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American Morning
Murdoch Apologizes for Cartoon; Obama's Economic Address; North Korea Ready for Satellite Launch; Clooney's White House Visit; Geronimo's Mystery Skull
Aired February 24, 2009 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
KIRAN CHETRY, CNN ANCHOR (voice-over): Stocks collapse to 1997 lows as the president takes unprecedented steps to save the economy.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We cannot and will not sustain deficits like these without end.
CHETRY: Banks under extreme stress. Your money on the line.
UNIDENTIFIED FEMALE: What's on the top list? Just basic everyday survival.
UNIDENTIFIED FEMALE: We just want to know when it's going to get better.
CHETRY: Your struggles, we have answers.
Plus, breaking news overnight. North Korea on the radar. Word that the rogue state is ready to launch, on this AMERICAN MORNING.
(END VIDEO CLIP)
CHETRY: And welcome. It's Tuesday, February 24th. I'm Kiran Chetry. John Roberts is back.
JOHN ROBERTS, CNN ANCHOR: Good morning, yes. Spent the weekend in New Orleans down there at Mardi Gras, sort of taking in the sights. People down there they're all saying hey, the city is back! But you know, even in this bad economy they're still whooping it up down there. But, you know, things are not going to look good after Ash Wednesday and the economic realities will kick in.
CHETRY: And you got out just in time.
ROBERTS: Got out just in time, just before the really big party.
At any rate, let's get started this morning with some pictures just coming in to CNN. An amazing water rescue at Cape Verde, Arizona.
Two people stranded in the middle of the raging Beaver Creek River. They were spotted clinging on to a tree. Five rescue teams lowered a boat into the rapids and pulled the victims to safety. Both were treated at an area hospital. Fire officials say they were seen riding an all-terrain vehicle before they got stranded in the water.
Also this morning, breaking news overseas. Right now, growing concerns over a long-range North Korean missile site. Pyongyang says full scale preparations are underway there to launch a satellite, not a missile. But American officials say the last time they saw this type of activity was in 2006 when a Taepodong 2 long range missile was launched. That missile failed 40 seconds after takeoff. But if it works properly, it could reach Alaska, even Hawaii.
We're working our sources from the Pentagon to our bureau in Seoul, South Korea. We'll bring you the very latest developments throughout the morning.
And just in to CNN, the price for a gallon of gas down for the tenth straight day. According to AAA, the national average now $1.90. Right now, just nine states in Washington, D.C. report regular gas prices of $2 or more.
And American Express has come up with a new way of cutting its losses, paying cardholders to close their accounts. The company is offering $300 to a limited number of credit card customers who pay off balances and close their accounts. Eligible cardholders have until the end of this month to accept the offer and must close their accounts in either March or April.
CHETRY: All right. Well, turning now to breaking news, the Dow opening this morning at its lowest level since 1997, and that is having an effect on markets across the globe, as you can imagine. We're keeping a close eye overseas.
Right now, the arrows are pointing down in the markets in Asia and Europe. And in less than 15 hours, President Obama will make his highly anticipated speech to Congress and the country to try to give a shot of confidence, but as the talking continues in Washington and on Main Street the pain is getting more pronounced on Main Street. You can see it from the images sent in by our iReporters. Businesses shuttered, homes foreclosed and you can hear it in just about any street corner.
(BEGIN VIDEO CLIP)
VICTORIA THA, CNN IREPORTER: I spend a lot of time worrying about my job. I mean, I just started my job probably eight months ago and I was under the impression that, you know, my company was doing really well. All of a sudden we're hearing, you know, people that have been with the company for like 15, 20 years are getting laid off. And so, I think, you know, having some sort of confidence being restored would definitely help.
(END VIDEO CLIP)
CHETRY: This morning, concerns like the one we just heard from that young lady will launch our coverage. Christine Romans and the CNN money team are here. They're ready to go. Suzanne Malveaux also dialed in to her sources at the White House. She's here with us this morning. And some of the best economic minds are live in our studio this morning as well. And we want to hear from you, so go to our Web site CNN.com/am. Send us an e-mail or an iReport for things.
Starting off right now, we're going to get things kicked off with Christine and boy, ugly numbers for the Dow.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It really was, the worst since 1997. I mean, but consider this, since that original bailout was passed, I think October 1st, right around there, the Dow Jones Industrial Average is down 34 percent. It lost a third of its value since the very expensive bailout was launched.
What Wall Street is telling you, what the market is telling you is that there isn't a lot of confidence right now. Still, we know that the banking system is still quite fragile. A lot of people are saying that Citibank is on the verge of nationalization, whatever that means. We know that the government is probably going to have to take a larger stake or at least that's the concern here.
We know that AIG may be very close to its second revamp of its big bailout, and a lot of people are saying they expect AIG when it reports its earnings to have the worst quarter in the history of any company ever.
CHETRY: And AIG is the company that got the largest chunk of the original bailout, $120 billion?
ROMANS: And this is after, after all of those efforts by the United States government to try to shore things up so what we know and what Wall Street is telling us is that the condition out there is still pretty tough. We know the recession is worsening, so this all sets up as a very, very difficult scenario for the president and his team, as they try to move forward here. Since all of these rescue bailouts, interventions, loans, guarantees, some $7 trillion plus over the past few months, things are still moving in this direction.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: And, Christine, there was quite a buzz at the White House last night when we saw Dick Parsons, head of Citibank. He was actually there. He showed up and everybody was wondering oh my God, what does this mean? Is he going to nationalize the bank?
