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Homeowner Affordability & Stability Plan; New Way to Sell Homes; Cutting Waste in Government Contracts; Back to the Future; Housing Crisis Prescription; Where Are the Results?; Vampire Power; Head-On Train Crash; Selling Gandhi's Stuff

Aired March 4, 2009 - 12:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


FREDRICKA WHITFIELD, CNN ANCHOR: Hello again, everyone. I'm Fredricka Whitfield in the CNN NEWSROOM. Tony Harris is off today.

Here are the headlines from the CNN Center for this Wednesday, the 4th day of March.

Rewrite your mortgage, lower your payment, if you qualify. The president's team outlines requirements for mortgage modifications.

A new business springs up from the housing bust -- house sitting empty homes in exchange for a cut in rent.

And the very first project paid for with your stimulus money. Find out why critics call it a bridge to nowhere in the NEWSROOM.

Let's start with the president's plan to modify millions of at- risk mortgages. He announced a broad outline three weeks ago. Today, millions of American homeowners are finding out specifics and whether they qualify.

CNN's Christine Romans is at the business desk in New York.

Christine, is the plan just for people who are facing imminent foreclose?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: No. There's two different groups of people who are helped by this plan, Fredricka, and the first group of people may not be facing imminent foreclosure, frankly. These are people who are in their home, could afford their home, they're paying their bills, they're not behind, but the market around them has crumbled and they now owe more on the home in some cases than it's worth.

Four to five million homeowners may be in this first part of the program. They're current and able to pay the mortgage. It allows them to refinance and to lower monthly payments and take advantage of those real low interest rates that we have right now.

The second group of people, three to four million homeowners who might be closer to foreclosure, frankly, behind, unable to pay the mortgage. The lender may lower the interest rates and/or the principal on this. The idea is to, you know, change their mortgage payments so it's something that they can afford. The whole idea is for people who might be able to avoid foreclosure, to make it so that they don't have an onerous monthly payment. And how do you that? Incentives for lenders, also some incentives in there, frankly, for borrowers of that second group of people, borrowers so that they keep paying even after they're modified, so they keep current for five years and stay in the home.

There are some surveys that have shown that modifications sometimes don't work for everyone simply because six months out, they're still in trouble again. So two different groups here.

Now, a couple of places, things you need to know.

Hud.gov, go there. There's an awful lot of information if you even think it is possible that you could do this. Go there. There's a ton of information there.

And also ustreas.gov. It's called "Making Home Affordable" is sort of the buzzword of the program. So look for that section of information.

But the question is, what does it mean for the overall economy? And I've been asking a lot of economists this.

Look, if it works the way the government wants it to, it would help, Fredricka, seven million to nine million homeowners. That's a lot of people. But more than one economist and, frankly, housing advocates have said, gosh, we wish we had this a year ago, but we didn't. You know, that's sort of 20/20 vision. We have it today.

We still have a problem with joblessness in the country. If you don't have a job, or you just lost your job, this isn't going to help you, because you have to have an income here to be able to pay the monthly payment anyway. So it doesn't sort of address the jobless part of it, but it is the most expansive homeowner rescue we've seen yet. It really is the biggest and the most sort of coordinated effort we've seen yet.

WHITFIELD: All right. Christine Romans, thanks so much.

ROMANS: Sure.

WHITFIELD: Lots of information there, very helpful information, too. Thanks so much.

So, is President Obama's housing plan the right prescription? We're asking economists for their 90-second fix.

Here's Emory University finance professor Tom Smith.

(BEGIN VIDEO CLIP)

TOM SMITH, FINANCE PROFESSOR, EMORY UNIVERSITY: Here's my prescription for the housing crisis.

People have to sit back, take a big breath, let it out, and realize that they're going to lose a lot of money in the short run. And they're not going to be happy about it, but they have to realize it, it's going to happen. No way around it.

And housing prices were so inflated that people are sitting on property and they're selling it for, you knows, last year's prices, two years ago prices. And that's not going to clear the market.

The market has to clear and, you know, if we get some nice regulation on one end, and we get some people who are willing to sell their house on the other end, these sellers are going to find buyers. And so part of the prescription is making sure that the people who have houses are comfortable with losing some money -- and nobody is -- but they've got to get used to that idea. But we also have to get some regulation in place to make sure that bankers and institutions that are lending money are going to do so responsibly. And then we have to make sure that the system has money to lend.

And so it's kind of a three-part prescription. Right?

