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International Space Station Evacuated; Madoff Addresses Court After Plea; Madoff Victims React to Guilty Plea; Wall Street's Winning Streak; Creating Jobs; Rumble on Basic Cable; Madoff Pleads Guilty; Spend the Money Wisely; Chopper Goes Down in Atlantic Ocean

Aired March 12, 2009 - 11:59   ET

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

TONY HARRIS, CNN ANCHOR: All right, hello again, everyone. Busy, busy, busy in the CNN NEWSROOM.

Good to see you, I'm Tony Harris. Here are the headlines from CNN for this Thursday, March 1t2th.

Bernard Madoff, the one-time giant of Wall Street, is trading a life of riches for a jail cell. Live coverage, plus reaction from his victims right here in the CNN NEWSROOM.

He is going straight to jail. One of the highest-flying names on Wall Street crashed in a Manhattan courtroom two hours ago. Bernard Madoff admitted to a Ponzi scheme that stole the savings of thousands of investors.

CNN's Allan Chernoff is at U.S. District Court in Manhattan. Also in New York, CNN Senior Legal Analyst -- there he is -- Jeffrey Toobin.

Allan, let's start with you first.

You know, Allan, I want to know as much as I can. I know you've got to run to get to dot-com here in a moment, but I want to know what he was wearing when he walked into the courtroom, I want to know the reaction from the victims, those investors who were bilked, when he walked into the courtroom.

Give me the atmosphere, give me some of the color of this day in court.

ALLAN CHERNOFF, CNN SENIOR NATIONAL CORRESPONDENT: Tony, the tension inside the courtroom was so tight, astounding. When Madoff walked in, he had a little bit of a grimace, and that was the only emotion I saw.

Madoff was wearing a gray suit, white shirt, gray tie. This is almost an obsession with Madoff. Almost all of his clothing is either gray or black. He sat down, heard the judge begin speaking, and shortly afterwards he stood up and gave a five-minute description of his crime. The judge asked him to do that.

And Madoff said that he was grateful to publicly speak. He said that he is deeply sorry and ashamed. He said that he believed that his actions would actually end shortly when he began this scam, he said, in the early 1990s, but he said he was unable to extricate himself, and what he wanted to do was simply satisfy clients at any cost.

HARRIS: Oh, boy.

CHERNOFF: So he said what he did was take money from investors, deposit it in the Chase Manhattan Bank, and simply tell these clients that they were earning above-market returns, returns better than the stock market average, the Standard & Poor's 500. And he said that he knew this day would come, he knew that he would be arrested, he knew that he eventually would end up in court. And he said that he realized that he had made...

HARRIS: OK.

CHERNOFF: ... family members, family and business associates -- he said he's extremely sorry.

HARRIS: Yes, extremely sorry. Yes, right.

So, all right. Those were his words. I apologize for that.

So let's chop this up, because I don't want to lose you before I ask a couple of other things.

Did he ever -- so expressed remorse. OK, got that. Did he ever explain why at a time from -- I only know this from your reporting -- that he was making tens of millions of dollars already, why he started down this road and created -- and started this Ponzi scheme?

CHERNOFF: You know, Tony, like so many crimes, so many people, particularly in the financial world who commit crimes, they don't need to do it. There's something in their psychological makeup.

Bernard Madoff was a pillar of Wall Street. The guy was worth tens, probably hundreds of millions of dollars. He was a chairman of the Nasdaq stock market. He ran one of the biggest stock trading firms on Wall Street.

He was taking business away from the New York Stock Exchange. This guy didn't need to touch this. But something in his makeup made him do it, made him want to feel that he could manage money.

HARRIS: Yes.

CHERNOFF: He was a specialist in the back office end, the trading end. Not as prestigious as actually managing money and beating the stock market. He clearly wanted to prove that he could do that, and he did it in only a criminal fashion...

HARRIS: Yes.

CHERNOFF: ... cheating thousands of thousands of investors out of billions.

HARRIS: OK. And we should mention, as we say good-bye to you, Allan, because you've got to get to dot-com quickly here, CNN.com, if you would like to stay with Allan and hear more of his comments on this case today and the latest developments in the case.

Appreciate it, Allan. Thank you.

As we say good-bye to Allan, we want to bring in a bit of sound from one of the victims who spoke a short time ago. His name is Richard Freeman (ph), and here he is talking about what he wants moving forward.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We're not asking for a bailout. We're just asking for a specific (ph) to pay the money that they should be paying. They're not following the formula that was set up. The IRS hasn't issued guidelines yet. We just want the proper things to be done to get a fair shake on this ourselves.

(END VIDEO CLIP)

HARRIS: All right. The legal case against Madoff will take him from the penthouse to prison.

Let's talk to CNN Senior Legal Analyst Jeffrey Toobin in New York.

