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American Morning
Gunman Opens Fire at School in Finland; Congress Fights Over Details of $700 Billion Bailout; Nation's Top Military Officer Calls for More Troops in Afghanistan; Current Financial Crisis Boosts Barack Obama in the Polls
Aired September 23, 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: We have some breaking news we're following for you this morning. Nine people are now dead after a school shooting that happened in western Finland. This new information is coming to us according to the Finnish media, and new video also coming in to us now. Police say that a gunman opened fire at a school for adults just before 4:00 Eastern Time. One local police official said the gunman was caught wounded by his own bullet but did not say how seriously he was wounded.
To the markets now after a major drop in the Dow to start the week. What can we expect today? We're going to talk about it coming up. In fact, we're going to talk about it right now with our own Ali Velshi, who is sitting here muttering to it.
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: We can't be waiting for breaks on things like that. This is urgent news.
CHETRY: Muttering to yourself as you were listening to John talked to the two candidate's --
(CROSSTALK)
JOHN ROBERTS, CNN ANCHOR: (INAUDIBLE).
(CROSSTALK)
VELSHI: I have to -- I mean, I appreciate that you asked the question three times and it didn't get answered. There is not much conceivable way.
(CROSSTALK)
VELSHI: There is just no conceivable way that either candidate's tax cuts can be unplanned. Not by their own doing. I'm sure they had the best of intentions but this new financial crisis means a reevaluation of that. I think middle class voters out there should be thinking there is a very good chance that you will not see tax cuts under these candidates. We'll have to, you know, crunch the numbers on that and see where it goes.
Right now, as we were saying, Dow futures are a little bit lower. We saw European markets actually turn positive, but Asian markets had a rough night. Hong Kong was up, up almost 4 percent. Shanghai up 1.5 percent. Australia down 2 percent. We don't know how this day is going to go. And bottom line is it doesn't actually matter what futures say, the market is going to do when it opens. It's what is this day going to bring in terms of greater opposition or likelihood that this plan, this rescue plan might actually happen. And that's where we are right now.
There is opposition from the Democrats who want greater protections for taxpayers, limits on how much CEOs with these companies that might get bailed out might get, and some sense of who is in charge. That's going to come down to that because the Treasury has quite remarkably asked for powers that have never been given to the Treasury before to be able to take this money and deal with it as they wish without intervention by Congress or the courts.
Now, the reason they're doing this is this idea that people won't loan money and people won't re-establish themselves in business if they think that Congress will mess with the details. But the bottom line is, in this political climate, you simply can't tell Congress, particularly after the mess that's happened that they can't have a say in the matter. So that is going to be a big sticking point. And then you have spoken to others on the other side like Senator DeMint earlier who said the government should have no role in this, whatsoever.
So, again, this is becoming very, very dicey and markets will just not react to it. Again, we look at the stock market. We look at the Dow. The bottom line is the thing we can't see, the credit markets, the deals that are being made, the financing deals, they are coming to a grinding halt right now.
ROBERTS: Yes. I mean, there's not a whole lot of trust out there on Capitol Hill.
VELSHI: No.
ROBERTS: In terms of, you know, crafting this deal or letting the administration go ahead and do it.
VELSHI: Correct.
ROBERTS: Do we run a risk here that things are going to get worse in the next few days?
VELSHI: Yes, absolutely. In fact, the people I've been speaking to say things might get worse regardless. Even if there is a deal, the bottom line is not everybody will qualify for a bailout so there may still be financial institutions that fall. This government buyout is not supposed to be of assets that are so bad, they'll never get rid of them. So, there may still be failings. But if there isn't a deal, now that they've started the clock ticking, no one will finance American companies because there's an expectation that in a week or two, they'll be able to finance them with a guarantee.
So why would I loan you money today knowing that in a couple of weeks the government might be behind you. If you want money today, you're going to have to pay me a lot of interest for it. So, we're in a bad situation.
CHETRY: Why is it so controversial to lose this line about the CEOs getting compensation? Why can't?
VELSHI: You know, the CEO -- of all the very legitimate complaints in this thing, this one is a red herring and needs to be dealt with later. We can deal with the executive compensation later. This can't hold this up. The amount of money we're talking about for pay is so minute compared to the amount of money this bailout is going to cost. It is really not worth taking a week even to work that out, because this deal gets more expensive with each passing day.
CHETRY: You bring us a good point. Ali Velshi, thanks so much.
And we're talking about this because Senators John McCain and Barack Obama are also criticizing what we're talking about -- these executive bonuses for CEOs of these failing companies. They're following their colleagues in the Senate asking for restrictions in the new bailout bill.
And our Jim Acosta is here now. He's taking a look at what both camps are saying this morning about that.
JIM ACOSTA, CNN CORRESPONDENT: Well, as my old College professor and political science used to say as goes the economy, so goes the party in power. And we're seeing that right now with John McCain, and the Republicans.
