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Sheer Panic Weighing Down the World's Financial Markets; More Claims of Voter Registration Fraud by ACORN; Race in the Presidential Race
Aired October 10, 2008 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: And welcome back this morning. We begin our 8:00 hour much like we started a little bit earlier, about 30 minutes early today on AMERICAN MORNING because of the changing situation that's going on right now in terms of the global financial markets we saw a big dive yesterday in the Dow and we've seen the Asian and European markets follow suit today.
JOHN ROBERTS, CNN ANCHOR: Yes. Let's get right to that. It's the breaking news this morning, financial chaos literally sweeping the globe as markets in Asia and Europe have huge losses and it's shaping up to be another rough day on Wall Street. And in Japan, the Nikkei closed down 9.6 percent. In Hong Kong, the Hang Seng dropped more than seven percent. Stocks are sharply lower in Europe as well. London's FTSE is down seven percent. In Paris, the CAC is down eight percent and Germany's Dax index is down nearly nine percent.
Meantime, Dow futures are down 200 points. That comes off of yesterday's 679-point nosedive. President Bush will make a statement on the economy at 10:45 Eastern Time this morning. CNN is going to be carrying that live, of course. From the Rose Garden at the White House.
Christine Romans here "Minding Your Business," this morning. And, you know, when you take all of this together, you're getting close to the idea of, if not a crash, it's a crash occurring in slow motion.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It is. And a slow motion crash is exactly what "The Wall Street Journal" is calling it this morning. And you know, a crash is something like in 1987, we knew it right away. This has been body blow after body blow. And you've got a week now, where the Dow has lost 17 percent in five trading days. Well, 4 trading days because we haven't started today. A $2.3 trillion in value lost. And if you go back even farther, you can see over the past year, the Dow is down -- actually, this is just this year, 35 percent. NASDAQ down 38 percent. S&P 500 down 38 percent.
That means $100,000 investments in stocks at the beginning of the year is worth $62,000 today if it's 100 percent exposed in stock. You hope in your 401(k) that you have shuffled things around a little bit. Kiran is looking at me like she hopes she had shuffled things around and didn't. But you hope that you have some other exposure there, not just stocks, because stocks have had just a horrific performance. This will be the big bear of 2007, 2008. There's no doubt about it. It has been a very painful ride for stock investors. And it's unclear where the bottom is. You talk about capitulation, that's the word you're going to hear a lot over the next few days. Is everyone throwing in the towel here now, means that we are toward the end of this? You know, it's hard to tell, and you can break a lot of bones trying to find the bottom and bounce off the bottom of the market like this. But it all goes back to the health of the banking system, the financial services system.
What has blown up from subprime to a housing crisis, to a toxic securities crisis that are spread in portfolios around the world. Will the banks have to be recapitalized? Is it enough to just buy those toxic securities from them? The government's role in the banking system has exploded. We've never seen an intervention in the markets like this since the Great Depression. All of these record territory. We're talking about new things that we've never had to deal with before, and that's why stock investors, there's a total deficit of confidence and a surplus of fear.
ROBERTS: Who knows where it goes from here.
ROMANS: That's right.
KIRAN CHETRY, CNN ANCHOR: Is there any consensus at all about if, you know, if the train left the station, there's no point in getting off now, you're in it for the ride?
ROMANS: Well, I've been getting a lot of e-mails this morning from financial analysts who are saying if you're getting out, if you don't need the money to pay your mortgage or to put a kid in college, leave it where it is.
CHETRY: All right. Well, maybe that's one thing we can all agree on this morning, because a lot of other questions still remain.
CHETRY: Christine, thank you. You know, it's not been any better across the pond. Trading on the Vienna Exchange actually was suspended after stocks dropped 10 percent. CNN's Richard Quest is watching developments in the European markets for us this morning. He's live in London.
RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: Good morning to you. Indeed, the markets in Europe are just simply horrible. We opened several hours ago down 10 percent. And frankly, whether it's Frankfurt or Paris or London, we haven't really improved matters much since then. Now down between 7 percent and 9 percent.
Treading water as we wait to hear what President Bush has to say in the Rose Garden, and waiting to get any form of direction from Wall Street. But truth be told, if the direction is anything like we saw 24 hours ago, we'd be rather gratefully could stay in bed over on Wall Street because another fall of 7 percent will simply make matters a great deal worse.
I wish I could bring you a little bit of tea and sympathy from London at this particular hour, but as London heads into the afternoon, it's just one word, and that's grim.
CHETRY: All right, Richard for us this morning. Agreed on this side of the Atlantic as well. Thanks. By the way, Dow futures now down 260 as we look ahead to the market opening in just about 90 minutes.
ROBERTS: They are swinging very wild and they were down 250, then down about 140, then 200, and now back down again. And all of this occurring just within minutes of each other.
President Bush is wasting no time today. About two hours, he is again going to address the nation. CNN's Brianna Keilar is live at the White House for us this morning.
Brianna, do we have an idea of what the president will say? Will there be new policy or will this just be another statement to try to instill some sense of confidence in the markets?
