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American Morning
Stocks Overseas Tumble; Fed Confronted With Increasing Fears of a Recession; Academy Award Nominees; Verbal Attacks Between Obama and Clinton
Aired January 22, 2008 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: Stocks overseas tumble. Now, there is word of profits at the nation's largest bank have fallen 95 percent.
As for those foreign markets, let's take a quick look. The Hang Seng had its biggest one-day drop ever in Hong Kong. Japan's Nikkei had its biggest fall in ten years. Europe's markets all opened lower this year and mixed in trading right now.
We're following all the developments this morning in your "Financial Security Watch." Our senior business correspondent Ali Velshi here with me in Myrtle Beach, South Carolina.
Tell me about what happened to Bank of America.
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: All right. This is the latest news that we're getting in. Bank of America's profits have fallen by 90 percent in the fourth quarter. Bank of America is now barely profitable on revenues of over $10 billion. Their profit was about $250,000. This is the nation's biggest bank.
We've also got word from Wachovia. Their profits could have fallen even more than 95 percent in the quarter. And this all follows up. A very, very rough night.
Second rough night in a row for overseas markets. You talked about the Hang Seng. The Hong Kong's market had its worst percentage drop ever. We also saw Shanghai down 7.2 percent. Australia down 7 percent. Take a look at what happened in Japan. We saw a drop of 6.5 percent there. In Taiwan, we saw 6.5 percent. In Japan, 5.7 percent, South Korea, 4.4 percent.
We've seen losses again in Europe this morning, though they aren't as bad. But strangely, U.S. markets are still showing some very heavy losses at the open. If the numbers that we're looking at right now hold true, we are going to see the Dow Jones open with a triple-digit loss. It could be as much as 500 points right at the open.
Right now, Treasury Secretary Henry Paulson is addressing the U.S. Chamber of Commerce. We're keeping an eye out to see what he says but basically this is investors around the world saying that the fiscal stimulus plan will not keep America out of a recession. And if America goes into a recession, the world is going to hurt as a result.
ROBERTS: What was it that caused Bank of America to take such a hit in its profits?
VELSHI: Writedown on mortgages. Yes, that's the thing that's hurting most of these banks. That's what hit. In fact, all of that profit was the mortgage writedown. Very little of it came from somewhere else.
So that's where you're seeing the losses of Bank of America and Wachovia. The issue right now is we're a week away from another Federal Reserve interest rate cut or an expected one next Wednesday. There's now talks that that has got to happen sooner. And maybe it's going to be bigger than the one we expected.
ROBERTS: Maybe happen today. Ali Velshi, thanks very much. We'll see you on the road soon across some of those battleground states.
And to politics now. Kiran, has got that news for us this morning in New York.
Good morning, Kiran.
KIRAN CHETRY, CNN ANCHOR: Hey, good morning, once again. There are two new polls that signals severe trouble for the Rudy Giuliani campaign. Both say the man known as America's mayor isn't even winning New York. There's a WNBC/Marist poll that has Senator McCain leading him by 11 points in the state and Mitt Romney and Mike Huckabee trailing.
Also, a Sienna College Poll giving Senator McCain a dozen-point lead over the former New York City mayor with Mitt Romney in third but barely polling in double digits. You see there.
The Sienna Poll is showing Hillary Clinton faring much better on home turf. The New York senator coming close to half the vote among the Democrats. In fact, in the state, more than doubling Senator Barack Obama -- John?
ROBERTS: Kiran, thanks very much.
The Democrats are focused on South Carolina today after that brutal debate last night. Some of the attacks between Hillary Clinton and Barack Obama were so strong, that they actually drew gasps from the audience.
Our senior political correspondent Candy Crowley was there and watched it all last night. What did you think?
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, gasps and boos. And I thought it was pretty rough stuff. You know, how we love alliteration. I think we got to call this the mauling in Myrtle Beach.
(BEGIN VIDEOTAPE)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Wait, no, Hillary, you just spoke for two minutes. SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I do not say anything about Ronald Reagan.
CROWLEY (voice-over): You think this race isn't personal? Then you didn't watch.
OBAMA: While I was working on those streets, watching those folks see their jobs shipped overseas, you were a corporate lawyer sitting on the board of Wal-Mart.
CROWLEY: They read their research, used it frequently and never gave an inch.
CLINTON: I was fighting against those ideas when you were practicing law and representing your contributor Resco in his slump landlord business in Inner City, Chicago.
CROWLEY: Also, John Edwards was there.
JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: I also want to know on behalf of voters here in South Carolina, this kind of squabbling, how many children is this going to get health care?
CROWLEY: So first victim, that high-minded campaign on the issues. And even when they did get down to it, hostilities simmered, each accusing the other of distorting the truth.
An economic stimulus plan. Obama said Clinton changed hers to match his. She said it wasn't true. Fiscal responsibility. She said he can't pay for his plans. He said it wasn't the truth. On health care.
EDWARDS: There's nothing wrong with us arguing about this, but -- but I believe that there is not a single man, woman and child in America who is not worthy of health care.
CROWLEY: It was two on one, Edwards and Clinton have health care plans that mandate insurance for everyone with government subsidies for those who can't afford it. Obama's plan pivots on offer the same subsidies but driving down costs so people can afford health insurance.
OBAMA: The mandate on families to buy health insurance that they can't afford and if they don't buy it, you find them or in some other way take money from them.
CROWLEY: The Clinton campaign thinks this is a winner. It's one of her favorite subjects.
CLINTON: I think that the whole idea of universal health care is such a core democratic principle that I am willing to go to the mat for it.
