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American Morning
Pastor Shot and Killed During Sunday Service; President Obama to Reverse Bush Policy on Embryonic Stem Cell Research; Military to Announce Iraq Withdrawal Plans; Should Some Banks Be Allowed to Fail?; What Really Brought Down Bear Stearns
Aired March 09, 2009 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JIM ACOSTA, CNN CORRESPONDENT: Secretary Clinton has yet to show the grit Americans saw during the campaign, but she will get that chance when the nation is tested by its first foreign crisis, something that hasn't happened yet, Kiran.
KIRAN CHETRY, CNN ANCHOR: All right. Jim Acosta for us this morning, thanks so much.
JOHN ROBERTS, CNN ANCHOR: Crossing the top of the hour now, it's 7:00 Eastern Daylight Time. And here's what topping our agenda this morning. These are the stories that we'll be covering for you in the next 15 minutes here in the "Most News in the Morning."
Police in Maryville, Illinois, poring over audiotape and talking to members of the First Baptist Church this morning to try to figure out why a 27-year-old man suddenly gunned down the church's pastor ahead of a Sunday morning service. His motive, still a mystery.
Our Carol Costello is standing by with the very latest on the investigation.
Just a few hours from now, President Obama ready to lift the ban on federal funding for embryonic stem cell research. It was put in place by President Bush. Scientists say it could lead to huge medical advances, but there is plenty of controversy around the move.
Our White House correspondent Suzanne Malveaux will have the breakdown for us this morning from the North Lawn of the White House.
And out of Baghdad, U.S. military leaders giving us the first details about President Obama's plan to withdraw U.S. forces. They say 12,000 American troops and 4,000 British forces will be gone by September. Our senior international correspondent, Nic Robertson, is in the Iraqi capital for us this morning.
But we begin with the tragedy in Maryville, Illinois. Police are turning to audiotape from the early morning service at the town's First Baptist Church after the pastor there was murdered by a 27-year- old gunman. Officers say the pastor actually blocked the first of four bullets with his Bible.
Carol Costello is tracking the latest from our Washington bureau for us this morning. Any clues yet, Carol, as to what set this fellow off? CAROL COSTELLO, CNN CORRESPONDENT: Well, actually, John, I have some new information for our viewers to tell you about, this 27-year- old suspected of killing the pastor.
The Associated Press is reporting he suffers from Lyme Disease and has for years. Now this young man was profiled in an article in the "St. Louis Post-Dispatch." In it his mother describes how the disease affected her son's brain causing doctors to diagnose him with mental illness.
Now, we're not releasing the man's name because he hasn't been charged with anything. But a red jeep parked outside of the First Baptist Church was registered to this man's address. What we do know is that no one inside that church had ever seen the gunman before he shot their pastor.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: And at first we thought that it was confetti, but later we found that he shot through his Bible and disintegrated his Bible.
COSTELLO (voice-over): The relative quiet among the congregants inside the First Baptist Church in Maryville, Illinois, quickly turned to chaos Sunday morning. Police say an unidentified gunman calmly walked down the aisle during Reverend Fred Winter's sermon, exchanged a few words with the well-liked pastor, then pulled out a gun and opened fire.
LARRY TRENT, DIRECTOR, ILLINOIS STATE POLICE: The suspect said something to the pastor and the pastor said something back to him. We don't know what that was. It was almost as if the pastor may have recognized him, but we're not sure about that at all.
COSTELLO: After the shots rang out, the Reverend Winters ran down the aisle before collapsing. Parishioners dropped for cover, praying and fearing they might be next.
CLAUDIA BOHLEY, WITNESS: They were down on their knees on the floor screaming and praying. It was a terrible thing. It's just terrible.
COSTELLO: Police say the killer pulled a knife after his gun finally jammed. That's when two parishioners tackled him to the floor. In the struggle, all three men were stabbed. Both the gunmen and one of those heroic churchgoers seriously injured. Besides his wife and two children, Pastor Winters leaves behind his flock, which had grown to some 1,000 members since he took over the church more than 20 years ago.
UNIDENTIFIED FEMALE: He knew your name when you walked in the door. Even with over 1,000 members, he knew your name.
(END VIDEOTAPE)
COSTELLO: Sad story. As for the two men who tackled the gunmen, one of them, Terry Bullard, is in the hospital this morning. He's in serious condition. The other man, Keith Melton, is at home recovering.
The gunman is in serious condition with knife wounds to his neck. Police will spend the day listening to audiotapes from inside the church to try to figure out what words were exchanged between the pastor and his killer just before gunfire broke out -- John.
ROBERTS: Terrible story, Carol Costello this morning. Carol, thanks so much for that -- Kiran.
CHETRY: Well, we're just hours away now from the president's major announcement on embryonic stem cell research. It's a debate right at the intersection of politics, religion, morality and money. President Obama is planning to reverse former President Bush's limits on taxpayer-funded stem cell research.
White House correspondent Suzanne Malveaux joins us live from the North Lawn with more this morning.
