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IndyMac Opening: Under Control of Federal Government; U.S. Base Invaded: 9 U.S. Soldiers Killed in Afghanistan; Myanmar Death and Misery Hidden Form World
Aired July 14, 2008 - 11:00 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 again, everyone. You're informed with CNN.
I'm Tony Harris.
RANDI KAYE, CNN ANCHOR: I'm Randi Kaye. Heidi Collins has the day off.
Developments keep coming into the CNN NEWSROOM on this Monday, July 14th.
Here's what's on the rundown.
Opening rally based on reinforcement. A government plan to bolster mortgage giants gets investors pumped. But for how long?
HARRIS: How the sweet ride ended. Signs were there before the housing boom went bust.
KAYE: And hope runs out. A missing Army nurse's remains are found. Her husband charged with arson -- in the NEWSROOM.
HARRIS: And at the top 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 U.S. history. IndyMac specialized in mortgages that required little, if any, proof that the homeowner was well qualified.
The mortgage crisis is 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 are investors reacting? Wall Street opened, what, over 90 minutes ago? And a quick check of the Big Board shows that the Dow is off of session highs. We opened in triple-digit territory. We are back down now to plus 43. The Nasdaq, I'll get a number on that shortly.
We are following all of these numbers for you right here in the NEWSROOM.
KAYE: Opening time for IndyMac. The FDIC now in control of the California bank. The customers get their first chance this morning to get that money out.
Kara Finnstrom is live in Pasadena, California, for us.
And Kara, any sign of these frustrated customers?
KARA FINNSTROM, CNN CORRESPONDENT: Yes, all around me. IndyMac reopens today under the federal government in about an hour. But take a look at this.
The customers are already lining up. You can see them here. Many of them have been here for hours, they tell us. Some of them have questions, others tell us that they just want to get as much of their money out as they can this morning.
Now, joining us live is a gentleman who was number four in line, Nasim Ahmed.
Thank you for joining us.
Tell us your concerns, because you drove here all the way from San Francisco.
NASIM AHMED, CUSTOMER: Actually, I have my business account and personal accounts with IndyMac the last three years, and I have a whole lot of money with them. So I'm really concerned what is going to happen with my money, whether I'm going to get all of this, part of it.
As I was confused, I decided to take my whole family, my daughter and son, a 7-month-old boy, drive down to Pasadena here today. So let's see what happens.
FINNSTROM: And his big concern is that he has well over the amount that he believes may be safely insured here.
AHMED: That's true. That's true.
FINNSTROM: Joining us live now with a little bit more insight into how all of this works, we want to bring in the man who is now in charge of running this bank, with the FDIC, John Bovenzi.
Thank you for joining us.
Give us kind of a thumbnail sketch, because one of the big questions we're getting here is, "Is my money going to come back to me?" Who is insured, who may not be?
JOHN BOVENZI, CEO, INDYMAC BANK: Most of the accounts at this bank were fully insured. There are about 265,000 accounts that have complete insurance coverage. There are about 10,000 accounts that have some uninsured amounts.
So most people, 95-plus percent of the customers, are fully insured. And for those who have some uninsured, we're making available their insurance portion, 50 percent of the uninsured amount, and then may get more later. FINNSTROM: All right. Thanks for joining us. We know it's going to be a busy day for you.
Once they get inside, they'll actually see a lot of the familiar tellers. They are being brought back, giving some instructions on what changes under the FDIC, and will be able to answer a lot of these questions.
Back to you.
KAYE: All right. Kara Finnstrom with some very concerned customers there.
Thank you.
HARRIS: Boy, oh boy. Fannie, Freddie and you. The mortgage crisis could reach into your wallet.
Here to explain, CNN Senior Business Correspondent Ali Velshi.
Ali, I know we're going to get to Freddie and Fannie in just a moment, but what is your take on that scene that you just saw there with Kara Finnstrom with a line around the bank?
ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Yes, it's very -- you know, it's puzzling to people, it's surprising. You don't expect a bank to fail, and that was a particularly large bank to fail.
The FDIC has a list of apparently 90 names of banks that are in trouble. That list has been bigger in the past. There are always, apparently, names on that list, and many of them are very small.