You know, Jeffrey, last hour, the question -- you posed it, and so now we have an answer -- was whether or not the judge would revoke the $10 million in bail money -- in bail and send Bernard Madoff directly to jail -- do not pass go, directly to jail. And now we have an answer.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: We do. And I think it is an answer that will contribute to respect for the rule of law in the United States, because if you had Bernie Madoff, having admitted to running the biggest scam in the history of the United States, living in a penthouse on the upper east side, even though he was not a risk of flight, even though he was not a danger to the community, it really would have encouraged disrespect for the rule of law.

HARRIS: Yes.

TOOBIN: So I think Judge Denny Chin made the right decision.

HARRIS: I'm sort of -- Jeffrey, I'm curious. Why, strategically, do you believe this was handled this way? He didn't get a deal. There was -- I don't even know if there was any discussion of a possible plea deal arrangement.

Why did, strategically, he handle it this way in deciding to plead guilty to the 11 counts he was facing?

TOOBIN: Well, let's look at it from the perspective of prosecutors.

HARRIS: Great. TOOBIN: They only deal when they have to deal, when they need something from the defendant. When they have a case that they're not entirely sure of, you give them a lesser plea, or you need his cooperation, so you give him a lesser plea in return for his cooperation.

HARRIS: Yes.

TOOBIN: Here, this was such a slam-dunk case. They didn't need anything from Bernie Madoff. They would have proved it easily without him.

HARRIS: Right. Right.

TOOBIN: So -- but then the interesting question is, even in spite of that, why did Madoff agree to plead guilty? That's where the speculation becomes a little harder, because, you know, he didn't really get anything out of pleading guilty. He didn't get a lesser sentence.

HARRIS: Right.

TOOBIN: My own theory is that he knew that if there were a trial, he would have to listen to a lot of people testifying under oath about how his business worked, and it might implicate other people, most particularly his family. So by shutting down a trial, he limits the investigation somewhat.

He can't stop it. Obviously, the government is going to continue to investigate his two sons, his brother, his wife. But a trial would have put a spotlight on them that he didn't want.

HARRIS: Right. Can you -- can prosecutors get the information that is in his head that will help them along the road as they continue this investigation? How do prosecutors get that information?

TOOBIN: Well, it's a little complicated, but they do have one way of doing it.

Madoff has now pled guilty...

HARRIS: Right.

TOOBIN: ... to crimes relating to his investment scam. He doesn't have a Fifth Amendment right anymore. He has no risk of self- incrimination because it would be double jeopardy to prosecute him again. So he could be given immunity and put in the grand jury, testify in the grand jury. He has no right to refuse.

Now, when he's looking at a life sentence anyway, if they find him in contempt of the grand jury, whqhat more can they do to him? So -- but I think at some point, prosecutors will put him in the grand jury and force him to answer questions as best they can.

Whether he tells the truth, whether he is forthcoming in the grand jury, I don't know, but certainly that's something down the road. Also remember, they're going to have access to all the e-mails, all the internal documents of the Madoff companies, so they are going to be able to look at the paper trail and the electronic trail to see whether other people were involved.

HARRIS: All right. Our Senior Legal Analyst Jeffrey Toobin.

Jeffrey, good to see you. Thank you.

TOOBIN: OK, Tony.

HARRIS: All right. In a few minutes, here in the NEWSROOM, I will talk with Alexandra Penney, the best-selling author and former editor for "Self" magazine. She says she lost her savings -- boy -- to Madoff and has a few choice words for him.

And Christine Romans will be joining us for that interview coming up in just a couple of minutes in the NEWSROOM.

Another high-roller-turned-defendant planning on taking the Fifth. Texas billionaire Allen Stanford has filed papers in federal court saying he will not answer questions relating to his case. Stanford and top officers at Stanford International Bank in Antigua are accused of an $8 billion Ponzi scheme. The government today is trying to have a court-appointed receiver keep control over Stanford's companies.

More Americans facing life without a paycheck. New claims for unemployment insurance rose last week. Another 654,000 people filed for jobless benefits. That raises the number of people collecting unemployment to a record 5.3 million.

In other news now about the economy, retail sales showed a smaller-than-expected decline in February. The Commerce Department says sales fell .1 of one percent last month.

New signs that the housing crisis has yet to hit bottom. Foreclosure filings were up almost 30 percent in February, compared to a year ago. That's according to RealtyTrac, an online marketer of foreclosed properties. Foreclosures increased to 74,000 in February from 67,000 the month before.

Spend the money wisely, the message today from President Obama to state officials hoping for their share of the $787 billion recovery program. Last hour, he spoke at a meeting with state leaders and Vice President Joe Biden.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We have got to go above and beyond what I think is the typical ways of doing business in order to make sure that the American people get the help that they need, and that our economy gets the boost that it needs. And so I've said before -- I know Joe emphasized this to you earlier -- if we see money being misspent, we're going to put a stop to it.

(END VIDEO CLIP) HARRIS: White House Correspondent Suzanne Malveaux joining us live, our first opportunity to talk to Suzanne today. I'm not sure I'm happy about that.

