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Retooling the Bank Rescue; Solving the Salmonella Mystery; Stimulus and Healthcare
Aired February 11, 2009 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: It is Wednesday, February 11th, I'm Heidi Collins. You are in the CNN NEWSROOM.
A whole lot going on this hour. Most of it on Capitol Hill. And all of it having to do with your money. The Treasury Secretary, Timothy Geithner, is on the Senate side, testifying now about plans for stricter oversight on bailout money. House members getting ready to grill the heads of some of the biggest banks about how they have already spent some of that money. And lawmakers are said to be closing in on the compromise with an economic recovery plan.
So another House committee is holding a hearing on the deadly Salmonella outbreak linked to peanuts. At least eight people are dead. And linked to that outbreak. Another 600 people have gotten sick. Lawmakers will question the president of Peanut Corporation of America. That's the company blamed for the outbreak.
Now to central Oklahoma where tornadoes are being blamed for at least eight deaths. There is widespread destruction, as you see on your screen. Clean-up, though, beginning there today. We're going to have a live report from one hard-hit town in just a few moments. Rob Marciano standing by now in the severe weather center with details on where that same storm system is headed today.
Actually, we're going to get to Rob in just a moment. Because you see the map there and how those conditions are changing just a bit.
First want to check in on Wall Street. Yesterday's drop of more than 380 points sent the Dow to its lowest level in three months. The drop came after Treasury Secretary Timothy Geithner announced a retooling of the bank bailout. Today he's back talking more about his plan with members of the Senate budget committee.
CNN's Christine Romans with our money team watching all of it from New York. So, yeah, those numbers went down after he started mentioning some of the details, anyway. About this overhaul of the TARP plan. But they actually started going down even before that.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: That's right. You know, Heidi, frankly, it was a two thumbs down from Wall Street about this - basically, the rough sketch of this plan. We know what Treasury wants to do, and they say they're going to overhaul TARP, it's going to be a new and improved TARP that's the acronym, of course, for the financial rescue. But really, there is a lot of skepticism on Wall Street. They really didn't think the first one worked as well as they had hoped, and they are skeptical that you know, it will be able to do any better this time around. So you've got Wall Street a little bit unnerved by this. So in front of the Senate Banking Committee, Timothy Geithner, the new Treasury Secretary, gets a second chance to explain what they're doing. And maybe he'll give more details.
But really a lot of sources close to this tell us that the moving target, you know, and even the Treasury Secretary yesterday said they will probably have to switch course. They're going to have to change their game plan. They're going to be nimble because market conditions keep changing. Of course, the whole reason why there is so much skepticism about TARP and the overhaul here is because a lot of these stories about how the bank CEOs have spent the money, how have the banks spent the money that the American taxpayer has invested with them.
And there is some real concerns that they were not real good stewards of American taxpayer money. So today over at another hearing in the House Financial Services committee, chairman Barney Frank is expected to be asking some very tough questions about the top bank CEOs who, gosh, you know, when you take a bunch of taxpayer money, you've got to go - when they call you in Washington to come and talk before your committee, you've got to do it.
So even as this happens we know that the New York attorney general is confirming that their own investigation of Merrill Lynch -
COLLINS: Yes, this is incredible.
ROMANS: Yes.
COLLINS: This is unreal.
ROMANS: Yes. So Merrill Lynch, the top four employees or four top executives of Merrill Lynch took home $121 million in bonuses, Heidi, even as the company lost more than $15 billion in the quarter and lost $27 billion for the year. So think of that. The company moving forward its target for when it, you know, pays out all of its bonuses until just before it was going to be acquired by Bank of America, and paid out all that money.
So, look, so even this. The New York attorney general determined that Merrill Lynch made the following bonus payments. The top four bonus recipients received a total, $121 million. The next four got $62 million. The next six got $66 million. Those are just the top 14 people at the company took home all of that money, even as this company was on the ropes. So you can see why people get so angry and concerned, because Merrill Lynch, when it was acquired by bank of America just a few days later, had to receive another $20 billion of our money to stay afloat. So people are very upset. And you're going to hear more about this here today at that hearing.
COLLINS: Absolutely. We are watching very, very closely. And that - that's a pretty incredible report. Once again, coming to us from the New York attorney general there, Andrew Cuomo. All right. Christine, thank you. We are watching closely.
ROMANS: you're welcome.
COLLINS: Back to the banks and the billions of dollars the government has given. You see Chairman Barney Frank there, some of the biggest names in the financial community are sitting in front of the members of the House Financial Services Committee right now. All chief executive officers representing eight of the biggest banks in the country, as you heard Christine say, they're set to defend how they have spent the bailout money they've gotten so far. We'll be dipping into their testimony from time to time here today.
Now to the economic recovery package. The Senate has a version, the House has a version. So can they work out their differences by the president's Monday deadline? Senior congressional correspondent Dana Bash joining us now live from Capitol Hill on that.
