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IndyMac Bank Failure; InBev Taking Over Anheuser-Busch; Myanmar Devastation Hidden From Public; Body of Missing Army Nurse Found in North Carolina; Search for Missing Multimillionaire Steve Fossett

Aired July 14, 2008 - 09:00   ET

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


TONY HARRIS, CNN ANCHOR: And good morning, everyone. You are in the CNN NEWSROOM. I'm Tony Harris.
RANDI KAYE, CNN ANCHOR: And I'm Randi Kaye. Heidi Collins is off today.

You'll see events come into the NEWSROOM live on this Monday morning, July 14th.

Here is what's on the rundown.

Your money, your mortgage, the government moves on two fronts to calm fear. This hour we'll watch how Wall Street reacts.

HARRIS: A jump in violence in Afghanistan leads to a call up of hundreds of blast-deflecting vehicles.

KAYE: And our Betty Nguyen sneaks into a part of Myanmar still reeling after the cyclone, in the NEWSROOM.

HARRIS: And at the top of this hour, your wallet, your worries. The week starts with dramatic and unsettling news on the economy.

Reopening this morning, under federal control, IndyMac. On Friday it became the second largest financial institution to fail in the United States in U.S. history, the biggest collapse since Continental Illinois went under in 1984.

IndyMac had specialized in mortgages that required little, if any, proof that the home buyer was well qualified.

The mortgage crisis also looming over two lending giants. And the government wants you to know it is ready to step in at risk, Fannie Mae and Freddie Mac. They're responsible for about half of all mortgages in the United States.

So how far are the concerns rippling? We will keep an eye on Wall Street where markets open at the bottom of the hour.

Earlier this morning Asian markets closed mostly lower.

Fannie, Freddie and you -- the mortgage crisis could reach in to your wallet. Here to explain, CNN senior business correspondent, Ali Velshi. Susan Lisovicz is following the market reaction for us this morning. But let's start with you, Ali, and let's talk about Fannie and Freddie and the steps to shore up those companies.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes, you know there are three different mortgage things going on today. There's Fannie and Freddie, which I'm going to talk about, there's the IndyMac failure over the weekend, and then the Fed has new mortgage rules. So it's hard to keep track of it.

But Fannie and Freddie -- let me tell you what they do. These are privately traded companies. They trade on the stock exchange. They're sort of attached to the government. But what they basically do is they buy mortgages from the retail bank that you'd get your mortgage from. That lend -- that frees up the bank to make more mortgages to other people.

Then what do Freddie and Fannie do with those mortgages? They repackaged them, they re-bundle them, and sell them to other investors as what we call mortgage-backed securities.

Now, as you know, that's been where the problem all started. Those mortgage-backed securities started to fail and Freddie and Fannie started to feel the pinch of that when people couldn't make their mortgage payments.

So what's happening now is that Freddie and Fannie are responsible for -- they hold or guarantee more than $5 trillion worth of loans, more than half of all U.S. loans. And the fear is if they were to go bankrupt there just wouldn't be that liquidity. It would be much harder to get a residential mortgage.

So the federal government has stepped in. Treasury Secretary Henry Paulson has said that they are working with the Fed to get more money to Freddie Mac and Fannie Mae if they need it. They are also being authorized -- they want Congress to authorize the treasury to invest in the company, to actually buy its stock on the market to shore up the company, and it has worked.

We are less than 20 minutes away from the open of the market. And Susan is going to tell you about the fact that this has had a very positive impact on trading, at least, for the open.

So it's a sign that the government stepping in and saying we're not going to let Freddie and Fannie fail because it's too important to the mortgage sector in the United States. Mortgage -- industry has taken too much of a hit. They're going to keep this one afloat.

HARRIS: And Ali, do we have any idea how much subprime -- how much of the subprime mess is in the securities Fannie and Freddie are trying to package and sell?

VELSHI: Well...

HARRIS: I mean it sounds like that might be part of the problem here. VELSHI: It is kind of the problem, because when this system works well, banks give loans to people, people pay the interest on those loans. You sell that as an investment to somebody else. Everybody is happy.

HARRIS: Yes.

VELSHI: And it keeps money flowing through the system.

The problem is that no one bet on the fact that home prices would come down and people would fail to pay their mortgages at the same time. And it's like a house of cards. It all started to come down.

So the government has decided that Fannie and Freddie are the piece that has to be propped up in the middle so that the money continues to keep flowing.

