Jack Welch on CNBC 6AM CT:
In one section that I failed to record, Jack said that in addition to the Paulson plan the Fed may have to "monetize" it.
Here is some of what I captured:
Carl: What does it tell you about the environment we are about to enter?
Jack: We are about to enter the toughest environment that I have ever seen. ... the market environment across every industry -- this thing is slowing -- it's going to be a GDP that is slowing in the third quarter ended the fourth quarter we have a danger of a real precipitous decline and I think the first half of 09 -- the longer this hangup is there's no credit out there -- guys we can't borrow.
Carl: by the hangup you mean the bailout package in Washington?
Jack: the if that stays hung up everyday at stays hung up the risk of this thing staying frozen of real trouble is very very real high. ...
Joe: so you're changing your viewpoint on the fundamental strength of the economy is modified because of this crisis?
Jack: we have gone from one problem to a credit crunch that has taken my view of moderate growth holding our own I'm probably the last holdouts ... the potential for Main Street really getting hurt and this package has got to be sold as a Main Street solution the idea that the bailout is for rich fat cats isn't the selling point. The selling point is the that if we don't get jobs jobs jobs 401(k)s 401(k)s 401(k)s that's the sale.
Carl: did he [Bush] deliver on what he needed to? It seems they were losing the war of words early on?
Jack: I thought he articulated this thing perfectly I would've rather had him bleed a little more so the people could see the intensity of his emotion around this cousin this what he said was all perfect but everyone on the Hill has got a see this is really serious stuff
Joe: what do you think of the job Paulson has been doing?
Jack: Paulson bernanke and Geitner deserve every accolade we can possibly give them this is an incredible job these guys are not letting ideology locks them in they don't work they don't say I tried that and go on to another one. These guys have done a remarkable job -- people don't realize. How close we were to disaster.
Joe: if the money markets and frozen completely, if that had been allowed, to happen, some people say 500 trades away, and the commercial paper market were to be frozen completely, are there major industrial companies, not necessarily GE, GE is going to 10 to 15% of commercial paper now, is there a chance the companies that are not financials could have had a problem funding their operations?
Jack: there is no question that if you had a short-term need, at that point in time you would've had a big hickup.
Joe: are there times -- yet the go chapter -- two big companies need to protect themselves from creditors?
Jack: I think something would've happened -- those guys wouldn't have sat there -- I'm not to take this position -- they would've done something else.
Joe: wouldn't have let that happen speaking
Jack: if we didn't have guys that really knew what they're doing, that is studied the depression in the case of bernanke, that no Wall Street like Paulson, that understand Wall Street deal in cool ways like Geitner, we would not be feeling as good as we do today even with the troubles out there so we have a team doing this and the idea that we're getting picked here and pick their and we have a week to debate and do your thing, but let's get it done Friday or Monday at the latest.
Karl: is it clear to you is it clear to you that if the package happens whether it's this week our next that the pipes open up?
Jack: no. I hope so, I believe so, I'm led to believe by great people it will. I don't think any -- look we may have to modify this move. We are in uncharted waters here -- but we got people that know the water and when the storm comes if it's a tropical storm turning into a hurricane they seem to be able to shift the boat to deal with this issue, the thing I like about this team so much we're not thinking about enough is -- the inherent lack of rigidity. These guys are trying things and working with it. They're all smart as hell. So ya smart guys working the problem area.look we've been through RTC, we've been through Black Monday -- all these things. Smart guys figure it out. This happens to be a little more complex. A few more moving parts. The globalization piece -- but the thing about this that's good is we don't have rigid bureaucrats. We've got bright smart well-intentioned people.
Joe: Schumer?
Jack: Schumer was surprisingly good. I happen to like him and he was right on point.
Joe: 700 billion -- that's a significant number.
Jack: it's not a check -- I'm not giving you $700 billion. I'm investing $700 billion.
Joe: I saw somewhere that it's $35 billion a year in debt service. That's nothing.
Jack: it's a chip shot.
Carl: Bernanke seems to not want to go with fire sale prices, right? And go to this hold to maturity strategy? Why should we give anyone any more money than we absolutely have to?
Jack: because they've got to see horsepower. You've got to see real horsepower there. You start giving it out like Chiclets from a chewing gum box -- are they out of Chiclets? -- are they to stop them from giving another chew? -- don't end up going to a knife fight with a water pistol. You don't want to you want to have a howitzer.
Note - dictated to DNS (NUAN dictation product latest edition) quickly and not checked |