BRIANNA KEILAR, CNN GENERAL ASSIGNMENT CORRESPONDENT: That's exactly what it is, John. We're not expecting there to be any policy announcements. It is all about restoring confidence, giving a reassurance to Americans, and to the financial markets. We're expecting President Bush to say again, as he has, that help is on the way in the form of this economic bailout package that Congress passed last week. Also that the Treasury Department is in the process of getting things moving here with this package to make sure that credit will continue to flow so that there isn't difficulty in getting home loans, car loans, loans to send kids to college.
And yesterday, we did hear President Bush acknowledge that the economy is in what he called a very tough stretch. But at the same time, we've been hearing President Bush and Treasury Secretary Paulson urging patience, saying that a fix to this credit crunch is not going to happen overnight but that it will come.
There is, though, a tacit acknowledgment by the White House just as -- into what a serious economic situation this is. President Bush will spend part of his Saturday talking with finance ministers from the so-called G-7 countries, the industrialized nations, here at the White House. And he's expected as well to make remarks after that meeting tomorrow. He's made remarks on the economy almost 30 times in as many days. And again, John, here in just a couple of hours.
ROBERTS: Brianna, have you had a chance to talk with anybody there, either from the press office or from the economic office to figure out which direction they might be leaning in in terms of how they are going to utilize the $700 billion in this bailout program?
KEILAR: You know, at this point we don't know, John. We're just being told that this is about assuring the Americans that this is on the move and just urging them to have patience. Obviously that's a question we're pressing them on, but at this point they're saying they're trying to move forward, but it's not going to happen overnight.
ROBERTS: All right, Brianna Keilar for us at the White House. Brianna, thanks so much for that.
CHETRY: And breaking news today. We're monitoring the world's markets after this morning's massive selloff across the globe. Asia drops ten points, Europe also down. And we're live at the New York Stock Exchange as well today.
Also, more claims of voter registration fraud this morning against a liberal activist group already under fire in several states. CNN's Special Investigations Unit gets to the bottom of it. You're watching the "Most News in the Morning."
CHETRY: We have breaking news, and sheer panic weighing down the world's financial markets across the globe. The orders to sell are piling on fast and furious. In Asia, Japan's Nikkei plummeting more than 9.5 percent. In Hong Kong, the Hang Seng lost more than 7 percent. European stocks also sharply lower. London down more than 7 percent. Also, Germany down more than 9 percent. The selloff comes after the Dow tanked nearly 679 points yesterday. And again, as we take a look at Dow futures this morning, looking for another day of shedding stocks, down now, John, 247 points.
ROBERTS: Right. Those numbers keep moving, still an hour and a half to go until the open.
More claims this morning of voter registration fraud by ACORN -- the Association of Community Organization's for Reform Now. The liberal activist group is already facing investigations in Nevada and other states. Now word that anomalies have been found in Indiana. And wait until you hear what they are. CNN Special Investigations Unit is working the story for us. Our Drew Griffin is live in Chicago this morning.
What's ACORN being accused of exactly here, Drew?
DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT: Well, it's not even accused there, it's fraud, John. What they're showing me down in Lake County, Indiana -- this heavily Democratic County in a Republican state has gotten 5,000 voter registration forms all gathered together by ACORN and dumped into the office for verification. They started going through this records and what they found, one after another, fraudulent. Take a look.
GRIFFIN (on camera): A lot of them?
RUTHANN HOAGLAND (R), LAKE COUNTY ELECTIONS BOARD: 50 percent. We had close to 5,000 total from ACORN and so far we have identified about 2100.
GRIFFIN: So, roughly half of them are bad? HOAGLAND: Roughly half. Correct.
GRIFFIN: Registered to a dead person, registered as a person who lives at a fast food shop.
GRIFFIN: Or just all of them, amazingly, in the same hand?
HOAGLAND: Yes, yes. All the signatures look exactly the same. Everything on the card filled out looks just the same.
GRIFFIN: Ruthann, fraud?
HOAGLAND: We have no idea what the motive behind it is. It's just overwhelming to us.
GRIFFIN (voice-over): Here's another ACORN filled out registration form. It's for Jimmy Johns, 10839 Broadway in Crown Point. Jimmy Johns. We decided to track him down. Here he is.
(on camera): Is there anybody here that's actually named Jimmy Johns? Nobody registered to vote here named Jimmy Johns?
SALLY LASOTA (D), LAKE COUNTRY ELECTION BOARD: Both sides, Democrats and Republicans, for us it's unfortunate. ACORN with its intent perhaps was good to begin with, but unfortunately went awry somewhere. And these people, we don't know, if truly they are registered or actually people who want to vote. They're mixed in with those that, as you see, the dead, they're trying to resurrect for elections and that's sad. It really is.
GRIFFIN: John, ACORN has endorsed Barack Obama in the primaries. The Barack Obama campaign gave ACORN $800,000 for its voter registration, but is not working with them in the general. ACORN, in its defense, sent us to their lawyer in Boston, who claimed all of these allegations are just efforts to suppress the poor vote.
(BEGIN VIDEO CLIP)
BRIAN MELLOR, ACORN SENIOR COUNSELOR, PROJECT VOTE: We believe their purpose is to attack ACORN and suppress votes. We think that by attacking ACORN that they are going to discourage people who may have registered with ACORN from voting. We think that this is an attack on ACORN because they want to suppress votes. They want to discourage us from doing the work that they should be doing, the state should be doing this.
