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American Morning
House Vote on the $700 Billion Bailout Plan Expected Today; Polls Say Obama Wins First Debate; First-Time Voters Answers Questions on Foreign Policy
Aired September 29, 2008 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
JOHN ROBERTS, CNN ANCHOR (voice-over): To the rescue.
REP. NANCY PELOSI (D), HOUSE SPEAKER: We sent a message to Wall Street -- the party is over.
ROBERTS: The $700 billion bailout in writing. Whether you're paying for college or retirement, what's in it for you?
Plus, child after child left behind.
UNIDENTIFIED FEMALE: He can be made to get help.
ROBERTS: Parents abandoning kids of all ages.
UNIDENTIFIED MALE: Trauma that will last throughout the child's life.
ROBERTS: And the loophole that makes it perfectly legal on this AMERICAN MORNING.
(END VIDEO CLIP)
ROBERTS: Good morning. Thanks very much for being with us, Monday, the 29th of September. We start a brand new week and a big week it is. We have a lot of news on the table. Economic bailout, big vice presidential debate coming up on Thursday.
KIRAN CHETRY, CNN ANCHOR: Oh, certainly looking forward to that. You know, it's funny, when Congress puts their heads together, look what they can get accomplished in a mere weekend.
ROBERTS: (INAUDIBLE), isn't it? Wow, they actually got something done.
CHETRY: They should have tackled some of the other ones (INAUDIBLE) they've been working on.
ROBERTS: You know, there's a time of spending bills that have been passed, but they managed to spend $700 billion of our money.
CHETRY: They sure did. And we begin with issue number one this morning, and that's the bipartisan deal we're talking about as they're saying to save the U.S. economy which is why they had to do it.
Many Congress -- members of Congress say they didn't want it but they are going for it. The $700 billion rescue plan -- it goes to a House vote today. This is after days of late night bargaining on Capitol Hill. President Bush urging Congress to approve the measure promptly.
Overseas markets having a negative reaction. Japan and Hong Kong closed sharply lower. European markets also down. Dow futures point to a lower opening on Wall Street, down 184 points.
And gas prices falling for the 12th straight day. AAA reports the national average for a gallon of regular is now $3.64. That's down more than a penny from yesterday. Gas prices have dropped more than four cents in the past month.
And British chocolate maker, Cadbury, recalling 11 types of its candies from shops in Hong Kong. The company says tests have "cast doubt on the safety of the Chinese-made chocolate." It's not clear if melamine, the toxic chemical used to make plastics, was found in those tests but tens of thousands of babies have been sickened and at least four killed by Chinese milk that was tainted with melamine.
ROBERTS: Well, more now on the historic rescue of the nation's financial system. A House vote is expected on the $700 billion bailout bill some time today. And the Senate is likely to vote later on this week. The deal gives Treasury Secretary Henry Paulson an immediate $250 billion to buy bad loans from financial companies with the rest of the money to be handed out in several stages. House Speaker Nancy Pelosi says the bill is not about saving Wall Street but protecting everyone else.
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REP. NANCY PELOSI (D), HOUSE SPEAKER: People have to know that this isn't about a bailout of Wall Street. It's a buy-in so that we can turn our economy around, and we can help people who are saving for their pensions and retirement, for the education of their children.
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ROBERTS: CNN's Kate Bolduan is live for us on Capitol Hill this morning. Kate, when you got to swallow a $700 billion pill to say it's a rescue plan, a buy-in sounds a lot better than a bailout but it's very hard. It's a bailout.
KATE BOLDUAN, CNN CORRESPONDENT: That's a very big pill to swallow for anyone. John, you're absolutely right. The House is expected to vote on this bailout bill later this morning. This after party leaders and key negotiators spent much of yesterday trying to line up votes and win support among their colleagues and the public, even posting the 100-page bill on the Internet most of the day yesterday.
So what is in this bill? Well, broadly, the bill authorizes, as we talked about, $700 billion that that would be distributed, dispersed in stages. It also sets up two oversight boards, a federal and the congressional oversight board, and a very hot topic that we've been talking about this rescue plan bill. It also puts limits on executive compensation and those golden parachutes we've talked so much about for the top executives of the companies that take part in this bailout. Listen here to House Speaker Nancy Pelosi.
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REP. NANCY PELOSI (D), HOUSE SPEAKER: The party is over. The era of golden parachutes for high flying Wall Street operators is over. No longer will the U.S. taxpayer bailout the recklessness of Wall Street. And that's the news that this legislation brings.
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BOLDUAN: Also, a nod to fiscal conservatives in terms of this bailout. The treasury will set up an insurance program where they will guarantee these troubled mortgage assets, not just buy them. And the premiums for that plan will be paid by the industry. So we do expect, as I said before, John, a vote later today. And we're hearing from members it could be around noon.
ROBERTS: Any idea at this point how many votes the Republicans have because there are some conservatives who are very strongly, continue to be very strongly opposed to this deal?
BOLDUAN: Yes. There definitely was some strong opposition all last week and even throughout the weekend, especially among those fiscal -- those House conservatives. And we have heard it's very tough to say exactly what the vote lineup will be. But Majority Leader Steny Hoyer says that he expects the majority of Democrats and Republicans to sign onto the bill. And we are -- we do now know that House Republicans, in order to show their strong support and push their members to line up, they're now coming out saying they're going to vote and support this bill. Listen here to number two House Republican, Roy Blunt.