There was a lot of people making phone calls at that point, and then senior administration officials telling us no, no, that's not it. He's here with Valerie Jarrett, one of Obama's closest advisers. But you can imagine the speculation and the questions about that. And they said well, look, if he wanted to -- if we're going to nationalize Citibank, he'd be meeting with Geithner.
ROMANS: Right.
MALVEAUX: He wouldn't be meeting with Valerie Jarrett, but there's still a lot of buzz about that.
ROBERTS: Well, you never know. He could have been meeting with the president to talk about it overall.
MALVEAUX: Yes. ROBERTS: You know, as we said, in less than 15 hours, the president makes his first address to Congress. It's going to be a joint meeting of Congress.
The pressure is certainly on tonight. A brand new CNN/Opinion Research Corporation poll that came out just minutes ago found 62 percent of Americans say the president's speech will likely make them feel more confident about the economy. So the question, Suzanne, while Americans, rank and file Americans, the public at large believes that he's going to instill some confidence in the market and the economy, there are a lot of indicators that every time he opens his mouth, he creates a lack of confidence in these markets.
MALVEAUX: There's a big problem that they have, the administration. They've very much aware of this right now is that, you know, every single time he speaks about this, you see the Dow go down. And they're looking at these numbers and they're thinking every time, well, you know, it's not just a snapshot this one day. We're going to take a long view of this, which you're going to hear the president talk about is look, everybody has to make sacrifices. We know this is going to be a tough time. We have to look for it.
Everybody has to be fiscally responsible, and he's going to be a lot more optimistic because he heard the words of former President Clinton when he said you know, it can't be all doom and gloom here. People are very worried, and so he's going to talk a little bit more about we can do this. We can solve this problem together. He's going to try to instill the confidence that he just has not been able to do.
ROBERTS: Yes.
MALVEAUX: But he does do well with ordinary folks when he gets out there and talks to folks. He's going to be doing that on Friday.
ROBERTS: Well, I guess...
CHETRY: Last time he talked to them, there was a lot of support. He talked about the need for the stimulus. We saw in the subsequent polling that more people were on board with it.
MALVEAUX: And one of the things that he's going to do is every week he's going to go out and visit. You know, he's going to go travel and talk to real people, say this is the problem. This is how we need to, you know, illustrate it. But one of the things that he is doing is that he is also going to Republicans and saying, look, I don't think you guys are being reasonable here.
ROBERTS: Any sign that he's winning them over? You know, only three of them voted for the stimulus package.
MALVEAUX: Well, you know, he had just them at the White House just a couple of days ago. I had a chance to talk to Governor Jindal of Louisiana because, obviously, they are butting heads here. We heard the president say look, you know, 99 percent of this we agree on. One percent we disagree, minimizing some of the differences. But Jindal said no, we have some legitimate concerns. I want you to actually hear what he said.
(BEGIN VIDEO CLIP)
GOV. BOBBY JINDAL (R), LOUISIANA: We absolutely, Republicans and Democratic governors who want our president to succeed, when we disagree with him, we will certainly offer alternative ideas and solutions, but we face serious challenges as a country, economic challenges, international challenges. We're going to look for every opportunity to reach across the party line to work with him. We absolutely want to see him succeed.
(END VIDEO CLIP)
MALVEAUX: John, I know you were in New Orleans. People were angry about that.
ROBERTS: I was there. A big issue, yes.
A lot of people think that Jindal is putting personal politics ahead of the good of the state. You know, most of those people are Democrats but, you know, that's what they believe.
MALVEAUX: Right. And it's one of the things that Obama is trying to capitalize off of, the divisions within the Republican Party to say, look, I don't think you're being reasonable here. Look at Arnold Schwarzenegger of California. He supports the stimulus package. What's wrong with you? Why are you doing this? And people are going to suffer. That's at least the case he's making.
CHETRY: He actually in a thinly veiled swipe at that yesterday said the time for campaigning will come soon but it's not right now, because Jindal is being accused of basically doing it for political purposes. And Mayor Ray Nagin of New Orleans said hey, we'll take the money. You know, don't say we don't want it because we do.
ROBERTS: He's got his own problems.
CHETRY: Yes. Well, as the economy continues to dominate the headlines, our viewers are sounding off. And we want you to keep your thoughts coming as well. Go to our Web site CNN.com/am. Send us an e-mail or an iReport overnight.
IReporter Anthony Steele from Wichita, Kansas, sent us this video. Check it out.
(BEGIN VIDEO CLIP)
ANTHONY STEELE, CNN IREPORTER: It seems to me that the average cost of foreclosure is $218,000, even if we bought a million of those foreclosures, one million foreclosures would be $218 billion. It's a lot less than we've already bailed out Wall Street and a whole lot less than the stimulus package is.
It seems to me that it's pretty basic. Why are we talking about bridges and things that will happen five and ten years from now? Just a question. (END VIDEO CLIP)
CHETRY: A sentiment echoed by a lot of people.
ROMANS: Oh, yes. I heard that a lot of times. That was the sentiment (ph) and Anthony has got a great question. He's really kind of hit us some on -- on some of the other people are really talking about.
