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Central Banks Ante Up to Temper Financial Fallout; Secretary Rice Speaks about Russia-Georgia Conflict; Politicians Attempt to Address Economic Issues

Aired September 18, 2008 - 13:00   ET

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

FREDRICKA WHITFIELD, CNN ANCHOR: How much is enough? What will it take to jump-start the banking system? Does that stop the brokerage firm to buck up panicked investors? The world's central banks weigh in.
In search of a safe haven? One may be as close as your nearest credit union. We'll see how they're steering clear of the money market meltdown.

(BEGIN VIDEO CLIP)

GARY STOCKLAUFER, ADOPTIVE FATHER: I told them from the very beginning that I wasn't going to that dog wasn't going to hunt. That dog didn't hunt. I got my son back.

(END VIDEO CLIP)

WHITFIELD: Too fat to adopt? Not anymore. You'll meet a Missouri man who lost 250 pounds and gained a son.

Hello, everyone. I'm Fredricka Whitfield, in for Kyra Phillips, live at the CNN Headquarters in Atlanta, and you're in the CNN NEWSROOM.

Two words sum up reaction from the global economic front: What's next? In the wake of the stock market nosedive and the numerous shock waves that caused it, President Bush canceled a trip to Alabama and Florida to huddle with his economic advisers.

In a statement you may have seen here live on CNN, Mr. Bush promised his team is focused on meeting the economic challenges.

Overseas the central banks of Europe, Britain, Switzerland, Japan and Canada teamed up with the U.S. Federal Reserve to pump an additional $180 billion into the global money market. The goal is to motivate banks to keep lending.

And stock markets opened the day with a rally, though not on the scale of the sell-off yesterday and Monday. But that, too, fizzled late in the morning. The price of oil has held fairly steady since yesterday's spike.

Well, it is indeed issue #1, times three. Our Allan Chernoff is following the global fallout. Susan Lisovicz is on Wall Street. And Brianna Keilar is at the White House. Of course, we're keeping a close eye on the numbers there, the Dow down 132 points.

Allan, let's begin with you. You've learned of yet another effort to inject some funds to inspire lending.

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: That's right. The Federal Reserve this morning, in three separate operations, has injected $105 billion into the financial system, into the banking system. This is a record amount in one day, even greater than the $81 billion that the Fed injected following September 11 after the attacks. So this -- this is really a big move by our central bank to try to keep the wheels of finance turning.

Now, what's been happening is that banks have been so nervous, they haven't been lending, even much to each other. And so this is overnight funding that the banks will have. They, in turn, have given the Federal Reserve treasury securities and also debt backed by Fannie Mae and Freddie Mac. They make a trade overnight.

And so these institutions now have lots of capital. They can use that capital to lend to each other. Ultimately, the idea is that we want to see the banks lend to corporations, lend even to individuals, like ourselves.

I just got off the line, though, with Brian Fabbri, a veteran economist at BNP Paribas, who's followed the Fed for years. And he says he thinks this may not be enough yet to get that lending going to consumers, to corporations. Still a very big problem for all of us.

WHITFIELD: Wow. May not be enough. And we're talking about this in addition to the $180 billion from the central bank that we spoke of. This is all separate money?

CHERNOFF: Exactly. What happened overnight is that our Federal Reserve, our central bank, handed over, in return for other currencies, handed over $180 billion. The whole idea here is to get dollars distributed around the globe. So central banks overseas are injecting that money into their banking systems.

We want to keep the wheels greased over here, to keep the banking systems operating. Yes, that is how seriously the central bankers are taking this crisis right now, and they are taking very aggressive action. The move overnight also was unprecedented.

WHITFIELD: Wow. All right. Allan Chernoff, thanks so much, from New York on that.

And you see now the Dow down 137 points. Let's get an idea from Susan Lisovicz exactly what all these money injections and how it's shaking up the market, or perhaps stabilizing, because that is the goal, but when might we actually see that?

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, you know, we still don't have complete confidence in the market. In fact, there's a lack -- a continued lack of confidence, despite the fact that the Federal Reserve is taking these extraordinary measures. You know, there was a very good metaphor the "Wall Street Journal" used in very comprehensive story on this crisis, saying that, you know, the U.S. financial system is like a patient in intensive care. You know, it convulses, and then it will -- it will stabilize for a while. And then it gets worse, and -- and the doctors in charge are taking extraordinary measures. They're experimental measures, in some cases, to try to revive the patient. And that's what we're seeing. That's what Allan's talking about.

