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American Morning
Federal Reserve Bailing Out Troubled Insurer AIG; U.S. Embassy Explosion in Yemen; Senator John McCain and Governor Sarah Palin Reunite Today; Democrats Flood the Battlefield in Indiana
Aired September 17, 2008 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: There are reports of a claim of responsibility from a group called Islamic Jihad in Yemen.
Defense Secretary Robert Gates this morning offering, quote, "personal regret" to Afghanistan over recent air strikes that killed civilians. Gates' comments came during a meeting with Afghan President Hamid Karzai. Gates promising more accurate targeting in the future. Afghanistan alleges as many as 90 civilians were killed in an air strike last month.
And the Federal Reserve is bailing out troubled insurer AIG, giving the company essentially an $85 billion loan. Officials say it will be business as usual for AIG's customers. With 74 million clients worldwide, the Fed said that a failure of AIG would undermine already shaky markets.
And the Dow futures, the indication of just how the markets may kick off the session this morning, are down slightly at this hour, also affecting the number is the news that British bank Barclays will buy Lehman Brothers' banking and investment operations for $250 billion in cash. Ali Velshi "Minding Your Business" right now.
A bit of a bargain, I guess you could say?
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes, and they're getting the headquarters. They're getting the fancy Midtown Manhattan headquarters in that amount of money. And that's what happens. If these companies go bankrupt, the fact is they're still valued due to the operation that was Lehman Brothers. So there be almost 10,000 people being employed by this new operation.
You said the market futures are up -- you know, they're around even. They're moving around the zero mark. And that's probably the way things should be. It means that there's nothing in the market today to overreact to, which is a good thing for us, particularly how we started this week.
That means the market's OK with the AIG deal. It wasn't fantastic. Asian markets and European markets didn't blow through the roof on the deal. There is some sense that this is generally OK because it allows AIG, the world's largest insurer, to live to fight another day. It doesn't get them out of the woods because the cost of this $85- billion, 24-month loan is 11.31 percent at today's interest rates.
So, it's not really in AIG's interests to keep going with this. AIG, you may know it because you may be insured by them. They have homeowner's insurance, auto insurance, travel insurance, life insurance. But they also insure businesses. They insure banks and those secondary mortgages, those mortgage-backed securities. They insure airlines and they insure Hollywood movies and movie stars and oil rigs and things like that. They insure things you didn't even know could be insured.
And that allows businesses to take risks that they otherwise wouldn't take, which is why this was deemed to be an important thing for the government to get involved in. They did not get involved early. They sort of waited until there was no other option for AIG and in doing so, AIG's credit rating dropped earlier in the week and that made this bailout more expensive than it would have been last week.
But are you as the taxpayer on the hook? Well, look, in exchange for an $85 billion loan, the government is holding collateral of 80 percent of the company and they're getting this high interest rate. So, the bottom line is, again, and we seem to be saying this a lot, the argument was that this had to happen. AIG may not have been too big to fail, but it was certainly too interconnected to the economy to fail.
JOHN ROBERTS, CNN ANCHOR: So, here's the question, though, does this fix AIG's problems, or does it just --
VELSHI: It buys them time. They're calling it a bridge loan. Anybody who has ever taken a bridge loan knows it is a loan that carries you over to the ship you think is coming in. That ship had better have left port and better be headed right to AIG right now.
ROBERTS: All right. Thanks very much. Ali Velshi for us this morning "Minding Your Business"
CHETRY: All right. We want to head to Zain Verjee right now. She's bringing us new updates this morning on that explosion that took place outside of the U.S. Embassy in Yemen this morning.
Hi, Zain.
ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Hi, Kiran. Many of the details are still unclear, but this was a serious attack. What we're hearing from, from a senior State Department official is this, that the Embassy was first rocked by gunfire. Then there was a main explosion and then there were secondary explosions.
There were six security officials killed, there were four civilians. And he's saying, according to the Embassy in the -- the Yemeni Embassy in Washington, they're telling us that six terrorists were also killed and one was found wearing a suicide vest. There were no Americans killed or injured in this attack, Kiran.
We're also learning a little piece of additional information from the Yemeni Embassy spokesman in Washington, who's saying that there were actually two vehicles that were filled with explosives. Again, he indicated that the information was still coming through and there was a lot that was still unclear. The U.S. Embassy in Yemen is closed and all consular services are also closed for the time being.
Kiran?
CHETRY: Yes, and Zain, when we also spoke a little bit earlier with the U.S. Embassy spokesman there, this is something they've been trying to protect against. I mean, they've been showing a lot of vigilance. In fact, when he said that nonessential employees were just recently allowed back to that embassy, they didn't allow for dependent children. So they know there's a looming threat. Do they have -- are they any closer to figuring out how to stop it or why it's happening?
VERJEE: Well, there's a constant threat against U.S. -- the U.S. Embassy in Yemen as well as around the world. All U.S. Embassies are always on alert for incidents like this. There was an attack just a few months ago, in April of this year, at the same embassy where mortars were fired. They were targeting the U.S. Embassy but actually hit a school.
But there is a real fear, real concern about al Qaeda and militant groups in Yemen. The U.S. has worked with Special Forces in Yemen along with the military there to try and crack down with what analysts say is pretty limited success.
