GLENN BECK PROGRAM
GLENN: 888-727-BECK. I can't say that he's a friend of mine. I would like to say that someday I can call him a friend of mine. Neil Cavuto, one of the straight-up good guys on the planet today is a guest on the program here. Hello, Neil, how are you?
CAVUTO: Hey, Glenn, I'm calling you a friend. I'm just running with it. So I mean, it's working for me.
FOX Business Network
GLENN: I am as well. I have to tell you, Neil -- well, first let me get into the business of the day. I wanted to have you on because I'm not a real optimist on the economy. I am a guy who, I believe in America, I believe in capitalism. You know, I'm a Ronald Reagan guy, I really am. However, I think we're facing a real storm of things that are all starting to come together that are just going to be a real problem for us if we don't make all of the right moves or if there's any additional pressure put on your economy and I've been warning, look out, look out, this stuff with the banks and liquidity is a real problem and everybody is in denial on it, everybody's being, you know, oh, Glenn, you're being Chicken Little. I don't think I am. I didn't want to get somebody who's more pessimistic on the economy than I am. I wanted to get an optimist on. Explain what is going on now with the world's central banks doing something they never do. The last time they did this, correct me if I'm wrong, was after September 11th.
CAVUTO: That's right, that's right. You're right to be concerned about what could happen. I'm equally concerned about the moves, Glenn, that could make things much worse. I'm not in the camp, Glenn, that says all mortgages are melting down. I'm not in the camp that says we've got housing -- because I also look at all the numbers and I realize that 95% of mortgages are being paid each month, month to month on time and that even among sub prime mortgages, Glenn, close to 9 out of 10 of those are being paid on time.
CAVUTO: So having said that what I worry about is the perspective that some in Washington lack and for the bulk of the few who aren't paying their mortgages -- and it's a record few. I don't want to minimize it. We are going to make things worse for the overwhelming vast majority who are. That's where I share your concern because Washington in its infinite wisdom could really complicate this. They could set up programs and the like to bail out homeowners and lenders that for years, for decades to cut a freeze on housing, but you must, must, must be careful of that.
Now, I also worry when central banks around the world get together and throw in a lot of money to short the banking system because what effectively they are doing, Glenn, is trying to encourage lending or provide the money and the reassurances effective there so people can lend. People have to take the lump on that. You can't force someone to spend their money. You can't -- although my wife says it's relatively easy to do. You can't force that issue. So now we have to see whether banks respond to this sudden flood of money coming in.
GLENN: Okay. Here's the thing that I am concerned about. It is -- the reason why, and please correct me where I'm wrong. The reason why they are trying to free up more money is because these banks are -- a lot of it is fear. They have to make sure that they can cover anything that might go bad and so what they're doing is they are cutting back. It's harder and harder to get short-term loans which are like 30-day loans to where if I've got some vegetables that need to get to market, I usually go to my bank and I say, hey, you know, I need the loan. 30 days it gets to trucking, to move things here and there. And that money is drying up. And when you dry up that money, then you've got a real problem. When businesses can't get that 30-day loan, am I right on that?
CAVUTO: Well, I think stepping back from this, we're talking $40 billion. I know that is the pooled money that is going to be available here. $40 billion sounds like a great deal of money, Glenn. Trust me I'm not trying to minimize what's going on here. I am saying, though, we're talking about $5 trillion worth of monies available to lend. So you've thrown $40 billion into the mix to encourage people to sort of, you know, dip their toes in the water and lend either on a short, medium or longer term basis to someone else. Now, like CNBC here, I think what's going on is skittishness and the lender is skittish to lend, the borrower is skittish to borrow and these central banks are trying to get the two together. They are trying to make it less of an issue for the lender to lend and less of an issue for the borrower to borrow. I'm trying to minimize it but I think what they are trying to do is to get past the fear. That does not mean there is no money available. There's a great deal of money available. You can look in the newspaper on any day and see the deals are popping for those who can put down 15 to 20% on a home or who meet the criteria to get a loan. For those type of people, there is no shortage of loan proceeds available. But even -- the trouble is those people are the ones who are saying, you know what, I don't know, I don't know. Very smart people, very wealthy people I know are telling me, Neil, you know, I was thinking about getting that vacation home. I'm not so sure right now. So I'm holding back. These are people who can afford and put down the down payment and not pay for the whole thing in cash, but they are just leery. So I think what central banks are trying to do, what the President is trying to do in the omnibus package, you know, to help lenders to get over the help and borrowers to get over the hump is to say, guys, the water's okay, try it. The great thing we have to get past now, Glenn, is convincing people on both sides of the deal to agree.