The fact is, there are still concerns about financial, big well- known financial companies, and it plays out dramatically to the down side.

Again, we are seeing shares of Morgan Stanley, which hit a level -- share price hit a level we hadn't seen in ten years, down an additional 36 percent. This is a company that reported a $1.5 billion quarterly profit earlier this week. So this is a company very much of concern, in this kind of chaotic times, as to whether it is going to pair up with another -- another firm. The published reports say it could be Wachovia.

Also, Washington Mutual. Its shares are up right now, up 10 percent. There are published reports that it's put itself up for sale.

The point is, is that these events continue to shake out quite rapidly, and right now the investors are saying we're not through it yet, and that's why a triple-digit rally at the open couldn't hold -- Fred.

WHITFIELD: All right, Susan. Thanks so much.

We're going to get reaction from the White House in a moment. But first, we're going to go to the Mayflower Hotel in Washington, D.C., where U.S. Secretary of State Condoleezza Rice is talking not the economy but actually talking about the relations with Russia.

Let's listen in.

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CONDOLEEZZA RICE, SECRETARY OF STATE: ... Russia during this crisis have also been deeply disconcerting. Its alarmist allegations of genocide by Georgian forces. Its baseless statements about U.S. actions during the conflict. Its attempt to dismember a sovereign country by recognizing Abkhazia and South Ossetia. Its talk of having privileged interests and how it treats its independent neighbors. And its refusal to allow international monitors and NGOs into Abkhazia and South Ossetia, despite ongoing militia violence and retribution against innocent Georgians.

What is more disturbing about Russia's actions is that they fit into a worsening pattern of behavior over several years now. I'm referring, among other things, to Russia's intimidation of its sovereign neighbors. Its use of oil and gas as a political weapon. Its unilateral suspension of the CFE treaty. Its threat to target peaceful nations with nuclear weapons. Its arm sales to states and groups that threaten international security. And its persecution and worse of Russian journalists and dissidents and others.

The picture emerging from this pattern of behavior is that of a Russia increasingly authoritarian at home and aggressive abroad.

Now, this behavior did not go unnoticed or unchallenged over the last several years. We have tried to address it in the context of efforts to forge a constructive relationship with Russia. But the attack on Georgia has crystallized the course that Russia's leaders are now taking. And it has brought to us a critical moment for Russia and the world. A critical moment, but not a deterministic one.

Russia's leaders are making some unfortunate choices, but they can still make different ones. Russia's future is in Russia's hands. But its choices will be shaped in part by the actions of the United States, our friends and our allies, both in the incentives that we provide and the pressure that we apply.

Now, much has been said recently about how we have come to this point, and some have attempted to shift the responsibility for Russia's recent pattern of behavior onto others. Russia's actions cannot be blamed, for example, on its neighbors like Georgia.

To be sure, Georgia's leaders could have responded better to the events last month in South Ossetia, and it benefits no one to pretend otherwise. We warned our Georgian friends that Russia was baiting them, and that taking this bait would only play into Moscow's hands.

But Russia's leaders used this as a pretext to launch what by all appearances was a premeditated invasion of its independent neighbor. Indeed, Russia's leaders had laid the groundwork for this scenario months ago: distributing Russian passports to Georgian separatists, training and arming their missiles, and then justifying the campaign across Georgia's border as an act of self-defense.

Russia's behavior cannot be blamed, either, on NATO enlargement. With the end of the Cold War, we and our allies have worked to transform NATO, to bring it from an alliance that manned the ramparts of a divided Europe to a means for nurturing the growth of a Europe whole, free and at peace. And an alliance that confronts the dangers, like terrorism, that also threaten Russia.

We have opened NATO to any sovereign democratic state in Europe that can meet its standards of membership. We've supported the right of countries emerging from communism to choose what path of development they pursue and what institutions they wish to join.

And this historic effort has succeeded beyond imagination. Twelve of our 28 neighbor -- NATO allies are former captive nations. And the promise of membership has been a positive incentive for these states to build democratic institutions, to reform their economies, and to resolve old disputes, as nations like Poland and Hungary and Romania and Slovakia and Lithuania have done.

