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IndyMac Bank Failure; Looking for Oil in Florida; Anheuser Busch Sold to Belgian Company
Aired July 12, 2008 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RANDI KAYE, CNN ANCHOR: Looking for oil in a place as big as Florida but nowhere near the Gulf Coast. Ali Velshi takes us there.
DAN SIMON, CNN ANCHOR: This bud might not be for you much longer. A Belgian company wants to be the king of beers. You are in the CNN NEWSROOM.
KAYE: We begin with a sign of very troubled times. The biggest U.S. bank failure in almost a quarter of a century and it could turn out to be the costliest in U.S. history. The California based IndyMac Bank, once one of the nation's largest home lenders, now the latest victim of the credit crunch. Federal regulators took it over yesterday. The failure is expected to cost the Federal Deposit Insurance Corporation somewhere between $4 and $8 billion. And it could cost customers with uninsured deposits up to $500 million. Customers can keep using checks, ATMs and debit cards this weekend and the bank will reopen next week under FDIC control.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Hopefully I'll get my money on Monday.
UNIDENTIFIED MALE: And you're pulling your cash out of this bank?
UNIDENTIFIED FEMALE: Yep. Well I'm sorry they're having problems but with their problems I have more of a problem.
(END OF VIDEO CLIP)
SIMON: You may never have heard of IndyMac but if you are buying or selling a home, IndyMac's failure it could really hurt you. Peter Viles, he's a former CNN correspondent, he's now a senior producer for real estate at "L.A. Times.com" and he joins us by phone. Peter, you and I are friends so I know you know this stuff pretty much better than anybody. If you look at the big picture here and you have a bank that goes under, what does it mean for the average person?
VOICE OF PETER VILES, SR. PRODUCER, REAL ESTATE "L.A. TIMES.COM": It means a couple things Dan. It raises the issue of trust in American financial institutions. It's not a huge institution but it's a very big one and it failed on Friday. Now the government is going to stand behind it. People can get their money but I have talked to depositors and they understand that but they still want their money. They don't want to go through the hassle. They don't want to stand in line. They understand the money is there. They just want to have it. That idea that I just want to have my money that runs counter to our banking system. Our banking system is built on the trust your money is going to be there some day when you need it. If you don't run down to the bank every day and say give me my money. In that sense, the idea that a bank failed and some people just want their money right now, that's a bad thing for the financial system. It doesn't mean other banks will fail but it raises this issue of how safe is my money which is just not a good issue in an economy that's struggling right now.
SIMON: But I got to tell you, if I'm a customer of the bank and they're going under, wouldn't the first thing you'd do on Monday morning is walk into the bank and say give me the large check I'm taking it all out?
VILES: Right. That's certainly a reasonable response. I have talked to IndyMac's customers and some of them have that response. They say I understand that my money is insured. I don't care. I want it. I want to take it to a different bank. And I've talked to other customers who said they do not understand the concept of insurance. The money is insured, you don't have to take it. So there will be people who will look at this from both sides. The problem is enough people want their money and people were taking money out of this bank Dan at a rate of about $100 million a day for the past 10 days. No bank can stand that for very long. They don't have all of your money sitting in the bank. People start saying give me my money, that's a problem for a bank.
SIMON: Peter, before you go, if you have $100,000 or less it seems like you're fine but if you happen to have more than $100,000 at that bank, it could all be at risk.
VILES: Yeah. If you have more than $100,000 you have already taken a risk because you have already had money that was not federally insured and that's a risk you already took and you probably should have known you were taking it and it would be unkind to people but this story was very much in the news. This stock traded in the pennies. Wall Street saying what this bank was worth so if you left more than $100,000 in the bank while all that was happening, you weren't watching your nest egg very carefully.
SIMON: All right Peter, thanks so much for joining us. That's Peter Viles, senior producer for real estate at "L.A. Times.com."
KAYE: A member of the senate banking committee democrat Charles Schumer wrote to regulators last month, he urged them to take steps to prevent what he described as IndyMac's likely collapse. The government's office of thrift supervision blames the release of that letter for panicking investors and causing a run on the bank. Schumer quickly fired back releasing a statement that declared quote, "If OTS had done its job as regulator and not let IndyMac's poor and loose lending practices continue, we wouldn't be where we are today." Schumer continued, "Instead of pointing false fingers of blame, OTS should start doing its job to prevent future IndyMacs."
No matter what caused IndyMac's failure the result is heartache and uncertainty for many depositors. CNN's Kara Finnstrom joins us from Pasadena, California. Kara?
KARA FINNSTROM, CNN CORRESPONDENT: Randi, lots of jittery customers this morning. Many of them just now finding out that the bank has been seized and wondering what's happening with my money. They won't be able to make any major bank transactions until Monday when this bank reopens under the FDIC. As you mentioned earlier, they can use their ATM, debit cards and checks to try and get a hold of some money but these customers tell us they have bigger concerns than just getting a hold of some weekend cash.