CROWLEY: But mostly, this was a debate dominated by the dynamics of a tight race with big stakes.
CLINTON: Senator Obama, it is very difficult having a straight- up debate with you because you never take responsibility for any vote.
CROWLEY: And two candidates with raw nerve endings.
OBAMA: These are the kinds of political games that we are accustomed to. I'm sorry.
CLINTON: Wait a minute. Wait a minute. Just a minute. You know, now...
UNIDENTIFIED MALE: Senator Edwards, let them wrap up and then we'll come to you.
(END VIDEOTAPE)
CROWLEY: Huge stake. Close race. To be continued.
ROBERTS: So is this distasteful as that back and forth was for some people that I talked to. There are others who say, you know, seeing Hillary Clinton being as assertive as she was last night helped them make up their mind to say, yes, she's the person I want to vote for.
CROWLEY: And I heard the exact same thing actually about Obama. Saying, you know, not only did she take -- did he take her on, he took President Clinton on. And that's a difficult way to walk at this point with somebody with 60 percent approval rating in the country, higher than that among Democrats. But the Obama camp has said, you know, we have to take him on. He's becoming such a player.
ROBERTS: OK, so here is the question of the day, where are the candidates this morning?
CROWLEY: Well, interesting because Barack Obama and John Edwards are in South Carolina. Hillary Clinton is in Washington, D.C.
ROBERTS: What does that say?
CROWLEY: Well, it depends on who you talk to. But, you know, the fact of the matter is the Obama camp says, listen, she's given up on South Carolina. Look at the polls. She's going elsewhere. And in fact, she is going to some of those February 5th states.
They say, of course, they'll be back at the end of the week. But nonetheless, you know, when everybody is here pounding the pavement and you are some place else, it's going to lead to speculation that you've given it up.
ROBERTS: Well, latest polls have got him with a substantial lead here. So we'll see how that plays out, four days in counting. Candy Crowley, thanks very much -- Kiran?
CHETRY: All right, John, thanks.
Well, our Alina Cho is here with some other stories new this morning.
Hey, Alina.
ALINA CHO, CNN CORRESPONDENT: Hey there, Kiran, good morning. Good morning, everybody.
We want to begin with some breaking news out of Washington. Shows some live pictures there in just a moment of Treasury Secretary Henry Paulson. Giving some remarks there to the public. He has just said that Congress and the Bush administration need to agree very quickly on a package of tax cuts and other measures to boost the economy. Of course, the one big idea that the Bush administration has floated was giving taxpayers an $800 credit to help spur spending. A big issue in the debate last night.
We will be monitoring the Treasury secretary's speech. We'll be bringing you more in the next half hour.
Also new this morning, some key White House e-mails may be missing by the millions. "The Washington Post" is reporting the Bush administration scrapped an archiving system early on in the first term and did not replace it.
E-mails from the run-up to the Iraq war and the investigation into who outed former CIA officer Valerie Plame Wilson may be missing now. The paper also says the White House recorded over backup tapes that could have provided a last line of defense, even though a similar practice got the Clinton administration in legal trouble. A congressional hearing on this subject is scheduled for next month.
New U.N. sanctions against Iran will be on a table at the meeting of key foreign ministers in Berlin today. The five permanent members of the U.N. Security Council and Germany are working to put the finishing touches on a draft resolution to pressure Tehran over its nuclear program.
A French diplomat describes the deal as quote, "very balanced and very firm." But Tehran insists its nuclear activities are peaceful and has repeatedly said U.N. sanctions will not stop them from enriching uranium.
How many calories are in that glass of wine? Well, we may soon find out. Thanks to a new proposal that would require beer, wine and liquor bottles to put nutrition and alcohol content labels on their containers. Great. Critics say the labels take up too much space on wine bottles leaving little room for artistic displays.
Tiger Woods speaking out for the first time. A golf channel anchor, of course, recently said that the best way for other players to beat him on the golf course was to quote, "lynch him in a back alley." That anchor is there on the left. Woods called the incident unfortunate and said he and the Anchor Kelly Tilghman are long time friends. Tilghman was suspended for two weeks.
(BEGIN VIDEO CLIP)
TIGER WOODS, PROFESSIONAL GOLFER: It's speak and there was no ill intent. She regrets saying it, so, in my eyes, it's all said and done.
(END VIDEO CLIP)
CHO: There you have it from the man himself. "Golf Week" magazine added to the controversy last week by that cover there putting a noose on the cover of its latest issue. The editor responsible for that cover was fired.
And Kiefer Sutherland slept in his own bed last night after serving 48 long days in jail on a drunk-driving charge. The star of the hit series "24" spent most his time alone. We're told had his own cell, even ate alone.
We're told the only time he interacted with other prisoners was when he was on his way to the laundry room where he works on cleaning sheets and pillowcases. One of the officers called him a model prisoner saying he was very cooperative, humble and didn't give us any problems.
Now if he could only solve the problem of the writer's strike because production on "24" has been suspended. You know, indefinitely.
CHETRY: I get the DVR that record all the shows. And I'm saying where are all the shows?
CHO: It's supposed to premiere in January, the seventh season. But we'll see what's going to happen.
CHETRY: We'll see what happen. Although, you know, they're announcing the Oscar nominations live at 8:00. So it will just be interesting to see if there will be a big to-do this year. There wasn't one for the Golden Globes.
CHO: Well, they're going to have to settle that writers strike pretty quickly if there is going to be an Oscar ceremony.
CHETRY: All right. Thanks a lot, Alina.
CHO: You bet.