Hi, Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, Kiran, and talking with a top aide here at the White House, it was not about if he would make this decision but just how. Whether or not it would be Congress that would enact legislation to take on this controversial issue or whether or not it would be the president himself, ultimately he decided he'd put a stamp on it.
(BEGIN VIDEOTAPE)
MALVEAUX (voice-over): The executive order today, the fulfillment of a controversial campaign promise.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We are going to discard those embryos, and we know that there's potential research that could lead to curing debilitating diseases, Alzheimer's, Lou Gehrig's disease. If that possibility presents itself, then I think that we should, in a careful way, go ahead and pursue that research.
MALVEAUX: President Obama's order will direct the National Institutes of Health to develop revised guidelines on federal funding for embryonic stem cell research within 120 days. It will allow scientists to apply for government grants to support any stem cell research. Under President Bush, taxpayer money for embryonic stem cell research was limited to be used for just a small number of stem cell lines that had already been created from destroyed embryos.
GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: Without crossing a fundamental moral line by providing taxpayer funding that would sanction or encourage further destruction of human embryos that have at least the potential for life.
MALVEAUX: Obama administration officials say this is a broader effort to end the Bush administration's practice of putting ideology over science. Critics who oppose the research argue that federal funding could lead down a slippery moral slope.
UNIDENTIFIED MALE: Federal funding of embryonic stem cell research can bring along embryo harvesting, perhaps even human cloning that occurs. We don't want that. That shouldn't be done. That's wrong.
MALVEAUX: Supporters say the new policy opens the door for research that may lead to cures for diabetes, Parkinson's disease and spinal cord injuries.
UNIDENTIFIED FEMALE: My religion teaches me to heal the sick, and God gave us this intelligence to find cures for the sick. I think it's a great moment.
MALVEAUX: Critics argue it is immoral to use stem cells from human embryos because it requires destroying them. They say stem cells taken from adult bone marrow, the skin or placenta can also potentially create cells that will lead to curing disease. The issue crosses party lines with notable Republicans Nancy Reagan, John McCain and Arlen Specter in support of Obama's plan.
(END VIDEOTAPE)
MALVEAUX: And later this morning, you'll actually see some of those prominent Republicans at the East Room ceremony. And, John, also interesting, he's going to be hosting later today a group of high school seniors and the finalists for a national talent search perhaps to underscore that main point dealing with policy versus science, Kiran.
CHETRY: All right. Suzanne Malveaux for us this morning at the White House, thanks so much.
Well, don't miss the president's stem cell announcement this morning, 11:45 Eastern time from the White House East Room right here on CNN and CNN.com.
John, she might have thought I was you because I'm not wearing a tie today.
ROBERTS: Everybody is tired this morning. And I think it's, you know, you lose an hour of sleep over the weekend. That leaping ahead thing, particularly on this shift, it's a killer, folks.
Also developing this morning, the U.S. military says 12,000 troops will be out by September from Iraq. It's another step towards fulfilling President Obama's campaign promise to end the war there.
Senior international correspondent Nic Robertson joins us live from Baghdad.
Nic, you spent an awful lot of time in Iraq. You've traveled all over the country. Are things really good enough there for at the large scale withdrawal to happen?
NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, things are certainly improving at the moment, John. They've improved over 2008, over 2007, and that's what commanders here are saying that this improvement is significant enough that these reductions can be made.
This is two combat brigade teams that are being drawn down not to be replaced, 12,000 troops, not just the combat forces but the logistics that support them. The engineers, the military police, the intelligence all rotating out of the country over the next six months. That will leave about 130,000 U.S. troops here.
Also, commanders yesterday saying that 4,000 British troops to leave the country by early summer. That is almost the entirety of the British force here. They, of course, have been in the south in Basra in Iraq.
And also, one F-16 fighter squadron also being drawn down, rotated out, not to be replaced. So a significant reduction and that entirely because they've seen, commanders have seen security improve over the past year or so. But it doesn't mean attacks aren't still going on. There was a big one in Baghdad just this weekend, John.
ROBERTS: All right. You have 20 people dead at last count.
Nic Robertson for us in Baghdad this morning. Nic, thanks so much.
CHETRY: Coming up on 10 minutes past the hour, we past forward now to the stories that will be making news later today.
At 5:00 p.m. this evening, the latest President Obama nominee to face tax trouble will have his confirmation hearing. Ron Kirk is up for U.S. trade representative. The Senate Finance Committee says he's agreed to pay $10,000 in back taxes over a three-year span.
And the college student accused of hacking into Governor Sarah Palin's Yahoo e-mail account and posting the private messages on line has a hearing. That's today at 9:30 Eastern time. David Kernell is charged with fraud. He's the son of a Democratic state lawmaker in Tennessee.
And happy birthday Barbie, she's 50 today and still turning heads. Mattel celebrating her birthday around the globe with a series of pink carpet events in New York, Paris, Shanghai and, of course, Malibu, California.
