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American Morning
Overseas Markets Recover; The Feds Next Move: Buy Stakes in Banks?; Families React to McCain's Mortgage Buyout Plan; Interview with Michelle Obama
Aired October 09, 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)
KIRAN CHETRY, CNN ANCHOR (voice-over): Shaken to the core. Today, the economic turbulence intensifies. Will your bank be bailed out next?
And the McCain plan to buy up bad mortgages.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: We go out and buy up these bad loans so that people can have a new mortgage at the new value of their home.
CHETRY: And when the national debt clock runs out of room, just buy a bigger clock?
Plus, one on one with Michelle Obama.
MICHELLE OBAMA, BARACK OBAMA'S WIFE: I saw her last night. I don't know when she said this.
CHETRY: On Hillary Clinton, Sarah Palin, Cindy McCain. How she feels about the other powerful women in the race now.
OBAMA: Now, I've called her. I've talked to her. She's given me advice about the kids.
CHETRY: On this AMERICAN MORNING.
(END VIDEO CLIP)
CHETRY: And good morning to you. It's Thursday, October 9th. Wish we had better news when we're talking about Wall Street and the financial mess we're in right now. But another down day on the Dow. We're looking ahead to today. Hopefully it will be better.
JOHN ROBERTS, CNN ANCHOR: Has there ever been a more anticipated Friday eve? It's like stop the bus. I want to get off at least for a weekend.
CHETRY: Right.
ROBERTS: Well, one more day to go on all of that, or two actually.
We begin with the overseas markets on the rebound today. A little bit of good news out there. Stocks in Japan and Hong Kong mixed overnight after major central banks cut interest rates to try to shore up the global economy. Wall Street desperately in need of a rally after losing another nearly 200 points yesterday, and there's word that the Bush administration is considering taking ownership of some U.S. banks, at least partial ownership to deal with the credit crisis. We've got details on all of that just ahead.
Worries about a global recession have sent the price of oil and gas plummeting. According to AAA, gas prices are down for the 22nd consecutive day, now averaging $3.40. That's down more than four cents from yesterday.
And new, urgent concerns about Afghanistan. According to the "New York Times," a draft report by American intelligence agencies warns that the country is in a "downward spiral and slipping under Taliban influence." The report blames widespread corruption in Afghanistan's government, the country's booming heroine trade. The final version of the report which will be a national intelligence estimate will be released after the November election.
CHETRY: And back to our top story. That's the turmoil on the world financial markets. Asian stocks stabilized overnight.
In Japan, the Nikkei index was down half a percent while the Hong Kong's Hang Seng gained more than 500 points. European markets also in positive territory. It follows another volatile session on Wall Street with the Dow dropping 189 points. This is the sixth straight day of losses. Dow futures, though, right now, up 167 points looking to a higher opening today.
Meantime, the Federal Reserve is lending troubled insurance giant AIG an additional $37.8 billion. That's on top of last month's $85 billion bailout to keep AIG from collapsing.
Also, Treasury Secretary Henry Paulson is said to be considering a plan for the government to take ownership stakes in several U.S. banks, again, an effort to shore up confidence in the credit markets. Paulson urged patience while the government's financial rescue plan takes effect.
(BEGIN VIDEO CLIP)
HENRY PAULSON, TREASURY SECRETARY: I'm not going to make predictions on the time it's going to take the economy to recover. What I'm looking to do is to take all the steps that we need to take to stabilize the financial system in order to mitigate the negative impact that a weakened financial system is having on our economy.
(END VIDEO CLIP)
CHETRY: And yet another sign of the bad economic times, take a look at that. The U.S. debt outgrowing the national debt clock. It used to be a dollar sign and they had to drop it to make room for the extra digit as the debt number turned over to $10 trillion and counting. CNN's Gerri Willis is here "Minding Your Business." We talked about the one bright spot, Dow futures up at least 167 at this point. Maybe it will hold.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: I love bright spots. Absolutely. OK. Well, let's talk about what's going on and why it's so surprising.
Henry Paulson who you just heard saying yesterday that he's going to use all the tools in his toolkit and that could include actually taking ownership stakes in banks, which is a very surprising idea not done in this country. Yesterday, Britain said it was going to do just that with a very big plan to buy up stakes in some of that country's biggest banks.
Now, it could happen here as well. We don't know yet obviously. But the idea here is that it could work more quickly than what they had originally planned, which is actually buying up the bad debt and then managing that debt over time.
Now, I don't know if you noticed in the legislation they passed in that $700 billion bailout, but it gave Paulson 45 days to actually put that plan in place. That's a long time. I think the government may be looking for something that works more quickly and more fast relief solution to the problem.
Now, let's talk a little bit about everything that's happened to date to try to fix this problem with the credit markets and get banks lending to each other and then also to consumers. We've got interest rates.
Yesterday, we had a coordinated move, the Fed with five other central banks across the planet. We also injected funds in the system. We bailed out financial firms. It's a long list of stuff we've already done to date. And as you noticed, we talked a little bit about, you know, AIG, going in and rescuing institutions already. So we're going to see how many other tools Paulson and company have in their toolkit.
