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Israel Votes; President Obama's Road Tour
Aired February 10, 2009 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICK SANCHEZ, CNN ANCHOR: Hello again, everybody. I'm Rick Sanchez.
We're going to get going with several things that are going on right now, first of all, a cliffhanger in Israel. Jim Clancy, sitting next to me, he's going to be taking us through that. This is breaking news. As soon as we get those results, Jim, we're going to be able to report them and tell them who the winner is, several factions going at each other on this one.
The gentleman you see on the right of your screen there, that's Tim Geithner. He's unveiling as we speak to the Senate Finance Committee exactly what the new plan is, not the old plan, but the brand-new plan to rescue the banks, will be in this country.
One more thing. At the very bottom of your screen, you see what's going on with the Dow? Not pretty right now. We're going to be watching it. Remember, over the next hour, we will find out if it's a down day, an up day, or an in-between, and certainly a lot of people are going to tying that what is going on with the economy.
Now, here's what else we're going to have today.
(BEGIN VIDEOTAPE)
SANCHEZ (voice-over): Cutting to the change, today's stop on the presidential tour, Florida's west coast, foreclosure central.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The situation we face could not be more serious. I believe in hope, but I also believe in action.
(CHEERING AND APPLAUSE)
SANCHEZ: A president taking real questions from real people with real problems, that's change.
UNIDENTIFIED MALE: There's our house, baby, gone. Everything's gone.
SANCHEZ: A voice of desperation coming from those deadly fires in Australia.
A sign of the times. This is no ordinary police car chase. That's a Bentley.
And A-Rod, how do you go from this to this? Now we know. But wasn't it obvious to begin with? You tell us, as you join in our national conversation.
This is participatory journalism, only on CNN, right here, right now.
(END VIDEOTAPE)
SANCHEZ: Speaking of participatory journalism, a lot of you have been commenting on that A-Rod story. We're going to bring you some of that.
But, first, I want to start with a number, if we can. What does it look like? Because this is the number we're learning now. This might be the total outlay, the price for the brand-new rescue plan for the banks in the United States. You ready for this, what it looks like? You're seeing it right there.
See that banner just below me? That is what $1.5 trillion looks like. That is a lot of cash, folks, probably as many zeros back to back as we have ever seen. I know it's hard to even count them, so, let me just tell you, there's 11 there.
Patricia Murphy joining us now to bring us up to date.
You know, it's funny, Tim Geithner, Murph, was introduced today by Chris Dodd. It's not something you see all the time. Usually, you would see a White House person introducing him or somebody else, or, heck, he would need no introduction. We didn't see that kind of introduction during the Bush administration.
Why was Chris Dodd introducing Tim Geithner?
PATRICIA MURPHY, EDITOR, CITIZENJANEPOLITICS.COM: Well, you're right, it's a very unusual step for somebody like Chris Dodd to introduce Geithner.
Chris Dodd very importantly is the chairman of the Senate Banking Committee. That's the committee that will be overseeing this entire TARP reset. And that is done in an effort by the Department of Treasury to indicate that there is great congressional support for this plan.
It's not clear that there is support for this plan in Congress yet. But they wanted to do -- to at least send the key senator who will be most important overseeing this, have him introduce Tim Geithner, at least start to create confidence in this plan as it gets out of the gate.
SANCHEZ: You know, it's interesting you would use the word confidence, because we have been getting a lot of reaction from some of the folks who have been following our newscast both on MySpace and Facebook and Twitter, and especially on Twitter.
Right after the comments began, people started saying, you know, this guy looks straight up. I'm getting a sense of confidence from him for some reason. So maybe it did work.
I imagine that's important, right?
Hold on. You know, I'm going to stop myself, because I see that the chairman of the committee is now talking to Tim Geithner. Let's diplomat into this real quick, if we can, Dan.
And, audio guy, leave my mike up.
(JOINED IN PROGRESS)
SEN. CHRISTOPHER DODD (D), CONNECTICUT: ... believe as between the choices of spending our time on going back and reviewing how we got here and the question of whether -- how do we get out of this, I don't have any question in my mind what is the more important issue for the American people.
Clearly, they may want to know how we got here, and that's important. But that person who lost their job today, or their home, or will tomorrow, wants to know what we're going to do to get them back on their feet today. And so, from my perspective, that's the more important issue for this committee and for the administration.
SANCHEZ: All right. Sounds like they're just kind of laying down exactly what they hope to achieve. Obviously, they're going to get on the groundwork.
What we're going to do, we're going to be monitoring this thing all along and checking to see when questions are asked. And if we can't get to them in time, we will just turn it around, so trust me, you're not going to miss a thing.
Patricia, back to you on the question of confidence. How important is it for him to get that message out to the American people and why?
MURPHY: It's crucial. It's the most important element of this plan is to restore confidence not just in the markets, but among American consumers. We know that consumer confidence is just at rock- bottom. We know the confidence in the markets is at rock-bottom.
None of this can work if people don't believe that it's fair and that it's going to work. So, what you're seeing, a lot of the elements that are put into place are for that. We talk about transparency. We talk about accountability. Also, there's an element in here called a stress test. That means the Department of Treasury is going to be looking at every bank that comes to them to see, are you going to go under, even if we give you money? We want to make sure we're not throwing good money after bad.
This whole thing is about confidence.
SANCHEZ: But here's the deal.
MURPHY: Yes.
SANCHEZ: He has to convince the American people that this is not about the banks, that it's about families, it's about foreclosures, it's about them.
I want you to listen to this. Those of you at home, this is the -- this is how your money is going to be spent. And this is Tim Geithner trying to let you know, the Treasury Secretary, that this is not going to be spent on just big CEOs and big bankers, despite what you might think. Let's pick it up.
(BEGIN VIDEO CLIP)
TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: We believe that access to public support is a privilege, not a right.