HARRIS: Yes.

VELSHI: Some of it is subprime. That wasn't the plan. Fannie and Freddie are not there specifically for that market but it is part of the whole thing. And...

HARRIS: Yes.

VELSHI: You know that's been the effect.

HARRIS: Yes, all right, Ali Velshi for us this morning.

Ali, appreciate it. Thank you.

KAYE: How will the markets react to all of this? The opening bell is less than 30 minutes away. Susan Lisovicz is at the New York Stock Exchange with a quick preview for us.

Hi there, Susan.

SUSAN LISOVICZ CNN CORRESPONDENT: Hi, Randi.

Well, we are set for sharply higher open. At this point we're looking for triple digit gains from the Dow.

Just to follow up on what Ali was saying. The moves by the Treasury Department and the Federal Reserve are extraordinary measures to prop up Fannie Mae and Freddie Mac. But there is another element as well. It's meant to calm down investors. No coincidence.

These measures were announced before the Asian markets started trading. They traded down ultimately but it could have been a lot worse. And this comes after a tumultuous week here in Wall Street.

Last week, you remember, Dow briefly fell below 11000 for the first time in two years and oil prices got within $3 of $150 a barrel. We saw a real stampede out of Fannie and Freddie. Their shares were down about 40 percent for the week. Today investors are encouraged, no doubt, by the government's move to prop up Fannie and Freddie. Their shares, by the way, are up about 30 percent in pre-market trading. They're down about three- fourths. They've lost about three-fourths of their value this year.

Freddie is scheduled to auction off $3 billion in debt this morning. That will be an important test of confidence.

Remember, the failure of a financial company ripples through the economy. It affects all of us. Less money available. Could cause a run on the banks that we saw at IndyMac last week.

The Federal Reserve, as Ali mentioned, set to release tighter lending rules today and we'll also finally watching shares of Anheuser-Busch. It accepted a sweet $52 billion bid from the Belgium brewer InBev. Bud shares are up 1.5 percent in the pre-market.

There is a lot going on today -- Randi.

KAYE: When you see the treasury secretary come out on a Sunday afternoon to talk, you know the goal is to calm investors.

LISOVICZ: No question about it.

KAYE: All right, Susan Lisovicz, thanks so much.

LISOVICZ: You're welcome.

KAYE: FDIC. Those four letters could mean everything if your bank goes under. The government program ensures private savings accounts up to a limit.

The FDIC's chief operating officer spelled it out to our Rick Sanchez.

(BEGIN VIDEO CLIP)

JOHN BOVENZI, COO, FDIC: If there are other bank failures in the coming weeks, I think the same message, if your accounts are under $100,000, you have absolutely nothing to worry about. And there are ways to structure your accounts so you can get much more than $100,000 coverage fully insured in any individual institution.

And I would recommend that people look at our Web site to see how to structure their accounts to take full advantage of deposit insurance.

(END VIDEO CLIP)

KAYE: And that Web site if you want to check it out, the address is fdic.gov.

HARRIS: So let's break it all down, if we can, here. What are Fannie Mae and Freddie Mac? Both were created by Congress and are owned by shareholders. Their mission -- increase homeownership and rental housing but as losses added up investors backed away. The shares in the companies have plunged as much as 90 percent since last August.

We are asking for your iReports this morning. Are you worried about your financial future? Do you have a story you'd like to share with us? Send it to ireport.com.

KAYE: New details this morning about a bold insurgent attack on an outpost in eastern Afghanistan. Nine American soldiers were killed. It is the deadliest attack on U.S. troops in Afghanistan in three years.

Our Barbara Starr joins us now to bring us up to date -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Randi, we are getting more details about what happened yesterday in Kunar province. That's on the eastern edge of Afghanistan right along the Pakistan border.

Officials now -- U.S. officials now confirming to CNN that there were perhaps as many as 200 insurgents involved on this attack on a combat outpost and a small observation point on the outer edge of this area was indeed over-run by the insurgents.

It is believed that most, if not all, of the nine U.S. casualties and more than a dozen wounded did occur when that observation point was over-run. The insurgents used small arms, mortars, rockets and simply melted away back into this village area. It was the second major attack in Afghanistan over the weekend.

And I have to tell you that sources also confirming to us, U.S. commanders now, not just because of the weekend's events, are asking at the highest levels of the Pentagon for hundreds of additional MRAPs, those heavily armored vehicles that have proven to save so many lives in Iraq, asking for hundreds of them to be sent to Afghanistan.