Suzanne, good to see you.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Good to see you, Tony.

HARRIS: What approach is the administration taking to making sure all the governors and the states are on board?

MALVEAUX: Well, Tony, it was interesting. What we saw was a little bit of good cop/bad cop that happened today.

We saw President Obama talking to these state officials, saying they're very capable people, I'm sure we'll work together very well, but we're going to keep an eye on you. Then earlier in the morning, though, we saw the vice president, Joe Biden, harsher words, harsher tone.

Essentially, what this administration is doing by pleading, cajoling, even threatening, is to let the governors and these state officials know that, look, we're going to be watching the dollars here, how they're spent, not wastefully, not on projects that don't make any sense. Don't make us look like fools here in giving you the kind of money that's coming from this economic stimulus package...

HARRIS: Yes.

MALVEAUX: ... only to turn around and say, look, you've wasted all of this.

Biden was saying, pick up the phone, tell your governors to call me if there are any problems, any concerns, things you don't understand, because we're all going to be watching what happens here, and we know what happened the last go-around. They do not want it look bad here. They want to make sure that this money is being used wisely. So this really is kind of a warning to state officials to get on board, be transparent and be accountable.

HARRIS: And we've heard a familiar -- well, at least a familiar broadside from the president. We heard it again this morning, that, look, if you're being wasteful, we're going to call you out. And it really is about enforcement this time around, isn't it?

MALVEAUX: It absolutely is. And some people are not satisfied.

Senator Mitch McConnell, he's already sent out a letter. He's calling for the Government Accountability Office to periodically audit how this money is being spent. So he wants really tougher oversight.

One of the things that Biden said is that he announced that there is going to be $8 billion for all of the states for these weatherization projects, but he said only $800 million of that is going to be allocated today. So they'll get some of that money, but obviously he says states have to come back and show us, how was it that you used the money before you get more of that money in the pot?

HARRIS: All right. Our White House Correspondent Suzanne Malveaux.

OK. So the stars are now aligned in my world.

All right, Suzanne. Thank you. Appreciate it.

MALVEAUX: Mine, too, Tony. Mine, too!

HARRIS: All right.

The meeting on the recovery plan, part of a busy day for the president. At 2:30 Eastern Time, he meets with the Chinese foreign minister. Later this afternoon, he delivers remarks at the Business Roundtable. And at 5:15, he has a meeting with Secretary of State Hillary Clinton.

A curious search conducted by the FBI this morning to tell you about. CNN has confirmed that agents went through the offices of the chief technology officer for the District of Columbia. The former head of the office, Vivek Kundra, recently went to work for President Obama.

Now, while the raid is at his old office, no one has indicated it has anything to do with him. The FBI says two people have been arrested as part of this ongoing investigation. Office workers were told to go home for the rest of the day.

Bernie Madoff heads to jail. How did he pull off his Ponzi scheme, and for so long? I will talk to one of his victims about her experience.

(COMMERCIAL BREAK)

HARRIS: Admitting guilt and being sent directly to jail. Disgraced financier Bernard Madoff this morning made shocking confessions about his Ponzi scheme.

Madoff said, quoting now, "I always knew this day would come. I never invested the money. I deposited it into a Chase Manhattan Bank." Madoff also said -- quoting now -- "I cannot express how regretful I am for my crimes."

The judge has accepted Madoff's guilty plea to all 11 criminal counts against him. He faces up to 150 years behind bars beginning today. Sentencing is set for June 16th.

Bernard Madoff had 4,800 clients when his Ponzi scheme collapsed, many of them Jewish. We're now coming to understand how they were recruited.

"Vanity Fair" spoke with Rabbi Marc Gellman, who is rabbi to many of the victims.

(BEGIN VIDEO CLIP) RABBI MARC GELLMAN, TEMPLE BETH TORAH: He was a member of the club, and clubs that defined who was in and who was out. Maybe that's what this is all really about, who was in and who was out. Maybe, just maybe, it can lead to an understanding that the only valid way of deciding who is in and who is out is this -- who is kind and who is not?

(END VIDEO CLIP)

HARRIS: Boy, I love that sentiment.

Let's dig deeper into this recruitment practice. The "in club" full of unsuspecting people. Live with our Christine Romans in New York.

And Christine, I hardly know where to start with this. So many people, and maybe the place to start is where you took us last hour. You know, you can think of this in terms of the hedge funds, the big sort of institutional investors who were bilked by Madoff, but that's not all of the story here, is it?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: No. There are a lot of people who didn't even know who Bernie Madoff was, but they knew someone who they trusted or someone successful who said, look, you know, I invest with this guy named Madoff, you should, too. I mean, it's been a really good 10 years. You won't make a lot, you're not going to get 40 percent or 50 percent like you will in a high- flying hedge fund, but you're going to made a steady eight percent, 10 percent, 12 percent. And people thought he was safe. I mean, that's the irony, that he was the least safe thing out there.

