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American Morning

Oil Prices Surge to New Highs; Breastfeeding With Asthma; Racial Injustice? Death Penalty Disparity

Aired November 01, 2007 - 08:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEOTAPE)
KIRAN CHETRY, CNN ANCHOR (voice over): Multimillion-dollar punishment.

UNIDENTIFIED GROUP (singing): God hates America...

CHETRY: A jury's message at protesters at military funerals and the marine dad who took them on.

ALBERT SNYDER, FATHER OF FALLEN MARINE: I couldn't let them get away with doing this to our military.

CHETRY: In the dog house. "Dog the Bounty Hunter" off the air right now, caught spewing racial insults.

Plus, a happy reunion. A family burned out of their home and the best friend they thought they lost.

UNIDENTIFIED MALE: He's something else. He's more -- you know, part of the family than an animal.

CHETRY: Together again on this AMERICAN MORNING. .

(END VIDEOTAPE)

JOHN ROBERTS, CNN ANCHOR: And good morning. Thanks very much for joining us on this Thursday, the 1st of November. A brand new month, wipe the slate clean.

I'm John Roberts.

CHETRY: And I'm Kiran Chetry. Glad you're with us.

Well, a fundamentalist Kansas church is now paying a heavy price for protesting a military funeral. A federal jury now ordering the Westboro Baptist Church to pay the father of a marine who was killed in Iraq nearly $11 million. Church members picket military funerals. They claim that the Iraq war is punishment for America's tolerance of homosexuality.

Well, earlier on AMERICAN MORNING, I talked to the marine's father and asked what his reaction was to that stunning jury award.

(BEGIN VIDEO CLIP) SNYDER: I was very happy. I think the first thing I thought about was my son Matt. I don't think there is anything more private than a -- than funeral. And, you know, frankly, I don't care where these people protest, to be honest with you, but not at a funnel.

(END VIDEO CLIP)

CHETRY: Well, Al Snyder says that the lawsuit was about decency, not money. He's hoping that other families don't have to deal with that type of torment on top of grief. The church though plans to appeal and says it will continue protesting at funerals despite losing this lawsuit.

ROBERTS: The bounty hunter, Duane "Dog" Chapman, now apologizing after he was caught on tape on an offensive tirade. The Web site for "The National Enquirer" has two recorded telephone conversations, it says, of Chapman raging against his son's black girlfriend.

The Enquirer doesn't say how it obtained the tape, but it is loaded with the N-word and other offensive words. Take a listen.

(BEGIN AUDIO CLIP)

DUANE "DOG" CHAPMAN: It's not because she's black. It's because we use the word (EXPLETIVE DELETED) sometimes here. I'm not gonna take a chance ever in life of losing everything I've worked for 30 years because some (EXPLETIVE DELETED) heard us say (EXPLETIVE DELETED) and turned us in to the "Enquirer" magazine.

Our career is over. I'm not taking that chance at all.

(END AUDIO CLIP)

ROBERTS: Doubly ironic, then, it was the Enquirer that got a hold of that tape.

This morning, Chapman released a statement saying, "My sincerest, heartfelt apologies go out to every person I have offended for my regrettable use of very inappropriate language. I am deeply disappointed in myself for speaking out of anger to my son and using such a hateful term in a private phone conversation."

"It was completely taking out of context," he says. "I was disappointed in his choice of a friend, not due to her race, but her character. However, I should have never used that term."

A&E has announced that it is suspending production of Duane Chapman's show.

We saw thousands pack the tiny town of Jena, Louisiana, to say that justice is not colorblind. We heard cries of injustice in Georgia during Genarlow Wilson's legal struggle. Now one radio talk show host is calling on the African-American community to protest the legal system by not spending a dime tomorrow.

Warren Ballentine is calling it the blackout. He's asking listeners to stay out of the stores because of the way that the government is handling hate crimes.

And the symbols of hate keep appearing. Police in New York City are investigating another one at Columbia University. They say a Jewish professor at Columbia's Teachers College found a swastika painted on her office door yesterday. Just last month, you'll remember a black professor at the Teachers College discovered a noose on her office door.

On Long Island, New York, another noose around a black mannequin's head. Police say it was found outside of a home, along with a piece of paper with the N-word scribbled on it. At least two nooses have turned up on Long Island in recent weeks.

And is this noose display OK? It's part Halloween display in Florida, but it's a man hanging from a tree, and it appears to be a white man. The couple says it's not meant to offend anyone, it's just Halloween. But the sheriff is getting a few complaints about it. The state attorney's office told sheriff's deputies the decoration is covered under freedom of expression.

Well, CNN is taking a look at the noose and its violent history in "The Noose: An American Nightmare." Kyra Phillips investigates in a special tonight at 8:00 p.m. Eastern -- Kiran.

CHETRY: Well, another toy made in China recalled because of lead paint. This time it's 16,000 toy soldiers and tanks sold by Toys "R" Us called Elite Operations for possible lead paint. For the latest information on toy recalls, visit our Web site, CNN.com/am.