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REP. ROY BLUNT (R), MINORITY WHIP: It's not exactly the bill we would have drafted certainly, but it's a long way from where it was just a few days ago -- a substantially more taxpayer protections. I think you can much more adequately describe this bill now because of the elements that have been put into it as a workout of the problem rather than a bailout of the problem.
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BOLDUAN: It may be a big pill to swallow, John, as you said earlier, but they do expect -- the majority leader says they do expect that they'll be able to pass it today and send it over to the Senate as early as Wednesday.
ROBERTS: Hey, Kate, all weekend as they're going through this, did any member of Congress say hey, we're sorry for letting this happen? BOLDUAN: You know what? To be honest, yes. I have actually heard a couple of members -- not a couple but more than that of Republicans and Democrats saying, you know what, this is not a perfect bill. I would not have written it, but we have to do something in time here. And we keep saying and it sounds like I'm repeating myself, which I am, but time is the -- time is the factor here.
ROBERTS: All right. Kate Bolduan for us this morning at Capitol Hill. Kate, thanks so much.
President Bush says that he is confident Congress will approve the bailout bill quickly. He issued a statement last night saying, "This bill provides the necessary tools and funding to help protect our economy against a system-wide breakdown. The bill will help allow access to credit so American families can meet their daily needs and American businesses can make purchases, ship goods and meet their payrolls."
The president will speak publicly from the White House this morning, 7:35 Eastern, before the market opens. And, of course, we'll bring that to you live right here on the "Most News in the Morning."
CHETRY: There are other markets that are already open and we're getting a first look at how those markets are reacting to the Wall Street bailout. Overseas, investors don't seem to be convinced that this deal will rescue the financial system.
Tokyo's Nikkei down. Hong Kong's Hang Seng down. And in London, the stock exchange also in negative territory. A lot of questions over this monumental commitment of taxpayer dollars.
So what does this mean if you're 60, you're in your 60s and planning to retire, or if you're in your 20s and you're just starting out? Christine Romans is here today. She is "Minding Your Business."
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Good morning.
CHETRY: Good to see you this morning. And we keep saying $700 billion...
ROMANS: Right.
CHETRY: ... it is stipulated in this bill if you read through the 100 or so pages, that they're not expecting to spend all of that, correct?
ROMANS: They're going to be -- $250 billion first and then they'll do it in big chunks after that and the treasury secretary can decide with alerting Congress how much more he's going to need and then the hope there's some taxpayer protections here. The hope is that they're going to be able to recoup some of that money.
Now, hope is the big word here and this is how it matters to you. I mean, tomorrow you're not going to wake up once they sign this thing some time this week. The president signs it, it's not going to change your life. It's going to keep things from getting worse. It's going to stabilize the situation. It's not necessarily going to rescue.
That's what everyone is telling me. In fact, one person this morning telling me, basically, this rolls things back to where we were three weeks ago and buy some time and lets people kind of figure out the situation, but doesn't fix the situation. It stabilizes the situation.
Now, let's talk about who may benefit if we can get things stabilized and move forward here because this is, after all, the beginning of the process here. This is not the end of the crisis. This is the beginning of fixing the crisis.
Banks, credit unions, pensions, they can all sell their bad assets to the government. Taxpayers, after five years of the provision here, the president can go and try to get the money back from the industry if they haven't -- if they haven't paid it back. It prohibits golden parachutes for the CEOs of companies that have to use this program, and it aims to stem foreclosures by making the government when it can own a whole mortgage, actually change and modify some of the terms of some of these foreclosures.
CHETRY: Can I ask you a question about that?
ROMANS: Sure. Sure.
CHETRY: Who, I guess, contacts who? For example, if I'm somebody whose home is going into foreclosure, is the government going to call me and say, hey, let's go over this?
ROMANS: Here's the thing about --
CHETRY: Who do you call?
ROMANS: Here's the thing about the government plan because we have been hearing for months now, call this Hope Alliance -- this, you know, Hope for Homeowners Alliance and the Treasury Department is spearheading with private -- with the different companies, and we're going to, you know, call your lender, call the government. And over and over again, we hear from people who say, we call these numbers and we can't.
You know, there's a real -- I'm going to tell you, there's real frustration from people who are in default because they don't know who to call and they're told by personal finance experts to either talk to their bank and their bank doesn't talk to them and they say call the government. There are some real issues that need to be worked out there. There are a lot of people who have so far complained that they have not been able to get much help from the government on this. So we're going to see if -- we're going to see if this is going to make it a little bit better.
But now, remember, we're still expecting job losses. We're still expecting some two million foreclosures over the next year. So this is the beginning now of fixing it once we can get this thing signed and move forward and get this money sort of deployed to get those bad toxic assets off the books. CHETRY: All right. A lot to chew over this morning.
ROMANS: Sure.
CHETRY: We're glad you're with us, Christine, thanks.
ROMANS: Yes.
ROBERTS: The Dow futures down almost 200 points.
ROMANS: Right.
ROBERTS: So the stability get to materialize.
ROMANS: Yes. A couple of big bank failures overseas so that's really a problem.
ROBERTS: Yes. Christine, thanks so much.
Barack Obama hoping to build on a bounce from Friday night's first presidential debate with John McCain. We take a look at how the Obama campaign is spinning the face-off.
And it's a done deal. Find out the big name headlining the Super Bowl halftime show.
You're watching the "Most News in the Morning."
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CHETRY: Welcome back to the "Most News in the Morning." Barack Obama campaigning in Colorado today and trying to ride a wave of momentum the campaign says it gained from the first debate. According to a new "USA Today"/Gallup poll, 46 percent of debate watchers believed that Barack Obama outperformed John McCain Friday night. Thirty-four percent said that John McCain came out on top. And bolstered by those poll numbers, Obama has been going after McCain over the financial crisis.