But you have people, lots of people, who were talking about trying to get into the real clubs that he was in, in Palm Beach, or the places where he went to dinner, or the other kinds of groups that he belonged to because they wanted to get close to him so they could get in. And he wouldn't let everybody in. There was this feeling of exclusivity.

If you got in, you really hit the jackpot. And that jackpot was a steady return, 10 percent, 12 percent. People didn't think they were being greedy, Tony. They thought that they were just getting something safe and they wouldn't have to worry.

HARRIS: Let's bring in someone you know and have spoken to in the past. Alexandra Penney is a best-selling author, former editor for "Self" magazine, and a victim of Bernard Madoff.

Alex, good it see you.

Alex, I should mention, is joining us from West Palm Beach, Florida.

Alex, a couple of questions. And Christine's going to jump in here as well.

I read something from you where you called Bernie Madoff a sociopath. Explain. I think a lot of people understand the sentiment, but explain what you mean by it.

ALEXANDRA PENNEY, VICTIM OF MADOFF'S PONZI SCHEME: I'm obviously not a psychologist or a psychiatrist.

HARRIS: Yes.

PENNEY: But I was trying on my way over here to kind of get into his mind, Tony. And I think what I also meant by sociopath is there is a certain grandiosity.

In his mind, Bernie Madoff still thinks he's a hero. And what I mean by that is, he's protected his family by pleading guilty, so he doesn't implicate any members of his family. He still thinks that he was doing good for his clients.

HARRIS: Yes! Did you hear the comments from inside the courtroom this morning?

PENNEY: Yes! Yes!

HARRIS: OK.

PENNEY: And I heard what you said about a half an hour ago. And I am just stunned.

In other words, he maintains the fact that he is, unlike what the rabbi was just saying, a decent, good guy. The man is totally deluded.

I also think that his wife is as equally deluded as he is. How did this woman amass $62 million or $69 million? She wrote a cook book. And the cook book was embargoed because she and the co-authors had stolen the trademark.

So it just becomes more and more complex.

HARRIS: Well, Alex, one more quick one from me...

PENNEY: Sure.

HARRIS: ... and then I'm going to turn it over to Christine.

How are you feeling today? Look, this is a man who is going to jail. He is, in all likelihood, going to spend the rest of his days in prison. How do you feel on this day?

PENNEY: I'm very grateful, I'm very glad that Denny Chin put him in jail, where he belongs. What I don't understand, and I think a lot of us don't understand, is what were the prosecutors doing for three months? He didn't come up with a plea deal. He gave up nothing. And that is a big question.

I think I feel that he should be in jail. I do believe very strongly he should be in solitary, where he has absolutely no computer or telephone or cigars...

HARRIS: Yes.

PENNEY: ... where he just has to be there all by himself with no communication to the outside world.

HARRIS: Hey, Christine, you see the sketches?

ROMANS: I do. I do see the sketches.

HARRIS: And Alex, I don't know if you can see them as well...

PENNEY: No, I can't see them.

HARRIS: ... but we're getting the first sketches from the courtroom today.

PENNEY: Yes.

ROMANS: You know, he stood there...

PENNEY: I wish I could.

HARRIS: OK.

ROMANS: ... in a blue suit, Alexandra, and he was pretty poised. You know, our reporters on the scene, Allan Chernoff, saying that he was erect, he kind of grimaced on the way in there.

But I'm wondering -- you know, he had 4,800 victims.

PENNEY: Right.

ROMANS: How do you see him maybe as a metaphor for this entire financial crisis? I mean, it's almost as if Bernie Madoff symbolizes the big pop that happened to all of our wealth.

PENNEY: Great question, Christine. You know, when you talk about the overall picture, let me just give you an idea that I had.

When I call 911, I expect a policeman to respond to my emergency. I put my money in a securities account, I expect the SEC is going to protect me. I think that the overreaching situation, or crime here, really, is that we as investors are really not protected.

To your question of whether he's emblematic of the whole system, there is no question that he is. I'd like to know, what's going to happen over at Chase Manhattan? Are they subpoenaing those records? What's happening over there? Are your reporters on it?

HARRIS: Yes, we're on it.

ROMANS: Oh, yes, we're on it.

HARRIS: But Christine, can I turn a question?

ROMANS: Sure. HARRIS: Can I turn part of that answer from Alex on to you and ask you this question -- we asked it of Abbie Boudreau last hour -- what the heck -- you report on this stuff. What happened to the SEC? I mean, what, four examinations, two full-blown investigations, a blueprint from the whistle-blower as to what was going on here.

Why did so many people at the SEC drop the ball on this guy and call...

PENNEY: Thank you, Tony.

HARRIS: Yes.

ROMANS: It's embarrassing. I mean, it is embarrassing, and people at the SEC have testified that it is embarrassing and that they are going to investigate it and try to do something about it.