Now, the Federal Reserve has just put new laws into place. They just passed it today, rules that would prevent some of the mess that we've been in, in the housing sector. But it's not going to undo any of the damage that's done. But from here on in, the bank, the lender, is going to have to verify that the borrower actually has sufficient income and assets to cover that loan, that they'll be able to repay that loan, that there won't be the same kind of penalties for paying them back.
So, the kind of mess that IndyMac got into because they offered loans to people without any income or assets will hopefully be prevented in the future.
HARRIS: Wow. OK. Ali, appreciate your work on this throughout the morning, and we know this will be topic number one on "ISSUE #1," coming up at noon Eastern.
VELSHI: Yes.
HARRIS: Thanks, Ali.
VELSHI: OK.
HARRIS: So let's break this down a bit. 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 add up, as Ali mentioned just a moment ago, investors backed away. Shares in those companies have plunged as much as 90 percent since last August.
KAYE: The White House says President Bush will lift a ban on offshore drilling. The official announcement just a couple of hours from now, but it's largely a symbolic move. The executive ban was put in place by his father, George H. W. Bush, back in 1990, but there's also a federal law banning offshore drilling. President Bush has asked Congress to change that.
The economy, it's issue #1, and we will bring you all the latest financial news weekdays at noon Eastern. It is the information you need on the mortgage meltdown, the credit crunch and so much more.
"ISSUE #1" at noon Eastern.
HARRIS: And 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 has more.
Barbara, good morning.
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning to you, Tony.
It was a very bad weekend in Afghanistan for U.S. troops. A major firefight in the South. And in eastern Afghanistan, in Kunar Province, right up against the Pakistan border, nine U.S. troops killed in this massive firefight.
Apparently, according to sources, there were about 200 insurgents that came against a very remote U.S.-Afghan combat outpost in this remote area of Afghanistan. They didn't get inside the combat outpost, but according to an official familiar with what happened, insurgents did overrun an observation point, a very small, raised platform area for observation outside of the combat outpost.
Apparently most, if not all, of the U.S. fatalities occurred in that portion of the firefight at the observation post. Helicopters called in to provide air support. This firefight went on for several hours.
You know, it is the latest sign of the rising level of violence in Afghanistan, and the deteriorating security situation overall. And because of that overall situation now, we have been told and have confirmed, U.S. commanders in Afghanistan have asked at the highest level for hundreds of additional armored vehicles to be sent to Afghanistan, the MRAPs, Tony, those very heavily-armored vehicles that have proven so successful inside Iraq at protecting the lives of U.S. troops against roadside bombs and other threats.
And also, there is an ongoing requirement for more troops in Afghanistan, as many as three brigades. That's about 10,000 troops. Afghanistan now turning out to be the war that needs more troops and more equipment.
HARRIS: Barbara Starr at the Pentagon for us.
Barbara, thank you.
STARR: Sure.
KAYE: New developments in the disappearance of a Fort Bragg Army nurse. This morning, our affiliate WRAL is reporting the body of Army 2nd Lieutenant Holly 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, and we now learn that her husband, Marine Corporal John Wimunc, has now been charged with first-degree arson. A second person is also facing arson charges.
Wimunc's body was found last night by crews fighting a brushfire near Camp Lejeune. "The Jacksonville Daily News" says sources tell them the body was mutilated.
HARRIS: Seeking an arrest warrant for the president of Sudan. An international prosecutor unveiling genocide charges against Omar al-Bashir just a couple of hours ago.
Al-Bashir, seen here, is accused of ordering murder and rape in Darfur. It could take the three-judge panel months to go through the evidence before issuing any rulings on this.
On Sudan's state television, the president's National Congress Party warned of more violence and bloodshed if an arrest warrant is issued. The United Nations estimates 300,000 people have died in Darfur, millions more have been displaced during the fighting.
(BEGIN VIDEO CLIP)
BETTY NGUYEN, CNN CORRESPONDENT: I'm Betty Nguyen.