Just as importantly, NATO has consistently sought to enlist Russia as a partner in building a peaceful and prosperous Europe. Russia has had a seat at nearly every NATO summit since 2002. So to claim that this alliance is somehow directed against Russia is simply to ignore recent history.

In fact, our assumption has always been, and it still is, that Russia's legitimate need for security is best served not by having weak, fractious and poor states on its borders, but rather peaceful, prosperous and democratic ones.

It is simply not valid, either, to blame Russia's behavior on the United States, either for being too tough with Russia or not tough enough; too unaccommodating to Russia's interests or too naive about its leaders.

Since the end of the Cold War spanning three administrations, both Democratic and Republican, the United States has sought to encourage the emergence of a strong, prosperous and responsible Russia. We have treated Russia, not as a vanquished enemy, but as an emerging partner. We have supported, politically and financially, Russia's transition to a modern, market-based economy and a free, peaceful society. and we have respected Russia as a great power with which to work to solve common problems.

When our interests have diverged, the United States has consulted Russia's leaders. We've searched for common's ground. And we have sought as best we could to take Russia's interests and ideas into account. This is how we have approached contentious issues from Iran to Kosovo to missile defense.

And I have traveled repeatedly to Russia, the last times, two times, with Defense Secretary Robert Gates, to try to foster cooperation. Increasingly, Russia's leaders have simply not reciprocated. And their reasons actions are leading some to ask whether we are now engaged in a new Cold War.

WHITFIELD: All right. You're listening to U.S. Secretary of State Condoleezza Rice there at the Mayflower Hotel there in Washington, talking about and underscoring the disappointment in the relations between the U.S. and Russia.

Our State Department correspondent, Zain Verjee, is also monitoring this speech and got a firsthand look of the speech as it's being delivered. She joins us now from Washington.

So Zain, we heard Condoleezza Rice underscore, you know, some of the disappointments involving Russia, including the armed sales. What else do we need to be listening for in her speech?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well, Fredricka, this is really a stinging criticism of Russia by the secretary of state. She's accusing Russia in this speech of taking a dark turn, worsening its behavior and just being authoritarian, both at home and aggressive abroad, she says.

In this speech, she basically warns Russia that it's taking actions that puts it on a path to isolation and irrelevance. Russia's invasion of Georgia, a U.S. ally, Rice goes on to say in the speech, really has achieved nothing. But all she says it's done is to bring the world to this really critical moment.

Now, key, Fredricka, in this entire speech, Secretary Rice wants to present American and European unity, and what she's telling the Russians is that, look, the alliance is not -- it is strong. It's not weak. It's not wobbly. There are no cracks here that you can exploit. And she makes it very clear in this entire speech that the west will stand up to Russia's bullying and threats, as she says -- Fredricka.

WHITFIELD: There's some striking language that she uses. In -- you know, in part when she stalks about Russia almost being past tense as once an emerging partner?

VERJEE: Yes. The language is striking because it's pretty tough language. In diplomacy everything likes to talk nice-nice. But Secretary Rice is coming out punching a little bit here.

The other striking thing here, Fredricka, is really who this speech is aimed at. Secretary Rice really isn't just speaking to Russia's leaders, but she's also along in the speech targeting the Russian people. What she says is, that, "Look. You've gained so much since the days of the Cold War. Do you really want to go back and be isolated?"

She goes on to point out that the U.S. has supported Russia's economic growth, and it's the ordinary Russians that are prospering from it. So she's saying that Russia depends on the rest of the world for its economy, as well.

The other audience, Fredricka, that she's targeting in this speech is really the Europeans. What's important to understand here, is that it's really essential for the U.S. to show the Russians that there's no daylight between the U.S. and Europe. The thing is the Europeans depend on Russia for oil and gas, and they not want to be too confrontational. So Secretary Rice is saying to them, "Look, we need to stick together."

And interestingly, this entire speech is going to be translated into French, German and Russian. So the State Department really wants this message out.

WHITFIELD: Is there any downside to all this? Especially the kind of language being used?

VERJEE: There is. You know, even with the chill between the two countries and the rhetoric we keep hearing back and forth between Moscow and Washington, the fact of the matter is, the U.S. needs Russia's help on a number of international issues: things like negotiations with Iran and North Korea. And the U.S. isn't really looking, and doesn't want a serious rift with Russia.