CNN's Suzanne Malveaux is live in Denver for us this morning with more. Hi, Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hi, Kiran. Well, both these candidates are trying to make the case after Friday's debate that they were the ones who were on top with this bailout bill over the weekend. We heard John McCain saying he was physically in Washington talking to the Republican leadership. Barack Obama, while campaigning in Detroit, Michigan, said he was constantly in contact with Secretary Paulson.
McCain says he's taking credit here now for at least bringing back to the negotiating table the Republican leadership. Barack Obama, on the other hand, is saying, look, he set out some principles from the very beginning that the administration now has complied with. Take a listen.
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SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: This administration started off asking for a blank check to solve this problem. Joe Biden and I said absolutely not. I said it was unacceptable to expect the American people to hand this administration, of all administrations, a $700 billion check with no conditions, no oversight, when a lack of oversight in Washington and on Wall Street is exactly what got us into this situation in the first place.
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MALVEAUX: Kiran, not surprisingly, neither one of these candidates is actually praising this plan. Barack Obama saying that this is a big mess. This is not a time to celebrate. We heard from McCain saying this is going to be hard to swallow.
The reason why is if either one of these men is going to have to deal with this when he's president if this whole thing doesn't work, it is the next president who has to come up with a plan to figure out how to pay the taxpayers back -- Kiran.
CHETRY: Either one of them, I wouldn't be too thrilled either if that's what you're inheriting. A big challenge for sure.
MALVEAUX: Absolutely.
CHETRY: You know, another big challenge as it relates to the campaign is the big debate, the vice presidential debate Thursday night. How is the Obama campaign getting ready for that?
MALVEAUX: Well, you know, both of them are hunkering down. Sarah Palin at the Sedona Ranch with John McCain, a team full of folks that are working with her. And also, Joe Biden, well, he is going to debate camp himself. The Michigan governor, Jennifer Granholm, she is playing Sarah Palin. So it's going to fascinating to see how that plays out in the next couple of weeks.
We talked to David Axelrod. He's the chief strategist for Obama and he says look, they're not going to go after Sarah Palin in a personal way. But they do say that what they're going to do is they're going to basically link her, say Sarah Palin is linked to John McCain. John McCain is linked to Bush and therefore, go after the policies that they believe are directly linked to President Bush.
CHETRY: All right. Suzanne Malveaux for us this morning in Denver. Thanks so much.
And the vice presidential debate will take place Thursday night in St. Louis. And, of course, CNN, the best political on television, will have complete coverage for you.
ROBERTS: Left behind.
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UNIDENTIFIED MALE: That is a trauma that will last throughout the child's life.
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ROBERTS: Parents abandoning their grown children at the local hospital and the law that makes it legal.
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UNIDENTIFIED MALE: These mothers that are in this situation are not criminals.
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ROBERTS: You're watching the "Most News in the Morning."
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ROBERTS: Oh, Bruce from way back in the glory days there, and The Boss going to the Super Bowl. New Jersey's Bruce Springsteen and the E Street Band will be performing during the Super Bowl's halftime show that will be Tampa. The big game here is February 1st. Last year, more than 148 million viewers watched Tom Petty and The Heartbreakers at Super Bowl XLII. Maybe they can break that record with Bruce.
Rob Marciano is off today. Reynolds Wolf at the weather center in Atlanta.
You know, my son's name, Reynolds, is Kyle. He's never been a troublemaker but certainly his namesake storm is.
REYNOLDS WOLF, AMS METEOROLOGIST: Yes. Well, I mean, you know, the good thing is your son is still around. Kyle, though, the storm, is going, going, gone. That's the good news. But Kyle was responsible for quite a bit of rough weather in parts of the northeast.
Right now, there are still some scattered showers in parts of Boston, back over to Providence, northward to Manchester along parts of 95. But the remnants of Kyle now moving farther to the north and eventually dying out altogether.
We do have another storm to talk about, not Kyle. We've got Laura at this time. Laura, with winds of 60, gusting to 70. Thankfully, this storm isn't expected to pull well to the northern Atlantic. No direct threat to land. No direct threat to the United States.
What could be a threat later on today not only just for rough weather but possibly for travel will be in parts of the Midwest. We're going to leave the eastern seaboard and make your way back over to parts of, say, the central plains and back in the Midwest, and you see an intense line of storms. Nothing severe at this point, but as this drives eastward, we may eventually see some delays in places like Des Moines, possibly in Chicago later on today, maybe even into St. Louis. That is the latest on your forecast. John, let's send it right back to you.
ROBERTS: Reynolds, thanks so much. We'll keep checking in with you.
WOLF: You bet.
ROBERTS: It's 19 minutes now after the hour. You're watching the "Most News in the Morning."
CHETRY: First-time voters listen.
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SAM KLEINER, FIRST-TIME VOTER: We see a really stark decision.
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CHETRY: As future leaders talk about war and peace in the Middle East.
(BEGIN VIDEO CLIP)
LIBBY WEISS, FIRST-TIME VOTER: To negotiate, you need to have a partner with whom to negotiate.
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CHETRY: Why some college students say the election has energized people in their age group.
You're watching the "Most News in the Morning."
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CHETRY: Well, November will be the first time thousands of young voters will head to the polls. CNN's Rick Sanchez has been traveling coast to coast for his series, "The League of First-Time Voters." And this morning he talked to the group of young Jewish students at Northwestern University in Illinois.