(BEGIN VIDEOTAPE) RACHEL SACRAMENTO, BANK CUSTOMER: I saw all the news crews parked in the parking lot and so I'm about to read the notice.
FINNSTROM: Rachel Sacramento just found out the bank that claimed you can count on us wasn't so reliable after all.
SACRAMENTO: It is disconcerting that you believe that your bank is very strong.
FINNSTROM: Sacramento had watched IndyMac's financial struggles detailed on the news for weeks. She had acted.
SACRAMENTO: Investor panic. So I decided to close my accounts but I did leave my checking account here.
FINNSTROM: Customer Alan Sands waited.
UNIDENTIFIED MALE: I've been thinking about doing this. I've been thinking about taking my money out. I'm just kind of kicking myself for not doing it earlier.
FINNSTROM: Sands simply did not believe it would all lead to this. The federal government shutting down his bank.
ALAN SANDS, BANK CUSTOMER: We have quite a bit of our funds here with my wife and I and my mom. I knew the headquarters was down here so I rushed down here and now they're closed. I guess I got to wait until Monday.
FINNSTROM: FDIC officials say customers who have less than $100,000 in the bank, the majority of customers, are fully insured and could have full access to their money on Monday. But if customers have savings of more than $100,000 in a single account, the FDIC will only provide 50 percent of that money up front. It hopes to make more payments as it sells off the bank's assets. So which customers could take the hit?
DAVID BARR, FDIC SPOKESMAN: It runs the whole gamut. We've had fairly young people. We've had older people with their life savings here. There are businesses and nonprofit organizations.
FINNSTROM: Alan Sands thinks his mom may have saved more than is fully insured.
SANDS: My mom, she's a little worried. She has been around longer and has a little more saved up.
FINNSTROM: The fine print is especially confusing to customers like Jeanne Poulin who never heard the rumors of IndyMac's downfall.
JEANNE POULIN, BANK CUSTOMER: They wouldn't open the doors.
UNIDENTIFIED MALE: Not even for you to give them money.
POULIN: No. Excuse me.
FINNSTROM: Poulin just came to make her house payment. She left like so many others questioning who can she trust with her money now?
(END OF VIDEOTAPE)
FINNSTROM: And the message the FDIC says it really hopes Americans will take away from all of this is make sure your savings are fully insured. For the most part, that means you shouldn't have more than $100,000 in a single account. You can have a little more that's insured in those retirement savings accounts but check it out and call the FDIC or logon to their website if you have any questions. Randi?
KAYE: Good advice. Kara Finnstrom, thank you so much.
SIMON: The collapse of Indy Bank comes amid mounting concerns about the two big government sponsored lenders, Fannie Mae and Freddie Mac. Hold or guarantee about half of the nation's mortgages. Senate banking committee chairman Christopher Dodd is trying to offer reassurance.
(BEGIN VIDEO CLIP)
SEN. CHRISTOPHER DODD, (D) BANKING CHAIRMAN: There's no reason for the kind of reaction we're getting. These fundamentals are sound. These institutions are sound. They have adequate capital. They have access to that capital. This is the reason for people to have confidence in these Fannie and Freddie.
(END OF VIDEO CLIP)
SIMON: If you want to know more about the mortgage meltdown, just check out cnn.com/money on the web for a much closer look.
KAYE: Destruction is everywhere. Two months after a powerful cyclone hit Myanmar, thousands of people are still struggling to survive. The military government says nearly 85,000 people were killed in cyclone Nargis. Another 55,000 still missing. The government has banned foreign journalists but our Betty Nguyen made it in. She is now in neighboring Thailand with incredible video you are going to see only right here on CNN. Betty what did you find?
BETTY NGUYEN, CNN CORRESPONDENT: Well what I found was the military government has made it nearly impossible for us to reach the cyclone devastation. It has set up military checkpoints in every city leading down to the delta. So after some very careful planning, we decided to go in search of why Myanmar is working so hard to keep the rest of the world out. I will warn you, the images that you are about to see are graphic.
(BEGIN VIDEOTAPE)
NGUYEN (voice-over): The landscape is littered with the remnants of lives swept away by cyclone Nargis. This is not what Myanmar wants reported some two months after the storm. The only way for us to capture these images was to sneak into the delta under the cover of darkness.
(On camera): It's really the only way to get down there and bypass the checkpoints.
(Voice-over): I can't reveal how we made this journey because it would jeopardize the safety of the locals who helped us and once we arrived it's easy to see why the government doesn't want us here. Devastation is everywhere. This slab is all that's left of a monastery. The village's only monk says the tidal surge was up to his neck and he barely made it out alive but many did not. This farmer forces back tears describing how he lost his wife and only daughter. He says if it weren't for his two surviving sons, he would have no reason to live.