So that's why in this speech we're not hearing Secretary Rice come out and say, "We need to put sanctions on Russia." Because that's not going to help. One top State Department official just yesterday was also warning, Fredricka, that the U.S. has to prepare for real frustrations, maybe even danger, this official said, with the way it deals with Russia in the future. So this is going to spill way beyond Secretary Rice's speech now, beyond November's election, and whoever's in the White House is going to have to wrestle with the Russians' bear.

WHITFIELD: All right. Zain Verjee, State Department correspondent, joining us from Washington, thanks so much. Good to see you.

All right. Well, some of the world's biggest banks, well they're stepping in to try to calm the global financial jitters. Where does their money come from? And where will it go? We'll get some answers from our Josh Levs.

(COMMERCIAL BREAK)

WHITFIELD: But for the moment, the nation's economy trumps Republican fundraisers on President Bush's agenda today.

CNN Brianna Keilar is at the White House -- Brianna.

BRIANNA KEILAR, CNN CORRESPONDENT: Well, Fredricka, the bailout of AIG on Tuesday night did not, obviously, buoy the markets as the Fed had hoped. But President Bush trying to smooth some things over today with words. We canceled trip he had planned to Alabama and Florida so that he could give his first on-camera address about the economy since the AIG bailout.

And this was not a discussion of the big solutions that the White House is proposing for the situation. He didn't get into any specifics about options he's considering, and White House officials won't get into those specifics either. What this was, was President Bush talking about what the government has already done, to show that he is on top of this situation, and aware of everything that's going on.

He touted the takeover of Fannie Mae and Freddie Mac, the bailout, of course, of AIG, and the Securities and Exchange Commission tightening a trading rule.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: These actions are necessary and they're important, and the markets are adjusting to them. Our financial markets continue to deal with serious challenges, as our recent actions demonstrate. My administration is focused on meeting these challenges. The American people can be sure we will continue to act to strengthen and stabilize our financial markets and improve investor confidence.

(END VIDEO CLIP)

KEILAR: So President Bush trying to be a cheerleader here, assuring Americans and the markets that he in constant contact with his economic advisers and with Treasury Secretary Henry Paulson, who he'll be meeting with today at the White House.

But no word from President Bush or from Congress, for that matter, on how long it's going to take to get out of this situation. And as the White House sees it in the short term, it's all about stabilizing the economy, with the realization that any total overhaul, Fredricka, is going to take years.

WHITFIELD: All right. Brianna Keilar at the White House. Thanks so much.

Well, in the midst of worldwide turmoil, Congress agrees on one point: it is somebody's fault. Democrats object to what they consider eight years of lax financial regulation. Some Republicans object to sudden government intervention.

(BEGIN VIDEO CLIP)

REP. TOM FEENEY (R), FLORIDA: The question remains, if there's no private sector left to bail out the taxpayer, and the taxpayers are the lenders of last resort, who bails out the taxpayer? There's simply nobody left on the hook.

As was said earlier, you have privatized all of the risk-taking and encouraged people to take risks in search of higher returns, or higher rewards for Wall Street executives. And you have socialized, on the back of hard-working, prudent and responsible taxpayers, all of the -- all of the risk.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: We don't need them to take regulation and supervision off the field, because when we do, we end up where we are now. And that's how we're going to go forward, in a very serious way, because this is deadly serious to middle-class families who are concerned about their jobs, their homes, the education of their children, how they pay for college.

(END VIDEO CLIP)

WHITFIELD: All right. Well, lawmakers in both parties say they should have been consulted about more of the administration's emergency measures.

Meantime, from the campaign trail, strong words from Republican John McCain on exactly what he would do right now if president.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: There was no transparency in the books of the Wall Street banks. Banks and brokers took on huge amounts of debt, and they hid the riskiest of all investments. Mismanagement and greed became the operating standard, while regulators were asleep at the switch. The regulators were asleep, my friends. They were not working for you.

The primary regulator of Wall Street is the Securities and Exchange Commission -- we call the SEC -- kept in place trading rules that let speculators and hedge funds turn our markets into a casino. They allowed naked short selling, which simply means you can sell stock without ever owning it. They eliminated last year an important rule called the uptick rule, that has protected investors for 70 years. Speculators pounded the shares of even good companies into the ground.