It certainly is a $64,000 question. We want to know what's happening behind closed doors, Dana.
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: $800 billion question, I think, Heidi.
COLLINS: Yes, exactly.
BASH: What's happening is these meetings are continuing today. Last night or maybe I can say close to this morning, White House officials - in fact, the White House chief of staff and the president's budget director, they were here until close to midnight. They were shuttling back and forth between the House Speaker's office and the Senate Majority Leader's office. And really were here all day.
In fact, about nine hours yesterday. And we expected to resume right now. In fact, there are already meetings going on. And what they are doing as you mentioned, Heidi, is trying to urgently negotiate a deal between the House Democrats and the Senate Democrats on the president's stimulus package.
Now, we are - understand that the top line number, meaning the overall number, is just under $800 billion now that they have worked out enough cuts between the Senate and the House to bring that number down. And that is at the behest or really the demand of three republican senators, Heidi. And this really is the fascinating dynamic here. You have democrats negotiating with democrats. But really, the people who hold the power are Senator Arlen Specter, Senator Olympia Snowe, and Senator Susan Collins, the three Republicans in the Senate who are giving the Democrats the votes in order to pass this.
So we are told from democratic sources that they are actually optimistic, cautiously optimistic that they can come up with a deal in the next several hours. Again, you know, you never know until you see it. But they are hoping that the formal so-called conference committee, meaning the people who are actually going to write this - this negotiation, will actually meet this afternoon. If that happens, that means that these leaders, along with the White House, who have been hunkered down in these closed-door meetings means that they will come up with some kind of agreement on how to do it.
COLLINS: Yes, a break-through is what they're going to need, right?
BASH: Exactly.
COLLINS: Is there any idea at this point what issue it is that's holding them up where or where that break through could come?
BASH: It's a great question. And frankly, the answer is there are a lot of issues. What they're trying to do is keep that number down to please the moderate Republicans. But they're also trying to see if they can work out some - putting some of the spending that House Democrats were upset about that cut got. For example, spending on education. They were very upset that in order to keep the number down in the Senate, they cut a rot lot of programs and funding for - that was targeted for education.
So they're trying to figure out if there was some way they could get some of that money back in, but it is I'm told changing literally by the hour and staff was working all night last night. I can give you a couple of little details that we are told, the things that apparently are out. In the Senate, they passed a $15,000 tax credit for home buyers.
We're told that is going to be scaled back dramatically. Also, they passed a -- an amendment to give a tax credit for people who buy American cars. We're told that will be scaled back dramatically, if not completely eliminated. Those are two examples of things that they are probably putting on the chopping block to make room for other things, and perhaps just to bring the overall number of this near trillion-dollar, unprecedented spending bill down a little bit.
COLLINS: Oh, yes, well, we will be watching closely. Sure do appreciate it, Dana Bash, keep us up to date, if you will.
The President has been pushing his economic recovery plan from day one. He knows it's a tough sell, and says it will take time. Our White House correspondent Suzanne Malveaux is standing by now this morning, as well. So how is the White House strategy playing this one out, Suzanne?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Oh, Heidi, as you noted and Dana noted on the Hill there, as a shuttle diplomacy that is taking place with the chief of staff, Rahm Emanuel, but here at the White House, the president hosted late yesterday a group of blue dog democrats, those fiscally conservative democrats, the moderates, the more than 40 or so here at the White House..
And we were told by those participating in these that there were no hors d'oeuvres, there were no cocktails, this was not really kind of a party atmosphere, but certainly a serious discussion about what needs to happen to push forward this legislation. And along those moderate democrats, Heidi, very much concerned, well, is it OK, we'll give up some of these programs in the millions of dollars.
But they're looking ahead, saying, how do we do the big things, the big item agenda when it comes to reforming social security or Medicare and things like that. We're told that the president said, look, you know, this is going to be a tough sell here. You may even have to vote against some of the interests in your own district to push forward this economic stimulus package.
It is not a popular thing to do. So what is the President doing, Heidi? Well, in about an hour or so, he's going to be traveling to northern Virginia, obviously just right next door here to Washington, D.C.. He's going to be meeting with the governor, Tim Kaine, as well as touring a construction site. He is trying to put a human face on this.
He is not talking about the trillions of dollars that this thing is expected to cost, the bank bailout and all of this, but he is trying to get people to relate to their everyday hard times, their hard circumstances, and make the case that he has got the solution here for what they're going through. So you saw yesterday in Ft. Myers, Florida, a very good example, of a guy who was working at McDonald's for four years who said he didn't have benefits and a woman who was homeless, as well, who he hugged. These are the kinds of pictures, it's the kind of back drop that the president is using to push forward his economic stimulus package, Heidi.