CHETRY: Meanwhile, some mixed messages this morning from the medical community when it comes to caffeine. Can it protect against cancer? Does it increase your risk of miscarriage? What should you be thinking of if you're in taking a large amount of caffeine during the day?
Well, CNN's chief medical correspondent Dr. Sanjay Gupta is at our medical update desk in Atlanta. It seems that caffeine intake is one of these issues that we hear a lot of conflicting advice about, Sanjay.
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Yes, you do. And there's good news and there's bad news when it comes to caffeine. No surprise. It is a very widely used substance, as you know, Kiran. Let me give you some of the good news first. I hardly ever get to do that. There is some good news when it comes to caffeine. A study out just this day says that three cups of coffee, roughly, can actually decrease a woman's risk of ovarian cancer by about 25 percent. Overtime, it can also reduce your risk of type 2 diabetes, Parkinson disease, colon cancer, improve your alertness is something that people point to as an attribute of caffeine quite a bit as well.
We should point out that it's probably not coffee specifically or any specific caffeinated beverage but something in the caffeine or some aspect of the chemical specifically that causes some of these benefits, Kiran.
CHETRY: Then of course, in the other study is for pregnant women and new study done saying that it actually can double your increase -- double your risk of having a miscarriage if you are taking in more than 200 milligrams of coffee. What do you recommend to pregnant women?
GUPTA: Well, yes -- I mean -- I think that was a scary study for a lot of women out there who are concerned about miscarriages and the caffeine intake.
You know, look. They came up with the number 200 milligrams specifically. I think more importantly, it's really important to note what exactly is giving you caffeine throughout the day. I think it surprises people.
Take a look at some of these numbers here. When it comes to overall caffeine intake it can vary, quite a bit. Starbucks tall coffee, 260 milligrams. Regular coffee, 161. Cappuccino 75. And then you look at things like Coca-Cola classic, 34.5 mg.
People don't pay attention often, Kiran, when it comes to their caffeine intake. For women specifically, to your question, they talked about maybe a cup of coffee in the morning is OK. And maybe one soda during the day. But you probably don't want to go over that.
CHETRY: The other interesting thing is what is a cup anymore? I mean, the tall, the smallest you get at Starbucks, that's 12 ounces. And as we saw from there, you are getting a big shot of caffeine. Even the paper cups that you get coffee at work. This is 12 ounces. It's not 8 ounces anymore.
GUPTA: That's right. And there are certain people who probably have to pay more attention to that. You mentioned pregnant women for one. But also people who may have a problem with their heart, who had a problem with irregular heartbeats for example.
It is not common. I mean, we don't want to frighten anybody here and say that it's common for caffeine to cause these sorts of problems, but if you've had a problem with an irregular heartbeat, for example, in the past, you may really want to watch how much caffeine you're getting in all these different products.
CHETRY: We're going to see you up here in New York tomorrow. GUPTA: Yes. I'm excited. I'm just sitting there right next to you on the set.
A couple of interesting things coming out tomorrow. One is that, we've talked a lot about weight loss surgery. Might there be an additional benefit, a significant benefit for diabetics? Might they actually benefit more from the surgery than from conventional means? Also red meat. I was curious about this myself. How much red meat is too much? I'll answer that question for you tomorrow as well, Kiran.
CHETRY: All right. Sanjay, look forward to seeing you up here with us. Thanks.
Well, three feet of snow in Fulton, New York. Emergency crews, though, can't get the snow blowers or the salt trucks or the plows out because of the snow. We're going to explain what happened there and tell you what they are planning to do about it. Rob Marciano is up there, right now.
Also, was there just too much bickering going on? Did Senator John Edwards get a fair amount of time? Our I-reporters weighing in on last night's Democratic debate.
Veronica De La Cruz is going to tell us how you thought the candidates did, ahead on AMERICAN MORNING.
(COMMERCIAL BREAK)
ROBERTS: Sixteen minutes after the hour. Welcome back to a special edition of AMERICAN MORNING. Now, look at the big board there for you. We're on the "Financial Security Watch." Stocks here in the United States. Stock markets open in about an hour and 15 minutes.
Overnight, every major stock market fell with some in Asia seeing record losses. The markets here as I said, open in the next hour. All signs pointing to a dismal day ahead, as much as 500-point drop on the Dow at the opening.
We'll keep watching that and tell you how is it going. AMERICAN MORNING is covering every angle. Your place for the news that matters to your money. Right now, here's Kiran.
CHETRY: Yes and, you know, the big debate last night. A lot of people watching and the political pundits aren't the only ones weighing in on what went on in South Carolina.
Our Veronica De La Cruz is here now with a look at what our CNN I-reporters thought about that debate. Certainly, a lot of fireworks. A lot of (INAUDIBLE).
VERONICA DE LA CRUZ, CNN CORRESPONDENT: Lots of healthy political discourse. Like you were just saying, you know, our I- reporters sending lots of video commentary on last night's debate.
Aaron Baker in Charlotte, North Carolina told us he was a Hillary supporter but after last night, he says that he may have changed his mind.
(BEGIN VIDEO CLIP)
AARON BAKER, I-REPORTER: Watching the bickering that is going on between Clinton and Obama and the strong performance, at least I believe, by John Edwards makes me really question the true colors of these candidates and when under stress and under duress, how they perform. After watching tonight, I feel like John Edwards has done an incredible job of keeping his cool and being honest first and foremost.
(END VIDEO CLIP)
DE LA CRUZ: Aaron says that he thought that this was definitely one of the most interesting debates that he has seen in years. Now, Rebecca McDonald from Missouri says that we need to be more focused on the issues. Here's a little more of what she had to say.