The question is, though, why would you give all that money straight to the banks again? I mean, think about it. That money would go straight to the banks because the banks own most of those homes anyway. They're being foreclosed on, right? And they own the mortgage on. You wouldn't really help homeowners that much you could argue.
Also, foreclosure prevention, according to the joint economic committee in Congress, you know, that costs $3,000 a home. It's all costs for foreclosure prevention, $3,000 a home. So instead of just buying everybody out, making the government this humongous landlord or just, you know, giving all the money to the banks, the proper foreclosure prevention plan is what we need here. We need a foreclosure prevention plan that works for the right people and almost you need to go sort of case by case and zip code by zip code. And I mean, it's such a complicated, complicated problem.
But now, you have the administration going after. They have their own foreclosure prevention plan and their foreclosure relief plan. There have been a lot of different plans. The White House, under George Bush, had started some that frankly a lot of people said we're not very successful. It's a very -- it's a very messy issue.
ROBERTS: It certainly is.
ROMANS: And what does it do? How does it fix all of these bad assets, too, you know, if you just bought people out of their homes? How do you fix the bad assets?
ROBERTS: You know, we're going to be talking about all of this morning. We got our panel of experts behind us. A lot of analysis this morning on where this is all going, what the president needs to do to try to instill some confidence in the markets.
We've seen certainly things go from bad to worse on Wall Street. How low can the market go? We're back in 1997 levels right now. What does that really mean for your money? This morning, we've got some of the top economic minds live on our set. They're going to answer your questions for you.
Also today, CNN.com rolling out extensive and exclusive coverage about your money beginning at 11:00 Eastern, a special online edition of "STATE OF THE UNION WITH JOHN KING" with real time reaction from you. And at noon, Christiane Amanpour previews President Obama's prime time speech to Congress.
At 1:00 Eastern, Ali Velshi and the CNN money team host a two- hour special, "On the State of the Economy." And at 3:00 Eastern, Suze Orman answers your questions.
It's all day all online at CNN.com/live. Coming up now on 11 minutes after the hour.
The mortgage mess, even experts can get sucked in. It happened to them.
(BEGIN VIDEO CLIP)
MATT SWIFT, FORMER MORTGAGE BROKER: The business, yes. I've been doing it for a very long time, 13 years.
(END VIDEO CLIP)
ROBERTS: Mortgage brokers against the bank. Wait until you hear how far they'll go to hang on to their home.
You're watching the Most News in the Morning.
(COMMERCIAL BREAK)
CHETRY: Some Republican governors are insisting that they will not take the stimulus money.
(BEGIN VIDEO CLIP, "THE DAILY SHOW WITH JON STEWART")
(LAUGHTER)
JON STEWART, HOST, "THE DAILY SHOW WITH JON STEWART": You know, money from Democrats can still be exchanged for goods and services. You know that, right?
(END VIDEO CLIP)
CHETRY: Welcome back to the Most News in the Morning.
That was Jon Stewart using a clip from our show to blast GOP governors planning to turn down some money from President Obama's stimulus plan.
Well, we're counting down to the president's prime time address tonight, less than 15 hours from now and we're focused on your money and what the president's economic fix means for you. And we have our two leading economists here to answer your question, Jeffrey Sachs and Conrad Dequadros, also "Wall Street Journal" reporter Kelly Evans. Thanks to all of you for being with us this morning.
And, Kelly, let me just start with you because what a bad day on the Dow. I was reading, you know, your very paper this morning about trying to figure out why we're now at the lowest levels in nearly 12 years. What happened yesterday?
KELLY EVANS, REPORTER, "WALL STREET JOURNAL": I don't know. I mean, certainly when we saw stocks, it wasn't just the banks stocks fall it wasn't just the bank stocks. And it was really a lot of people who seemed to be throwing in the chips. But from my point of view, you know, writing about the economy, if you were to look at the various gauges of how we're doing, we've seen whether it's manufacturing or housing or different parts, different sectors at multi-decade lows. Just having a horrible go of it and yet the stock market you could say, by some accounts, is only at a five or six-year low.
And so, to see us down at levels where we are now I think isn't as surprising as it is to sort of worry some to say wait a minute, we've fallen by 50 percent in 15 months, or something like that?
CHETRY: Well, Jeffrey, I want to ask about this because there's a new survey by some of the country's leading economists. And they think the recession will continue through the rest of the year and that we'll see a turnaround in 2010. According to the new projections, though, we're talking about a recession that's deeper and longer than we previously anticipated. Do you agree with the assessment?
JEFFREY SACHS, DIR., COLUMBIA UNIVERSITY EARTH INSTITUTE: I think that's what we've been saying in recent weeks. This is going to be deep. It's not going to be a quick rebound.
The loss of wealth worldwide from the stock market is not just here but all over the world. The loss of housing values is about $40 trillion. That's weighing on consumers all over the world so demand is down, industrial production is down.
The stimulus is going to be a small, modest step in the right direction. We're going to need more of that down the road. So this is not going to be a quick rebound. I think everybody is figuring that out.
CHETRY: We're calling $787 billion modest. That just shows, you know, how far we've gone.
SACHS: After a $40 trillion loss of wealth, this is the -- this is the predicament that the whole world is in. One of the things the administration is going to have to do more is international cooperation and coordination. We've not had that part of the puzzle filled in yet, but that's coming up and that's very important because this is a worldwide challenge.