When our government provides support to banks, it is not for the benefit of banks. It is for the businesses and families who depend on banks. And it's for the benefit of the country. Government support has to come with strong conditions to protect the taxpayer and with transparency that allows the American people to see the impact of those investments.
(END VIDEO CLIP)
SANCHEZ: Let me bring in professor Jeffrey Miron. He's joining us as well.
Few people would know more about this, because he's an economist at Harvard. He's good enough to join us.
You know what he also did? He called the Bush policies, or the bailout that the Bush administration tried, he called it -- quote -- "inadequate." And I wrote it down on my notes when he said that.
How is this plan that he presented today going to differ -- or I guess let me just ask you directly -- how will it be better than the plan they called today inadequate?
JEFFREY MIRON, ECONOMICS PROFESSOR, HARVARD UNIVERSITY: There are some ways in which I think this plan is not obviously better, because it's basically similar.
What's different is hinted at is, is not really made explicit, is that they're going to attempt to figure out before they give banks more money whether those additional capital injections will actually make a difference.
And in the background is the notion that if you look at a bank and see that giving it 50 billion more dollars still leaves it in a terrible position, then that is a reason why it should be taken over, it should in fact be nationalized. And that's a different way to recapitalize it.
So, that part may well end up being different. The additional purchases of various securities by the Fed, that's more of the same. There is some evidence that that had some effect in keeping interest rates down. The purchasing of the toxic assets, that part, I don't really get, because if people wanted to buy those assets, they could buy them right now. If the government buys them, it means that it's overpaying. And, so, I don't quite see the point.
(CROSSTALK)
SANCHEZ: Let me hold you on that, on the toxic assets, because we're going to want to talk about that on the other side.
MIRON: OK.
SANCHEZ: In fact, we have actually asked someone who's an expert on this to draw out for you what they mean by this.
In the meantime, let's dip back into Geithner as he addresses the committee once again. Let's listen on to what he's got to say.
(JOINED IN PROGRESS)
TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: It's absolutely true that one reason why this crisis is so damaging and has become so acute is because we did not move soon enough to recognize the scale of the risk this country faced, and put together a comprehensive program.
And, again, without very substantial support from the government to help get people back to work and support private investment, without a comprehensive housing strategy, and without direct, substantial, sustained commitment to strengthen our banking institutions that need assistance and without providing support to these capital markets, we're going to leave with a deeper, longer recession. You're absolutely right.
SANCHEZ: Professor, is he right? Did we not move fast enough? And is that part of the problem that we're dealing with now? Just about 20 seconds, sir, if you can finish this off for us.
MIRON: I don't it was not moving fast enough. I think it was some of the wrong decisions. I think they should not have bailed out Bear Stearns back in March, then turned around and let Lehman fail, and then turned around and bailed out AIG. The confusion I think was a crucial part of the problem, not the failure to act, but the inconsistency.
SANCHEZ: All right, stay there, if you would, professor Miron.
MIRON: Sure.
SANCHEZ: Patricia Murphy, if you would, too, hang tight.
We're going to be coming back to you. And my thanks to both of you for that first segment, by the way.
From McDonald's to the spotlight, Julio (ph) gets his moment in the Florida sun. Who is Julio? Take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Oh, this is such a blessing to see you, Mr. President. Thank you for taking time out of your day. (CHEERING AND APPLAUSE)
UNIDENTIFIED MALE: Oh, precious God, thank you so much.
OBAMA: All right. What's the question?
(END VIDEO CLIP)
SANCHEZ: Not too excited, is he? That's Julio. He got his chance. The president said he was going to go out and talk to real people with real questions and real problems. We're going to bring you Julio. In fact, he's joining us live. We have just made contact with him.
Also, Zorro, the bandit, wait until you hear this guy's M.O. Mike Brooks is going to be filling us in on what's going on in the state of Florida, where this guy continues to hit literally dressed like Zorro.
Oh, and the government wants to create a bad bank. You just heard the professor allude to that moments ago, literally, a bad bank, where all the bad debt is put. How is that possibly going to be able to work? We're going to take you through that. In fact, we have commissioned someone to explain that to you.
And of course, Jim Clancy standing by. Anything going on with Israel, he's going to let us know. And we're expecting results on this all-important election in just what, any moment now, right?
JIM CLANCY, CNN CORRESPONDENT: Any moment, we should see at least the exit polls, which will give us a good idea.
SANCHEZ: All right. We will have that, Jim Clancy, all that I just described and more. Stay with us. I will be right back.
(COMMERCIAL BREAK)
SANCHEZ: There's a couple of things I want to dip into it.
Before we do anything else, Barack Obama today as president of the United States set out to go on one of these speaking tours once again. He's in the area around Fort Myers and Naples. And it's interesting, because a lot of the people there didn't vote for Barack Obama. They voted for John McCain.
Now, here's the president before he was leaving as well meeting with some of the troops there at Andrews Air Force Base. Look at the reaction he gets as he walks away. People had come out with cameras. They wanted to see if they could get autographs, kind of a change with what was going on before. Now he goes on to the area around Naples and Fort Myers, where, again, it's a staunch Republican area.
Let me cut to something else. Let's dip back in, Dan, if we possibly can, to what's going on at the Senate Finance Committee. See if you can give me that shot of Geithner. I understand he's taking some questions. He's just now finished fielding some questions from Republican members of this panel. Let's listen in and see how he's responding.
(JOINED IN PROGRESS)
SEN. RICHARD SHELBY (R), ALABAMA: You think cost is important here?
GEITHNER: Absolutely.
SHELBY: You're playing, we're dealing maybe with trillions of dollars.
GEITHNER: Right.
SHELBY: Go ahead.
GEITHNER: Let me just make to a few quick points.