Barack Obama has essentially received what appears to be a bailout bump if you look at our latest CNN polling on this subject right now. Who is better equipped to handle the economy right now? Barack Obama seems to be dealing with a slight advantage over John McCain -- 53 percent to 43 percent. Not so slight. A ten-point bump there for Barack Obama on the economy.
And if you look at the polls around the country, that is translated into a slightly better lead for Barack Obama. And he has done something interesting. You heard it over the last ten minutes. He has not come forward with a specific plan. John McCain has tried to make him pay for that. It's not altogether clear that that is panning out in the polls for John McCain. And Barack Obama is firing right back. He is spending more of his time trying to paint John McCain as doing the regulation reversal on this subject.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Fix the Wall Street mess, reform Washington, and most importantly enact a pro- growth agenda, create jobs for Americans and get this country back on track.
(APPLAUSE)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: We need a plan that helps families stay in their homes and workers keep their jobs. A plan that gives hard-working Americans relief instead of using taxpayer dollars to reward CEOs on Wall Street.
(APPLAUSE)
(END VIDEO CLIP)
ACOSTA: And it's interesting, when I was listening to those two sound bytes there. And if you read them without looking at whose name is attached to which sound byte, they kind of sound the same. They're all talking about oversight. They're all talking about how they don't like these golden parachutes. But at the same time, they're really held hostage to what is happening right now when they take office in January. The landscape is going to be dramatically different by then.
CHETRY: A lot of campaign promises made -- universal health care, tax cuts from both sides. Are they going to have to adjust some of the things they're talking about in light of this financial crisis?
ACOSTA: Yes. How are we going to pay for all of this stuff, exactly. At this point, no. And they're both talking about tax relief. They're both talking about tax cuts. Barack Obama for the middle class, John McCain talking about keeping the Bush tax cuts permanent. But we're looking at potentially a $1 trillion federal budget deficit after this bailout plan goes through.
What are we supposed to do about that? And the candidates aren't really addressing that at this point. Bill Clinton back in 1992 talked about a middle class tax cut. And he was convinced after he took office that, no, he had to go after the deficit. So campaign promises may not turn into political reality when January rolls around.
CHETRY: All Right, Jim Acosta for us. Good to see you. Thanks.
ACOSTA: Good to see you.
CHETRY: And Barack Obama and John McCain will be facing off for their first debate on Friday. It takes place at the University of Mississippi 9:00 Eastern. So join the Best Political Team on Television for your front row seat.
ROBERTS: Seven minutes after the hour now. Congress fighting over the details of an 11th hour rescue plan for the financial markets. So what are the holdups? We'll ask Senator Hillary Clinton about the $700 billion bailout.
Double the troops in Afghanistan. And that's what the nation's highest ranking military officer is calling for this morning. Find out what else he says is desperately needed in the war zone. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the "Most News in the Morning." Running out of time. The nation's top military officer is calling for more troops in Afghanistan, and he says, "that's not all that's needed." CNN's Barbara Starr following this morning's development. She joins us live from the Pentagon right now.
So what else is needed, Barbara?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, John, we're about to find out. Defense Secretary Robert Gates is on The Hill later this morning talking about Afghanistan and Pakistan. Senators Obama and McCain might want to be listening because there's not going to be very much good news.
(BEGIN VIDEOTAPE)
STARR (voice-over): Just weeks until Election Day, and the U.S. military has a message for President Bush. It needs to nearly double the number of troops in Afghanistan. But even the highest ranking officer says Afghanistan needs billions in reconstruction and aid, more troops alone won't be enough.
ADM. MICHAEL MULLEN, JOINT CHIEFS CHAIRMAN: Frankly, we're running out of time.
STARR: Either way, the new man in the White House will be handed a mess that will likely last well beyond his presidency.
JOHN NAGL, SENIOR FELLOW, CNAS: I see an American commitment to Afghanistan being required for the next 20 years.
STARR: The threat, fighters crossing from Pakistan and the growing numbers of foreign fighters and al Qaeda and Taliban networks now inside Afghanistan. The U.S. is hunting a new generation of insurgents like this man, (INAUDIBLE), a Taliban commander who one official called a primary concern, responsible for many attacks against U.S. troops.
Even before the bombing of the Marriott Hotel in Islamabad, the U.S. was trying to get Pakistan to pursue militants. But Islamabad is furious at recent U.S. missile attacks on its territory. Afghanistan seems more willing to cooperate.
ABDUL WARDAK, AFGHAN DEFENSE MINISTER: We should have a combined and giant task force of coalition, Afghan and Pakistanis, to be able to operate on the both side of the borders.
(END VIDEOTAPE)
STARR: So, John, the candidates have been bickering for months about Iraq. It now looking like it's the war in Afghanistan and the problems in Pakistan that may really need to be addressed first -- John.
ROBERTS: Wow, an American/Afghani/Pakistani coalition. That sounds like it would be difficult to put together.
STARR: It does, indeed, and that is the real bottom line. Pakistan's willingness to join in on all of this. ROBERTS: All right. Barbara Starr for us this morning from the Pentagon.
Barbara, as always, thanks so much.