CHETRY: And, Conrad, I want to ask you a couple of questions about that. First of all, AIG, and we talked about this, the largest insurer getting $120 billion, the biggest chunk of the original bailout and now they're coming back saying it looks like they're going to need more money. Why, again, there's a lot of questions about that, and now it looks like all of the interventions didn't help. So where do you go now?
CONRAD DEQUADROS, SR. ECONOMIST, RDQ ECONOMICS: I think the issue with AIG is not necessarily it's too big to fail but it's too interconnected to fail, and AIG has relationships and is a counter party to many other financial institutions. I think that's the reason why there's concern about the stability of the company. And it's also a reason why the equity markets did so poorly yesterday. There were a lot of concerns about the financial system about the potential of nationalization of the banks which for the average individual it really doesn't mean much but for an investor in a bank stock, nationalization hasn't been very good for stocks, as we can see from Fannie Mae, Freddie Mac and, in fact, AIG as well.
CHETRY: Let's listen to one of our iReporters who have been soliciting viewer comments and questions. A lot of people have questions. How does this affect me? And so, let's listen to what we're going to hear right now from Kim Keller.
(BEGIN VIDEO CLIP)
KIM KELLER, CNN IREPORTER: We just want to know when it's going to get better. What's going to happen six months down the line? Already know it's kind of crummy right now. What's going to happen in six months? What's going to happen in nine months? What's going to happen a year from now?
(END VIDEO CLIP)
CHETRY: And I'll get all of you to weigh in. Kelly, go ahead.
EVANS: I actually am heartened to some degree by the fact that people are now worried. You know, you have people all over the country who are saying, you know, they've been in a tough financial situation, but I can remember times even last summer, writing about the recession or the downturn.
Remember, it wasn't even declared yet. There were still people in places like Wachovia who are saying that we weren't in recession. So to get from that point to now, well, yes, there's a lot of gloom and doom and yes, it seems like every day there's another dire prediction of how long we'll be mired in this or how long it could get ______8.08 dried out but at least we're all kind of, you know, on the same page here.
I mean, there is this sort of reckoning that here's why we're talking about such massive government intervention. Here's why we're talking about, you know, making comparisons to past really tough periods so, you know, six months, nine months, who knows. But ultimately it's not going to be quick.
SACHS: I think what's really important is the government take care of those people who are really hurting, unemployment, health care. People are hungry in this country, shocking, but a lot of people, and I think more and more that's understood. So we need the government to really provide that safety net right now.
We also have to get past the idea that this stimulus was a short- term three-month, six-month, up till next September. That's a little bit silly. We're going to need to be building out our infrastructure, the role of government stimulus for many years to come. This is not going to be a quick rebound, where we go down and then simply snap back. DEQUADROS: I think the consensus forecasts are the recession ends technically at least sometime this year. And what's going to be very important is the character of the recovery and my fear is that the recovery is going to be fairly lackluster and I think that the unemployment rate may continue to rise, even as the economy starts to grow, just because that growth is going to be quite slow.
CHETRY: Conrad Dequadros, as well as Jeffrey Sachs and Kelly Evans, thanks to all of you. We'll be checking with you throughout the three hours. Thanks -- John.
ROBERTS: Well, if anyone should have known the ins and outs of the mortgage business, it should have been this couple, former mortgage brokers now facing foreclosure themselves. Find out the frustration that they are facing and what you can learn from their struggle.
And President Obama taking questions from his critics, including Senator John McCain. Hear what the president's former campaign rival asked and the president's response.
It's 20 minutes now after the hour.
(COMMERCIAL BREAK)
CHETRY: Twenty-three minutes past the hour. Time to fast forward to some of the stories we'll be hearing about on CNN later today.
It's Fat Tuesday in New Orleans, the final day of Mardi Gras and a Zulu parade kicks off at 9:00 Eastern. It's the oldest African- American parade and this year, it features CNN's Soledad O'Brien as Mrs. Big Stuff. That's followed by Rex, the last parade of Mardi Gras, at 11:00 Eastern.
Well, Captain Chesley "Sully" Sullenberger and the crew of US Airways Flight 1549 will tell Congress about their miracle splash landing in the Hudson River. They'll actually be testifying at a House Committee hearing. The panel will also hear from aviation experts including a leading authority on the effect of bird strikes on aircraft.
At 10:00 Eastern time, Fed Chairman Ben Bernanke goes before the Senate Banking Committee. Lawmakers are expected to question Bernanke on the government's stimulus plans and also recent talk regarding nationalizing the biggest banks.
And that's a look at what's coming up later today, John.
ROBERTS: Looking forward to that, Kiran. We got some live pictures that we want to show you this morning.
There's a fire at the moment. It seems to be raging out of control in the Chinatown section of New York City. It's a six-story building as we understand. You could see the flames just roaring out of the top of the building there. Eleven people hurt so far, four of them critically. The fire department, of course, on the scene down there in Chinatown, down west of SoHo there. And we'll keep an eye on this and let you know more details as we get them in.
President Obama committing $75 billion to help as many as nine million families stay in their homes. The plan, chock-full of financial incentives to help borrowers and lenders work together but we found out one couple who knows more about the mortgage business than most and they're skeptical that the president can help.