What this is all adding up to, Randi, is a very accelerated understanding, if you will, that the war in Afghanistan does not have enough troops or enough equipment in the face of this rising violence -- Randi?

KAYE: Barbara, might we be seeing some type of surge in Afghanistan in the near future?

STARR: I think without question, that's exactly what everyone believes will happen come the first of the year. The critical thing now, commanders say, is to get a troop drawdown in Iraq. Free those troops up because they really cannot add to Afghanistan with what they have going on right now.

They've got to get more troops out of Iraq, get them home for rest and recuperation, and then send fresh troops into Afghanistan. The requirement now is for three brigades for Afghanistan. That could be as many as 10,000 additional troops come next year -- Randi.

KAYE: All right, Barbara Starr at the Pentagon for us. Thank you.

HARRIS: And getting ready for the storm. Bertha has weakened to a tropical storm as it moves in toward Bermuda. But it is still kicking a deadly surf as far away as New Jersey. Forecasters say it is expected to hit Bermuda today with high winds and three to five inches of rain. People who live there are taping up windows and tying down their boats.

KAYE: Rain from violent thunderstorms helping firefighting efforts in California just a little bit, but it's also triggered mudslides.

A mudslide in an area devastated by wildfires last year damaged about 50 homes. It also shut down a main road in the town of Independence on the eastern side of the Sierra, Nevada. Firefighters couldn't get to a blaze in Lake Isabella.

Meanwhile, in Paradise, most of the people who evacuated their homes because of the wildfires have now returned with about 300 homes are still threatened. And evacuation order in nearby Concow has also been lifted. But officials say nearly 300 fires are still burning around the state.

HARRIS: Boy, a major highway back open this morning in Phoenix after massive rains forced a shutdown. Take a look at this. Quite a traffic jam. Hundreds of cars and other vehicles at a stand still. Some drivers were stranded. Look at that scene.

A storm rolled into Arizona yesterday dumping up to two inches of rain an hour. Both directions of U.S. 60 near Interstate 10 were closed for hours.

KAYE: (INAUDIBLE) weather to watch today.

HARRIS: Boy.

KAYE: Meteorologist Jacqui Jeras has more on the storms in the southwest and along the east coast -- Jacqui.

(WEATHER REPORT)

HARRIS: Well, if you don't like it that makes us a little uncomfortable up here.

KAYE: Yes, looks pretty messy out there.

HARRIS: Yes. OK, Jacqui.

JACQUI JERAS, AMS METEOROLOGIST: Go to have a heads up.

HARRIS: Thanks, Jacqui.

KAYE: Thank you.

The mortgage crisis -- it's more than a news story. It may be latest hit on your wallet. We'll talk to an expert on what it means to you.

(COMMERCIAL BREAK)

BETTY NGUYEN, CNN ANCHOR: I'm Betty Nguyen. Coming up, what the Myanmar government doesn't want you to see two months after the deadly cyclone.

(COMMERCIAL BREAK)

KAYE: An award today for newly freed French Colombian hostage, Ingrid Betancourt.

French president, Nicholas Sarkozy, awarded her with France's highest accolade, the Legion of Honor.

He praised Betancourt as a symbol of hope. The award came during an even marking Bastille Day, which is France's national holiday.

Betancourt spent six years held captive by Colombian rebels. She, along with 14 others, were freed in a daring rescue operation on July 2nd.

HARRIS: Genocide in Darfur. Hours ago, an international prosecutor filed charges against the president of Sudan, accusing him of that crime. He wants the president arrested.

CNN senior international correspondent Nic Robertson is live in London.

Nic, I've got to tell you, watching over the years, our reporting here in CNN domestic and some of your reporting on CNN International, it would seem the prosecutor would have more than enough evidence to make a case.

Some are probably wondering what's taken so long to file these charges.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: You know, Tony, I asked the prosecutor that same question and he said, look, I've been working at it for three years. It takes time to do it. He said a year ago I was ready to charge two people in Sudan, a former state minister of the interior, somebody alleged, a big leader in the Janjaweed.

And he said, and I worked for another year and I've got the case against the president. And he said it's basically as simple as this. All roads of power in Sudan lead to the president. The president is responsible.

And for genocide, you have to show that there's an intent to kill part or a whole of the ethnic group. And that's what the prosecutor says he's been doing for the past three years.