We'll be watching the markets. I just want to show you what the markets have done here today and I know you're looking at your 401(k) thinking, boy, what next? Look at that.
The Dow down 30 percent year-to-date. Nasdaq down 34. As you said, though, futures pointing higher today. We'll be watching that. Yesterday, we had stocks trade a little higher during the day, and I think people got excited about that and then it turned late in the day.
CHETRY: It really is a drastic comparison, though, because here, when you look at the year-to-date, last October was the high of all time for the stock market.
WILLIS: That's right.
CHETRY: And now -- WILLIS: Just a year ago. Absolutely. So it shows you how fast this can turn and how fast it can happen. I mean, it's one thing that individual investors need to keep in mind. You know, the stocks could trade down very rapidly, have an incredible impact on your 401(k), but they can turn around just as quickly.
CHETRY: All right. Thanks so much, Gerri.
WILLIS: My pleasure.
CHETRY: John?
ROBERTS: What is that? About the higher they fly?
The economy is the first topic of conversation on the campaign trail. John McCain touting his plan to have the government step in and help homeowners who are struggling with high adjustable rate mortgage payments. Barack Obama criticizing that plan calling it costly and out of touch, and he told ABC's Charlie Gibson that it's vital the next president restore trust in our financial institutions.
CNN's Suzanne Malveaux is live for us in Dayton, Ohio, this morning. Kind of surprising that Senator Obama is criticizing that plan. It was something Hillary Clinton floated a couple of weeks ago and a similar plan very effective during the depression years.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, obviously, John, both these candidates are trying to get the upper hand on this saying that they're the ones that have this leadership when it comes to the economy. Both of the candidates the last final four weeks barnstorming through these battleground Midwest states. We saw John McCain -- Pennsylvania, Wisconsin, Ohio, today. Obviously, Barack Obama here in Dayton, Ohio.
Both of them trying to basically paint a picture here saying it's the other guy who's here to blame when it comes to this economic mess. They're the ones who can fix it and they're the one who is going to display the leadership to get this done. Take a listen.
(BEGIN VIDEO CLIP, ABC WORLD NEWS)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: They saw I wasn't trying to play politics with the issue, that a measured calm steady response to the crisis, but one that recognizes that it's outrageous we're in this position to begin with.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: As recently as September of last year, he said that subprime loans had been "a good idea." Well, Senator Obama, that "good idea" has now plunged this country into the worse financial crisis since the Great Depression. To hear him talk now, you'd think he had been some voice in the wilderness back then. His wise warnings unheeded, but there's absolutely nothing in his record to suggest he did anything.
(END VIDEO CLIP) MALVEAUX: So, John, you hear both of these candidates obviously jockeying for position. Both of them arguing that they're the one that can display leadership when it comes to getting out of this economic crisis, this mess that we have.
Barack Obama today here in Ohio making three different stops. And what he's trying to do is really go after the socially conservative Democrats and some of those independents. He believes that he can make some inroads in this critical state. As you know, Ohio and Florida are considered the two states that are going to make the difference in terms of who gets in the White House -- John.
ROBERTS: He's also traveling in some traditionally Republican areas like the state of Indiana. What's he doing in those states? Does he actually think he has a chance, or is he just forcing John McCain to use some of his precious money to play defense there?
MALVEAUX: It's actually both here. They believe that they can make some inroads in Indiana. They are seeing some signs that people, it's very -- as you know, the polls show very, very close between these two men but they believe that it is turning in Obama's favor.
It's still kind of a long shot here but they are confident. It shows a certain sense of confidence. It also forces John McCain to use his resources really to try to shore up some of those states, the red states that used to be really kind of in the given category, now in the if category, the maybe category. So John McCain not going out trying to reach out to those blue states but really just trying to hold on to what he has -- John.
ROBERTS: Well, we'll see. We'll see if Barack Obama is still playing in places like Indiana in a couple of weeks. That will really tell the tale.
Suzanne Malveaux for us this morning in Dayton, Ohio. Suzanne, thanks.
CHETRY: And John McCain is gaining some ground on Barack Obama. In the latest national CNN poll of polls, the new numbers show Obama leading John McCain 48 percent to 44 percent among likely voters, with eight percent still unsure. McCain had trailed by six points earlier in the week.
Sarah Palin's husband says he never pressured the state's top law officer to fire his wife's former brother-in-law, a state trooper. That according to written answers submitted in the investigation into the firing of the state's public safety commissioner. Todd Palin said the public safety commissioner was let go because of budget disagreements and a failure to fill trooper vacancies. Governor Palin denies any wrongdoing.
ROBERTS: Michelle Obama in the thick of a nasty political race. She speaks to our Larry King about the mudslinging and what she thinks of her husband's former rival, Hillary Clinton.
(COMMERCIAL BREAK) (BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: The United States government will purchase mortgages directly and immediately from homeowners and mortgage services and replace them -- replace them with manageable mortgages with rates that people can afford.
(END VIDEO CLIP)
ROBERTS: And Senator John McCain on the campaign trail and talking up his plan to buy up bad mortgages, hopefully saving millions of Americans from foreclosures. Well, some families are embracing the idea but others are furious about it. CNN's Chris Lawrence looks at the reason why.