Coming up, what the Myanmar doesn't want you to see two months after the deadly cyclone.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
KAYE: Inside Myanmar. Two months after that deadly cyclone, the government doesn't want foreign reporters there, preferring to hide the storm's devastation from the world. But CNN's Betty Nguyen has been on a dangerous assignment there, getting some incredible pictures, and she joins us now out of harm's way, live from Bangkok, Thailand, with this exclusive report -- Betty. NGUYEN: Well, Randi, the Myanmar government has made it nearly impossible for us to reach the cyclone devastation. It has set up checkpoints in just about every city that leads 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'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 was to sneak into the Irrawaddy Delta under the cover of darkness.
(on camera): This is 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 Junta government doesn't want us here.
Devastation is everywhere. This slab is all that's left off a monastery.
(on camera): The water was this high?
(voice-over): 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 (through translator): 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. And 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 VIDEOTAPE)
NGUYEN: And I can tell thaw aid is not being distributed evenly. Very little aid, in fact, has reached the half-dozen or so villages that we toured. Little more than some rice, roofing materials, some tarp. Not nearly enough.
Now, the situation, Randi, may be different in the larger cities along the delta, where aid organizations have set up their camp. But we couldn't reach those cities because the Junta government was all over the place there, and had we ventured off into those cities, we'd face deportation and the locals helping us face prison time, something we didn't want to risk.
KAYE: And Betty, it really is remarkable that you got in there. I know you don't want to say who helped you get in because you'd put them at risk, but can you give us an idea of the journey getting inside there?
NGUYEN: It was pure hell, just to put it bluntly. It really was.
It took us 21 hours to get down to the delta. We had to stow away like fugitives. And it's a trip that normally only takes about four hours by car, minus those checkpoints, of course.
And once you get down there, like you saw, the devastation is just everywhere. We couldn't leave once we got down to the delta because it would be tricky to get back. It already took us 21 hours in the first place. So we had to stay down there.
We didn't shower for days. We lived off of bottled water and power bars. We waded in water near dead bodies. But, you know, that was nothing compared to the reality that people face on a daily basis down there. Our temporary misery is their reality, and what they need is aid.
KAYE: They sure do.
Betty Nguyen, Bangkok, Thailand.
Thank you.
And you can help. At CNN.com, we have a special page on the aftermath of the cyclone in Myanmar, plus links to aid agencies that are organizing help for the region. It is a chance for you to impact your world.
(WEATHER REPORT)
KAYE: Dating, having sex, being abused by partners -- a growing problem for those growing up too fast. We talk to tweens.
(COMMERCIAL BREAK)
KAYE: Too hot for tweens, a new study looks at the relationships of 11-to-14-year-olds. Too many of them beyond their years. Here's CNN's Kate Bolduan.
(BEGIN VIDEOTAPE)
KATE BOLDUAN, CNN CORRESPONDENT (voice-over): They're not yet teens, and far from adults, but a newly released survey shows tweens are growing up faster than ever. The survey commissioned by Advocates Against Teen Dating Abuse shows nearly half of 11-to-14-year-olds say they've dated. One in four say sex is part of relationships. And of the tweens who say they're sexually active, 69 percent say they face some type of verbal or physical abuse.
Dr. Kay Abrams is a clinical psychologist who works with tweens.
DR. KAY ABRAMS, CLINICAL PSYCHOLOGIST: They want to belong. I'll get young girls in my office who in eighth or ninth grade were dating an older boy, and they weren't ready, and they want to please.
BOLDUAN: To find out more, we went directly to tweens themselves.
(on camera): The people that you hear having sex, do you think they are too young? Do you think they're mature enough?
ANDREW RUSSO, 14 YEARS OLD: When you're in a serious relationship, it gets harder and harder to do, because there's a lot of temptation. There's always people who are saying, oh, you should try it.
EMILY FORGO, 11 YEARS OLD: Parents say you're too young to date, but it's also the kids' fault, because they will go ahead anyway thinking that they can handle it, when they really can't.
BOLDUAN (voice-over): This group, ranging from 11 to 15 years old, said they know kids having sex and have even seen kids being abuse in relationships.
LLOYD BERG, 13 YEARS OLD: It's verbal and it's physical, too. Like, they'll slap each other. They'll push each other.