I'm not standing here before you today to ask you to authorize more resources.
SANCHEZ: By the way, that's Senator Shelby of Alabama just asking the question, a Republican.
GEITHNER: ... that I think this is going to be an expensive problem for the nation, and it's going to require substantial resources.
But Congress has already authorized substantial resources. And I think our first obligation is to move to use those resources as carefully and as effectively as possible. As we develop the details of this plan in consultation with you, we will have a better sense about what it's going to take to make it work and whether we're going to need additional resources and authority.
And absolutely we can't come to you and ask you for that unless we give you something that you can react to.
SANCHEZ: I'm going to ask our director to do something for us. Since we're on the story of Tim Geithner, come back to me, if you can. It's interesting, but one of the plans that he's explaining to Senator Shelby is a plan to take all the bad debt in the United States and put it in one bank.
The federal government would actually create a bank filled with nothing but bad debt. It's actually being called the bad bank. I want to get reaction on this from professor Miron.
But before we do that, we have asked Salman Khan, who is also an economist and who also has one of the most curious Web sites that you will ever find, SalmanKhan.com on the Internet, where he draws these things so that we can all understand them, because the average person can't understand these things.
Watch what he's done. Dan, this is not the next sound bite that we were expecting. I want you to jump one ahead. Thanks. Here it is, Salman Khan on this bad bank idea presented today like you have never seen it.
(BEGIN VIDEO CLIP)
SAL KHAN, KHAN CAPITAL MANAGEMENT: I have drawn here a simple balance sheet for a bank. The left-hand side is the assets. Assets. This is the liabilities. This is what they owe to other people, liabilities.
And here's the equity, or the stock. What the government wants to do is take these assets right here off the hands of the banks. And this is apparently because these banks can't sell these assets, or at least they can't sell these assets for what these banks need to sell them at in order to be able to meet their liabilities and in order to continue lending again.
So, the idea behind the bad bank plan -- and the details are still coming out, so this is my best guess -- is that they want to create a new bank here, where some of the money is going to come from the government. So let's say half of it comes from the government. This is from the government.
This is the cash that the government puts in initially. And then the other half comes from the private sector. I don't know if it's half, maybe it's a lot more comes from the government. Maybe a lot more comes from the private sector. Private sector.
And then using all of this cash that comes from both the government and the private sector, they would go and buy these assets for more than the banks can sell them for right now. If these assets really are worth what they pay, then this bad bank -- we will call this a bad bank -- bad bank -- might do OK.
On the other hand, if the current market that's only paying a lot less for this asset, let's say the current market's only paying less for this asset, and we're overpaying by a certain amount, that overpayment amount relative to the real value of the asset is essentially a subsidy of the stock and the bondholders of the current company.
(END VIDEO CLIP)
SANCHEZ: That's why we call it participatory journalism. We think if there's somebody on the Internet who is real good at explaining things, we are going to tap them and tap their resources, like we just did right there.
Let's take it now to a Harvard professor.
Jeffrey Miron, did you see that?
MIRON: I did see that, yes.
SANCHEZ: Was it a good explanation? But here's the question I really have for you. Will it work?
MIRON: I don't think that that does very much, because it basically is just moving the assets from one place to another. As was explained in that little video, if people -- if the banks could sell the assets for prices that they liked, they would have sold them already. So, private investors aren't going to put their money in unless the government is either adding a lot of money on the table or providing guarantees.
But guaranteeing risky debt is exactly how we got into this problem in the first place. That part of what Geithner proposed today seems completely crazy to me. I don't think it's going to be effective.
SANCHEZ: All right. We have got a lot of moving parts going on right here. I have got Jim Clancy to my right. He is just now getting some information.
What are we learning right now on the Israel elections?
CLANCY: Well, a bit of a surprise. But a warning here, Rick, these polls have been wrong in the past. And what we're getting right now is the Kadima, with Tzipi Livni, the foreign minister, at the head of it, is edging out the expected winner, the predicted winner, Benjamin...
(CROSSTALK)
SANCHEZ: That's a surprise.
CLANCY: Well, yes. It's -- these are exit polls. We're going to keep that in mind.
(CROSSTALK)
SANCHEZ: OK.
CLANCY: But just barely edging them out, either 30-28, or some of the Israeli media have it as 29-27, very close.
What's interesting is the far right-party of Avigdor Lieberman pulling 14 votes, predicted to get 14 houses in the Knesset. And that's more than the Labor Party of Ehud Barak.
SANCHEZ: That's interesting. Hang tight right here. I want to come back to you and talk more about this.
CLANCY: Sure.
SANCHEZ: And we will explain not just what's happening in Israel, but what possibly it could mean to us.
Let's go back to Patricia Murphy, if we could.
Murph, a question for you about what Barack Obama was trying to do today and whether he achieved it. Before you answer that, take a look at this video. This is our friend Julio. Everybody back in our little Sanchez headquarters back there looked at the TV and turned up the volume when this guy came to the microphone. He seemed to have to fight to grab the microphone, but he achieved it and then was able to ask his commander in chief the following questions.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Thank you for taking time out of your day.
(CHEERING AND APPLAUSE)
UNIDENTIFIED MALE: Oh, precious God, thank you so much.
OBAMA: All right. What's the question?
(LAUGHTER)
UNIDENTIFIED MALE: All right, Mr. President. My name is Julio Osegueda (ph). I'm currently a student at Edison State College in my second semester.
And, OK, I have been at the same job, which is McDonald's, for four-and-a-half years because of the fact that I can't find another job. Now, with the fact that I have been there for as long as I have been there, do you have any plan or any idea of making one that has been there for a long time receive any better benefits than what they have already received?
OBAMA: Well, I tell you what. First of all, a couple things I would like to say. Number one, the fact that you are working as hard as you're working at a job that I know doesn't always pay as well as some other jobs, I think that's a source of pride for you. That shows that -- that you're doing the right thing.