CHETRY: $700 billion of your money used to bail out the banks. You've written us and we've seen it on our Web site. Many people furious. So which candidate has the plan to win over your vote? We're going to talk to our political panel, ahead.
Also, the market is down, but it might be just the right time for you to invest. We're going to take a look at what history tells us about some good investments in bad economic times.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Welcome back to AMERICAN MORNING. Rob Marciano keeping track of things for us down in the CNN weather center in Atlanta.
But, it seems like it's been a relatively quiet week as far as storms go. Anything cooking in the Atlantic now.
(WEATHER REPORT)
ROBERTS: Senator John McCain claims that his presidential rival, Barack Obama, has no plan to fix the economy. What's the truthiness of that statement? We're calling in our "Truth Squad" this morning to find out what Obama is saying about your money.
Stocks are down and your 401(k) is suffering but there are some investments that do well in hard times. What are they? Gerri Willis has got some much needed advice for us. You're watching the "Most News in the Morning."
World leaders, heads of state, and rock stars.
(BEGIN VIDEO CLIP)
ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Whether it's a superpower or a tiny nation, everyone comes to the United Nations with an agenda and to get their 15 minutes in the spotlight.
(END VIDEO CLIP)
ROBERTS: President Bush and Iran's leader in the same town sharing the same stage. Zain Verjee joins us live on the big showdown at the United Nations.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Well, we've got some news just in to CNN this morning. Ali Velshi has been following every single move as this big discussion takes place about the $700 billion bailout.
What did you have?
VELSHI: And Ben Bernanke and Henry Paulson are testifying at Capitol Hill. We just got word of their testimony. What they're going to say. They're going to make a very strong case to Congress about why this deal has to go through. Some segments from what Henry Paulson has to say.
He is saying that this juncture in light of the fast moving developments in financial markets, it is essential to deal with the crisis at hand. Paulson has not been given to using language like crisis until this last week. Ben Bernanke is saying that the market turmoil we're experiencing poses great risk to the U.S. tax payers.
When the financial system doesn't work as it should, American's personal savings, the ability of consumers and businesses to finance spending, investment and job creation are threatened. And one of the things we were talking about a little earlier is what this credit freeze means. And I was saying that banks don't lend banks money and companies can't borrow money. Remember that many of America's major corporations borrow money in the billions of dollars on a daily basis for operating reasons.
Operating reasons means paying the bills and paying payroll. When a company cannot raise money to meet its payroll, you've got a big problem on your hands. You, Americans have a big problem on your hand. So that's something we have to think about. This isn't Wall Street getting stuck. This isn't a Wall Street problem. This is your company that may not have enough money in the bank that would typically be able to borrow that money on a short-term basis because they know that some amount of funding is coming in later.
If they can't do that, they can't pay you, they can't meet their bills. And right now, we are in a situation where it is so difficult and so expensive to get credit that that could become a reality inside of the next few days if there is not some sense that there is a solution to this problem.
So, you'll be hearing that from Ben Bernanke and Henry Paulson on Capitol Hill this morning.
CHETRY: You know what else seems to be the case is that, it just seems that the American people are not buying this anymore.
VELSHI: Sure.
CHETRY: That, you know, that we cried wolf so many times. We said we need this money. Sometimes, that they're like, wait a minute.
VELSHI: And how did you get into this?
CHETRY: Right.
VELSHI: I mean, Americans are saying, you really -- you, Wall Street and the government let this happen. I understand the criticism of those people who say this is the wrong thing to do and it's hard to buy. But the reality is it is here.
And we will have to discuss how we got here at some point, but we may have to deal with this crisis before we -- before we figure out how it never happens again.
ROBERTS: Strong testimony this morning but apparently it was very stark terms last Thursday night in that meeting.
(CROSSTALK)
VELSHI: That's right, in that meeting.
ROBERTS: Some source familiar with the meeting told me that basically, Paulson and Bernanke came in and said we risk a complete collapse in the markets unless we do something in the next few days.
(CROSSTALK)
VELSHI: Serious recession, Bernanke apparently said. You have both spoken to some of the people who are in that meeting who have come out and said we were told -- I mean, it's not even that we don't know that this happened. They were told in stark terms, you've got to deal with this. And again, that does not mean you've got to do what is on the table, but something has to be done to get us out of this log yet.
ROBERTS: Boy, this morning, 9:30, Senate Banking Committee, right, the testimony?
VELSHI: Right. Yes.
ROBERTS: We are watching it. Thanks, Ali.
VELSHI: OK.
ROBERTS: Current financial crisis giving Barack Obama a boost in the polls. But which candidate is better equipped to clean up the whole mess. Our radio hosts debating, coming up.
It's a worldwide problem but the money that fixes it may come from American's pockets. So how is the $700 billion bailout plan playing overseas? We go live to London to find out. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Why they're bailing out these big multimillion dollar corporations and putting the burden on the taxpayer, and then the executives from these companies leave and they get these big sums of money. So as a taxpayer, it makes me angry and I just want to find out when that's going to stop.
