific, but it's better than last week. So, you know, the last week number may be the crescendo, low for that. What we need to see is a trend of that gradually improving and normalizing.</s>COLLINS: The monthly number coming out tomorrow, so we might have a better indication.</s>HOGAN: Right, and that's very important, yes. Right. If that number actually comes in and is not the new low print, I think that's a positive sign. Because what happens is, you get sort of a decrease in the magnitude of the negative news as the economy starts to get better.</s>COLLINS: OK. All right. Well, art, we sure do appreciate your perspective in all of this. Thanks. You know, we have seen 16 bank failures so far this year. Small banks across the country are certainly feeling the pinch of that. Julie Cripe leads Omnibank in Houston, Texas. So, Julie, I want to get right to it. This is a smaller bank, an independent bank. What are you doing right? I mean, this is kind of a success story. You must be lending money.</s>JULIE CRIPE, CEO, OMNIBANK, N.A.: We are lending money. And on behalf of my colleagues around the country, they're lending money, as well. We have 8,400 banks in this country, and 16 is a small number. Eighty-three hundred-plus are lending money across the country on Main Streets everywhere.</s>COLLINS: OK, so wait. Do we have it wrong then? I mean, the credit market has loosened up?</s>CRIPE: I'm telling you what I know from my colleagues, and I see small businesses every day. I see what they're manufacturing. I see their job growth. And it's a fact that small businesses have provided most of that job growth in the last 10 to 15 years, and they're still doing it. So it's a positive story. Not just in Houston, Texas, but in Kansas and all around.</s>COLLINS: What about the future for small businesses, though?</s>CRIPE: I think it's great.</s>COLLINS: Really?</s>CRIPE: They are flexible, they can adapt to changes. And that's the same with small banks. We can ride the tide, so to speak, come in every day and figure out how to make our business successful today.</s>COLLINS: What exactly are you able to do for that small business owner?</s>CRIPE: We look at the business. They have an opportunity, for example, to buy a building. And we are able to help them purchase and finance that building. We're able to look at equipment purchases for them and help them finance equipment, lines of credit for accounts receivable. About anything that a small business would need, banks around the country are able to help. If it's an agricultural area, helping people buy livestock or with their crop financing.</s>COLLINS: All right. Julie Cripe, we sure do appreciate that side of things. I want to get to Sam Golden, now, because Sam, I know you've had experience on the federal level with the government office overseeing all national banks. And specifically pretty interesting here, the firm you've been working with, the co-founder of that firm is actually now the de facto CEO of Lehman Brothers. Give us your unique perspective, because we really want to be talking about this potential divide, because some people would argue they are absolutely intertwined, and that's Wall Street and Main Street.</s>SAMUEL P. GOLDEN, FORMER TREASURY DEPT. OFFICIAL: Yes, it's an incredible perch. We at Alvarez & Marsal really have a front seat to financial history. And you couple that with my 34-year history with the Comptroller of the Currency, the last 14 as ombudsman literally involved in many of these significant issues that confronted particularly the national banking industry. As we step back today, and take a look at what has transpired, there are many who have asked, how did this happen? Essentially, what transpired over the last ten years that has posture that is in a position that is so difficult. And I think it serves very little purpose to focus just exclusively on ultimately trying to find and parlay blame on that. Because there is enough blame to go around for everyone, from unsupervised mortgage brokers to an insatiable appetite that existed.</s>COLLINS: Yes, and I mean, to be fair, some people would say, you know, you have to look back in order to fix it. But here's the question for you. I have trouble sometimes understanding, you know, people who say, well, you know, I don't want this money to go to Wall Street, because I'm an average guy.</s>GOLDEN: That's right.</s>COLLINS: But explain to me how anybody does anything on Main Street without reacting from what is going on on Wall Street? Are they not completely intertwined?</s>GOLDEN: I think there is an inseparable interconnectivity, not just in Main Street and here in the U.S., but what has transpired is a global connectivity that exists. But I'll go back to my longtime friend Julie Cripe. There are many, many banks. In fact, a preponderance of banks, commercial banks in this country are very healthy, well-capitalized, earning money. That's not to say that there are not issues that they have to deal with, but they are satisfying and fulfilling the needs of their respective communities.</s>COLLINS: Yes.</s>GOLDEN: But even they are impacted, because we have at Alvarez & Marsal, we even have clients whose loan portfolios are healthy, but because they purchased many of these sophisticated mortgage-backed types of securities, they, too, are having difficulty. But for the most part, the industry has been broad-brushed with one brush and painted as if they're all having difficulty and are not lending money. And that simply is not true.</s>COLLINS: All right. Well, we've got a little bit of that picture, at least today. One of the issues we are not going to have time to discuss, however, unfortunately, is that whole issue of trust between, you know, Main Street -- everybody living on it -- and Wall Street. So maybe we can get to that next time. We sure do appreciate your time, everybody. Sam Golden, thanks so much. Also thanks to our other guest, Omnibank CEO Julie Cripe and Wall Street analyst Art Hogan. "Snapshot across America." Out of work with jobs few and far between. No wonder hundreds of people are turning up to sell themselves. CNN, right in line with them.