Wachovia's wide effect on Charlotte

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    Hair stylist Yvonne Curtis sweeps and smiles at Gene's.

    - Amy Scott

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    Gene's Master Cuts in Charlotte, N.C.

    - Amy Scott


Scott Jagow: As part of our special coverage of the financial crisis, we're hitting the road. We've dispatched two Marketplace reporters on a trip across America.

We begin in Charlotte, North Carolina, where Amy Scott is standing by. Amy, I used to live in Charlotte, so I know it's all about the financial industry. Bank of America and Wachovia both headquartered there. What's your sense of the city right now?

Amy Scott: Well, when Citigroup stepped up to buy Wachovia's banking business earlier this week, it really hit Charlotte hard. The bank employs about 20,000 people here, and though no lay-offs have been announced, thousands are expected. And just to get a sense of how that could affect really the whole economy here, I visited a hair salon right across the street from one of Wachovia's many towers here in Charlotte.

Yvonne Curtis: Probably about 50 percent of my clients are Wachovia people. I was up all night last night thinking about it, 'cause it's really been kind of sad around here.

That's Yvonne Curtis, a hair stylist at Gene's Master Cuts. Her boss, Gene Buchan, said he's feels like he's been down this road before:

Gene Buchan: Cause I've been doing bankers ever sine 1973, so I've been through these times before. I've had to rebuild several times.

Buckin says he's been cutting hair in this neighborhood so long, he feels like he works for Wachovia. So he was taking this pretty hard.

Jagow: And Amy, what about the gas shortage we've been hearing about in that area?

Scott: Right, well Charlotte and much of the southeast are in the midst of a gas shortage that's been going on close to three weeks now, after Hurricanes Ike and Gustav took out several refineries. I met people who are really suffering from this, some guys who had to take off a day without pay because there wasn't enough gas to drive their van, a car salesman who said he's had to send customers home with vouchers to come back and fill up their new cars at another time. I'm told the situation is improving, but people are still having to drive around looking for gas, wait in long lines and often pay a lot more.

Jagow: Well, I hope you make it to your next stop.

Scott: So do I, thanks.

Jagow: All right, Amy Scott in Charlotte. Thanks.

Scott: Thanks a lot.

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Ask Nobel Economic winner Robert Mundell, he says Obama's Economic plan is "Lethal".

Mundell, Professor of Economics at Columbia University in New York, has served as an adviser to the United Nations, the IMF, the World Bank, the European Commission, several governments in Latin America and Europe, the Federal Reserve Board, the US Treasury and the Government of Canada. He is considered to be the father of the euro - first proposing a common currency in Europe in the 70s -- and won his Nobel Prize in Economic Science in 1999. His world-wide credentials are impeccable.

Appearing in the Wall Street Journal on (Saturday, June 21 2008), Nobel prize winning economist Robert Mundell suggests that if the Bush tax cuts were scrapped, the U.S. "(would) go into a big recession, a nosedive" which, naturally, "would be devastating to the world economy."

"The world's pre-eminent Nobel Prize winner in Economics has just told us that if we allow the Bush Tax cuts to expire, it will immediately plunge us into a deep recession - much worse that the situation we are currently slowly crawling out of - and will be disastrous to the world's economy for years to come. That world-wide economic disaster is precisely what Barack Obama has proposed."

Electing Senator Obama as President is sort of like putting the fox in charge of the chicken coop !

The corruption and mismanagement at Freddie Mac & Fannie Mae, as disclosed by Federal Regulators, was the root cause of the financial crisis. Frank Raines who headed this organization received $90 million dollars in compensation over five years. He was appointed by Senator Obama to select Vice Presidential running mate, Joe Bieden, who supported The Gramm-Leach-Bliley Act of 1999. Former Congressman Jim Leach of Iowa gave the key note address at the Democratic convention.

A review of Federal Election Commission records back to 1989 reveals Obama in his three complete years in the Senate is the second largest recipient of Freddie Mac and Fannie Mae campaign contributions, behind only Sen. Christopher Dodd, D-Conn., the powerful chairman of the Senate banking committee. Dodd was first elected to the Senate in 1980.


Buying up toxic assets is one thing, but is that going to generate the confidence needed to free up credit and unjam the inter-bank lending log-jam. I believe somebody needs to come up with an FDIC type insurance for interbank lending. I would like to hear other comments in this idea.

I have not heard how many people or households are directly affected by having a non traditional mortgage and can't afford their homes anymore. I am hearing large dollar amounts for the "rescue/bailout" however I don't understand how many "Main Street" american are exposed. Are there $700-800 billion worth of non performing mortgages? Does the language of the "Plan" clearly address people with non performing loans. It seems like we don't have a clear understanding of the magnitude of the exposure. Or at least I have not heard anyone state it. How was the $700-800 billion number calculated? These are probably some of the questions the average "Main Street" american would want to know the answers to in order to formulate an educated position and contact their representatives and senators to support or oppose the "Plan". I don't necessarily think an individual american might have significant influence on their representatives in DC because the group dynamics of the votes probably trump any insight our representatives may get from us. But at least we would be better informed.

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