The head of the agency behind those recalls, the Consumer Product Safety Commission, is under fire. House Speaker Nancy Pelosi calling for CPSC chairperson Nancy Nord to step down. Pelosi criticized Nord for opposing a bill that would boost the CPSC.

Earlier on AMERICAN MORNING, I asked Nord why she opposes that bill.

(BEGIN VIDEO CLIP)

NANCY NORD, CPSC: I pointed out the Senate bill is imposing a number of new requirements on our agency. Many of them take us away from our core missions in that they have not provided sufficient funding for us to do that new job, as well as the job that we were set up to do.

(END VIDEO CLIP)

CHETRY: Nord says that her agency needs more safety inspectors but that some provisions of the Senate bill would hinder its efforts to inspect toys -- John.

(NEWSBREAK)

(WEATHER REPORT)

CHETRY: Well, oil prices surge to new highs. Ali Velshi is at the Business Update Desk with more on that.

I see you still haven't been able to change your barrel.

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: . No. And in fact, I'm not going to change that number until oil starts trading again in just a little over an hour in New York, because that's the number at which it settled yesterday, $94.53. It's the highest price that oil has ever settled at.

Now, the reason, Kiran, you're mentioning this is because overnight -- oil trades electronically around the world. It went past $94, past $95, past $96. Right now we're looking at about $95.26 for a barrel of oil. That, of course, is going to pass its way through to gasoline prices and to heating oil prices.

So we're looking at that, and come 9:30, we will change that to see what else is going on.

We're also just getting word in from Exxon Mobil, the world's largest oil company. Its earnings are in for the quarter -- $9.4 billion. By the way, that's down 10 percent.

So, with these kind of oil prices, even Exxon Mobil says it's not making as much money. Quite an issue as to how that actually works out.

We also have some other records for you. This is my bar of gold. Gold ended up $7.70 higher yesterday, to settle at $792 an ounce. We're seeing that go higher as well.

That typically is an indicator that inflation could be around the corner. It also talks about the fact that the U.S. dollar went down again after the Federal Reserve cut rates yesterday.

So a very mixed picture when it comes to the economy and how it relates to your wallet -- Kiran.

CHETRY: All right.

Ali Velshi, thanks so much for that.

There's also a new study out about breastfeeding. It looks at what happens when a mom has asthma.

Medical Correspondent Elizabeth Cohen is at the Medical Update Desk right now.

You know, you hear so often breastfeeding is best, it's the best thing for the baby. But what about when a mom has asthma?

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Well, Kiran, I've got to tell you, I think we're going to see pigs flying, because here are medical authorities saying something kind of negative about breastfeeding. You don't hear that very often.

What they found in this study is that moms with asthma when they breastfed their babies for four months or more, and when they looked at those babies later in life, those kids were more likely to have coughing and wheezing problems and actual -- actually had decreased lung function. Now, in fact, the babies who were fed formula by their asthmatic mothers were better off. Can you believe that?

They don't know why this happens to babies with asthmatic mothers. Usually breastfeeding improves lung function -- Kiran.

CHETRY: Right. So that's the confusing part about this. But if you know you have asthma, if you're a mom and you have asthma, should you either, A, stop breastfeeding or, B, just don't consider breastfeeding as an option?

COHEN: You know what, Kiran? Every single pediatrician we talked to said do not stop breastfeeding. You absolutely should breastfeed even if you have asthma. They said this is just one study and breastfeeding has so many advantages, that they said even if this is true, still breastfeed your baby.

CHETRY: And also, you know, if you are breastfeeding and you do have asthma, you take asthma medication, many people do. Is that harmful? Do they worry about that getting in to the breast milk?

COHEN: No, the doctors we talked to said keep taking your asthma medications. It is OK for you, it is OK for the baby.

CHETRY: All right.

Elizabeth Cohen, thanks so much.

COHEN: Thanks.

(NEWSBREAK)

(COMMERCIAL BREAK)

CHETRY: Well, dramatic images coming in all night from Tropical Storm Noel. Devastating floods and mudslides in the Dominican Republic, knee-deep water in the roads. People jumping in rowboats to get around to help others. The storm has killed at least 80 people in the Dominican Republic, Haiti and Cuba.

Well, ominous signs on the shores of the storm's next potential target. This was shot by an I-Reporter, Teresa Vercimak, who is vacationing on Paradise Island in the Bahamas. The ocean slamming the seawall. She says she has also been watching branches fly off of trees.

And waves are crashing on Ocean Boulevard in Ft. Lauderdale. Our I-Reporter Rob Orcutt took this picture. Tropical Storm Noel doing a number on the area in terms of beach erosion even though it has not yet made landfall there -- John.

ROBERTS: Radio talk show host Warren Ballentine is calling on his listeners and all African-Americans to not buy anything tomorrow. He is calling it a blackout to protest against what he says are injustices in the legal system, such as the vast disparity in how the death penalty is carried out.