CNN's Allan Chernoff joins us now. They're finding themselves in a spot of trouble here.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: A real spot of trouble, John. And, you know, if anyone could have gotten themselves out of trouble, avoided foreclosure, it definitely should have been this couple, Matt Swift and his partner Matt Wallis. These guys were in the business, but they fell victim to the housing market collapse like millions of others.
(BEGIN VIDEOTAPE)
CHERNOFF (voice-over): Matt Swift and Matt Wallis both worked as mortgage brokers for American Home Mortgage. So when they bought their house about three years ago for $400,000, they knew what they were doing. They took out a fixed rate mortgage from Countrywide Financial that was well within their budget.
MATT SWIFT, FORMER MORTGAGE BROKER: This is our business. I've been doing it for a very long time, 13 years.
MATT WALLIS, FORMER MORTGAGE BROKER: We both did very well for ourselves. We had money left over, even after the down payment to do what we needed to do to make the house livable.
CHERNOFF: But when the mortgage market turned south, both men were laid off. Matt Swift was able to land a new job with Countrywide but within a few months he was let go again.
SWIFT: To date, you know, had other round of layoffs and so on. It was last in first out, I guess.
CHERNOFF: Their savings dwindled and their affordable house suddenly no longer was. Soon they fell behind on their mortgage.
SWIFT: We wound up about 11 months, you know, of unemployment. So that kind of did it in for us.
CHERNOFF: Before his foreclosure notice arrived, Matt Swift filed for personal bankruptcy in an effort to hold onto his home.
SWIFT: What that did was kind of throw a monkey wrench in the process. It kind of helped. It gave us time, much-needed time to, you know, find employment.
CHERNOFF: By last autumn, both Matt had landed jobs. Matt Wallis as a retail banker, Matt Swift in health care. Now they're trying to get their mortgage adjusted to an affordable level.
WALLIS: We have proved we can pay. We need -- but you know, we need them to do something. We need them to modify the mortgage for us.
CHERNOFF: But Countrywide, now part of Bank of America, offered a mortgage modification the two say that gives them no break. They'd have to spend nearly two-thirds of their combined income meeting their monthly obligations.
SWIFT: In my best day of loan underwriting and pressure from sales, I would never have been able to approve a loan like that, but yet, they sent that to us right away to hurry up and sign it.
(END VIDEOTAPE)
CHERNOFF: Countrywide says it can't comment on individual mortgage cases, but the lender tells CNN it will review the couple's financial situation again to see if it can lower their mortgage payment. Last week, Countrywide's New York parent, Bank of America, unveiled a moratorium on foreclosure sales and the chief of Bank of America says we want to ensure that any borrower who has sufficient income and the desire to sustain homeownership has the ability to do so, and by using any tools that we do have available.
ROBERTS: All right. Allan Chernoff bringing us that sad story this morning. Allan, thanks so much.
CHERNOFF: It's unbelievable what's happening in housing now.
ROBERTS: It really is. Yes, and some people predicting the worst is yet to come. So, I'll say thanks.
CHETRY: And, of course, the economy will dominate the president's speech to Congress, as well as the country tonight. Will it make you feel more confident about America's economic future? Our panel of experts live on set to answer your questions.
Also, Senator John McCain pressing President Obama on the new pricey fleet of presidential helicopters. Coming up, we'll show you the candid give and take.
It's 28 minutes after the hour.
(COMMERCIAL BREAK)
EUNICE YOON, CNN INTERNATIONAL CORRESPONDENT: Welcome back to the Most News in the Morning. I'm Eunice Yoon in Hong Kong.
Asian stocks are falling to their lowest point in five years. Investors here are growing more concerned that stimulus plans adopted in countries like the U.S. and China won't be enough to counter a deepening global downturn. Thailand's economy has contracted, pushing it closer to its first recession in a decade. Hong Kong is expected to announce Wednesday that its economy is in its worst shape since the SARS virus outbreak in 2003 -- John, Kiran. CHETRY: Eunice Yoon for us and the global resources of CNN, giving us a glimpse of things overseas this morning as the markets dip there. Of course, in this country, a lot of people hoping that President Obama's speech tonight, 9:00 Eastern, will give them some hope for the future. And we'll dig a little deeper into that in a couple of minutes when John talks to our expert economic panel here in our studio.
First, though, just about 30 minutes past the hour and brand new this morning -- Rupert Murdoch, owner of the "New York Post" and News Corp., personally apologizing to readers offended by a cartoon last week that played off the recent chimpanzee attack. There you see the cartoon.
In a statement, Murdoch said that he spoke to a number of people and now better understands the hurt the cartoon has caused. He also went on to say that the cartoon's only intent was to, quote, "mock a badly written piece of legislation." The NAACP has called for the editor-in-chief of the "Post" and the cartoonist to be fired.
The White House is hoping President Obama's third choice for commerce secretary will be a charm. Officials close to naming former Washington Governor Gary Locke to head the Commerce Department. Locke became the country's first Chinese-American governor back in 1997 and served two terms in the Washington State house. The president's last choice, Republican Senator Judd Gregg backed out before his nomination went before Congress. He cited "irresolvable conflicts with the policies of the president."