(END VIDEO CLIP)

WHITFIELD: All right.

And this is really going to ruffle some feathers. Some executives blamed for causing the crisis now stand to make millions from the government's bailout.

"The New York Times" reports that former leaders of Countrywide Mortgage are now buying up bad home loans from the federal government. Sometimes for pennies on the dollar. The new investment company PennyMac is owned by Countrywide's former president, Stanford Kurland. Under his leadership, Countrywide popularized the subprime loans blamed for bursting this housing bubble.

So here's a unique approach to helping people caught in the mortgage mess. A company in New Mexico is providing homes at a low cost to people who then help sell the home.

We get details now from Melissa Mahan of affiliate KOAT.

(BEGIN VIDEOTAPE)

MELISSA MAHAN, REPORTER, KOAT (voice-over): Tom Schmidt has been building homes in Albuquerque for decades. But when the economy started to take a hit, he decided to shift his focus and start a unique company.

TOM SCHMIDT, HOMES IN TRANSITION: We like to think of ourselves as being able to really kind of lend a hand out there to the general public.

MAHAN: Homes in Transition places gives caregivers into vacant homes like this that aren't selling in this market. That person pays a small amount in rent and agrees to maintain the home for potential buyers. A caregiver can be pretty much anyone who needs affordable housing, from people who have gone through foreclosure, to those going through divorce, to someone who just wants to save some money.

CHRISTINE LOHKAMP, HOMES IN TRANSITION: So many people are suffering right now, they can't afford the costs of rent or mortgages. And they can live in a nice neighborhood and in a nice home, at a very reasonable, affordable amount.

MAHAN (on camera): Homes in Transition will put in you a home just like this for $400 a month plus utilities. But there is a catch.

(voice-over): In addition to allowing a realtor to enter the home at any time through a lockbox, the caregiver must also be willing to move with little notice.

SCHMIDT: These properties will all sell, and our caretakers have an option of moving through our service, they can keep going from home to home. We have a moving service that's available for them.

MAHAN: Schmidt says his service provides a way for homeowners and financial institutions to maintain the value of their property until the market picks up again, and offers those who are struggling a little financial break.

In Albuquerque, Melissa Mahan, KOAT, Action 7 News.

(END VIDEOTAPE)

WHITFIELD: Making government contracts more competitive to cut waste, that's what a memo signed by President Obama today is actually designed to do.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Peter Orszag, my budget director, will work with cabinet officials and agency heads to develop tough, new guidelines on contracting by the end of September. We will stop outsourcing services that should be performed by the government, and open up the contracting process to small businesses.

We will end unnecessary no-bid and cost-plus contracts that run up a bill that is paid by the American people. And we will strengthen oversight to maximize transparency and account ability.

All together, these reforms can save the American people up to $40 billion each year.

(END VIDEO CLIP)

WHITFIELD: White House Correspondent Suzanne Malveaux joins us now with more on this contract overhaul.

So how big a job is this going to be to make these changes, Suzanne?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Fred, it's going to be a huge job. We heard the president just within the last hour or so outlining this. And essentially, he was putting the blame much on the previous administration, President Bush, saying the last eight years, you had billions of dollars essentially going to these private contractors for work that could be done by government employees. He specifically cited the Defense Department.

It was interesting that the number two defense guy was actually at that same event with the president. And he said he is going to take a look at all those defense contracts, because he says this is no longer a blank check for all these different agencies using these private entities.

Now, one of the things that he's going to do, he outlined very specifically, is that they're going to stop outsourcing certain services, things that they believe the government can actually handle on its own.

Secondly, they're going to end these no-bid contracts. A lot of that we saw in the work in Iraq. That is something that the president says is not going to happen anymore.

The third thing that he brings up is that he believes that this is going to save $40 billion a year if they can actually allocate these kinds of jobs and switch it over from private contracting to people who are hired by this government to do this kind of work, fully capable of doing the job -- Fred.

WHITFIELD: And so also interesting here is that during that meeting, or that announcement, was his former rival, Senator John McCain. Another example of reaching across the aisle, or is there something else to read into this?

MALVEAUX: Well, got a little bit of a backstory here.

He was actually congratulating John McCain and Senator Carl Levin, who was on the other side of him, the Democrat. The two of them working on legislation it to get rid of some of this waste.

But Fred, I have to tell you, and you know, that there is this ongoing battle that's been raging through Congress. You've got a $410 billion spending bill working its way through Congress that's got 9,000 earmarks. A lot of criticism towards the president and this administration because he vowed to get rid of the earmark process in the first place.