(END VIDEO CLIP)
GRIFFIN: 5,000 ballots, 2100 of them, John, are fraudulent. They put the other 2900 aside. They'll deal with those later to see what entails in there. But right now they're trying to just deal with the real voters who want to vote in this election. And, John, they are concerned that with this volume there could be some voter fraud come November.
ROBERTS: Yes. From what I've read in reports say in the state of Nevada as well, investigators found that the Dallas Cowboys starting lineup have registered to vote there. Pretty incredible. Drew Griffin for us in Chicago.
Drew, thanks so much for that.
CHETRY: And we're continuing to track breaking news this morning of the global financial crisis. Meantime, "Fortune" magazine has named the top 50 most powerful women in business. Here's a doctor who made the cut, but before we tell you who she is, here's your chance to guess. Take a look.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I'm very motivated by my father's experience as a pharmacist.
UNIDENTIFIED FEMALE: She pursued a career in medicine and became a scientist destined for the executive suite. She now has product development in one of the world's leading biotech companies. Who is this doc who thinks out of the box? Stay tuned for the answer.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Number 13 on "Fortune" magazine's most powerful women list is Susan Hellmann of Genentech. Hellmann as a doctor of Genentech appreciates having on call. Under her direction, many groundbreaking drugs have hit the market including Evastin.
SUSAN HELLMAN, GENENTECH: When we made a drug for the most difficult type of breast cancer, I literally never thought I would see something like that. So any time that I hear that we've helped someone's mom, sister, wife, I'm thrilled all over again.
(END VIDEO CLIP)
ROBERTS: And it's 15 1/2 minutes after the hour. Back to this morning's breaking news. Worldwide markets plummeting this morning as fearful investors continue to yank their money out. The Dow yesterday dropping another 679 points, the Dow's largest seven-day point drop in history, down more than 1/3 of what it was a year ago. This time last year it was at 14,100.
The NASDAQ and the S&P both 500 seeing 40 percent of their value wiped out year to date. So, what's in store for this morning? That's the big question. CNN's Allan Chernoff is here to answer it on Wall Street talking with investors.
What's the mood like there? ALLAN CHERNOFF, CNN BUSINESS CORRESPONDENT: John, we've got a lot of very grim faces down here on Wall Street. I mean, this has become a very scary place. People walking by the stock exchange where their savings are simply disappearing.
I spoke with one woman a few minutes ago who sold everything she said last Friday, and she said now she's delaying her retirement for 15 years. Another woman, works at a prep school nearby, said that her husband's investments have lost a lot of money. She had a big smile on her face as she said that. There's certainly a back story to all that.
But the bottom line, what's going on here is that people are simply selling based purely on emotion, and nobody really knows exactly when the end is going to hit. So, other people are saying, hey, you've just got to ride this out.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I think we still have a long way to go, but I'm optimistic that we're going to pull through. It's just a matter of how patient one is going to be and how do you deescalate the fear.
UNIDENTIFIED FEMALE: I think that this will all settle down eventually, and I think that, you know, it's like people get panicked because there's a lot of news, a lot of things feed on each other, and -- but eventually it will settle down and because the real world is still here. People are still, you know, the sun's coming up every morning.
(END VIDEO CLIP)
CHERNOFF: The stock market tends to forecast the future and at this point, the market is almost beginning to forecast a depression. We have to ask ourselves, is it really going to get that bad? One cabbie told me we need a hero now, and the heroes are going to be the people who step up and start buying en masse.
John, back to you.
ROBERTS: Well, no sign of that is happening, at least not at this point. Allan Chernoff for us down on Wall Street.
Allan, thanks so much for that.
CHETRY: Well, as the markets continue their worldwide plunge, how can you protect yourself? We're talking with billionaire Richard Branson on riding the market turbulence. You're watching the "Most News in the Morning."
CHETRY: Welcome back to AMERICAN MORNING. A lot of people are wondering this morning, what impact this economic news of late will have on the election. Well, our next guest, millionaire entrepreneur Eric Greenberg outlines what's important to voters under 30 in his new book "Generation We: How Millennial Youth Are Taking Over America And Changing Our Lives Forever."
Thanks for joining us this morning, Eric. Great to see you.
ERIC GREENBERG, CO-AUTHOR, "GENERATION WE": Thank you.
CHETRY: What a world they're going to be inheriting, as we take a look at a lot of the global turmoil right now as it relates to the financial markets. I want to ask you, what's your take on what appears to be this global recession we're in right now?
GREENBERG: It's pretty catastrophic. And you know, 89 percent of the youth thought their generation thought that they had to take decisive action themselves to reverse the damage. And a year ago when we surveyed them, 46 percent thought that they were going to inherit a world that's worse off 20 years from now than it is today.
Now, if we polled this today, that would be sharply up. So we have a very sober view about what's happening, and a lot of the rhetoric that's being taught, we can't really pacify them. You know, what we're seeing is a complete rejection on their part by traditional -- you know, of the traditional institutions.