(CHEERING AND APPLAUSE)
OBAMA: Now, the second thing is, is that you will actually benefit from the tax breaks that we're talking about, so you'll be able to keep a little bit extra money, because we're going to offset your payroll tax. That's going to help.
I don't -- I assume that you're not getting health care through your job, and so one of the things that we want to do is reform the health care system so that you will have access to health care in your job.
But the thing that I'm really interested in is -- you say you're going to school. What are you studying?
UNIDENTIFIED MALE: I'm looking to study and major in communications, hopefully being a broadcaster or a disc jockey.
OBAMA: Well, you sound like you've got good communication skills.
UNIDENTIFIED MALE: Thank you so much.
OBAMA: So -- so part of what we want to do is we want to make it easier for you to afford going to college by giving you this refundable tax credit for your tuition, because young people like Julio, who have that much enthusiasm and that much energy, we've got to make sure that we are giving them a pathway so that they can educate themselves and go as far as their dreams take them.
Thank you very much, Fort Myers. I appreciate you.
(CHEERING AND APPLAUSE)
(END VIDEO CLIP)
SANCHEZ: By the way, what are we learning from that, Murph? Down to 20 seconds. What do we get out of that?
MURPHY: Well, Barack Obama is saying to the American people, I'm on your side. Congress is going to be over here hashing it out. They might make a mess of it. But I'm on your side.
He's basically letting Washington sort of sort itself out while he removes himself from the conversation, so he can be on the winning side. He's actually added a line in his speech that says, this isn't perfect; it was made in Washington. It gets a huge laugh. But it's a message to say Congress is part of the problem. I'm part of the solution. I'm working for you. What comes out of Congress will be good for you.
SANCHEZ: Murph, professor, my thanks to both of you.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Everyone's lost everything. There's our house, baby, gone. Everything's gone.
(END VIDEO CLIP)
SANCHEZ: Dramatic video from a man who kept his wits about him long enough to interview his neighbors as he escaped those brushfires in Australia.
Also, we're monitoring the election results that are coming out of Israel. Here we have got Jim. He is working the computer, getting results. As he gets the information, he is going to be sharing it with you as it happens, hot off the press, as they say, or, nowadays, off the Internet.
CLANCY: This is going to be a fascinating outcome. I have got a feeling here that, you know, we're going to watch this late into the night, just to see how it comes out.
SANCHEZ: All right. We will be right back with Jim and a whole lot more. Stay with us.
(COMMERCIAL BREAK)
(WEATHER UPDATE)
SANCHEZ: Meanwhile, we're going to be dipping into the Tim Geithner appearance today at the Senate Finance Committee. I have got my colleague Jim Clancy to my right here following the situation on the elections that are coming in, in Israel. He tells me there may be some new information hot off the press. And we will have it for you in just a moment.
And, oh, the Dow, we're watching that as well, and, right now, not so good.
We will be right back.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back. I'm Rick Sanchez here in the world headquarters of CNN.
Here's the question. If Israel makes a really hard right turn politically, what will happen with its relations to the United States and the Obama administration?
Well, let me give you first what the scorecard looks like by showing you who the players are in this election. Let's start with the baseball cards if we can, Dan.
Benjamin Netanyahu, most people would describe him as being, Jim, hawkish. He's running as the Likud Party -- for the Likud Party.
CLANCY: Hawkish, in the right wing, concerned about Iran, and has a record, a proven record of not negotiating with the Palestinians.
SANCHEZ: Tzipi Livni, leader of the Kadima Party, considered by most to be a centrist.
CLANCY: A centrist, but untested really. We haven't seen her as the prime minister.
SANCHEZ: Ehud Barak, Labor Party. And nobody in Israel is to the left, but if you were going to have somebody who is a little more center-left, that would be him.
CLANCY: Had his shot. Here's the man that pulled Israeli troops out of Southern Lebanon. Had his shot at prime minister. Tried to negotiate a peace deal, failed.
SANCHEZ: Then there's a wild card. His name is Avigdor Lieberman. They say he's even more hawkish than Bibi.
CLANCY: Well, wild with the accent -- wild card with the accent on wild, because this is a man that really wants to see -- he's worried -- you know, his -- Yisrael Beiteinu name to that party means, 'Israel is our home."
He wants to see the Arabs who are living in Israel proper to be moved from that area, so that this is a land for Israel. He's talking about having people swear out a loyalty oath, having the Arab Israelis swear out a loyalty oath. SANCHEZ: Wow.
Yes, some people are saying he's right on the -- right on the fringe of being maybe racist or bigoted. But we will get to that.
(CROSSTALK)
CLANCY: He's been accused of that a lot in the Israeli media.
SANCHEZ: Yes. But who is winning? What is going on?
CLANCY: OK. Here is what is going on.
And it's important to understand that there is no guarantee in the Israeli election system that because you get the most votes, you become the prime minister. No, it doesn't work like that. The way it works is, do you have enough votes to control the Knesset? It's 120 member seats. So, you're going to need 61 seats. None of these parties have 61.
(CROSSTALK)
CLANCY: The right wing -- the right wing has 66 seats. According to the projections -- and I'm stressing here again these are projections. These are exit polls. These aren't the final vote counts.
So, we have to look at it here, and you would say that Tzipi Livni is in a quandary. The only way that she could get into office would be have a broad coalition government -- might even have to take in one of the right-wing parties. It doesn't seem likely. Benjamin Netanyahu...
SANCHEZ: But she -- is she doing surprisingly well?
Let's -- you know, let's do this. I want to dip into the Israeli coverage that we're getting right now.
CLANCY: Sure. I think this is...
SANCHEZ: This would be channel...