His aides saying, look, that was from last year, fiscal 2009 budget. We're dealing with 2010, so we're going to let this one go through.

A lot of people looking at that and saying, look, that's not consistent here, perhaps even critical. So it was interesting that he gave some props to those two individuals there. Those are some folks that have actually been criticizing him because of all of the waste they say that they're letting this administration get away with -- Fred.

WHITFIELD: Interesting. All right.

Suzanne Malveaux at the White House.

Thanks so much. Appreciate it.

OK. The president's money men back on Capital Hill today, pushing his budget. Treasury Secretary Timothy Geithner is testifying before the Senate Finance Committee. Geithner is also trying to convince lawmakers that the president's efforts to fix the economy will pay off.

Budget Director Peter Orszag appears before a House panel later on today.

President Obama has promised to sign a spending bill that critics say is parked with pork. Ahead this hour, Josh Lev will examine whether the president has a double standard on those earmarks that Suzanne was underscoring earlier, too.

All right. Congress got a global perspective on the economic crisis last hour from Britain's prime minister. Gordon Brown spoke before a joint meeting of Congress. He's calling for a global new deal to confront the financial storm.

(BEGIN VIDEO CLIP)

GORDON BROWN, BRITISH PRIME MINISTER: An economic hurricane has swept the world, creating a crisis of credit and a crisis of confidence. History has brought us now to a point where change is essential, and we are summoned not just to manage our times, but to (INAUDIBLE) them. And our task is to rebuild prosperity and security in a wholly different economic world where competition is no longer just local, but it's global, and where banks are in longer national, but they're international.

(END VIDEO CLIP)

WHITFIELD: And during Brown's address there, the prime minister announced an honorary knighthood for Senator Ted Kennedy. A British official says Queen Elizabeth wants to recognize Senator Kennedy's work on peace in northern Ireland, as well as his lifetime of public service. Because the award is honorary, Kennedy cannot call himself, however, "Sir Ted." But I'm sure his good friends will anyway.

All right. Well, where are your stimulus dollars being spent? One of the first projects under way is already the target of very strong criticism.

(COMMERCIAL BREAK)

WHITFIELD: President Obama says you're already seeing shovels hit the ground on the first infrastructure repair project funded by your stimulus dollars, but critics are calling the repair a waste.

Our Drew Griffin takes us to the project site so you can judge for yourself.

(BEGIN VIDEOTAPE) DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): We're headed to the nation's first project paid for by the nearly $800 billion stimulus bill. It's a bridge across the Osage River in Missouri.

Where's that? Fair to say that's part of the story.

(on camera): All right. Show me where we're going now. We're here, right?

(voice-over): Drive 40 miles south of Jefferson City, then take a left, 10 miles on a two-lane rural road, and we find your stimulus dollars at work -- a handful of truck drivers, a bulldozer, and a crumbling 75-year-old bridge near the tiny town of Tuscumbia, Missouri. It's about three hours from Missouri's second largest city, St. Louis, where the mayor is not happy about the bridge. He says stimulus money in his state is going to rural, far-flung projects almost forgotten until stimulus money started flowing from Washington.

MAYOR FRANCIS SLAY, ST. LOUIS, MISSOURI: This is an insult to the people of St. Louis. It's a violation of federal law, and I think that they're doing -- they're spending this money contrary to the intent of Congress.

GRIFFIN (on camera): Of more than $4 billion in stimulus money coming to the state of Missouri, $600 million will be spent on transportation projects, and the mayor of St. Louis says most of that money should be spent in high unemployment areas like St. Louis, putting people back to work. But the Department of Transportation in this state will spend just $2 million in this city, only enough, says the mayor, to repave a road.

(voice-over): The Missouri Department of Transportation says $200 million will be spent around St. Louis and says the projects are on a "worst is first" priority.

The Osage River Bridge tops that list, even though it's difficult to find on a map.

David Cochran (ph), the project manager here, says there's no doubt it needs replacing.

(on camera): So they're getting a two-year jump -- whoa, there's a perfect example.

UNIDENTIFIED MALE: This is the stuff that will come down.

GRIFFIN: That?

UNIDENTIFIED MALE: That came down there.

GRIFFIN (voice-over): Up the road, at the Red Oak Inn, owner Wes Horton says Missouri has been promising a new bridge for years. It's only the federal money, the Obama money, he says, that has suddenly got things going.