I don't think it's going to be talk that soothes them. I think it's the iconic part of change. Some of what we experienced in the 1979 election where Reagan landslided Carter. And, you know, to fix this situation, basically, we have a situation of socialism happening in this country. Let's call it what it is. The government is nationalizing debt. It's nationalizing banks. It's nationalizing risks. And we have to bring an end to this speculation. And the young voters understand this.
CHETRY: Are they in favor of that or not?
GREENBERG: I, right now, I think everybody is shell shocked by this. There is not a living person here who is governing that was actually of age in the Great Depression. I think that they're very sober about their future and they don't really know what it entails for them, so their whole issue is the iconic notion of change. It's not about candidates. But they do know one thing.
If you look at the under 30 set, they were 22. The oldest of them was 22 years old, when Bush took office, or the current Republican Party, you know, had complete control of Congress and the White House. What they've seen is a war, and now they're inheriting the worst economy that we've had in the last, you know, 60 years by everybody's estimations. So, for them, change is iconic. It's not necessarily about the candidates or the parties. Because, you know, we showed in our polling that over half of them were basically independents.
CHETRY: Right. And we see that growing among the young people. I just want to ask you one quick question about it as we try to look towards solutions and we're hearing from some of our elected leaders about what the answer to the problem is.
You started many businesses. For small business owners right now, people that are fearful about perhaps having to lay off some of their employees and at the same time having trouble meeting pay roll because of some of the lending problems. How bad is it going to get for the small business?
GREENBERG: I think it's going to be horrible. There is basically no liquidity in the markets. And as you know, a dollar spent has a multiplier effect, if you studied economics. Well, a dollar not spent also has a multiplier effect. So upon economic contraction and the lack of credit and liquidity in the markets, you're going to have a drastic slowdown that's also exacerbated by panic and by psychology.
I think the government has to step in and basically go very interventionist right now, and nationalize, then privatize. I don't see any other solution. One other thing is that, you know, the stock market crash yesterday coincided with a three-week lift of a ban on short selling. So coincidentally, I think they also have to ban short selling and make complete transparency available for all derivatives and off balance sheet transactions.
I think we have to get to a period of complete, complete clarity so that way we can manage our way through this. You know, the small business, though, is going to take it hardest, because when you look at massive consumer demand decreasing, they are the first that are hit. They are the first layoffs that are made, and that's really going to have a multiplier effect.
CHETRY: All right. Eric Greenberg, co-author of "Generation We." Thanks so much for your input this morning. We appreciate it.
GREENBERG: Your welcome.
ROBERTS: As we watch the global market shrink, we are going right to the source. What are investors on Wall Street saying this morning about the worldwide panic in stocks? Right now, not too optimistic. Futures down about 175. You're watching the "Most News in the Morning."
ROBERTS: 27 minutes after the hour. Race in the presidential race. It's a subject that neither campaign talks about openly, but it may certainly be out there between now and November the 4th. CNN's Jason Carroll here to tell us what's really going on out on the campaign trail.
So, what's up?
JASON CARROLL, CNN CORRESPONDENT: Well, some analysts say it's going on, but not all. It's a subtle way of bringing race into the campaign. For example, listen to how an introduction was made at a rally in Florida.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Let's leave Barack "Hussein" Obama wondering what happened. CARROLL: The goal? Energize the Republican base. But some critics see a more subliminal message.
You know, when you have people introducing the vice presidential nominee or the presidential nominee and talking about Barack "Hussein" Obama, people aren't -- that's not an accident.
CARROLL: Some critics say, it's code.
SEN. JOSEPH BIDEN (D), VICE PRESIDENTIAL CANDIDATE: When you hear these kind of phrases, you know where it's going.
CHARLTON MCILWAIN, PROFESSOR, NYU: There are a lot of whole stable full of race-coded language that they use in their stumps speeches. It's a way of tapping into unconscious racial attitudes.
CARROLL: Republican Don Scoggins says while racism in politics exists, it doesn't mean it's always there.
DONALD SCOGGINS, PRESIDENT, REPUBLICAN FOR BLACK EMPOWERMENT: Quite frankly I do not think that it's specifically coded language. I think that, just like anything else, you can always apply meaning to something that is said by someone.
CARROLL: Critics are not just targeting the McCain camp for using coded language. Remember this comment?
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: So, the only way they figure they're going to win this election is if they make you scared of me. You can't risk electing Obama. You know, he's new, he doesn't look like the other presidents on the currency.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: He brought up the issue of race, I responded to it, because I'm disappointed, and I don't want that issue to be part of this campaign.
UNIDENTIFIED MALE: I am begging you. Take it to him.
CARROLL: Following a town hall meeting yesterday, one voter urged Senator John McCain to get tougher on Obama.
MCCAIN: Yes, I'll do that, but I also, my friends, want to address the greatest financial challenge of our lifetime with a positive plan for action.
CARROLL: Most political observers agree both McCain and Obama will be cautious in how they criticize each other.
MARK HALPERIN, SENIOR POLITICAL ANALYST, TIME MAGAZINE: Politicians stay away from the unpredictable, from something that can blow back in their face. Race is such a potentially explosive issue that no one has wanted to engage on it.
CARROLL: Closing note here, the McCain campaign has rejected supporters who have used Obama's full name as a way to denigrate him, as did that sheriff in the report that you just saw there when that sheriff introduced Sarah Palin at a rally in Florida this.
