Mind Over Market

Watch CBS Videos Online Here is the text of the CBS News' 60 Minutes segment "Financial WMDs" that was broadcast August 30, 2009 The Bet That Blew Up Wall Street Steve Kroft On Credit Default Swaps And Their Central Role In The Unfolding Economic Crisis Note: This story was first published on Oct. 26, 2008. It was updated on Aug. 27, 2009. Anyone with more than a casual interest in why their 401(k) has tanked over the past year knows that it's because of the global credit crisis. It was triggered by the collapse of the housing market in the United States and magnified worldwide by the sale of complicated investments that Warren Buffett once labeled financial weapons of mass destruction. They are called credit derivatives or credit default swaps. As correspondent Steve Kroft first reported last fall, they are essentially side bets on the performance of the U.S. mortgage markets and some of the biggest financial institutions in the world - a form of legalized gambling ...

The U.S. Government Accountability Office spent a year reviewing alternative retirement plan designs abroad and proposals for new plan designs in the United States to determine which features in these plans could potentially address retirement risks currently faced by American workers. GAO modeled the impact on retirement income potential from defined contribution plans in three scenarios: mandated universal access, automatic enrollment, and mandated employee participation. GAO found that universal access and mandated employee participation together would increase the share of workers with some defined contribution plan savings at retirement from a current 67 percent level to 97 percent. It would raise the equivalent annuity benefit from a baseline of $15,217 a year to $21,312 a year. In a scenario where there is mandated access and automatic enrollment, but no required employee participation, the results are almost as impressive: the share of workers with savings at retirement rises t...

Deutsche Bank estimates that 14 million, or 26 percent of homeowners with mortgages, owed more than their house is worth in the first quarter of 2009. An estimated further 14 percent decline in home prices will drive up the number of homeowners with negative equity to 25 million or 48 percent of mortgagors by the first quarter of 2011, the bank forecasts. By Robert Stowe England August 20, 2009 Hopes that the housing market is now beginning to stabilize have been dampened by the release of a Deutsche Bank forecast on the level of negative equity among U.S. homeowners with mortgages. The study, "Drowning in Debt -- A Look at 'Underwater' Homeowners," was authored by Karen Weaver and Ying Shen at Deutsche Bank's U.S. research unit and can be found at this link: http://www.scribd.com/doc/18206788/Deutsche-Bank-Securitization-Reports-Drowning-in-Debt-A-Look-at-Underwater-Homeowners Based on analysis of data on 6.7 million non-agency loans compiled by First American Co...

The chairman of the Federal Deposit Insurance Corporation shares her views on navigating the banking system through the current financial market crisis. By Robert Stowe England Mortgage Banking August 2009 Sheila C. Bair was sworn in as chairman of the Federal Deposit Insurance Corporation (FDIC) on June 26, 2006, for a five-year term. As FDIC chairman, she has presided over an exceedingly tumultuous period in the nation’s financial sector. She has helped transform the agency with programs that provide temporary liquidity guarantees, increases in deposit insurance limits and systematic mortgage loan-modification relief for troubled borrowers. Before joining FDIC, she was Dean’s Professor of Financial Regulatory Policy for the Isenberg School of Management at the University of Massachusetts at Amherst from 2002 to 2006. While there, she served on the FDIC’s Advisory Committee on Banking Policy. Prior to taking the helm at FDIC, Chairman Bair had considerable experience in government. Sh...