(END VIDEO CLIP) CHETRY: That was just one angry taxpayer unhappy with the $700 billion proposed bailout. Barack Obama and John McCain were out on the campaign trail yesterday trying to convince angry voters, like the one we just saw, that they're the ones to solve this financial crisis.
(BEGIN VIDEO CLIP)
MCCAIN: Fix the Wall Street mess. Reform Washington. And most importantly, enact a pro-growth agenda, create jobs for Americans and get this country back on track.
(APPLAUSE)
OBAMA: We need a plan that helps families stay in their homes and workers keep their jobs. A plan that gives hard-working Americans relief instead of using taxpayer dollars to reward CEOs on Wall Street.
(END VIDEO CLIP)
CHETRY: So as this economic emergency gets worse, Barack Obama is actually gaining ground from it. Our new CNN Poll of Polls shows Obama ahead of John McCain by five points. That's up two points from Friday. Joining me now from Los Angeles is conservative radio host Michael Reagan. He supports John McCain. Also in Chicago, CNN contributor Roland Martin who will be voting for Barack Obama.
Thanks to both you for being with us this morning.
MICHAEL REAGAN, CONSERVATIVE RADIO HOST: Good morning.
ROLAND MARTIN, CNN CONTRIBUTOR: Glad to be here, Kiran.
CHETRY: Let me start with you, Michael, because it looks like -- and when people are asked as well of our own CNN Opinion Research Poll, who would better handle the economy, Barack Obama is opening up a ten-point lead now, 53 percent to 43 percent. I know that it's harder for John McCain right now because he's with the majority party, with the party in the White House. But what does he need to do right now to convince people that he would do something different to get us out of the mess right now?
REAGAN: Yes. Quit pointing fingers at Christopher Cox and start pointing fingers at Barack Obama and the people who are working for him -- Franklin Raines, Jim Johnson, Jamie Gorelick. People who ripped off Fannie Mae and Freddie Mac for over $200 million pay no price for it, working for Barack Obama. And will they be working for Barack Obama when he becomes president of United States of America.
John McCain needs to remind people in 2005, there was a piece of legislation, a reform act, that would have reformed this mess, that was stopped in the Senate of the United States by the very Democrat Party that's supposed to in fact now solve the problems that they helped create back in the 1990s. And now we're in 2008. No, Congress created this problem and I don't believe they can fix the problem at all unless they start lowering taxes on corporate America. CHETRY: Roland, let me --
MARTIN: Hey, Mike, that was pretty -- Mike, that was pretty cute of you. But the reality is that John McCain has been a deregulator for years. Not only that. I love how you brought up all of the Fannie Mae and Freddie Mac people but did you also forget Rick Davis who is running McCain's campaign got a couple million bucks for lobbying for those same companies?
Look, you can deny the reality all that you want to. The fundamental problem is that Phil Gramm, who is who, a McCain backer, led the legislation that also created some of the same mess. Now, you have to accept that and own up to it, Michael. So stop ignoring it. You also mention a bill in 2005. The Democrats didn't take control of Congress until January of 2007. Your party --
(CROSSTALK)
REAGAN: Yes. Don't start playing that game. No, no, no, no. Don't start playing that game because you know and I know -- maybe America doesn't know -- it takes 60 votes in the Senate to bring a bill to the floor. Your party, the Democrat Party stopped reform in 2005 in the Senate of the United States from even coming to -- don't give me this Michael, Michael, play that crappy game on me. I don't want to hear it.
(CROSSTALK)
MARTIN: Michael, you don't want to hear it because it's true. Kiran, that's the fundamental problem here. John McCain admitted he doesn't know much about the economy. And the reason he is behind --
REAGAN: And Barack Obama does?
MARTIN: Michael, Michael, don't interrupt. I didn't interrupt you. Kiran, Kiran --
(CROSSTALK)
CHETRY: Let Roland finish and then we'll get you, Michael, I promise. Go ahead, Roland, finish.
MARTIN: Kiran, Kiran, the fundamental problem is that John McCain had a horrible week last week because he was trying to say it's fundamentally strong when it wasn't. The bottom line is John McCain has been out of touch. And, again, he's been a deregulator.
(CROSSTALK)
CHETRY: But hold on, let me just -- I want to ask both of you these because this is very interesting. We're asking taxpayers to sort of suspend disbelief that Congress can somehow solve this, that the White House can somehow solve this and even if the two current candidates running for president can solve it. But it wasn't only John McCain, Roland, who was saying this. We have a quote from Henry Paulson, the Treasury Secretary from July saying the fundamentals are strong. So, who can the American people really trust when it comes to fixing this situation?
REAGAN: I tell you one thing --
(CROSSTALK)
MARTIN: Well, look, it is --
REAGAN: Excuse. They can learn not to trust Washington. I write -- I put a press release the other day. The Democrats, in my belief, are guilty of robbing the bank. And the Republicans are finding themselves of driving the getaway car.