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RICK SANCHEZ, CNN CORRESPONDENT: There's something about this particular election that you think makes it different from elections in the past.
SAM KLEINER, FIRST-TIME VOTER: When you look at U.S. foreign policy, I think that we see a really stark decision in this election between the competing camps and how we want to take U.S. foreign policy forward in the next 50 years.
SANCHEZ: We're now thinking that the Iraq war will cost $3 trillion. Has it been worth it? SOPHIE SOLOMON, FIRST-TIME VOTER: Particularly depends on, I guess, to your view of the war in Iraq and if you think that it was worthwhile to go in and democratize a country that maybe wasn't ready for it or isn't going -- it's not going to work for them.
MICHELLE SWEETWOOD, FIRST-TIME VOTER: Maybe it's a bad situation there right now, but it's the kind of bad situation where it's long terms and you really have to wait until years after Bush's presidency to see the effects of it.
SAM SCHILLER, MCCAIN SUPPORTER: So far, the political conditions in Iraq hasn't been good enough based on our military presence there. And in Afghanistan and in western Pakistan, our forces are needed more.
SANCHEZ: Do you think the Iraq war has set back the cause of freedom between Palestinians and Israelis?
LIBBY WEISS, FIRST-TIME VOTER: The issue is not the Iraq war and not that aspect of our foreign policy. I think the issue comes in the fact that to negotiate you need to have a partner with whom to negotiate. And negotiating with Hamas is something that's not only not in the best interest of Israel but I do not think it's in the best interest of this country.
JAMES KOWALSKY, FIRST-TIME VOTER: I think one of the biggest disappointments with the Israeli-Palestinian situation is that we're aware of the fact that Palestinian people have a lower quality of life than people living in Israel. And that's not because of Jewish people or because of Americans, it's partially because of the Palestinian leadership but that doesn't mean that there isn't things that Israel and United States could be doing to improve their situation.
KLEINER: The biggest problem, though, in the Middle East right now is the threat from Iranian nuclear program. The threat we've seen from radical Islam is a willingness to die to kill your enemy. So I think that the threat we need to be concerned about coming from Iran is the development of a nuclear weapon which pushes an existential threat to Israel and a massive security threat to the United States.
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CHETRY: Those are some informed college students. Well, you can find out more about "The League of First-Time Voters" on our Web site, CNN.com/league.
ROBERTS: A standoff this morning on the high sea as a ship packed with Soviet tanks, grenades and ammunition seized by pirates, a massive ransom demand as a U.S. warship moves in. We've got the latest for you.
And Congress cuts a deal, but is it enough to save the economy from collapse? And how are the world markets reacting? We're on the ground across the globe.
You're watching the "Most News in the Morning." (COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
REP. NANCY PELOSI (D), HOUSE SPEAKER: We sent a message to Wall Street -- the party is over. The era of golden parachutes for high flying Wall Street operators is over. No longer will the U.S. taxpayer bail out the recklessness of Wall Street.
(END VIDEO CLIP)
ROBERTS: Fingers crossed. House Speaker Nancy Pelosi with a blunt message to Wall Street after a tentative deal on that $700 billion bailout plan was reached, the fate of which now rests in the hands of Congress. It is expected to pass through the House today, the Senate possibly by Wednesday. Still some opposition from House Republicans to it, though.
What does it all mean for you as a taxpayer? Well, here to break it all down is Mark Zandi. He's the chief economist for Moody's Economy.com.
Mark, it's great to see you. So this original proposal floated by the treasury secretary was three pages long. This bill which is going to go through the House today is 101 pages, been lots of additions, lots of changes. Is it this going to work? I mean, when you look at the Dow futures today, they're down almost 200. They don't seem to be cheering.
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ECONOMY.COM: Yes, I think it will work. I think it's a good idea. And I do think it was certainly necessary.
I think the Dow futures are reacting to some problems in Europe. The European banks are under a lot of pressure. Also, it's not passed yet. We need to see it go through Congress and signed before I think markets feel sure that this is something they're going to get.
ROBERTS: Is this going to provide the credit necessary to keep the economy moving? And how soon can we expect to see credit, which has been pretty tight over the last couple of weeks, firming (ph) up?
ZANDI: Well, I think it should help particularly in the money markets. This is the market where big businesses finance their operations, their near-term operations like payroll and investment -- that kind of thing.
So I think that should freeze up or should thaw out a bit relatively quickly. With respect to credit for you and I as consumers, vehicle loans, student loans, credit cards, that's going to take a bit longer. You know, I think banks are still under a lot of pressure. This isn't going to solve all their problems immediately.
ROBERTS: What about people who are at risk of losing their homes in foreclosure? The bill calls for the Fed to put pressure on people who hold the paper to not foreclose on people. If somebody is facing foreclosure now, the average Jane and John Doe American, is this going to help them hang on to their home?
ZANDI: It could. It certainly could. The idea here is that federal government would take ownership of these mortgage loans and then it has some options. And it could work to keep people who are in foreclosure in their homes. It also could facilitate another big mortgage write-down plan that was passed by Congress a few weeks ago. This would allow mortgages to be modified, the mortgage amount reduced. And this plan that was passed or should be passed in the next couple three days should help make that move a little bit more efficiently.
ROBERTS: Right. And how long would it take? I mean, if somebody is in danger of foreclosure and they've got 60 or 90 days or whatever, how soon might they expect relief from this?
ZANDI: Well, it could very quickly. It's just going to take a bit of time to get this current plan up and running. I would think at least a month probably, two months. So we're not looking for any real relief for another three, four, five months. It really won't be until the end of the year, early next, before I think people facing foreclosure actually get some help.