UNIDENTIFIED MALE: I have nothing. No food. No property. No companion.
NGUYEN: It's a place where the living still walk among the dead in the thick vegetation that lines the narrow canals, the cyclone's horror is hard to ignore.
(On camera): This is what the Myanmar government doesn't want you to see. Bodies still rotting along the delta some two months after the cyclone hit. You can still smell the stench of death.
(Voice-over): Villagers say there were simply too many bodies to bury. They believe this was a child. No one knows for sure. In fact, most are trying their best to forget the painful past. Perhaps that's why rice was planted in fields just a few feet away. These poor farming communities don't have time to linger over the loss especially when cyclone survivors are still struggling to stay alive.
(END OF VIDEOTAPE)
NGUYEN: Very little aid had reached the villages that we toured. Not much more than some bags of rice, a few sheets of roofing material and tarp, really not enough to make a big difference for the people who are suffering. Now the situation may be different in the larger cities where aid organizations have set up their camp but we couldn't get into those cities without getting caught by the government. Randi?
KAYE: And Betty I know you can't tell us how you got in or who helped you, but can you share with us how difficult the trip was?
NGUYEN: It was extremely difficult. It was one of the most difficult assignments I've ever taken. It took us 21 hours to get down to the delta. Typically it only takes about four hours to get to some of these areas. We had to avoid those military checkpoints and once we got down there we knew we had to stay in order to capture these images and bring you this story. We slept on rice bags. We didn't shower for days. We walked sometimes barefoot near dead bodies in order to bring you these stories. I will tell you Randi, the people we spoke to they wanted to talk. Not a single person refused our interview request. The situation is really deplorable. Aid has not been dispersed evenly and of the villages we toured of all of them very few had received much aid at all.
KAYE: That's what those people want the world to know. Betty Nguyen for us in Thailand. Thank you.
SIMON: Tony Snow, he was the face of the Bush administration during some very tough times. Friends and colleagues are mourning his loss this morning.
(COMMERCIAL BREAK)
SIMON: It is a sad day in Washington. Former White House press secretary Tony Snow passed away losing a hard fought battle against colon cancer. Snow was a popular commentator who recently joined CNN as a special contributor. President Bush released a statement saying, quote, "Laura and I are deeply saddened by the death of our dear friend Tony Snow. Our thoughts and prayers are with his wife, Jill, and their children, Kendall, Robbie, and Kristi. The Snow family has lost a beloved husband and father. And America has lost a devoted public servant and a man of character." Snow served in the White House for 17 months. A short while ago our own Ed Henry got reaction from former President George H.W. Bush.
(BEGIN AUDIO CLIP)
GEORGE BUSH, FORMER PRESIDENT: In this case it isn't a press secretary, it isn't a speech writer. It was a dear valued friend that went on to heaven.
(END OF AUDIO CLIP)
KAYE: On the phone with us now is former Homeland Security Adviser and CNN contributor Frances Townsend. Frances thanks for being with us. You knew Tony Snow. What is your reaction to his passing today?
VOICE OF FRANCES TOWNSEND, CNN CONTRIBUTOR: I think all of Tony's colleagues would say the same thing to you and that is he was known for his generosity and his warmth and most of all, his sincerity. In Washington where people often say things because they think it's what you want to hear, that was not Tony Snow. Tony... everyone believed every word that came out of his mouth. You could disagree with the substance but no one I think ever doubted the passion and the belief Tony had in what he was representing and what he was saying to the American people.
KAYE: He had actually said at one point that cancer was the best thing that happened to him. It really made him appreciate his life and his family. What does that say about him as a man?
TOWNSEND: You know he was one of these people who really didn't just sip life, he gulped it. I was with him on one of his first rides on air force one and he was like a little kid. He was not shy about his excitement about it, his thrill at the opportunity to serve the president. He always had a wonderful sense of humor. I heard you in the lead in say he was there in some tough times in his 17 months and I will tell you in all of that he never lost his sense of humor, his ability to make others smile in very difficult times.
KAYE: His press conferences so personality driven. He really redefined that role didn't he at the podium.
TOWNSEND: That's right. And you know as you watch the White House press corps members respond to Tony, you realize that even those that disagreed with the substance of what he was saying really enjoyed the give and take that Tony brought to the press room and his passion for it. How much he really loved just being there.
KAYE: All right. Frances Townsend, former Homeland Security Adviser and CNN contributor. Thank you for your thoughts this morning.
TOWNSEND: Thanks Randi.
SIMON: Many of you watching this morning have been sharing your own thoughts about Tony Snow and our Josh Levs is checking those i- Reports. Hey Josh.