And I'm telling you, I think America is ticked off that nobody is being held accountable. And when this happened with Enron, you know, somebody went to jail or died going to jail. Now you have Congress creating the problem. You have friends of Congress who made hundreds of millions of dollars off of this deal and nobody is held accountable. It's interesting. For seven years we can't pass an energy bill, but over the weekend Congress has spent $700 billion of our money and no one is being held accountable and we're able to pick up the...
(CROSSTALK)
MARTIN: Kiran, Kiran --
(CROSSTALK)
CHETRY: All right. Let me give you the last word.
(CROSSTALK)
REAGAN: I'm telling you, if they all got fired, if they all got fired, we'd be happy.
(CROSSTALK)
MARTIN: Here's the deal, Kiran. It's very nice to come on television and say, well, Washington can't fix it. Well, who's going to fix it? The Alaska legislature? It's going to be the New Hampshire legislature? South Carolina? No, you have to look to Washington to do this. We may not like it. It might not be easy to be talk show host and dog Congress and dog Paulson and dog Bush, but the reality is these are the people who are going to have to confront the problem now. So, Michael, get over it. They're going to have to be the ones to do it. Nobody else can do it.
REAGAN: First of all, first of all, they have to know what created the problem. They're not willing to look at what created the problem, and if they're not willing -
MARTIN: I agree.
REAGAN: How are they going to solve the problem?
CHETRY: You guys, you know what, if anything, it's going to be sparking a very healthy debate. We're going to be hearing from all of the people involved, all the main players and we're going to be hearing some very different points of view from the members of Congress. So we'll see how it goes.
I want to leave it there. Thanks for the vigorous debate this morning.
Michael Reagan, Roland Martin, great to see both of you.
ROBERTS: Crossing the bottom of the hour now. And breaking news to report today. Officials say at least nine people are dead after a student opened fire at a college in southwestern Finland. The mayor of the town says the gunman also tried to kill himself but survived the shot. Finnish police say they are investigating whether the man seen in these threatening YouTube videos is the shooter. Police say he was questioned yesterday over these videos and then released.
And this morning Capitol Hill is the scene of feverish negotiations. Congress and the White House struggling to agree on the details of a $700 billion bailout plan. This morning, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke will tell the Senate Banking Committee that immediate action is needed for the health of the U.S. economy. That hearing gets under way at 9:30 this morning.
Will we see a second straight day of sell-offs on Wall Street? Dow futures are down slightly just about an hour now before the opening bell. "Issue number one" having a worldwide impact hitting European and Asian markets again and again. How is this $700 billion emergency loan playing overseas? Our Becky Anderson joins us now live from London with public reaction from her side of the pond.
Good morning, Becky.
BECKY ANDERSON, CNN CORRESPONDENT: John, I promise I won't shout at you. Yes, Henry Paulson here in the U.K. certainly and across Europe being seen as the sort of proverbial white knight in shining armor. Listen, British banks are up to their necks in toxic debt at the moment. And as one commentator put it very bluntly in the "Evening Standard" afternoon newspaper here in the U.K., Hank puts us to shame in handling this crisis.
Now, what this guy is ultimately saying is that Hank Paulson has played a blinder during this in credit crisis. First sign in trouble, he forced JPMorgan to buy out. Lehman in trouble, he didn't throw it a lifeline. AIG were in trouble, he decided that he would throw them a lifeline.
And at this point, what you hear is this from many, many people in the city of London. The world needed a creative solution to what is a global liquidity crisis and it was Hank Paulson - and it's got to be said, Ben Bernanke, who came up with that solution. Compare them, John, for example, to the guys who are trying to run things here. And I don't mean to slag them off but this is the way it stands. The Central Bank Governor here, Mervyn, he is an academic. The guy runs the regulatory authorities. He was a management consultant and Alistair Darling, who is the finance minister here in the U.K.. Well, he's just an elected official.
So the headline writers, John, have been having a field day. Ultimately the headline that's been used again and again and again is literally they think, "Darling, move over." And that's the way it stands. The Finance Minister really not being seen to have done a particularly good job here. So all eyes on Paulson and your man Ben Bernanke as they try to work things out. Not just you guys in the U.S. but for us here in the U.K. and other people globally -- John.
ROBERTS: Alistair, not the darling he might have once been. British Prime Minister Gordon Brown has got a speech that he's going to be giving today. some people calling this the speech of his life. He needs to try to rescue the economy, rescue his ratings at the same time. Can he do it?
ANDERSON: Yes. Well, this is going to be an interesting one, isn't it? It's the Labor Party Annual Conference up in Manchester. It's not a happy affair up there. Alistair Darling speaking yesterday. He got an ovation but it was almost a slow hand clap from the delegates. The Labor Party in real trouble.
Don't forget that Gordon Brown is the man who had his hand on the tiller of the economy for 10 years during Tony Blair's time. And everybody said he was a fantastic chancellor, as we call him here, chancellor being secretary at the time. He was the man who talked about prudence all the time, about steering a really sort of stiff ship. He wanted things to be really flat, as it were.