BOLDUAN: So, what's going on? The peer pressure is great and the influences are everywhere. Television, for one.
JABARI DOUGLAS, 15 YEARS OLD: I also think that it's that -- like the music that people listen to.
BERG: I think that since you can get anything on the Internet, I think it's more destructive and more influential.
BOLDUAN: When it comes to protecting youth, Dr. Abrams says it's a simple formula of a watchful eye and an open dialogue.
ABRAMS: Stay mindful, yes. Be concerned, yes. Give children more time to be safe and innocent, to learn to be respectful, and to learn when to turn to adults.
BOLDUAN: And maybe take some advice from a fellow tween.
FORGO: You're a kid. Be a kid. You won't be it forever.
BOLDUAN: Kate Bolduan, CNN, Washington.
(END VIDEOTAPE)
KAYE: To get your "Daily Dose" of health news online, log on to our Web site. You will find the latest medical news, a health library, and information on diet and fitness. The address is CNN.com/health.
HARRIS: The housing market in the dumps, some banks in the danger zone. How in the world did we get here?
We break it down for you.
(COMMERCIAL BREAK)
KAYE: And welcome back to the NEWSROOM. Good to have you with us today.
I'm Randi Kaye, in for Heidi.
HARRIS: And I'm Tony Harris.
The mortgage crisis, the banking scare -- is your money under siege from a perfect storm of bad news? Let's take a look at how we got to this point.
(BEGIN VIDEOTAPE)
TOM FOREMAN, CNN CORRESPONDENT: If you think about the good times, they were really, really good. Neighborhoods were expanding, it seemed like the whole nation was being reborn on this just wave of money sweeping over everything. And it was very hard in the middle of that for anyone to say it's not going to continue forever.
HARRIS: Even adjusted for inflation, home prices increased, on average, by 80 percent between 1997 and 2006.
UNIDENTIFIED FEMALE: It was like a casino in the housing market. Prices just couldn't stop going up.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: The whole idea that suddenly everybody's house price could fall was -- seemed ludicrous.
HARRIS: Neighborhoods across America were a builder's dream, but there were early signs the foundation was cracking.
WILLIS: There were construction cranes everywhere, but at the same time, when we went into the neighborhoods, you would see for sale signs; you would see neighbors who were nervous.
SOLEDAD O'BRIEN, CNN ANCHOR: After going up and up and up and up for years, just how far down and down and down are house prices going to fall.
VELSHI: That's how we understood that this whole thing was slowing down, that the demand for new homes, at every price range, was just softening up. That was the first thing. There were just too many -- it was a supply and demand issue. There was too much out there.
WILLIS: The peak of the housing bill was in the summer of 2006. Median home prices hit about $230,000. I think the cracks in the foundation were already there.
UNIDENTIFIED MALE: The trend is a 30 percent drop in prices.
WILLIS: Oh, my goodness. Are you saying that prices are going to drop 30 percent?
UNIDENTIFIED MALE: I think that's a ballpark number.
VELSHI: We have never, never in the history of the United States, seen an economic downturn caused by, or triggered by, housing first. It's often something else, and housing then becomes a part of it because people lose their jobs or they can't afford to pay so then the housing market comes down. But to see the housing market actually come in and start this -- and now we see the effects of it.
HARRIS: At issue, not just the number of homes available, but now the mortgage market too. Lenders had been giving money to high- risk buyers with little or no money down. Those loans were often adjustable rate mortgages, or ARMS. And when monthly payments went up, homeowners were not able to pay up.
UNIDENTIFIED FEMALE: We should have went to the mob for a loan.
SUSAN LISOVICZ, CNN CORRESPONDENT: There were predatory lenders and people who were unethical in their sales approach. They simply just wanted to do even more. They just wanted to keep that gravy train going. So what you saw in many cases was a loosening of standards.
LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Subprime mortgage lender, New Century Financial, today filed for bankruptcy. The lender, which specialized in loans to people with poor credit, was overwhelmed by customer defaults.