CHRIS LAWRENCE, CNN CORRESPONDENT: John, Kiran, some people are wondering how many more bailouts they can stomach while other families see Senator McCain's proposal as a lifeline.
(BEGIN VIDEOTAPE)
LAWRENCE (voice-over): Two homes, right across the street from each other. Two neighbors stuck with homes worth $200,000 less than they paid, and two very different views of Senator McCain's mortgage plan.
LEANNE BENSON, PAYS ON TIME: It feels unfair. It sounds like it should be across the board.
DAVID MELTON, SUPPORTS MCCAIN PLAN: That would give me a breather -- a little room to breath.
LAWRENCE: David Melton hasn't made a mortgage payment since February when he lost his union job.
MELTON: There's 116 men above me on that out of work list and the list isn't moving at all.
LAWRENCE: He probably would be able to renegotiate his mortgage under McCain's plan. David says he can't eat, buy health insurance and afford the $1,700 payment, making $1,800 in unemployment.
MELTON: I'm 58 years old. Which way do I go?
BENSON: Don't go on the street. Just stay on the sidewalk.
LAWRENCE: Leanne Benson makes her house payments on time and sacrifices a lot to do it.
BENSON: I don't even go to the grocery store. I just -- if I have to make things and we need (ph) every night for dinner, I have to do that because it just wipes us off completely.
LAWRENCE: She could support McCain's plan, but only if it includes some reward for taxpayers who do make their payments.
BENSON: Not just the people who choose to throw in the towel earlier or don't want to sacrifice their vehicle or their vacation.
LAWRENCE: Realtor Heather Upton says when home prices rise again, homeowners who get a break on their payments will be ahead of those who didn't. So any bailout should account for faithful payers.
HEATHER UPTON, REALTOR: That would be giving back to the consumer. That would be giving back and rewarding the people that have been hanging in there.
(END VIDEOTAPE)
LAWRENCE: The one thing that all our families agree on is that no matter what final form this housing help takes, it's got to do as much to help the families at the bottom, as the bailout is doing to save the companies at the top -- John, Kiran.
CHETRY: Chris Lawrence for us. Thanks.
Michelle Obama goes one on one with Larry King. She talks about her husband's relationship with 1960s radical Bill Ayers.
The "swing vote".
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: There isn't a clean cut simple thing and I really haven't made up my mind.
(END VIDEO CLIP)
CHETRY: Winning over Florida's senior set. John Zarrella with the voters who could hold the power to decide the election.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We don't know if Obama is that much better.
(END VIDEO CLIP)
CHETRY: You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: How about this for creative? Google is now trying to save you from firing off an angry or desperate e-mail while under the influence. There's a new feature on its Gmail service called mail Googles, and it requires users to solve five math problems in under a minute before they can send their e-mail. That pop quiz activates during late night hours on the weekend. The theory, if you can't do the math, well, then maybe you shouldn't be sending an e-mail.
Eighteen minutes past the hour now. Rob Marciano, how nice of Google to look out for you. You know, they're making sure you don't drunk dial or drunk e-mail.
ROB MARCIANO, AMS METEOROLOGIST: That's very -- no, that's not foolproof. I mean, I have some friends who, the only way to get through calculus was to be drunk.
CHETRY: Yes. And you know what else? I'm thinking even if I was dead sober, I probably couldn't solve the five math problems in under a minute. So there it goes.
MARCIANO: Yes. Exactly. You know, crossword puzzle -- that may be a safer bet for some.
Hey, check this out, Kiran. This is a hurricane. It's a major one, a Category Three. It was a four at one point and it's close to the U.S.
This is Norbert. It's in the eastern pacific about 400 miles south southwest of the Baja of California, and it will be heading that way. This four -- to be a Category Three in this area, that's pretty rare. And if it makes landfall as a Category two, which is what it's forecast to do here over the weekend, that's pretty rare across the Baja also.
All right. Winds gusting to 155. It sustained at 125. It's moving north westerly at seven. It will make this turn into the Baja over the weekend and make landfall somewhere north of Cabo or early morning hours on Saturday, and then kind of be drawn up into Mexico and into the U.S.
Pretty big storm into the inter mountain west. That will help draw some of the moisture eventually up Norbert into the plains and that we could have some problems from that. But later next week, cool and wet definitely a strong fall-like storm heading into the Rockies and some thunderstorms down across parts of the southeast. Rains ending across parts of the northeast this morning.
High temperatures today will be 85 in Dallas. Seventy-four degrees once the rain clears in New York. Sixty-nine degrees in Chicago. Not too bad, but here's the cool air across the west. Fifty-one Portland, 65 degrees in Salt Lake City.
Simple math, was it? Just some addition, some subtraction?
CHETRY: Could have more but apparently you can make the settings harder or easier depending on your math skills.
MARCIANO: I think we need to do an investigative report, maybe a field study.
CHETRY: Yes. And you could be the first tester, if you will. All right, Rob, thanks.
MARCIANO: See you.