Well, that's not the way it is because everybody now says that he put nothing on ice. There was no savings, effectively, for what might have happened. And in fact that's happened today. He's going to take to the stage this afternoon. All ears will be on what he says about the economy. All eyes will be on whether he looks like a man condemned at this point. It's a difficult time for Gordon Brown at the moment, difficult for the markets. Let me just tell you what they're up to.
Down between 1.5 percent and 2 percent on the European and oil trading at around $107. That isn't too bad. At least that's better news. So we are waiting to hear from Hank Paulson and indeed Ben Bernanke -- John.
ROBERTS: Dow futures down 36 at this point, all the indices are down. So it looks like it could be a down start to the day. Becky Anderson for us this morning on greater Marlboro Street. Always engaging to be with you.
Becky, thanks so much.
CHETRY: Well the economic times are tough right now but there may be a silver lining in their somewhere for investors. So what can we learn when we take a look at history about investing in down markets? Perhaps even the mother of all down markets. And that was of course the Great Depression. CNN personal finance editor Gerri Willis joins us now with more on this.
When we talk about this, historically what investments do well in hard times?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, you know, first we wanted to look at the Great Depression because that was as you said the mother of all times but it's hard to make comparisons. The numbers aren't that good and what's more times were different. Deflation was the order of the day not inflation. The stock market had lost 90 percent of its value. So we tried to find something closer to what we're experiencing right now.
We checked in with Standard & Poor's. They have records on 11 previous recessions going back to 1945. And we looked at the stock sectors that do well during these periods. They're all what the pros call noncyclicals - tobacco, alcohol and beverages, household products. You can see the list right here. Food, beverages, non- alcoholic. And these are the kinds of things that folks are buying no matter what the economy is doing. That's why they're called noncyclical. They're considered safe havens.
Health care is a little further down on this list. But I have to tell you, Kiran, you know, you look at the returns. I said these are safe havens. Some of these even lose ground, lose money. Food and beverage is down pretty dramatically during a recession. They lose money but less compared to other sectors.
CHETRY: So what is the closest comparison to the time that we're in right now if you had to generalize a little bit?
WILLIS: We talked to the folks at Morningstar. They say the stock market comparison that is probably most apt is the S&L crisis starting in August 1989. They took a look at how the stock market performed in the wake of that event. take a look at this. A turnaround pretty quickly, coming at three years. The stock market rebounds hard at 30 percent, up 30 percent after three years after that event.
You know, the moral of this story is, I know a lot of people out there very nervous right now. They're taking their money out of their 401(k). You can't predict when the market is going to turn around. It's tough to time the market. I know a lot of folks out there, they're not worried about the return on their money. They're worried about the return of their money right now. So a lot of folks concerned but I have to tell you, you know, someday at some point, this market will turn around. Investments will turn around. But it takes a lot of confidence to stay in this market.
CHETRY: And unfortunately, it seems like some of the hardest hit are those seniors out there, you know, relying on that retirement income because they're not bringing in any more.
WILLIS: Well, the closer you are to retirement the more conservative you need to be. CHETRY: All right. Gerri Willis for us. Thanks.
WILLIS: Thank you.
ROBERTS: 38 minutes now after the hour. This morning Congress and the White House working to finalize a financial rescue plan. A lot of uncertainty and finger pointing going on. Ahead Senator Hillary Clinton on whether the Democrats should take any of the blame for the financial crisis.
You're watching the "Most News in the Morning."
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ROBERTS: Welcome back to the "Most Politics in the Morning."
Congress tried to put its stamp on the $700 billion bailout plan earlier this morning for the first time since the primary season ended. I talked with New York Senator Hillary Clinton about President Bush's massive financial rescue plan.
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ROBERTS: President Bush is urging swift action on this measure. He says, "the whole world is watching to see if we can act quickly to shore up our markets." Do you trust him to do the right thing here? Because some members of Congress are likening this to the run-up to the Iraq war. The administration is saying, trust us here.
SEN. HILLARY CLINTON (D), NEW YORK: Well, John, I think we could have done better had we started acting nearly two years ago when I and others said that this crisis was looming on the horizon and we had to do something to help people stay in their homes and begin to deal with these mortgages that unfortunately, you know, were not in the best interest of either homeowners or our economy. Well, we are where we are now and we do have to take action. But I think it's important that Congress is driving a hard bargain with the administration and not just saying, OK, we'll do whatever you want, because we want to make sure that taxpayers have some control over the purse strings an they're not just left holding the bag of this huge bailout.
So I think we are going to have to come to agreement. And there's a consensus to that. But we also want to inject some reality- based checks and balances and not just give the administration a blank check.
ROBERTS: Senator, everybody is pointing fingers in a number of different directions. I talked with Speaker Pelosi the other day. She said the democrats bear absolutely no responsibility in this. But if you go back to 1999, the Gramlich-Liley Act that a lot of people say started all this whole ball rolling. In the House, 138 democrats voted for that, one democrat voted for it in the Senate. Your husband signed it. Are democrats, do they get off scot-free with all this?