WILLIS: New Century Financial was one of the big subprime lenders. And when it went into bankruptcy, that was like one of those depth charges in the sea. It kind of shook everybody and everybody thought, oh, this is going to be a real problem.
JOHN ROBERTS, CNN ANCHOR: More bad news, this ongoing crunch.
VELSHI: The mortgage market melt down.
LISOVICZ: The moment of truth came last summer when you started to see these huge financial companies that were exposed. And finally, it was like you opened a vault and you saw all of the skeletons in there.
VELSHI: Writing off $3.4 billion in loans.
LISOVICZ: One of the things that has just been, I think, mind boggling, it continues to amaze me, is how is it that a small group of people with crummy credit could unhinge some of the biggest financial companies in the world?
UNIDENTIFIED MALE: There are 51 active listings. I would say 20 to 30 of those are foreclosures or bank-owned right now.
VELSHI: The bankers didn't seem to pay attention to the danger of people going into default. They figured they would just take the property or the person in default would sell their home. It was a fantastic plan, until property values started to fall.
HARRIS: As home prices plummeted, oil prices soared because of rising global demand and Americans felt the pinch.
UNIDENTIFIED MALE: So you actually ran out of gas trying to get here.
UNIDENTIFIED MALE: Never in my life have I seen gas this high. We can't drive, we can't heat our homes. We can't do -- nothing can be done without -- with this energy.
FOREMAN: When you go to fill up your car and it costs $50 instead of $20, you get it. And America got it. I think that when gas prices went up, that was the thing that, more than anything else, made all sorts of normal Americans coast to coast say, I understand, something is happening with my economy that is not good for me.
VELSHI: It just got very loud here. Just moments before you came here, we took our third run at $100 and oil has now stayed above that level.
The average consumer, if there is no other source of income, or their income wasn't going up enough, they were getting squeezed all around and that mortgage payment was getting bigger. Something had to give. And it's when you stop making that mortgage payment, that the whole house of cards falls apart.
(END VIDEOTAPE)
HARRIS: Boy, oh boy. That's how we got here.
So what is next? Here to look beyond's today crises, senior business correspondent, Ali Velshi, and personal finance editor, Gerri Willis -- key members of CNN's money team in New York this morning.
Good to see both of you. I know you're getting ready for "ISSUE #1" in just about 25 minutes at the top of the hour, but I want you both to weigh in on this.
When will we see a turn around in the mortgage and banking sectors? We have heard the third quarter from experts, analysts and members of this administration. As you know -- hello -- we're in the third quarter.
Who wants to take this on first?
VELSHI: That's all Gerri?
(CROSSTALK)
WILLIS: Well, I can't forecast for you what these banking revenues, assets, earnings are going to be. That's not what I'm about.
But I can tell you right now that what we saw happen over the weekend is a disaster for the industry. It's very negative, particularly with Fannie Mae and Freddie Mac. These institutions are critical, critical to the housing industry. The federal government frankly has to stand behind them. There's no other way out.
I think we're in for another rough patch here. That's what we're seeing shaping up.
VELSHI: The complication, Tony, of course is that we talked all there about how the housing prices got us into this mess. The bottom line is what we weren't counting on -- you see there was a clip in there where I was talking about oil hitting $100.
HARRIS: That's right.
VELSHI: I was on TV with you when it happened. We're at $145 today. No one knew where this was going to go. So the ability to fix this problem on the housing side is just being hammered back down by the energy side.
HARRIS: OK, let's --
WILLIS: And of course we're also --
HARRIS: Go ahead.
WILLIS: -- also seeing inflation across the board go higher. It's not just gas prices; it's food prices. Consumers now are caught in a grip and it's very frustrating for them and very worrisome, especially since jobless rates are higher.
HARRIS: I think that's a great point.
One more quick one here. The Federal Reserve just moments ago okaying (ph) new mortgage rules to crack down on some shady lending practices.
Ali, is the federal government, in your estimation, doing all it can right now?
VELSHI: I think that these rules that they have just came out with today, which mean that you can't give loans to people who don't have any income verification or assets or jobs, I think that would have solved the problem if they had been in place. What do you think, Gerri?