JOSH LEVS: Hey there. We're getting them constantly. We're trying to follow all of the i-Reports, all of the e-mails that we can. Send them to us, weekends@cnn.com. This is our top story of the day, it's getting a lot of hits right now. A lot of people learning about Tony Snow's life right here. I'll step out of the way, you can get a picture of cnn.com right there. Let's go now to the first e-mail I want to share with you. This one comes from someone named Tony. "I never supported Tony Snow's political views, but I wish to extend my heart-felt sympathy to his family. May they find peace and strength as they deal with their loss." Now from Todd Ellison who says, "Tony Snow's death is sad to hear. It should highlight cancer concerns in this country, particularly colon cancer where thousands of people are expected to die from his preventable disease." And finally this from Sheila and Benny, "Very sorry to hear that Tony Snow has died. He was such a dedicated man who loved his job and family. We know that he is in a better place now. Our prayers are with his family."
All right. A couple things I want to show you on the screen behind me. One of those e-mails there got me thinking about the number. Let's take a look here at colon cancer in America each year. This the National Cancer Institute, they're expecting this year 108,000 new cases of just colon cancer. About 40,000 cases of rectal cancer. Between the two about 50,000 deaths a year. They also say it is preventable. I also want to bring you to ireport.com as another way you can share your thoughts on all things here. This is a picture that we got from Robert Melendez. I'm going to step out of the picture here who said that he got a chance to meet Tony Snow at an event in Washington this year and he says, "Tony was graciously willing to take a photo with me. I told him we would be praying for him and his family. He said thank you and told me to take my name badge off for the photo."
We love to hear your personal recollections of Tony Snow. Whatever you want to say in the wake of his death, go to iReport.com. Or write to us at weekends@cnn.com. Guys, we will continue to share many of the messages right here on TV.
SIMON: All right. Thanks, Josh. Pretty thoughtful of folks to send those e-mails. We're going to talk now about Dick Cheney. He checked in with his doctor today. It's time for his annual exam. Cheney's press secretary says, "The vice president feels fine." At 67 Cheney has a history of heart problems including four heart attacks and several heart surgeries, including a quadruple bypass.
KAYE: A victim of California's wildfires found among the ashes.
(COMMERCIAL BREAK)
KAYE: Hurricane Bertha looks like it might breeze by Bermuda. Forecasters say the island will feel tropical storm force winds tonight. We expect updated numbers on the storm shortly. At last check Bertha was a couple hundred miles southeast of Bermuda. Top winds 90 miles an hour. Tourists don't seem too concerned about the storm. Many say they will hunker down at their hotel bar.
SIMON: On Thursday President Bush will get a look at the destruction left by California's wildfires. Crews in Butte County there in California found a badly burned body in the ashes of a home. It's one of 50 houses that burned this week in the town of Concow. The area was under a mandatory evacuation order but some apparently chose to ignore it. The victim would be the first directly killed by the fires.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: This is what can happen if you don't listen to the sheriff's department, listen to Cal fire and other fire agencies. It's time to get out when we say it's time to get out.
(END OF VIDEO CLIP)
SIMON: Firefighters are getting more help from overseas. Australia, New Zealand, Greece, Canada and Mexico will send in crews and equipment very soon.
KAYE: Governor Schwarzenegger is sending more National Guard troops to the front lines that will bring the total to 2400. CNN meteorologist Reynolds Wolf is in the city of Chico, California.
REYNOLDS WOLF, CNN METEOROLOGIST: I come to you from the city of Silver Dollar Park in Chico, California. But today it goes by a different name. Today it's fire camp. Home for nearly 3,000 firefighters. You see a couple of the guys behind me. Some of these fellas have been working beyond 24 hours straight going out there and doing what they can to battle a blaze that's consumed over 49,000 acres. They have it about 55 percent contained but still there's a couple of variables they have to deal with. The biggest is going to be nature. Today they're anticipating the forecast to be a little more favorable. The sun you see in the sky, not burning quite as hot on some of those mountains. They're expecting temperatures not to rise into the 90s. A little bit cooler into the 80's. They're also expecting the wind to be a little bit less intense and the humidity to be going up. So that should certainly be favorable. However, it's still going to be hard work for these fellas. You see this crew here, they are from Flagstaff, Arizona. You have people obviously not just from this state but from across the region. Across the country. Across the world in fact. Fire crews as far away as places like Australia, New Zealand and even crews in places like Mexico and even to our north in Canada. It's going to be a tough battle for them but they are certainly up to the task. Reporting from Chico, California, back to you in the studio.
SIMON: A giant bank has failed. The question is what should you be doing to protect yourself.
(COMMERCIAL BREAK)
SIMON: A little update now on vice president Dick Cheney. He just wrapped up his annual physical at George Washington University Medical Center there in Washington, D.C. and it is all systems go. They looked at his heart. Everything is functioning properly. A good bill of health for the vice president. He's apparently heading back to his home and is going to resume his normal schedule.