WES HORTON, OWNER, RED OAK INN: I think they ought to spend all their money on things like this instead of buying the bankers out.

GRIFFIN: There are will be 30 jobs here directly connected to this $8.5 million project. But like the Obama administration, Cochran says this one project will be a jobs multiplier: steel workers, concrete haulers, even the gas stations supplying fuel, an estimated 245 jobs created or saved from this one rural bridge.

Bunk, says university of Missouri economist, Michael Sykuta.

MICHAEL SYKUTA, UNIVERSITY OF MISSOURI ECONOMIST: There's been a lot of research done on the Great Depression. Most of that work and the general consensus of my economic report is that it didn't work. That there were a lot of people deployed, but it didn't create a net long-term growth in the economy.

GRIFFIN: St. Louis Mayor Francis Slay says the Osage River bridge project is just plain wrong in the middle of nowhere and nowhere on the road to recovery.

Drew Griffin, CNN, Tuscumbia, Missouri.

(END VIDEOTAPE)

WHITFIELD: All right. Thousands of earmarks totaling billions of dollars packed into a massive spending bill. President Obama plans to sign it. Will this mean breaking a promise?

Our Josh Levs joins us with that.

JOSH LEVS, CNN CORRESPONDENT: Yes it's a big question right now. It's a big growing question, getting more and more attention.

In fact, check out the board behind me. This is from TIME.com, which is a Web site in partnership with us at CNN.com. "Does Obama have a double standard on earmarks?" They're talking about how does he plan to sign the omnibus spending bill.

This is the key quote here. I'll tell you the basics.

"Despite the fact that congressional Democrats crafted much of the bill after Obama was elected, the White House argued that the pork-laden bill is part of the prior administration's legacy."

I know you're seeing the jumbled text. Let me explain the idea here.

The bill is to keep the government running through 2009. Now, the White House says President Obama's first budget will be for 2010. But short version here, he doesn't have to sign this bill this way if he doesn't want to.

Now we go to a clip from a debate last year. Senator McCain, at the time, was accusing then-Senator Obama of downplaying the whole idea of earmarks because Obama was saying they only accounted for about $18 billion in federal spending.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: But the point is that -- you see, I hear this all the time, "It's only $18 billion." Do you know that it's tripled in the last five years?

OBAMA: John, nobody is denying that $18 billion is important. And absolutely, we need earmark reform. And when I'm president, I will go line by line to make sure that we are not spending money unwisely.

(END VIDEO CLIP)

LEVS: Line by line. That's the question right now, is he keeping that promise?

Now, for an answer, we're going to go over here to the Obameter. Fred, you and I have looked at this before, the Obameter from PolitiFact.com.

WHITFIELD: I know. You like saying it.

LEVS: It's fun to say "Obameter."

Go line by line. This was just promised, and they're going with compromise. That's what they're saying.

Let's go to this graphic which will tell you their ruling on this.

They say that, "On the economic stimulus bill, Obama took a strong and vocal stance against earmarks. The bill was not earmark- free, as he claimed." And they say it was close.

The omnibus, however -- that's the spending bill that we're talking about here -- they say is loaded with earmarks. "Obama and the White House could have used the bully pulpit to criticize them, but they have not been very critical, nor have they indicated any attempt to go line by line through this bill."

Fred, so what it boils down to is they, like us, are going to keep a close eye on where the administration goes from here. But so far, you can't really declare that he's keeping that promise since he's not on this bill.

WHITFIELD: So even though the argument is this is something designed for this year and this is kind of part of the legacy, he could actually make modifications on that line by line if he wanted to, even before he signs it?

LEVS: Well, he doesn't have to sign it this way if he doesn't want to. And he could, as they're saying, use the bully pulpit, be very vocal, call on lawmakers not to do this, or to pull it from there. He's not, and the White House has said he does plan to sign this bill this way. Their position is they want to take care of this right now and then focus on maybe the next step for what they call his first budget, which will be next year. WHITFIELD: OK. So people want to be involved in the process.

Is there a place they can go to get more information on all this?

LEVS: There is, yes. I'm going to take all the links I just showed you right here. I'm going to post them on my Facebook page right here, Josh Levs CNN. If you're on Facebook, do that.

Also, if you're not able to get that, if you're not on Facebook -- I know I was one of the last Americans to get on that bandwagon...

WHITFIELD: No you're not.

LEVS: If you're not on Facebook yet, go to CNN.com and you can see a section on stimulus there. And little by little, they all end up over there, too -- Fred.