The chairman of the SEC serves at the appointment of the president, and in my view, has betrayed the public trust. If I were president today, I would fire him.

(END VIDEO CLIP)

WHITFIELD: All right. And underscoring, John McCain saying if president today, he would fire the SEC chairman, Christopher Cox.

CNN has reached out to Chairman Cox, and we have not received a response from Cox' office, saying, no immediate comment for now on the heels of these comments coming from John McCain saying, if president right now, he would actually fire the SEC chairman.

All right. Well, this is the reality of Galveston right now on the heels of Ike. And there's a fear that all of this devastation could actually stir up diseases.

(COMMERCIAL BREAK)

WHITFIELD: All right. The cleanup continues in Houston, and the power is slowly coming back on. More than a -- more than a half -- more than half, rather, of the power companies nearly 2 million customers are still in the dark.

Homeland Security Secretary Michael Chertoff says food and water distribution is going well. And Houston officials, well, they didn't seem to think so a day earlier.

Galveston's "look and leave" policy is now a "get out and stay out" policy. So many people tried to get back on the island it created a huge traffic jam 20 miles long. Officials are trying to get people who rode out the storm to leave Galveston for fear now of diseases there.

And at the Houston Zoo, cleanup with a little help from one of the very big residents there. Right there, pitching in, that's Tucker, a 3-year-old elephant lending a hand, or should we say, a trunk. The zoo is open, but with a limited number of concession stands, of course. But the zoo's education programs have been canceled until next week.

All right. Well, Hollywood answers the call for help. Actor Matt Damon and hip-hop artist and activist Wyclef Jean are teaming up to help those devastated by a hurricane in Haiti. A look at their efforts coming up in the next hour.

But first, a 180 billion dollar lifeline for the global banking system. We'll see where that money is actually coming from and then where's it going?

(COMMERCIAL BREAK)

WHITFIELD: All right. 33 minutes after the hour. Here are some of the stories we're working on in the NEWSROOM.

President Bush says he shares the American people's concern about Wall Street and the economy and promises his administration is focused on the challenges. Mr. Bush says the recent government bail outs are necessary and important for the health of financial markets.

Secretary of State Condoleezza Rice says Russia is on its way to international isolation and irrelevance, unless it changes its ways. She is speaking today in D.C. about U.S./Russia relations. Rice says relations have not been this bad since 1991, and the invasion of Georgia is just the latest example of Moscow's bad behavior, she said.

And it looks like people of hurricane Ike, those who were victimized by it, left homeless will have places to stay beyond the short term. The federal government plans to put them up in public housing apartments and might even build some temporary housing. The short-term housing solution expires October 14th.

(BUSINESS HEADLINES)

WHITFIELD: All right. So, we have been talking about a colossal worldwide effort now to keep these lenders lending and borrowers borrowing. U.S. federal reserve is working with the central banks of Europe, Britain, Switzerland, Japan and Canada for starters to pump an extra $180 billion into the system.

So, CNN's Josh Levs is here to break it all down for us. And again, let's hope it's all glass half full.

JOSH LEVS, CNN CORRESPONDENT: Yes. Well, you can try to see it that way. See, it's very good to have Fred, isn't it? To be so glass full at this time when we're coming out of Susan Lisovicz and talking about this -- like going AIG --

WHITFIELD: It's all very confusing, too, though.

LEVS: It is. It's very confusing and that's why I have this new hobby here, where I get these assignments and try to boil it down to something very simple and then go bug the guys in graphics and say, I need maps and arrows and stick figures.

Let's go to this first one. Because I'm going to try and explain to you now what the $180 billion is and why it's going to affect us. First of all, this is the basic idea. You've got these central banks all over the world. six of the biggest, including the federal reserve here. Which are issuing and I want to emphasize this, $180 billion U.S. dollars. A lot of the time in news when we give you a big figure, we're actually approximating based on other currencies. This is all U.S. dollars which is why the federal reserve has to agree to it. Let's go to the next pictures now. This will start to explain to you why anybody would do this. And I chose England, as an example. Go back to the England one. Go back, go back. There you go. Look at that. So, this is why they would do that. In each country, all these little private banks that do business in U.S. dollars. They do business in other things too. But, some of their really important business, Fred, is done in U.S. dollars. And in this economy, because things are so rough, they're not getting U.S. dollars fast enough. They're not having enough transactions which means it can slow down all these private banks in any of these countries.