We're going to move on now. It's just about 11:30 here on the east coast here in Atlanta. We're going to talk about President Bush. He says he is deeply saddened by the death of his former press secretary Tony Snow. Snow, also a well know conservative writer and commentator. He died today at the age of 53 after a long battle with colon cancer.
Depositors, they can lose up to $500 million in uninsured accounts following the failure of IndyMac. It is the biggest U.S. bank failure in 24 years. Federal regulators have taken control of the California based bank, the latest corporate victim of the mortgage crisis.
RANDI KAYE, CNN ANCHOR: Quite a shock as you might imagine to go to the bank and find the doors locked. What can you do to protect your money? CNN's Deborah Feyerick joins us with some advice. Deb?
DEBORAH FEYERICK, CNN CORRESPONDENT: Well you know Randi, the federal government has stepped in. They're taking over really what this means for the average person who has an account at Indymac is that instead of being called Indymac it's now called Indymac Federal. The government has basically guaranteed the money that is in the bank, at least the majority of that money. For anyone who had $100,000 or less in the bank they are ok. They can use the ATMs, they can use the direct deposits. If they have loans, they have to pay those loans as normal. Nothing has changed as far as that goes. Problem, for those people who have more than $100,000 they're at risk of losing the amount above that. Let's say you have $150,000, the bank will guarantee $100,000 and they also said they will give you half of the remaining. You will get $125,000 as opposed to $150,000.
Again, that could change depending on if Indymac is sold, depending on the amount of time Indymac is sold. That's one of the things that's under consideration. We've been speaking to some experts today, they say this is really a warning to many people that especially if you have your money in smaller banks, you should really be thinking how much money you are willing to keep at those banks especially because the government only insures $100,000. So for example, if you have all of your money in one bank, it may be time now to divide up that money. But for the average Indymac customer they will not be affected. The others, yes. It is going to be a problem. But as far as the operations of the bank, it's really operating as normal. You have your ATMs and direct deposits and then on Monday the tellers will be in place and online banking will resume. All it is, the government has stepped in to guarantee the money that is there right now. Randi?
KAYE: To sort through for these customers, so many questions. They've been watching all of the reports. It is hard for everybody really to figure out what to do. So that is some good advice. Thanks, Deb.
SIMON: Both Barack Obama and John McCain taking a day off from the campaign trail. Good for them. Senator Obama is on the record though talking about terrorism telling CNN he thinks Afghanistan's president has failed to deliver. He also spoke with our Fareed Zakaria about what he would do with a captured Osama bin Laden.
(BEGIN VIDEO CLIP) FAREED ZAKARIA, HOST, "FAREED ZAKARIA GUPS": If U.S. forces in Afghanistan captured Osama bin Laden, what would you do with him and you were president?
SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: I would think that if he was captured alive, then we would make a decision to bring the full weight of not only U.S. justice but world justice down upon him. And I think and I've said this before, I am not a cheerleader for the death penalty. I think it has to be reserved for only the most heinous crimes but I certainly think plotting and engineering the death of 3,000 Americans justifies such an approach. Now, I think this is a big hypothetical though. Let's catch him first.
(END OF VIDEO CLIP)
SIMON: You can catch the rest of the interview on Fareed Zakaria GPS that comes your way tomorrow at 1:00 p.m. eastern right here on CNN.
KAYE: Three freed Americans are really going home today. They've been at Brooke Army Medical Center in San Antonio for eight days but next hour they get on planes and fly to their hometowns. The pentagon contractors were held for five years by Colombian rebels and rescued in a daring military operation in the jungle. Doctors say the men are in remarkably good shape considering. The former hostages gave their first interview this week, they talked about the rescue with CNN Headline News anchor Robin Meade.
(BEGIN VIDEO CLIP)
THOMAS HOWES, FORMER HOSTAGE: Brought us out to the helicopter. I missed bits and pieces. As I finished what I saw up to that point, maybe Keith and Marc had different angles inside the helicopters because there's a lot going on in there, but they got me on board. I went to the back and as I went by it looked like they were pushing Keith on the floor. I think he partially fell also. But they looked like they were pretty rough. I'm thinking this was a little odd for humanitarian aid workers. You know a big guy like that, he's down on the floor. They wanted to tie wrap tightly his legs.
ROBIN MEADE, HEADLINE NEWS ANCHOR: How did this all fit into the rescue?