ROBERTS: Are taxpayers going to be out the $700 billion? Or is there a chance that some economists, some analysts have suggested that the government could actually make money on this?
ZANDI: Yes. There is no chance that the taxpayers are going to be out $700 billion. I think at the end of the day, several years down the road when the government sells up all these assets, the government will be made whole. So, you know, the issue here isn't the $700 billion. It's not going to cost taxpayers that amount of money.
ROBERTS: All right. Mark Zandi from Moodys.com (ph). It's good to see you. Thanks for coming in bright and early on a Monday morning.
ZANDI: Thank you.
ROBERTS: Appreciate it.
CHETRY: Well, we're just about half past the hour now. We'll check on some of our top stories this morning.
Venezuelan President Hugo Chavez says he wants to develop a civilian nuclear power program and claims that Russia is offering to help. Chavez just returned from a trip to Russia where he met with Prime Minister Vladimir Putin and President Dmitry Medvedev.
Chavez says he's interested in using nuclear energy for peaceful purposes. This is the second meeting in as many months. The last time he came away with a billion dollar credit line for weapons to develop military ties with Russia. That according the Interfax news agency. Chavez saying that Brazil and Argentina have similar civilian nuclear programs.
The U.S. Military keeping a close eye on a cargo ship hijacked by pirates. That ship carrying Soviet made tanks and other weapons was taken over Thursday, in dangerous waters off Somalia. The pirates demanding $20 million in ransom and saying they would fight to the death if any country tried military action to regain the ship. The U.S. says it is, quote, deeply concerned about the ship's 21 crew members and cargo.
And a judge in Hawaii, rejecting a legal challenge to the large, padron collider. The massive billion dollar project designed to unlock the secrets of the universe. A judge says, U.S. courts don't have jurisdiction for the collider. It is a Monday morning. Hawaii residents sued because they feared the machine could create black holes that could destroy the planet.
And returning to our top story, that's the mammoth $700 billion bailout. It goes to a vote in the House, one day after party leaders worked out a deal and the government's sweeping intervention taking a toll on markets overseas. In fact, in Europe, London down. France, also in negative territory, as is Germany. We're tapping into CNN's worldwide resources to follow the action on the ground. We start in Asia.
Hugh Riminton in Hong Kong.
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HUGH RIMINTON, CNN CORRESPONDENT (on camera): I'm Hugh Riminton in Hong Kong. Markets in Asia were the first to react to the bailout plan that now goes to a vote before Congress. The early moods were higher but that mood quickly soured, largely because of wider concerns about the state of the global economy.
In Japan, Toyota fell. It's announced that it's going to cut production of cars in China, because of the expectation of falling sales. Shipping companies were also under pressure because again, of a fear of a global slowdown. Here in Hong Kong, the property sector was under pressure. The huge bank HSBC announced that it was going to raise mortgage rates by 50 basis points, blaming the higher cost for interbank trading. The costs the banks charge each other as they exchange money between them.
Now, other banks are likely to follow suit and that's likely to bring the property sector here, as in so many other parts are of the world, under even greater pressure.
(END VIDEOTAPE)
(BEGIN VIDEOTAPE)
SON JIE AE, CNN CORRESPONDENT (on camera): I'm Son Jie Ae in Seoul, with the Korea Exchange, where the board behind me is mostly green reflecting market losses as well as the not so optimistic reaction to the news coming out of Washington.
Traders tell us that when the market first opened investors were initially optimistic about the bailout plan, hoping that it would bring stability to Wall Street and Seoul. But as the day progressed, any type of initial gains were overweighed by questions raised about the effectiveness of this plan as well as concern about the Korean economy, especially the rising of the U.S. dollar against the Korean won.
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JOHN DEFTERIOS, CNN CORRESPONDENT (on camera): I'm John Defterios in Beijing, where people on the ground are starting to feel the pinch of the U.S. credit crisis. Growth is expected of around 9 percent this year, which is stellar by world standards but well off the peak of last year.
Asian bankers broadly happy with the agreement that's on the table but makes no doubt about it, this agreement will bring the U.S. and China closer together. The world economy is depending on China's growth and U.S. will be ever more dependent on China's vast reserves fund its budget deficits.
(END VIDEOTAPE)
CHETRY: That's John Defterios for us in Beijing.
So, how will the American markets react to the bailout plan? Christine Romans is here for Ali Velshi, Minding Your Business today, with more.
But you said that the reason that a lot of these markets are down isn't necessarily because of our bailout talk.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, and as Hugh Riminton said there's some concern broader, about what kind of global economic impact that's already started. And this rescue, while it helps them stabilize is the banking system in his country, what kind of -- there's going to be a lag with the economy.
Almost everyone I've talked to said they expect more job losses, more foreclosures. If you are a homeowner facing foreclosure you're not getting help today, you're not getting help tomorrow. You heard Mark Zandi from the newseconomy.com say, it could be three, four, five months out before you're going to get helped. And there are 2 million people who are facing foreclosure in the next year or so. So, there still are a lot of near term concerns here. And foreclosure and the housing crisis is at the core of all of this.
Now, what does it mean for homeowners? Well, we also know that there are provisions in this 106 pages that they're going to look at this week that facilitates some changes to home loans. It expands help against foreclosures. The government has ability and is in fact the imperative to push these mortgage servicers to get them to modify these loan. But still no changes in the bankruptcy laws. That's something that community activists had really wanted. They wanted people who are facing bankruptcy to be able to modify the terms of their mortgage on their first home, their only home in many cases. And they didn't get that. And there are community activists who are also saying that this just doesn't go far enough. That they are concerned that there won't be widespread help for people who are facing foreclosure. That there could be some help, but not widespread help. So, a lot remains to be seen.