We're also learning, too, from one State Department official who told us there was nothing in the intelligence traffic in Yemen that warned of this kind of attack.
So, while they did recall some of the staff back, clearly there's going to be a reassessment of this situation on the ground. That's something really worrisome as they try and figure out how to handle this attack.
Kiran?
CHETRY: Zain Verjee for us this morning in Washington. Thank you.
ROBERTS: Now, to the "Most Politics in the Morning." Senator Barack Obama says the economy can get back on track. Obama telling CBS News it will take some regulation to get the job done.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: If we can just stabilize things and ride out some tough few months and then overall the regulatory system, our tax codes, start investing in things like clean energy, then I'm confident that we can get the economy back on track by next year.
(END VIDEO CLIP)
ROBERTS: Obama added that allowing more transparency and openness in how the financial markets work will also help to restore trust.
Meantime, the economy will be issue number one when Senator John McCain and Governor Sarah Palin reunite today. The Republican ticket will hold a town hall meeting where Palin will take questions from voters.
CNN's Ed Henry is live in Cleveland, Ohio for us this morning to sketch out what's ahead.
Good morning, Ed.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, John, good morning. It's very interesting and very striking when you're out on the campaign trail as to why John McCain is using Sarah Palin so much with him. When he's solo on the trail, he has good crowds but not great crowds. They're not quite as large and loud as when Sarah Palin is here, like they were together here in Ohio last night.
And it's not just that Sarah Palin is sort of the new flavor, the new face. It's also what she's saying and how she appears to be connecting with voters when you watch the crowd, when you're there up close, what she's saying and how she's connecting on issues like the economy.
Unlike Senator McCain who's having a hard time, as you noticed a couple days ago when he said the fundamentals of the economy are still strong, then he had to backpedal on that. Take a listen in contrast to how Sarah Palin is framing the debate in a way that maybe connects with people over their pocketbooks. For example, yesterday when she was talking about Barack Obama wanting to raise taxes on the wealthy.
(BEGIN VIDEO CLIP)
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: His tax plans really would kill jobs and hurt small businesses and make even today's bad economy look like the good old days. To grow our economy, Ohio, you know this, to grow our economy and to avoid a recession, to bring new jobs to this state or save the jobs that you already have, we need relief for every taxpayer and for every business in America. And we also need serious reform on Wall Street. And John McCain is the guy who will get it done.
(END VIDEO CLIP)
HENRY: It's almost as if sometimes Sarah Palin is making the case for John McCain better than he, himself, is. You saw him yesterday right here on AMERICAN MORNING telling Kiran that he thinks there should be a 9/11-style commission to sort of investigate Wall Street. That fell flat. He didn't even mention it later in the day out here on the campaign trail. Because he's campaigning as an outsider and yet he came up with a solution there that sounds like something that an insider would say.
Basically, a Washington solution, come up with some sort of blue ribbon panel to study it and then reform it. That's not the kind of thing that resonates with voters, John.
ROBERTS: Governor Palin still facing questions about her experience. Is the campaign doing anything to deal with that? And do we know is this going to be a free-wheeling question-and-answer session or will the questions have been pre-screened? HENRY: Well, that's always a big question. We don't quite know yet and whether or not, you know, the microphone is just passed around or not. I can tell you, at John McCain's solo town hall events, when you see it up close, the microphone is headed around people who raise their hand and John McCain appears to just be going to whoever wants to answer. So, we'll see how that plays out with Sarah Palin there.
On the question of her experience, the McCain camp says right now they have nothing to announce officially. But there are some indications they may be sending Sarah Palin to New York early next week in conjunction with the United Nations General Assembly meetings.
That would give her a chance to meet with world leaders and sort of raise her profile on the international stage. And it shows that even while they're confident in her abilities, they are still a little concerned that she has that hole in her resume, John.
ROBERTS: All right. Ed Henry for us this morning. Ed, thanks so much.
HENRY: Thank you.
ROBERTS: 9-1/2 minutes now after the hour.
Ground war.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Are you registered to vote?
(END VIDEO CLIP)
ROBERTS: Democrats flood the battlefield in Indiana, hoping to turn a solidly red state blue.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: They have a fight here.
(END VIDEO CLIP)
ROBERTS: You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Welcome back to the "Most Politics in the Morning" now. With the presidential race so close, we're turning our attention to battleground states. These are states where no candidate has an overwhelming lead and could go either way on November 4th. Some of the battleground states right now, Florida, Ohio, Virginia, Michigan, Missouri, Nevada as well as New Hampshire. And there's another state that could end up being a battleground. It's Indiana. It's leaning for John McCain right now. But it's been a long Republican stronghold.
And CNN's John King shows us a surge for new voters could push its 11 electoral votes into the blue column.
John?
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Kiran and John, George W. Bush won Indiana with 57 percent of the vote in 2000, and then with 60 percent four years ago. So consider this most unfamiliar territory, with seven weeks to go in campaign 2008, Indiana is a battleground state.
(BEGIN VIDEOTAPE)
KING: At $4.29 a gallon, the grumbling and disbelief is to be expected.