CLANCY: This would be Kadima's headquarters. They're celebrating because they see a victory. But it may be a rather hollow one.
SANCHEZ: Let's listen in to what they're saying.
(VIDEO CLIP)
SANCHEZ: This is like one of our shows. I mean, basically, they've got a panel. They're trying to describe exactly what's going on. And there's reason for celebration from -- you would think more than one party would be celebrating.
CLANCY: Well, you know, Kadima -- Tzipi Livni, the foreign minister, showing better than a lot of people expected, but not good enough to be able to form a government. And that's what counts.
SANCHEZ: So that means the government will be formed then by the more right?
CLANCY: And there's going to be so much -- well, absolutely. I think you can see Benjamin Netanyahu coming in and then forming a much broader government...
SANCHEZ: So he will be...
CLANCY: ...even bringing in Kadima.
SANCHEZ: So he will be prime minister if they get enough votes?
CLANCY: Well...
SANCHEZ: That party will get to choose its prime minister, of which he is the leader, so he will be the prime minister?
CLANCY: Look, you've got Shimon Peres -- a long history with the Labor Party. Shimon Peres might pick Tzipi Livni to try to put together a government, see what she can do. It's only when all of the votes are counted -- when we see what the little parties did -- can she cobble something together?
Well, if you look at the raw numbers as they're projecting them, 66 seats out of 120 going to hard-liners. She can't do it.
SANCHEZ: That's interesting.
Boy, thanks for breaking that down for us.
We certainly appreciate it.
Jim Clancy with the very latest results. And still looking a little tight there. But it doesn't look good now for Tzipi Livni.
CLANCY: Well -- and we can talk about this later.
What does it mean for Obama, who has made peace talks a priority?
You know, that might be the bigger issue.
SANCHEZ: Yes, it may be a bit of a wrench.
All right. When we come back, we're going to be letting you know what else is going on.
Our thanks, by the way, to Jim Clancy for joining us on the set to take us through this.
The very latest on what happened in Naples, Florida today. This is Lee County. That's Julio.
And he joins us live.
Who is this guy?
When we come back. In fact, there he is. Julio, hang tight. We'll be with you in just a moment, my friend.
(COMMERCIAL BREAK)
SANCHEZ: Interesting reactions that have been coming in to us as we follow this. A couple of things.
I want to bring your attention, first of all, to what's going on with the Dow. It's at 370 right now, which is actually pretty good considering that we're told moments ago, while we were having our conversation, Jim, it dropped down below 400, which certainly made some -- there was some cause for alarm there. We're going to be watching it.
In fact, here's what we're going to do. All the way until the very end of this hour, we're going to stay on top of what's going on with the Dow and you'll be able to see the bug all throughout our conversations. If it goes under 400 again and we start seeing that there is need to do so, we're going to be checking in with our crews immediately in New York.
Either way, before this newscast ends, we're going to be taking you to Wall Street to get reaction to what's going on there.
Reaction from you, as well. Let's go to our Twitter board, if we can. This on the Israel story that we reported moments ago. This is from Beth. She says: "If Israel gets any more radical, they can kiss off support from the general population of the United States."
And then let's go ton the next one out of here. It says -- oh, this on Geithner: "Geithner will spend it right and will put in constraints. Paulson didn't."
So certainly we know where Jeeannie stands on that issue.
I want to bring somebody in now who was -- who we got a kick out of today. Barack Obama, as president of the United States, has said that he's going to go around the country and try and talk to people -- in other words, take his message to the people of the United States.
This is one of the places where he took it today. Look at all the people with their hands up. I want to be the one to ask the question, they were saying. They were extremely excited there in Fort Myers, Florida. It's the Naples area. It's extremely depressed -- one of the worst areas in the country when it comes to foreclosures -- and, by the way, not an area that voted for Barack Obama. They voted heavily for John McCain.
So in comes Barack Obama today to this very place -- what was maybe not going to be a friendly crowd. Instead, he runs into this guy. This is Julio Osegueda. He's an Obama questioner. And you know what's -- Julio, how are you doing?
You good? JULIO OSEGUEDA, STUDENT, EDISON STATE COLLEGE: Oh, I'm doing -- I'm having a blast. This is -- I've never felt so good in my life.
SANCHEZ: Let me ask you a question.
OSEGUEDA: (INAUDIBLE).
SANCHEZ: We got some video. At the very end of this thing, the president said, look, I've got to go. I can only take one more question. And everybody started raising their hands, almost like they were fighting for that last question. And somehow -- yes, here's the video we're talking about.
OSEGUEDA: Yes.
SANCHEZ: And somehow you end up with it. And there you are, all excited. You're going to ask a question.
First of all, how did you pull it off?
How did you win the last question contest?
OSEGUEDA: Well, I actually tried my best to -- I was thinking, you know, I didn't know what -- I didn't think I would have the chance. So what I did was I looked around and I saw all the others with their hands up. And I tried to do something that none of them did.
And what I did was I got on top of my chair. I jumped for joy. I kept screaming: "Mr. President, pick me, pick me, pick me." I was just going crazy.
SANCHEZ: Do you...
OSEGUEDA: And then when I -- the moment that he picked me, I just like -- I was just like shocked and blew up. I couldn't believe it.
SANCHEZ: Yes, we saw that.
Hey, why is it important for a guy like you, who's like an every guy, to be able to talk to the president and tell him his beef with what's going on in the country?
Why is that important?
OSEGUEDA: Yes. Oh, that was awesome. I mean I was glad that I had...
SANCHEZ: No, it was...
OSEGUEDA: ...a chance to express.
OSEGUEDA: It was -- maybe I didn't ask it right. It's a question to you.
Why is it important to you and why is it important to the country that a guy like you would be able to ask the president of the United States a direct question and complain about what's going on economically?
Why is that important?