When I talked to him about this over the weekend he was very, very clear, rape is part of the ongoing genocide there.

(BEGIN VIDEOTAPE)

ROBERTSON (voice-over): Using a map detailing killings in Darfur, Luis Moreno-Ocampo explains to me why he's calling for the arrest of Sudan's president.

LUIS MORENO-OCAMPO, INTL. CRIMINAL COURT PROSECUTOR: And normally these attacks are conducted by army plus (INAUDIBLE) Janjaweed supporting the army.

ROBERTSON: The International Criminal Court's prosecutor says President Omar Bashir is trying to destroy three of Darfur's biggest tribes -- the Fur, the Massaleit and the Zaghawa, and that's genocide.

MORENO-OCAMPO: This is clear targeting of the group, and targeting the business and then the country. Substantial part of Darfur government (INAUDIBLE) camps and that is there what they're advocating. That's why the genocide is ongoing. It continues today. Their weapons, rapes. Rapes is the weapons of (INAUDIBLE).

ROBERTSON: In his submission to the three judges at the International Criminal Court, Moreno-Ocampo accuses President Bashir of three counts of genocide, five counts of inhumanity, and three counts of war crimes.

Since 2003, the U.N. says more than 300,000 people have been killed and more than 2.5 million forced to flee their homes. For three years, Moreno-Ocampo's investigators have been talking to victims and witnesses.

MORENO-OCAMPO: We moved that al-Bashir has absolute control. He's the president of the country, he's a chairman of the International Congress Party. He's a commanding chief of the army. Even -- we have evidence showing that different Janjaweed call him, report to him. So al-Bashir control everything in Darfur.

ROBERTSON: President Bashir has long denied accusations of genocide. His government officials insist only 10,000 people have died and claim no international laws have been broken.

(on camera): Last year the court issued arrest warrants for two Sudanese officials -- Ahmed Haroun, the former state minister of interior, and Ali Kushayb, an alleged Janjaweed commander.

So far Sudan has done nothing to send them to the court here. Indeed, Sudan refuses to recognize the legitimacy of the International Criminal Court.

(voice-over): Sudan's ambassador to the U.N. has already accused the prosecutor of playing with fire and threatened all the government's options are open.

Moreno-Ocampo says he has no option but press ahead with the charges.

MORENO-OCAMPO: I have the responsibility to the Security Council decide to defer their case to me and request me to investigate. I cannot give (INAUDIBLE). I cannot yield. Silence never helps the victims.

(END VIDEOTAPE)

ROBERTSON: And I asked him as well what is he concerned about, what happens to all those peacekeepers and humanitarian workers in Darfur if there would be some action against them. And he said, look, if the Sudanese took action against these people, then that would be just another clear reason, he said, to bring President Bashir to that International Criminal Court -- Tony?

HARRIS: All right, let me probe a little bit deeper here. Quite a lengthy sit-down with the chief prosecutor before the hearing. Any other tidbits that might provide some insight into the way he is thinking on this case?

ROBERTSON: Well, one of the ways he's thinking is that he knows it's going to be tough to get President Bashir to that court because Sudan does not recognize it. And I said, well, OK, what are you going to do about that? Well, he said the ball becomes in the U.N.'s court.

I said what about sanctions. And he said, no, because, you know, that's not the right way to go. He talked about the possibility of some kind of snatch squad going in to take out the president, although he recognizes that's unlikely.

What he says is really effective is putting this in the sort of public domain, letting people know that the president, he believes, is guilty of genocide and having the public around the world put pressure on their governments to take a stronger line against Darfur and to force Sudan -- rather and force Sudan to hand over President Bashir.

HARRIS: OK. CNN senior international correspondent Nic Robertson from London for us.

Nic, appreciate it as always. Thank you.

KAYE: Cover controversy. "New Yorker" magazine's latest issue gets a push back from the Obama campaign.

(COMMERCIAL BREAK)

HARRIS: And to presidential politics now. John McCain and Barack Obama appealing to minorities today.

Obama could expect the love to flow when he addresses the NAACP in Cincinnati tonight. McCain will remind Latino voters he supported the past citizenship for illegal immigrants. He addresses the National Council of La Raza this afternoon.

CNN's new national poll of polls shows Obama leading McCain by 4 points, 47-43 percent, with 10 percent of registered voters unsure.