(BEGIN VIDEO CLIP)
REBECCA MCDONALD, I-REPORTER: What I think is interesting is that, according to the media, black folk can't make a decision unless it's calculated by race. That's ludicrous. We are Americans and we care deeply about the issues.
(END VIDEO CLIP)
DE LA CRUZ: The 30-year-old says that she is most concerned about health care and says that she will be voting for Barack Obama.
All right, Kiran, check this out. I have to say that our next I- report has got to be one of the most spirited submissions that we have ever received. A 15-year-old, Marcus Harun from Hamden, Connecticut. Perhaps a future CNN correspondent.
(BEGIN VIDEO CLIP)
MARCUS HARUN, I-REPORTER: Hey there, everyone. I'm Marcus Harun from Hamden, Connecticut. I just had a few points I want to bring up about the debate tonight starting with John Edwards because I think he felt a little bit left out.
But I think John Edwards did very well. When he did get to speak, he tried to fill up his full time because he knew that he didn't get as much time as the others. He spoke very well and I think he connected to voters really well. He was talking about segregation and how he was there. He seemed to be speaking to the people who he wanted to vote for him.
(END VIDEO CLIP)
DE LA CRUZ: You think, John, better watch out?
CHETRY: How about that? He can be one of our pundits. He comes on with Wolf and John and how about it. He even wore a blazer for his I-report. Adorable. DE LA CRUZ: Great. Very cute. And if you do think that that last submission was cute. Check out this photo from Jen Mattingly. She says her kitty was trying to join the other fat cats in the room. She says that she enjoyed the debate but she didn't like the bickering. Can't really tell whether or not her cat enjoyed the debate though. What do you think?
CHETRY: No. The cat is not even facing the television. And kitty, you got to turn the other way to even see it.
DE LA CRUZ: Of course, you, too, out there, you can send us your I-reports to ireport@cnn.com.
CHETRY: Good stuff. Veronica, thanks so much.
DE LA CRUZ: We got lots of good ones.
CHETRY: Yes, we did. We really did -- John?
ROBERTS: It was getting so ugly up there, even the cat couldn't stand to watch it.
It's called the corridor of shame. One of the most financially strapped schools and towns in the nation right here in South Carolina. People are struggling. Kids are going to class in a crumbling school. A look at a place where depression has hit as voters head to the polls.
And who will claim Oscar gold. Well, it all starts with the nominations and this is a big day. Coming up in just about 20 minutes, this year's Academy Award nominations live from Beverly Hills. Keep it right here on CNN. We'll be right back.
(COMMERCIAL BREAK)
ROBERTS: Breaking news here on AMERICAN MORNING. Our Ali Velshi joining us now. And it seems as though the Fed took the hint that you were pointing out there this morning. Another (INAUDIBLE) as well, a rate cut.
VELSHI: I wish I could take credit for it. We heard this morning that the Federal Reserve, that there are people calling for the Federal Reserve to cut rates immediately. And it's just happened.
The Federal Reserve in an unprecedented move has cut the Fed funds rate by .75 percent. I don't even recall ever seeing a .75 percent cut in the middle of -- it's not even in a normal meeting. They were supposed to cut next Wednesday by .5 percent.
The Fed funds rate now stands a 3.5 percent. Now, that is three percentage points lower than the prime rate. Prime rate is always three points higher than that. So that means prime rate is now 6.5 percent. And so many consumer loans and adjustable loans are tied to prime rate. So the effect of this is an immediate discount to anybody in America who holds any sort of debt with the exception of fixed rate mortgages. Now, what tends to happen is mortgages are set in the bond market. Bonds rated at the Chicago Board of Trade. That's not open yet. But when the Board of Trade starts trading those bonds, you'll see those rates come down. So everybody in America should get some sort of break if you are in an adjustable rate of any sort today.
The effect should be that you take that money and you spend it and it helps the economy shore up. So we should see some effect in the market futures as a result of this. But this is what was called for this morning. Traders started floating this idea. This is unprecedented for the Fed to come in between a meeting and cut rates this deeply.
ROBERTS: Pretty dramatic action. We'll get you back here to tell us what's going to happen on the markets today when you got to read on how the futures are doing.
VELSHI: I will do that.
ROBERTS: Ali, thanks.
Well, one town here in South Carolina is not talking about recession. It is worried about depression. Dillon, South Carolina is struggling like few other areas in the entire country. Voters there are watch a school, crumble and they are looking for answers. And candidates are taking notice.
(BEGIN VIDEOTAPE)
AMANDA BURNETTE, PRINCIPAL, J.V. MARTIN MIDDLE SCHOOL: He was standing right over there.
ROBERTS (voice-over): It was a moment of hope for Principal Amanda Burnette. The day presidential candidate Barack Obama showed up in her school's gymnasium. JV Martin Middle School was the center piece of the 2005 documentary, "Corridor Of Shame" which unveiled dismal conditions in South Carolina's rural schools.
Failing and falling apart from a lack of state funding. Students consistently score 50 percent to 75 percent lower than the state average in math and reading.
BURNETTE: Based on the no child left behind guidelines, we're at the bottom.
ROBERTS: Burnette is the latest in a long line of principals here. She started last June.
How were the students? What was the mood among the students? How were they when you first got here?
BURNETTE: I will say that the students were very beaten down. The faculty and staff were beaten, too.
ROBERTS: History teacher James Multrey (ph) says students felt abandoned. JAMES MULTREY, HISTORY TEACHER: They say when they would go off and talk to kids from other schools; it just made them feel bad. They got the impression that we the people in Dillon County didn't care that much about them.
ROBERTS: The school is a mishmash of buildings. The oldest from 1896. They leak when it rains. Plaster peels off the walls.