OSEGUEDA: Well, it's important -- to me it's important because then it lets, you know, other young folks such as myself to be able to -- that are going through the same thing -- to be able to hear from the president directly what exactly kinds of things are going to -- are going to come with this economic stimulus package.
Because see, like myself, I've been at McDonald's for nearly four-and-a-half years and I have not received any kind of benefits. And the reason I'm -- I've been there for so long is because of the fact that I can't find another job because of the economy the way it is.
See, because a lot of people get -- you know, after being at one job for so long, you just want to go out and try something else. Well, now that -- this -- in this case, it was me. I've been wanting to try something else, you know, because I've been in the fast food industry for the longest time. And I'm not getting any kind of benefits out of it. So I want to try something different.
SANCHEZ: You know...
OSEGUEDA: And I understand that the economy the way it is, I am going to try to stick in there and do what I can do.
SANCHEZ: Do you trust this guy to be able to fix it as the president of the United States?
You've heard his -- you heard his pitch.
Do you think it can work?
OSEGUEDA: Yes. Well, with the faith and trust that I have in the president -- the current president, I am so like honored to have the chance to be able to talk to him. But to be able to trust in him to do this, I actually do believe in President -- Mr. Barack Obama. Because I -- the things that I've read and seen -- and I've seen all of his -- all of his campaign trials. I've been, you know, all around watching him and seeing what he says.
This man speaks from the heart. He tells -- he told Congress and Washington these games that are being played need to stop. Now that is the type of thing I like to hear, because that is what needs to happen.
SANCHEZ: We've got it.
Julio Osegueda. No shortage of enthusiasm with you.
By the way, let me ask you...
OSEGUEDA: Oh, I love it. SANCHEZ: Yes. I saw your name there.
Tola Espanol estas bien? (ph)
Do you speak Spanish?
OSEGUEDA: Yes.
SANCHEZ: Interesting. OK.
OSEGUEDA: (INAUDIBLE) in Spanish.
SANCHEZ: Maybe si would have been the right response.
Julio Osegueda, my thanks to you.
My thanks for being with us.
And, by the way, new information coming in on the situation in Israel.
Jim is standing by. He's checking the computer once again. Let's spend a couple minutes when we come by bringing folks up to date.
CLANCY: All right.
SANCHEZ: Is there anything you want to just give them a tease right now?
CLANCY: No. It's staying steady here. But remember, these are exit polls. But, you know, it's an interesting, interesting election.
SANCHEZ: All right, let's do this.
Let's take a quick break.
When we come back, we'll talk about that and other pictures that I want to share with you.
Stay with us.
I'll be right back.
(COMMERCIAL)
SANCHEZ: All right. Talk about some moving parts. Let's stay on the air with this, if we can.
First of all, look at the Dow. You see it right there? Go ahead and take it full, if you would, Dan.
We're now looking at a situation where the Dow is below 400. This is obviously not what a lot of people wanted to see on this day.
What it's related to in terms of some of the plans that were announced today by Tim Geithner -- it would certainly be unfair to make the leap.
We're going to leave that bug up -- that's what we call it -- so you can see it throughout the newscast. And hopefully, it will come back to the other side. At least that's what I'm sure a lot of folks are hoping for there on Wall Street -- the investors, that is.
And, you know, the president of the United States has said on several occasions recently that things were going to get worse before they got better. At least on this day, at least on Wall Street, at least in terms of investors, he's right.
Here's another picture I want to switch to.
Let me show you live pictures -- I'm not sure what router this is. But, yes, here we go.
This is the Kadima Party headquarters, where it looks -- Jim, take us through this, if you would.
Jim Clancy joining us now from CNN International. What -- has Tzipi Livni won this thing?
CLANCY: Well, the exit polls...
SANCHEZ: I mean her party?
CLANCY: The exit polls shows she got the most votes.
Now, she -- did she win the election?
No, nobody did, because nobody has an outright majority. It's a 120-seat Knesset. And right now, as it looks, she surprised everybody and came out ahead of Benjamin Netanyahu, the former prime minister. A lot of people thought that he was poised to really take that job again.
Certainly, it's good news for her personally and for Kadima, certainly, to come out first.
SANCHEZ: But with...
CLANCY: But the reality is...
SANCHEZ: But, but, but...
CLANCY: ...they can't form a government.
SANCHEZ: Well, let me ask you this. Given that she's not a what -- would be considered a right-winger in Israel. She's not that far to the right. She's not an extremist, like maybe some maybe would describe -- some would describe maybe -- and certainly they would describe Lieberman.
Does that mean that the government of Israel could end up being more conciliatory, more like what Barack Obama, for example, has been asking for in that region? CLANCY: Well, you know, it could end up like -- a lot like the other governments that we've seen. And that is a split between Kadima and Likud, with Labor perhaps coming in and filling the gap.
The risk here is that the Likud Party would take over and bring in one of the big winners, Avigdor Lieberman, and his Israel is My Home Party, which is extreme, far right...
SANCHEZ: Yes.
CLANCY: ...and bring them in and form a coalition without...
SANCHEZ: And that would not be -- well, it certainly would be interesting to watch how they would be able to par with the new envoy that we're sending over there, George Mitchell, for example, who's...
CLANCY: Exactly.
SANCHEZ: Is it Mitchell who's going to...
CLANCY: Yes.
SANCHEZ: Yes.
Who...
CLANCY: George Mitchell is going to be in charge of that. Mitchell, a veteran here. He doesn't like settlements...
SANCHEZ: Who said there's no problem that can't be solved by talking.
CLANCY: Well, but he also is very firm with the Israelis about settlements and said this is the core of the problem. They have to end. Both...
SANCHEZ: Yes.
CLANCY: All of the right-wing wants to continue settlements. Their support base is on the West Bank, among the settlers, in large measure.