And that's what we're following for you this morning.
ROBERTS: Well, there are new calls this morning to let some of America's biggest banks fail. Christine Romans is tracking that story for us.
Hey, Christine.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: That's right. By propping up these big banks, Citigroup, AIG, are we just rewarding bad behavior or preventing something like terrible like the Great Depression? I'll have that story.
ROB MARCIANO, AMS METEOROLOGIST: And I'm Rob Marciano in the CNN Severe Weather Center. Twenty-two reports of tornadoes yesterday, some of which doing damage and another threat of severe weather today. Complete details coming up when the "Most News in the Morning" comes right back.
It's 10 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. You know, you've already contributed close to a trillion dollars to the nation's banks, the number that you couldn't count to in a thousand lifetimes.
Well, now, a couple of top Republicans are saying enough is enough and it's time to let the market decide if these initiatives and institutions should survive.
(BEGIN VIDEO CLIP)
SEN. RICHARD SHELBY (R), RANKING MEMBER, BANKING COMMITTEE: Close them down, get them out of business. If they're dead, they ought to be buried. We buried the small banks. We got to bury some big ones and send a strong message to the market.
(END VIDEO CLIP)
CHETRY: President Obama's first budget leaves open the possibility for as much as $750 billion additional in bailout money.
And the iReport inbox is exploding with your questions, your concerns and a fair share of outrage. David Seaman in New York City found an interesting way to drive home the point that shares of the most powerful bank in the world are now almost worthless.
(BEGIN VIDEO CLIP)
DAVID SEAMAN, IREPORTER: Look at that. I have enough money to buy a share of Citigroup. You see that?
Look at that. Just hand that over to your broker and you can buy your own share of America's preeminent financial services company. The only thing to ask yourself is should you buy a share of Citigroup or should you go and get something off the dollar menu at McDonald's?
(END VIDEO CLIP)
CHETRY: I vote dollar menu. You get four pieces McNuggets.
ROBERTS: Might be more satisfying.
CHETRY: For one buck. They're so crispy.
Well, keep those iReports coming. Whether you're fired up about bailouts, you're fed up with the banks or you have questions about your money, we'd love to hear from you. Send us an iReport by going to CNN.com/am.
ROBERTS: Christine Romans here with us this morning "Minding Your Business." What about this idea of letting some of these banks fail?
ROMANS: I'm not as funny as David Seaman. You know?
ROBERTS: Is it a good idea?
ROMANS: You know, clearly two administrations now think it is not a good idea, first, the Bush administration and now the Obama administration. Democrats and Republicans who are running the Treasury Department say no, it is absolutely not a good idea. They're letting the smaller banks fail as Shelby said, Senator Shelby said, they're burying them. The FDIC insures those deposits, goes in, takes over these banks and does it as clearly and calmly as possible so there's no disruption to the community and to the overall economy.
Seventeen banks have failed this year after 25 last year. But should Citigroup be allowed to fail? We have already pumped $45 billion of your money into it. We've guaranteed another $300 billion in losses. The stock has been hammered down 96 percent. Shareholders have been decimated here, but clearly, again and again what we're hearing is that this is a big global company that's too big to fail and the impact on the global system would just be catastrophic.
This is where I get fired up about this idea of too big to fail. Maybe there's something that's too big top be allowed to be so big. I mean where were we when these companies over the past 20 years were getting so big and so risk...
CHETRY: Risky, I know.
ROMANS: Loving, loving risk so much that this has happened. You know, this is something to think of as we go forward.
ROBERTS: In a few minutes, we've got William Cohan on, famous writer who has written a new book that comes out in the next day or so called "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street."
ROMANS: I love that.
ROBERTS: He details what was going on here. So it's going to be interesting to listen to.
ROMANS: And all these guys who are in Washington right now getting so upset about how this has happened. They have all been taking money from the financial services industry for their campaign contributions for years. I mean, the financial services industry has greased the wheels in Washington, and we all know it. The lobbyists have been very, very strong and forceful, and this has all happened as a result.
CHETRY: And not only that, but there were regulations in place that should have raised some antennas. ROMANS: Sure, there were regulations in place that were ignored. There are all kinds of -- you know, we have sleeping watchdogs. We have watchdogs that were, you know, their tooth were taken out because of all the work of the lobbyists. It's just a mess. What is it wretched excess? I like that.
ROBERTS: "Hubris and Wretched Excess."
CHETRY: All right.
ROMANS: I like it.
CHETRY: We'll take more about it in just a couple of minutes.
ROMANS: Sure.
CHETRY: It's 17 minutes past the hour.
New threat at the border. Are international terror groups really backing the Mexican mayhem? It may not just be drug lords on our doorstep anymore. Ahead on the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. Dangerous high winds still a threat across the Midwest this morning. It's after thunderstorms rip across Illinois and Indiana. At least one tornado was reported south of Indianapolis. The National Weather Service has not yet confirmed whether or not it was actually a tornado that touched down.