AMERICAN MORNING legal contributor Sunny Hostin joins me now.

Good morning to you, Sunny.

SUNNY HOSTIN, AMERICAN MORNING LEGAL CONTRIBUTOR: Good morning.

ROBERTS: The American Bar Association is calling for a moratorium on all executions pointing to racial disparity as one of the reasons why.

What evidence do they have to back that up?

HOSTIN: They have quite a bit, actually. I mean, they've determined the death penalty, the process is flawed.

They did a three-year review covering eight states and they found several, several statistics. One, that DNA evidence is not always collected and preserved. And that's very important. We know that over 200 inmates have been, you know, exonerated by the Innocence Project.

They also found that eyewitnesses are getting it wrong, they're ID'ing the wrong people. And as a prosecutor, I saw that. And that's a very, very important statistic.

They also found that defendants are giving false confessions, and we think that that is really not the case anymore, but it really is. Sometimes defendants with a lower I.Q., are under a lot of pressure by law enforcement, do admit to committing crimes that they haven't committed.

And then finally, they found that death sentences when the victim is white are usually the case. However, when the victim is black, that doesn't always happen.

ROBERTS: Yes. In fact, let's drill down into the statistics just a little bit deeper.

I was on death penalty information Web site today. They found that in cases of interracial murder, where there's a white defendant and a black victim, there were 15 cases of execution carried out. But when there's a black defendant and a white victim, that number jumps to 223.

Now, I also found out that the majority of executions are people who are White, and that the greater number of people who are on death row are White. But you would expect that because of the greater number of the population.

HOSTIN: Exactly.

ROBERTS: But when you look at those interracial numbers, we see a real disparity there.

HOSTIN: A real disparity. It's startling. It's cause for a lot of concern. If we, as a society, are going to have the death penalty, it has to be meted out appropriately, fairly, accurately. The process is flawed, and that is what the ABA has found.

ROBERTS: You know, one of the other complaints we hear from the African community as well is this disparity in sentencing guidelines between powdered cocaine and crack cocaine. How did those sentences guidelines come about, and do they disproportionately affect the African-American community?

HOSTIN: Well, first of all, the sentencing guidelines are problematic, and we now know that they're advisory. But judges are still following them, prosecutors are still pushing it.

It used to be that crack in the '80s, you know, that was sort of a big epidemic and it really affected the African-American community more than other communities. And what we found is that the majority of crack offenders were black, the majority of cocaine in its powder form were white.

Crack offenders for let's say a candy bar size, would go to jail for 10 years. You would have to have a briefcase full of powder cocaine to get the same amount of time. Very inappropriate, very -- not equal.

ROBERTS: Right. And today is significant because those sentencing guidelines are changing.

HOSTIN: Yes.

ROBERTS: Now, activists have been calling for parity in the sentencing guidelines. They didn't quite get there, but they did go some distance.

Where did they go with this?

HOSTIN: They did. They got a two-level reduction.

Anyone that knows anything about the sentencing guidelines, sort of formulaic. It's a formula, and so you have different levels.

Two levels means 15 months. So I think we're going to see a lot of people asking to be freed. And they should be because, really, again, in our justice system, it has to be fair, accurate, and it to be equal.

ROBERTS: But we should point out though that at the moment, the change in the guidelines is not retroactive.

HOSTIN: True.

ROBERTS: It's sort of from today forward.

HOSTIN: That's right.

ROBERTS: Is there a case to be made, as you said, for all of those people who are in jail right now? HOSTIN: People are going to make the case. I don't know that it will be successful, but the courts are going to be reviewing that, and it may be retroactive. We're going to see a lot of litigation about that.

ROBERTS: All right. Interesting stuff.

Sunny Hostin, always great to see you.

HOSTIN: Great to be here.

ROBERTS: Thanks for dropping by -- Kiran.

(NEWSBREAK)

(COMMERCIAL BREAK)

ROBERTS: Just turning 23 minutes after the hour. Ali Velshi here "Minding Your Business" this morning.

Good morning, Ali.

VELSHI: Good morning to you all. It's been a very, very busy day or busy 24 hours in terms of business news.

We had this Fed cut yesterday. We saw oil peaking again above -- $94 is where it closed, then we went above $95 and $96 overnight.

We also saw -- because of the Fed cut, you saw the dollar dropping again. And they're all connected.

So the Fed cutting rates pushes the dollar down, which pushes the price of oil up. And this morning we have earnings from the world's biggest oil company, Exxon Mobil, coming in for the quarter.

For three months, $9.41 billion is the profit. But the revenue, the amount of money they took in, $102.3 billion.

They actually took more money in and made less money. Their profit is down 10 percent from the same period a year ago.

This is mind-boggling when you think about it, because we're paying over $2.80 on a national basis for a gallon of self-serve gasoline. Oil is at the highest prices it's ever been. And Exxon's profit is actually down from a year ago.