UNIDENTIFIED MALE: I'm putting $80 in, and I'm eight gallons shy of being full.
KING: But listen closely to a very different sound Democrats are counting on to make history.
DOMINIQUE MORSON, OBAMA CAMPAIGN VOLUNTEER: Do you know who you're planning on supporting this year?
KING: Dominique Morson is cheerful...
MORSON: Are you registered to vote? OK, great. Thanks.
UNIDENTIFIED MALE: Thanks for asking, though.
KING: ...patient...
MORSON: It takes 30 seconds, like, literally.
KING: ...and persistent.
MORSON: And what city is that?
KING: Morson is part of an unprecedented effort by the Obama campaign to register new voters, with the ambitious goal of turning reliably Republican states like Indiana from red to blue.
MORSON: I think we can. I really do. I think we definitely have enough people dedicated to the campaign, and then people that want to see some change. So, I think we will definitely see that happen.
KING: At Obama headquarters, constant reminders of the October 6 registration deadline.
And Republican Secretary of State Todd Rokita says the McCain camp had better take notice.
TODD ROKITA (R), INDIANA SECRETARY OF STATE: Yes, they have a fight here, yes. And I think it's real.
KING: In 2004, 2.5 million Indiana voters cast ballots for president. This year, the state has already processed more than 560,000 new and updated registration forms. And Rokita predicts that number will reach a record 750,000 by the deadline.
ROKITA: This is the first time I have ever seen a Democratic presidential campaign this engaged in this state. Usually, Indiana is number one on the board for the red states on election night when it comes to our presidential elections.
KING: Not since 1964 has a Democrat carried Indiana for president. And Republicans promise to keep it red this year.
Without a doubt, the state's farm communities and small towns lean conservative.
UNIDENTIFIED MALE: Every vote counts this year.
KING: Tough going for Obama foot soldiers along the Kentucky border in Evansville, too. President Bush took nearly 60 percent of the vote here in 2004.
UNIDENTIFIED MALE: Just the man himself. Not really sure about him.
KING: In this garage, a McCain voter.
UNIDENTIFIED MALE: Thank you.
UNIDENTIFIED MALE: All right, man.
UNIDENTIFIED MALE: Take care.
KING: So, it's not easy. In a half-hour knocking doors, only one promise to vote for Obama, and plenty of skepticism.
UNIDENTIFIED MALE: You aren't registered?
UNIDENTIFIED MALE: No.
UNIDENTIFIED MALE: Do you want to get registered.
KING: But that Democrats are here at all in the final few weeks, never mind here aggressively looking for every last vote, is itself a dramatic change.
UNIDENTIFIED MALE: Haven't decided?
UNIDENTIFIED MALE: Too much tossups.
(END VIDEOTAPE)
KING: Most Republicans and even many Democrats here predict in the end Obama will come up short, but that he is competitive here at all is proof that Democrats have the edge and more options this year in trying to assemble the 270 electoral votes needed to win the White House.
John and Kiran?
ROBERTS: John King reporting for us this morning. And don't forget, we're going to have interesting new poll numbers coming in 4:00 this afternoon from Indiana, Florida, Ohio, and North Carolina. Wolf Blitzer will have those for us coming up on "THE SITUATION ROOM" this afternoon. Make sure you stay tuned.
The candidates zeroing in on the financial turmoil. But are their promises fact or fiction? We've got your "A.M. Reality Check" coming up for you. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
ROBERTS: Well, if you're going to Carolina today in anything other than your mind, you're going to want to know about the rain happening there. Our Reynolds Wolf watching the extreme weather for us from Atlanta this morning.
Hey, Reynolds.
(WEATHER REPORT)
ROBERTS: Coming up on 19 minutes now after the hour.
Reality check.
(BEGIN VIDEO CLIP)
SEN. JOSEPH BIDEN (D), VICE PRESIDENTIAL CANDIDATE: Increased regulatory oversight of the very people John has refused to regulate.
(END VIDEO CLIP)
ROBERTS: Joe Biden on AMERICAN MORNING. Was his attack on John McCain fact or fiction? Alina Cho tracks down the truth. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": Barack Obama was in Hollywood at a big fund-raiser, sold-out fund-raiser featuring Barbara Streisand singing. $28,500 a ticket. $28,500 a ticket, Barbara Streisand was singing. All the big Hollywood stars were there. Featured dinner prepared by the finest Hollywood chefs serving an array of gourmet foods. And be the topic tonight was how John McCain is out of touch with the common people.
(END VIDEO CLIP)
CHETRY: Well, there's Jay Leno taking a shot at Barack Obama's star- studded fundraiser last night which reportedly raise $9 million.
ROBERTS: Back on the campaign trail. The candidates are in a red hot fight over who is better equipped to fix the economy. Senators John McCain and Joe Biden appeared here on AMERICAN MORNING yesterday, each one of them weighing in on government regulation. Did they spin us? Let's get a fact check here. Alina Cho is sorting out fact from fiction in this reality check.
Good morning to you.
ALINA CHO, CNN CORRESPONDENT: Good morning, guys. And good morning, everybody. John, we're going to begin with your interview with vice presidential candidate Senator Joe Biden yesterday. When asked how an Obama-Biden administration would take action if they were in the White House right now, Biden had this to say.