COLLINS: All right. Suzanne Malveaux at the White House for us this morning. And as Suzanne mentioned, President Obama s wrapping up his 23rd daily briefing, getting ready to head to Virginia. Next hour, he is set to visit a construction site in Springfield. We're told he will focus on the new jobs, the proposed recovery plan can create.
Later in the day, he is set to meet with Defense Secretary Robert Gates at the White House.
Vice President Joe Biden visiting Pennsylvania to talk about the stimulus bill. This afternoon, he and Governor Ed Rendell will tour a bridge in Carlisle. Later, the two will speak together at the state capitol in Harrisburg. Mr. Biden is expected to talk about the need to invest in infrastructure.
You're looking at video now. We just got in this morning from our affiliate KWTV. Some of the tornado damage Oklahomans woke up to today. Look at that. With the tornado warning lifted there, the difficult clean-up work begins. CNN's Samantha Hayes is in the hard- hit town of Lone Grove where the landscape there has definitely changed. So Samantha, tell us a little bit more about what is going on now this morning.
SAMANTHA HAYES, CNN CORRESPONDENT: Oh, Heidi, I'm just off the main highway here, and in the town, and this debris behind me is what used to be John's Furniture Store, and it's - it's heart-breaking for people who have, you know, owned this business and also, you know, homes that have been destroyed. When the sun came up this morning, this is what they saw. The owner of the business, John Taliferro is here with me.
And John, I was talking with one of your cousins this morning, and she said you know, we're not unaccompanied to tornadoes around here, and thought maybe there would be some superficial damage, but to see it demolished is really hard.
JOHN TALIFERRO, OWNER, JOHN'S FURNISTURE: It's like somebody put a bomb underneath it. I don't know. Just surprising. You just can't tell what -- Oklahoma, I guess, you know. Whatever. I don't know.
HAYES: You're telling me you also owned a property back there that you wouldn't even know there had been one.
TALIFERRO: Yes, there is a house right down there.
HAYES: A-huh.
TALIFERRO: You see the blue bed and all of that stuff?
HAYES: Oh, yes.
TALIFERRO: You see a bunch of mattresses back there.
HAYES: I saw search and rescue crews were back there earlier.
TALIFERRO: OK. Well, come people live back there. Yes, I see people back there right now. I guess they're taking - yes, going through this. Actually, the woman in the red that lives back there. So I'm glad they're all right.
HAYES: John, I'm sure your neighbors and everybody is talking about this today. What's the next step for you here?
TALIFERRO: Clean up. Clean up. Yes, look at all them.
HAYES: It's astonishing when you take a look at where the tornado did. I mean, you might expect it to throw metal sheets around, but cinder block walls, just taking a look at the debris here gives you an idea of the might, the strength of the wind in that tornado last night. And this is what, you know, people are seeing as they wake up, and they're, you know, coming in and taking a look at their homes and then their businesses, search and rescue has been out.
Eight people did not survive the tornado last night. And one of their concerns is there could possibly be more. So some roads are blocked off. As firefighters and local police go in and look through the debris and do the best they can to assess damage. When I talked to the director of the Oklahoma emergency agency today, she said it's just going to be a tough day. This is going to be a really hard day for folks.
COLLINS: Absolutely. All right. Well, Samantha, we sure do appreciate the report. We'll keep our eye on this story, obviously. In fact, Rob Marciano has been doing that for quite some time now. Rob, a lot of people might be wondering how much warning they had in Oklahoma.
ROB MARCIANO, CNN, METEOROLOGIST: They had a decent warning, the National Weather Service put it out about 40 minutes ahead of time. That is average or above average for a lead time with the new Doppler radars that we have been using for the past couple of decades, and they do a heck of a job.
We're now getting some very preliminary reports and analysis from the National Weather Service in Oklahoma describing the path of the two storms that did most of the damage. They'll send crews out there later today to get more on the strength and size of this storm. But needless to say, the two that went through this area did a significant amount of damage, and extremely rare for this time of year. We'll have more in just a few minutes. Heidi.
COLLINS: Yes. I want to hear a little bit more about that, too. All right. Rob, thanks so much.
Meanwhile, I want to get back to one of the major stories that we are following here today. The bank hearing, the CEOs from several different banks that have gotten a lot of money, and everybody wants to know how they spent it. So we want to let you listen in to a little bit of flavor here. This is Chairman Barney Frank of the House Financial Services Committee. Some of his opening remarks. Let's listen.
(BEGIN VIDEO CLIP)
SEN. BARNEY FRANK, CHAIRMAN, HOUSE FINANCIAL SERVICES CMTE.: I hope the argument that people would put their own economic self interests in the narrow term ahead of unnecessary program to get the country back isn't the case. We need to look at that, we need to talk about it. I think that some of you have been lagging in understanding that. I urge you going forward to be ungrudgingly cooperative, and understand that these are extraordinary times.