ROBERTS: On the campaign trail, Sarah Palin keeps trying to play up Barack Obama's ties to Bill Ayers, the former member of the domestic terrorist group, the Weather Underground. Now, Michelle Obama is speaking out about her husband's relationship with the 1960s radical. She sat down last night with CNN's Larry King. And here's what she had to say. (BEGIN VIDEOTAPE)
LARRY KING, HOST, "LARRY KING LIVE": She said that your husband pals around with terrorists, and she's referring to William Ayers, I guess. Do you know William Ayers?
MICHELLE OBAMA, BARACK OBAMA'S WIFE: Yes, yes, yes. Barack served on the board of the Annenberg Challenge with Bill Ayers. And --
KING: That was started by the Annenberg family, right?
OBAMA: Absolutely. And Mrs. Annenberg, in fact, endorsed John McCain. So, I don't know anyone in Chicago who's heavily involved in education policy who doesn't know Bill Ayers. But, you know, again, I go back to the point that, you know, the American people aren't asking these questions.
KING: You don't think it affects the campaign?
OBAMA: You know, I think that we've been in this for 20 months, and people have gotten to know Barack. He's written a book. Books have been written about him. He, like all of the other candidates, have been thoroughly vetted. And I think people know Barack Obama. They know his heart. They know his spirit.
And the thing that I just encourage people is to judge Barack and judge all of these candidates based on what they do, their actions, their character, what they do in their lives rather than what somebody did when they were 8.
KING: Speaking of Hillary, are your happy with the way she's supporting your husband?
OBAMA: She has been phenomenal. From the minute after this was done, right, she has always been just cordial and open. I've called her. I've talked to her. She's given me advice about the kids.
We've talked at length about this kind of stuff, how you feel, how you react. She has been amazing. She is a real pro and a woman with character.
KING: And will she campaign and go all the way?
OBAMA: She's been campaigning. She's on the road. I don't know her schedule completely, but she's been raising money for the campaign. She has been working on her donors. She's been in swing states. She and Bill Clinton have been working hard to make sure that Barack is the next president of the United States.
KING: All right. Some people regard you as a role model. Who are your role models?
OBAMA: Well, first and foremost is my mom. You know, I come from modest means. My parents were working class folks. My mother didn't get a college education, neither did my father. But they are two of the most common sense based people that I know.
(END VIDEOTAPE)
ROBERTS: Michelle Obama also went on to say that despite the back and forth in the campaign, Barack Obama has the utmost respect for Senator John McCain.
CHETRY: The Bush administration taking new steps to deal with the credit crisis by buying a stake in troubled banks. A renowned economist tells us what he thinks of the latest plan.
And honoring every day heroes. Anderson Cooper is going to be joining us live this morning to reveal the ten people who you could make CNN's "Hero of the Year." We'll hear more about their fascinating stories as well.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP, "LATE SHOW WITH DAVID LETTERMAN")
DAVID LETTERMAN, HOST, "LATE SHOW WITH DAVID LETTERMAN: I'm beginning to worry about my accountant. I go to his office today because I'm a little jittery. I'm a little jumpy about things. I walk in and the guy, honest to God, my hand to God, is using cardiac paddles on my portfolio. Come on! Come on!
(END VIDEO CLIP)
ROBERTS: The economy, issue number one on "Late Night" as well. And there's word this morning that the Treasury Department is prepared to take ownership stakes in a number of troubled U.S. banks to try to restore confidence in the financial system. My next guest predicted the housing crisis that precipitated this global financial upheaval. Robert Shiller is the author of "The Subprime Solution" and a professor of Economics at Yale University. He joins us now live this morning from New Haven, Connecticut.
Professor Shiller, good to see you. Thanks for taking the time this morning.
ROBERT SHILLER, CHIEF ECONOMIST, MACROMARKETS LLC: Good morning, John.
ROBERTS: So what do you think of this latest proposal by the Treasury Department to take a partial ownership stake on some of these banks to try to restore confidence, try to recapitalize the market here? Will that work?
SHILLER: Well, we have a sinking ship and we have to try various things to keep it afloat. They are on. We want to fix it, make sure the ship works better. Right now, we have to keep the banking system going. It's the highway that we run the economy on.
ROBERTS: But Professor Shiller, as you say, we got a sinking ship and they're trying it seems like just about anything to try to keep it afloat. You know, it's like, you know, throwing spaghetti against the wall and when it sticks you know it's done. We haven't gotten to the magic formula yet, though. What do you think needs to be done?
SHILLER: Well, in "Subprime Solution," my book, I think, I said and I think that we need a major overhaul of our financial institutions. And the basic theme of my book is that we need to democratize finance. That means not rely on bailouts. We want to have good, sound financial principles working for the people, for everyone. And that's a big project that I hope Congress and the new president will take on.
ROBERTS: Yesterday, we had one of your colleagues, Jeffrey Sachs, from Columbia University on. He seemed to think that this bailout was already obsolete, that events had already overtaken any effect that the $700 billion could have. What do you think about that?
SHILLER: Well, I think the $700 billion will help. I don't think that it's going to put us on a road to rapid (ph) prosperity. I think we have years of a weak economy ahead of us.