(BEGIN VIDEO CLIP)
BIDEN: Create jobs, keep people in their homes, and increase regulatory oversight of the very people John has refused to regulate.
(END VIDEO CLIP)
CHO: That John he's talking about Republican rival John McCain and the financial markets, of course. Now a reality check. Did Senator John McCain oppose government financial oversight? Well, the truth is, until recently, the GOP presidential candidate consistently called himself an opponent of most government regulations.
In fact, in a "Wall Street Journal" interview, about six months ago, McCain said he's always for less regulation but said he also understands the opposing view. McCain went on to say, quote, "I am fundamentally a deregulator."
Fast forward to now, with all the recent problems on Wall Street, and there are many, McCain is talking more frequently of increasing government regulation on the financial sector. Here's what he said to Kiran just yesterday.
(BEGIN VIDEO CLIP)
MCCAIN: Well, we have these regulatory agencies, some of them who are asleep at the switch for the last couple of years or few years, and they were designed for the 1930s.
(END VIDEO CLIP)
CHO: Now, McCain went on to say there needs to be more transparency and accountability on Wall Street. But so far he has offered no specifics on a plan. So, was Senator Biden right when he said Senator McCain has refused to regulate? The verdict, Biden's statement is historically accurate, but with all the recent turmoil in the financial markets, McCain's position, guys, appears to be changing.
So, again, this is something we are doing every day, our reality check. Something that I think is really good for voters as they try to decide who to vote for.
ROBERTS: Absolutely, yes. People want information and sometimes it is difficult to separate fact from fiction.
CHO: It is.
(CROSSTALK)
CHETRY: And put it in context. That's right. And we appreciate that Alina. Thank you.
CHO: You bet.
CHETRY: Well, battleground Indiana, we're taking you to that key swing state and looking at the issues that matter to voters there. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Guess what state we're talking about today? Battleground Indiana. Welcome back to the "Most News in the Morning." You know we've been looking at the key swing states that could decide this presidential election and the key issues that matter to voters in those states. Now, Indiana is very unique. It was once a Republican stronghold that's now up for grabs. A recent poll showing that John McCain leads Barack Obama 45 percent to 43 percent. That's pretty tight. 11 percent still unsure.
Joining me now are two people with their fingers on the pulse of Indiana politics, conservative radio talk show host Greg Garrison, host at 93.1 WIDC, Indianapolis, and liberal host of "Afternoons With Amos" on 1310 A.M. WTLC -- I need to take a breath there -- Amos Brown. Both of you live in Indianapolis for us this morning.
Thanks for being with us.
GREG GARRISON, CONSERVATIVE RADIO TALK SHOW HOST: Good morning.
AMOS BROWN, LIBERAL HOST, "AFTERNOONS WITH AMOS": Thank you. Appreciate it.
CHETRY: You know, I want to show you guys, we had a chance to look at that new poll, but over the last 70 years, the Democrats have carried Indiana only one time. That was in 1964, Lyndon Johnson landslide. Why is Indiana suddenly so close? I'll start with Amos.
BROWN: I think it's the, first of all, the enthusiasm for Barack Obama, and more importantly the enthusiasm for change. Many Hoosiers believe that they are better -- they are worse off today than they were four years ago, worse off today than they were eight years ago. Even though Indiana has the lowest unemployment rate of our mid- western industrial states, we have lost more jobs in the past year than we've gained.
People know things are going wrong. They want a change in Washington. And they believe that Barack Obama will do that. And the enthusiasm level across this state, particularly in the capital city region of Indianapolis, is something I've never seen in my 34 years here.
CHETRY: Greg, has John McCain done enough to show that he is the one who will help lift Indiana out of some of those economic troubles?
GARRISON: Well, not yet. But it's also not November or even October. I don't know where those numbers came from that have it that close, but I would submit that there's a lot of wishful thinking going on --
(CROSSTALK)
CHETRY: It's how we gauge poll from the end of August, by the way.
GARRISON: Yes. Well, if it's -- if it's Brian Howe, he's a friend of mine, I would like to see what his sample would look like if it was registered or if it was likely voters. But I can tell you this, not only have they -- do we almost never go Democrat, Barack Obama did awful in the primaries. He lost 83 of our 92 counties to Hillary Clinton.
And, of course, you're going to have a lot of folks who are going to be Democrat down the line. They're going to vote with whoever the Democrat candidate is. But he has simply not produced anything akin to what I -- to Amos' description. I think Amos is right about Indianapolis and the area here. Democrats are more active, I think. They're more engaged. But around the state he has not resonated well.
One of the bellwether it seems to me is two counties north of here, Madison County which is a very ethnically mixed place, a lot of blue collar. A lot of folks lost jobs when GM moved out of town, and he got thumped by Hillary Clinton in that county. And he did foully across the border.
(CROSSTALK)
CHETRY: Yes, and I want to ask Amos about this Hillary Clinton effect. She did win May's primary in your state in large part because of older voters, those 65 and older, by a 38-point margin. Not exactly Barack Obama's voting bloc. Will those voters come out for Barack Obama? Is he even targeting them?