Also take a look at this. The winds tossing a school bus onto a building, completely flattening that bus. In all, a dozen homes were either severely damaged or destroyed. The strong gust also flipped a semi-trailer on its side on Interstate 65. So far, there's been no reports of any serious injury, but men, when you take a look at the damage, Rob Marciano is tracking all this for us. Quite a system that moved through.
MARCIANO: Yes. It was a strong one especially at this time of the year to be that far north. As you mentioned, the number of tornadoes unconfirmed at the moment, but 22 reports of possible tornadoes and the one that ripped through southern Indiana will be checked out by the National Weather Service today. That one did the most damage and likely it was just a matter of how strong and wide and how long it was on the ground.
All right. Next threat for severe weather will be across the plains that will include Dallas. Another piece of energy comes out of the Rocky Mountains and into the plains and that will make for another bet for severe weather in the same spot that got it over the weekend for tomorrow.
Meanwhile, northeast New York, Bridgeport towards Boston, this is all rain for the most part. You get towards a little bit more of the freezing mark up towards Beantown, so a wintry mix just north of there. And there are some winter weather advisories out. This precipitation shouldn't last too much longer as opposed to what happened over the weekend.
Records set in parts of Kansas City and Chicago. A number of flood warnings out for area rivers here, including areas in the Iroquois, the Illinois, the Des Plaines and the Kankakee, to just name a few of those rivers there.
All right. The New York metros and the Boston airports will see some delays today at D.C. and Philly as well. Some low clouds in Dallas, Houston and Atlanta, and San Francisco and Vegas will see a little bit of wind. There's your warmth in Dallas, 83 degrees that may need a fuel for some more severe weather this afternoon.
Kiran, back up to you.
CHETRY: All right. We'll be tracking that. Thanks so much, Rob.
MARCIANO: You got it.
ROBERTS: Some of the top videos right now on CNN.com. No more albums for Annie Lennox. She tells CNN that she has enjoyed her 30- year music career. Now, she's into blogging and using her MySpace page to highlight humanitarian efforts.
Also, you can't see the small plane that plunged into this Georgia lake yesterday, but one witness says it looked like a hurricane when it hit the water. Two people are dead and a third passenger is missing.
And this restaurant in Taiwan certainly puts a new twist on the poo-poo platter. Diners sit on toilets and drink out of urinals.
CHETRY: That's gross.
ROBERTS: But the special decor, the place stays packed. The owner says he got the idea from a Japanese robot cartoon character who loves to play with poop.
CHETRY: That's so disgusting.
ROBERTS: What's next? Do you know the hospital restaurant where you eat out of a bed pan?
CHETRY: That's so gross.
ROBERTS: Please.
Twenty-three minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the Most News in the Morning. Can the cause of the nation's financial meltdown be described in just one word? My next guest thinks it might be possible, and that word is greed.
William Cohan is a senior Wall Street banker turned author. The book is "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street." It comes out tomorrow. Cohen says Bear Stearns is the poster child for everything that went wrong and if you understand what happened to Bear Stearns, you understand the entire financial meltdown. And he joins me now for more.
Good morning, Bill.
WILLIAM COHAN, AUTHOR, "HOUSE OF CARDS: A TALE OF HUBRIS AND WRETCHED EXCESS ON WALL STREET": Good morning, John.
ROBERTS: Congratulations on your book.
COHAN: Thank you for having me.
ROBERTS: Good to have you back here again.
COHAN: Appreciate it.
ROBERTS: Because you've been here before as an analyst, so it's great to have you back here as an author.
COHAN: You're nice to do that.
ROBERTS: So what was the driving force behind Bear Stearns going down and how does that tell us what happened with Wall Street?
COHAN: Well, human beings do what you reward them to do. And people on Wall Street were rewarded to manufacture in part huge amounts of mortgage-backed securities and then sell them off to investors around the world. They got rewarded a tremendous amount of money to do that, and the executives who controlled those groups at Bear Stearns in particular and other firms, Lehman Brothers, Merrill Lynch, and others also got rewarded vast sums to create huge profits. And as a result of that system and no controls and no accountability, these securities were manufactured and sold and the risks were taken.
ROBERTS: But how did these people put these huge financial institutions, these huge investment properties at risk just because they were so greedy for the money? I mean there's a long history that some of these companies were well over 100 years old.
COHAN: Well, that's true. And for most of that time there were private partnerships where they shared responsibility with each other as partners, shared the liability.
What happened is when they became public, the risks was shifted from partnerships -- the partners, to shareholders. And when they combined that with financing themselves in the overnight market, and I know I'm getting technical here at 7:30 in the morning, but by financing themselves in the overnight market, they gave these overnight lenders a vote on the confidence, on the ongoing viability of the firm and when questions began being raised because of the securities that they used to secure those loans, then it all came crumbling down.
ROBERTS: Somebody else who had a vote as well was the then head of the New York fed, Tim Geithner, who's now the treasury secretary.
COHAN: Absolutely.