GLENN: Well, but you also have the problem, and I'm sorry, I apologize because we are turning into CNBC here for a second.
CAVUTO: That would never happen to you, Glenn.
GLENN: But I am concerned because -- did you read Amity Shlaes' book?
CAVUTO: Yes, I did.
GLENN: Okay. We're making the same damn mistakes that we made in the Great Depression. We've got people -- we've got politicians proposing the same kinds of things that we were proposing in the Great Depression.
CAVUTO: Right. And as she points out, we historically go through this every couple of decades and we've done this with, of course, the savings and loans back in the Eighties, we've done it with Chrysler, we've done it with Continental bank. When things get tough, we look for Draconian steps. Unfortunately we do it after the animals have left the barn. So you lock the barn good, you got the double, you know, barrel shotgun outside just in case. But the animals aren't there.
GLENN: Is it --
CAVUTO: And that is what I worry about, that the cure is worse than the disease.
GLENN: Okay. I have been saying get out of debt, just get out of debt. Part of the problem with our country is our country is, you know, spending money like Paris Hilton at a night vision video store, and we've got to stop doing that. Wrong advice, too panicky advice?
CAVUTO: Well, since I'm living in a big glass house, I'm not going to take you on on that. But I think it's true. The problem when you get out of debt is the process of getting out of debt means you free spending of an economy and when you free spending in the economy, all of a sudden the --
GLENN: I've got a small enough audience, we're not going to affect the economy.
CAVUTO: I'm not so sure about that. You have a certain best seller out there.
GLENN: I'm just saying that if, for instance, you know, don't go out and -- go buy Christmas presents. Just don't put yourself deeper into debt. Just spend at your means. Buy something that's, I don't know, $26, you know.
CAVUTO: Right, right.
GLENN: Down at the bookstore.
CAVUTO: I think this is the time everyone who buys gifts, get that thing that says "As seen on TV. "
GLENN: I think you are exactly right. All right, Neil, I want to -- and I hope this is okay with you. I guess I should have asked this prior, but I have to tell you I think I have more respect for you than anyone I have ever met in television, and I know that's not saying very much.
CAVUTO: Then you must get out more.
GLENN: I know. But you are a remarkable man. Most people don't know. I mean, they know if they read your book, that you have MS. What I didn't know is that -- may I share what happens to you sometimes?
GLENN: What you may not know if you've ever watched Neil Cavuto is sometimes his legs don't work, sometimes his arms don't work, sometimes he will go completely blind during a show for 45 minutes and just keeps going.
CAVUTO: It's a highly rated show because then they know, hey, this guy seems to be freaking out.
GLENN: Right. I think it would be kind of neat if I -- I mean, you might want to play a little game, like a game.
CAVUTO: I have. People react to it. I'm like the crazy uncle at the Christmas dinner and then we just say, hey, he's really out of it, you know.
GLENN: When somebody says, oh, Neil Cavuto, he's blind as a bat, you can say, sometimes I am.
CAVUTO: Absolutely right.
GLENN: Yeah. I just have a ton of respect for you. You know, I know you have overcome so many things and you keep getting hit with things and it never, ever stops you.
CAVUTO: That's the pot calling the kettle black, my mind. I know it sounds like mutual in my society but my wife is a huge, huge, huge fan of yours and she's tickled pink to meet you on certain occasions and, man, hasn't stopped talked about it.
GLENN: I have to tell you it's a cross I bear. I apologize. I wreck so many marriages, I really do. It's just chicks dig me.
CAVUTO: You're preaching to the choir, buddy.
GLENN: All right, Neil, thanks a lot, man. I appreciate you being on. We'll talk again soon, my friend.
CAVUTO: All right. Be well.