CLINTON: Well I think everybody has to take responsibility. But the great bulk of the responsibility rests with this administration and with the ideology that the Republicans have been promoting since they took over the Congress in 1995. You know, they never met a regulation that they thought was worth implementing. They really believe in almost faith-based way in the power of the marketplace. And we have learned our lesson repeatedly in our country. It's human nature, if you take the rules away or if you have weak rules, then people are going to take advantage. And that's what happens in the markets.
ROBERTS: But again, but again, many people are looking at the closeness of this race and they are wondering what would have happened, where would this race be if Barack Obama had chosen you as his running mate. Your husband yesterday on "The View" said, "she would have been the best politically, in terms of choice, at least in the short term because of her enormous support of the country." Would Senator Obama be further ahead if he had chosen you as his running mate and did you really want the job?
CLINTON: Well, I have always said that it was Senator Obama's choice. And I think his choice was a good one. Joe Biden is a friend of mine. He is a champion of working people. He is a great strategist about what's going on around the world. And our team is just such better - so much better prepared to take on the challenges that we face now than the McCain-Palin case.
ROBERTS: Did you want the job?
CLINTON: Well, it's not something you want or don't want. It's up to the presidential candidate to make a choice. And I've always said that I was going to support this ticket and I was certainly going to support the choice that Senator Obama made. And I think it was a good choice.
ROBERTS: So you would have taken it, if offered?
CLINTON: You know, I'm not going to hypothesize about something that didn't happen, John. What I want to do is make sure voters understand the stark differences between our candidates and the Republican candidates. And if you've liked what's gone on the last eight years and if you're happy about this Wall Street meltdown and having to put $700 billion in to try to rescue these banks so that we can keep lending and keep the economy afloat, then I think you've got a ticket on the Republican side. But I don't believe most Americans want to buy into that.
(END VIDEOTAPE)
ROBERTS: World leaders, heads of state, and rock stars.
(BEGIN VIDEO CLIP)
VERJEE: Whether it's a superpower or a tiny nation, everyone comes to the United Nations with an agenda and to get their 15 minutes in the spotlight.
(END VIDEO CLIP) ROBERTS: President Bush and Iran's leader in the same town sharing the same stage. Zain Verjee joins us live on the big showdown at the United Nations.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Well, it's U.N. week here in Manhattan. President Bush and Iran's president will be in front of the same podium today. State Department correspondent, Zain Verjee joins us now.
In some ways this is the beauty of the United Nations that, you know, world leaders all take the same stage, no matter where they stand on the issues.
VERJEE: Exactly, Kiran.
And it's always great to have a little bit of drama. There's always some of those moments but all eyes are going to be on the sidelines of some of those speeches today. Governor Sarah Palin is going to be introducing herself to a few of those world leaders. And she may need a crash course on United Nations General Assembly.
(BEGIN VIDEOTAPE)
VERJEE (voice-over): New York is a beehive for thousands of foreign diplomats. Their grip and grin photo ops good for home audiences.
UNIDENTIFIED FEMALE: Thank you.
VERJEE: The massive security, motorcades and grid locked traffic making New Yorkers cranky. Ah, It's United Nations week again.
VERJEE (on-camera): Whether it's the superpower or a tiny nation, everyone comes to the United Nations with an agenda and to get their 15 minutes in the spotlight and make their case to the world.
VERJEE (voice-over): In an age of e-mail and cell phones, world leaders still travel thousands of miles for a face to face reunion with the who's who of diplomats. But they aren't the only rock stars here. Celebrities like Bono come to promote their cause.
BONO, SINGER/ACTIVIST: Only an idiot at this point would turn away from Africa as an important and enlightened as well as enlightened self interest.
VERJEE (on-camera): Secretary of State Condoleezza Rice is holding court at the luxurious Waldorf Astoria. All week she greets a steady stream of world leaders. She will hold short meetings behind closed doors. But how much gets done is really a question mark.
(voice-over): In such close quarters there's always the danger of bumping into the enemy. President Bush who is pushing sanctions on Iran over its nuclear program will be sitting just a few feet from Iranian President Mahmoud Ahmadinejad. And Russian President Dmitri Medvedev comes to New York just days after Rice ripped Russia on its military action in Georgia.
All of them are protected by American Secret Service. Even Bolivia's President Evo Morales who just kicked out the U.S Ambassador from his country.
The forum has its own special drama. Remember Morales holding up a cocoa leaf at the U.N.? And Venezuela's President Hugo Chavez comments comparing President Bush to the devil. The curtain just opening on this year's show.
(END VIDEOTAPE)
VERJEE: President Bush speaks this morning and then, Kiran, just a few hours later, Iran's President Ahmadinejad takes the podium. You know, last year when he went up there as he was starting his speech, the U.S. delegation just walked out and left a low-level note taker sitting there just to snub him.
CHETRY: Well, of course, and it's also interesting is this whole new dynamic which is the presidential race. And John McCain's running mate Sarah Palin is going to be there. What are world leaders making of her appearance in some of the meet and greet that are going to be taking place?
VERJEE: Well, they're curious and they're really interested. We'll have more for you when we get a little bit more information on how the meetings for those world leaders went. But they're telling us that they're curious to see what she's like, what she'll say, what she knows.