SANCHEZ: Let me stop you real quick.
We -- I'm told by my producers we've got to get a break in, because apparently, we're going to try and hit the story that's going on over there in -- on Wall Street.
Where is the market now?
403. Not as bad as it was before.
Stay with us.
We're going to be right back.
By the way, take a look at these pictures. This is Zoro the bandit. Wait until you hear what this guy's M.O. Is.
Mike Brooks is going to join us in just a little bit -- he's over here to my left -- taking us through these stories. Now, it's a good time -- it's a good -- it's a good thing we don't use a teleprompter on the show or I'd be really confused and so would they.
We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: All right, more breaking news. Now we're told that -- you know, Chad Myers called it. He said he saw something that looked real bad on the radar and now it looks real bad in pictures, too -- Chad, take us through this.
Are you there?
CHAD MYERS, CNN METEOROLOGIST: Yes. KWTV, Channel 9, Oklahoma City flying their helicopter. And this is off to the north of War Acres, northwest of Oklahoma City proper, out near the Kirkpatrick and the turnpike as it turns in Northwestern Oklahoma City.
I have not seen any touchdowns yet, although I do have reports of power line damage in parts of Yukon. Also, tennis ball size hail out there near Yukon. You can imagine that falling onto your roof or into your car, for that matter.
And there are the live shots from two separate affiliates, KOCO on the right -- my old affiliate. KWTV there on the left. And they are chasing the storm.
So far, no reports of touchdowns. But I'm telling you, Rick, this storm is still violently rotating. It could put down a tornado at any time. And Edmond and then up toward Guthrie would be the next two places that I want you to be taking cover if you are in Oklahoma City proper.
This is a very dangerous situation out there. That on the left -- that picture on the left very well could be the first part of what funnel could be falling out of a wall cloud proper -- Rick.
SANCHEZ: All right. Thanks so much.
Chad Myers following the situation for us. Stand by, Chad.
We're going to be getting back to you in just a little bit as this story develops.
We really, as you've been seeing, have a lot of breaking news stories that are taking place right now. So we're trying to keep -- keep you abreast of all of them.
If we have a chance to get through some of these breaks, we will. I'm sending kind of a note to my producer now through the magic of television.
Susan Lisovicz is standing by for us now.
We're watching the story on Wall Street.
As -- the last time I looked, it was down 417. That was scary. Now I'm looking it's 366. Maybe not to scary, but still, not a good day, huh?
LISOVICZ: It's a terrible day. It's a terrible sell-off. It's the worst sell-off of the year, Rick. And there's no question that it was a reaction to the -- the financial stability plan outlined by Treasury Secretary Tim Geithner earlier today.
Wall Street is disappointed by the lack of details in this plan. We know what the problems are. The problems have existed for a long time. Banks aren't lending. There's toxic assets on the balance sheets. We need some help for struggling homeowners. We need to expand consumer lending.
There was just a frustrating lack of detail and the market is selling off accordingly.
And financial stocks, in particular, are getting creamed. Right now I'm looking at Bank of America shares down 20 percent. Citigroup down 14 percent. You get the idea.
SANCHEZ: What do they mean by a lack of detail?
I mean can you give us a sense of specifically what they wanted in this plan?
LISOVICZ: Well, for instance, we knew there were going to be four parameters, right?
That was leaked out to the press, you know, a couple of days -- a few days ahead of time. And the toxic assets -- just to give you an idea. This has really weighed down financial companies in particular. It's really hurt them. They can't sell them. They can't get them off the books. So there was this -- this idea that the private sector and the government will work together to try to sell them. How to reach a price -- how much money will be -- how much money the government is going to put up to back stop them, we don't know.
And, in fact, in the very text that the Treasury secretary put out, it said we're looking for input from a variety of parties to get this going. So, you know, basically three words -- work in progress, is what you would get from this -- it's a very difficult plan. No one doubts it's a Herculean task before the government. But the fact is we aren't really there yet. And that's why you're seeing this sell-off.
SANCHEZ: I think we've got Mel Martinez, who's -- you know, it's interesting, because it sounds like the people who are following our newscast said, you know, Geithner looked straight up, he looked honest. He looked like he was inspiring confidence.
But he's not getting that from investors, in terms of reaction. You're saying it's mostly negative. Let's hear what this Republican -- this is Mel Martinez, from the State of Florida, about to retire but maybe going out with some tough questioning of Tim Geithner.
Let's listen to Tim Geithner here as he respond to Senator Martinez.
(BEGIN VIDEO CLIP)
TIMOTHY GEITHNER, TREASURY SECRETARY: And we announced today with the Fed is that we're going to expand this program to the commercial real estate -- to the CMBS market. And there is a complimentary program already underway by the Treasury and the Fed together to help get directly out the kind of factors that are helping keep mortgage interest rates higher. And, again, our hope is the combination of those things will be helpful across the broader residential real estate and commercial real estate markets.
But I'd be happy to listen to the specific challenges in that area more carefully and get back to you and get my -- have my -- our staff get back to you with whether we think there's any additional things that we can do.
SEN. MEL MARTINEZ (R), FLORIDA: Thank you. My time is up. I would love for you to, at some point, address your -- your thoughts on a housing recovery package, which I know is part of...
(END VIDEO CLIP)
SANCHEZ: All right. So, obviously, they're kind of picking his brain, trying to figure out where he wants to go with this thing.
And as we watch this, we're talking to Susan Lisovicz. And she's giving us the reaction from some of the big cheeses there on Wall Street -- some of the folks who are, you know, who wear the white collar shirts when they go to work and try and figure out how to make money off of these plans or how they will be able to make money. They're not doing well.
Is it also affecting average people?
Take -- I want you to look.