If you're facing retirement, I mean, this is something I really want to hit home, because we've heard this over and over again. If you are close to retirement, say maybe even five or ten years out, depending on where you are in this country and where you are in your job, it's hard to say who the average American is, right? Because there are 300 million people in this country all in various stages of the American Dream. But, if you're facing retirement, this is not the time to be taking risks. This is the time to be protecting your job, protecting your assets. This is not the time to be taking risks because we are looking at an economy that could be weak for the months ahead.
CHETRY: All right. Christine Romans for us. Thanks.
ROMANS: Sure.
ROBERTS: Well, they might not like it, or everything about it but John McCain and Barack Obama do appear ready to support the financial rescue bill. And one will have to live with the consequences of it is as president.
Here's what McCain said Sunday, about the compromise plan.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: This is not going to all of a sudden, wow, everything is turned around, everything's going to be fine now. We've got a lot of other difficulties, including the continued decline in housing -- home values. That has to reach a point where it's stabilized and again hopefully will go up in America.
(END VIDEO CLIP)
ROBERTS: Meantime, John McCain hits the campaign trail today in Ohio and Iowa. CNN's Dana Bash is live for us in Washington, this morning.
What is McCain saying about supporting this bailout plan, Dana?
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, John, he hasn't actually formally said he will vote for the bailout bill and advisers say, they're still reading the fine print. But it is really impossible to imagine McCain will vote no, especially now that all sides have signed on, including his fellow Republicans in the House, who McCain insisted he needed to come back to help -- John.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER (R), MINORITY LEADER: He has been making calls to members in support of this bill. And I think I've made clear to many of you that if not for John McCain supporting me at the White House when I said whoa, whoa, time out, they would have run over me like a freight train. And I'm grateful for his support.
(END VIDEO CLIP)
BASH: Now, there you hear John Boehner, the is the House Republican leader saying that he was grateful for McCain's support. And that is really part of the controversy in terms of the politics of this here, John.
The House Republicans are sort of giving John McCain credit for coming back, suspending his campaign and then helping them get a voice at the table, a seat at the table in these negotiations. And making clear, even to McCain's fellow Senate Republicans, you are not going to have a deal, you're not going to have my support unless you have these House Republicans. But there are others who have quite a different take.
As you know, Democrats and even some of McCain's Senate Republican colleagues are saying you know, this deal actually may have been able to get through a couple of days ago without all of the drama and the politics infused in McCain's presence on Capitol Hill. But you know what? McCain aides are saying that they are going to wait and let history judge this. And they're definitely, definitely ready to move on beyond this story and get McCain back on the trail and talking about other issues now -- John.
ROBERTS: But, what is the McCain campaign saying about this, though? You look at what John Boehner said, that John McCain rode in and helped galvanize support for this. Is he going to take credit for some of this?
BASH: He is being very careful not to. He is being very careful to say that he's going to let history judge whether or not he hurt.
But I can tell you the reality is, all weekend long John McCain aides were furiously trying to shape that history. I got calls, I am sure other reporters got calls saying you know what, that John McCain came back, he listened to the concerns of House Republicans. He gave them a voice in a way that others didn't, in a way that they weren't getting one before.
So they are sort of -- McCain is being careful not to try to take credit but his aides are being very, very aggressive in trying to kind of shape this, because it has been so controversial, this whole idea that McCain came back.
ROBERTS: Maybe we'll find out how he'll vote on Wednesday. That's when the Senate expected to take it up. Dana Bash for us this morning in Washington.
Dana, thanks very much.
BASH: Thank you.
ROBERTS: 39 minutes after the hour. You're watching the Most News in the Morning.
(BEGIN VIDEO CLIP)
CHETRY: Checking the facts.
MCCAIN: Senator Obama is the chairperson of a committee that oversights NATO.
CHETRY: John McCain accuses Barack Obama of not doing enough in the Senate.
MCCAIN: To this day, he's never had a hearing.
CHETRY: The Truth Squad checks his record. You're watching the Most News in the Morning.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
CHETRY: Time now to check in with the Truth Squad. It's part of our efforts to keep the campaigns honest and to help you sort fact from fiction about what they're saying on the campaign trail and in some of those ads. And this morning, Alina Cho is looking into some charges that were made at Friday night's big debate.
ALINA CHO, CNN CORRESPONDENT: Oh, there were plenty of them.
CHETRY: Plenty to choose from.
Good morning. Happy Monday.
CHO: Good morning, everybody. And we are starting this morning with John McCain and something he said about Barack Obama's handling of the war in Afghanistan. McCain essentially accused Obama of failing to act in the Senate.
Here's the GOP candidate during Friday night's debate.
(BEGIN VIDEO CLIP)
MCCAIN: Senator Obama is the chairperson of a committee that oversights NATO that's in Afghanistan. To this day he's never had a hearing. I mean it's remarkable.
(END VIDEO CLIP)
CHO: He must have been involved. He must have never had a hearing.
CHETRY: Yeah. I was at home, I didn't want to. No, I really didn't want to. We have the wrong mike open here.
CHO: Here I am. Never had a hearing? that's What McCain just said. Is that true? Well, it is true that Obama is the chairman of the Sub Committee on European Affairs. And it does have oversight over NATO and its actions in Afghanistan. But, if you've never heard of that sub committee, it's because it's part of the larger Senate foreign relations committee, the full committee, which Obama's running mate Joe Biden chairs.