ROBERTS: The day after Bear Stearns went down, he made available money from the fed to these investment houses and he said that he didn't offer it to Bear Stearns because he didn't think it was worth the bet. He didn't think that the books were good enough to loan money.
You talk with Jimmy Cayne, who's the former CEO of Bear Stearns.
COHAN: Right.
ROBERTS: He hit some rather, shall we say, colorful things...
COHAN: Colorful, yes.
ROBERTS: ... to say about the then New York fed governor, now the treasury secretary. He said, "The audacity of that -- blank -- in front of the American people announcing he was deciding whether or not a firm of this stature was good enough to get a loan. Who the -- blank -- ask you, you're not an elected officer. You're a clerk. I want to open on this -- blank -- and that's all I can tell you."
He's obviously hopping -- yes, no kidding.
COHAN: Yes.
ROBERTS: But, I mean, did Geithner do the right thing? And if he did or if he didn't, how does that inform what he'll do as treasury secretary, trying to lift the country out of this economic mess?
COHAN: Well, first of all, Mr. Geithner didn't act alone. And I spent several hours with him, interviewed him four times as part of this book. When he was head of the New York fed, he obviously worked with Mr. Bernanke and Mr. Paulson.
I think that each time that they addressed the problem as it was unfolding, I think they actually did do many of the right things, not all of the right things. And I think he is uniquely able. He has a very good temperament, a very smart guy. And I think his ego is in check and he know what needs to be done here and he's uniquely qualified to do it. I think people need to give him more time.
ROBERTS: All right. Well, we'll see if they can do it.
William Cohan, it's great to see you. The book is called "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street." A fascinating read, congratulations.
COHAN: Thanks, John.
ROBERTS: Kiran? CHETRY: All right. Twenty-nine minutes past the hour, a look at the top stories we're following for you right now.
Police still searching for a motive in Maryville, Illinois. Officers are trying to talk to church members and also listen to audiotape after a 27-year-old man shot and killed the pastor of the town's First Baptist Church. Police have not released the suspect's name, but a local newspaper is reporting the man could be a long-time sufferer of Lyme Disease.
And later today in Washington, President Obama will change another of President Bush's policies, lifting a ban on federal funding for embryonic stem cell research. Supporters say that could lead to huge medical advances. Some critics, though, reject the practice for moral and religious reasons.
And the trading week off to a pretty horrible start. Tokyo's Nikkei closing at a 26-year low down to 7,086 points. Sluggish sales of Japanese cars and electronics are battering the world's second largest economy. We're going to have an update from our Hong Kong bureau in about 10 minutes.
CHETRY: It's a story we're following very closely. The growing fear that a bloody drug war won't stop at the Mexican border. It's the kind of chaos that terrorists dream about and that's causing the Pentagon to step in. Here's CNN's Barbara Starr.
(BEGIN VIDEOTAPE)
BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): Across Mexico, federal army troops out manned and outgunned by violent drug cartels are in a fight to the death. The mayhem now a security concern for the U.S, the Pentagon stepping in, offering a new round of military aid. Defense Secretary Robert Gates on NBC.
ROBERT GATES, DEFENSE SECRETARY: Providing them with training, with resources, with reconnaissance and surveillance kinds of capabilities but just cooperation including intelligence.
STARR: Late last year, elite U.S. military teams went to Mexico to train their forces in counter narcotics and counter terrorism. The U.S. has given Mexican forces helmet, vest, radios and night vision equipment. There are plans to send five Bell surveillance helicopters like these and maritime patrol aircraft. How bad is the violence? Last year alone, there were more than 6,000 drug related homicides.
JANET NAPOLITANO: They've been targeting in some of those homicide, public officials, law enforcement officers as a process of intimidation.
STARR: Napolitano says her department is working with local U.S. law enforcement all across the border region to be ready if this war comes north. A recent U.S. military report underscored the concerns stating that "...any descent by Mexico into chaos would demand an American response based on the serious implications for homeland security alone." STARR (on-camera): The nightmare concern, international terrorist organizations joining forces with the Mexican drug cartels. A U.S. counter terrorism official tells CNN one concern, a group like Hezbollah could turn its attention to Mexico and expand its operations south of the U.S. border. Barbara Starr, CNN, the Pentagon.
(END VIDEOTAPE)
CHETRY: So certainly a nightmare scenario there. Michael Ware has experienced covering the war on terror and the war here on our border. He joins us this morning. So how realistic that an international terrorist organization say something like Hezbollah could actually join forces with the Mexican drug cartels?
MICHAEL WARE, CNN CORRESPONDENT: Well, I think that's a bit of a stretch at this stage. Certainly, that's what the Pentagon is saying, however all the piece of the puzzle are in place and certainly the cartels are motivated by the profits that they gain from running the drugs. If they thought it was in their financial interest to hook up with one of these group, then perhaps they might.
ROBERTS: Chairman of the Joint Chiefs of Staff Admiral Mike Mullen was recently down in Mexico and other Latin American countries looking into the drug war. He suggested that maybe to use anti- terrorism tactics to fight these narco gangs. Is that an idea that you think would work?