So, I mean, at some point through the course of today I'm going to start growing a head of hair, because the impossible seems to be happening.

So it's -- I mean, again, it provides a very mixed picture. We've got a whole bunch of pressures on the economy.

The one that you have to worry about is the dollar down and oil going up. It means that things are going to cost you more. Those are inflationary pressures. And with interest rates a little lower, the point is you're supposed to spend more. Businesses and individuals are supposed to go out and say, hey, everything's OK, let me spend a little money.

All of that creates demand and pushes prices up.

CHETRY: It's also in the news, of course -- to add in some more insult to injury -- the number of foreclosures hitting an all-time high as well.

VELSHI: Again. Doubled again, yes.

CHETRY: Is this Fed rate cut going to help that?

VELSHI: Well, it doesn't change the type of mortgages that puts you into subprime. It doesn't change that balance.

What it does mean is people who are going to have their rates adjust to a higher rate, well, that adjustment will be a little lower. And people who do have adjustable rate mortgages will pay that much less.

Does it help? Yes. It somehow takes a while to get through the system, though. So it's not an immediate fix to that problem.

You're still going to see a lot of foreclosures. That's probably going to start to pull off early next year.

ROBERTS: All right. Ali, thanks very much.

VELSHI: OK.

ROBERTS: We've been taking a look at the frustrations that all of us face as flyers. And you've been sending along some of your horror stories for us as well.

This morning we've looked at airport security, the long lines, which made us ask, is there hope on the horizon that high-tech screeners will help move things along?

CHETRY: And meanwhile, here are some of your horror stories.

Heather from Ontario said that, "We boarded our flight home, began our taxi down the runway, and at the last second before takeoff the pilot aborted, slammed on the brakes, and skidded to a halt."

She talks about luggage flying, people screaming, hearts pounding.

"We were told it was an electrical problem, had to get off the plane. Waited several hours, missed the connecting flight, and not much information was given. We were then told the problem was fixed and we were put back on the same plane."

ROBERTS: From John in Wisconsin, "leaving Chicago on a certain airline, we sat on the tarmac, first of all, for an hour and a half, then landed in Philadelphia two hours late. We missed our connecting flight to Barcelona, Spain, for our 40th wedding anniversary and 10- day Mediterranean cruise."

"On top of that, the airline lost our bags. After 20 days, we're still missing one bag."

We want to hear from you. You can e-mail your horror stories to us at AM@CNN.com.

We're also going to get a little blog going when we get it set up so that people can sort of interactively, you know, share their horror stories with people and read others as well, because we've all got them.

CHETRY: Yes. It should be interesting.

Well, here's another story coming up that you can't miss.

"The National Enquirer" getting its hands on an explosive and shocking racist rant. It was a phone conversation between this guy -- he's known as Duane "Dog" Chapman, the bounty hunter, who has his own show, and his son.

ROBERTS: Yes. He says that he's sorry for the outburst, but will it be enough to save his television career on A&E?

That story and today's headlines when AMERICAN MORNING continues.

(COMMERCIAL BREAK)

ROBERTS: Welcome back to the most news in the morning here on CNN, on this Thursday, the 1st day of November.

I'm John Roberts.

CHETRY: And I'm Kiran Chetry. Glad you're with us.

New this morning, a potential death sentence. That's what one longtime American diplomat is saying about the State Department's order to go to Iraq or get tired fired.

They spoke out at a town meeting in Washington yesterday. The department says it is necessary because there aren't enough volunteers to work at the U.S. Embassy in Baghdad or in other parts of the country.

Well, more tough times for Army recruiters. The general in charge says fewer recruits are signed up for basic training than any year since the army became an all-volunteer service back in 1973. The army is trying to increase its active duty force to relieve strain on war-weary troops but there are doubts it will reach its goal of 80,000 recruits this year.

ROBERTS: A plan to fix bridges gets $23 billion trim in congress. House committee approved a bill that would fix the nation's worst bridges for a cost of only $2 billion. The original version of the bill called for $25 billion for repairs. Lawmakers balked at that because it would have been paid for with a 5 cent a gallon gasoline tax. The original proposal came in response to the deadly collapse of the i-35w bridge in Minneapolis last August.

New and conflicting report this morning about a woman who died in police custody at the Phoenix Airport. A flight attendant says she remembers serving Carol Ann Gotbaum alcohol on her flight to Phoenix but at least one passenger said she didn't see the woman drink. The new information coming out on police documents. Gotbaum was headed to an alcohol treatment program when policed arrested her for disorderly conduct. She died in a holding room and autopsy and internal police investigation are still pending.

A new information this morning about a boy who admitted to starting a 38,000 acre wildfire in Los Angeles County. According to this morning's L.A. Times, the boy lived on a ranch that offers therapy for mentally and physically disabled children but he wasn't a part of that program. Prosecutors are still deciding whether to file charges. Officials say that the fire burned down more than 60 buildings, including 21 homes.

