Steve Syre

Tom Finneran -- Todd Feinberg here on the -- time show on Tuesday. They have succeeded WRKO listeners know that everyday at this time we do the Boston business report with the Boston Globe Steve -- today's edition. Of the business report is brought to you by TD bank analysts to remember the FDIC's stopped by today for a safe. High yield CD with TD BankNorth Steve's -- have you ever seen a week like this at all in North Korea.

You know although I thought last week was pretty hotel.

Op op that was bridge random but the big leagues --

It -- yeah absolutely. Well now that we have everybody in a Roman Washington everything will be -- What as I told you yesterday contacted both the longer that this story because -- in Washington and it's political it's sort of walk away from me and you know I spent most of my time looking at the markets and -- this week that the markets haven't been doing that well it hasn't been anything dramatic but particularly in the last day or two if you look at death. Credit market for things that thing that that triggered everybody's rush to get something done was what happened last week last Wednesday when. When it when it looked like everything was just gonna. Breed and its staff and we're not nearly bare -- But the quality of things are declining it's getting. Are harder and harder to trade things and that banks seem to be. Holding onto money even more than usual and and I think that's a reflection of kind of sort of the ball bouncing around Washington.

Yeah this is a period of kind of a grace period where everybody's doing their best to stand in place but it's hard to stand in place.

Bright while I also think that it it it's another indication why do whatever it actually looks like something we'll get done pretty well because -- if you look at kind of we're. Lending in credit markets are right now and even the stock market it's pretty clear that you know if you. If installer or you don't get something done in the short term that that that accent was over your head last week is is still around and it's gonna be back soon and you know it as much as everybody. -- different parts of what's on the table right now. Everybody realizes what the price not and they.

Hey Steve of front page story in the globe I gotta say that's you know I have my fun poking fun at you guys but. You folks have been putting extraordinary resources on it and one of the great reporters -- adviser. Is set talking about the local implications of this the headline on the front page says -- all state facing budget woes as a local aid payment becomes do I read in the end. That we eat the commonwealth we're going to be paying three times the normal rate of interest. And we're going to have to go back out onto the marketplace for even more money just to make a local it payment within the next week. What I think is going on.

is exactly the kind of thing we're talking about. I'm not an expert in how we actually funding is local aid. Things I -- I I think that it's not that usual pressed to borrow short term to plug some of these all of the question is. You know how accessible is the money what do you have to pay for it and you know we could get it's not huge money but it's it. Yesterday we we are about fifty million in debt. You know another 350 we have to borrow it that's real money immediately but in the context of huge budget it's not that statement still. You know we're we're going out we're paying 6% for money that usually costs 2% this is essentially short term borrowing by the by. What in short term. World does rock solid credit in the state of Massachusetts and that. This is a reflection of how we locked in anyone is -- loan money right now and you know that's I just. In your face example write your -- You know.

to throw a little bit more spice into it there also dividends of the rainy day fund earlier than they had to. I projects are you redress payments the but what they've budgeted for interest payments is going to be thrown out of whack. The a timetable on withdrawals from the rainy day fund. Thrown out of -- this is I mean the only reason this is not dreadful pop by the up so you know top headline is because the other headlines in Washington Wall Street. Are even more ominous but this is a terrible but are the.

Real question though is how much linkage there is not just between the money flow problems but also that the federal government's. In in the markets and Wall Street are -- financial issues and the states are having financial issues at what point does do those things all start to come together. And feed on each other -- the Wall Street thing isn't in isolation. But maybe we're gonna have states start to go bankrupt or municipalities start to go back.

The states that a silly in Massachusetts might have to be included in that if you've built the budget that is somewhat dependent upon capital -- she should be checked in to a a unit at the -- and it is lousy it is dumb it is reckless you're responsible budget -- that -- out some because it's -- so much volatility it is absolutely incredible and there are some people have been talking about this -- and and -- KL has been blowing you know kind of warning signals that he is upset at the last couple years anyway in the spending his -- but it has --

It yet as you point out which you know we're we're always in the credit markets borrowing money and -- just that -- the week and immediately after Labor Day we were talking about. How the state was going out with a bond issue of the general obligation bond issue and that. Kato and his staff work. Worried about sort of you know what the demand would be whether. Traditional borrowers institutions would there aren't going to be interested in taking that money. And this debate. Ended up. Stealing a program essentially it was attempted first and cal yeah yeah yeah which was basically we're going to replace some of those buyers by we're going to try to bang the drum and get more. Retail business individual investors doing that they did a lot of stuff online and elsewhere to make it easier for individuals to buy. Of those bonds and back to work but it's I think it get their money and to a much greater degree than normal. Individuals. Purchased those bonds I think it was about fifty cents for every dollar they raised. Came from retail investors.