ROBERTS: Yes. We remembered that all started with talk show host Bill Cunningham in Ohio.
ROBERTS: Jason Carroll, great piece, thanks.
CARROLL: Thank you.
CHETRY: Breaking news this morning. We're monitoring the world financial markets after a massive selloff overnight. Japan's Nikkei plummeting 9.5 percent. The Hang Seng in Hong Kong losing more than 7 percent and stocks across Europe sharply lower as well. The latest financial turmoil triggered by the Dow's 678-point nose dive yesterday.
We're anxiously waiting for the market to open in about an hour. How much lower can it possibly go? Susan Lisovicz is live at the New York Stock Exchange. The Dow down about 150 right now in terms of futures. At one point about a couple of hours ago it was down 300. Are we expecting another big sell off today?
SUSAN LISOVICZ, CNN CORRESPONDENT: Well I think we're expecting another sell off and that in and it of itself, Kiran, is saying something. Remember, we're coming off the worst seven-day losing streak for the Dow industrials ever, and the Dow industrials have been around since the 1800s, just ferocious selling that suddenly came upon us yesterday, and what "The Wall Street Journal" frankly now calls over the past week, a slow motion crash.
If you remember what happened in October of '87, and many of our viewers do, there was a freefall for the blue chips of 22 percent. Well, basically in the last seven sessions, we've lost about 20 percent for these 30 stocks. And of course it's not just limited to these 30 stocks. And that, that also can be a sign of optimism. I know you might raise your eyebrow on that. But when you see the kind of indiscriminate selling that we have been, after all, there are a lot of concerns about the credit crisis, about the fiscal health of our - of the nation's financial companies, and actually, financial companies around the world. You're seeing tech stocks like Apple and Google beaten up with Bank of America, and Merrill Lynch and Morgan Stanley.
When you see that kind of indiscriminate selling in big volume, sometimes, sometimes it signifies a bottom, or that a bottom is near. And, you know, there are increasingly a number of people who say that it could come. On the other hand, also, I'm just going to sound like an economist who often gives both scenario. This is a historic problem, there are historic solutions and this is a historic sell off. So you know we are expecting a sell off at the open, after that, anyone's guess. It's a long 6 1/2 hours here. Kiran. CHETRY: It sure is. Thanks goodness it's Friday. I really mean that when it comes to the markets today. Susan, thanks.
LISOVICZ: You're welcome.
ROBERTS: For more perspective on all of these, that is if you can actually get perspective on this. Joining me now is Andy Serwer. He is the managing editor of "Fortune" Magazine and Chrystia Freeland. She is the managing editor of the "Financial Times." Let's start with you, Chrystia. How would you describe what we're seeing right now?
CHRYSTIA FREELAND, U.S. MANANAGING EDITOR, "FINANCIAL TIMES": I think there is a real mood of fear, which has really taken hold. And people don't know where the bottom is going to be. I think what really happened this week was people started focusing on the second order impact of the financial crisis and they really said, you know what? This is the beginning of a recession and we haven't seen that hit yet. And that's why I think you've seen a much broader sell off going beyond the financial stocks.
ROBERTS: You know we had (inaudible) on a lot. He was on a couple of times this morning. He believes we're in the throes of a global recession. What do you think, Andy?
ANDY SERWER, MANAGING EDITOR "FORTUNE" MAGAZINE: Well, I think that's pretty unassailable, unfortunately. And as Chrystia suggests, we're really not even there yet. That's the scary part. If you travel around and talk to people, I was just in Arkansas a few days ago talking to a guy who runs a factory, an air-conditioning factory. He says he usually makes 2,000 units a week, at this point, usually, now he's only making 400. And he's scrambling not to lay people off. See, this is the bad news.
ROBERTS: How long can he hang in there?
SERWER: Yes, exactly. And that's the bad news. I mean, it's one thing to see your 401(k) go up in smoke, but, you know, jobs, even a bigger problem.
ROBERTS: Yes, you've got to have money to be able to put food on the table and keep a house around you. But where is the bottom is? Do we know? It seems like every time we think we're at the bottom it goes another step forward. Some people are talking about I mean, 8,000 for the Dow when people finally say, OK, we've got all of the bad stuff out of here and now it's time to get back in and rebuild.
FREELAND: Some people are talking about 7,000. And I think.
FREELAND: And I think what is particularly -
SERWER: OK. Do I hear a five?
ROBERTS: I'm leaving now. FREELAND: No, but I mean, we have, the equities have now been hit and we have a spiral there. But the initial problem, the credit crunch, hasn't been resolved yet. Banks are still unwilling to lend to one another. And so we now see these two elements, the financial crisis and the markets crisis really playing off against each other.
ROBERTS: So the annual IMF meeting is this weekend and we're talking to Jeffrey Sachs who is going down representing Ban Ki-Moon, the U.S. Secretary General saying he hopes that they start talk about ideas, instead of just talking to President Bush, meeting with the G-7 finance ministers and of course, the White House, and to try to figure out what to do with the $700 billion bailout program. Should they buy up toxic assets or should they, as Lou Dobbs advocates take that money, throw it into the banks, try to boost up the system, recapitalize it if you will, and get things going. What should they do?