CHETRY: Police in New York City investigating another symbol of hate found at Columbia University. They say a Jewish professor at Columbia Teacher's College found a swastika painted on her office door yesterday. It's the latest biased incident at the school in recent weeks. And just last month a black professor at the Teacher's College discovered a noose on her office door.

Out in the suburbs, another noose around a black mannequin. Police in Long Island, New York, say it was found outside of a home along with a piece of paper with the "n" word on it.

And how about this news display, is it OK? It's part of a Halloween display in Florida. The man hanging from a tree but the couple says it's not meant to offend anyone, its just Halloween. The sheriff is getting a few complaints. The state attorney general's office told sheriff's deputies the decoration is covered under the freedom of expression.

CNN is taking a closer look at the hateful symbol of the past in a special tonight called "The Noose: An American Nightmare." Our own Kyra Phillips investigates tonight at 8:00 p.m. Eastern.

ROBERTS: Coming up on 33 minutes after the hour.

And tropical storm Noel still causing problems for people in South Florida. Our Reynolds Wolf in the CNN Center Atlanta with a look at our extreme weather today. Good morning, Reynolds.

REYNOLDS WOLF, CNN, METEOROLOGIST: Good morning to you John. Not a really well-defined storm at this time, even hard to see the center. The eye of the storm which is, again, the center of circulation just south of Bahamas and with that we got that wind spinning counterclockwise and some gusts with winds up to 70 but maximum sustained winds currently at 60 miles an hour. The storm is moving northward, doing so at a fairly slow pace at 6 but it is expected to move a little bit faster, increasing speed and increasing with strength with maximum sustained winds going to 70-mile-per-hour by late Thursday and then into Friday morning. And then to Friday afternoon, we're going to see a gradual weakening with winds at 70 and then of 65.

But still, although it is not expected at this point to make landfall in Florida, it will come fairly close and for that very reason we've already have at this point strong waves, a lot of wave action up and down much of the coast. And showers are picking up anywhere from 2 to 4 inches possible, much heavier in parts of the Bahamas where they could see over a foot of rainfall.

And we have a tropical storm warning that is in effect from Coral Springs, southward along I-95, into Miami, even moving into portions of the Florida Keys. So, there's a lot that can happen between now and into tomorrow. It does appear as I mentioned with that path, we have the National Hurricane Center, the storm should remain away from Florida but still we really don't want to let our guard down too much in a situation like this and we're going to watch it for you very carefully. Back to you in New York.

ROBERTS: All right. Reynolds, thanks very much.

Severe drought has three states now fighting over what's left of Lake Lanier. Your "Quick Hits" now. The governors of Georgia, Alabama and Florida are meeting today. Lake Lanier is in Georgia but it supplies all three states. Georgia says there's only 80 days of drinking water left for 3 million people in metro Atlanta. Alabama and Florida have a long-standing complaint that Atlanta takes more than its share of water from the lake.

Confessions from Warren Jeffs, the polygamist sect leader. Transcripts of tapes made during jailhouse visits have been unsealed. He renounced his role as a prophet and admitted to being "immoral with his sister and a daughter." Jeffs will be sentenced later on this month for two rape convictions.

Shaking foundation. What the housing crisis means not just to the value of your home but to all of your investments. We're bringing together a round table ahead on AMERICAN MORNING.

UNIDENTIFIED MALE: Score free upgrade on this week's "Road Warriors."

BARNEY GIMBEL, WRITER, FORTUNE: I book rental cars. I pay no attention to the different vehicles offered and get the cheapest one. That is because, more often than not, you're going to get upgraded for free because like airlines, car rental agencies over itself. By booking the most popular car, the cheapest car you are betting that they run out of that car. To score the best chance of a free upgrade with rental cars, think of when you're traveling and when you're picking up the car. In big airports and big cities, they're going to run out of the cheap cars early in the day, early in the week. That's because all of the business travelers are coming in. They tend to arrive Monday morning. And when you're picking up the car, they ask you if you want to prepay for your gas. Don't do it. It is much better to fill it up on your own, even though it takes an extra ten minutes out of your day. For the most part, your credit card and your personal auto insurance will cover everything you need on each individual rental car. (COMMERCIAL BREAK)

CHETRY: Welcome back to AMERICAN MORNING. There are new numbers out today about America's home loan crisis. One in 196 homes nationwide foreclosed in the last quarter. Even if your home is safe the mortgage meltdown is likely to affect your other investments. AMERICAN MORNING's Greg Hunter explains how.

(BEGIN VIDEOTAPE)

GREG HUNTER, CNN, CORRESPONDENT (voice-over): It's easy to find for sale and foreclosure signs across the country. Signs of financial pain for many families. Yale economics professor Robert Shiller says we're witnessing the bursting of the biggest real estate bubble in U.S. history.