AMOS BROWN, LIBERAL RADIO TALK SHOW HOST: Well, I think, first of all, Kiran, I want to refresh my dear colleague, Greg's memory. Barack Obama only lost the Indiana primary by three-tenths of one percent. The other thing he carried the most Republican county in the state and that is Hamilton county by a wide margin over Hillary Clinton. I think that a lot of those blue-collar voters, particularly as the message focuses on the economy, particularly this brand new Barack Obama spot that I understand is going up nationally and in the battleground state where he looks Americans in the eye and tells them exactly what he's going to do on the economy, if elected president of the United States.
I'd like to see what brother McCain would do and look America in the eye and really say what he's going to do. And I also disagree with my good friend, Greg, I think John McCain has taken Indiana for granted. And he needs to come in here and he needs to campaign and campaign hard. Hoosiers - and I know Greg will agree with me. Hoosiers don't like to be taken for granted. We are excited about the fact that our vote makes a difference in this election. And I think all four of the candidates, president, vice president, need to crisscross this state and make us feel important. And that includes McCain and Palin.
CHETRY: You know, you even had your state attorney general, Greg saying, there had to be the Secretary of State, rather, saying that there is going to be a fight in Indiana. How is John McCain going to try to make sure that he keeps that in the red column?
GARRISON: Well, if Barack Obama s about to look anybody in the eye and tell them anything that's intelligible, it's going to be a red- letter day and I can't wait. And I suspect we'll have no problem with Senator McCain being able to do that and a whole lot more. I think what's going to happen here as this election cycle matures, it's a republican state. It's got a very popular governor.
Some of the numbers that Amos is banding about sound like they came off the talking points from the democrat candidate for governor last night in the first debate and those fell flat. This is the one state that's been protected from and in large measure because of Governor Daniels protected from a lot of what's been going on in the midwest economically and he's had a lot of new stuff coming to town. I don't think there is going to be a problem. I can't wait to hear Barack Obama actually say something that I can understand.
CHETRY: All right. We're going to have to leave it there. Greg Garrison and Amos Brown, thanks to both of you for being with us.
GARRISON: You bet.
BROWN: Thank you, Kiran.
CHETRY: And we want to remind you if you live in a battleground state, if you have a question or issue you want tackled, e-mail us, cnn.com/am and tell us what's on your mind. Be sure to stay with CNN. Today at noon we'll be releasing brand new battleground polls featuring Indiana as well as other states.
ROBERTS: So coming up now on 33 minutes after the hour. Breaking news, there's been a deadly attack outside the gates of the U.S. embassy in Yemen. At least 16 people were killed including the six attackers after an explosion which was followed by up to four subsequent explosions. Many first responders were on the scene. They were attacked by snipers across the street. State department says all embassy staff have been accounted for.
Earlier we spoke with Ryan Gliha, he's a spokesman for the U.S. embassy who was in the building at the time of the attack.
(BEGIN VIDEO CLIP)
VOICE OF RYAN GLIHA, U.S. EMBASSY SPOKESMAN: There was an explosion that occurred at the main gate of the embassy. At that point we were all ordered to assume what we call duck-and-cover positions which is a position where we guard ourselves and our bodies from - from potential debris. From that vantage point I really can't tell you much after that except that we did feel several explosions after the main explosion that shook the ground.
(END VIDEO CLIP)
ROBERTS: The Federal Reserve stepping in to rescue insurance giant AIG by providing it with an $85 billion emergency loan. Officials say the government had to step in to avoid the, "disorderly failure that could have seriously hurt the fragile financial markets."
And it may have worked. Right now Dow futures down by about 20 points. Can the AIG rescue help stabilize a jittery Wall Street? CNN's senior correspondent Allan Chernoff is live outside of AIG's headquarters in New York this morning "Minding your business." Hey, Allan.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Good morning to you, John. Really an extraordinary deal that we have over here. The U.S. government lending $85 billion to this giant insurance company, AIG, a two-year loan. In return, the government gets 80 percent of the insurance company. I mean, this is really not the way capitalism is supposed to work. So, why do they do it? Think of the financial world as a human pyramid, and AIG is so big, it's one of the pillars.
If AIG had gone under, if it had declared bankruptcy, there would have been billions of losses, not only here, not only at financial institutions around the U.S., but globally. It would have been putting huge pressure on the global economy. And as a result, when private bankers didn't step in with the money, the U.S. government stepped up to the plate. Now, not everybody's happy about that. Have a listen to what the Speaker of the House had to say.
(BEGIN VIDEO CLIP)
REP. NANCY PELOSI (D), HOUSE SPEAKER: Where's that money coming from? What are the opportunity costs of that money? What - what shortfalls does that create for us as we try to meet the needs of the American people? This is, again, serious mismanagement on the part of the administration who has refused to regulate an industry where apparently all of the gain is privatized and all the risk is nationalized.
(END VIDEO CLIP)
CHERNOFF: So, you better believe there's going to be plenty of calls for regulation now, for tighter regulation of the financial markets. John.
ROBERTS: Allan Chernoff outside of the AIG headquarters for us this morning. Allan, thanks so much.
