Financial News Coverage: By: Laura Burrows, Jennifer Kahn, Kat Martin, Julianne Nowicki, & Jessica Schissel

Financial News Coverage By: Laura Burrows, Jennifer Kahn, Kat Martin, Julianne Nowicki, & Jessica Schissel

“Fed Chief Downplays Recession Talk” March 29, 2007 • “Even though the economy is facing some big problems, the chairman of the Federal Reserve says he's optimistic.” • “He told members of the Joint Economic Committee he didn't see any evidence that problems in the subprime mortgage market were spilling over to affect the rest of the economy.” • “Bernanke said inflation remains a bigger concern than recession for the time being” • Effective: Sen. Schumer asks important questions regarding why the Fed didn’t do more to prevent abusive lending • Could have been better if NPR had further investigated Bernanke’s claims, acted as a watchdog

“Recession Odds ‘Clearly Rising’” December 14, 2007 • Well, let me stop you for a second because there is a simpler version of this story that is sometimes told. Alan Greenspan lowered interest rates, fueled a housing bubble, and got us in the lot of the trouble we're in right now. What's wrong about that analysis from your point of view? • Do you believe that there was nothing that you could have done that could have prevented the housing bubble or could have brought it down a little more gently? • Effective: forces Greenspan to own up to his involvement in the housing bubble; asks the right questions that challenge authority, getting the truth out there for their listeners

“Global Nightmare: If Fannie and Freddie Had Failed” September 9, 2008 •

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Economists argue that the cost of not saving Fannie and Freddie would have been far, far greater than the Congressional Budget Office estimation that the bailout would likely cost American taxpayers $25 billion. “Allowing Fannie Mae and Freddie Mac to collapse would have been akin to letting Japan or the United Kingdom go bankrupt”

“Amid Financial Turmoil, Small Banks Thrive” October 1, 2008 “Wall Street may be on a roller coaster and credit markets in a deep freeze, but many smaller, local banks aren't yet feeling the pinch. They lend only as much money as they take in and stayed out of the subprime mortgage business”.

“Leon Moore, chairman, president and CEO of a small bank in Virginia says his bank's assets are worth about $220 million, and he says those assets are safe because the Bank of Floyd avoided investing in Fannie Mae and Freddie Mac and does no subprime lending.”

Mr. MOORE:. One problem we have at the end of the day is consumer confidence. If they don't have confidence in the financial markets, if they don't have confidence in their congressmen, then we've got a problem. So, sooner or later they've got to address the issue and come up with some solution to that. Mr. MOORE: We've tried to assure people that, yes, we are well capitalized, yes, we do have money to loan, yes, we are conservative. It's just a process of talking to your customer and assuring that customer that you know what you're doing and that you're watching after their money. Effectiveness: Effective that it gives perspective of small banks outside of Wall Street. Ineffectiveness: Trivializes the real issues here and ignores the overreaching effect Wall Street would still have on the majority of small banks throughout the country. Does not offer solutions. No further examples outside this one bank.

“Federal Program To Help Homeowners Takes Effect” October 1, 2008 “All the attention to the Wall Street bailout has overshadowed the crisis that got it all started, but the foreclosure problem has not gone away. A new federal effort, the Hope for Homeowners program, goes into effect today. It's supposed to help homeowners who are on the brink of foreclosure to get better loans” “The idea is to help homeowners who are in over their heads, on the edge of foreclosure, people who couldn’t make their payments at first, but couldn't keep up when the rate moved higher, people like Diedre McCloud.” (Continues on to explain in simple terminology what this would exactly mean for many people)

Effective: Covers information that would appeal and benefit to the common listener. Explains in layman terms what the bill could mean for troubled homeowners. Gives real example. Doesn’t sugarcoat the bill to appease listeners. Ineffectiveness: Program doesn’t give further advice to individuals outside advice dealing with big finances in Wall Street or bills in the government realm. Is there anything they can do themselves at this point? What do economists recommend homeowners do at this point if not the Hope for Homeowners loan?

“The Man Who Predicted the Economic Meltdown” December 4, 2009 • In August 2006, Peter Schiff, president of the Connecticutbased brokerage firm Euro Pacific Capital, warned viewers on CNBC that the U.S. economy would be hampered by "too much consumption and borrowing and not enough production and savings.” • December 2006, was more blunt by saying: “You're going to start to see both the government and the lenders re-imposing lending standards and tightening up on credit- and these sky-high real estate prices are going to come crashing back down to earth.” • Nicknamed “Dr. Droom”

“The Origins of the Financial Crisis” March 11, 2009 • Interview with Gillan Tett, Assistant Editor of The Financial Times • Interview explores what created the financial crisis • Explains what caused the financial crisis in an easy-tounderstand way • Talks about excessive risk taking and bad lending • Effective: Tett gives a well-reasoned, in-depth interview of what created the Financial Crisis. He explains the terms he uses, like “bad lending” or “credit bubble.” He makes the Financial Crisis something that can be understood by people of all ages.

“The Origins of the Financial Crisis”Continued March 11, 2009 • • •

Demystifies the financial crisis for the common listener, while also maintaining a high-level understanding of the situation Gives good, simple analogies to understand complex terms like “collateralized debt obligations of asset-backed securities” Does not minimize the magnitude effects or confusion created by this situation- “Well, I think right now the problem is that the banks, the investors, and frankly, most ordinary mortals are pretty darned confused about what the government’s actually trying to do… There’s still a lot confusion. And that is very dangerous because right now everybody wants clear simple goals and clear simple implementation so people know where they stand.”

“Fannie, Freddie Future Still Unclear” September 7, 2009 • •

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“The administration tried to send reassuring signals to investors, but in the end, they were forced to takeover Fannie and Freddie altogether, placing them in what's called a conservatorship” “That means, effectively, the government has assumed the obligation for continuing to fund their losses. And the government has also allowed them to continue to operate, that is, to continue to make investments in mortgages.” “…the Obama administration says it's beginning to look at how to reform Fannie and Freddie. But with so many other things on its plate, that's not expected to happen until next year at the earliest.” Effective: Zarroli gives a thorough analysis on the government’s response to signals of the collapsing economy; clear for the average listener to understand and provides a present day analysis

“The Bailout and Fallout: Adding up the Costs” September 15, 2009 • “If you total it up, the bailout - the cost of rescuing the financial system - could run taxpayers around $600 billion.” • “But, sad to say, that's not the whole bill, says Blinder. "The bigger cost is the net loss to the economy of this recession, which is in the trillions. People should remember that…the total bill for taxpayers is likely to be more than $1.5 trillion.” • Effective: taxpayers have a right to know how much this bailout plan is ultimately going to cost them; straightforward and factual; refrains from adding unnecessary information (“fluff”) to deter from what the damage is for taxpayers

Ineffective Example:

“Would Women Have Helped Avert Wall Street Crash?” “One of the ideas that's been floating around since the meltdown is that women in particular may approach risk differently than men…women tend to be more averse to risk than men. And insofar as a great chunk of this meltdown was the result of people… having taken on way too much risk.” “What these two scientists did was they measured men's testosterone levels in the morning … it turns out that when these men had higher levels of testosterone, they made riskier and often times more profitable trades.”