KEITH STANSELL, FORMER HOSTAGE: They had a reason. The thing with the rescue was you have to look at it. What went down was they were able to get two FARC commanders in this helicopter with us. Basically only armed with pistols. Now those guys had to be real nervous because normally we have two guards for every person and we're in chains. So now you've got a front commander and our jailer and obviously what we didn't know at the time they have two tasks. One is to fool the FARC because those guys walked right in the middle of this huge force unarmed, incredible thing to get us out. And the second thing is they have to deal with us. Now imagine you're in their position. I'm talking about the Colombian military that did this. You've got 15 prisoners that are getting on a helicopter. For the first time we've got two guys that are responsible for what they've done for us and they're unarmed. So the tie wraps which we didn't know at the time were to keep us. And this guy (INAUDIBLE) I was one of the larger guys. They had placed me in a spot just to control me because they didn't know how I was going to react. When Tom saw me, it was a hedge up on their part, because I had already broken out of my tie wraps. If you get a chance here, they just had a window to take these guys down and to do it before we -- it wasn't anything planned. Just to get a chance to do something. The numbers were in our favor. So I think there was just a window. I don't know details of the planning but I think they took that all into consideration. Those guys were at risk from the FARC and from us because we didn't know who they were. And they did a great job. They knew it was something. The support and the training that must have gone into this was incredible. I'd just like to say that those guys -- it was well thought out.
(END OF VIDEO CLIP)
KAYE: You can see the full exclusive interview on CNN. Join Robin Meade for hostages to heroes 10:00 eastern tonight and again Sunday night only on CNN.
SIMON: Crude is closing in on 150 bucks a barrel and that's making it possible to squeeze oil from an unlikely place. We're talking about sand. Here's an "Issue #1" report from senior business correspondent Ali Velshi.
(BEGIN VIDEOTAPE)
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT (voice-over): One- third of the world's known oil deposits are right here in the dirt. So that's where we headed on our energy hunt from New York to Ft. McMurray, Alberta.
(On camera): This is it. We are literally walking on black gold. This is what we came here to see. This is oil sand. It's sand that is encased in water and oil. In fact, this is about 10 percent crude oil.
(Voice-over): Large quantities of oil embedded in sand only occur in two places in the world, Venezuela and Canada. Giant shovels scoop up 100 tons of oil laddened dirt at a time. Hundreds of trucks move across the landscape all day and night every single day.
(On camera): You need a lot of earth to make oil. It takes about two tons of oil sands to make one barrel of oil. Now, this big hauler holds 400 tons of oil sands so once that's all filled up and made into oil, you'll have about 200 barrels of oil.
(Voice-over): That's right. Two tons of oil sand makes one barrel of oil. But at today's oil prices it's wildly profitable. That's why major players like Exxon Mobil, Shell, Chevron and others squeeze 1.5 million barrels of oil out of this land every day and they send most of it to the U.S. It's costlier than getting it from a simple land well because the tar like oil has to be separated from the sand. That uses lots of natural gas and warm water. The result is a heavy oil molasses like oil which has to be upgraded into a lighter, high quality form of crude that can then be easily refined into gasoline, home heating oil and other petroleum products. Canada produces much more oil than it needs so the excess oil is then sent by pipeline to its best customer, the United States. Notice there's no pipeline to Canada's west coast. There is one proposed and it's backed by China. The best case scenario is that production of oil from these sands could reach four million barrels a day by 2020 but world demand is projected to increase by much more than that. While most of the oil from the oil sands comes to the U.S. right now, it's not clear that it will always be that way. If that pipeline to the west coast never gets built, the oil could just as easily be shipped to China. Ali Velshi, CNN, Ft. McMurray, Alberta.
(END OF VIDEOTAPE)
SIMON: Next hour we have more from Ali Velshi. He's going to show us how the oil rich sands of Alberta have turned Ft. McMurray into a boom town. Would you believe that housing prices there are equivalent to San Francisco?
KAYE: Parents are burying their twins. Did a hospital's mistake cost two newborns their lives?
(COMMERCIAL BREAK)
KAYE: Two possible near collisions within a week are raising some questions about air traffic at New York's Kennedy Airport. A spokesman for the Air Traffic Controllers' Associations says a Delta flight that was landing at JFK Friday came within 600 feet of a Comair flight that was taking off. But an FAA spokeswoman says the aircraft were never less than a half mile apart and that air traffic controllers safely separated the two planes. The National Transportation Safety Board says last Saturday night a Chilean jetliner departing JFK came close to a Cayman Airways jet that was landing.
SIMON: They were supposed to have a baby shower today instead teenage parents in south Texas they are burying their twins. Investigators are trying to figure out if a hospital's mistake killed the Garcia babies. Here is CNN's Ed Lavandera.
(BEGIN VIDEOTAPE)
ED LAVANDERA, CNN CORRESPONDENT (voice-over): The lives of little Keith and Kaylin Garcia are measured in hours, not years. The twins died just days after receiving an overdose of the blood thinner heparin in a Corpus Christi, Texas, hospital. The twins' grandparents say they're devastated and shocked.