Now, take a listen to Obama's reaction on Friday night.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: The issues of Afghanistan, the issues of Iraq, critical issues like that don't go through my sub committee because they're done as a committee as a whole.
(END VIDEO CLIP)
CHO: Now it is true that the sub committee could hold hearings. But Obama was noting that Biden held full committee hearings instead. Biden says there were three of them in the last two years and Obama says he attended one of them.
So, the question again, is McCain right to say Obama hasn't held any oversight hearings on NATO's involvement in Afghanistan? Well, something of a mixed verdict here. The Truth Squad says, technically true. But also what's not there on the screen is also incomplete. Obama's sub committee has not taken up the issue itself. But, the full committee, the Senate Foreign Relations committee, has.
As always we are truth squadding both sides, it's a verb now. In the next hour, we're going to be talking about tax cuts. Obama is charging that McCain will help the rich save billions of dollars. We'll tell you whether Obama's statement is true. Kiran, as you know. he was saying $300 billion in tax buts for the wealthiest Americans. Is that fuzzy math? We'll get you that in the next hour.
CHETRY: I suspect the closer we get to election day, we're going to hear more of these true but mixed, but incomplete. A little bit of a tax loophole for these two.
CHO: Well, that's where the campaigns get in there and they make these statements as you know. Politics.
CHETRY: Glad to have you then. Thanks, Alina.
CHO: You bet.
(BEGIN VIDEO CLIP)
ROBERTS: Left behind.
UNIDENTIFIED MALE: That is a trauma that will last throughout the child's life.
ROBERTS: Parents abandoning their grown children at the local hospital and the law that makes it legal.
UNIDENTIFIED MALE: These mothers that are in this situation are not criminals.
ROBERTS: You're watching the Most News in the Morning.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
ROBERTS: 48 minutes after the hour. Nebraska's safe haven law allows overwhelmed parents to abandoned their children without fear of prosecution. But a loop hole in that new law is coming under increased scrutiny this morning. CNN's Chris Lawrence has got the latest for us on it.
(BEGIN VIDEOTAPE)
CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): Parents are actually leaving their children in Nebraska hospitals and walking away. And it's all completely legal. One woman dropped off her nephew who's 15 years old.
UNIDENTIFIED FEMALE: He can be made to get help.
LAWRENCE: Kathy Poland says she's tried discipline, medication but can't handle her nephew's behavioral problems anymore.
UNIDENTIFIED FEMALE: If we just do like I've seen a lot of parents do, get of my house, that we're going to be either be burying him or he's going to live out the rest of his life in a prison.
LAWRENCE: Nebraska's new law states, "No person shall be prosecuted for leaving a child in the custody of a hospital employee."
It was designed to protect unwanted babies. Before it passed, a mother who couldn't care for her newborn, could have been charged with child neglect, which might have discouraged her from getting help for the babies.
ARNIE STUTHMAN, NEBRASKA STATE SENATE: These mothers that are in this situation, to me, are not criminals.
LAWRENCE (on camera): In most states, the maximum drop-off age is one year-old. But some lawmakers were concerned about arbitrary age limits so they expanded it to include the word, child. Some parents have taken that to mean any of their children under age 18.
(voice-over): 11 children were dropped off in just 24 hours. Including a dad who left all nine of his kids.
TODD LANDRY, DIR., NEBRASKA HEALTH AND HUMAN SERVICES: We were not able to keep the siblings together overnight.
LAWRENCE: Some were sent to a shelter, others put in foster care. The youngest was a year-old, the oldest, 17. Officials say none of the kids were in immediate danger, which is what this law intended to cover. JIM BLUE, PRES. CEDARS YOUTH SERVICES: It's about what I did. For the rest of that child's life, it's about what I did. That is a trauma that will last throughout the child's life.
LAWRENCE: Now the court's may require these parents to participate in therapy sessions and pay child support. Lawmakers are already talking of amending the law in the next session.
Chris Lawrence, CNN, Los Angeles.
(END VIDEOTAPE)
(BEGIN VIDEO CLIP)
OBAMA: Senator McCain is proposing $300 billion in tax cuts to some of the wealthiest corporations and individuals.
CHETRY: Keeping them honest. The record behind the rhetoric. Truth Squad dissects the debate and separates fact from fiction. You're watching the Most News in the Morning.
(BEGIN VIDEO CLIP)
(COMMERCIAL BREAK)
CHETRY: Well, Rob Marciano is off today. Reynolds Wolf in the Weather Center for us in Atlanta, this morning with an eye on the Atlantic.
Hey there, Reynolds.
WOLF: Hi there, Kiran.
It is a new day and we've got a new storm to talk about. What we're talking about Laura. Laura is a tropical storm, thankfully this one has no direct threat to the United States. Winds at 60 miles per hour, gusting to 70.
If you happen to be at home, you're wondering when a sub tropical storm. Well, the easiest explanation is that it's a cold core system unlike the other storms that we have that form normally to the south. This storm expected to veer mainly to the north and actually lose strength as we get into Wednesday and into Thursday. As I mentioned, no direct threat to the rest of the U.S. So certainly some great news there.
And also, the rest of the tropics very quiet for the time being so it's a good break certainly for many people. Let's send it back to you in New York.
CHETRY: Reynolds, thanks.
(BEGIN VIDEO CLIP)
ROBERTS: Backing the bailout.
NANCY PELOSI (D), SPEAKER OF THE HOUSE: We sent a message to Wall Street. The party is over.