(on-camera): So there's a real pungent odor of mold in here.
BURNETTE: Yes, absolutely.
ROBERTS (voice-over): One classroom had to close recently because of mold. Since the documentary, the Dillon School Board has made some improvements. Thanks to a petty sales tax in the country and Burnette has managed to improve reading skills among many students.
But there's a long way yet to go. Superintendent Ray Rogers has dreams of finally building a new middle school.
RAY ROGERS, SUPERINTENDENT: In 1991, we had new plans up here. This was what we wanted to do. And they had turned yellow from the lack of funding.
ROBERTS: Are you confident, Ray, that these will not turn yellow from neglect? That these will actually come to fruition?
ROGERS: I'm 100 percent sure now that we're going to make a difference. We're going to have a new middle school.
ROBERTS: Since Senator Obama's visit in August, he has talked about Dillon in campaign speeches.
OBAMA: That the hopes of the little girl who goes to a crumbling school in Dillon are the same as the dreams of the boy who learns on the streets of L.A.
ROBERTS: The district got word he may be planning another visit later this week.
What do you want to hear from the candidates?
BURNETTE: I want to hear that the inequities in funding and education are not right.
ROBERTS: Are you thinking inside when these presidential candidates come through. Please don't let it be just words?
ROGERS: I got to feel like that they'll make a difference. How many times in the history of our county has anyone ever come to see us? It's got to be a start.
(END VIDEOTAPE)
ROBERTS: Well, Senator Clinton has also visited the area as the national economy becomes the key issue on the campaign trail. The question up there in Dillon, is it just politics at the moment or is this an actual shot at progress? Kiran?
CHETRY: All right. Thanks so much, John.
You know, coming up, we're going to continue our "Financial Security Watch" here on AMERICAN MORNING.
Breaking news from the Fed. The Fed confronted with increasing fears of a recession decided to cut a key interest rate by .75 percent. That news coming in just a few moments ago. We're going to talk more about how that's going to be affecting the markets today.
Huge losses overseas and the Dow futures down this morning. An hour before we are set to open. What does it all mean for your money? We're going to take a look just ahead.
Also, we're just a few minutes away from the announcement of this year's Academy Award nominees. We'll have the announcement and the other headlines when AMERICAN MORNING comes right back.
(COMMERCIAL BREAK)
CHETRY: There's a live look right now at the Samuel Goldwyn Theater in Beverly Hills, California, where the Oscar nominations are due to be read this hour.
You know, of course, this is a highly anticipated award show. But will it be this year, with the writers strike still casting a shadow over the red carpet? Golden Globes reduced to, basically, a one-hour press conference. Will Oscar face the same fate this season? We're going to talk about that today with our Lola Ogunnaike.
Welcome, by the way. It's Tuesday, January 22, a special edition of AMERICAN MORNING. I'm Kiran Chetry here in New York.
Hey, John.
ROBERTS: Hey, good morning to you, Kiran. I'm John Roberts in Myrtle Beach, South Carolina. We've got breaking news to tell you about this morning, and this is big. A massive cut by the Fed. Our Ali Velshi is here to tell us more about it.
How much did they cut? What kind of an effect is it going to have?
VELSHI: Massive is absolutely right. This is three-quarters of a percentage point, well, 75 basis points, as we call it. I don't recall -- and we're just trying to find out when they last did this.
But three-quarters of a percentage point cut. The Fed rate is now 3.5 percent. The way that affects you is that that makes the prime rate 6.5 percent. So if you have a loan that is connected to the prime rate, it has gone down. It will go down by the end of the day. We are going to wait now to hear from America's major banks, which within a few hours should announce that they are lowering the prime rate.
The second thing is once the Chicago Board of Trade options -- Chicago Board of Trade opens for trade, you will see bonds trading lower, because they usually move in sympathy with that. So if your mortgages are tied to an adjustable rate, you may see them start to come down. Maybe.
This is a massive move in light of rough markets for the last two nights in overseas markets. We are now going to see stock markets open up in the United States in less than a couple of hours. And until now we had seen Dow futures down more than 500 points. Again, something we have never seen before. Now, as a result of this Fed move, we have seen those futures come up dramatically. But, John, I have to tell you, they are still down more than 300 points.
So there's a real sense that the Fed and the government are not in touch with what everyday Americans are feeling. We have seen this poll after poll. Americans think we're in a recession. Last week, Ben Bernanke says we're not in a recession. He doesn't even see one coming. President Bush put forward a stimulus package.
Investors are saying this is not enough. It's too little; it's too late. So even with a three-quarter percent cut in interest rates, you are still not seeing the chance that the Dow will open on the upside. Now, that could change, but that's where we are now.
ROBERTS: And also, could this just be a Band-Aid measure, that you're not getting to the underlying problems; you're just infusing some liquidity into the market, making people feel a little better about where they are today?
VELSHI: That's exactly right. And remember, while we talk about the economy and Americans see the economy as their No. 1 concern in this election, what is the economy to the average American? In some places, it's housing; in some places it's job losses; in other places, it's gasoline; and in other places, it's interest rates. So this is a complicated problem.
A Fed rate is probably a move in the right direction. But it's not enough, and it might be too late.
ROBERTS: All right. Ali Velshi watching the markets for us this morning. They open in just under an hour.
VELSHI: Yes.
ROBERTS: We'll see what happens. We'll see if they get back to even before they open -- Kiran.
CHETRY: All right. Thanks a lot, guys.
Well, still ahead, will it be Julia and Tom? Or will new stars emerge? The Oscar nominations just minutes away. We're going to have them for you live when AMERICAN MORNING comes right back.