So, what do they do? They can now, because of this infusion, they can now borrow U.S. dollars from the central banks in their countries. So, this is the first key here. All these individual private banks can now get the number of U.S. dollars they need to keep operating and not fall apart.

Now, let's go to the next one so I can show you what this does. Ultimately what this does here that it allows all of these countries to keep doing business with each other. All the private groups, all the public groups. The global economy keeps operating instead of slowing down. At least that's the theory.

Now, how does it affect you and me? This is the stick figure in the final picture, here. Let's bring it way home. That's you, Fred, see? Or, anyone working at a desk.

WHITFIELD: And pondering, oh gosh, what next?

LEVS: It's anyone. OK, so this is how I'm trying to bring it home for you. Those first two pictures there. So, you're sitting there working, right? You're thinking maybe some day I want to buy house or buy a car. Well to do that you need a loan. The health of your bank, your lender, is probably dependent on whether it can operate in that global economy. So what happened today affects your private bank and what kind of interest rate you could ultimately get.

Also the last little picture we have there for you showed a picture of a boat, I think. And that is supposed to represent retirement. Your 401(k) is also caught up. See there you go. They're on the beach.

WHITFIELD: Oh yes, vacationing.

LEVS: They're on the beach. Because everybody when they go in to retirement they walk together and smile on the beach. That's what happens.

But you see what I'm saying? It can also affect your 401(k), and that's why in the end it brings it all home to you. Your bank, your lender is affected by that whole process. That's where the $180 billion goes, assuming it happens. And that's the glass half full image. The question is, what happens next? Does it, in the end, really create help in the long run?

WHITFIELD: Yes, and that's the hope, that this will revive lending. revive the economy. Not necessarily completely save it, but maybe resuscitate it.

LEVS: Slow it from slowing down so much -- the private banks all over the place.

(CROSSTALK)

LEVS: Yes, that's the hope. But then what if it's only a temporary band-aid? What if things are really bad in two more months? Then what do we do?

So, will we be doing this again? We don't know. That's where it gets ugly.

WHITFIELD: All right, Josh.

LEVS: All right.

WHITFIELD: Thank you.

LEVS: Nice picture, too.

WHITFIELD: Appreciate you simplifying it, breaking it down. We like that.

LEVS: Thanks, Patrick.

WHITFIELD: Thanks.

All right. Well, if there is a calm in this economic storm, it may be credit unions. Their books are sound, by and large, and their investors are sleeping through the night. So what are they doing differently from the big banks? Neil Weinberg -- well he seems to know. He's a senior editor at "Forbes" magazine and he joins us now from New York.

Good to see you, Neil.

NEIL WEINBERG, SR. EDITOR, "FORBES" MAGAZINE: Pleasure to be here.

WHITFIELD: So we hear about mergers, we talk about bailouts. It's making a lot of us very nervous about banking. So why do we need to give it a second look, or maybe even for some of us first look, at credit unions? Why are they so sound?

WEINBERG: Well, credit unions are probably a safe harbor for a couple of reasons. First of all, they operate a lot like commercial banks, and commercial banking, even in this day and age, is a very stable and profitable business. You're talking about things like taking deposits from you and me, and our savings accounts and checking accounts, and then lending them out for car loans or any other sorts of loans at a much higher rate. So you earn a spread, it's very profitable.

Secondly, most of the credit unions in this country are federally insured, meaning that just like you have the so-called FDIC insurance for commercial banks, there's a National Credit Union Administration, a part of the U.S. government, which ensures your deposits up to $100,000, in some cases more

WHITFIELD: OK. But that's the same as a commercial bank.

WEINBERG: Excuse me?

WHITFIELD: That's the same as a commercial bank.

WEINBERG: Very much like a commercial bank.

WHITFIELD: You're insured up to $100,000.

WEINBERG: Exactly. So, they tend to be very conservatively managed, and they are also federally insured. So in this day and age, that's probably what you want.

WHITFIELD: But usually credit unions -- you may be privy to a credit union because your employer offers it. What if you don't have that kind of connection? Then you're out of luck?