And Senator John McCain pulling no punches when asked by -- when he asked his former rival about the president's new helicopters. Here's a little bit of yesterday's exchanges as McCain points out the president's new helicopter will cost taxpayers as much as Air Force One.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), ARIZONA: I don't think that there's any more graphic demonstration of how good ideas have cost taxpayers enormous amount of money.
OBAMA: I've already talked to Gates about a thorough review of the helicopter situation. The helicopter I have now seems perfectly adequate to me. Of course, I've never had a helicopter before.
(LAUGHTER)
You know. Maybe I've been deprived and I didn't know it.
(END VIDEO CLIP)
CHETRY: Well, the contract to build a new generation of helicopters was signed four years ago, but at the time the cost was $6.1 billion. Then, changes authorized by the Pentagon have now ballooned to the price tag to $11.2 billion.
Isn't that always the case when you get an estimate, John?
ROBERTS: Oh, absolutely. So, it's going to cost you more, $400 million apiece now.
Right now, we're about 14 1/2 hours away from the president's prime time economic address. The stimulus and mortgage rescue plans were supposed to bolster confidence. But Wall Street didn't get the memo and Main Street is full of concern.
Let's bring in our panel once again. Economist Jeffrey Sachs, Conrad Dequadros also here and "Wall Street Journal" correspondent Kelly Evans.
You know, Jeffrey traveled around the world in the 1980s and 1990s rescuing economies. Every time the president opens his mouth, things get worse. Why is nothing working?
SACHS: Well, you inherited a colossal collapse. So, first of all, this isn't the president's cause. It's the fact that they haven't yet been able to find the barriers to this huge wave of wealth collapse all over the world. There's still a lot of pieces to put in place.
They haven't done that yet. They're rolling out a five-year budget scenario now. They haven't focused on the international side of the crisis yet. So, part of the problem is that there are a lot of pieces in play and they're only getting to one at a time, and this is taking weeks and it will take months to roll out.
ROBERTS: You know, Kelly, this is like that children's book "Give a Mouse a Cookie." The economy is the mouse. It's like you give the mouse a cookie, now he wants another cookie, then he wants a glass of milk, then he asks to you bake some more cookies, then you got to go to the store to get the dough. I mean, where does it all end? What's the key to turn things around?
EVANS: I don't know. Again, a big part of forecasts for the rest of this year and especially after that, we're saying how much is the stimulus package going to lend and help and help boost the economy and when we get that confidence instilled.
I mean, but again, the stock market is a great leading indicator. And when you see it now, it's not as if we're working up from its depths. I mean, we're in the middle of them and I think, you know, again, when you have the mouse chasing this around, it just seems like what's the solution?
ROBERTS: Do you have an idea -- do you have an idea of how low the Dow could go? I mean, could we go down to the sixes?
EVANS: I mean...
ROBERTS: We're almost there.
EVANS: If you look, we're 50 percent off. We're at, you know, 12-year low pretty much, and yet there are other gauges of economic activity that are lower, so I don't know.
ROBERTS: All right. And Conrad, this idea of a $65 a month tax rebate for families, is that enough really to bolster the economy?
DEQUADROS: The hope is that rather than give out this rebate just through checks that will be saved, the administration's hope is that the smaller checks, the smaller payments will be spent. I think that consumers realize...
ROBERTS: 65 bucks gets absorbed up in the family budget pretty quickly.
DEQUADROS: Especially when consumers are facing so many headwinds. So I think the problem is that people also realize that this is only a temporary tax cut, temporary cash that usually gets saved. So, I don't think it's going to have a very big near-term impact.
ROBERTS: In fact, on that point, listen to this person that we talked to, Becky Fiene about what she'll do with her $65 a week.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We're talking about a $65 break.
BECKY FIENE: Right.
UNIDENTIFIED MALE: How would that help you?
FIENE: Oh, I'd put it away. I think everybody -- you know, they want you to put it back in the economy and I understand that, but I think everybody wants to pack a little bit more money away in their savings. And I would probably do that for a good full year and just $65 a month adds up.
(END VIDEO CLIP)
ROBERTS: So, Jeff, if you take that money and it may be difficult to find in your paycheck at the end of the week or every two weeks and you put it away, how much of a stimulus is that to the economy?
SACHS: A lot of us were saying that the tax cut side of the stimulus didn't make much sense. This was actually conventional view among the widespread range of experts. This was pushed very hard by the Republicans in the Congress. We haven't -- I don't think there's going to be a lot of stimulus from that side of the package.
The stimulus is going to come from the investments the government's making. That's going to have to be a longer term perspective. The idea that this is a quick, quick rebound is just not right. We're going to be at this for several years to come.
ROBERTS: All right. Folks, thanks for joining us this morning. Appreciate it. Jeff, I know you got to get out there and do some interviews for your book coming out in paperback edition. We're looking forward to the next book, which is -- keep your money in your mattress, it's your best way to return. Thanks so much. Appreciate it.
SACHS: Thank you.
CHETRY: All right. We're monitoring breaking news this morning. A disturbing declaration from North Korea. It says it's prepared to launch but the question this morning -- what's on the launch pad? In a moment, breaking developments from South Korea and our own Pentagon correspondent Barbara Starr.
Also, you don't want to miss the CNN documentary that provoked dialogue across the country, tomorrow and Thursday, 8:00 Eastern. Join Soledad O'Brien for an encore presentation of "BLACK IN AMERICA." It's 38 minutes after the hour.