WHITFIELD: Yes. Well, I'm in that flood of folks who are among one of the last Americans.

LEVS: Yes, we've got to bring you on.

WHITFIELD: I know.

LEVS: Last...

(CROSSTALK)

WHITFIELD: OK. Thanks, Josh. Appreciate it.

LEVS: Thank you, Fred.

WHITFIELD: All right. Well, how close is it anyway? While you were getting on with your life, Earth had a close encounter with an asteroid.

(COMMERCIAL BREAK)

(WEATHER REPORT)

WHITFIELD: All right. This story is so sad, you can't say it enough.

A life vest and a cooler, the only signs searchers found of the three missing boaters off the Florida coast. The Coast Guard has now officially called off its search for the NFL's Marquis Cooper, Corey Smith and a friend. But family members say they will keep looking.

Meantime, the fourth boater is recovering in the hospital still. He was rescued Monday about 35 miles from Clearwater, Florida. Here's what his doctor had to say last hour.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: For those of you who saw "Titanic," the scene at the end where they were in the water together and the heat just goes -- it just goes very quickly. And to stay in the water for 46 hours and to be alive afterwards, I think is a miracle. I really do.

(END VIDEO CLIP)

WHITFIELD: All right. Well, billions of dollars are being pumped into the economy. So when and where will we start actually seeing the results?

(COMMERCIAL BREAK)

WHITFIELD: All right. A quick check of the markets. The Dow is going in the right direction. It has been, at least, in the last hour and a half. Up 136 points now. And the Nasdaq up 31 points. All fairly good news given the markets took a nasty dive earlier in the week.

Perhaps having something to do with this, some news out of the White House today on kind of mortgage resuscitation or plans for it. So Wall Street has turned the calendar back to 1997. When will stocks get back to the future? We asked Mary Snow to take a look.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT (voice over): Adding to worries about soaring unemployment and home foreclosure, the stock market dropping to 1997 levels, wiping out years of investment savings for people like Cory Hutchison.

CORY HUTCHISON, INVESTOR: Damaged would be pretty accurate. I've taken a very serious hit on all the investments. All the money that I've put in has seriously depreciated.

SNOW: Hutchison estimates he's lost 60 percent of his 401(k) investments, but the 30-year-old software consultant, who's expecting a second child, says he'll keep putting money into his 401(k).

HUTCHISON: I'm fortunate enough that I'm young enough that this hit hurts, but I've got a long time to recover from it.

SNOW: But many other aren't as calm. It's estimated Americans pulled $35 billion out of stock fund last month. And it's turned financial advisers Pran Tiku into more of a therapist these days for his 250 clients.

PRAN TIKU, PEAK FINANCIAL MANAGEMENT: And I think that's a major part of our role right now is to hold hands with and make sure that they understand that there is a long term and we will, at the end of the day, come out of this.

SNOW: To come out of it, though, will take years. Years many older Americans were hoping to spend in retirement. But financial adviser Ryan Mack says dwindled 401(k)s are forcing people to change life plans.

RYAN MACK, OPTIMUM CAPITAL MANAGEMENT: We're getting for too many calls from individuals who are saying, Ryan, I've lost half the value of my 401(k) and I should be retired right now. SNOW: Cory Hutchison says he tries to help out some of his older relatives who have lost money and one personal finance columnist says Cory's situation is not uncommon.

TERRY SAVAGE, "CHICAGO SUN-TIMES": It may very well be, can adult children provide support for their parents as the retirement assets they expected to have simply have disappeared.

SNOW: So how long will it take to recoup the losses? There's no simple equation. We asked financial advisers who told us the one bright spot is that sharp declines are often followed by sharp recoveries. Some say it could take about three years to make up for most of the lost ground, but that's once the market turns around. And there are a lot of ifs in the equation.

Mary Snow, CNN, New York.

(END VIDEOTAPE)

WHITFIELD: All right. Meantime, the nitty-gritty of the president's mortgage modification program is out today. It's one program but two initiatives. One for homeowners who are under water because home values are down and they can't refinance. And second for those on the brink of foreclosure. Here are the key points if you want to modify your mortgage.

The mortgage must have originated on or before January 1, 2009. Principal balance cannot exceed $729,750. Homeowners who make on-time pavements can get $1,000 saved off their principal. Mortgages will be restructured so that home payments account for no more than 31 percent of a borrower's monthly income.