(COMMERCIAL BREAK)
CHETRY: We are just minutes away now from the 80th annual Academy Award nominations. Bringing it to you live as soon as they happen. Our own Lola Ogunnaike also joins us. She's at the Sundance Film Festival in Park City, Utah.
Looking ahead to the Oscar nominations, what should we be looking out for, Lola?
LOLA OGUNNAIKE, CNN CORRESPONDENT: Well, in the "Best Movie" category, expect nominations for "Atonement," "There Will Be Blood," and "No Country for Old Men." In the "Best Actress" category, expect nominations for Marion Cotillard for "La Vie En Rose," Julie Christie for "Away from Her" and Ellen Page, hopefully, for "Juno."
In the best director category, that's going to be a really tight race, Kiran. Expect nominations for Julian Schnabel. He won the Golden Globe for "Diving Bell and the Butterfly." Also expect nominations for Paul Thomas Anderson for "There Will Be Blood," the Coen brothers for "No Country for Old Men," and maybe Sean Penn for "Into the Wild."
CHETRY: Is there any theme working? You know, sometimes we see, you know, anti-war films. Sometimes we see, you know, a big push for international. Anything this year?
OGUNNAIKE: I'm sorry. I didn't hear you. You said what? A theme working?
CHETRY: Actually, OK. Actually, Lola, let's listen to them. We'll talk after.
SID GANIS, PRESIDENT, ACADEMY OF MOTION PICTURE ARTS AND SCIENCES: As we prepare to honor the finest achievements of our art form for the year 2007, I'm also delighted to announce the Oscar- winning performer who is going to help me this morning. Please welcome an outstanding actress and a good friend of the academy, Kathy Bates.
KATHY BATES, ACTRESS: Thank you, Sid. Good morning, everyone.
GANIS: The 2007 nominees for "Best Performance by an Actress in a Supporting Role" are Cate Blanchett in "I'm Not There," Ruby Dee in "American Gangster," Saoirse Ronan in "Atonement," Amy Ryan in "Gone Baby Gone" and Tilda Swinton in "Michael Clayton" -- Kathy.
BATES: Thank you. For "Best Performance by an Actor in a Supporting Role," the nominees are Casey Affleck in "The Assassination of Jesse James by the Coward Robert Ford," Javier Bardem in "No Country for Old Men," Philip Seymour Hoffman in "Charlie Wilson's War," Hal Holbrook in "Into the Wild" and Tom Wilkinson in "Michael Clayton."
GANIS: For "Best Performance by an Actress in a Leading Role," the nominees are Cate Blanchett in "Elizabeth: The Golden Age," Julie Christie in "Away From Her," Marion Cotillard in "La Vie en Rose," Laura Linney in "The Savages" and Ellen Page in "Juno."
BATES: The nominees for "Best Performance by an Actor in a Leading Role" are George Clooney in "Michael Clayton," Daniel Day- Lewis in "There Will Be Blood," Johnny Depp in "Sweeney Todd, the Demon Barber of Fleet Street," Tommy Lee Jones in "In the Valley of Elah" and Viggo Mortensen in "Eastern Promises."
GANIS: In the category of "Best Achievement in Directing," Julian Schnabel for "The Diving Bell and the Butterfly," Jason Reitman for "Juno," Tony Gilroy for "Michael Clayton," Joel Coen and Ethan Coen for "No Country for Old Men" and Paul Thomas Anderson for "There Will Be Blood."
BATES: For "Best Original Screenplay," the nominees are Diablo Cody for "Juno," Nancy Oliver for "Lars and the Real Girl," Tony Gilroy for "Michael Clayton," Brad Bird, Jan Pinkava and Jim Capobianco for "Ratatouille" and Tamara Jenkins for "The Savages."
GANIS: For "Adapted Screenplay," we have Christopher Hampton for "Atonement," Sarah Polley for "Away from Her," Ronald Harwood for "The Diving Bell and the Butterfly," Joel Coen and Ethan Coen for "No Country for Old Men" and Paul Thomas Anderson for "There Will Be Blood."
BATES: For "Best Foreign Language Film" we have, from Israel, "Beaufort," from Austria, "The Counterfeiters," from Poland, "Katyn," from Kazakhstan, "Mongol" and from Russia, "12.".
GANIS: For "Best Animated Feature Film" the nominees are "Persepolis," Marjane Satrapi and Vincent Paronnaud, "Ratatouille," Brad Bird and "Surf's Up," Ash Brannon and Chris Buck.
BATES: And finally, I'm pleased to announce that the films selected as the "Best Picture" nominees for 2007 are "Atonement," Tim Bevan, Eric Fellner and Paul Webster, producers, "Juno," Lianne Halfon, Mason Novick, and Russell Smith, producers, "Michael Clayton," Sydney Pollack, Jennifer Fox and Kerry Orent, producers, "No Country for Old Men," Scott Rudin, Ethan Coen and Joel Coen, producers and "There Will Be Blood," JoAnne Sellar, Paul Thomas Anderson and Daniel Lupi, producers.
GANIS: So, please join us on Sunday, February 24, when some of these very talented and accomplished individuals become Oscar winners. It will be a night to remember. See you then.
CHETRY: And there you have it. The Oscar nominations for this season and this year.
Our Lola Ogunnaike is in Park City, Utah, actually covering the Sundance Film Festival.
Lola, I know you were listening, though, in your ear. You could hear the nominations. Any surprises? OGUNNAIKE: I was surprised by the Tommy Lee Jones nomination for "Valley of Elah." That was a huge surprise. No one knew where that came from. And "Valley of Elah" had really been forgotten, so that's pretty huge. Also Jason Reitman for "Juno." That was another big surprise. Tim Burton getting snubbed for "Sweeney Todd," also another huge surprise.