SERWER: Well, on that last point. Well, that's what we really did in the 1930s and it worked. So we do have a template, an example, a road map to go there. And I think when you're talking about the regulators and the central bankers and government leaders, they ready need to get ahead of this crisis. I mean, there's been a lot of criticism of Treasury Secretary, Bernanke acting on an ad hoc basis trying to respond. And you really can't blame him, because these are unchartered waters.
But now we see, we have this big problem, we've tried interest rate cuts, tried to get in the commercial paper markets, tried the bailout bailout, nothing's really worked. A coordinated global effort, I know you like global efforts, to try to get ahead of the crisis to show investors and individuals across the globe that leaders are on top of this crisis.
ROBERTS: Yes. We're getting in territory where it's a little bit frightening to watch what's going on.
ROBERTS: Andy Serwer, Chrystia Freeland, thanks for being with us this morning. It's always good to talk to you.
SERWER: Thanks, John.
CHETRY: Well as the markets tumble, we're asking one man for advice on weathering the storm. He's a billionaire. Sir Richard Branson. He's going to tell us how to keep your cool in this bear market.
Also the "First Patient," does the leader of the free world have a right to medical privacy. CNN's medical investigations unit takes a look at the health of our president. You're watching "the most news in the morning."
(COMMERCIAL BREAK) ROBERTS: 38 minutes after the hour. Breaking news this morning. Worldwide panic in the markets as all of the major indices drop overnight from Asia to Europe, a constant sell off. But British entrepreneur and billionaire adventurist Sir Richard Branson says there's a way businesses can remain on top during these tough times. In his book, "Business Stripped Bare," he writes how he has managed to secure the future of his companies. And he joins us now in the studio.
Sir Richard, it's good to see you this morning. Thanks for being with us.
SIR RICHARD BRANSON, BRITISH ENTREPRENEUR: Lovely to be here.
ROBERTS: So what do you make of what we're seeing, not just today in the markets but what we've seen in the last couple of three weeks?
BRANSON: Well, we have exceeded our means, over the last few years, I think. I mean, the enormous borrowing that's been irresponsible borrowing by the banks, irresponsible borrowing by the mortgage companies, irresponsible regulation. And in a sense, the world is suffering from that now. And you know I think the markets may actually over the next year or two go down even further. I think we haven't necessarily seen the bottom yet. So how do we get out of that?
ROBERTS: I mean, they're throwing everything but the kitchen sink at it. Rate cuts, $700 billion bailout programs, talk of recapitalizing banks. Do you see anything -
BRANSON: I think, I mean, we do need decisive intervention by the G- 7. There's still things that they can do further so they can guarantee all deposits in banks which are not guaranteed at the moment, which the Irish have done, which is quite and astute move by the Irish.
I think in Europe they can reduce interest rates further. I mean, interest rates in England are actually quite expensive. I think they can get risk - they can guarantee all interbank borrowings, but at the moment, banks are just not lending to each other, and therefore, the danger of that is that small businesses will not get loans. They'll go bust, and the problem will get worse and worse.
ROBERTS: In your new book "Business Stripped Bare" you talk about how you have fireproofed most, if not all of your companies. And you write in your book, you say, "we've never let a Virgin company go bankrupt. Even though we had one or two companies that we'd like to have seen the back of. Because our reputation is everything, we've always paid off debts of any company we own that has had problems and we move on."
But in this economic climate, as the owner of very successful businesses and a number of them, are you looking at this saying, how is this going to affect me?
BRANSON: Yes. I mean, you know Virgin is fortunate because we're in 350 different companies. We've got a big reputation, you know people seek out Virgin and actually all around us we've got companies going bankrupt. Some for instance Virgin Atlantic on the Atlantic, all the business airlines that have been competing with us have gone bust, and obviously we picked up a lot of that business.
In America we launched an airline, Virgin America a year ago, great quality airline, and there are other airlines going bust around it. People are seeking us out. Oil prices are dropping, so actually there's you know, there's a silver lining sometimes.
ROBERTS: So there are some advantages out there as well?
BRANSON: Yes. You know, for us, there's the advantage there will be less competition and also, the cost of fuel, which went right up to $148 a barrel has come back down to $80, and it's still going down further.
ROBERTS: You know a tremendous amount about American society. You've got businesses here. When you look at America and Americans, are we living beyond our means? We've got $10 trillion worth of debt, the average American carries an awful lot of debt. Do we need to fundamentally rethink how we live our lives?
BRANSON: Yes, in one word. I mean, you know, the last eight years has been one of the extreme excess, and I'm afraid that now the chickens have come home to roost. And, you know, I think there are - there are great opportunities in the election campaign, both candidates have been, you know, pushing to go for alternative fuel and build up a whole alternative fuel industry. That is essential, a for global warning and but also because we're going to run out of fuel in the not so many, you know, distant years. So there are - there are opportunities out there.
ROBERTS: And you have certainly proven you can at least partially fly an airplane on alternative fuels.
BRANSON: Yes. That was an important experiment just to prove that an airline could fly. Now we've got to get out there and develop you know, maybe an algae or something which, you know, won't eat into the food supply, which all airlines can fly with.