WARE: Well, put it this way. When I was in Juarez, the border town just across from El Paso, about 10 days ago, this is the center of the drug war. Now, there are many, many differences, I couldn't shake the feeling that I was in the middle of an insurgency. And we see the "Foreign Policy" magazine come out this week and say that this is actually a raging insurgency and the war in Mexico is actually being fought just like an insurgency for the hearts and minds of the people.
You want to win this fight? You make people feel safe, so that they can tell you about the cartels. So that they can walk on the streets. But you know what? I hope Admiral Mullen told President Obama that right now as it's being fought, this war cannot be won.
CHETRY: And really illustrating this challenge, you guys were doing some reporting last week just about the police, you can't even trust whether or not...
WARE: Oh, no.
CHETRY: And those that are straight and on the straight and narrow are getting shot and killed.
WARE: They're lonely men and women. And indeed we saw just last weekend in again in Juarez, two police officers, a husband and a wife were cut down by the cartels, and she was pregnant.
ROBERTS: Wow. WARE: And the week that I was there, eight police died as a part of a campaign to force the police chief to stand down. The cartel said, you step down or we're just going to keep killing your officers, and they were true to their word.
ROBERTS: Unbelievable. I know you're probably spending a lot of time there in the future.
WARE: Yes, it looks that way.
ROBERTS: All right. Mike, thanks for coming in this morning. Appreciate it.
WARE: Thanks, guys.
ROBERTS: We're following breaking news this morning. Asian stocks sinking overnight to lows that we haven't seen in a generation. What would will it mean for your saving at the opening bell today in New York? 35 minutes after the hour.
(COMMERCIAL BREAK)
ANNOUNCER: This is CNN breaking news.
ROBERTS: And we're following breaking news for you this morning. Asian markets taking big hits overnight. The Nikkei in Japan hitting a 26-year low over the concerns about the global economy. Andrew Stevens has got the fallout from Hong Kong for us this morning.
(BEGIN VIDEOTAPE)
ANDREW STEVENS, CNN CORRESPONDENT: Another bruising start to the week for the Asian markets, more evidence of an export collapse in Japan and a major selloff in Hong Kong's biggest stock HSBC, sending two of the regions biggest markets into a spin. The Nikkei in Tokyo ending at a 26-year low after a drop of 1.2 percent. New worries about the health of the country's banks and news that Japan posted its first current account deficit in 13 years, hitting the markets Japanese exports to the world tumbled an extraordinary 43 percent in January, exports to the U.S. were even worse, down 53 percent from a year earlier.
As one trader said, Japan is like an old man who has developed pneumonia while other younger countries caught the flu. Speaking of not being well, the bluest of Hong Kong's blue chip stocks HSBC tumbling nearly 25 percent on Monday. That's an extraordinary selloff for this stock and it appears to be on the back of the bank's ongoing exposure to the subprime crisis on top its plans to raise $17 billion to plug holes on its balance sheet.
The stock has crumbled more than 40 percent since announced its capital raising which will dilute the stock back on March 2nd. Most of the selling came in the last minutes of the day's trade, while the mood in Asia remains relentlessly downbeat, many investors are watching the U.S. markets for some sort of lead but Wall Street has so far failed to provide any stability at all. Andrew Stevens, CNN, Hong Kong.
(END VIDEOTAPE)
(BEGIN VIDEOTAPE)
CHETRY (voice-over): Retro toys and the recession. Old toys make a comeback.
UNIDENTIFIED FEMALE: They were hits once, there's no reason why they shouldn't be hits again.
CHETRY: Trying to sell toys in a bad economy, the old-fashioned way. You're watching the most news in the morning.
(END VIDEOTAPE)
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UNIDENTIFIED MALE: Watch her. One of us die tonight. Somebody knows why, somebody knows.
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CHETRY: Welcome back to the Most News in the Morning. After two decades in the making, it was a triumphant opening weekend for the superhero movie "Watchmen." The film adaptation of the graphic novel took in nearly $57 million in ticket sales between the U.S. and Canada. That's the best opening weekend for any movie so far this year.
And Hollywood moviemakers aren't the only ones going retro in tough economic times. Toy makers are also turning to the tried and true, hoping that nostalgia will equal sales. Alina Cho has that story for us this morning.
ALINA CHO, CNN CORRESPONDENT: Hey,
CHETRY: Hey, there.
CHO: Good morning. You know what's old is new again. Good morning, everybody. It's worked for songs. It's worked for movies, why not toys? Toy companies are hoping the classics will help them get through these tough economic times. They're basically banking on the idea that the old will work for a new generation of kids.
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UNIDENTIFIED FEMALE: It all started at the dance.
CHO (voice-over): In 1959, Barbie looked like this.
UNIDENTIFIED FEMALE: Think of the fun you'll have.