And there's more on the modification program on our website. Just log on to cnnmoney.com to help you out.

So is the president's housing plan the right prescription? We asked top economists to give us their fix for the nation's housing ills in 90 seconds or less.

(BEGIN VIDEO CLIP)

FRANK ALEXANDER, PROFESSOR OF LAW, EMORY UNIVERSITY: My prescription for the housing foreclosure crisis is really simply two steps.

The first step is to reconcile housing values with mortgage debt. With the decline in housing prices of 20 percent or more over the past year across much of America, mortgage debt exceeds value. In that situation, lenders will unlock, modify or refinance. So long as lenders refuse to modify, foreclosures are going to continue. And we're all losers -- owners, lender, neighbors, cities. The key here is it have bankruptcy judges given the power to reduce the debt to fair market value. The very existence of that power will lead lenders to modify loans.

The second thing that needs to happen is access to new mortgages at low interest rates. We need to return to what worked in the past for so many years, the simple 30 year fixed rate mortgage at a low rate of interest. The availability of such mortgages will allow homeowners to refinance at current values. And owners who can no longer own at all, to sell at current values.

In both situations, lenders will prefer to take current values rather than foreclosure values. Last year's foreclosure crisis was the symptom, the first wave of the current economic crisis. When we stabilize home values and home prices, we can then have the beginning of the recovery.

(END VIDEO CLIP)

WHITFIELD: All right. Tomorrow we'll get a prescription for fixing the nation's health care system.

So with the government dumping billions of dollars into the economy, you need to know if things are getting better. Our Tom Foreman follows the money.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: When the president said it will take some time to dig the economy out of its deep hole, we started calling around to figure out what that means. After all, keeping them honest, the government is spending hundreds of billions to stabilize the economy and yet loans remain hard to come by, jobs keep disappearing and the markets are still a wreck. So is anything getting better? Let's start over here with banking.

After the mortgage collapse, banks were afraid to make new loans, so the government gave them billions to build their confidence to start moving money again to home buyers, small businesses. And the Treasury Department says it is working. The number of loans is not falling substantially anymore. And between banks an big businesses, more loans are actually being made than what we saw during the deep freeze of the loan market last autumn, which should ease the credit crunch for you. So we're going give that an even arrow and a bit of an up arrow, too.

What about jobs? The stimulus package is supposed to create a great many of those. Well, we called the Department of Housing and Urban Development which says it is moving stimulus money out to the states very quickly. For example, $3 billion for the backlog of delayed projects in public housing. HUD says right now counties everywhere are lining up contractors for jobs like re-roofing housing projects or installing new window, new sidewalks. And once the paperwork is done, HUD says you will actually start seeing people hired for this work in your neighborhood. Probably within weeks. So for jobs, it's a down arrow right now, but that could start turning, at least a bit, soon.

An finally, over here to the markets. Why are the markets acting so crazy? Well, like you, investors are trying to guess when this economy is going to turn around and they just don't know. So one day the market is up, the next day it is down. Clearly they are not yet convinced the country is headed for better days, but that can change suddenly as we have seen. So we're going to give it both a down and an up arrow. The bottom line is, critics still have plenty to doubt about this whole economic recovery scheme. But if you look closely, you can see these faint indicators of progress that are giving the White House hope.

(END VIDEOTAPE)

WHITFIELD: War crime prosecutors at The Hague today issued an arrest warrant for Sudan's president. President Omar al-Bashir is charged with crimes against humanity in Sudan's Darfur region. It's believed to be the first warrant issued for a sitting head of state. The U.N. says government troops and Arab militia have terrorized Darfur for six years. Sudan's government responded to the warrant this way. A spokesman says it won't answer to, "a white man's court."

All right. Making a commitment to securing peace in the Middle East. Secretary of State Hillary Clinton in the West Bank today. She met with Palestinian leaders and later vowed to make the Middle East a top priority.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: Time is of the essence. We cannot afford more delays or regrets about what might have been had different decisions been made in the past. The Obama administration will be vigorously engaged in efforts to forge a lasting peace between Israel, the Palestinians and all of the Arab neighbors. I will remain personally engaged. As I said in Sharm el-Sheik, this is a commitment that I carry in my heart, not just in my portfolio as secretary of state.

(END VIDEO CLIP)

WHITFIELD: Clinton says the U.S. will wait until a new Israeli government is in place before addressing key issues that have stalled the peace process.