Here's an "AM Extra" look of why AIG matters to us so much. It ranks 13th in the Fortune 500. It's also part of the S&P 500 in the Dow industrial average meaning that its stock is in a lot of people's 401(k)s and mutual funds. The company has 130,000 employees and it handles home, auto and life insurance for individuals as well as insurance for banks, airlines and even Hollywood movies. In all the company, the company has got 74 million customers around the world.
(BEGIN VIDEOTAPE)
ROBERTS (voice-over): Aloha from Hawaii.
UNIDENTIFIED MALE: Vote for Obama. Contact your friends, contact your family.
ROBERTS: Barack Obama's Hawaii network tries to rally the troops on the mainland. You're watching "the most news in the morning."
(COMMERCIAL BREAK)
CHETRY: Well, with Wall Street in crisis mode, the Democrats are hitting Senator John McCain hard on the economy. Earlier on AMERICAN MORNING, Obama supporter Bill Richardson said that McCain shares part of the blame for the current crisis.
(BEGIN VIDEO CLIP)
GOV. BILL RICHARDSON (D), OBAMA SUPPORTER: But here we have Senator McCain being the deregulator at a time when a lot of these entities needed tighter regulation, tighter oversight to prevent predatory lending, to prevent so many mortgage deficiencies in our economy. And also to take a look at these giants that are today falling apart. I don't see how Senator McCain who keeps saying that the fundamentals of our economy are still strong, when you've got high unemployment, job losses, foreclosures and an economy probably in worse shape since the Great Depression, try to take a pass on that.
(END VIDEO CLIP)
CHETRY: We also spoke to John McCain supporter Mitt Romney. He fired back at McCain's leading spokesperson on the economy, Carly Fiorina. She was once head of Hewlett-Packard and said neither candidate was CEO material. Here's how Governor Romney responded.
(BEGIN VIDEO CLIP)
GOV. MITT ROMNEY (R), MCCAIN SUPPORTER: I think she's just misinformed in that regard. I'd be happy to hire John McCain and Sarah Palin to run a business that I'm an investor in. But I can also tell you that when you compare John McCain with Barack Obama, it's a pretty - pretty clear comparison that John McCain has the experience that's been a lot to develop the judgment that you need in a time like this, and Barack Obama who has been a community organizer and a state senator, who's been a U.S. senator for three years, two of which, years he's been running for president. He just doesn't have any relevant experience to help our economy in such a critical time.
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CHETRY: Governor Romney talked up his own business experience during his presidential bid.
ROBERTS: Well, it only has five electoral votes but Nevada is a big prize in election '08. A key western state that both candidates are fighting hard for. Obama is hoping for a win and he's taking an unusual route to get there. For him, the path to the high desert runs through the Pacific Ocean. Confused, our Chris Lawrence joins us now to sort it all out. He's live in Las Vegas for us this morning. So, what do the Pacific Ocean and the deserts of Nevada have to do with each other? CHRIS LAWRENCE, CNN CORRESPONDENT; Yes, they seem worlds apart, John. But if you follow the logic of some of these Barack Obama supporters, the key to winning this swing state is actually 3,000 miles away in the state where Obama was born and raised.
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LAWRENCE (voice-over): Nearly 12,000 Hawaiian residents have traded its beautiful beaches for jobs in Nevada's bone-dry desert during the past decade. A lot when you consider Nevada only has 1.3 million registered voters.
ED HASEGAWA, OBAMA SUPPORTER: I would say a few thousand votes in Nevada would make a difference.
LAWRENCE: We traveled to Hawaii where Ed Hasegawa and a team of Barack Obama supporters are dedicated to defeating John McCain in Nevada. Obama's Hawaii Network called 3,000 Nevada residents during Nevada caucuses where he narrowly won more delegates, now they are ramping up for the general election.
CHARLES HERRING, NEVADA RESIDENT: I personally have been getting a lot of calls for Obama, vote for Obama, contact your friends, contact your family.
LAWRENCE: Hasegawa thinks Hawaii is a safe win for Obama, so he is recruiting former residents that have moved to the swing state.
HASEGAWA: Yes. I think it could be a real work --
LAWRENCE: But in Hawaii's republican party headquarters, the chairman says democrats need to focus on local issues like tax relief. Not Nevada.
UNIDENTIFIED MALE: It's presumptuous certainly.
LAWRENCE: Willis Lee has no plans to start a similar campaign targeting republicans in Nevada.
UNIDENTIFIED MALE: They rally around me and they understand that John McCain is the one to lead the country. They'll come out because this is an important election not because they are being called by friends in Hawaii.
LAWRENCE: While some say there's a sense of family among people in Hawaii. You trust?
UNIDENTIFIED MALE: It's loyal. Loyalty.
LAWRENCE Others won't be influenced by a call from the islands.
Would that play into who you are going to vote for?
PHYLLIS LEONAHI, NEVADA RESIDENT: Not really. Because I'll make my own decision.
LAWRENCE: Hasegawa says even a few votes could pay big dividends for Obama.
UNIDENTIFIED MALE: If you can get 3,000 or 4,000 of them, it may be a win.