HECTOR CHAPA, GRANDPARENT: They won't know what actually is the cause of death is why on the first child that passed on, Keith, they wanted to do an autopsy because they don't know what the cause of death was.
LAVANDERA: Christus Spohn Hospital says pharmacists mistakenly mixed the heparin drug giving the Garcia twins 100 times the normal amount for babies their size. Hospital officials confirm the overdose was given to Keith and Kaylin and 12 other babies. One of those children is in critical condition, the others are stable. But hospital officials say adverse effects of heparin have not been identified in the Garcia babies.
VOICE OF BRUCE HOLSTEIN, CEO, CHRISTUS SPOHN HOSPITAL: We do not know at this time, what if any, normal than higher expected concentration of heparin played in this babies' death.
LAVANDERA: Autopsies have been performed on the twins but those results aren't public. The twins were born a month premature and put in a neonatal intensive care unit because they had slight problems breathing. But it's not clear yet if it was the heparin overdose or another medical condition which caused the deaths of the Garcia twins.
CHAPA: We want to know why it happened and why this heparin was given out even if it was the cause. The lived for hours in perfect health condition.
LAVANDERA: This weekend the Garcia family was supposed to celebrate a baby shower in Keith and Kaylin's honor. But now the family will mourn them at a funeral. Ed Lavandera, CNN, Dallas.
(END OF VIDEOTAPE)
KAYE: All morning we've been talking about the passing of Tony Snow, the former White House press secretary. Senator John McCain has just released a statement and we want to get to Suzanne Malveaux who has that information for us. Suzanne?
VOICE OF SUZANNE MALVEAUX, CNN CORRESPONDENT: Actually, I'm sorry I don't have that information for you. I'm just calling in to talk a little bit about my own relationship with Tony Snow.
KAYE: Why don't I share that statement first. Then we'll get your reaction to it and to the passing of Tony Snow. "Our thoughts and prayers go out to the family and friends of Tony Snow. He was a loving father, husband and truly one of America's most gifted commentators whether he sat behind a radio mike or stood behind a White House podium. Tony Snow always sought to give the American people new insight into our government political process and leaders. He asked the tough questions. Took them as well. Even when diagnosed with cancer, his fight served as an inspiration to all Americans. In the coming days we will celebrate the life of a truly great and generous man." Suzanne, your reaction to that and your thoughts on his passing?
MALVEAUX: I certainly agree. Tony Snow was somebody who was very special and just getting to know him over the time covering the White House he was really somebody that you could spar with. He really held his own. But he also was just a very sweet and gentle person. He was someone who was very open with discussing his struggles with his cancer. I was in his office a number of times and we all have friends and family who have gone through that disease and he would be very comforting. He would talk about it personally. Also kind of nudging everybody to take good care of themselves. But a very positive person. Somebody who really appreciated where he was and what he was doing at all stages of his life. When he left people were sad to see him go. When he came back, everybody kind of celebrated the struggle and really the overcoming, the victory, the small victories that he had along the way. He was a true professional at the podium one who really gave you a run for your money and obviously someone who was generous and also very honest. It was very deep among the press corps.
KAYE: He was pretty tough but he had a real heart didn't he?
MALVEAUX: Oh absolutely. He really did. You could tell how close he was to his daughters at the White House functions. How proud he was of them. He would talk about it. He would always invite you into his office to kind of sit down and sometimes take up a breath and a breather from all of the serious news and a lot of the back and forth that we had. I remember we had a couple of sparring matches when I was substitute anchoring for "THE SITUATION ROOM" and I think it was his last day really and it was a real back and forth and I was surprised but I kind of laughed afterwards and I said, wow, Tony, you're on fire here. You're really trying to get in the last word. He just laughed. He thought it was really funny. That's just the way he was.
KAYE: Very special guy. Suzanne Malveaux, thank you for your thoughts.
MALVEAUX: Ok, thank you.
KAYE: We'll have much more ahead. Stay with us.
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SIMON: An iconic American beer may soon wear a foreign label. A Belgian brewer wants to buy the maker of Budweiser. "The New York Times" says hostile talks have turned friendly. Maybe they talked about it over some cool ones. A deal could soon be announced as soon as Monday. Here's CNN's Susan Roesgen.
(BEGIN VIDEOTAPE)
SUSAN ROESGEN, CNN CORRESPONDENT (voice-over): In St. Louis, it sounds unthinkable, could the king of beers be knocked off of the throne by a company headquartered in Belgium? No comment from Anheuser-Busch but global giant InBev is ready to take over. On the company website the CEO has been promising that, while the brand may change hands, the beer will stay the same.
CARLOS BRITO, CHIEF EXECUTIVE OFFICER, INBEV: I think what's important here is that Budweiser, the beer, will continue to be brewed in the same brewers, we don't have plans to close any breweries. By the same people. According to the same recipe. According to the same traditions and heritage. I think that's what matters at the end of the day. And that's what we're committed to. Because we understand that's so key to the business, to the brands and to the consumers and therefore to us.