ROBERTS: One week and 102 pages later, the president tells us why it makes sense for us. Live in our next hour.
Plus, crashing the party.
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: I was just your average hockey mom.
ROBERTS: Why some conservatives are now bailing on Sarah Palin.
UNIDENTIFIED MALE: The expectations for Sarah Palin, I think, are pretty low. You're watching the Most News in the Morning.
(COMMERCIAL BREAK)
ROBERTS: Sarah Palin's dead ringer showed up again on "Saturday Night Live," this weekend. This time, it was her interview with Katie Couric.
Look at this.
(BEGIN VIDEO CLIP)
TINA FEY, ACTRESS PLAYING GOV. SARAH PALIN ON "SATURDAY NIGHT LIVE": Katie, I'd like to use one of my lifelines.
(LAUGHTER)
AMY POEHLER, ACTRESS PLAYING KATIE COURIC ON "SATURDAY NIGHT LIVE": I'm sorry?
FEY: I want to phone a friend.
(LAUGHTER)
POEHLER: You don't have any lifelines.
FEY: Well, in that case, I'm just going have to get back to you.
(LAUGHTER)
POEHLER: Forgive me, Mrs. Palin. But it seems to me that when cornered, you become increasingly adorable. Is that fair to say?
(LAUGHTER)
FEY: I don't know. Is it?
(END VIDEO CLIP)
ROBERTS: That was Tina Fey, back by popular demand doing her pitch-perfect impression of John McCain's running mate. The late night acts are nothing new. But, after a couple of uncomfortable interviews, some conservatives are questioning John McCain's vice presidential pick. Our Carol Costello joins us now, live from Washington. Some people are going to so far as to say she should step down, get out of the race.
COSTELLO: I know. It's incredible, John. I mean, you'd expect Democrats and liberals to malign Sarah Palin. But conservatives, whose once loved her. Let me read you a quote, "It was fun while it lasted but now we see an earnest competent candidate clearly out of her league." That's from a conservative. Ouch.
(BEGIN VIDEOTAPE)
PALIN: One proven reformer who will clean up Wall Street and Washington, and that man is John McCain.
COSTELLO (voice-over): Sarah Palin's star rose at lightning speed.
PALIN: I was just your average hockey mom.
COSTELLO: But some fear that old cliche will hold true. The faster they rise, the harder they fall. And if Palin falls, some fear she'll take John McCain down with her. Former Palin fan, conservative columnist Kathleen Parker make no bones about it.
She writes, "Only Palin can save McCain, her party, and the country she loves. She can bow out for personal reasons. Do it for your country."
Parker's plea comes on the heels of Palin's widely panned interview with CBS's Katie Couric.
PALIN: It's very important when you consider even national security issues with Russia, as Putin rears his head and comes into the air space of the United States of America, where do they go? It's Alaska.
COSTELLO: It's became instant fodder for "Saturday Night Live."
POELHER: Forgive, Mrs. Palin. But it seems to me that when cornered, you become increasingly adorable. Is that fair to say?
FEY: I don't know. Is it?
COSTELLO: Conservative columnist George Will was just as harsh writing, Palin performed like a flustered rookie. Former Bush speech writer David Frum wondered if Palin was a responsible choice for vice president.
While all of this sounds bad, Republicans caution, it's coming from intellectual conservatives, not Main Street Republicans who still love the hockey mom from Alaska.
UNIDENTIFIED FEMALE: These are the folks that have really responded to the candidacy of McCain/Palin ticket. These are the folks that are showing up in huge numbers, tens of thousands to the rallies.
COSTELLO: Still some wonder if all of this negative talk coming from conservative pundits will affect Palin, who will debate Joe Biden in just four days. The answer to that seems to be no. Actually, the negative talk about Palin may help her.
UNIDENTIFIED MALE: The expectations for Sarah Palin, I think, are pretty low. So, I think she can exceed expectations. I'm not sure that she can disappoint them.
COSTELLO: And there are analysts who say, despite some ominous signs, Palin has performed well in past debates in Alaska.
(END VIDEOTAPE)
COSTELLO: Now, Palin practiced for those debates all weekend long. She's flying to Columbus today to campaign with John McCain. But then it's back to the drawing board and back to more practice, preparing for that debate in St. Louis, in just four days.
ROBERTS: And she'll be doing that out at the McCain ranch in Sedona, Arizona, as well. It's a nice place to get away from things and focus on the issues.
Fareed Zakaria, also in today's "Washington Post," has got a very harsh editorial about Sarah Palin. And it's interesting, too, Carol, to note that a couple of times during the Tina Fey skit, she was almost word for word repeating what Sarah Palin actually said in the interview, to great comedic effect.
COSTELLO: Well, you know what's interesting about that. I've been talking to a lot of people about how they took that "Saturday Night Live" skit. And a lot of people said, it went too far. It just became mean after a time. And actually made them feel better about Sarah Palin.
ROBERTS: Yes. Well, we'll see how it goes. But that big debate coming up on Thursday. A lot of expectations for her. A lot of expectations for Joe Biden. And certainly the Obama campaign doing everything they can to try to say, she's a great debater. This is going to be a tough one for Joe.
COSTELLO: I bet more people will be watching this debate, than watch the presidential debate. Do you want to make a bet?
ROBERTS: Yes. I'll be there. No question.
Carol, thanks so much for that. Appreciate it.
On the other side, critics say that Senator Joe Biden has the gift of both gab and gaff. Next hour, our Jim Acosta looks at some of his slip-ups in the campaign trail and what could make for an interesting vice presidential debate this coming Thursday -- Kiran.