KAYE: The Obama campaign is slamming the "New Yorker" magazine over the cover of the issues that hits newsstands today. The illustration depicts Senator Obama in the oval office wearing additional Muslim clothes. He's fist bumping his wife who has an AK- 47 over her shoulder.

There's also a portrait of Osama bin Laden hanging above the fireplace where the American flag is being burned. "The New Yorker" is defending the cartoon. But an Obama spokesman released this statement, quote, "The 'New Yorker' may think that their cover is a satirical lampoon of the caricature Senator Obama's right-wing critics have tries to create. But most readers will see it as tasteless and offensive, and we agree."

The McCain campaign says it agrees with that assessment.

HARRIS: Will they get all their money? Customers will larger accounts really feeling the IndyMac failure.

(COMMERCIAL BREAK)

HARRIS: All right. We are getting close to the opening bell here, probably happening right now.

What do you say we take that shot of the New York Stock Exchange and see if we have that up?

Not ready yet? OK.

You know, there are -- really, there's no shortage of news out of the financial sector this morning. That's not the shot we want. First, federal government -- it looks good but it's not what we want.

The federal government sees lender IndyMac and then unveils -- here we go -- a lifeline of mortgage giants, two mortgage giants, Fannie Mae and Freddie Mac.

I'm sorry. I'm trying to see where the DOW is going and get you some of the details here that we're following.

OK. Wow, Susan, right on this. Susan Lisovicz at the New York Stock Exchange for a look at how investors are reacting to all of this news.

I'm sorry. I can't keep two competing thoughts in my head at the same time here, Susan. Good morning to you. Help me out here.

LISOVICZ: Good morning to you, Tony.

Well, you know, it's understandable because there is just a deluge of information out on Wall Street today. And in the first minute of trading, we're seeing triple-digit gains for the DOW. The NASDAQ is also up one percent. The broader S&P 500, which tracks so many of our mutual funds, 401(k)s, also up nearly one percent.

This, of course, after the government's extraordinary move to prop up the biggest players in the mortgage industry, Fannie Mae and Freddie Mac. That lifeline very real in terms of capital. But also, a dramatic attempt to calm down investors. And indeed, it is bolstering confidence on Wall Street in the early going. Shares of Fannie Mae right now are up 26 percent after dropping about 40 percent last week. Freddie Mac right now up about 24 percent. Losing an equal amount last week.

The broader financial sector so important to the stability of the economy is rallying as well. A test of confidence is taking place right now, Tony. Freddie Mac's $3 billion auction in short term debt. The government, we understand, was talking to commercial investment banks over the weekend about whether they planned to participate in this previously scheduled auction.

One other thing, lots of information out this week. Lots of economic reports. But an important test on financial companies because we're going to hear second quarter earnings from Citigroup, JPMorgan Chase, Merrill Lynch, as well as a bunch of regional banks including Wells Fargo and Capital One. It is a busy weekend -- Tony.

HARRIS: Yes. Yes. You warned us about that last week. Or at least, put it on our radar that those financials were going to start to report this week. I got to tell you. Really, we're up, what, 134 points inside the first couple of minutes. It makes you wonder how much real trouble Fannie and Freddie were really in that the moves announced over the weekend by the Treasury secretary could have this kind of impact on the markets.

LISOVICZ: Well, first of all, we know that the housing market is in the worst slump since the great depression. So that affects everyone in the -- exposed to the mortgage industry. These are two giants.

But I think, also, what you're seeing, this is the second time that the government has basically stepped in over the weekend to allay fears. In March, it was Bear Stearns. What happens sometimes is a little flame can very quickly become a wildfire when there are concerns about an institution solvency.

And of course, Bear Stearns was on the brink of bankruptcy before the Federal Reserve stepped in. And I think that in this case, Fannie Mae and Freddie Mac owning or guaranteeing about half of the outstanding mortgage debt in the U.S. is just so much bigger. And not only affects the U.S. economy in a very real way, but also global economies because lots of overseas investors hold that debt -- Tony.

HARRIS: Good point. All right, Susan. You're with us throughout the morning on this story. Appreciate it. Thanks, Susan.

LISOVICZ: You're welcome.

KAYE: The mortgage crisis, it is a huge issue, with a simple bottom line. Its cost will likely pluck money from your wallet.

Mark Zandi is the chief economist and co-founder of moodyseconomy.com. He joins us from Westchester, Pennsylvania.

Good morning, Mark.

