CNBC "WALL STREET IN CRISIS"- Transcript
MR. KUDLOW: All right. Now we welcome Republican Senator Bob Corker of Tennessee. He's a member of the Senate Banking Committee. He's going to hear all the big wigs.
Mr. Corker, thank you, sir, very much.
SEN. CORKER: Larry, glad to be with you.
MR. KUDLOW: Let me just ask you a quick one. You know there's a conservative revolt. Newt Gingrich calling this the "mother of all bailouts." Let me just ask you, do you guy the Treasury view that without their rescue plan, we would have an American and global banking meltdown? Is that view too slick, or do you buy it?
SEN. CORKER: I don't know. I sat yesterday for an hour and 15 minutes with Hank Paulson and Ben Bernanke in my office. And certainly, Chairman Bernanke seems very concerned. Paulson is more looking to a solution. But I think there are serious concerns. I do think we need something better than three people sitting in a room on Sundays deciding which company's going to be nationalized and which isn't.
But it's interesting listening to the people talking with you prior to me being on. The debate now has narrowed, unfortunately, to all the edges. You know, what are the accouterments, if you will, of this bill? What's not happening is a debate about whether this is in fact the right solution.
MR. KUDLOW: Yeah, that's the part. Thank you for that. I just think that's the part that's missing. I don't think anybody -- I mean, you know, they're backing up the money market funds. That was the trigger. When the money market fund up in New York started to go down, you know, went below $1 to 97 cents, redemptions were pouring in, it seems to me that was the trigger for the global meltdown. Now that that's backstopped, I just wonder whether we shouldn't be talking about this so-called global meltdown, and maybe we're rushing headlong into something that doesn't need to be rushed into.
SEN. CORKER: You know, I'm spending a lot of time talking to people out in the market. I mean, as you've discussed earlier, the financials dropped 12 percent today. Was that because they think this plan is not a good one? Was it because, as you mention, the mark to market or what they actually sell their assets for is going to be lower? What is the reason for that?
But I have to tell you, I'm one of those people that is in the middle of this. I'm trying to figure out, you know, is this in fact the right concept. I will tell you, Paulson is -- this is a freight train, let's face it. I mean, I think people feel under pressure to take a position and vote yes or no by the end of this week, a major, major decision that's not just going to have an impact on what happens in America and the world today, but this is setting precedence for the future.
But again, there's no debate about the main concept, Larry, which to me is the most important thing. All these other things are just window dressing, aren't they?
MR. KUDLOW: Senator, just let me ask you, we're going to hear more tomorrow about the case for this big plan. But just quickly, poison pills, yes or no, executive compensation limitations, more money for foreclosure protection for homeowners, what's your take? Are those poison pills? Are those deal breakers?
SEN. CORKER: The foreclosure piece, to me, falls into the area of loading it up. That's not what this should be about this week. I'm very concerned about some of the add-ons like that that can be very costly and, again, not hit at the liquidity issue we're talking about right now in these assets. The compensation piece, look, I can understand the tremendous resentment that people have when they see what was happening at Fannie and Freddie. This is a little different. And every case is different. This is a huge market. You know, there may be some limitations that ought to be discussed, but I understand what that does in these companies, what it does to the decision-makers as far as making the right decisions.
MR. KUDLOW: Senator Corker, we thank you for your time, sir. Thanks very much.
SEN. CORKER: Thank you.