CHO: Now she's 50. Look familiar? Mattel is bringing back Barbie's original face with a two-piece twist.
This is something that is tried and true.
NEIL FRIEDMAN, PRESIDENT, MATTEL BRANDS: Yes, it is and when you have tried and true classic brand or a brand that consumers really knows and loves, there is much less risk.
CHO: Take Candy Land.
UNIDENTIFIED FEMALE: And you don't have to read the page.
CHO: The most popular toy of the 1940s is back, this time with a customized board. Hasbro is launching a new GI Joe and an update on a classic that has more than meets the eye.
UNIDENTIFIED MALE: Transformers. Robots in disguise.
CHO: And who can forget Cabbage Patch dolls. That sparked a generation of parents to act like children.
UNIDENTIFIED MALE: What is it that has left 10 people injured and two arrested?
CHO: In a bad economy when toy sales are down, nostalgia sells.
LINDA KAPLAN THALER, MARKETING EXPERT: The toy companies, I think, are going back to classics because this is the most profitable way to run their business right now. They are losing money.
Launching a new toy can be risky. Take Flava, a hip-hop doll Mattel introduced in 2003 to go head to head with the Bratz dolls, an expensive flop. Tried and true saves on research and marketing.
JOHN FRASCOTTI, HASBRO CHIEF MARKETING OFFICER: We're able to pull on a lot of that memories that parents have and really we're delivering a lot of those great same experiences to those parents' children today.
CHO: This vintage Fisher Price garage was part of my childhood.
And this is my favorite little doll, the blue one here. The new Fisher price barns looks the same as the original but open it up and there's a DVD. There's a retro fabulous Barbie camper, a new townhouse and guess who's making a comeback?
UNIDENTIFIED FEMALE: And here's skipper.
CHO: Barbie's little sister.
THALER: They were hits once, there's no reason why they shouldn't be hits again. These toys feel familiar and there's a certain amount of comfort in knowing that.
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CHO: That's right. You know, today is Barbie's 50th birthday. And to celebrate, toy stores across the country are hosting Barbie parties. You're going to take Maya, Kiran? You know at Toys 'R Us, by the way is selling the new 1959 doll or what it calls the 1959 price, $3. And here it is. This is the 2009 version.
CHETRY: Oh, wow.
CHO: Of the 1959 Barbie with the original face. You can see the face is the same. But as I said in the story, the old one has the one piece, the new one has the two piece, sunglasses, cool earrings. And they're also taking an opportunity with the 50th anniversary vision to sort of sell Barbie through the ages. So you got 1960s Barbie here. You got Superstar Barbie here in the '70s.
CHETRY: 1960s Barbie looks like how I looked when my mother gave me a Ogilvie home perm in second grade, but hey, a little Rod Blagojevich.
CHO: A little Rod Blagojevich. This is also a prototype of the new Candyland that's coming out. And so it's got a customized board. It will be 3-D as well. and check this out, this is actually the original Transformers. And then we've got the GI Joe's here. And get this. Always the tie in is a good thing, right? So Transformers and GI Joe movies are actually coming out on the summer. So you can see why the toys are coming out.
CHETRY: I get it. So seriously, this is $3 right now?
CHO: Apparently so. Yes. Three bucks at Toys 'R Us is what it was advertised as this past weekend, but it's just incredible stuff, I mean really. And when you think about it, too, Kiran, it saves on research and development. You don't have to market a new toy. People are familiar with this already.
CHETRY: That's true.
CHO: So you know they see the commercial, especially for those moms seeing those Barbies for their daughters, it's like wow, I played with that when I was a kid, maybe I want to buy with that for my daughter.
CHETRY: My daughter is playing with a Mr. Potato head that's also you know, what's old is new. Thanks so much, Alina.
CHO: You bet.
CHETRY: John.
ROBERTS: When they bring back Hot Wheels, I'm in. That was the best when I was a kid.
Here's what's coming up in the next 15 minutes of the Most News in the Morning. The first lady opens up to Oprah about life in the White House, talking about the day after inauguration.
And what can the Taliban do for the United States? President Obama now saying there may be opportunities to reach out to some moderate voices within the enemy. Is that smart or is it just naive? It's 47 minutes now after the hour.
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ROBERTS: Welcome back to the Most News in the Morning. For the first time, media mogul Oprah Winfrey is sharing the cover of "O" magazine with someone else Michelle Obama. The upcoming issue features an in-depth interview with the first lady, and Ted Rowlands has got a preview for us this morning.
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TED ROWLANDS, CNN CORRESPONDENT (voice-over): What was the first weekend like after the inauguration for first lady Michelle Obama? "Almost like a wedding, she told Oprah Winfrey. A huge very complicated wedding. The last visitors didn't leave until Sunday and the first Monday was kind of weird. You know. Now we live here and Barack is getting up and going to work, and it's just us. This is our home now." A home the first lady told Oprah she is decorating to reflect the taste of the first family saying, "I want comfortable sofas. I want art that reflects contemporary and traditional. I want to bring in new American artisans. And you've got to be able to make a fort with the sofa pillows. Everything must be fort-worthy."