But I think what it shows is, is a whole period of time when self-regulation was the rule of thumb that Washington and Wall Street were pursuing together with, you know, holding hands, and now we're seeing the fallout from that. Where were the watchdogs? The watchdogs were lap dogs, and now you've got -- you know, you've got victims who are really in trouble.

HARRIS: Yes.

ROMANS: I mean, Alexandra Penney is starting all over again, essentially after building a life and a fortune and doing what she loved, which is to paint now and travel and enjoy her home.

Now you're starting over, aren't you?

PENNEY: Absolutely. I lost every cent of my savings.

There's so many people, Christine -- I know you've been on this story for a long time -- who are so far worse off than I am, these elderly victims. Two people have committed suicide because of this man.

You know, at some point I started thinking, you know, he's like -- not like, he is a terrorist. I've heard that term, "economic terrorist."

HARRIS: Yes.

PENNEY: Why aren't we sort of indicting him on those terms, too?

HARRIS: Well, Alexandra Penney, thanks for your time.

PENNEY: Sure. Thank you, Tony, Christine.

HARRIS: We really appreciate having you on the program today.

And Christine, as always, you're awesome. Thank you, Christine.

ROMANS: You're welcome. HARRIS: Still to come in the NEWSROOM, a chopper goes down in the ocean with 18 aboard. We'll get the latest on the search for survivors.

(COMMERCIAL BREAK)

HARRIS: You know, for all of the other news, we haven't been able to bring you the latest on this pretty tough story, and it is a difficult search that is going on right now, this hour, for victims of a helicopter crash in the north Atlantic.

The Canadian Broadcasting Corporation says the chopper, carrying 18 oil industry workers, went down off Newfoundland shortly before 8:00 a.m. Eastern Time. So far, we know of one survivor being taken to a hospital.

Let's do this, let's bring in our Jacqui Jeras here.

And Jacqui, perhaps you can talk to us a little bit about the weather conditions prevailing right now during this search.

JACQUI JERAS, CNN METEOROLOGIST: Actually, they've been really rough, Tony, unfortunately. It's actually amazing to even find that one person was able to survive. And really, you have to be in a life raft. You had to have gotten out of the chopper, you had to have gotten out of the water almost immediately in order to be able to survive this.

Let's talk about this area, however. I will show you our Google Earth animation, and we'll zoom in, and first talk a second about that.

You know, they left Halifax, Nova Scotia, in this area, and they were on their way to the oil platform. It's called the Hibernia offshore oil platform, and it's somewhere right on this area. It's the world's largest oil platform, and we think it was somewhere in this area where that crew was found.

I'm going to switch sources here for you. And there you can see those are what we call buoys, and they take weather observations out there in the middle of the ocean. So this is the best kind of data that I'm able to give you at all.

And we'll zoom in to the area there, and the closest one that we can find here, and it will show you, you know, the winds really strong, 34 miles per hour. That's sustained winds. And so when you're getting winds that strong, your gusts are going to be well beyond that. It could be, you know, up to even 40 miles per hour.

Look at the wave height. Eight feet. You've been seeing waves in this area over the last couple of hours between about six and 10 feet. So that's going to be really rough water if they're out in that and, you know, can even make you a little sea sick if you're in a tiny little raft.

But what's most critical here, Tony, is that water temperature. Look at that, 32 degrees. You know, if you're wet, if you're in that water with a temperature like that, maybe 15 minutes, if you're lucky, in order to be able to survive.

HARRIS: All right. So we hold out hope for the others on-board that chopper. One survivor, again, has been found and taken to an area hospital. We'll try to get additional information on this story.

Jacqui, appreciate it. Thank you.

Police in southern Alabama say a shooter left behind lists of employers and co-workers he felt had, "done him wrong." Investigators say 28-year-old Michael McLendon killed himself after a three-town shooting spree. Ten people were killed, most of them members of his own family, but none was on the list. Investigators say McLendon became bitter at relatives after his parents divorced but they still don't have a specific motive for the rampage other than anger.

It could have been worse. That's what police are saying today about that school shooting in southwest Germany. A make-shift memorial sits outside the building today. A 17-year-old former student killed nine students and three teachers Wednesday, but police say there could have been even more victims. Teachers followed a well-rehearsed plan. They locked classroom doors and told students to stay on the floor. The gunman fled to a nearby town. When police arrived, he killed three more people, then he died of a gunshot wound when police closed in. It is now clear whether the gunman killed himself or was shot by officers.

More bad news on the jobs front. We get an economist's 90-second prescription for turning things around.

(COMMERCIAL BREAK)

HARRIS: We're following some breaking news now. We're going to get to our John Zarrella in just a moment. We're hearing the International Space Station is being -- can this be correct here? Is being evacuated? But John Zarrella is on the beeper line with us from Florida and he can clarify all this.

This is one of those alerts, John, when you read it, well, you certainly want to get to the correspondent who knows about these issues best. John, what can you tell us?