We are going to be taking and have been taking extraordinary measures which will be to the benefit of some of the institutions, all of the institutions of which you preside that has to be on the sense of American people that you understand their anger, their frustration, and that you willingly cooperate. And, in fact, are willing to make some sacrifices so that we can get this whole thing working. The gentleman from Alabama.
(END VIDEO CLIP)
COLLINS: We're talking this morning about a deadly tornado that ripped through Oklahoma. Eight people are dead, about 15 others were seriously injured. Here's what it looks like in Edmond, Oklahoma. You can see how much devastation it left in its wake. Officials there figure it will cost millions of dollars just to clear all of the debris. And look at the size of the funnel clouds as the tornado makes landfall. Emergency responders raised into town, looking to help victims. The National Guard also out assisting local authorities. So obviously, that is the story today.
Rob Marciano joining me now with a little bit more on this. Because we were saying earlier as people try and go through the clean- up, and we're not even quite sure that - that the death toll won't change. We've got eight people who have been killed in this extremely rare this time of year.
MARCIANO: Yes, it certainly is. The last time we had any sort of tornado in February in Oklahoma was 2000, I think. And to have a fatality, you have to go back to 1975. So that is striking. And the set-up actually, it's not over. It's over as far as severe weather for the folks in Oklahoma, but they're going to get winds, it's going to be cold, not going to be best for clean-up and search and rescue, going house to house.
COLLINS: Yes.
MARCIANO: I want to show folks what's going with the weather situation. This map highlights what's going to happen today, and severe thunderstorms will be a distinct possibility east of the Mississippi River. They won't be quite as volatile as they were yesterday. That's the good news. But certainly, some of those could be strong enough to do some damage. And then just the wind field on this system is going to do some damage, as well.
Getting reports of cold rains in eastern Kansas, even a little snow mixing in with winds gusting over 30 miles an hour. It will be dry in most of Oklahoma where the damage has been. But winds will be gusty today, for sure. And this line of thunderstorms that looks pretty tame right now could very well strengthen as we go through time, and this thing gets into a little more of a juicy atmosphere.
All right, the ice storm, and all of the snow that folks have been enduring over the midwest over the last couple weeks, now you're getting a warm rain. So there will be isolated pockets of flooding with this, even aside from the severe weather that is potentially forecast here, or is forecast for a good chunk of this area.
Pay attention to the hour, we do have a slight risk for severe thunderstorms, but just the wind field from this low which is intensifying as it moves northeasterly. Some of those winds could gust 50, 60 miles an hour, and that certainly will be enough to do some damage, and we even got a couple of reports in western parts of Tennessee. They've already seen some straight line wind, nonthunderstorm wind damage there.
A live shot from Nashville, temperatures there in the 60s right now, in the warm sector. That shot went away, but nonetheless, Nashville and most everybody north of Nashville under a high wind warning through this afternoon and tonight from this system that will be intensifying as it moves north and east. Northeast. All right. I-95 corridor, you get a little bit of rain and will get wind from this, just how strong it is, the farther north you are, away from New York City, the stronger the winds will be during the day tomorrow. It will be cold and it will be windy for sure. And then another couple of storms lining up across the West Coast, Heidi, they're kind of lining up like a parade route, very active weather patterns, setting up for the next five to 10 days.
So folks will be dealing with stuff pretty much every other day. Back over to you.
COLLINS: All right. Rob, thank you. We'll keep our eye on that obviously, throughout the rest of the day here.
Quickly I want to get back to a number of financial stories, if you will, that we are following today. Of course, the stimulus bill, there may be a vote on that today.
We are also watching some of what's happening in this bank CEO hearing, if you will. There are eight major banks who are going before the House Financial Services committee, and kind of explaining to them, and to the American people, how they spent the money that was given to them by the government. In fact, go ahead and listen in with me to Representative Maxine Waters now.
REP. MAXINE WATERS (D), CALIFORNIA: ... to the big banks, the banks are saying to the credit card holders, oh, we're going to increase your interest rates. We know that you were paying 13, 14, 15 percent already, but now it's going to cost you 18, 19, 20 percent. So the taxpayers have lent their money to the big banks, who were supposed to be big business persons, expertise in business management, who are failing, they have gone back to ask for some assistance.
They are being denied. And in addition to that, Mr. Chairman, I want to talk a little bit later on when I question about the fact that these banks not only took huge amounts of money from the taxpayers, under the banner of TARP, they then charged and made money on the banks - on the money that we gave them in fees. We have not -
(COMMERCIAL BREAK)
COLLINS: Getting to the bottom of the Salmonella outbreak. A House committee holding a hearing this hour on the deadly outbreak tied to peanut products. At least eight deaths are now linked to the outbreak. Another 600 people have gotten sick. Lawmakers will be questioning the president of Peanut Corporation of America, and others. The company is blamed for the outbreak.