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LAWRENCE: And after being somewhat overlooked in past elections, some of these Hawaii democrats say they've got a chance to swing not one but two states for their native son, and if for some reason the states of Washington and Oregon will be close as well, they're going to reach out to the community there, too. John.
ROBERTS: That's interesting. People from the islands coming here to play on the mainland and doing it very effectively. Chris Lawrence for us this morning. Chris, thanks so much.
LAWRENCE: Yes.
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CHETRY: Grave robbers.
UNIDENTIFIED MALE: These are 400-pound doors that have been carted away during the day.
CHETRY: Things getting so desperate in one city, people are stealing from the dead.
UNIDENTIFIED MALE: We don't want to do it, but the situation's forced us to.
CHETRY: You're watching the most news in the morning.
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ROBERTS: Breaking news this morning. New information on the deadly explosion outside the U.S. embassy in Yemen. Senior state department officials say the building was first rocked by gunfire. Then hit with several explosions, including two car bombs and a suicide bomber. No Americans were killed in the attack. But the blast did kill 16 people, including the six attackers.
CHETRY: New this morning, with 17 cemeteries, the small town of Colma, California, was built to let the dead rest in peace. But it's now become a haven for grave robbers, thieves hoping to make a buck by stealing metal urns, statutes and gates. Dan Simon takes a look at what's being done to keep loved ones' final resting places sacred.
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DAN SIMON, CNN CORRESPONDENT (voice-over): It is called the City of Souls. Colma, California. In the early 1900s, it became the favorite spot outside San Francisco to build cemeteries. Today, there are 17 in this town of only 2.2 square miles. Now, the peace here has suddenly been disrupted. ROGER APPLEBY, HOLY CROSS CEMETERY: It hits to the heart of the families that have buried their loved ones in the cemetery.
SIMON: It began in April. Thieves have been ripping off cemetery vases, statutes, and even doors to mausoleums.
APPLEBY: These are 400-lb. doors that had been carted away during the day.
SIMON: Colma police commander Greg Hart says there have been at least dozen thefts since April. Employees are now forced to be on the lookout and police have stepped up surveillance.
CMDR. GREG ART, COLMA, CALIFORNIA POLICE: It is unfortunate that we would have to take an extra look at people that may be going in to visit a loved one. And now we have to look at them in a different light, perhaps, by saying, OK, maybe those are thieves. And, you know, that's - that's kind of from one extreme to another. We don't want to do it, but the situation forced us to.
SIMON: The extra vigilance is beginning to pay off. Two suspects were recently caught trying to steal the gates off a mausoleum. So why would anyone be interested in metal from cemeteries? Well, it's easy to get, and it fetches money from scrap yards. The stolen metal can bring as much as $2 or $3 a pound. A couple of heavy gates can bring a couple hundred dollars.
APPLEBY: Cash in their pocket right now, untraceable and good-bye and go feed whatever habit you may have.
SIMON: Copper, brass and bronze are the metals of choice because of their high price on the world market. Metal thieves target things like air conditioners, manhole covers, plumbing valves and wire. But those things are easier to replace than the valuable items stolen from cemeteries and don't quite carry the same emotional weight. Dan Simon, CNN, Colma, California.
ROBERTS: CNN NEWSROOM is just minutes away now. Heidi Collins at the CNN Center with a look at what's ahead. Good morning, Heidi.
HEIDI COLLINS, CNN ANCHOR: Good morning to you, John. That's right, here's a check of what we're working on the in the NEWSROOM today.
The U.S. embassy targeted. A car bomb exploded in Yemen. An update directly from the scene for you.
And the world's biggest insurer getting insured by you, your money. Details on the latest federal government lifeline.
And restoring some normalcy far from home. Young hurricane evacuees go to school. We get started at the top of the hour, right here on CNN. John.
ROBERTS: Looking forward to that 10 1/2 minutes away. Heidi, thanks so much.
COLLINS: Thanks.
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CHETRY (voice-over): Paying by the pound -
UNIDENTIFIED MALE: Over 10 percent of the people we screen are at risk.
CHETRY: The state that's telling workers to get their weight down or pay up.
UNIDENTIFIED FEMALE: It's penalizing people just for being genetically who they are. You're watching the most news in the morning.
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CHETRY: Welcome back to "the most news in the morning." You know, losing weight could save you money. In Alabama the state has a new plan that would make employees pay insurance premiums if they don't take steps to get healthier. Dr. Sanjay Gupta joins me now from Atlanta. And tell us how this program, how this works.
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, it's going to be controversial. I'll start with that for sure. But this idea that insurance programs, insurance plans, might reward somebody if they're healthier in effect penalizing someone if they're less healthy has been something that's starting to catch a little bit of steam. Not everyone's sold, though. Take a look.
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GUPTA (voice-over): If you're overweight in Alabama, you may soon be paying the price. More than 30 percent of adults in Alabama are obese. Making it the second fattest state in the country, after Mississippi. But William Ashmore of the Alabama State Employees Insurance Board has a plan to change that. In the hopes of saving money and saving lives.
WILLIAM ASHMORE, CEO, ALA. STATE EMPLOYEES INSURANCE BOARD: Over 10 percent of the people we screen are at risk for one of the factors that we're screening for. And the vast majority of these people have no idea that they were at risk. We screen for things such as cholesterol, blood pressure, glucose readings. We also have been monitoring the body mass index.