MARK ZANDI, CHIEF ECONOMIST & CO-FOUNDER OF MOODYSECONOMY.COM: Good morning.

KAYE: What do you think of the government's plan here to send a lifeline to Fannie and Freddie?

ZANDI: I think it's great. It's a very important, positive step. And the stock market is reacting very positively as a result. And I think it's going to be very important.

KAYE: What does all of this mean for homeowners and the housing market?

ZANDI: Well, you know, Fannie and Freddie are key to the housing and mortgage market. They insure or own nearly half of all the mortgage debt outstanding. And in recent months they've been responsible for nearly three-fourths of all the mortgage credit that's being extended to borrowers.

So they're absolutely vital to keeping the housing market together, as well as it's being kept together. So if they were going to have problems, we were all going to have problems. So, the government's intervention is a very necessary and positive development.

KAYE: Yes. Paint that picture for us, as ugly as it might be. These firms were designed to keep the money flowing in the housing, in the mortgages markets. What would it look like if they did fail?

ZANDI: It would be a complete mess. I mean, private mortgage lenders, your friendly banker isn't making a loan because they can't. Without Fannie or Freddie, it would be almost impossible to get a mortgage loan.

And if you could get a mortgage loan, the cost would be exorbitant. The interest rate would be very, very high. Now, the FHA, that's another lender of government institution. They're providing credit but they would not be able to keep up with the void left by a collapse in Fannie and Freddie. So, it's absolutely vital that they continue to apply credit.

KAYE: And these firms specialize in mortgages that require little proof of income. How much did that contribute to this mess?

ZANDI: Well, a major contributor. You know, I think it's very clear that in the boom times back, a couple three years ago, the lenders were making loans that the people are getting them just could not service and obviously now they're losing them.

And that took many forms of giving credit to people who had very low credit scores, giving loans to people with no down payment, giving people loans that didn't have the income that they said they did. So, it was a combination of all of those things. All that bad lending that's coming back to haunt us now.

KAYE: How do you fix the mortgage lending business? There's so much talk this morning of an overhaul. What needs to be done? ZANDI: Well, first step is to make sure that the future lending is done properly so the Federal Reserve is about ready to unveil new guidelines to make sure that mortgage brokers and bankers in the future are very forthright with the loans that they make. That the borrowers understand the loans.

Then it's key to repair the back end financial system. Make sure Fannie and Freddie are on solid ground. That the FHA is OK. And then, to help private mortgage lending get back on its feet to try to get credit back into the mortgage market.

KAYE: All right, Mark Zandi, chief economist from moodyseconomy.com. Thank you for your insights.

ZANDI: Thank you.

HARRIS: Well, IndyMac's failure, a repayment promised by the federal government. But worries for customers with bigger balances.

Kara Finnstrom has more.

(BEGIN VIDEOTAPE)

KARA FINNSTROM, CNN CORRESPONDENT (voice-over): Locked doors, their banks seized.

UNIDENTIFIED MALE: Good news and bad news.

FINNSTROM: Jittery customers of the former IndyMac lining up, wanting to know what happened to my money.

UNIDENTIFIED MALE: What about the people with over 100K? Will they be able to withdraw their money?

FINNSTROM: The FDIC's response, if you have less than $100,000 in a single account it is fully insured. You can get your hand on all of it Monday. But for bigger depositors, it's complicated.

KEITH GRAVES, INDYMAC ACCOUNT HOLDER: I have several accounts. A few are over six figures.

FINNSTROM: Keith Graves says he's one of the customers that had more money in his accounts than the FDIC insures.

DAVID BARR, FDIC: For them, their first $100,000 will be available immediately and then 50 percent of the amount that amount that exceeded the $100,000 limit will be made available to them immediately.

FINNSTROM: The FDIC hopes to make more payments when it sells assets. But there are no guarantees.

Graves is angry.

GRAVES: There's some funny stuff going on somewhere. And if these people that work for the government should be closely monitoring all these banks.

FINNSTROM: A loss won't hurt just him.

GRAVES: So we'll take care of it on Monday. We will go down there and take all the money out and put it somewhere else.

FINNSTROM: Graves' grandparents and other family members trusted his bank choice for both their smaller personal savings, which are fully insured, and larger accounts for the family trucking business.

UNIDENTIFIED FEMALE: Yes. We want him to get any business driving the truck because you make money.

FINNSTROM: A business that started three generations ago.