The president's economic recovery package throws billions of dollars at health care reform. Critics say there are provisions in the fine print that will let doctors dictate the kind of medical care your doctor gives you. Actually, I think that should say the government dictate what your doctor can do for you. Senior medical correspondent Elizabeth Cohen of course here with a fact check now.
Because a lot of people, I would imagine, would have serious issue with the government, who are not physicians, usually -
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Right.
COLLINS: Except for Bill Fritz, anyway, telling your doctors what to do and how to care for you. And there is money in the stimulus bill for this?
COHEN: Not exactly. Let me tell you what the concerns are first. The concerns are, as you said, the long arm of the government reaching into your doctor's examining room and telling him what to do. So let's see from two writers who have said that this is the case.
First of all, this is from Betsy McCaughey, a republican, former lieutenant governor for the state of New York. She writes, "the stimulus bill will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost- effective."
Definitely sounds like something you don't want. And this is - was something Scott Gottlieb wrote, he is from the American Enterprise Institute. "The bill will be used to create guidelines to direct doctors' treatment of difficult high-cost medical problems." But, Heidi, it was interesting, when we asked Betsy McCaughey show us the bill. I had a PDF of the bill up on my computer. I said, show me where in the bill it says that this bill is going to have the government telling your doctor what to do, and she directed me to language that didn't actually say that.
But she said that it was vague enough that it would allow for that to happen in the future. Now, when we asked the folks who wrote this bill, hey, is this bill going to allow the government to tell doctors what to do, they used words like preposterous and completely and wildly untrue.
COLLINS: Completely and wildly untrue. All right. Well, it is interesting, because there are people out there who say if makes way for that, then it can be moving towards things like national health care. So, you know, I think that is a concern.
COHEN: The language is vague enough that that can happen. That is the concern.
COLLINS: So because of this vague language, is it true that there is a chance then that doctors can be told by the government specifically about drugs and therapies and treatments for their patients?
COHEN: I suppose there is a chance for anything. I mean, when you have brand-new legislation that's coming out, that's being passed in some would say relatively quickly, because the - you want to get the economy going, some would say that it's written in such a vague way that they're paving the road for that. Will that happen? Who knows?
COLLINS: All right. We'll stay on top of it here, of course, alongside with you. Thanks so much.
COHEN: Thanks.
COLLINS: Our CNN senior health correspondent, Elizabeth Cohen. Thank you.
A lot of hearings to keep tabs on this morning. On Capitol Hill this hour, we are watching all of them for you. You see the new Treasury Secretary Timothy Geithner on the left talking about the overhaul of the TARP plan. Of course, day two on that. And the chief executive officers of some of some of the biggest banks in the country now on the right side of your screen beginning their testimony, how they spent all of that money?
(COMMERCIAL BREAK)
COLLINS: Busy, busy day here in the CNN NEWSROOM. It is the economy. That's the focus this hour for key House and Senate members trying to iron out differences and come together with a final stimulus bill. The economy also on the minds of bank CEOs, eight of them, to be specific there. They are actually sittinging in the hot seat now this hour before the House Financial Services Committee. Lawmakers want to know what happened to the first half of that $700 billion in taxpayer bailout funds.
Also happening right now, Treasury Secretary Timothy Geithner facing a grilling by the Senate Budget Committee. He's there one day after the U.S. stock market plunged. And that happened after he offered few details during the unveiling of his plans for the second half of those bailout funds. We are watching all of these hearings. We, of course, will keep you posted on any developments.
So, holding CEOs accountable. CNN senior correspondent Allan Chernoff is our eyes and ears as bailed-out bank executives take that hot seat on Capitol Hill. He is joing us now live from New York. And Allan, I think we have been listening to, at least a little bit here, the CEO of Goldman Sachs, who is in that hot seat right now.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Correct. That's Lloyd Blankfien, who is giving his opening statement right now. And Heidi, I have been reading through all of the statements from the chief executives, and to read them, you'd think we don't have any problems.
All these bankers are saying, we're putting the money to work, we're making new loans. JPMorgan said, during the fourth quarter, we made $150 billion in new loans. And that is Jamie Dimon right there, the CEO of JPMorgan Chase. Bank of America saying they made $115 billion in new loans during the fourth quarter. Of course, the world didn't really start collapsing until later in the fourth quarter.
But nonetheless, I mean, what we're hearing -- what we're going to be hearing from these chief executives is that we're with you, we're putting the money to work, and we understand there's a problem here, but we're doing business, we're making loans. The chief -- the chairman of the House Financial Services Committee at the very beginning of the hearing, Barney Frank, he warned these CEOs that the American public is not happy about this situation at all.