WEINBERG: Well actually, these credit unions are supposed to be nonprofit organizations and nominally they are affiliated with some group, an employer, a trade union, or some other affinity-type group and they can't open their doors to all comers, but they have, through their lobbying on Washington, managed to open the doors quite a bit.

So in many cases they can bring -- allow in people who are only nominally affiliated with the organization that they are supposed to be charted to serve. So if you look around, there's probably somebody in your family who has a credit union at their employer and they can allow in a relative or something like that.

WHITFIELD: So you want to jump onboard?

WEINBERG: Yes, exactly. In most cases you're going to get a little bit more interest rate on savings and a little bit lower interest rate on your car loan from a credit union than you would from a commercial bank.

WHITFIELD Oh, interesting. So just to underscore, since you were also able to borrow money for the purchase of a home or a boat or a car, just like would you a commercial bank, what is it about the credit union that perhaps -- I guess doesn't lead to the same kind of forecast for a lot of other commercial banks that are doing similar kinds of lending?

WEINBERG: Well the commercial banks that really got in trouble were those that were -- like Countrywide Financial, they were specialists in home loans and they got into very risky home loans. Typically the credit unions, which are federally chartered and have federal inspectors going through their books, have very strict rules that they have to follow.

WHITFIELD: They're tougher? WEINBERG: They're tougher, they tend to have, from their very beginnings as agriculture cooperative based organizations, they tend to be run conservatively, just like many insurance companies are.

WHITFIELD: All right. Neil Weinberg, senior editor of "Forbes" magazine. I got the message out of you, you want to go for those credit unions. Grab them while you can.

Thanks so much.

WEINBERG: Thank you.

WHITFIELD: All right. Well, could you get priced out by your family physician? More and more doctors are switching to something called concierge medicine. Elizabeth Cohen will join us to explain what that's all about.

(COMMERCIAL BREAK)

WHITFIELD: OK. So the concept of a retainer is moving beyond the legal world, right into medicine. More and more doctors are converting their practices to what's being called boutique or concierge medicine. So what does that mean for you and your family? Our medical correspondent, Elizabeth Cohen, is here to break it all down for us.

So this is really fascinating. This means more person-to-person care, but it means it's going to cost me more.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Right, absolutely.

I have two friends in the past couple of months who got the same letters from their doctors that said I've been your doctor for a decade now, and I want to keep being your doctor, but you are going to have to pay me an extra $1,500 per person. The reasoning is, is that these people will cut their patient load way down, get rid of, sometimes, like two-thirds of their patients so they can devote more time to the patients who pay them more money.

And they say, these doctors say, you'll get better service. I will return your phone calls more quickly. You will have shorter times in the waiting room. I will spend more time with you in the examining room. Those kinds of things.

WHITFIELD: So this doesn't means $1,500, for example, and you're not going to pay more for that visit --

COHEN: You're still paying --

WHITFIELD: You're still paying that?

This is like an initiation kind of fee? It is a retainer?

COHEN: It's to get into the club. And then you still are going to pay for all of your visits and your insurance will kick in just like it always does. WHITFIELD: So I need to ask a lot of questions to my doctor if he makes this offer to me, and what do those questions need to be?

COHEN: You better believe it. Some people are just saying, oh, sure, I'll hand over the money because you're promising me better care. That's probably not the wisest idea. How do you know you're going to get it?

Ask, what specific services am I getting for this money? You say you'll return phone calls more quickly. Do you mean that day? If I'm sick, will I get in to see you that day? Also, can you help me save money, doctor, in other areas? Can you help find cheaper drugs for example. And also, ask the doctor, will your office be making capital investments to make your office more efficient? Because that's what they promise. So are you going to get a better computer system, electronic medical records, nurses who know more about how to run an office? Those kinds of things.

WHITFIELD: Yes. And does that mean that every patient is a boutique medicine patient, too, or does it mean, I get to jump ahead of the line, so to speak, when I come to your office?

COHEN: No, usually when doctors convert their practice, they convert it. Everybody is in this boutique practices, everyone is forking over that extra fee.

WHITFIELD: So what are your choices?

COHEN: Some people don't have a choice. Like for example, my friends who got those letters, they are either going to have to pay this fee to get concierge medicine, or they are out. They have to find another doctor. So you're going to see this more and more.

(CROSSTALK)

WHITFIELD: And then you'll say, I don't like this idea. I'm going to --

COHEN: Right and --

(CROSSTALK)

WHITFIELD: -- move on.