ROBERTS: The new book is called "Business Stripped Bare, life and history in business." Sir Richard Branson, it's great to see you. Thanks for coming in this morning.
BRANSON: Nice to see you.
ROBERTS: Appreciate it.
43 minutes now after the hour.
CHETRY (voice-over): Under the microscope, the health of the president and the public's right to know.
UNIDENTIFIED MALE: There are some areas that the president is entitled to medical privacy. There's some areas where he's not.
CHETRY: When is it the right time to alert the press and alarm the public? More of our series, "Fit to lead." You're watching "the most news in the morning."
CHETRY: Welcome back to "the most news in the morning." You know, when you're commander in chief, medical privacy is a little hard to come by. It's because the president's health is of course a worldwide concern. Our chief medical correspondent Dr. Sanjay Gupta is taking a look in a new CNN special and you got some very interesting and unprecedented access about how they work this when it comes to the president's health.
DR. SANJAY GUPTA, CHIEF MEDICAL CORRESPONDENT: And if something goes wrong, this massive infrastructure sort of spins in the place, lots of people, lots of resources, and a doctor is there 24 hours a day.
GUPTA (voice-over): When it comes to the president, there's no such thing as a minor medical matter.
ARI FLEISCHER, FORMER WHITE HOUSE PRESS SECRETARY: Every day is a crisis. So if every day is a crisis, a crisis is normal at the White House.
GUPTA: January 14th, 2002, President George W. Bush is eating pretzels and watching football. His spokesman gets a call from the White House chief of staff.
FLEISCHER: Well, we've got a little incident, and the president choked on a pretzel, fainted, hit the table, and he's with Dr. Tubb right now and you've got to tell everybody.
PRES. GEORGE W. BUSH, UNITED STATES OF AMERICA: My mother always said when you're eating pretzels, chew before you swallow. Listen to your mother.
GUPTA: Fact is, you couldn't miss that bruise on his face.
FLEISCHER: There are some areas where the president is entitled to medical privacy. There's some areas where he's not, where the country is entitled to know fully everything.
GUPTA (on-camera): You know, it's been said when the president sneezes, the stock market catches a cold. There's no question that his health is of international concern. So when something goes wrong, when the news hits, alarm bells go off around the world.
GUPTA (voice-over): September 15th 1979, President Jimmy Carter collapses while running a 10k race near Camp David. Jody Powell was White House spokesman. JODY POWELL, FMR. CARTER PRESS SECRETARY: It wasn't as bad as I thought it was going to be, unfortunately there was a picture.
GUPTA: The press was alerted.
SAM DONALDSON, ABC NEWS: By the time we heard anything about the incident, they'd ruled out heart attack, they'd rules out something really terrible.
GUPTA: It turns out, it was just heat exhaustion.
POWELL: You're not a private citizen, you're the president of the United States, and health matters are something that people kind of have a right to know about.
GUPTA: A right to know. Especially when there's a picture.
GUPTA: So it is a pretty call when there's a picture for sure, but it's this delicate dance, this awkward dance, I would say, between medicine and media when it comes to the president.
CHETRY: Absolutely. We all you know treasure and value our medical privacy, but it's very interesting how often do you think the public is left in the dark, so to speak, when it comes to medical issues or problems with the president?
GUPTA: You know, we're investigating this documentary over the last several months and it came down to one of those things, you don't know what you don't know. We know what they told us but it sort of begs the question or raises the question, what have they never told us? Every press secretary, we talked to several of them over the last several administration say they have disclosed everything as it happened, even embarrassing things that might be embarrassing to the president or the first family. But you know we will never know some of this because there is such a veil of secrecy around the president's health.
And some people by the way say, look everyone has their own right to privacy -
GUPTA: So when it comes to this, the president should be no different.
CHETRY: Very interesting. You also find out a lot of stuff after their out of office right? I mean that's the case with JFK and some of the other presidents.
GUPTA: That's right. That's when it comes out.
CHETRY: All right. Sanjay, good to see you in person by the way.
GUPTA: Appreciate it. CHETRY: And don't miss CNN's special investigations unit presentation "Fit to Lead" hosted by Dr. Sanjay Gupta. It's tomorrow night and Sunday night, 8:00 eastern. John.
ROBERTS: It's 49 minutes after the hour. The economic crisis is leaving you sleepless about what to do about your money, help is on the way. Our personal finance editor Gerri Willis is working the blog and taking your questions coming up next, and there is still time to send one in. Just go to cnn.com/am.
CHETRY: Breaking news, fear and panic on the global financial markets, Asian stocks taking a plunge overnight. Japan's Nikkei off more than nine percent. Hong Kong's Hang Seng down seven percent and stocks across Europe also sharply lower. Dow futures pointing to another low opening on Wall Street, down 195 points right now. That comes on the heels of yesterday's massive 678-point loss.
ROBERTS: Well, yesterday we revealed CNN's top ten heroes of 2008. And as you continue to vote for number one, we have asked some familiar faces to share the spotlight introducing us to their heroes. This morning, Grammy award winning singer Cindy Lauper tells us about a human rights activist fighting for all Americans to live in a better, safer country.
(BEGIN VIDEO CLIP)
ANNOUNCER: This is CNN Heroes.