(BEGIN VIDEO CLIP)
REP. BARNEY FRANK (D), CHMN., HOUSE FIN. SVCES. COMMITTEE: You are the recipients of collateral benefit. That is, in an effort to get the credit system functioning, things will be done that will be to the benefit of the institutions over which you preside, because there is no alternative. But you need to understand, as I think many of you do, how angry that makes people.
(END VIDEO CLIP)
CHERNOFF: And the CEOs have been saying, look, we're not using these billions of dollars from taxpayers to pay out bonuses, to pay compensation. The money's being put to work. Obviously, though, we've still got a credit freeze under way here. We've still got some major financial problems, and these bankers are a key part of helping to get credit flowing again in the economy -- Heidi.
COLLINS: Yes, no question. Because I think at least in the beginning, if I remember correctly, Allan, the credit freeze, if you will, seemed to loosen just a bit. And then it tightened right back up again. So, you have to wonder when it's really going to start flowing. I mean, obviously, that's the big question. And I know we just heard, as we were sort of monitoring this while you were talking, that the chairman of Goldman Sachs said that they actually intend to pay back some of these funds into the economy.
CHERNOFF: Yes. Right. Some of these bankers are saying, look, we really didn't want the money, but it was pushed on us. We had to take it, and they would at some point -- they do want to get the money back. But for right now, they've got that money, and they've got to work to improve the flow of credit. And when a bank says, oh, we're making all these big billion-dollar loans, well, you know what? Some of those loans are going to well-established, triple-A credit companies.
COLLINS: Exactly.
CHERNOFF: But companies that have poor credit in this declining economy, those companies, those individuals, they cannot get a loan.
COLLINS: And people. Regular people.
CHERNOFF: And those companies are laying people off. And that's a critical problem here.
COLLINS: All right. Allan, sure do appreciate that. We know you're going to continue to watch that for us and let us know, should we bring anything else up live. Appreciate it, Allan Chernoff.
Also, investors are keeping a close eye on that hearing. Susan Lisovicz is at the New York Stock Exchange now with more on what has one New York politician outraged, along with how stocks are reacting. It looks a little flat there, Susan, yes? SUSAN LISOVICZ, CNN CORRESPONDENT: That's right, Heidi. Well, we're focused on Washington, but it's not only the politicians in Washington who are very upset about bonuses from the financial services industry. New York Attorney General Andrew Cuomo says he is outraged at Merrill Lynch, accusing executives of corporate irresponsibility. He says they secretly and prematurely awarded more than $3.5 billion in bonuses.
This, of course, as U.S. taxpayers were bailing out the industry. The New York A.G. accuses Merrill of secretly moving up bonus dates to award them before releasing disastrous fourth-quarter earnings. If you want a number attached to that, a $15 billion loss in just three months.
And also, the timing was before Bank of America completed its acquisition of Merrill. Cuomo says four executives alone received bonuses totaling more than $120 million. The claims made in a letter to Barney Frank, who's the chairman of the House committee holding these hearings. B of A, for its part, says it urged the bonuses to be reduced, but it was ultimately Merrill's decision to make.
What we're seeing in financial shares, B of A shares right now are up 6 percent, recouping some of yesterday's steep losses. Well, as for the broader market, Heidi, as you observed, we're doing not a whole lot of anything. There's some early nibbling, but the Dow right now just up 15 points. And the Nasdaq is down several points. So we're not by any way recouping yesterday's losses.
COLLINS: Yes, not yet, anyway. We are also hearing, unfortunately, about some more job cuts today.
LISOVICZ: Unfortunately, that is certainly one of the signs of this very deep recession. We have word from Nike, it says it may cut 1,400 jobs, or 4 percent of its global workforce. That's part of restructuring there. Applied Materials in the tech sector -- makes tools for making computer chips -- is cutting 2,000 jobs. This after a $130 million quarterly loss.
GE Transportation is cutting 350 positions, temporarily laying off another 1,200. So, unfortunately, that is something that continues. As we have the bickering in Washington, we do have a lot of distress in corporate America. No question about it, Heidi.
COLLINS: All right, Susan Lisovicz. We'll keep our eye on those numbers. Thank you.
LISOVICZ: You're welcome.
COLLINS: President Barack Obama vowing to get the economy back on the road to recovery. He's going to take that message to Springfield, Virginia today. The president will visit a construction site to highlight jobs he says will be created under his economic stimulus plan. We'll bring you live coverage of the president's visit. Make sure you keep it right here in the NEWSROOM for that.
Ominous image. A rare sight for Oklahoma in February. Tornadoes touching down and causing death and destruction. At least eight people in the central part of the state are dead. Forty-six other people were taken to the hospital. The storms uprooted trees, flattened homes and knocked out power to thousands of people. Rob Marciano has been watching it all for us, and is standing by now in the severe weather center. Hey there, Rob.