DR. ROBERT SHILLER, YALE UNIVERSITY: A lot of people think that they say home prices can never fall and you ask them why and they will say well, because, they've never fallen since the great depression. Well, it can happen again.

HUNTER: Shiller correctly predicted the stock market sale off in 2000. He anticipates how what he-called an over inflated bargain led to a rapid crash. Now, Shiller says a similar phenomenon is happening in the housing market.

If the housing market crisis is a nine-inning baseball game, what inning are we in?

SHILLER: First inning, I think. That's a guess.

HUNTER: Shiller says the downturn could cut home prices in half in some areas.

SHILLER: If home prices go down 50%, we are going to see some big problems in banks, in mortgage, insurers, in hedge funds, and in a wide variety of institutions that either invested in mortgage securities or insured mortgages. I really find it difficult to think through all of the ramifications of this.

HUNTER: Industry estimates say nearly $3 trillion, that's trillion with a T could be exposed in non-FDIC insured money market funds. According to former Wall Street regulator Bill Singer, those funds could take a hit.

BILL SINGER, SECURITIES EXPERT: We do know that this can happen and it has happened and that is one of Wall Street's dirty little secrets.

(END VIDEOTAPE)

HUNTER (on-screen): Investment advisers say the best way to protect yourself is know what's in that money market fund. So, how do you check your money market funds? Well, you can ask for a prospectus by mail or on-line. You could see what is in your money market fund, what that fund is investing. You can also ask the fund manager if it contains mortgage-back securities or subprime. Most of these fund managers will tell you flat out that they'll just say what's in the fund. A lot of people think that money market funds in a brokerage is just like a money market fund at a bank, FDIC-insured up to $100,000. Simply not true. Our own market fund here at Fidelity that handles our money market funds is a good company but it clearly says in the prospectus that that fund can lose money. But those funds have been safe in the past.

CHETRY: All right. Stick with us, Greg, because we want to bring in everybody. We have Gerri Willis, our "Open House" contributor or host, sorry of "Open House" and our contributor here on AMERICAN MORNING, Ali Velshi, of course. First of all, let me ask you Ali, is the housing crisis really as bad as Shiller in Greg's piece says.

ALI VELSHI: You know, the glass has exactly the right amount of water in it, Professor Shiller has a remarkable ability to see it at half-empty. There is an adjustment in the housing crisis. Gerri follows this all the time. You can chart out exactly just how many foreclosures there's going to be. It's not a new bunch of people, it's the same bunch of people who are having their mortgages adjusted. They're going to perhaps lose their homes or be foreclosed. We are seeing some banks adjust for this. You were seeing some of these adjustable rates go lower. It's what it is, the bottom line is it doesn't affect everything else in the economy as seriously as Shiller says it does. We still have the Dow up 10% for the year. We have most mutual funds that Americans hold up more than double digits for the year. And you're right about the money markets. Why investing in money markets right now? We got the stock market going through the roof. Diversified investments work better than conservative investments. That's part of the problem.

GERRI WILLIS, HOST, "OPEN HOUSE": Well, let me jump in here. Really, the housing market has had major major problems and it's not done yet but let's look at the best numbers out there. The median priced home will go down 12%. Peak to trough the worst of this will be 12% for most Americans out there. Hey guess what, in the last five years prices have gone up 50%. So for most of us out there, it's not going to be a difficult situation only those people who bought it the height of the boom are going to have real problems. So, what do you do about your investments? Well, realize the job number one is making sure you understand that your home is your biggest investment. You have to have the best mortgage available. A 30-year fixed rate mortgage. If you can't afford that, you can't afford your house. When it comes to your investment get an FDIC-insured money market fund if you're worried about the money market funds. At the end of the day, housing stocks have already taken their hit. If you sell them now, you're going to be selling them at lows and it makes no sense.

CHETRY: Also with the 401k, Greg, you talk about hidden red flags that people may not know about in their 401k?

HUNTER: Without questions, I looked at our own 401ks and we had all kind of paper in 401ks that are of questionable companies. Things like companies that have had big financial problems like (PNB Pravis) or Bear Sterns or Countrywide Financial. Hey, listen Shiller is out there saying, hey listen you know what, for the little guy out there, I mean Baird Stearns and Merrill Lynch wasn't expected to take a $8 billion hit in this last quarter and they are pros. And you know what, I say out there to people, warning, and so does Shiller. He says take a little off the table. We're (inaudible) stock market.

WILLIS: Well, at the end of the day though you've got to say to anybody who has a consistent investing plan, they're smarter than Bear Stearns which is crawling on top of the hottest new product all the time and it ends up biting them in the butt.

VELSHI: But thinking, the financial market has lost big because that was what they went and did. You're right and the banks, Greg is very right. People think of the banks as the safest companies in America. They made some of the worst bets in this industry but there are so many other companies that are doing well that if you stay diversified, and Greg is right, you'll never know where this market is going. There is some advantage of keeping some money available for other investments including housing by the way.