WILLIS: Well I've got to tell you, the horse is out of the barn. We're already past this point. Lending practices have been -- pretty systematically changed across the board. It's really not happening anymore.
VELSHI: You can't get those shady loans that you used to be able to.
WILLIS: So, it's good that it happened. It's coming too late. Hopefully that's just one shoe that's going to drop here. We're going to see a lot more from regulators who really need to weigh in here.
HARRIS: Boy, I want everyone to watch your show today -- every day, particularly today. "ISSUE #1," the top of the hour, noon Eastern on CNN. And there are your hosts, Ali Velshi, Gerri Willis.
See you guys at the top of the hour. Thank you.
VELSHI: Thanks, Tony.
WILLIS: Thank you.
KAYE: Opening time for the bank now known as IndyMac Federal. The FDIC now in control of the California bank. Customers get their first chance this morning to get some of their money out.
Kara Finnstrom is live in Pasadena, California, this morning.
And Kara, I can see there are still quite a few folks there behind you, looking to get inside those doors.
FINNSTROM: There are. And, Randi, this bank doesn't open up for another half-hour yet.
I want to pan around here and give you a look at the crowd that has been growing all morning long. We're estimating that there are about 150 people, maybe, right here and this is one of 133 branches. This is just the backside of the bank. Some folks may be lined up in front, as well, by those doors.
We've been talking to these people all morning long and they have lots of questions. Some of them just want to get their hands, as you say, on their money. Others have questions about mortgages or other holdings that they have here.
And joining us live here now, knitting away, is one of the ladies who's been here since 6:00 this morning?
JUDY WURSCHUM, CUSTOMER: At 6:00, yes.
FINNSTROM: Tell me about some of your concerns.
WURSCHUM: I have several concerns, more for other people than myself. I got wind of the fact that this wasn't doing so well and got some major money out. But we -- I have been talking to people here that have put large amounts in this bank -- under $100,000, each account -- and now they are finding out that they are not insured because it's $100,000 per person, per bank. OK.
And then one of the -- this gentleman here in front, is a lovely school teacher from L.A. city schools. He has worked his whole life; he has put substantial amounts of money in this bank and he stands to lose a lot of money.
FINNSTROM: Lots of stories here and a lot of these folks kind of sharing them with each other this morning.
Joining us live now is one of the men with answers here this morning. There are lots of men in suits, if you will, kind of stationed around here trying to help out folks, give them as many answers as they can this morning.
David Barr joins us.
Explain to us, first of all, for folks who had over $100,000, there are things, even people who aren't here today, that people can do to safeguard their money?
DAVID BARR, FDIC: Right. There are ways to have more than $100,000 insured at one financial institution. The basic limit is up to $100,000. But by splitting it up into various ownership accounts, not different accounts, but different ownership accounts, like individual, joint, retirement or trust accounts, you can actually have more than $100,000 insured at more than one FDIC bank.
FINNSTROM: All these folks here today want to get their hands on their money. But you were explaining to me, everyone doesn't actually have to come today, nothing is going to change between now and tomorrow.
BARR: Right. The FDIC is operating IndyMac as an ongoing bank, so it will be here today, and tomorrow, and until we actually sell it back into the private sector. So our plan is to run this and operate it as full service bank for customers.
FINNSTROM: All right. Thanks for joining us this morning.
Randi, again, they will be here today, tomorrow, and onward. But you can certainly understand why these customers are jittery.
KAYE: Kara, have you had a chance to ask them -- we hear so much about these customers trying to get their money out -- where are they going to put it? There are 90 other banks on this so-called problem list.
Have they told you what their plans are? Do they feel safe putting it in another bank?
FINNSTROM: That's a great question because a lot of these people have kind of lost their faith in banks. They said they always thought their bank would be there. We haven't seen this type of thing really in a long time in this country. So they just didn't even fathom this and it does shake their confidence in banking, period.
Many of them don't know what they are going to do, but they are taking it out today and they're going to look around and make some other decisions.
KAYE: Time to put it under the mattress I guess.
All right. Kara Finnstrom, thank you.
Cover controversy. "New Yorker" magazine's latest issue gets a push back from the Obama campaign.