And I I recall there a number web sites that they had done up Steve your report to -- your conversation with us. He indicated that you would actually gone online visited the web sites the fidelity one I think he told us was most impressive made it easy for those of us who have civilian -- if you will. -- and good for Tim Cahill for broadening the base Brent but today's story indicates that.

Hi I'd just got he got his money edit edit opportune time I think he was going out with a 600 billion dollar bond -- tomorrow. It would be a different story.

Yeah for sure for sure. What are you expect are coming out of Washington Steve any do you have any sense of you know the possibilities with three guide to what kind -- a timeline first of all. In anything did you expect anything unique Iran usual. From either Barack Obama -- John McCain's presence.

You know the last part I don't see anything dramatic happening there. And it and again you know it ultimately sort of how Washington works and what timetable is is ultimately. It's not my expertise but I I think I'd go back to this issue about. What what was it that boost everybody big time last week it was this market issue. And I I'd watch it -- I think it's slowly creeping back that that's going to become you know another cattle -- so if as it looks like things might be slowing down is something out there. That might push things along.

You know they're coming you know they want to steal desperately dangerous in Washington if Americans are actually aware of any issue their voting on the -- and or panic and they -- double panic if the Americans or were actually care about it. And I and our emotional so there are -- polls that show 25% of the people support the bailout. And they suddenly decide they have to change the words so it's not called a -- on anymore. And they have to put a bunch of restrictions and there are probably one of any teeth in order to make it look like they're protecting the people. But there -- get a deal done.

You know we we've been talking about it did did. Who is going to get what you're in and and investment banks and and training Freddie and all that but no we haven't talked that much about is. Banks that are in trouble regular commercial banks in the FDIC right now and you know the F yes it is in a position where if it's essentially a government backed. Insurance company and it collects premiums from banks and it -- off obviously deposit insurance of banks fail. And it has I'd give money for normal times which were clearly not in at this point. There was bank in California indymac that that went down earlier that took a big bite out of the FDIC's reserves -- was. A bank that all all the real short of the countrywide was generating in -- you know why that was allowed to go on I'm not sure but there you go. But there are a lot of banks out there that are going to go -- this is not exclusively on a Wall Street deal. A lot of banks were holding -- securities and in terms of how the housing problems affecting the really big ones that there's this big bank Washington Mutual which doesn't have a huge presence here but it. The biggest savings what the -- in the country and they've been trying to sell themselves. Desperately for the last week or so it can't get it done in the government right now is jumping in and trying to brokered deal somehow that's in this an indication of sort of you know how dire their situation get.

Really good -- this that's a big part of what this legislation is all about is trying to figure out a way to duel one stock measure. To put the power in the hands of the Fed and ordered to deal with these that they see comin' down the pike.

Absolutely but I I think my point here is that -- it's not their problems all over the place you know. They're right now you know the FDIC has something like 45 billion dollars which certainly sounds like a lot of money to -- that. It in reserves but you know it's just for scale a bank like Washington Mutual as a single largest personal -- country. Has 300 billion in assets if that fails.

Yeah yeah -- should all be looking to buy gold today -- yesterday to put an -- based precious -- all left it is everybody is spending on this is like a -- a dubbed the balance -- of America it's absolutely insane it really is it's insane -- this is fabulous like us Kyra the worse it gets founded the -- tickets for Todd -- and -- responded -- we -- look forward -- tomorrow's. Version tomorrow's addition of the Boston business report what the Boston Globe Steve's site every -- at today's edition has been brought to you by TD bank -- they Arab member of the FDIC stopped by today for a safe. High -- CD for a TD bank brought back in a moment on. AM 680 WRKO.