JOHN ZARRELLA, CNN CORRESPONDENT: Yes, Tony, I, just this minute, got off the phone with the Johnson Space Center officials there and they are confirming that, in fact, this is a precautionary measure. Let me stress, precautionary measure. The two astronauts and one cosmonaut have been evacuated.

What they are doing now is they have gone in to -- as we are speaking now, Tony, 12:35 Eastern Time, 11:35 Central, being evacuated into the Soyuz rocket, which is the escape vehicle that is attached to the space station. And the reason is, because a piece of space debris -- it's called a piece of a PAM motor, which is a payload assist motor, is approach the space station. And let me put it to you this way, Tony. This thing is tiny. It is literally a third of an inch -- 0.009 meters. And as we know, all of this stuff is tracked by space by U.S. Space Command out in Colorado. And apparently they were not able in time it do a debris avoidance maneuver. So as a precaution, they have gotten the two astronauts, Sandy Magnus, Mike Fincke, and the cosmonaut, Yury Lonchakov into that escape vehicle. And they should be in their for about the next 10 minutes before anyone can breathe easier.

They believe this piece of debris will pass. They believe harmlessly. But they're taking no chances. In the next 10 minutes, so between 11:35 Eastern, I was told, and about 11:45 Eastern is the time that they expect that piece of debris to pass by the International Space Station.

HARRIS: Whoa. OK.

ZARRELLA: (INAUDIBLE), Tony.

HARRIS: Well, yes, well, John, if you would, just keep us posted. Thank you.

ZARRELLA: Absolutely. You got it.

HARRIS: All right. John Zarrella, thank you.

Disgraced financier Bernard Madoff is going directly to jail. The con man, today, pleaded guilty to all 11 criminal counts in what may be the biggest Ponzi scheme in U.S. history. Speaking before a judge in federal court, Madoff said, "I never invested the money. I deposited it into a Chase Manhattan bank. When money was requested, I paid it out from the Chase account." He faces up to 150 years behind bars beginning today. Sentencing set for June 16th.

Madoff is being jailed in downtown Manhattan. The time he'll serve is little comfort to many of his victims. Live Now to CNN's senior correspondent Allan Chernoff at U.S. District Court in Manhattan.

And if you would, Allan, I don't know if some of the victims have had an opportunity to come to the microphones, which I believe are assembled outside of the courtroom to offer up some comments on what they saw in the courtroom today. But if you would, give us some of the testimony that was offered by at least a couple of the investors- turned-victims in the court today.

CHERNOFF: Well, Tony, I have one of those victims with me right now. She is Judith Welling (ph). And let's get her response.

Judith, you've seen Bernard Madoff remain out on bail in his luxurious upper east side penthouse until this moment. Your reaction.

JUDITH BAKER, MADOFF VICTIM: I think this is about time. I think the minute those jewels were mailed off to family, that's when the bail should have been revoked. And I'm feeling some satisfaction now. CHERNOFF: You're speaking of when he actually did try to mail off some valuables to family members from the apartment.

BAKER: Yes. Right. I don't have a problem with the original bail. We have a system. We have to live with it. But certainly once you violate the rules of that system, you belong in jail.

CHERNOFF: And when Bernard Madoff said 11 times, to the 11 different counts, responded to the judge, "guilty," what was your feeling in your heart?

BAKER: I think this was a necessary plea, but I can't say I had any emotional reaction. I think most of us have lived through this, at this point, if we're survivors, which is what I prefer to think of us as, we're moving on with our lives. And we do believe that the SEC and the IRS should have been up there with him since we certainly fault the SEC for its part in a lot of us having invested with Madoff.

CHERNOFF: So you blame the Securities and Exchange Commission for not having discovered the fraud?

BAKER: Absolutely. When they were told about it. And even when they originally checked in 1992. I think it's really a disgrace.

CHERNOFF: And indeed, Tony, that was one of the criminal counts to which Madoff pled guilty, perjury, actually lying to officials from the Securities and Exchange Commission when they did interview Mr. Madoff about his supposed trades.

Judith, thank you so much and best of luck to you.

BAKER: Thank you.

CHERNOFF: Tony, many other victims also expressing at least some satisfaction that at least Bernard Madoff is now, as we speak, in jail.

HARRIS: Yes. All right, Allan Chernoff for us. Allan, again, appreciate it. Thank you.

Let's do a quick market check here. Do we have time to do that? As you can see, the Dow is up -- you'll see it in a second here -- up 122 points. Susan Lisovicz is going to join us in just a moment. We're working on three sessions in positive territory in a row. Let me not jinx it. We're back in a moment.

(COMMERCIAL BREAK)

HARRIS: Whoo-hoo! Check out the big board! Come on, now! The Dow above 7,000 as stocks rally for a third straight day. It's your birthday. Susan Lisovicz at the New York Stock Exchange.

Hey, Susan. So earlier in the week we had CEO of Citi saying, hey, look, we're making a little bit of money. We're making a little money. And then that Jamie Dimon character, which one of these big banks does he run? Is it J.P. Morgan? SUSAN LISOVICZ, CNN CORRESPONDENT: J.P. Morgan.