CHETRY: Well, you know, if it gets too rough for Zain, she just kind of click those heels and says there's no place like home. Head back to Kansas.
(LAUGHTER)
VERJEE: This is what you need to run in on the streets of New York with, because the traffic is so bad, you have to just take off those heeled shoes and run.
CHETRY: That's right. And you certainly won't blend in at the U.N. with those on. Zain, great to see you. Thanks.
VERJEE: Thank you, Kiran.
CHETRY: You know, Larry King is sitting down with Iran's president as we speak. And you're going to get a chance to see his exclusive interview tonight 9:00, "LARRY KING LIVE" right here on CNN.
Life changer.
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UNIDENTIFIED FEMALE: Kind of light bulb moment like this is what I've been waiting for.
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CHETRY: Dr. Sanjay Gupta shows us how a simple decision helped this woman drop 160 pounds.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: It's an amazing lifestyle choice to make.
(END VIDEO CLIP)
CHETRY: Her amazing results and how you can follow in her footsteps.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
ROBERTS: Six minutes to the top of the hour and time for another amazing - try to say those two words - another amazing "Fit Nation" story. Our Dr. Sanjay Gupta introduces us to a woman who had incredible weight loss and her dieting tips for you. Have a look.
(BEGIN VIDEOTAPE)
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice-over): Angela Stokes was never an overweight child. But as she grew, an underactive thyroid gland changed all that.
ANGELA STOKES, LOST 160 POUNDS: 6 1/2 years ago I was like 300 pounds and very unwell, very miserable. I really - I tried to give this impression all the time that I felt fine about everything and that everything was good, but inside, I was really in a lot of pain a lot of the time.
GUPTA: But one day while working in a greenhouse in Iceland, of all places, Angela said she had an epiphany.
STOKES: It was like kind of light bulb moment like this is what I've been waiting for to just you know reclaim my health.
GUPTA: That day, she started a raw food diet.
STOKES: The mainstay of it is nuts, seeds, vegetables and fruits in an unheated, unprocessed condition. I often get asked, you know, does that mean sushi? Questions like that. And for me, no, it doesn't mean sushi. I'm pretty much a real vegan.
GUPTA: And after just two years she had lost 160 pounds. Angela hasn't looked back once.
STOKES: I went cold turkey or cold cucumber as we sometimes say. To me raw food is a lifestyle. It's an amazing lifestyle choice to make for ourselves.
GUPTA: So what tips does Angela have if you want to try the lifestyle for yourself? First of all, start slow.
STOKES: I recommend that people start out being at least 50 percent raw and just take it from there.
GUPTA: She also recommends getting plenty of variety starting off with foods you're familiar with and getting plenty of support.
STOKES: I think emotionally and socially it can be very challenging for a lot of people to live this way. Connect with other people who are into the raw food movement. It's very great to get support. My name is Angela Stokes and I lost 160 pounds with the raw food lifestyle.
GUPTA: Dr. Sanjay Gupta, CNN, reporting.
(END VIDEOTAPE)
CHETRY: That is just incredible. Unfortunately, it doesn't include bacon or, as you said --
ROBERTS: Chinese fried chicken.
CHETRY: Right. Fried chicken. Darn it!
Well, the $700 billion bailout, the Treasury Secretary says it is the best thing not just for the banks. He's trying to make the case that it's the best thing for the American public as well. Our Ali Velshi takes a look. You're watching the most news in the most morning.
(COMMERCIAL BREAK)
CHETRY: And we have some breaking news from the financial world. Ali Velshi on top of all of it for us this morning. Hey, Ali.
VELSHI: Half an hour away from markets opening and the U.S. futures still look mixed on expectations of more turmoil about this rescue package. But we do know that in half an hour Ben Bernanke and Henry Paulson will be testifying before the Senate Banking Committee and they will be making a very, very strong case for this package going through.
We've got some words from Henry Paulson saying in light of fast moving developments in financial markets it is essential to deem with the crisis at hand. He's calling it a crisis. Ben Bernanke is saying this troubled asset purchase program is on its own is the single most effective thing we can do to help homeowners, the American people and to stimulate our economy.
He says that at this point our frozen credit markets are a threat to American families and our way of life. So they will be making a very strong case. They will be questioned on it and they will be making the case that they do need the authority to go ahead with this deal.
As you know, Kiran, we've been discussing there are major stumbling blocks to this, including who actually has the authority to spend this money, how does it get spent, and are there any appeal or review processes or oversight processes.
And so as this day develops, we'll see market reacting to it, but at the moment we still have major problems in the credit markets. And that means companies cannot borrow the money they need in some cases just to operate on a daily basis -- Kiran?
CHETRY: All right, Ali, following it all for us. Thanks.
ROBERTS: And thanks so much for joining us on this AMERICAN MORNING. We'll see you back here tomorrow. See you from Washington.
CHETRY: That's right. And meanwhile, "CNN NEWSROOM" with Heidi Collins starts right now.