ROB MARCIANO, AMS METEOROLOGIST: Hey, you talk about how rare it is. It is rare for Oklahoma to have tornadoes -- well, in February, not to have tornadoes, but to have them in February is certainly a rare event. Jacqui Jeras working on some climatology, give you an idea of some of the numbers and where they should be this time of year. They shouldn't be here.
So, it's happened a couple times in the past, but it's an extremely rare event. These are the four tornado reports that came in last night, likely from the same cell, likely just a tornado that popped up and dropped down from the same thunderstorm complex. This is the one down by Lone Grove that started out south of the Red River Valley of Texas and then across the border, and this is the one by Edmond. Both of them doing substantial damage, and obviously the one by Lone Grove and across Lone and Carter counties, the ones where they had fatalities there.
So, the National Weather Service survey crews are heading out there now, and we'll survey both of those tracks and see just how big and how bad and how strong those storms were. Guessing from what we saw, probably at least an F-2, if not greater than that, so winds certainly over 100 miles per hour to do that sort of damage.
All right. Where's this storm going? It's moving pretty rapidly to the east at about 40 miles an hour. That's the good news with storms this time of year. They do move to the east quickly. So we're taking it, and we're pushing it to another part of the country. Shouldn't be quite as severe today, but we're already starting to see some thunderstorms tap into the Gulf of Mexico around Mobile Bay, so that's where they'll get a little bit of added energy, slight risk of seeing severe thunderstorms today, according to the storm's prediction center.
Padukah, east towards Bowling Green, south of Louisville, this an area ravaged by the ice storm, still weak trees and tree limbs there. That will easily come down and possibly take down more power lines. Not so much from thunderstorms, but just the wind field from this storm, which is intensifying.
So, high-wind warnings are posted from Memphis all the way to Cleveland, even as far north as Detroit with this storm. And we've already gotten a couple of reports just east of Memphis of some small damage due to the winds, not from any sort of thunderstorm, but just the wind field wrapping around that low, which will, by the way, tomorrow afternoon be across parts of New England. Cold and windy weather behind that, could see damaging weather or winds north of New York City, Upstate New York and parts of northern New England, as well. And then another couple storms coming on board across the West Coast to set up a fairly active weather pattern.
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COLLINS: All right, Rob, thank you for the update. Appreciate it.
Another meteorological story, if you will, bushfires burning in a devastated area of Australia. And officials now think they were deliberately set, at least some of them. Officials say at least 181 people have died in the fires that began on Saturday.
Twenty fires, in fact, are still burning. Thousands of homes have been destroyed. Tent cities have sprung up to accommodate the many people who have no place to stay or are not allowed back home because of safety reasons.
They're still counting votes from yesterday's elections in Israel, but that's not stopping both of the big parties from claiming victory. Live report from Jerusalem, coming up.
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COLLINS: All right. So, we've been telling you there's a whole lot of news going on today. And now this. CNN Sports has confirmed NFL quarterback -- currently a New York Jet -- Brett Favre, who you see there, has told the team he is now retiring from the NFL. Again. CNN Sports has confirmed this with the Jet officials this morning. And they are going to be holding a teleconference at noon. They are now saying that Favre will not be on teleconference, just the team officials.
So, there you have it. Brett Favre retiring now as a New York Jet. I think he did it before as a Green Bay Packer, right? We'll stay on top of that one for you.
If you listen to Israel's two biggest political parties, both of them won yesterday's elections. But it could take some time to find out who really came out on top. CNN's Paula Hancocks is live in Jerusalem now with more on what could be a new balance of power. Paula, good morning to you.
PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: This could take some weeks, so there's going to be a lot of jostling for power, a lot of negotiations behind the scenes. And President Shimon Peres hasn't even decided which of the two, Tzipi Livni or Benjamin Netanyahu, is going to form that coalition yet.
But the negotiation has already begun. We know a lot of meetings going on today, both sides trying to prove that they are the ones who can form this coalition, a stable coalition government, and become the next prime minister.
Now, they've both pretty much given their victory speeches. We heard from both Likud and Kadima in the early hours of this morning. But all the results haven't been counted yet. Now, unofficial results say that Tzipi Livni and her centrist Kadima Party is edging ahead and does appear to have won the election. But, remember, she has already had one try at forming a coalition about four months ago. She didn't manage to do it on that occasion. And this is why we're here today. This is why we have the fifth election in ten years. Now, Israelis I've been speaking to on the streets are pretty disillusioned with the whole political system. They don't understand why there has to continue to be so many elections, and they want this to be sorted out as soon as possible.
But as I say, it could take up to a month before we know who is the prime minister, and before we know what the government is. And remember, it's not just one country waiting for a prime minister. There is so much on hold and so much at stake, and President Obama said that he wanted to start on the peace process straightaway. He can't yet. He has to wait to find out who he's going to be talking to.