CHETRY: Let me just ask you this report before I let you go, the feds dropped the interest rate by a quarter point yesterday, how does that affect housing market?

VELSHI: It takes a while to work its way all the way through. In some case, as Gerri points out, some people will get a bit of a rate cut and some people will adjust to rates at a slightly lower rate than they would of but it's not magical.

WILLIS: It's not a magic bullet for consumers or the economy. Not yet.

CHETRY: You lock in now or have an adjustable rate or do you wait to see if it drops?

WILLIS: 6.51. At 6.51, 30-year fixed rate mortgage is a good deal, below the long term average of 8%.

CHETRY: All right. I want to thank all of you - Greg Hunter, Gerri Willis, Ali Velshi. Thanks.

HUNTER: OK.

CHETRY: John.

ROBERTS: "CNN Newsroom" just minutes away now. Heidi Collins is at the CNN Center with a look at what's ahead. Good morning, Heidi.

HEIDI COLLINS, CNN, ANCHOR: Good morning to you, John. That's right. We have these stories coming up on the NEWSROOM rundown this morning. More of what you just saw on AMERICAN MORNING, making sense of your dollars. What does the feds latest rate cut mean for you and when will record oil prices hit you at the pump? That is what everybody wants to know.

Also, a funeral protesters punished in court. Hefty judgment against a church that picketed a marine's funeral. We will be hearing from the church's leader and the marine's father.

Also, a symbol of hatred outside a long-island home. This morning, we're looking at what is behind noose incidents in the news. Join Tony Harris and me in the NEWSROOM. We're going to get started right here at the top of the hour on CNN. John.

ROBERT: Looking forward to it, Heidi. Just 14 minutes away now.

Runners who liked to get pumped up by their favorite song are going to have to sneak their ipods into Sunday's New York City marathon. We'll tell you why they are banned coming up.

And it's one of the most popular shows on A&E but after a racist rants by Duane "Dog" Chapman, his show was off the air. We'll talk more about the issues of race with the chairman of the congress for racial equality. That's coming right up on AMERICAN MORNING.

(COMMERCIAL BREAK)

ROBERTS: 11 minutes now to the top of the hour. Duane "dog" Chapman is apologizing after he was caught on tape in a racist rant. The web site for the "National Enquirer" has two recorded phone conversations from Chapman. In them, his son's girlfriend is the target of his apparent anger. The "Enquirer" does not say how it obtained the tape but it's loaded with the "n" word and lots of other offensive words. Take a listen.

(BEGIN AUDIOTAPE)

CHAPMAN: It's not because she's black. It's because we use the word "n-----r Sometimes here. It's not going take a chance ever in life of losing everything I've worked for 30 years because some f---g, n---r, heard us say 'N----g) and turned us in to the "Enquirer" Magazine. Our career is over. I'm not taking that chance at all.

ROBERTS: Oops. That is all you can say about that. This morning, Chapman released a statement. "My sincerest heartfelt apologies go out to every person I have offended for my regrettable use of very inappropriate language. I am deeply disappointed in myself for speaking out of anger to my son and using such a hateful term in a private phone conversation. It was completely taken out of context. I was disappointed in his choice of a fried, not due to her race, but her character. However, I should have never used that term."

A&E has announced that it is suspending production of his show "Dog the bounty hunter" until the investigation is complete. So, we wanted to talk more about this. One civil rights leader is now saying the bounty hunter should stay off the air. He joins us now. Roy Innis is the assistant chairman of the congress for racial equality. Roy, thanks for coming in this morning. How were you struck when you first heard this tape?

ROY INNIS, CONGRESS FOR RACIAL EQUALITY: Well, shock, of course. These things always shock you but I don't lose focus of the fact they represent a very small minority of the American people.

ROBERTS: A small minority with a huge megaphone though.

INNIS: They have a megaphone. What we should be concerned about is that we do not extend the size of the megaphone by our reaction to it. I'm glad that he has apologized, at least partially. He still has slimed the young lady. My understanding is she is a fine young lady, contrary to what he is saying.

ROBERTS: What I found interesting too is he says that we sometimes use the "n" word around here. I don't know if he was talking about the production company or some other company.

INNIS: It's business as usual.

ROBERTS: He was talking about but freely bandied about. And here's the thing, I mean, he seems quite contrite about what he said but if you don't have hate in here, how does it ever come out of there?

INNIS: Well, that's why, although the company has suspended the show, which is a good move, he has apologized partially, that's a good move. He has to make another step, one final step, and that is to examine himself. He needs to come to core. I'll talk to him.

ROBERTS: He needs to purge himself?

INNIS: He needs to purge himself.

ROBERTS: But how do you do that?

INNIS: I can help him. I can help him. You confront him with his ideas, his gut ideas. In reference to racial relations.

Of course, we've seen this a few times in the past. First of all, it started with Michael Richards who played Kramer on "Seinfeld," with that run at the Comedy Club then Don Immus, how does this measure up against those?