The "Best Actress" category, no big surprises there. You know, Ellen Page got nominated. Marion Cotillard, as I said, also got nominated, and Julie Christie got nominated, as well. That's going to be a very close race. "Best Director" category, also going to be a very close race. It's anyone's guess, Kiran.
CHETRY: It's also interesting, Cate Blanchett got a nod for two different movies for best supporting actress and best actress. They love her.
OGUNNAIKE: It's true. I mean, they do love her. She's won Golden Globes. She's won Oscars. I was surprised that she got a nomination for "Elizabeth." I found that movie pretty questionable. But they do love Cate Blanchett. And she is a favorite.
So she could sneak in -- she could sneak in there and win. But I think it's probably going to go to either Ellen Page, who's an audience favorite, or Marion Cotillard, who did win the Golden Globe.
CHETRY: There's always an unlikely story. I believe last year, there was a girl who was nominated who had never been in a movie before.
And this year for "Best Original Screenplay," Diablo Cody. She had written -- for "Juno." She had written a book before this, sort of what it was like to be a stripper. And she went from that to -- to writing a screenplay that's been given an Oscar nod.
OGUNNAIKE: Yes. You know, Diablo Cody, she does have an unlikely story. She was a stripper before. "Juno's" writing is just so strong. People rave about Ellen Page's performance, but the writing was really impeccable. And people do expect her to win for best original screenplay.
She did not win, though, for the Golden Globes. That went to the Coen brothers for their "There Will Be Blood" so -- I'm sorry for "No Country for Old Men." Excuse me. It's cold out here. Sorry. Diablo Cody could actually sweep in and take it.
CHETRY: It was also interesting. At the very end, they said, "No, be sure to be watching Sunday, February 24." I almost heard a tick, tick, tick in my head. The writers' strike needs to get resolved by then. Unless this awards ceremony can work something out, it could suffer the same fate as the Golden Globes.
OGUNNAIKE: Yes, they're saying that the show will go on. But what that show will look like is anybody's guess, Kiran.
CHETRY: All right. Lola Ogunnaike for us in Park City this morning as we announce the Oscar nominations for this year. Thanks.
ROBERTS: Kiran, it's been a busy morning today. Besides all the breaking financial news, that Fed rate cut, three-quarters of a percentage point. We're also taking a look at the fighting last night between Hillary Clinton and Barack Obama. A blow-by-blow account from someone who had a ring-side seat, straight ahead on AMERICAN MORNING.
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ROBERTS: Coming up now to 11 minutes to the top of the hour, and turning now to our other big story this morning: the fall-out from last night's Democratic debate right here in Myrtle Beach. If you went to bed early, you missed a big fight, Hillary Clinton and Barack Obama accusing each other
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SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Well, I was working on those streets, watching those folks see their jobs shipped overseas. You were a corporate lawyer sitting on the board at Wal- Mart. I was fighting these fights. I was fighting these fights.
SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I was fighting against those ideas when you were practicing law and representing your contributor, Rezko, in his slum landlord business in inner city Chicago.
OBAMA: No, no, no, no, no.
(END VIDEO CLIP)
ROBERTS: Our Suzanne Malveaux was right there for the slugfest. She was up there with Joe Johns asking questions.
You know, I was watching from our little work space. And when Obama said his little piece I said, bam. And when Hillary said it back, I went bam again. What was it like in there?
SUZANNE MALVEAUX, CNN CORRESPONDENT: Oh, the boos, and the crowd erupted. It was kind of like, oh, below the belt. It was almost like you were at a fight; you were watching a boxing match here. That's the way we were reacting. It was pretty much evenly matched here.
But there was a lot of tension, I think, that was building up. It was bubbling just beneath the surface over the week. You had one thing that didn't even come out, which was accusations back and forth of voter irregularity, suppression in Nevada.
But you also had other dynamics: these charges and countercharges about their records between the two, and the role of Bill Clinton, who really kind of got -- got in the middle of a lot of the controversy this week when it came to Obama's record, accusing him of one thing. Obama going back, saying, "You're misrepresenting my record."
So I think all of this just really came to the surface, because the question I had asked at one point was about fiscal responsibility. And this is what erupted afterwards. We said, oh, my goodness.
ROBERTS: You know, every time you ask a question, Suzanne, it just stirs people up. That's all it is.
You know, we talked with Congressman Jim Clyburn about this yesterday. Of course, he's a major figure here in South Carolina. And he said, "Well, as we say in Gullah Geechee county," which is the low country around here in South Carolina, "I urge Bill Clinton to chill a little bit."
But do you expect that that's going to happen going forward? It doesn't sound like it.
MALVEAUX: Not at all. It's not going to happen at all. While Hillary Clinton is leaving to go campaign in other very important states for February 5, Bill Clinton is staying behind with his daughter, Chelsea. And they will be here leading up to the primary, that critical primary. And they're going to be campaigning.
So what you're seeing...
ROBERTS: And Obama is staying here, as well.
MALVEAUX: It's Bill versus Barack. That is what it's turned into in this state, in this critical state. So obviously, the strategy is for her to reach out to those other key states and, meanwhile, the two of them, they may continue this fight.
ROBERTS: Well, he said last night that "I feel like I'm campaigning against two people, both Hillary Clinton and Bill Clinton."