CINDY LAUPER, GRAMMY AWARD WINNING SINGER (voice-over): I hate crime. It sends terror to a community.
UNIDENTIFIED MALE: ... was left for dead.
UNIDENTIFIED MALE: I've never been attacked like this.
CHETRY: 22 swastikas were found.
UNIDENTIFIED FEMALE: Just a random act of ignorance and violence.
LAUPER: You could die just because of who you are.
I'm Cindy Lauper and my hero is Cathy Nelson because she fights for the rights of all people, straight and gay.
CATHY NELSON: Lesbian and gay, bisexual and transgender. Equality is the civil rights issue of this generation. I'm a lesbian and I see the issues very personally. In 1989, I went to work for the human rights campaign.
This looks great. I really like it.
Events are a vital part of what we do. It's raising the visibility of the issues that we're working on.
UNIDENTIFIED FEMALE: Cindy Lauper.
NELSON: Cindy's 2007 True Colors tour was an amazing opportunity to educate about the upcoming hate crimes bill in Congress.
LAUPER: She had this whole idea, you could take a postcard and send it to your congressman.
NELSON: Becoming an activist starts with one simple step.
LAUPER: We've got to erase hate. It's a (inaudible). Open your eyes and let you know about things that are going on right now. And we can change.
NELSON: And what drives me is fighting for fairness and equality.
LAUPER: Cathy has helped a lot of people and don't take any vows for it. And that's a hero.
ANNOUNCER: Vote now at CNN.com/heroes.
ROBERTS: And this year's CNN Heroes will be honored at an all-star tribute hosted by Anderson Cooper. That's Thanksgiving night here on CNN.
CHETRY: Well, the Dow lost more than 35 percent this year and people are certainly feeling the pinch in their retirement funds. Our personal finance editor Gerri Willis is checking her blog. She's answering your questions when we return. You're watching "the most news in the morning."
CHETRY: Welcome back. Hopefully we can leave you on at least a positive note in terms of knowing maybe what to do. We talked about international stocks being down both in Asia and in Europe. Dow futures down, but what does it all mean for your bottom line? Gerri Willis has been working her blog, answering some of your questions this morning. Maybe you know, you have a way of help people feel like there's an end to this.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, OK. Let's talk about how do you know when to sell your mutual fund. Here's one e- mail I got from Frank in New Jersey. He writes, "how should I deal with my IRA that is a mutual fund such as Selected and Fidelity funds?" These are all mutual funds family. If you want to know, do I sell this mutual fund or do I hang on to it.
Well, here's a way to get at that question. First of all, understand its performance. Just as like there are league tables if you like basketball or baseball, there are league tables for mutual fund. Go to morningstar.com. you can compare the performance of your fund, other funds that are exactly like it. Now if your fund isn't doing so well, performing maybe 10 percent below what the other funds in the same sector are doing, you might as well sell that and pick a better one.
Also look at the fees. You need fees below two percent, certainly below one percent. That way you're not paying too much out of your pocket just for the management of the fund. And finally make sure that the fund is doing what it's supposed to in your portfolio. Look, you know, we buy funds that are supposed to be large cap growth funds, value funds, small cap funds, sometimes these funds are doing what you want. Check out the style box on morning star and it will tell you if the funds are actually performing the way you want them to.
ROBERTS: All right, any other questions you got this morning?
WILLIS: We got a ton of questions, we just haven't had time for them today. But hopefully I'll be back next week to talk more about investors' views, small investors' views. I know a lot of people out there really worried. We're taking a look at your questions and we'll answer them next week.
CHETRY: And this is the other thing that we were talking about today in addition to the stock market being down so much, consumer spending also they're saying is the first quarterly decline in 17 years in this third quarter. People are afraid to spend their money right now.
WILLIS: But I have to tell you that's a smart response to what's going on. You know, keeping some money in your pocket, making sure you have some money for emergency times, if you're really worried about what's going on, that makes a lot of sense.
ROBERTS: How much money should people keep in reserve?
WILLIS: Anywhere from three months to six months. Some folks even now are saying nine months. You want some money on the sidelines in case you lose your job. Because I have to tell you the biggest threat to most folks right now is not their mutual funds. It's not their 401(k)s, they can wait for that money to turn around. The real problem is that you could lose your job and what's going to be a really horrible economy, even after the stock market comes back.
ROBERTS: And as you said, even people are starting to pull back on consumer spending. That is going to affect companies. They won't be able to keep the number of employees.
WILLIS: That's not my job, though. I don't have to worry about that part of it.
ROBERTS: Andy Serwer was telling about this air-conditioning plant down in Arkansas, usually 2,000 units a week, 400 now. So.
CHETRY: So you're saying, save your money because, because, you're right. You're keeping your job right now, which is to tell consumers rein it in.
WILLIS: Rein it in. It's time to definitely rein it in.
ROBERTS: Gerri, thanks for that. We'll see you in "Open House" this weekend.
WILLIS: My pleasure.
ROBERTS: Thanks so much for joining us on this AMERICAN MORNING. We'll see you -
CHETRY: We'll see you back here Monday.
CHETRY: We went a whole three and a half hours without mess-ups. So I guess the time was right for that. Right now, here's Betty Nguyen in the CNN NEWSROOM.