ROBERTS: Right. And what about this new loan to AIG? I mean, the government gave them $85 billion a couple of weeks ago and then we heard about this junket to the St. Regis resort in Dana Point, California, where they spent almost half a million dollars. And now we learned yesterday that the Feds aided them for another $37.8 billion. Any idea what's going on, where all that taxpayer money went?
SHILLER: Well, the thing is that AIG and other companies were not managing their risks right. And people -- ultimately it all comes back to this housing bubble and burst that was not properly accounted for. Homeowners were not managing their risk right that's why so many of them are in trouble. So we have to get around to a better and sounder financial system. And this is a big project for the next Congress and I hope that we will see major changes.
ROBERTS: So that's in the long term. Give us some help here in the short term. People are watching the market. They're watching the value of their 401(k)s deplete, in some cases by as much as 30 percent.
Do you have any idea where the bottom is here? Can you tell us when we have reached the low ebb here in the markets? The Dow futures are up today. Is that the low, or is that maybe the dead cat bounce, as we've said in the past?
SHILLER: The one thing that we can say with assurance is that volatility is going to be high. The market is going to be making huge swings, either up or down.
You have to remember that the Dow is not cheap. It can go way down. It could fall in half from where it is. It could also go way up. The most important thing for people to remember is that this is a risky time, and it's not a time to consider an opportunity to plunge into the stock market.
ROBERTS: So, you would counsel then people against buying at this time?
SHILLER: It depends on where you are in your life cycle and how -- the real counseling is -- especially if you are, say, retired and you have limited funds, it would be a big mistake to take this as a wonderful opportunity and throw it all into some risky investment. That's a mistake.
ROBERTS: But those who have been contributing to 401(k)s, so we say a decade or more away from retirement, should they continue to contribute?
SHILLER: Well, I'm actually -- if you're a patriotic American, you might want to support the markets. But if you're interested in your own individual welfare, I think this is perhaps a time to be a little bit more conservative, to pull back.
ROBERTS: Well, wow. Robert Shiller, thanks for your advice this morning. Appreciate it.
SHILLER: My pleasure.
ROBERTS: Good to talk to you -- Kiran.
CHETRY: 6:30 here in New York. A check of the top stories now. North Korea reportedly set to conduct more missile tests. A South Korean newspaper said that U.S. find satellite detected signs that the north had deployed about ten missiles near Korea's disputed western border another adjacent areas. A government official is quoted as saying North Korea fired two short range missiles earlier this week. But the U.S. State Department will not confirm that report.
A non-profit group is disputing claims it committed voter registration fraud. Authorities in Las Vegas raided a community organization that helps organized voter outreach, Tuesday, after noticing some names did not match addresses. They also say some of the forms included names of Dallas Cowboy's players. The group's regional director claims they were the ones who tipped off election officials about fake or duplicate forms.
And Hasbro announcing a recall of its Nerf N-strike toy. Officials say that a child's skin can get caught in the toy's plunger causing injury to the face, neck or chest. Consumer Products Safety Commissions has dozens of injuries to kids between ages 4 and 12 have been reported. Toys are sold at Wal-Mart, Target, Toy "R" Us from November 2007 through August 2008.
Well, it's time to check in now with the "Truth Squad." Keeping both of the campaigns honest by taking what they're saying and sorting fact from fiction. This morning Alina Cho is looking into some continuing back and forth over the financial crisis. Hey, Alina.
ALINA CHO, CNN GENERAL ASSIGNMENT CORRESPONDENT: Hey, there. Everybody is talking about it, right? Good morning, Kiran. Good morning, everybody. You know from the debates to the campaign trail it keeps coming up. Who said what, who did what and when did they do it. Issue number one is the economy of course, and what got us in this mess. Here's John McCain yesterday.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: As recently as September of last year he said that subprime loans had been, quote, "a good idea."
(END VIDEO CLIP)
CHO: Obama said subprime loans, a large part of the current financial crisis had been, quote, "a good idea?" Was McCain right when he said that? Well, he's talking about a speech that Obama gave last September. Obama said, quote, "subprime lending started off as a good idea helping Americans buy homes who couldn't previously afford them." But here's what McCain didn't talk about. Obama went on to say that greed changed all of that. Certain lenders and brokers, quote, "began to lower their standards" he said. And borrowers, well, they ended up in places they could never afford.
So, Obama definitely spoke out against the practice. McCain's statement was an accurate quote but the words were taken out of context. So the "Truth Squad" verdict on this one, misleading, John. That's right.
Obama essentially said subprime mortgages were a good idea that went bad. And of course as always we're watching both sides. Coming up at 8:00, Obama said McCain will give some CEOs a tax cut that could be worth close to a million dollars. Is he right? We'll tell you. Of course, tax cuts, that was the one issue where we saw during the debate format started to unravel because McCain made some charges and Obama said wait a minute, I know we're suppose to be moving on, but I got to get to this and answer this. So, anyway --
(CROSSTALK)
CHETRY: That's when Brokaw said I'm just the hired help, don't worry about me here.
CHO: Exactly.
CHETRY: All right, thanks, Alina.
CHO: You bet.