HARRIS: Didn't he say yesterday, hey, we're making a little money, right?

LISOVICZ: Right.

HARRIS: So investors are smiling a bit and everyone's making a little bit of money over the course of the last couple of days, right?

LISOVICZ: That's right. We have a very nice rally and a very rare trend here in this bear market. That is three days of gains. And, you know, the gains are accelerating right now.

Why is that? Well, GM shares are up right now 12 percent. Unfortunately, that translates just into 23 cents. But the CFO of GM says the company won't need $2 billion in loans it requested for March from the government because cost cuts are starting to take hold.

HARRIS: OK.

LISOVICZ: Also, Tony, we got February's retail sales. They dipped, but not as much as expected. And January was revised higher. A lot of analysts say consumers are starting to respond to discounting. And, obviously, if this economy is to improve, we have to have consumers spending.

You want more, Tony?

HARRIS: Yes, yes, yes. Greed (ph).

LISOVICZ: All right. GE shares -- well, greed is an important part of market direction.

HARRIS: (INAUDIBLE), I'm sorry. Oops.

LISOVICZ: GE shares are up 12 percent. It actually had its legendary AAA credit rating downgraded. Its held on to that rating for decades. The market was expecting the downgrade because of losses tied to its financial unit. But Standard & Poor's says GE's outlook is stable. So, in a weird way, it rallies because of that.

And, finally, if you're really greedy, let me tell you about Pfizer. Pfizer shares right now up 7 percent. This is a company that has very promising news in late clinical trials on a drug to treat advanced pancreatic cancer. That is a rare cancer. It is a deadly cancer. It has limited treatment options. It's great news for a pharmaceutical company to have something in the pipeline. And, of course, it's even better news for people who have that disease.

HARRIS: Yes, absolutely. Let's face it, the pharmaceuticals over the last couple of days are really rocking the markets. Truth be told, correct?

LISOVICZ: That's true. And there's also been a merger. I should say Genentech and Roche, a Swiss pharmaceutical. So there's consolidation there. And it all adds up to a nice rally. And we will watch it, Mr. Harris.

HARRIS: Whoo, Susan, thank you.

LISOVICZ: You're welcome.

HARRIS: Good news. Look at that smile.

All right. So what's your quick prescription for putting people to work? We asked Professor Paula Caligiuri, of Rutgers University, she's in human resources management, and brings us this 90-second RX.

(BEGIN VIDEO CLIP)

PAULA CALIGIURI, HUMAN RESOURCE MGMT. PROF., RUTGERS UNIVERSITY: Well, my prescription for fixing the job market would really be for us to invest in small businesses.

We have, as Americans, we have an amazing creative and entrepreneurial spirit. If we could only harness that, we would definitely be able to create more jobs. For individuals who do have interest in starting businesses, I would encourage them to think of managing their careers the way they would manage their portfolios. To do some things that are slow and steady but guaranteed sources of income, but do other things that may be a little more high-risk, high- reward, like starting a new business.

For our country, I would recommend that we do whatever we can to invest in our entrepreneurs, either through grants, micro loans, whatever it takes to help invigorate that. About 50 percent of Americans who work in the private sector work for small businesses. The small businesses will definitely help create jobs.

(END VIDEO CLIP)

HARRIS: All right. And for more on planning your financial future, just go to cnnmoney.com. There you will find tips on retirement investment and find out ways to ask our experts your own financial questions.

Want to get an update on the story we brought you just moments ago. Strange story. Again, hearing that the International Space Station is being evacuated -- imagine that -- because of a debris cloud. Let's get the latest from John Zarrella. He is on the phone with us from Florida.

And, John, what is the latest?

ZARRELLA: Tony, we're still waiting to get confirmation back from NASA that there is -- of what happened. Whether this piece of space debris actually hit the International Space Station or if it has passed by harmlessly.

Background on what exactly happened. There was a piece, literally 0.009 meters in width, about a third of an inch, that was approaching the International Space Station. It's an old piece of a motor, a payload assist motor that would have been used to put up satellites, things like that, over the course of the last -- God knows how many years. And as those pieces orbit the earth, they have a tendency to get in the way. And that's this piece of debris.

Apparently, for whatever reason, they did not track it soon enough or were not able for whatever reason to do what's typically done, which is a debris avoidance maneuver. So for safety purposes, the crew of the International Space Station, Sandy Magnus, Mike Fincke, and Yury Lonchakov, were evacuated to the Soyuz escape vehicle, which is permanently attached to the space station.

Now, we were told that they should, by now -- that piece of debris should have passed by. NASA believed that it would pass by harmlessly. And again, we're still waiting for an update from the Johnson Space Center.

HARRIS: Well, John, we're showing folks at home video from a spacewalk on Tuesday. And I don't know that I've discerned from your reporting, one doesn't have anything to do with the other, right? Tuesday's spacewalk . . .