COHEN: If you say you don't want to pay the 1,500 bucks per person, you are gone, you're out. Bye-bye, go find somebody else. Right.

WHITFIELD: Wow.

COHEN: It is tough out there. It is.

WHITFIELD: And I guess -- is this in part because a lot of doctors are feeling the squeeze, that they are not getting a chance to spend a lot of time with their patients, and/or they're having to pay an exorbitant amount for their malpractice insurance, and this may help offset the costs?

COHEN: It all of these things put together. Doctors feel crunched in two ways. One, they feel that they can only spend minutes with each patient and they want to spend a lot more time. And two, they are just not making as much money as they used to, so more and more of them are turning to these boutique practices, really by the thousands.

If you want to read more about what questions you should ask if your doctor decides to join this bandwagon, go to CNN.com/health and you can find out is boutique medicine worth the price.

WHITFIELD: I can't wait to read that. I haven't gotten a notice from my doctor yet. I'm not quite so sure if I like the idea or not.

COHEN: You might.

WHITFIELD: I don't know. I've got to get schooled on it.

All right, thanks, Elizabeth.

COHEN: Thanks, appreciate it.

WHITFIELD: All right. Well, it might turn some people's stomachs, we are talking about this -- genetically-engineered meat. It is a step closer to your supermarket. The FDA has issued some proposed guidelines on the regulations of so-called GE-animals. The technique is already used with lab animals, and apparently, it is to grow better produce.

Well, basically, scientists splice bits of DNA into an existing animal or vegetable to give it different traits. Today's FDA guidance says producers would have to demonstrate to the agency that their genetically-modified animals are safe to eat.

Well, as the market goes down, the price of gold is currently going up. In the next hour of the NEWSROOM, what you should know before you go on a gold rush.

(COMMERCIAL BREAK)

WHITFIELD: All right. A Missouri couple has finally been able to adopt a baby after a custody battle they say was prompted by weight discrimination. The dad actually got free gastric bypass surgery after he went to media. However, all of the judges involved in the dispute insist that weight was never the issue. They say the couple actually violated state adoption laws.

Ultimately, as KMBC's Jim Flink reports, the little boy is now legally in his new home.

(BEGIN VIDEOTAPE)

JIM FLINK, KMBC REPORTER: Sitting in his living room with son Dakota on his lap, Gary Stocklaufer can finally say he has won his fight. STOCKLAUFER: I told them from the very beginning that dog wasn't going to hunt. That dog didn't hunt. I got my son back.

FLINK: But the fight was long and costly. Gary still believes he was the victim of discrimination -- he once weighed over 500 pounds.

STOCKLAUFER: The state didn't have a problem with my size as a foster parent. We had kids coming in and out of our home. Everything was all good.

FLINK: But when the Stocklaufers tried to adopt Dakota from a Texas relative, the state of Missouri stepped in, taking him away. When his story made headlines, a Texas company donated weight loss surgery. He has now lost 250 pounds.

STOCKLAUFER: We really want to thank you for the prayers -- and the donations and what not.

FLINK: But more than the weight he has lost, it is the burden now lifted from the court system, which found in his favor this year, so that Dakota could stay with his own relatives.

STOCKLAUFER: I feel like a big weight has been lifted where can go do more things as a family and that we don't have to wonder, are we allowed to say something?

FLINK: Happy the legal battle for Dakota is over, even if the price tag for fighting to regain custody goes on.

STOCKLAUFER: The amount it's not -- it doesn't really matter. What matters is that we got my son back.

Thank you. Thank you.

(END VIDEOTAPE)

WHITFIELD: Oh, my gosh, that little Dakota is sweet.

All right. Well this custody battle has been going on for about 14 months. Little Dakota is now about a year-and-a-half old.

Well, how do you keep some famous stone faces so pretty and so fresh? Forget the moisturizer, break out the caulk.

(COMMERCIAL BREAK)

WHITFIELD: All right. Well, we all need a little makeup every now and then, don't we? Including the presidents featured on Mount Rushmore. Workers this week are conducting annual preservation work on the national monument. They are sealing cracks in the granite to help keep water out. I bet you are wondering how they do that. Well the carving on this memorial began in 1927. And every now and then, even that needs a little facelift.