ROBERTS: Thanks, Alina. It's Barack Obama's ambitious goal turned Virginia blue. We have new polls to see how he's doing in the reliably red state. Plus, we are hitting the air waves to find out what voters there are saying. And lots of you at home are concern about your savings and investments. CNN's Gerri Willis is logged on, plugged in, and taking your questions right now. We'll have your answers ahead on the "Most News in the Morning."
(BEGIN VIDEOTAPE)
ROB MARCIANO, AMS METEOROLOGIST: When powering the green car of the future, one man is turning to Fred Flintstone for inspiration. Charles Greenwood is the creator of the HumanCar, an automobile powered by you and me, and maybe a few of your friends.
CHARLES GREENWOOD, INVENTOR, HUMANCAR: There we go. All the way forward, all the way back. It's just exactly like an engine firing around a four cylinder cycle. So, in this case we can see we've got one, two, three, four. They're firing around the firing order.
MARCIANO: The vehicle is made entirely out of recycled plastics and can reach speeds of up to 60 miles per hour. The rowing handles produce electricity that moves the car forward. And if you don't feel like rowing, well, an electric motor takes over. And it's more than just a vehicle. Designers say it could also be a power supply for your home.
This is the imagine PS power station. Theoretically, you could operate 100 of these vehicles to create a 100 kilowatt mobile power station.
MARCIANO: The HumanCar cost a little more than $15,000. And a final design is set to roll out on Earth Day 2009. Rob Marciano, CNN.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
CHETRY: Yes, there's beautiful shot this morning of the Norfolk coming to us from WAVY. Welcome back to the "Most News in the Morning." You know, this is a crucial battleground state, Virginia is. Barack Obama spending more time and more money there. The state has not backed a Democratic nominee in 44 years, but this election could be different.
CNN's latest poll of polls shows Barack Obama leading John McCain by four points there -- 49 percent to 45 percent. So what are the voters saying there? Joining me right now to talk about it, radio talk show host Doc Thompson from WRVA in Richmond.
Thanks for being with us this morning.
Good morning, Kiran.
Why has Senator Barack Obama seen this recent surge in the poll numbers? Was this state taken for granted by the Republicans maybe too early on?
DOC THOMPSON, WRVA RADIO HOST, RICHMOND, VA: Yes, probably a little bit. But I think the big thing is there's been a shift in demographics in Virginia for a while. It's not as red as people think now. A third of the population in northern Virginia which is primarily pretty liberal. And the second thing is I think a lot of people are buying into his notion of change. They probably a little bit for good reason and not for good reason think that this is all the Republicans fault.
CHETRY: Expand on that a little bit more, because I know you say that there's a chance you might vote for a third-party. You tend to lean conservative but you might vote for a third-party candidate. Why is no one speaking to you this year?
THOMPSON: It was a hot issue a couple of days ago on my show when I announce that I would probably vote third party because I can't vote for John McCain. Barack Obama is an awful choice for most conservatives. And they can't even stomach it. But John McCain is not a true conservative. For me, it's the choice of drinking strychnine or drinking slow-acting strychnine. Neither one is a good option. And there are a lot of conservatives that feel that way, but still feel they have to vote for John McCain because the thought of Barack Obama appointing Supreme Court justices is unacceptable.
CHETRY: Bob Barr has never looked so good.
THOMPSON: Yes. Bob Barr looks pretty good, but I'm considering (INAUDIBLE). I know it's pointless. It won't mean anything with the Electoral College, but I'm considering voting for Jim DeMint from South Carolina because he is a true conservative.
CHETRY: You know, some analyst say that these poll numbers by Barack Obama's could be overestimated, that perhaps when people get into the voting booth it might be a different story. Is there anything that John McCain or Sarah Palin can say to sway undecided voters?
THOMPSON: They got to do something big. And I think they missed the real opportunity certainly in Virginia with my listeners that say they want somebody who is fiscally conservative. And through this whole financial mess, they could have come out and said no more spending. And they didn't do it. Instead, it was more of the same.
And then during the debate the other night, he announced he wanted to do more of the same. I'll tell you what, Kiran, the big issue over all of this from my listeners is the march towards socialism. And that's what they see Barack Obama is. And yet so many Americans are still wanting that socialism because they think conservatism and capitalism hasn't worked it. I can't blame them because most members of Congress and many presidents have failed America. That's the other big issue, is that my listeners are saying kick out all of the bums.
CHETRY: Yes, and it's very interesting that you talk about that. But when we heard it at the debate on top of this $700 bailout that was pretty much wildly unpopular among many in American, on Main Street, who says I just don't understand this, then John McCain who's the Republican candidate comes out and says -- oh, and on top of that we're going to bailout homeowners as well. So it really was yet, almost say -- hold on, am I hearing this correctly. THOMPSON: Yes, exactly. Republican does not equal conservatism. In years gone by it has primarily been conservative. But there has been a move away from being conservative for the Republicans, and that's what got people so nuts. And yet --
(CROSSTALK)
CHETRY: We certainly don't have it now in the Bush administration either with these bailouts. Are we going to see the whole notion of fiscal conservatism die for a while because of the dire economic situation we seem to be in?