ZARRELLA: No, no. No, not at all.

HARRIS: Yes, yes, that's totally separate.

ZARRELLA: Totally separate. You know, all of this space debris is tracked, but -- it is clear. It has cleared.

HARRIS: Oh, it's clear.

ZARRELLA: OK. We're just getting word, Tony, from the Johnson Space Center that this piece of debris did pass. We're waiting to find out how close a call it was. But we are being told now that, in fact, it did pass by without incident. So they are all clear at the International Space Station after about 10 very, very tense minutes.

HARRIS: All right, great news. John, boy, you were all over it. John Zarrella for us. John, thank you.

We're going to take a quick break. We'll come back in just a moment. When we do, a comedian taking on a financial advisor. And there's a pretty big fallout associated to this. You'll want to see that report in just a moment.

(COMMERCIAL BREAK)

HARRIS: And it is the news we have been following throughout the morning. And take a look at the banner headline from "The New York Post" -- "Jail for Madoff." Bernie Madoff going from the penthouse to the big house. His new residence, the Metropolitan Correctional Center in Manhattan. Bernie Madoff pleading guilty earlier today to all 11 charges that he was facing. Now facing up to 150 years in prison. Sentencing scheduled for June 16th, as I recall. And some of the thoughts now from one of his victims, Richard Freeman.

(BEGIN VIDEO CLIP) RICHARD FREEDMAN, MADOFF VICTIM: If Madoff acted alone and people believe him, then those people being scammed by Madoff today. There is no way in the world he could have acted alone. His operations were just too immense, too many statements had to be sent out. He could not go through "The Wall Street Journal" every day and pick out stock prices that fit into his statements. There had to have been plenty of other people.

(END VIDEO CLIP)

HARRIS: Richard Freeman there.

A cable TV financial expert on another network is coming under fire for his behavior. What's he been doing?

(COMMERCIAL BREAK)

HARRIS: So tonight the sage of snark will be face-to-face with the blowhard of "Mad Money." I like saying that, the blowhard of mad money. Can Jon Stewart and Jim Cramer cool it long enough to have a conversation? Here's CNN's Jim Acosta.

(BEGIN VIDEOTAPE)

JIM CRAMER, HOST, "MAD MONEY": You know, I don't want to stick my neck out anymore because it seems to get chop off every single time --

JIM ACOSTA, CNN GENERAL ASSIGNMENT CORRESPONDENT(voice-over): The war of words has gotten personal. In one corner CNBC's "Mad Money" host Jim Cramer.

CRAMER: That comedian is attacking me. Wow.

(CROSSTALK)

CRAMER: He runs a variety show.

ACOSTA: In the other corner, "The Dally Show's" Jon Stewart.

JON STEWART, HOST, "THE DAILY SHOW WITH JON STEWART": A variety show? What?

(LAUGHTER)

STEWART: He makes it sound like I'm some kind of buffoon.

ACOSTA: Who spent the last week lampooning Cramer's bad stock calls.

CRAMER: It's a fun game, and it's a lucrative game.

ACOSTA: But this video made in 2006 has suddenly gone viral, and it's no joke.

CRAMER: Go in and take a bunch of stocks and make sure that they're higher. And maybe commit $5 million in capital and do it, and I could affect it.

ACOSTA: Cramer explains to his own financial Web site, TheStreet.com, how he could influence stock prices up and down as a manager of a massive hedge fund.

CRAMER: By the way, no one else in the world would ever admit that, but I don't care.

UNIDENTIFIED MALE: That's right, and you can say that here.

CRAMER: I can't. I'm not going to say it on TV.

ACOSTA: Largely unregulated, hedge funds were attractive to wealthy investigators, and at their peak, may have controlled more than $2 trillion in assets.

TOM DAVIS (R), FORMER CONGRESSMAN: I think he's become a poster child for why hedge funds need more regulation and transparency.

ACOSTA: Tom Davis, a former top Republican on the House Committee that investigated hedge funds last fall says Cramer's comments in the video showed the need for reform in the markets.

Now, is any of this illegal?

DAVIS: It wasn't. But it should be. He may well have crossed that line. I think that's something somebody ought to be looking at. I think the tragedy is over the last few years, nobody's been looking at this at all.

ACOSTA: Cramer issued this statement to CNN. "No one knows and respects the securities laws more than I do. I didn't go to Harvard Law School for nothing. When I was a hedge fund trader in the 1990s, I played fair and I did nothing that violated those laws."

The "Mad Money" host will have a chance to explain himself in a scheduled showdown with Stewart, tonight.

STEWART: The annoying guy with the money show. I don't know. He'll be here tomorrow in this studio.

ACOSTA (on camera): A spokesman for CNBC declined to comment on the Web video noting that it first became public in 2007. Cramer does have his legions of fans who say tips from the "Mad Money" host have boosted their portfolios. But over the years, Cramer concedes he has made some bad calls.

Jim Acosta, CNN, Washington.

(END VIDEOTAPE)