And the question has been raised, and I raised this with Howard Dean, who puts on the black and white jersey and just plays the referee here, whether it's proper for an ex-president to be so stalwartly behind one candidate that they're taking on the other candidate and criticizing them. Typically, an ex-president's role is to criticize the opposition candidate.
MALVEAUX: Well, sure. I think what's interesting and unique about the situation in South Carolina is Bill Clinton, obviously, has a very close relationship with the black community here. Fifty percent of the Democratic voters are African-American. So it's very important for him to reach out to them.
And what you're seeing, what we're seeing is really a split, a struggle among African-Americans here, which side they're going to go to: the loyalties, the days of Bill Clinton, some of the policies that were good for the black community, or if they're going to go for a fresh face like Barack Obama.
ROBERTS: Well, if we look at the results from Nevada and Michigan, it sounds like they're siding with Barack Obama. But you know, still maybe a few days for the Clinton campaign to change that poll. Find out how it turns out on Saturday.
Suzanne, as always, thanks very much.
MALVEAUX: Thank you.
ROBERTS: Great job last night.
MALVEAUX: Thanks.
ROBERTS: It was a pleasure to watch -- Kiran.
CHETRY: Well, here's a quick look at what "CNN NEWSROOM" is working on for the top of the hour.
(BEGIN VIDEO CLIP)
HEIDI COLLINS, CNN ANCHOR (voice-over): See these stories in the CNN NEWSROOM.
Wall Street watch all day, after Asian stocks plunged sharply again. President Bush ironing out details of his economic stimulus plan with Congress today. Yahoo reportedly laying off hundreds of workers. Sentencing day for convicted terror conspirator Jose Padilla. Three feet of snow buries upstate New York. And who got an Oscar nomination?
"NEWSROOM," top of the hour on CNN.
(END VIDEO CLIP)
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ROBERTS: Well, he's been following news of your financial security all morning. And how he's getting set to hit the road to do more stories on the economy across this nation of ours.
Ali Velshi here with the CNN Election Express.
Where are you going, Ali?
VELSHI: (AUDIO GAP) ... but at the end of the day, business issues and the economy are personal. They're local to people. Is it housing? Is it interest rates? It is energy? Is it jobs? We're going to go across the country and find out.
We're leaving in a couple of hours from Myrtle Beach. We're going to hit Birmingham, Alabama. We'll be there by tonight. We're going to try to cover about 500 miles a day, speak to people on the way.
Then we're going to go to Shreveport, Louisiana. This is my luggage, by the way. I'm waiting to load it onto the bus. After Shreveport, we're going to go to Sweetwater, Texas, and talk to people there on day three and see what's going on. After Shreveport, we'll head to El Paso and get a feeling for what -- these are all states where people are going to be voting on Super Tuesday. Then we're going to go to Phoenix, Arizona. We're going to do this. We're going to be in this bus talking to people. We're going to stop and ask them what they care about, what their concerns are. And hopefully, if all goes well and I know how to change a flat tire, by next Sunday, we're going to get to California, where this bus is going to be there for the next set of debates that we see in California next week.
So we are hitting the road. We're going to, like I say, try and cover about 500 miles a day. And we want to hear from people about what -- when we know that the economy is the No. 1 concern for people, we want to hear what that means. What is the concern? What do they want to do?
We know that the Federal Reserve just cut rates today, John, by three quarters of a percentage point. That is unprecedented. Is that enough to get people out and shop? This, you've seen this before, John. You've spent a lot of time in this. A lot of our viewers have seen it. It is -- it's a fully tricked-out ride. This is as pimped as it gets. We can do -- we can broadcast anything you need from this -- from this bus. We have a full -- we have capabilities to be talking about anything that's going on in the news.
For instance, when we hit the road today, one of the big stories I'm going to be working on is this market. We're expecting the market to -- to still open possibly hundreds of points lower after some very rough days overseas. I can do that from in here while we're moving. So I will be able to bring economic news, business news, while we are on the road for the next six days.
I'm really looking forward to this. I'm looking forward to meeting the people in all those cities that we're going to be at. But if you need to find me for the next week, John, find me here on CNN's Election Express.
ROBERTS: We'll just dial up the CNN Election Express. Thanks, Ali, very much. Jealous of you.
What about you, Kiran? Wouldn't you love to take a cross-country ride on the bus?
CHETRY: I'd love to see Ali attempt to change a flat tire on the Election Express. I think we'd be into the next election by the time that actually was successful.
I can tease him and he can't say anything, because I'm here and he's on the road.
Well, hey, we want to get a final check of this morning's Quick Vote question. Who do you think won last night's Democratic presidential debate? A lot of back and forth, a lot of personal attacks. But were the issues tackled?
Well, 27 percent of you picked Hillary Clinton; 32 percent for Barack Obama. The top choice, though, 39 percent of you say it was John Edwards who won that debate; and 3 percent believe no one won. To all of you who voted today, thanks very much. And we want to say thanks so much for joining us on this AMERICAN MORNING. We will see you back here tomorrow. And that includes John Roberts, who is taking a little break from his road trip.
I have your spot for you warmed up right here on the desk.
ROBERTS: Thank you. Yes, I'll see you. I'll be there with you tomorrow and Thursday and then back on the road. We'll be down in Charleston getting set for the Democratic primary here in South Carolina coming up on Saturday. So I will see you back in New York.
"NEWSROOM" with Heidi Collins starts right now.
COLLINS: Good morning, everybody. I'm Heidi Collins.
A breathtaking move to pump up the economy and get you to spend. Less than an hour ago, the Federal Reserve announced a startling key interest rate cut: three quarters of a percentage point. The action, a response to the threat of recession.
Here's what the nation's treasury secretary had to say just a few moments ago.
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