THOMPSON: Unfortunately, I think so. That's just my opinion. But, again, so many people -- they so want change because they think the Republicans have screwed up so bad, wrong or right, that's what they think. So, they're doing what's the other option, the other thing, which has been socialism, and that's actually what's gotten us into this problem in the first place.
CHETRY: Very interesting stuff. Doc Thompson, WRVA radio host, thanks so much for joining us this morning. You talked about the changing demographic of Virginia. And we have a little bit more about that today in an "A.M. Extra" for you. Virginia's political observer says that Barack Obama has built a coalition of progressives in suburban D.C., as well as African American voters in the south, and young voters statewide.
And John McCain still has a solid advantage in southwestern Virginia that's from the Cumberland Gap to Roanoke. Obama lost that area to Hillary Clinton in the primaries. And Obama also has Democratic Governor Tim Kaine out campaigning for him. Still though, the last time Virginia voted Democratic in the presidential election was Lyndon Johnson back in 1964.
ROBERTS: Well, it's almost 43 minutes after the hour. The current economic crisis has you on edge about your money. Our personal finance editor Gerri Willis is here to offer some help. She's working the blog this morning taking your questions and we will answer them coming up next. There's still time to send her one by the way. Head to CNN.com/am.
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ROBERTS: We are "Minding Your Business" this morning, answering your money questions with CNN's personal finance editor, Gerri Willis. She's been working the blog this morning. What did you think to what Robert Shiller said that he would be very cautious about investing anything in the market right now, even to your regular weekly contributions to your 401(k)?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Yes. I was surprise -- well, I wasn't surprised with how negative he was. You know, Shiller has a reputation for taking the dark view of almost any question. He predicted the dot com crash years before it happened. He's been negative on this market now.
ROBERTS: He predicted this. Yes, so why should we listen to him.
WILLIS: No, no, no.
(CROSSTALK)
WILLIS: Don't get me wrong. He really is very, very smart.
ROBERTS: I'm kidding.
WILLIS: And in fact, the kind of research he's done has been groundbreaking.
CHETRY: Well, I've been listening to you, though. You told me it's like a shoe sale. You're still getting these stocks for a bargain.
WILLIS: It's like a shoe sale. But if you're in retirement, you do have to pay attention to what you're doing right now.
CHETRY: Yes, absolutely.
WILLIS: Because you have to have that money very, very soon.
ROBERTS: What are you hearing this morning?
WILLIS: All right. We've got lots of e-mails here. John in Washington writes, "Am I living in the next "Great Depression"? When will this meltdown of the stock market stop? We can't keep hemorrhaging hundreds of points off the Dow everyday. What will it take for people to take a breath and stop selling everything?"
I wanted to answer this question about the Great Depression, because people are asking me this all the time. Is this a replay of 1929? And I have to tell you, that was a far, far different era. For example, the jobless rate, even ten years after the Great Depression was still 15 percent. It's 6.1 percent right now. And stocks, they dropped 90 percent in the Great Depression. We're at 34 percent down since the high October 9th, two days away. We're coming up on the year anniversary of the high of the Dow.
It's a different time. And one thing that people don't pay much attention to is that the government involvement in society generally has changed and changed dramatically since the Great Depression. Three percent was the government's share of the economy back then. It's now 20. So, when Paulson does something, it really impacts the entire economy. So, I just wanted to talk about that a little bit. This is not 1929. The world is a very different place.
Moving on to the next question. Freddie in Florida writes, "How does the Fed cutting rates help me personally? I have not seen a decline in the interest rates of any of my debt." Not surprise there, Freddie. You know, credit card operators typically move in in sync with prime which would move with the Fed funds rate which is why I got cap. But I have to tell you, they're probably not doing that right now. You're not going to see any big impact from this. This wasn't from you. This was something to stabilized banking and other financial institutions. So, yes, I feel your pain.
And finally -- I guess, John, back to you.
ROBERTS: Oh, all right. The rates always move up quickly. (INAUDIBLE).
WILLIS: That's right. Absolutely right.
ROBERTS: A lot more of this this morning, right?
WILLIS: Absolutely. We'll answer your questions as we go along today. We're getting lots of them.
ROBERTS: Thanks, Gerri.
CHETRY: Yes, thanks.
ROBERTS: 48 minutes now after the hour.
CHETRY: The original maverick.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I'm free to be annoyed by it.
(END VIDEO CLIP)
CHETRY: The keepers of the family name.
(BEGIN VIDEO CLIP)
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: Mavericks.
(END VIDEO CLIP)
CHETRY: Speaking out against the McCain campaign.
(BEGIN VIDEO CLIP)
PALIN: Team of mavericks.
(END VIDEO CLIP)
CHETRY: And they are not holding back.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: It's very irritating.
(END VIDEO CLIP)
CHETRY: Uprising.
(BEGIN VIDEO CLIP)
PALIN: The maverick. (END VIDEO CLIP)
CHETRY: You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
TINA FEY AS GOV. SARAH PALIN: Oh, and for those Joe Six-Packs out there playing a drinking game at home, maverick.