(COMMERCIAL BREAK)
KAYE: The Obama campaign is slamming "The New York" magazine over the cover of the issue that hits newsstands today. The illustration -- there it is right there -- depicts Senator Obama in the Oval Office wearing traditional Muslim clothes. He is fist- bumping wife, who has an AK-47 over her shoulder. There's also a portrait of Osama bin Laden hanging above the fireplace, where American flag is being burned.
"The New Yorker" is defending the cartoon, but an Obama spokesman released this statement -- quoting here -- "'The New Yorker' may think that their cover is a satirical lampoon of the caricature Senator Obama's right-wing critics have tried 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: Over the weekend the government took control of IndyMac, it's being called one of the biggest bank failures in U.S. history. Susan Lisovicz is at the New York Stock Exchange with details and what it means for your money.
OK, Susan, talk me off the ledge here because I'm anxious and nervous.
LISOVICZ: Oh no, don't jump, Tony.
HARRIS: OK.
LISOVICZ: First of all, remain calm at all times. This is a cycle. It is -- we do see the market go in cycles just like the seasons, just like fashions. And a lot of excess that we saw ion the housing bubble is being shaken out.
And what we're seeing is a lot of nervousness about the financial sector today. As you mentioned, the government took control of IndyMac, making it IndyMac Federal Bank. Branches are reopening today. Over the weekend they were closed and customers did not have access to online banking or banking by phone systems. IndyMac shares, by the way, are no longer trading due to the seizure of the bank.
On Friday, it lost nearly half its value and the share price was just 14 cents when it closed. So there's no surprise on the street that IndyMac closed.
Overall, Tony, you and I were talking at the open --
HARRIS: What's going on here?
LISOVICZ: We saw a big open. It didn't -- (INAUDIBLE) volatility. This is a big week, Tony. Lots of economic data and everything from inflation to housing numbers. Ben Bernanke is testifying in two days. Housing numbers, did I mention it all?
HARRIS: Yes.
LISOVICZ: And then we get a lot of corporate earnings. It's the first big week with corporate earnings.
(STOCK MARKET REPORT)
HARRIS: Can I circle back to IndyMac for just a second here? Just a second.
LISOVICZ: Sure.
HARRIS: What happens if people -- we saw the lines just a moment ago in Kara Finnstrom's report -- what happens if people have money in that bank?
LISOVICZ: Well, this is one reason why you shouldn't panic. The FDIC is telling CNN that if people have insured accounts, they have nothing to worry about. The FDIC insures U.S. banks and has more than $50 billion in funds. When a bank shuts down, traditional accounts are insured up to $100,000, retirement funds are insured up to $250,000 -- Tony.
HARRIS: OK. So let's broaden this out a bit. What about the rest of the banking sector? Could this be the fate for other banks?
LISOVICZ: Well, we have seen some banks fail this year. This would be about the fifth bank. But a banking analyst that we talked to says few banks seem to be in danger.
The FDIC does have 90 unidentified financial institutions on its problem list, but says the overwhelming majority of U.S. banks are safe and sound. And, as I mentioned, we're getting corporate earnings this week, we're going to hear from big financial firms, Citigroup, Merrill Lynch JPMorgan Chase are just some of them reporting at the end of the week, Tony.
HARRIS: And IndyMac was not on that list of 90 banks thought to be in trouble and having problems. Something else to keep in mind moving forward.
Great to see you, Susan. Thank you.
LISOVICZ: Likewise.
KAYE: Wrestling with politics, Jesse Ventura considers taking Washington to the mat.
(COMMERCIAL BREAK)
HARRIS: OK, some 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 a path to 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 four points, 47 to 43 percent with 10 percent of registered voters, as you can see here, unsure.
KAYE: So will he or won't he? Ex-wrestler and former Minnesota governor, Jesse Ventura, mulls running for the U.S. Senate. He is expected plans to announce his plans tonight, right here on CNN's "LARRY KING LIVE." That's at 9:00 Eastern.
Ventura entry would set up a three-way race with Republican incumbent, Norm Coleman, and Democrat, Al Franken, of "Saturday Night Live" fame.