ROESGEN: Will things stay the same if a global company takes over? Many Bud drinkers don't buy it.
UNIDENTIFIED MALE: No. I think anytime they get their claws in it and then everything changes.
UNIDENTIFIED FEMALE: I would be skeptical that that would really be the case.
ROESGEN: Also skeptical are Missouri senators Claire McCaskill and Kit Bond. They're against a takeover. Worried that St. Louis could lose jobs and a community icon. Anheuser-Busch has been making beer for 150 years and the board of directors filed suit earlier this week to stop the takeover. But InBev is offering shareholders 30 percent more for the company's stock. And industry analysts say that may be enough to seal the deal. Susan Roesgen, CNN.
(END OF VIDEOTAPE)
KAYE: And NEWSROOM continues at the top of the hour with Fredricka Whitfield who is still getting ready.
FREDRICKA WHITFIELD, CNN ANCHOR: I am putting on my mike.
KAYE: While you're doing that you are going to be taking over the reigns. You have about eight minutes to get that microphone on.
WHITFIELD: Good, I'm getting it together now. I hope that you could hear me. KAYE: Tell us what you have coming up.
WHITFIELD: Good to see you guys this morning. Great, we've got lots straight ahead and of course we're going to delve into some legal issues, particularly of most interest. We're talking about the latest DNA discoveries involving the Jonbenet Ramsey case. Our legal experts will be delving into that as well as the divorce battle that gets really ugly involving Christie Brinkley. And then coming up on politics remembering how you voted. All of this coming back to vote Barack Obama and John McCain. All of that straight ahead. And of course we're going to be continuing to watch what's going on with Indymac in your home state. Boy it's so frightening, it really means that while people there in California are worrying about what's going to happen with their money, live pictures right now of Indymac out there after that bank failure. Of course the ripple effect is people across the country are wondering about their money in their banks.
KAYE: You see that woman right there, there's a live picture. There she is trying to find out what's going on, why the banks closed and she wants her money.
SIMON: I think she wants her money.
WHITFIELD: Yeah, I don't blame her.
We're going to continue to follow that throughout the noon hour and the rest of the day here on CNN. And I'll get my mike straightened out. I know you can hear me, it's just a little (INAUDIBLE) right now.
KAYE: We'll give you a couple of minutes to do that.
You have six minutes left now.
WHITFIELD: Ok.
KAYE: Thanks Fred.
WHITFIELD: Thank you.
KAYE: When most of us think of Italy we think of Roman ruins in the hills of Tuscany, well look at this. One of our i-Reporters found something completely different.
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KAYE: Time to talk trash. Big problem across Naples, Italy. The parliament has now approved plans for new dump sites and incinerators to solve a garbage collection crisis.
SIMON: Garbage collectors, they stopped picking up the trash because the dumps were full at residents. They were protesting the new ones. Some angry residents reacted by burning the garbage. CNN iReporter Brian Waite, he captured the pictures. Take a look.
(BEGIN VIDEO CLIP) BRIAN WAITE: It's pretty much on every breakdown lane on the expressways full of garbage. Little turns in the road are full of garbage. Anywhere there's a place where you're supposed to drop off garbage, the pick-up is so intermittent that the pile can form and stay there. You can't even see the dumpster.
This is right next to our house.
I went out, videotaped it. It turned out to be that fire that you saw in the video. The next day I went back and kind of saw the aftermath and the containers actually sat in the middle of the road for a week after the fire. The first video got 90,000 and the second video also got somewhere around that 90,000. We're actually shocked that we got the response that we did. My wife and I kind of looked at each other and couldn't believe that it was updated. We sent and hit the refresh button and every couple minutes there would be a thousand more views and it's really amazing the response the stories repeatedly gotten in both of the videos. Italy is a beautiful country. I've loved actually Naples. There's so much to do here. There's so much history. Herculaneum, Pompey, (INAUDIBLE). There are parks. There are royal palaces, there are art museums. And so that's why we kind of recorded this video was you know, it's just -- we hate to see it. It's so sad and my wife and I, we feel like there's -- we need to kind of do something about it and there's nothing that we can do except to tell people about it. I mean but the problem has been going on. I have people placing comments on the video on the i-Report site saying that they were here in the '70s and there was a trash problem then so I don't know what the fix is.
(END OF VIDEO CLIP)
KAYE: If you have an i-Report you can send it to us at cnn.com/ireport. You may see your pictures right here on CNN. Always stay safe when you're trying to capture video though of anything you might want to send us.
SIMON: Always a good thing. And CNN NEWSROOM continues right now with Fredricka Whitfield. Hey Fred.
WHITFIELD: Hi Dan and Randi, you guys have a great day today.