UNIDENTIFIED FEMALE: How long did you drive a truck?

UNIDENTIFIED MALE: About 20 years.

GRAVES: And I thought that, you know, it was a good small bank to put your money at. And I suggested it to the other people in the family, you know. They're paying the highest interest rates. It'd be good to put your money there.

FINNSTROM: Graves says he feels guilty and confused.

You just weren't even aware of that, once you passed over $100,000 it wasn't insured?

GRAVES: Some people worked all their life to put their money in there. And to be told you are only going to get part of your money?

FINNSTROM: Graves fears what the loss may mean for the family business.

GRAVES: The business is already hurting, anyway. Gas prices are going up. Diesel gas is even more. So then, not having money to sit on to sustain your business, it makes it even harder.

FINNSTROM: These are the very hard times Graves was saving for. Now he feels abandoned by the bank he trusted.

GRAVES: I haven't heard anything officially from any IndyMac Bank representative. You call, their lines are blocked up. They are not answering their phones.

UNIDENTIFIED FEMALE: I just said my grandson will take care of it. I try not to get angry because if I get angry I get overemotional. So I just say he'll take care of it.

FINNSTROM: Kara Finnstrom for CNN, Los Angeles.

(END VIDEOTAPE)

KAYE: Want to buy a Bud? It's costing Belgium conglomerate InBev $52 billion for Budweiser's brewer. The board of Anheuser-Busch approved the new takeover price ending weeks of back and forth between the companies.

InBev already owns iconic brews like Beck's and Stella Artois, with Budweiser, Rolling Rock, and others. InBev will be the world's largest beer company. The deal still has to be approved by shareholders and regulators.

InBev says it will keep all Anheuser-Busch breweries open in the U.S. but it's unknown if it will keep some of the companies other asset like Sea World and Busch Garden.

HARRIS: Take a look at the lower right-hand portion of the screen here. And there you see. We squeezed the New York Stock Exchange watching the DOW break territory right now. Up 100 points in the first couple of minutes of the trading day.

You know, it is easy to forget about saving for retirement when flat screen TVs and other goodies can be bought with a simple swipe of a credit card.

Christine Romans has some ways to trick yourself into saving that are "Right On Your Money".

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): To spend or not to spend -- that's the question many of us ask ourselves every day.

"Money" magazine's Walter Updegrave says one way to save money is to trick yourself, like signing up for automatic investing plan.

WALTER UPDEGRAVE, SR. EDITOR, MONEY MAGAZINE: The money that comes out of your paycheck before you get a chance to get your hands on it and spend it.

ROMANS: And, give yourself incentives to save.

UPDEGRAVE: Say that you set a savings goal, say $5,000 per year. And you say to yourself, "If I reach this goal, I'm going to give myself a reward, I'm going to buy myself an iPod or something like that."

ROMANS: If the carrot approach doesn't work, Updegrave says, try the stick.

UPDEGRAVE: Some people may operate better from fear of punishment than the promise of a reward. Now, it might be something, maybe you can't watch your favorite TV shows for a month or maybe you can't eat out for a month, something like this. Something that's enough of a penalty where you don't want to incur it, so, you have enough motivation to save.

ROMANS: Christine Romans, CNN, New York.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP)

NGUYEN: I'm Betty Nguyen.

Coming up, we take you down the Irrawaddy Delta to show you what the Myanmar government doesn't want you to see.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

HARRIS: Inside Myanmar. Two months after that deadly cyclone, the government doesn't want foreign reporters there, referring to hide the storm's devastation from the world.

But our very own Betty Nguyen has been on a very dangerous assignment in Myanmar, getting some incredible pictures. She is out of harm's way now and she joins us live, as you can see, from Bangkok, Thailand.

Betty, I've watched one of the reports so far. And I have to ask you, given what you witnessed, is there any doubt that more could have been done to save lives there if the military had been more open to foreign aid flowing into that country immediately after the cyclone?

NGUYEN: Well, I can tell you this, Tony. Very little aid has trickled into the villages that we were able to tour. We toured about half dozen villages. And few had very much at all.

And it's impossible, in fact, to get into Myanmar, one thing. Second of all, if you can get in the country, which has banned all foreign journalists, they have made it very difficult to get down to the cyclone devastation.

The junta government has set up military checkpoints in every city leading 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. And I'll warn you, the images you are about to see are graphic.