GUPTA: Under the plan, doctors will screen more than 3,000 state employees next year. And the ones found to be most at risk will pay an extra $25 a month for health insurance. Unless they take action.
ASHMORE: We give them the voucher. They'll go to the physician. As long as they go to their physician, they will get a $25 discount off of their premium.
GUPTA: Ashmore said the plan is not meant to penalize but help obese employees. But some state workers don't see it that way. University professor E.K. Daufin feels the plan is more of a fat tax.
PROF. E.K. DAUFIN, ALABAMA STATE UNIVERSITY: It's penalizing people just for being genetically who they are, and yet I have a body mass index, a lovely sexy body mass index of more than 44 right now.
GUPTA: But Dr. David Roberts, an Emory University physician, who is not affiliated with the plan says getting patients in the door is half the battle.
DR. DAVID ROBERTS, DIR., EMORY EXECUTIVE HEALTH: All they are doing is incentivizing people to go to the physician and trusting the physicians to do a good job. We don't know how many people are out there until they come in. I think that's a key point.
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GUPTA: So you can see why this might be a little bit controversial for sure, Kiran. But the end of the day, what the insurance program is hoping is that more people are going to be healthy as a result of this. It's adding economics to this whole equation which for sure is going to make people a little bit concerned.
CHETRY: What about some of the critics who say it is essentially a fat tax?
GUPTA: Yes, I mean, if you look at it overall, if you go in, you get screened, regardless whether you are skinny or obese, body habit has very little to do with it, but if your cholesterol's up, your blood pressure is up and you get screened and you do go see your doctor and you get the $25 voucher that you don't have to pay the extra premium. But you have to go see your doctor. So, the point is figure out who is at risk and make sure they are going to see their physicians. That's the goal but, again, if you don't see your physician, you end up paying more money and that essentially is sort of a fat tax.
CHETRY: All right, it will be interesting to see how it works out. So we'll follow the program.
GUPTA: We'll see how it catches on around the country for sure.
CHETRY: Right. And we'll see the results happen from that. Sanjay, great to see you today. Thank you.
GUPTA: Thanks, Kiran.
CHETRY: By the way, if you want more information about how you can slim down, Sanjay has got a lot of great stories out there, cnn.com/fitnation.
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ROBERTS (voice-over): Truth in advertising --
ANNOUNCER: The AIG companies, the strength to be there.
ROBERTS: Jeanne Moos checks out some classic slogans that now seem more ironic than iconic.
ANNOUNCER: Because at Merrill Lynch, we're bullish on the future.
ROBERTS: You're watching "the most news in the morning."
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ROBERTS: What's in a slogan? If you consider what's been happening on Wall Street, well, not a whole lot. CNN's Jeanne Moos is taking the bull out of "bullish" with a look at some ads from the fallen financial giants.
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JEANNE MOOS, CNN CORRESPONDENT (voice-over): Stock market, shock market. You know what gets me? The advertising for all these financial companies that flopped.
MOOS (on-camera): You know, in retrospect, all those ad slogans really do seem like bull. Take Merrill Lynch.
ANNOUNCER: Merrill Lynch, for all intents and purposes is gone.
MOOS: But what will never be gone, that old slogan.
ANNOUNCER: Because at Merrill Lynch, we are bullish on the future.
MOOS: That one even made it into the ad slogan hall of fame, at number 16. Then there's AIG, the insurance giant everyone's worried about.
ANNOUNCER: The AIG companies, the strength to be there.
UNIDENTIFIED MALE: Is your retirement plans have the predictability of income and protection against market risk?
UNIDENTIFIED MALE: Buddy, we're with AIG.
UNIDENTIFIED MALE: Oh.
MOOS: Should said uh-oh. But investors seem to be taking stock market losses in stride.
UNIDENTIFIED MALE: I have lost a lot of money in. A lot of money. But I'll get it back. It's in the hundreds of thousands.
MOOS: It's enough to cause this guy to rename his 401(k). Have you lost much money in the past couple days?
UNIDENTIFIED MALE: No. I got a 201k.
MOOS: A 201K. Now that Lehman Brothers has failed, folks are putting souvenirs like key chains and stress balls from the famed investment bank on ebay. There's a mouse pad that says safe. A former employee put up this mug with a Lehman Brothers slogan, where vision gets built. Talk about a vision. Some folks are offered a piece of toast with LB for Lehman Brothers on one side and BS for Bear Stearns on the other. Wall Street tourists are still bullish. Bullish on every angle of the famed bronze bulls. Not everyone has dread their brokerage statement.
UNIDENTIFIED MALE: I was reading our Merrill Lynch statement and I wanted to show it to you. (crying)
MOOS: Let's hope that's not his college fund. Jeanne Moos, CNN, New York.
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ROBERTS: Ah, Jeanne, has a way of spinning a tale. Thanks so much for joining us on this AMERICAN MORNING. We will see you back here. And you want to make it bright and early tomorrow morning. Don't be so late like you were today.
CHETRY: That's right. Meanwhile, CNN NEWSROOM with Heidi Collins starts right now.