COLLINS: Sure, of course. All right, CNN's Paula Hancocks coming to us live from Jerusalem this morning. Thank you, Paula.
They are calling it a brand-new day in Zimbabwe. President Robert Mugabe has sworn in his bitter rival, Morgan Tsvangirai, as the country's new prime minister. The new unity government between two opposing parties is part of a power-sharing agreement. It was reached in September. Zimbabwe has not had a ruling cabinet since political fighting began over election results in March.
Several hearings on Capitol Hill focused on America's economic recovery. The treasury secretary, on your left, is talking about his call for more oversight of bailout money. And the heads of some of the biggest banks are explaing to House members today what they did with some of that money. We're watching it, live.
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COLLINS: You've probably seen the dueling commercials about clean coal right here on CNN. One side says it's an attainable goal. The other insists it's a fantasy. So, who is telling the truth? CNNMoney.com's Poppy Harlow gets to the bottom in today's edition of "Energy Fix." Hi there, Poppy.
POPPY HARLOW, CNNMONEY.COM: Hey, Heidi. We're trying to get to the bottom of this, folks. Believe it or not, it is coal that is at the center of the green energy discussion.
Right now, we know it's the source of half our electricity in this country. That means it produces nearly 30 percent of the greenhouse gases in this country, as well. And interest groups have spent millions and millions of dollars on these TV ads arguing over the existence of clean coal technology, just like the one you're looking at right now.
This would -- the technology -- would strip carbon dioxide from the coal-burning process and burn it underground. Now, you've probably seen this commercial. It's sponsored by an environmental coalition. It features that guy right there in the middle of really a plot of barren land talking about clean-coal technology and how realistic it is.
The other side, though, of this argument has a pretty impressive advocate. Check out this commercial.
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BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We figured out how to put a man on the moon in ten years. You can't tell me we can't figure out how to burn coal that we mine right here in the United States of America and make it work!
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HARLOW: All right. So who is right? Is clean coal within reach, or is this all just a myth? We checked out factcheck.org. There are no commercial clean-coal plants operating in the United States today, but this Web site says research now under way has shown us that clean coal is possible. The problem is -- you could probably guess -- the price tag. It says it is extremely expensive. Given today's economic environment, it could be years before we actually see these plants operating, if they do come into existence.
But both the House and the Senate versions of the stimulus bill, Heidi, set billions and billions aside for clean coal development. And this is about more than just creating a source of energy. A lot of lawmakers say it's about creating jobs and energy independence. The question, though, are these really those shovel-ready projects we hear so much about, and is it going to pay off in end? Because it's our money, right?
COLLINS: Yes, absolutely. All right, Poppy Harlow with our "Energy Fix." Thank you, Poppy.
HARLOW: You're welcome.
COLLINS: To this story now. A flurry of bombings in Baghdad after a period of relative quiet in the capital. CNN's Arwa Damon is in Baghdad right now with the very latest. Arwa, tell us what's happened here.
ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Hi, Heidi. Well, the deadliest of those attacks happening today in Baghdad at a bus station, where Shia pilgrims were gathering to begin to make their way down to Karbala. Two car bombs exploding there, killing at least 16 people.
This causing some concern, as we are in the final days before the holy Shia holiday of Arba'een. That is when millions and millions of Shia pilgrims are going to be making their way to the city of Karbala. Arba'een commemorates the 40th day of mourning for Imam Hussein. It is one of Shia Islam's holiest days.
And Iraqi security forces have actually put into place a number of security precautions. They have around 30,000 Iraqi policemen, Iraqi army soldiers deployed around Karbala, along the routes leading up to at multiple check points, aerial surveillance, security cameras, plainclothes policemen amongst the pilgrims to try to prevent these types of attacks from happening.
This pilgrimmage does pose, does present an ideal scenario for the insurgency to carry out its attacks. What we are seeing here today is that the insurgents will still continue to exploit weaknesses within the security infrastructure here. This war, Heidi, is far from over.
COLLINS: All right, Arwa Damon for us live from Baghdad with the very latest there. Arwa, thank you so much. Appreciate that.
The president hammering away on his case for the economic recovery plan at a construction site. We're there to bring you his remarks, live.
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COLLINS: Quickly just want to give you one more live look at these hearings that are taking place regarding the salmonella outbreak across this country. They are waiting to hear from Stewart Parnell, the president of Peanut Corporation of America about the eight people whose deaths may have been linked to the salmonella outbreak at the Peanut Corporation of America. Several facilities have been closed down, 600 other people sick and an FBI investigation under way. We'll find out more about what he and the rest of the company knew regarding all of this.
We'll stay on top of that for you as well. Thanks so much for joining us, everybody. We'll see you again tomorrow morning, starting at 9 a.m. Eastern. For now, CNN NEWSROOM continues with Tony Harris.