(BEGIN VIDEOTAPE)

NGUYEN (voice-over): The landscape is still 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 were to sneak into the Irrawaddy Delta under the cover of darkness.

(on camera): It's really the only way to get down there and bypass the check point.

(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 junta government doesn't want us here.

Devastation is everywhere. This lab is all that's left of a monastery.

The water was this high?

The village's only monk says the tidal surge was up to his neck and 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'd have no reason to live.

UNIDENTIFIED MALE (through translator): I have nothing. No food, no property, no companion.

NGUYEN: It's a place where the living still walk among the dead and 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. And you can still smell the stench of death.

(voice-over): Villagers say there are 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 lost, especially when cyclone survivors are still struggling to stay alive.

(END VIDEOTAPE)

NGUYEN: Now, we can report that aid is not being distributed evenly. In the villages we toured, most of them had received just a tiny bit of donation. Maybe some rice, some roofing material, tarp. I saw a total of about two tents that had been distributed just to one village.

The rest had -- they hadn't even received that. It's not nearly enough, Tony. Now, to be fair, though, I will tell you in the larger cities along the delta, the situation may be different, because aid organizations have set up camp in those larger cities.

But the junta government is also in those larger cities. So, of course, they'll venture in and try to get that report. We would have been caught by the government and the locals who were working with us would face imprisonment. That was a risk we weren't willing to take.

HARRIS: Well said. What a look.

Betty Nguyen for us from Bangkok, Thailand. Betty, thank you.

KAYE: Red flags are going up along the New Jersey Coast today, warning swimmers about dangerous rip currents. Tropical storm Bertha is hundreds of miles away, but forecaster say it is churning up surf in New Jersey. Rip currents apparently played a role in the death of two swimmers in New Jersey over the weekend. The third, still playing missing.

HARRIS: Let's get more on these rip currents. Jacqui Jeras is in the severe weather center for us.

Jacqui, what can you tell us. I see you have some images behind you there.

(WEATHER REPORT)

KAYE: The body of a missing Army nurse found in North Carolina. New charges this morning related to her disappearance.

(COMMERCIAL BREAK)

KAYE: New developments in the disappearance of a Fort Bragg Army nurse. This morning, our affiliate WRAL is reporting the body of Army Second Lt. Holley Wimunc has been found.

Wimunc has been missing since Thursday when a fire burned her North Carolina apartment. WRAL says her father told them that he's been notified of her death.

The station is also reporting that her husband, Marine Corp. John Wimunc has now been charged with first-degree arson for setting the apartment fire. Wimunc's body was found last night by crews fighting a brush fire near Camp Lejeune.

The "Jacksonville Daily News" says sources tell them the body was mutilated.

HARRIS: A new search today for missing multimillionaire Steve Fossett. He was declared legally dead in February, you may remember, five months after his disappearance.

Today's search is being led by expert mountaineers and athletes paying their own way. Fossett's widow says she has nothing to do with the search. The search team is focusing on remote mountain areas near Carson City. That's where they think Fossett's plane went down. The team hopes to cover 20 miles a day through the rest of the week.

KAYE: Oops, it happened again. For the second year in a row, Miss USA falls during the Miss Universe pageant. Yes, always right. And only about, well, maybe, a billion people were watching.

HARRIS: OK.

(COMMERCIAL BREAK)

HARRIS: I guess this just has to be the nightmare for any reigning beauty. Help me out on this, Randi. This is Miss USA. Well, she fell during the Miss Universe competition last night in Vietnam.

KAYE: But she got up. Look.

HARRIS: Terrific, huh?

KAYE: Yes.

HARRIS: It reminds me of Beyonce when she fell off the stage a year so ago, and has bounce right back up, and she was right back into her routine. Let's just keep this rolling on a bit of a loop here.

Crystle Stewart tripped on her evening gown. I'm just surprise this doesn't happen more often because ladies wear these heels and you need to raise the hem on the dresses just a little bit. The slip coming just after judges selected her as one of the top 10 contenders.

KAYE: Don't they practice this stuff?

HARRIS: You would think.

(CROSSTALK)

HARRIS: It's a radiant smile though, isn't it?

You may recall that last year, Miss USA, Rachel Smith, also tumbled during the evening gown portion of the -- oh, I hope she iced that.

KAYE: When you wiggle like that, you're bound to tumble,

HARRIS: Just want to put some ice on that before it bruises. That's a pretty popular -- oh -- popular moment there on YouTube for all you YouTubers.