Winfrey on her show Friday said the first lady talked about making the White House, the people's house, including the children's new swing set.
OPRAH WINFREY, HOST: She said for other family members who work in the White House, if you work in the White House, if you bring your kids, they also have access to the swing set.
ROWLANDS: Mrs. Obama shared some funny experiences with Oprah, including this on what it's like keeping up with friends, saying, "that's the thing about being first lady. You try to catch your friends up on what's happening in your life, and they're like, we know -- we read it in the paper."
And this on her daughters' excitement level about seeing dad coming home on Marine One. "The girls don't move. I'm like, you want to see Daddy landing in the helicopter? No, that's OK. We already saw it."
ROWLANDS (on-camera): The issue of "O" magazine with the interview with the first lady hits newsstands on March 17th. The first time in the magazine's history that someone other than Oprah Winfrey has been on the cover. Ted Rowlands, CNN, Chicago.
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ROBERTS (voice-over): Before you decide if America should talk to the Taliban.
UNIDENTIFIED MALE: You have to look for more than just the obvious. ROBERTS: See their deadly war tool up close. The little red line in the sand.
UNIDENTIFIED MALE: Here is your TC-6 right here.
ROBERTS: Plus, one family's housing nightmare.
UNIDENTIFIED MALE: 135 down!
ROBERTS: Another family's dream come true.
UNIDENTIFIED MALE: This is my dream. This is everything new to me.
ROBERTS: You're watching the Most News in the Morning.
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CHETRY: The president hinting that a major dramatic shift in U.S. policy could be coming in Afghanistan. He tells "The New York Times" that he may consider talking to the moderate voices inside the Taliban. It's a strategy that appears to be working in Iraq. CNN's international security correspondent Paula Newton joins us live from Kabul. Paula, what are you learning on the ground?
PAULA NEWTON, CNN INTERNATIONAL SECURITY CORRESPONDENT: Kiran, both here on the ground and from sources outside the country, we have learned that, in fact, these negotiations brokered by Saudi Arabia that have been going on for months now, Kiran, have now been kicked up to the next level. That means certain elements of the government here of Hamid Karzai are now very carefully trying to really ascertain whether there was more modern elements of the Taliban will actually come to some kind of reconciliation.
What's happened now, what's different is President Obama is giving it his tacit approval. One thing everyone makes clear, Kiran, is right now the Taliban believe they are negotiating from a position of strength. No one wants that. Right now, troops here on the ground, the coalition forces have to take back the initiative from the Taliban and that is the way that everyone wants to go to the - back to the table. Kiran?
CHETRY: Also, IEDs a huge problem in Iraq, something that we've talked about used frequently to target troops in there. And as we understand, it's being used more and more in Afghanistan as well.
NEWTON: Absolutely. Kiran, you know, one of the reasons the Taliban thinks it has the upper hand is they keep taking these very cunning shots at both soldiers and civilians.
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UNIDENTIFIED MALE: That rock could be rigged. That magazine could be rigged, which it is. It is attached to this grenade. Now, he told you how much time you have for this.
UNIDENTIFIED MALE: One to two seconds.
UNIDENTIFIED MALE: One to two seconds.
NEWTON (voice-over): It's an improvised explosive device or IED and the grim monotony of trying to find them and trying to dodge them has gone from Iraq to the battlefields of Afghanistan.
UNIDENTIFIED MALE: You check it out. Right? Then you do what?
NEWTON: They know the drill here, but the 425 brigade combat team from Alaska with many veterans of Iraq is getting a refresher course.
UNIDENTIFIED MALE: Here is your TC-6 right here.
NEWTON: The fact is these soldiers are now less likely to fight the enemy face-to-face. The Taliban's terminator or weapon of choice now, says the U.S. military is the IED, responsible for three- quarters of all casualties, IED attacks have tripled so far this year over last.
COL. JEFFREY JARKOWSKY, CIED TASK FORCE COMMANDER: It is a fact of modern warfare. This is the type of asymmetric attack that our opponent will use against us and we got to be prepared to deal with that and this is a fight that is worth fighting.
NEWTON: But IEDs of all types kill more Afghan civilians and soldiers. Watch this 4x4 truck navigate the barriers, now notice the school children on the right coming home from their last day of school. Fourteen never made it home.
UNIDENTIFIED MALE: Nobody looked in this direction. You're not going to pay attention to this. This is a pink cord.
NEWTON: So here, as in Iraq, they are on the hunt for that crude, but effective weapon of war, they know all too well.
UNIDENTIFIED MALE: All right? Let's go.
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NEWTON: You know, Kiran, it's a bit like what we've been hearing about the economy, unfortunately. It's going to get worse before it gets better. The military being very blunt with me here on the ground. Look, you will see more troop deaths here in Afghanistan because of these IEDs. Kiran?
CHETRY: All right. Paula Newton for us this morning. Thank you.