Searching for terrorists in Pakistan one day after a deadly attack on Sri Lanka's visiting cricket team. The ambush in Lahore was caught on tape, so authorities have video of some of the gunmen. Pakistan is offering a $125,000 reward for information leading to arrests. Six Pakistani police officers and a bus driver were also killed in the attack and eight Sri Lankan cricket players were injured. The team returned to Sri Lanka's capital of Colombo today, thankful to be alive. The country's top diplomat says cricket ties with Pakistan will continue uninterrupted.

How the U.S. deals with terrorism weighs on the minds of college kids looking toward their futures. Tony Harris heads back to class to hear what students are thinking.

(BEGIN VIDEO CLIP)

TONY HARRIS, CNN CORRESPONDENT: Where would you like to see the new president place an increased emphasis in trying to bring more peace to the world?

UNIDENTIFIED MALE: Personally I think we need to put the most focus on Iran. I am scared to death of a, you know, a rogue state having nuclear weapons because I mean who know what they themselves would do with it. Who knows who they would give it to.

(END VIDEO CLIP)

WHITFIELD: And you can hear more smart talk from our future leaders when class is back in session with Tony Harris. That's this Friday, noon Eastern.

All right. Is there a vampire in your house? You may be surprised to find out there could be several.

(COMMERCIAL BREAK)

WHITFIELD: Vampire power. No, it's not a new horror movie. It's the energy your electronics are using even when they're switched off. Cnnmoney.com's Poppy Harlow has our "Energy Fix" from New York.

Hello to you, Poppy.

POPPY HARLOW, CNNMONEY.COM: Hey there, Fredricka.

Well, I think we are all guilty of this in some way or another.

WHITFIELD: Guilty.

HARLOW: Myself included. The EPA call this vampire power. This say it costs every U.S. household on average about $100 a year because a lot of the electronics you use every day, they suck energy right when they're turned off, believe it or not. Think about it. The clock on your microwave, when your DVR is on. I know mine always is. Even when you're not using them. Set-top boxes, the EPA says, are one of the biggest energy vampires.

Alan Mire, he's a scientist at the Lawrence Berkeley National Lab, says it costs $40 a year, on top of your monthly bill, just to keep your DVR plugged in, whether it is on or off. And, of course, if you unplug it, you lose all your shows. So that might not be the best option. But there are some energy star rated set top boxes that you can use instead.

On the flip side, though, if you leave your cell phone charger plugged in, it's not much of a vampire at all. Mire says if you leave it plugged in all year, it only costs you 50 cents, Fredricka. So there's a big difference there, but you want to be aware of it.

WHITFIELD: Yes. Oh, definitely. So what are some of the other things that you can do to maybe cut down on that vampire power use? Because, realistically, people are not going to unplug their DVRs, their television sets, all this stuff, before they leave the house.

HARLOW: Right. Yes. But you can unplug things that you're not using. Things, say, in a guest room. There are some things that you can do. Take a listen to this sound. We talked to an expert about this last Friday. Take a listen.

(BEGIN VIDEO CLIP)

MARC ALT, PRESIDENT, MARC ALT & PARTNERS: Anywhere from 20 percent to 30 percent of energy use is actually simply waited on vampire power. And so now that we're looking at trying to reduce our overall energy consumption and reduce our carbon emissions, that's a very easy, kind of low hanging fruit to look at. And so there are a number of products now coming out on the market, like smart power strips and other metering systems that really let you get a much more clearer picture of the energy you're using and actually let you have more control over how you use energy.

(END VIDEO CLIP)

HARLOW: Now he's talking about these power strips that can help because you can use them for a lot of items at once, like your computer, your printer, your speakers, et cetera. Think about unplugging things you don't use, like a TV or a lamp in a guest bedroom, for example. Keep in mind, energy star products. Those not only use less power when they're on, we found out they use less energy when they're on the stand-by mode. That can mean day it day savings. So interesting. But those are the things you can do without having to replace anything at all, just unplug them.

WHITFIELD: OK. Good, helpful advice saving us all money.

HARLOW: Good.

WHITFIELD: Sounds good. Thanks, Poppy. Appreciate it.

HARLOW: You're welcome.

WHITFIELD: All right. Details of a texting railroad engineer emerge as officials investigate a deadly train crash.

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WHITFIELD: At least two people should be in a train cab at all times to prevent accidents like a head-on crash that killed 25 people last year. That's some of what we're learning from the Metro Link disaster investigation. CNN's Ted Rowlands has the rest.