I recently spoke with Jesse Ventura about this decision and what he'd do if he got elected. Would he like the title Senator Ventura?
(BEGIN VIDEOTAPE)
KAYE: Why are you considering a run for the Senate? I understand you have become a big surfer, you're enjoying a very nice lifestyle. Why shake it up now?
JESSE VENTURA (I), FMR. MINNESOTA GOVERNOR: I get so angry at watching where the Democrats and Republicans and what they're doing to the country, Randi. They have us now over $9 trillion in debt. I don't even understand really what a trillion dollars is, but I know it sounds pretty bad.
KAYE: What do you think you offer that the other two candidates, Norm Coleman, the incumbent, Al Franken of "Saturday Night Live" fame, do not offer?
VENTURA: Independence, freedom from the two political parties. You're not -- I won't be a puppet on a string.
KAYE: Governor, have you made up your mind and you're just not ready to tell us or, are you still really undecided about this?
VENTURA: I'm still really undecided about it.
KAYE: You've said if you run and win, you would bring a revolution to Washington, D.C., playing off the title of your book, "Don't Start the Revolution Without Me."
What can we expect to see from a Ventura revolution?
VENTURA: You can expect to see probably the most outspoken senator ever. You can expect to see the good old boys out there getting turned on their ear because I'm not going to play any of the games.
KAYE: If you run, what policies would you campaign on? What changes do you want to make?
VENTURA: If they're going to pass something new for a certain amount of money, that means they have to cut it somewhere else for the same amount of money because we've got to do something about this deficit that they're all ignoring.
KAYE: I also understand that this is very personal to me, you want term limits on reporters. And if they're covering you for years -- I recall you made us, the reporters, wear the badges around the state capital that said jackal. So it wasn't exactly a love fest with the media.
Would you be able to take the heat again this time around?
VENTURA: Sure I can, and I took it the first time.
I would like to ask people when they tell me that I'm thin- skinned, how come nobody ever criticizes my policies? How come nobody ever criticizes anything that I accomplished as governor? All they ever do is attack me personally.
Why is it that way, Randi? Why is it only personal attacks?
KAYE: Well I'm sure it's happened. I can't name it all for you right now. But I will ask you this, the chairman --
VENTURA: Oh, no, it hasn't.
KAYE: -- the chairman of Minnesota's Republican Party says Minnesotans are still recovering from a hangover from your term as governor. What's your response to that?
VENTURA: I would say that Norm Coleman is recovering from a hangover of being defeated by me and so are the Republicans and I would say they're scared to death right now that I'll get in the race. I beat him once. If I can debate him, I can beat him.
KAYE: Can an independent spirit like you, who seems so fed up with politics, really be effective in Washington?
VENTURA: I don't know. We'll have to find out.
But I'll tell you what, you elect another Democrat or Republican, you're not going to get any effectiveness. You're just going to get go along to get along.
(END VIDEOTAPE)
HARRIS: Want to talk about straight talk. He ran into his share of controversies as governor, didn't he?
KAYE: It was never ending covering him. It was certainly interesting.
His son was accused of having parties at the governor's mansion, he suggested that religion was for the weak-minded, and he accused whoever designed the streets of St. Paul, Minnesota, of being drunk because of how crazy the streets are. So it was quite interesting.
HARRIS: And the announcement expected on "LARRY KING LIVE." Can't wait. That will be a great hour to watch.
Still to come, oops, it happened again for the second year in a row. Miss USA falls during the Miss Universe pageant.
Did you see that? She hopped right up.
We're back in a moment.
(COMMERCIAL BREAK)
KAYE: This is a tough one. Check it out. Miss USA fell during the Miss Universe competition. There she goes.
HARRIS: Smile on her face.
KAYE: Last night in Vietnam, Crystle Stewart tripped on her evening gown as she made her entrance. The slip coming just after the judges had selected her as one of the top 10 contenders.
Look at that. That's tough to see.
HARRIS: All right. Got to go, got to go. Got to get to "ISSUE #1."
CNN NEWSROOM continues one hour from now.
KAYE: "ISSUE #1" with Gerri Willis and Ali Velshi starts right now.