If you can, Dan, as we watch Geithner on one side of the screen, put up something on the other side of the screen. If you've got that video of this Bentley car chase -- this is a Bentley car chase. Imagine this. We see car chases all the time out in California. But imagine -- when was the last time you saw a car chase where the car was a Bentley. That's right, a Bentley.
We wanted to show you this because we think that maybe it symbolizes that there's a tough turn in our economy right now. When the guys who are getting away from the police -- or trying to get away from the police -- are driving Bentleys -- and let me just briefly bring Mike Brooks into this.
What do you know about this situation, as we look at it, economically?
MIKE BROOKS, CNN LAW ENFORCEMENT ANALYST: Well, it looked...
SANCHEZ: Talk about hard times.
BROOKS: It looked like this guy was having problems, both domestically and economically. And a lot of the things, they go hand in hand.
But this thing started about 3:30 in the afternoon. And a woman flagged down police and said that someone -- that her boyfriend had pointed a gun at her.
He took a -- they took a report, gave a lookout. About 8:00 p.m. this car returned back to the neighborhood. It was up on North Hollywood, near Universal City. They gave chase. He went all the way downtown -- the man, all the way through L.A. through Manhattan Beach, then all the way back up to Universal City.
SANCHEZ: Wow!
BROOKS: They stopped him. They -- he was there for about three hours. He put the trunk up. They brought armored cars in. And when they moved in, he decided to go ahead and take his own life, unfortunately.
SANCHEZ: You know what it is?
Yes, the tough times...
BROOKS: It really is.
SANCHEZ: A tough situation economically for him. It's really a sign of the times.
Susan Lisovicz watching this thing.
I guess there's some -- is there some number, Susan -- oh, did we lose Susan?
Because as we watch this, I wanted to see if there was a number that possibly need -- Susan, I'm told you're back now.
Hey, Susan, is there a number that, if we hit that number on Wall Street, it will cause more alarm than any other number?
I mean is there a threshold here?
Is 400 the number, for example?
LISOVICZ: No, it's really not -- well, the point decline obviously is something of concern. But it's really the level. There are certain things called resistance levels where, you know, generally, if you go through that, then, you know -- you know, you really don't know where -- the selling can gain momentum. And I actually can't see -- Mike, if you can put up the -- the ticker. I don't know exactly where the Dow is right now.
SANCHEZ: Three sixty -- it's 372.
LISOVICZ: No. 7900. OK. So basically the support level that we've seen for the close is about 7800. And so we're getting close to it. I mean, we're getting very close to it. And, you know, again -- I mean we've seen this happen in the last few months on news of -- whether it's something that the government says or doesn't say, whether it's something that we've seen...
SANCHEZ: And what...
LISOVICZ: ...out of a company reporting earnings that are terrible or...
SANCHEZ: But what happens -- tell us again. I think -- I missed that. Maybe our viewers caught it, but what the heck. Let's fill in our viewers.
What happens if this thing gets to 7800?
LISOVICZ: Well, I mean it's just -- it's just basically the market has been trading in a range, Rick, for several months. And basically, we're looking at a support level around 7800. You know, basically, once you start to go below that then, you know, that's something that just triggers more selling, typically, because a lot of...
SANCHEZ: Got it.
LISOVICZ: A lot of programs are automated and they're tied to a certain level. And once that is broken, then -- then it just triggers more selling.
SANCHEZ: I understand.
LISOVICZ: That's what happens.
SANCHEZ: I understand. I've experienced it in the past.
Susan, hang tight.
We're going to get a 90-second break in. We're going to come right back. We're going to let you know what's going on with Susan on Wall Street and also what's going on in Oklahoma. We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: All right. We've got Susan Lisovicz checking Wall Street.
We've got Chad Myers checking the situation in Oklahoma -- Chad, fill us in.
What have you got? MYERS: We still have a tornado warning for parts of Oklahoma County and on -- and a little bit even farther to the north, into the western sections of Edmond proper. We have damage now at Rockwell and Northwest expressways, according to KWTV, the affiliate there.
It would be the same cell back out here a little bit, probably 20 minutes ago, producing quite a bit of damage there to shopping centers in that general vicinity.
There you go. Another live shot from KOCO. You can see the low hanging cloud -- the wall cloud of the storm itself. I have yet to really see any definition. I've been monitoring a couple of other affiliates, as well.
I've yet to see anything that's actually touched the ground. But we have power line flashes, which means that either winds are blowing the power lines down or it's the potential of some type of circulation taking the power lines down.
This is going to be a dangerous situation all night long. Rick, this is going to go on until the wee morning of the hours. Watches are all the way from Arkansas back into Texas. If you are in Central Oklahoma, you need to be taking cover at some point in time. Listen for the sirens. These warnings are going to going on and off all night long -- Rick.
SANCHEZ: All right. Let me get to some of the comments of people who are watching this newscast right now, especially as the economy is concerned.
And, Chad, we'll get back to you.
Or, in fact, heck, let us know if something happens there.
"The more we bail out irresponsible companies, the more we endorse accountability. Is that a word?"
"It seems as if Republicans are just wanting Obama to fail instead of helping the American people."
And look at this one: "Sell the Bentley and you have enough money to live for a few years," on the story we did just a while ago.
All right, let me look at the time. Three -- well, we're down to 15 seconds. The closing bell is coming up right here. We'll see how we're going to close on this thing. Three hundred eighty-one is where it stands right now. We're probably just a few seconds away from the bell.
Let's listen to it. Crank that sound up as we get this thing. There's no bell as we go out. That's right.
I appreciate you being with us.
And more news right here.
Meanwhile, here now, Wolf Blitzer.
WOLF BLITZER, HOST: Thanks very much, Rick.
Happening now, an historic day of emergency action to revive the economy. The president and the federal government moving on several new fronts to try to free up colossal amounts of money.