(LAUGHTER)
(END VIDEO CLIP)
CHETRY: Well, that's Tina Fey poking some fun at Sarah Palin. You've heard it so often. The word association comes easy, John McCain equals maverick. Some McCain supporters consider the straight talking senator the original maverick, but one family in Texas begs to differ. Here's Jeanne Moos.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN NATIONAL NEWS CORRESPONDENT (voice-over): He has branded himself --
PALIN: The maverick.
MCCAIN: A maverick of the Senate.
PALIN: Send the maverick from the Senate.
SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: Maverick, he is not.
FEY AS PALIN: We're a couple of mavericks.
PALIN: This team that is a team of mavericks.
UNIDENTIFIED MALE: The original mavericks.
MOOS: Hold your horses.
FONTAINE MAVERICK, DEMOCRAT: It's very irritating because he is not a maverick.
MOOS: Fontaine Maverick said her family is the real, original maverick. Her Web site seeks to take back the family name that spawned the word we've come to know.
UNIDENTIFIED MALE: Maverick.
MOOS: Back in the 1800s, Samuel Maverick didn't brand his cattle, and they became known as mavericks. The word came to mean an independent individual who doesn't go along with the group.
OBAMA: Pretty soon I'm going to have to start saying I'm a maverick.
JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": What should I call you?
PALIN: Maverick.
LENO: What should I call Senator McCain.
PALIN: Maverick.
LENO: How much will I have to pay you not to ever say maverick again?
PALIN: $700 billion a year.
LENO: I don't have that kind of money.
PALIN: Maverick.
MOOS: But guess who is not laughing?
(on camera): Members of the Maverick Family say hearing John McCain is a maverick makes them want to shoot the TV. It's like hearing fingernails on a chop board times 10. After all, they are liberal Democrats. Some family members have held office in Texas. They have nothing against the old TV show -
UNIDENTIFIED MALE: "Maverick."
MOOS (voice-over): They have nothing against "Top Gun."
TOM CRUISE AS MAVERICK, "TOP GUN": I'm Maverick.
UNIDENTIFIED FEMALE: Maverick?
MOOS: But when they hear the music from "Top Gun" at McCain rallies, it must irk them. They know that McCain folks are free to use the word "maverick," but --
MAVERICK: I'm free to be annoyed by it.
MOOS: Maybe all the mockery helps.
UNIDENTIFIED GIRL: Sarah Palin is a maverick.
UNIDENTIFIED BOY: Only a real maverick would wear this.
MOOS: From swift kids for truth to this Obama spoof of the McCain strategy session.
UNIDENTIFIED MALE: One word? Maverick.
UNIDENTIFIED MALE: He wants to overturn Roe v. Wade. Maverick.
UNIDENTIFIED MALE: He doesn't know how many houses he owns.
UNIDENTIFIED MALE: Maverick. We just keep saying maverick, maverick, maverick until that's all they hear.
FEY AS PALIN: We are not afraid to get mavericky in there.
MOOS: Sometimes getting branded hurts.
BIDEN: You can't call yourself a maverick when all you've ever been is a sidekick.
MOOS: But maybe only a true...
UNIDENTIFIED MALE: Maverick.
MOOS: ...when he advertently referred to his fellow citizens this way.
MCCAIN: This is the agenda I have set before my fellow prisoners.
MOOS: Coming from a maverick. Nobody blinked. Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
CHETRY: Wall Street, Main Street, fat cats, little guys.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: If you really want to find out how the people on Main Street feel about the people on Wall Street, this is the place to find out.
(END VIDEO CLIP)
CHETRY: On the street with voters with strong opinions on the economic crisis and the election.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I don't think Barack Obama has the answer. I don't think Senator McCain has the answer. Our special "VOICE OF THE PEOPLE" series.
Plus, from the back seat of a taxicab.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We little guys are the ones suffering right now.
(END VIDEO CLIP)
CHETRY: The Best Political Team on wheels?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: That's been going on a long time. It's going to be exciting to see how it ends.
(END VIDEO CLIP)
CHETRY: The taxi pundit. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
ROBERTS: Our Larry King sat down with Michelle Obama last night. The two of them talked about the campaign and the effect of the slumping economy in her neighborhood.
(BEGIN VIDEOTAPE)
LARRY KING, HOST, "LARRY KING LIVE" (on camera): Good morning, Kiran and John. Michelle Obama was our guest on "LARRY KING LIVE" last night. We spoke about the debate, the economy and how the Obama Family is affected by the money crisis.
MICHELLE OBAMA, SEN. BARACK OBAMA'S WIFE: We have family members, friends, folks in our neighborhoods, everyone is nervous. You know, we live in a community that's pretty diverse. Folks have been out of work in our neighborhood for a long time. I mean that's the thing that we're seeing is that what's playing out on Wall Street now has been playing out in our neighborhood for a long time.
Folks that lost jobs in communities and we've seen commercial districts dry up. I work at a hospital. That's an academic health center. And we see our emergency rooms filled with people who don't have insurance. So this has been going on for a while. So, relatively speaking, we're blessed. Which is another reason why, you know, that's what makes Barack angry is to see the inequity going on, and it's been going on for a while.
KING (on camera): Could she be our next first lady? We'll find out in 26 days -- Kiran, John.
(END VIDEOTAPE)