(COMMERCIAL BREAK)
SOHN JIE-AE, CNN SEOUL BUREAU CHIEF AND CORRESPONDENT: Welcome back to the Most News in the Morning. I'm Sohn Jie-Ae in Seoul following a developing story.
North Korea said it is getting ready to launch what it calls a satellite. U.S. and South Korean intelligence sources say it is most likely a long-range missile. Either way, it's a delivery system, that if successful, could carry a warhead as far as Alaska. U.S. and South Korean officials have warned North Korea against conducting such a test. Saying that if North Korea does so it could face U.N. sanctions -- John and Kiran.
ROBERTS: Time for global resources of CNN there. That was our Sohn Jie-Ae from our bureau in Seoul, South Korea. And right now, U.S. Intelligence watching this North Korean launch pad 24/7. We get the latest now from our Pentagon correspondent Barbara Starr who joins us now on the telephone.
Does it look as though they're going to launch this thing, Barbara?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, John, it does. You know, we've spoken to a number of U.S. Military Defense and Intelligence officials. They have, indeed, been watching this launch site for several weeks now and they say that preparations are stepping up. The key question, as you say, is what is North Korea preparing to do? Either it's going to be a long-range missile, which could potentially reach Alaska, if it works, which the U.S. Does not think it will, or it could be a long-range missile configured to actually boost a satellite into space.
Either way, what senior U.S. officials say is why is it taking so long? They've been watching Korea build up for weeks now. They think the North Koreans are going very slow and very carefully, which concerns them because they believe that North Korea is now trying to maximize the chance of success of whatever it does launch. The preparations so far -- they see fueling equipment, they see telemetry electronic monitoring equipment, if you will. On the launch site, no sign we are told of a missile just yet. But every expectation is that this will happen, John.
ROBERTS: Barbara Starr reporting from the Pentagon for us this morning. Barbara, thanks so much for the update.
CHETRY: We want to take you live now to some pictures this morning in New York City of a fire, a devastating fire. This is in Chinatown actually 22 James Street. This fire broke out just after 4:00 this morning, and right now from our local affiliates, we're hearing that 20 people were injured, five of them critically. They call this a four-alarm fire that tore through an apartment building.
They say that there were so many people inside this one building that it really took firefighters by surprise. 19 residents and one firefighter treated for injuries so far, and emergency responders say when they first came on the scene they were met with a deluge of victims, as they tried to arrive at that fire scene.
Again, they've been working to put it out. The flames were much bigger when we checked in, even about 15 minutes ago. So, again, they're still working this fire in 22 James Street, which is right in Chinatown in the lower part of Manhattan. We'll bring you an update as soon as we get more.
Meantime, George Clooney's quest for peace in Darfur. The actor and activist talks to Larry King about his White House meeting with Vice President Joe Biden.
It's 43-1/2 minutes after the hour.
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CHETRY: And welcome back to the Most News in the Morning. Forty-six minutes past the hour.
There's a pretty shot this morning. A live look at Chicago. Thanks to our friends at WLS, chili 23 degrees. Although it's actually the 22 degrees here in New York right now as well. They're going up to 39 in Chicago, mostly sunny today so they're actually going to be warmer than New York. I think we're looking to stay in the mid to -- mid-20s to upper 30s today. It's going to be quite windy.
Well, check this out. Brand new pictures this morning just in to CNN. This is NASA launching a satellite from California to monitor greenhouse gases. That satellite, however, failed to reach space because of a, quote, "serious malfunction."
We'll be monitoring a news conference from NASA coming up in the next hour. If that satellite had been a success, it would have allowed scientists to track carbon dioxide levels and also to study our impact on the earth's climate change.
Forty-seven minutes past the hour. Rob Marciano at the weather center in Atlanta.
Boy, what a waste when you think about all the time and the money that goes into trying to launch one of those and it doesn't work.
(WEATHER REPORT)
CHETRY: It's 48-1/2 minutes after the hour.
ROBERTS: The mystery of Geronimo's skull. The warrior's great grandson says a secret society at Yale University has it.
(BEGIN VIDEO CLIP)
HARLYN GERONIMO, GERONIMO'S GREAT-GRANDSON: You upset the spirit, and sooner or later you know the spirits will come after you.
ROBERTS (voice-over): Trouble for the skull and bones society.
ALEXANDRA ROBBINS, AUTHOR, "SECRETS OF THE TOMB": I spoke with several bonesman, who told me that inside the tomb there is a glass display case containing a skull and the bonesman have always called it Geronimo.
(END VIDEO CLIP)
ROBERTS: The Apache warrior's family versus the Ivy League School.
You're watching the Most News in the Morning.
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the Most News in the Morning.
You're looking live at the White House today. We're just over 14 hours away now from President Obama's prime time address to Congress. And the American people on the economy. Of course, you can see the president's speech live at 9:00 Eastern on CNN and cnn.com.
Meantime, actor and activist George Clooney met with Vice President Joe Biden at the White House on Monday to discuss the crisis in Darfur. Clooney is just back from a trip to see Darfur refugees in camps near the border of Sudan and Chad. Clooney pressed the Obama administration for more aggressive diplomacy to try to end the conflict there. He spoke exclusively last night to Larry King.
(BEGIN VIDEO CLIP)
LARRY KING, HOST, "LARRY KING LIVE": What specifically, George, do you want Secretary of State Clinton and the administration to do?