INNIS: This is worse. I'll tell you why. He plays a plays a quasi peace officer, quasi low enforcement officer as a bounty hunter. A law that should be examined, first of all. Since he is in that role, he has, you know, he needs to be more sane in terms of race relations than he is because he is a kind of a role model.

ROBERTS: And he is on the arts and entertainment network as well. It's not some sort of obscure cable channel stuck up there in the 500s.

INNIS: And I've seen very few of these episodes but those that I've seen, he attempts to be the real good, Mr. Good guy helping people out and all that. How can these two, these two things don't mesh.

ROBERTS: Let me just give you a little bit more of his apology and get you to respond to it. He says "I have the utmost respect for black people who have already suffered so much due to racial discrimination and acts of hatred. I'm ashamed of myself when I pledged to do to whatever I can to repair the damage that I have cause. So, it says, I have the utmost respect for black people but when we hear this phone conversation, he says we use the "n" word around here. I mean, are you suspicious that he is only saying this because he got caught?

INNIS: I think the PR man did a good rewrite job. He also slimes the young lady, right? He needs to examine his statements, examine his thought pattern and he can do that by calling me or calling some civil rights leader, some black preacher and sit down and talk about racial relations.

ROBERTS: Well, I'm sure that the next step in this story is going to be that we hear that he is reaching out, either to you or Al Sharpton or Jesse.

INNIS: He needs to be careful who he goes to. I must ran to Al Sharpton and you see what happened, it came back worst.

ROBERTS: What is this boot camp you have?

INNIS: Well, you know, a few years ago, some kids up at Grinnage high school.

There's a very nasty racial student in the yearbook. So it's basically just a place where people can come and get their priorities right?

INNIS: The point is we were able to turn these kids around.

ROBERTS: That's good.

INNIS: The kids weren't as bad as it seems.

ROBERTS: Well, we'll see if he reaches out to you. Roy Innis, good to see you. Thanks for coming in.

INNIS: Thank you.

ROBERTS: Kiran.

CHETRY: Here is a quick look at what the "CNN Newsroom" is working on for the op of the hour.

TONY HARRIS, CNN, ANCHOR: See these stories in the "CNN Newsroom."

Water war. Governors in drought states try to work out a truce.

Diplomats revolt. State department workers outraged over Iraq postings.

Colon cancer concern. Can eating processed meats raise your risk?

And lighter lost overboard, returned to sailor 62 years later.

NEWSROOM just minutes away, at the top of the hour, on CNN.

(COMMERCIAL BREAK)

CHETRY: Well, it's a happy homecoming and we want to show it to you right now. This is a look inside Ft. Bragg for just a couple of moments ago for a happy homecoming, 200 paratroopers returning to the base after 15-month deployment in Iraq. Their families, of course, thrilled to finally see them after more than a year, putting their lives on the line every day, waving flags and banners and a lot, I'm sure, a lot of tears, definitely a lot of hugs and a lot of happiness.

ROBERTS: And a lot of young people pretty happy to have mom or dad back home.

Hey, it looks like runners at Sunday's New York City marathon can't run to their own tune. The race is banning Ipods and other listening devices to ensure safety and prevent some runners from getting a competitive advantage while the best runners of course would never dreamed of carrying an ipod within some recreation race just like their tunes for motivational boost. Marathon organizers admit that the rule is going to be difficult, if not impossible, to enforce.

And look at this. It's a heartwarming story coming out of a terrible situation in Southern California.

CHETRY: That's right. It's a family displaced by a wildfire. They thought they had lost everything, including their dog. That is until they came home.

(BEGIN VIDEO CLIP)

UNIDENTIFIED GIRL: We know where she likes to be tickled.

UNIDENTIFIED MALE: And where does he like to be tickled.

UNIDENTIFIED GIRL: On his tummy.

CHETRY: There you see it. These were the two little girls who were so thrilled when 3-year-old Brownie was found on the side of the road.

ROBERTS: My goodness. He suffered burns. Two broken front legs. The dog was spooked and took off as the huge Harris fire approached their home. He has casts now on both front legs but expected to end up doing just fine. We heard a lot of those stories when we were there in California last week.

CHETRY: I know. Well, at the Qualcomm Center, they had a whole area that was set up for people's animals and among the dogs, there were horses as well as many others but I want a happy ending because, and the dog is funny because even both front legs are broken you know, you can't break their spirit. His tail is still wagging and still licking the little girls.

ROBERTS: Still hiding around there on the cast.

That's going to do it for us. Thanks so much for joining us on this AMERICAN MORNING. We'll see you tomorrow.

CHETRY: Meantime, CNN NEWSROOM with Tony Harris and Heidi Collins starts right now.

HARRIS: And good morning, everyone. You are in the "CNN newsroom." I'm Tony Harris.

COLLINS: Hey there, everybody. I'm Heidi Collins. Watch events coming into the NEWSROOM live on this Thursday.

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