(BEGIN VIDEOTAPE)

TED ROWLANDS, CNN CORRESPONDENT (voice over): Engineer Robert Sanchez was at the controls of the southern California commuter train when it collided head on with a Union Pacific freight train in September of last year, killing 25 people and injuring more than 100 others. Phone records show Sanchez was not only texting a friend just 22 seconds before the collision, but made plans to allow the same friend to actually operate the train. This is a text conversation four days before the crash.

Sanchez to friend, "I'm really looking forward to getting you in the cab and showing you how to run a locomotive." Friend to Sanchez, "oh, my God, dude, me, too. Running a locomotive. Having all of that in the palms of my hand?" Sanchez to friend, "I'm going to do all the radio talking. You're going to run the locomotive and I'm going to tell you how to do it."

At a Washington NTSB hearing, officials say Sanchez had been caught with a cell phone twice before. Once, another employee turned him in. Another time, a manager called his phone to see if it was with Sanchez in the train cab.

RICK DAHL, CONNEX RAILROAD LLC: The engineer's cell phone rang. It was in his briefcase on the other side of the train. I told the engineer that he was in violation of our policy.

ROWLANDS: The NTSB investigation indicates that Sanchez missed a stop signal resulting in the collision. The engineer's alleged conduct has raised serious questions about what other people may be doing while operating trains.

KITTY HIGGINS, NATIONAL TRANSPORTATION SAFETY BOARD: One train, one day, one crew. And it raises questions for me about what the heck else is going on out there.

ROWLANDS: According to the NTSB, one of the operators of the other train ended up testing positive for marijuana. That individual survived. Sanchez, the operator of the commuter train, died with 24 others. The NTSB continues to investigate. They're expected to release a full report later this year.

Ted Rowlands, CNN, Chicago.

(END VIDEOTAPE)

WHITFIELD: Marine investigators say a string of bad decisions contributed to a deadly military jet crash in California. Four members of a Korean immigrant family died when the plane slammed into their house in December. Investigators blame delayed maintenance and faulty decisions by the pilot and ground controllers. They cleared the pilot to fly back to base instead of trying to land at a nearby Navy air field. The Marines relieved four officers of their duties. Nine others were also disciplined.

A potentially expensive fight over the belongings of a man who lived a life of poverty.

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WHITFIELD: A battle is raging over Mahatma Gandhi's few worldly possessions. CNN's Terrence Burke has details.

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TERRENCE BURKE, CNN CORRESPONDENT (voice over): Mahatma Gandhi is one of history's iconic figures. The father of Indian independence. A non-violent revolutionary. And an anti-materialist.

Now, ironically, it's the sale of some of his few worldly possessions that's causing controversy. At this New York auction house, Gandhi's pocket watch, bowl and plate, sandals and wire rim spectacles go under the gavel this Thursday. The items are expected to fetch between $20,000 and $30,000.

JULIEN SCHAERER, ANTIQUORUM AUCTIONEERS: This is a once in a lifetime opportunity and the people that want to acquire it I think are -- basically will pay whatever it takes for them to get those objects.

BURKE: But India's parliament wants the auction halted. And an Indian court issued an injunction claiming the items belong in India. Many Indians believe selling Gandhi's items for profit is outrageous.

VARSHA DAS, DIRECTOR, NATIONAL GANDHI MUSEUM: I feel very sad about it because Gandhi, he himself never believed in private possessions. He gave up everything. He did not even have a home to live in.

BURKE: The Indian government has contacted the collector, American filmmaker James Otis, about buying the belongings before they go to auction. Otis is puzzled by the controversy and says he'll donate most of the proceeds to Gandhi's causes.

JAMES OTIS, GANDHI MEMORABILIA COLLECTOR: I'm hopeful that Gandhi's belongings in this auction will remind us all, especially Barack Obama who actually has a picture of Gandhi in his office and has spoken very highly of him, that we can learn to solve our international conflicts without violence.

BURKE: The conflict over the possessions may have people seeing Gandhi in a new light.

RAMESH SUBRAHMANIAN, INDIAN CITIZEN: Gandhi means more to Indians probably than he means to the rest of the world. But I think his message is (INAUDIBLE) has generated the controversy.

BURKE: As Gandhi once said, honest differences are often a healthy sign of progress.

Terrence Burke, CNN, New York.

(END VIDEOTAPE)

WHITFIELD: I'm Fredricka Whitfield. The CNN NEWSROOM continues right now with Kyra Phillips.