GEORGE CLOONEY, ACTOR AND ACTIVIST: Well, several things. First is this envoy -- somebody working fulltime. We need -- we'd love for them to talk to people in the region. Obviously, China, who is in the region by -- because they're taking products from it. What we really need now is, since it doesn't appear that the United States is going to -- it doesn't make sense that the United States is going to send troops in or that the U.N. is going to send in an army to do this, what it really means is that we're going to need diplomacy. And diplomacy has to start and it has to be aggressive and it has to start soon. We have an opportunity here.
(END VIDEO CLIP)
ROBERTS: Including his trip to the Darfur region of Sudan was his sixth. He's getting to be known -- is quite a face around the area.
CHETRY: Yes, he sure is. I spoke to him at the United Nations about a year ago and he was -- you know, echoed a lot of those same sentiments. He feels very passionately about this, but he's also realistic that we're not going to probably be sending troops into Darfur and the United Nations also is not as aggressive as he had hoped.
ROBERTS: A very difficult problem to solve over there.
CHETRY: Absolutely. All right, George Clooney speaking to Larry King. It's 53-1/2 minutes after the hour.
Panic on Main Street, fueled by Wall Street.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We just want to know when it's going to get better.
CHETRY (voice-over): The president addresses the nation tonight. Does he have the answers? Well, we do. Advice from the best economic minds in America.
Plus, skull of Geronimo, secretly stashed on Yale University campus?
ROBBINS: If it is found that Geronimo's skull is really in there, that's a crime.
CHETRY: Geronimo's great grandson calls President Bush's grandfather a grave robber.
GERONIMO: You upset the spirit, and sooner or later, you know, the spirits will come after you.
(END VIDEO CLIP)
CHETRY: You're watching the Most News in the Morning.
(COMMERCIAL BREAK)
CHETRY: And welcome back to the Most News in the Morning. The tale of Apache warrior Geronimo and his brave fight against the U.S. cavalry has become legendary. That now his remains and in particular his skull are the focus of a tangled legal case. His family believes that the answer lies with one Ivy League school's secret society.
Deborah Feyerick is here with more on this fascinating story for us.
Hey, Deb.
DEBORAH FEYERICK, CNN CORRESPONDENT: Hey, there. Well, you know, Kiran, for decades this story was thought to be a rumor that members of the secret society at Yale stationed at Ft. Sill, Oklahoma, after enlisting in World War I stole the skull, femur and saddle bit of the Great Geronimo who is buried there. Well, Geronimo's family wants to know the truth and they want to have a proper burial befitting such a hero.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Geronimo hanged for murder.
FEYERICK (voice-over): Just his name, Geronimo, conjures up images like these in an American legend. A fierce Apache leader and his warriors greatly outnumbered fighting off the U.S. cavalry in an attempt to save his people and their way of life.
EMIL "HER MANY HORSE," NATIONAL MUSEUM OF THE AMERICAN INDIAN: And eventually surrounded and outmanned, outgunned. He is convinced to surrender.
FEYERICK: Geronimo died a prisoner of war. His body buried in Ft. Sill, Oklahoma. Now, 100 years later his family is suing to get his remains back.
GERONIMO: After awhile, you know, it hurts you inside.
FEYERICK: Harlyn Geronimo is the warrior's great grandson. He and other descendents are suing Yale University and the secret society known as the Order of Skull and Bones claiming Geronimo's skull was stolen back in 1918 by Yale Students, members of the Secret Order. One of the alleged grave robbers, Yaley Prescott Bush, the father and grandfather of Presidents 41 and 43.
GERONIMO: When you desecrated a grave of this nature, you know, you upset the spirits and sooner or later, you know, the spirit also come after.
FEYERICK: For decades members called Bonesman dismissed the suggestion as a hoax, but a Bonesman's letter written in 1918 discovered two years ago at Yale suggests otherwise. Quote, "The skull of the worthy Geronimo the terrible exhumes, now safe inside the T." T is believed short for the tomb, the Bonesman's private club.
ROBBINS: I spoke with several bonesman who told me that inside the tomb there is a glass display case containing a skull and the bonesman have always called it Geronimo.
FEYERICK: Author Alexandra Robbins wrote a book on the "Secret Order."
ROBBINS: If it is found that Geronimo's skull is really in there, that's a crime.
FEYERICK: Geronimo's descendants have also sued President Obama and Secretary of Defense Robert Gates hoping to recover Geronimo's remains at Ft. Sill.
EMIL "HER MANY HORSE": He died as a prisoner of war so he was not free, and he was not free to be buried in the old customary ways that the Apache would have been buried at that time.
(END VIDEOTAPE)
FEYERICK: Now, Geronimo's great grandson says he is willing to take a DNA test. He and his family want Yale University and Skull and Bones members to tell what they know. We attempted to reach Skull and Bones. No one return our calls. Yale says the university does not have Geronimo's remains and then it does not speak for the secret society. So a lot of unanswered questions.
CHETRY: Yes. And how does Yale know that they don't have them in.
FEYERICK: Well, there you go. But they're looking into it. Technically, they'd get subpoena and possibly see whether in fact anybody will say, oh, yes, well, that happens to be the skull, but unlikely.
CHETRY: Deb Feyerick, thank you.
